Nine out of 10 Ukrainians could face extreme economic vulnerability and be driven into poverty if the conflict with Russia drags on over the next year, the United Nations Development Programme (UNDP) warned on Wednesday.
“If the conflict is a protracted one, if it were to continue, we are going to see poverty rates escalate very significantly,” UNDP Administrator Achim Steiner told Reuters during a virtual interview.
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“Clearly the extreme end of the scenario is an implosion of the economy as a whole. And that could ultimately lead to up to 90% of people either being below the poverty line or being at high risk of [poverty],” Steiner further said, adding, “We estimate that up to 18 years of development gains of Ukraine could be simply be wiped out in a matter of 12 to 18 months.”
The poverty line is typically defined vis-a-vis purchasing power, with $5.50 to $13 per person per day being the threshold. Before the Russian invasion of Ukraine began on February 24, around 2% of Ukrainians were below the poverty line.
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Since the invasion began, however, Ukraine has said that Russian forces have destroyed a whopping $100 billion worth of critical infrastructure, while 50% of businesses in the eastern European country have been forced to shut down as a result of the ongoing conflict.
As it stands, the International Monetary Fund (IMF) expects Ukraine’s economy to contract by a considerable 10% in 2022 due to the ongoing conflict with Russia, but has warned that Ukraine’s economic output could shrink by as much as 25% to 35% if the conflict drags on for too long.