By Stephanie Nebehay

GENEVA, (Reuters) – If the conflict drags out over the next one year, nine out of ten Ukrainians will be in poverty or extremely vulnerable, according to the U.N. Development Programme, (UNDP).

Achim Steiner (UNDP Administrator) stated that his agency is working closely with the Kyiv Government to prevent the worst-case scenario of an economy collapse. This program was designed to give cash transfers to families in order to purchase food for survival and prevent them fleeing, while also supporting basic services.

Steiner stated to Reuters that if the conflict continues, and if it is prolonged, poverty rates will rise very substantially.”

“Clearly, the worst outcome is the implosion and collapse of the entire economy. In the end, that could mean as high as 90% of those living in poverty or at risk of becoming poor,” he stated during a New York video interview.

He said that poverty is defined generally as purchasing power of between $5.50-$13 per person per daily. According to him, only 2% of Ukrainians were below the poverty line before Russia’s invasion began on February 24, 2014.

Oleg Ustenko, Ukraine’s chief economic advisor, stated last Thursday that Russian invading forces had destroyed infrastructure worth at least $100 billion and that half of Ukrainian companies were closed.

Steiner stated that he believes the Ukraine’s 18-year-old development achievements could simply be erased in 12-18 months.

CASH TRANSFERS

UNDP will be looking for “tried, tested” programs that have been used elsewhere in conflicts situations.

His words were: “Cash transfer programmes, particularly in Ukraine where the banking system and architecture are still functional, with ATMs available, is a critical means of reaching people quickly.

The logistical difficulties were substantial, but not impossible to overcome, he stated.

    “Clearly some of the recent announcements by World Bank and International Monetary Fund in terms of credit lines and funding that is being made available will obviously assist Ukrainian authorities to be able to deploy such a programme,” he said.

UNDP reported that a cash transfer operation would provide partial income for the 2.6 million persons who are likely to become poorer. It costs about $250 million per monthly. An even more ambitious program to provide basic income, $5.50 per person per day, would run $430 million per month.

In 2022, Ukraine’s economy will shrink by 10% due to Russia’s invasion. But, the IMF stated in Monday’s staff report that the outlook could get worse if conflict continues.

The World Bank on Monday approved nearly $200 million in additional and reprogrammed financing to bolster Ukraine’s support of vulnerable people. This money is on top of $723million approved last week. The World Bank has a $3 billion plan of support for Ukraine that it will use to help its citizens in the coming weeks.

Steiner highlighted the significance of Ukraine for other nations’ economies, especially those of African countries that receive a third of their wheat from Russia or Ukraine.

Steiner explained that the economic stability of 45 African nations is a priority. He called them “least developed countries” and said they are looking to provide food for their people.