World Bank Says 1.8 Mln Additional Ukrainians in Poverty

FILE PHOTO: People queue for meals from World Central Kitchen food truck on a street in Kherson, Ukraine February 22, 2023. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: People queue for meals from World Central Kitchen food truck on a street in Kherson, Ukraine February 22, 2023. REUTERS/Lisi Niesner/File Photo
TT

World Bank Says 1.8 Mln Additional Ukrainians in Poverty

FILE PHOTO: People queue for meals from World Central Kitchen food truck on a street in Kherson, Ukraine February 22, 2023. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: People queue for meals from World Central Kitchen food truck on a street in Kherson, Ukraine February 22, 2023. REUTERS/Lisi Niesner/File Photo

The number of Ukrainians living in poverty has grown by 1.8 million since 2020, bringing the total to about 29% of the population as Russia's 2022 invasion continues to ravage the country's economy, the World Bank said in a report.
The situation would be much worse if Ukraine had not received substantial foreign budget support to pay old-age pensions and salaries for teachers, doctors and others, according to Arup Banerji, the World Bank's regional director for Eastern Europe.
"If international partners, especially the US, had not crowded in resources specifically tailored to these social expenditures, then there would have been three million more people in poverty," he told Reuters in an interview.
The World Bank report, based on monthly phone surveys of up to 2,000 households, estimated that some 9 million Ukrainians were living in poverty last year. The country's total population is now estimated to be around 32 million.
The increase in poverty was driven by declining employment, with more than a fifth of adults who were working before the war having lost their jobs, it said.
It noted that nearly one-quarter of Ukrainians surveyed did not have enough money to buy food at some point in June 2023, although a rebound in economic growth and slowing inflation had helped to improve food security in the second half of the year.
Banerji said US passage of fresh Ukraine funding after months of delay was "fantastic" news which would help ensure Ukraine's continued ability to keep up payments for salaries, pensions and social assistance.
The report showed that 85-92% of health clinics in Ukraine were still fully operational in 2023, despite ongoing Russian attacks.
It said at least 89% of children aged 6-18 also remained in school, although in areas facing active hostilities 72% of those students were attending school online.
The survey also showed that 97% of old-age pensions and 85% social assistance transfers were paid on time, a key factor in preventing even more from falling into poverty. Pensions and other social assistance had helped compensate for job losses in vulnerable households, it found.
Banerji said Ukraine's biggest challenge remained security and ending the war, but Ukrainian officials had done a great job running the economy under the circumstances.
"There can be no economic prosperity or economic growth without physical security," he said, adding, "But I've never seen a government that has done so much with so little."



Germany's Coalition in Impasse Over 2025 Budget

FDP Finance Minister Christian Lindner (L), Greens Economy Minister Robert Habeck (C) and Chancellor Olaf Scholz (R) of the SPD are locked in a budget dispute - AFP
FDP Finance Minister Christian Lindner (L), Greens Economy Minister Robert Habeck (C) and Chancellor Olaf Scholz (R) of the SPD are locked in a budget dispute - AFP
TT

Germany's Coalition in Impasse Over 2025 Budget

FDP Finance Minister Christian Lindner (L), Greens Economy Minister Robert Habeck (C) and Chancellor Olaf Scholz (R) of the SPD are locked in a budget dispute - AFP
FDP Finance Minister Christian Lindner (L), Greens Economy Minister Robert Habeck (C) and Chancellor Olaf Scholz (R) of the SPD are locked in a budget dispute - AFP

The three parties in the German government are locked in a bitter dispute over the 2025 budget, with experts warning the stalemate could be the final straw for the uneasy coalition.

Chancellor Olaf Scholz's Social Democrats (SPD), the Greens and the liberal FDP, who came to power in 2021, have until July 3, the end of the current parliamentary term, to reach a compromise, AFP reported.

FDP Finance Minister Christian Lindner, a fiscal hawk, is demanding close to 30 billion euros ($32 billion) in savings -- which the Greens and SPD have baulked at.

The coalition has faced many rows in the past but some pundits believe this could be the one that finally blows the government apart.

"These talks will decide the coalition's continued presence in office," said the Sueddeutsche Zeitung daily this week.

While budget discussions have been difficult before, they have never lasted this long.

"It's much more difficult than usual," Jacques-Pierre Gougeon, an expert on German politics at the French Institute for International and Strategic Affairs, told AFP.

He pointed to a gloomy backdrop due to Germany's poor performance in recent times, with Europe's biggest economy hit hard by high inflation and a manufacturing slowdown.

According to the finance ministry, tax revenues for 2025 are set to be 11 billion euros lower than originally forecast.

A ruling by the country's top court in November that the coalition had contravened the constitutionally enshrined "debt brake", a self-imposed cap on annual borrowing, has also limited room for new spending.

In addition, all three parties are increasingly worried about their own levels of support after doing badly at this month's EU elections -- in which the opposition conservative CDU-CSU bloc came first, with the far-right AfD second.

A key sticking point in discussions centres on unemployment benefits.

Lindner wants to restrict the current payouts, which he believes are too expensive and do not provide enough of an incentive to get people to return to work.

But the SPD won't accept this. Improving benefits was central to the party's 2021 election campaign as they sought to win back support of lower-income voters.

"Politically, the Social Democrats cannot afford to give it up," said Gougeon.

There is also disagreement about any measures affecting diplomacy and defence, at a time when Germany is seeking to stand up for liberal, European values and overhaul its creaking military in the wake of Russia's invasion of Ukraine.

Defence Minister Boris Pistorius is calling for an increase in his ministry's budget, and for military spending not to be covered by the debt brake.

"It would be disastrous to have to say in a few years' time: we saved the debt brake at the expense of Ukraine and the European security order," said Foreign Minister Annalena Baerbock, from the Greens.

While calls have grown for the debt rules to be relaxed, Lindner and the FDP categorically refuse to countenance any changes.

Maintaining the brake is an "existential question" for the party, according to Gougeon.

Lindner did however promise on Wednesday not to push for any savings in defence.

Scholz, Lindner and Economy Minister Robert Habeck, from the Greens, are due to meet Sunday in an attempt to make progress.

The aim is to prevent "the budget crisis from turning into a crisis of confidence", which could lead to new elections, according to the left-leaning daily TAZ.

The parties may ultimately compromise as the alternative -- a collapse of the government -- will not be in their favour.

They "know that they would be swept aside if there were new elections, and will want to avoid them", said Gougeon.