Global economy, local effects: poverty in Ukraine
Ukraine, 17 April 2008 — Many experts say that the excellent progress the whole East European region has made in reducing poverty in the last ten years is now being threatened by growing uncertainties in the global economy. At an international conference organised by UNDP, government executives from Eastern Europe, business leaders, international experts, think-tanks and NGOs shared their experiences of poverty alleviation and social inclusion through multilateral partnerships. The Conference’s participants called for an immediate response to resist further increases in poverty in Ukraine.
The UN Assistant Secretary-General and UNDP Assistant Administrator, Kori Udovički, told the forum participants that these global economic uncertainties "are manifesting themselves in building inflationary pressures, including in Ukraine,- particularly - food and energy prices and sharp slowdowns in economies as diverse as Kazakhstan, Turkey, Hungary, and the Baltic states."
In Ukraine, despite robust economic growth since 2000, 28 percent of people still live below the poverty line of UAH430 (USD90) per person a month, according to official statistics. High inflation in 2008 and poverty patterns in Ukraine, as well as in most former Soviet countries, are different from those prevailing in other parts of the world. Here it exists against the background of developed industry, skilled labour force and relatively low unemployment.
Poverty is a fairly new phenomenon for Ukraine, and originated from the re-distribution of resources during the country’s historic transformations on the way to a market-based economy. Speaking at the Conference’s opening, UN Resident Coordinator in Ukraine Francis O’Donnell said: “UNDP called this forum to discuss issues of poverty from the global, regional and Ukrainian perspective. By analysing issues on these levels we will be able to see the changing patterns and the many dimensions of the poverty in the world, in Europe and pay particular attention to Ukraine, which hosts this forum”.
Over the past 10 years Ukraine lost 4 million people. A disproportionate number of them were men, according to the official data. At the same time, during the past six years state funding to healthcare sector has grown by four times, while the public consumption of medicines grew by three times, with burgeoning mortality rates. In Ukraine, the worst situation is observed in rural areas, where almost 40 per cent of the population are poor. This is aggravated by non-income dimensions, such as lack of infrastructure or very limited access to adequate healthcare.
Nataliya Vlasenko, Deputy Head of the State Statistics Committee of Ukraine said: “Rural households did not experience positive change resulting from the country’s economic growth, while the disparity between standards of living in the cities and in rural areas became even more striking. We can say that rural poverty should be seen not just in terms of income, but also in terms of poor access to basic social services and as a result of limited life opportunities”.
Ineffective distribution of state budget social assistance funds and underdeveloped healthcare system has been named among the main reasons behind these alarming figures. As many experts say, over the past 17 years a number of proclaimed and much-awaited reforms, including pension system reform, national healthcare system reform, decentralization and restructuring of social benefits system, remain unfinished. These are important reforms, critical to poverty reduction. Yet poverty is not a political issue and is not on top of national agenda.
Today’s poverty risks to create more severe problems in the future if not addressed now, says Ella Libanova, Director of the Institute of Demographics and Social Studies, Ukraine’s leading think tank specialised in social development analysis and forecasts.
“In Ukraine the premises are being formed for the so-called hereditary poverty – children from poor families are destined to live in poverty in adult life, and they are deprived of the opportunity to provide means for their descendants, who in their turn will live in poverty,” she argues.
Various research works show that through many years other social groups are at risk of poverty. These are: families with two and more children, families with a child aged under three, households with at least one unemployed, households with persons aged over 75, pensioners, and people with disabilities.
The Conference’s participants took part in two plenary sessions during which they will analyse overview of poverty in transition economies and poverty patterns in Ukraine. In addition, they attended three parallel sessions dedicated to methodology, poverty monitoring and measurement techniques; social protection models based on case studies from countries in the region; and the role of the private sector in poverty alleviation.
As growth lifts economies like Ukraine into the ranks of middle income countries, definitions of absolute income poverty, as reflected in the Millennium Development Goal One’s indicator of the proportion of people whose consumption is below USD1 per person a day, become less meaningful, and measures of social exclusion and regional disparities become increasingly important.
However, the non-income dimensions of poverty – as they are defined in the Millennium Development Goals – remain quite relevant for middle income countries, particularly in terms of gender disparities, male life expectancy trends, and environmental sustainability, including climate change.
However, regardless of the measurement methodology applied, the scale of poverty in Ukraine requires immediate response from the national Government, local communities and business.
For more information, please contact Sergiy Grytsenko, UNDP Ukraine Communications Officer, at +38044 254 00 35 or sergiy.grytsenko@undp.org or Snizhana Kolomiiets, UNDP Regional Communications Officer in Moscow, at +7 (495) 787-2100 (ext.2235) or +7 (501) 414-0835.
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