AS SOON volunteers appear, those who were waiting for them in kyiv’s central Independence Square (known as Maidan) form a queue, shuffle forward and have a hot drink and a freshly prepared meal. An elderly man tries to quiet a loud outburst from his mentally disabled adult son. The war has left millions in economic hardship, but two years after the start of the full-scale invasion, some are suffering far more than others. The hardest hit are the elderly, the disabled and the displaced.
In 2023, Ukraine GDP was 72% of what it was in 2021. Millions of people lost their jobs or had their pay reduced because of struggling employers. But if you walk around any big city behind the front lines, today you will no longer know that there is a war. Last month, a huge bookstore opened a few minutes’ walk from where volunteers from Sant’Egidio, a Rome-based charity, distribute their food. Shops, businesses, cafes and restaurants are packed and many people drive luxury cars.
However, the war pushed many people into poverty, particularly those who had been struggling previously, and especially those whose homes and livelihoods were lost. A World Bank survey last November found that 9% of Ukrainians had lacked food at some point in the previous 30 days. In March, according to the Center for Economic Strategy, a Kyiv think tank, 23 percent were food insecure. Some 14% were unemployed.
Yevhen Hlibovytsky, an analyst, says some caution is needed when interpreting this data. The war has indeed caused “a lot of poverty”, he says. But Ukrainian society is less “atomized” than its Western counterparts. Family safety nets are more useful than in the West.
This is certainly true. But it’s the unlucky ones who queue up to eat on Maidan. Many retirees say that, far from getting help from their children, they ask them for money. Some of those in need spend their days traveling across kyiv seeking help from different humanitarian organizations. After food, utilities, medicine and communal housing costs, they all say they have nothing left. There is a good reason for this. In 2022, inflation reached 26.6% and in 2023 it was still 5.1%. Although pensions have increased, the increases have varied and have not kept pace with inflation. Retirees have all seen their income significantly eroded. Average monthly pensions are the equivalent of $135.
More than a quarter of the population, or 10.5 million people, are retirees. But they are far from being the only ones to lose, believes Oksana Jolnovich, Minister of Social Policy. The same goes for the 3 million people who receive disability benefits. Their numbers increased by 300,000 in two years, thanks to wounded soldiers, injured civilians and people with other problems ranging from heart attacks to war-related stress problems.
Many Maidan volunteers first came to Sant’Egido because, having fled the fighting or Russian occupation, they themselves needed help. There are 3.7 million internally displaced people (PDIs) in Ukraine. On her phone, Natasha shows a satellite image of a ruined building in the eastern town of Bakhmut, which fell to the Russians in May 2023 after nearly a year of heavy fighting. “My house,” she said. In Bakhmut, she was a kindergarten teacher and her whole family had their own house. She had additional income by renting two other properties. Today, she says, her friends and family are unemployed or working supermarket jobs for which they are grossly overqualified. “It was a comfortable life,” she says. “Now I live on humanitarian aid.”
Although many of them receive assistance, their main support remains social security. Until March 1stst some 2.5 m PDIs received a monthly payment ($77 for people with children or disabilities and $51 for others), which could be supplemented with other assistance. Anyone deemed capable of working is no longer eligible for this allowance. PDI payment, and the number of beneficiaries is expected to drop to around 1.5 million.
In this time of war, pensions and social security benefits are much more important than simply depositing money in the bank, says Ms. Zholnovych. When everyone received their money in March 2022, the first payment after the full-scale invasion began, it was extremely symbolic. These payments meant then, and still mean, she says, that “we are fighting, we are standing, the state exists.” Ukraine’s allies understand this well. The budget for all Ukrainian social benefits, except pensions, is now financed with their money.
For 2024, Ukraine needs $37.3 billion in external financing and there will likely be a deficit. This will mean cuts in social spending and perhaps an increase in energy prices, which have not kept pace with inflation. Hlib Vychlinski, who heads the Center for Economic Strategy, believes that 2024 will be roughly “manageable”. What worries him is how to continue in the years to come if the war continues “and we don’t have foreign support.” Crushing the Ukrainians on the front and impoverishing them behind, so that they lose the will to continue fighting, is clearly part of Vladimir Putin’s plan. ■