How to overcome poverty in Ukraine

Sep 22, 2015

Photo courtesy by the Regional Center of Social Services of the Berdyansk City Council

The strenuous economic situation in Ukraine, burdened by the armed conflict in the east and the annexation of the Crimea, has caused increased poverty and social exclusion among its population, with vulnerable groups such as internally displaced persons (IDPs), large families with children, people with disabilities, people residing in rural areas, and orphans being most affected.

According to the Ministry of Social Policy of Ukraine, 20-25% of Ukrainian households are poor. The most vulnerable socio-demographic group is children under 18 years old, with a poverty rate of 33.4%. A major reason for this is the low level of wages of their parents. The existing minimum wage standards result in a situation in which every fifth working citizen is officially poor. Due to the devaluation of the national currency against the US dollar (97.3% at the end of 2014)[1] and increased inflation (52.8% in August 2015 compared to the previous year)[2], real incomes were significantly reduced and the unemployment rate of the population of working age (according to the ILO methodology) amounted to 10.0% of the economically active population in 1Q2015[3].

“Poverty reduction is a top priority of the United Nations Development Programme in Ukraine and is stated in the Millennium Development Goals. Given this, UNDP strongly supports the development and discussion of the national Poverty Reduction Strategy (PRS), which was initiated and developed by the Ministry of Social Policy as a part of the Action Plan for the implementation of the Association Agreement between Ukraine and the European Union. UNDP experts held a series of consultations with the Ministry of Social Policy and research institutes, and developed recommendations for improving the draft PRS in accordance with the European platform against poverty and social exclusion, the European Social Charter, and the Ukrainian context. We hope that this document will act as an effective guide towards poverty reduction in Ukraine,” stated Ms. Olena Ivanova, Project Manager of the UNDP project “Support to the Social Sector Reform in Ukraine”.

During the meeting of the Interagency Working Group on the development of the PRS, chaired by the Deputy Minister of Social Policy of Ukraine on European Integration Mr. Serhiy Ustymenko, representatives of central executive authorities, academic institutions, and social partners, such as trade unions and employers, also expressed their comments and suggestions for the document.

“The Strategy should become a roadmap for a series of other reforms, namely in the field of employment policy, social security, education, and healthcare. As a result of the reforms social inequality will be reduced and access to social benefits by all groups of people will be improved. Cooperation with international experts and organizations helps us to reflect in the new PRS Ukraine's international obligations on social issues and international best practices in overcoming poverty and social exclusion,” noted Mr. Serhiy Ustymenko.

The Strategy envisages a gradual reduction of poverty and social exclusion by ensuring access to productive employment, increased income from employment, access to the benefits of public social insurance, improved regional policies, support for the quality of life of the most vulnerable categories of citizens, and prevention of poverty among IDPs.

As stated by the UNDP international consultant Mel Cousins: “The draft PRS in Ukraine is based on a comprehensive and coordinated approach to poverty reduction, as required by the European Committee of Social Rights.” The expert also provided recommendations for the draft Strategy in terms of improving monitoring indicators, introducing risk analysis, action plan structure, and communication strategy.

The new PRS is the next step in this direction after the National Programme for overcoming and preventing poverty for the period until 2015. It is assumed that after the approval of the PRS, a detailed action plan for its implementation will be developed, which will contain specific measures, the institutions responsible, key performance indicators for evaluation, and identify the necessary resources.

[1] Based on the data provided by the Ministry of Economic Development and Trade of Ukraine, report “Economic situation in Ukraine 2014” (http://www.me.gov.ua/?lang=uk-UA)

[2] Based on the data provided by the State Service of Ukraine (https://ukrstat.org/uk)

[3] Based on the data provided by the State Service of Ukraine (https://ukrstat.org/uk)

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