Ukraine is facing an economic “free fall” that could leave 90% of the population living below the poverty line over the next year if the Russian invasion continues, the United Nations’s development agency said on Wednesday.
In the U.N. Development Programme’s worst-case scenario for Ukraine, GDP would contract by 60%, wiping out 18 years of socioeconomic development after 12 to 18 months of war.
“An alarming economic decline, and the suffering and hardship it will bring to an already traumatised population must now come into sharper focus,” UNDP Administrator Achim Steiner said in a statement released on Wednesday. “There is still time to halt this grim trajectory.”
At least $100 billion worth of infrastructure, buildings, roads, bridges, hospitals, schools, and other physical assets have been destroyed in the war, according to the UNDP.
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The war has also shut down 50% of Ukrainian businesses and left the other half operating “well below capacity,” according to the agency.
“In order to avoid further suffering, destruction and impoverishment we need peace now,” said Steiner.
In order to mitigate the implosion of Ukraine’s economy, the UNDP proposes implementing a large-scale emergency cash transfer operation, at an estimated cost of $250 million per month, that would cover partial income losses for 2.6 million people expected to fall into poverty. The agency says that a “more ambitious” temporary basic income program providing Ukrainians $5.50 per day would cost an estimated $430 million a month.
Billions in international aid pouring into Ukraine could help cover the cost of such programs.
The World Bank announced on March 7 that it had approved a $723 million emergency financial package for Ukraine, and the International Monetary Fund approved a $1.4 billion emergency loan for the country on March 9.
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On Tuesday, President Joe Biden signed legislation that included $13.6 billion in aid to Ukraine.
Prior to Russia’s invasion on Feb. 24, an estimated 2% of Ukrainians lived below the $5.50 per day poverty line, according to Steiner.
