ALBAWABA – With most Ukrainian men between the ages of 18 and 60 not allowed to leave the country in the midst of war, the Ukraine economy actually needs now more than ever, according to a Bloomberg report released Monday.
Nearly a year and a half into the Russia-Ukraine war, 2.8 million working-age Ukrainian women have left the country, the report highlighted. That is nearly 68 percent of all Ukrainian refugees.
Some six million Ukrainians have taken refuge outside of Ukraine since the beginning of the war.
The huge amount of Ukrainian women in refuge has cost the Ukraine economy 10 percent of its annual pre-war gross domestic product (GDP), as reported by Alexander Isakov of Bloomberg Economics.
This estimated 10 percent constitutes some $20 billion in a worst case scenario, which would easily outweigh the European Union’s (EU) proposed four-year aid package of $13.9 billion per annum.
In a Bloomberg interview with Deputy Economy Minister Tetyana Berezhna, she declared “victory is when Ukrainian families unite in Ukraine, not abroad.”
“So the most important task now for Ukraine, for the Ukrainian government, is to make everything possible so that women with children come back to their husbands and unite in Ukraine,” she said.
Even before the war, Ukraine’s weakest economic link was its demography, with a fertility rate of just 1.2, among the worst in Europe, according to Bloomberg.
Tens of thousands of soldiers and civilians were killed, and even more Ukrainians too injured or traumatized for employment, the New York-based news agency reported. If anything, this further reduces the number of consumers and workers the economy has access to.
Notably, consumers and workers are indispensable for any economy. The same goes for the Ukraine economy.
The government has ambitious plans for post-war reconstruction that would double the economy’s size by 2032. But the Ukraine economy ministry says Ukraine is 4.5 million short of the number of workers and entrepreneurs needed to achieve that goal.
It aims to plug the gap with a mix of returning refugees — 60 percent of whom have degrees — and foreign talents, Bloomberg reported.
To that end, it’s working on incentives to bring women back into the workforce, including a new labor law, attempts to narrow the gender pay gap, and grants to help the spouses of those fighting at the front to start businesses.
Ukraine’s refugees and internally displaced people (IDPs) amount to almost a third of the 37.3 million population the government said was living on territory it controlled before Putin invaded Ukraine.
Meanwhile, whereas some of those displaced inside the country may still be able to contribute to Ukraine’s economy, those now living abroad are beginning to find work, pay taxes and boost output elsewhere.
“Only people make the GDP of an economy,” Oleg Gorokhovsky, chief executive of Monobank, a mobile-only bank service provider, said at his office in Kyiv. “I’m afraid that a lot of intelligent and smart people, young people, especially women, leave Ukraine.”
Women, he says, have a disproportionate impact on consumer demand because they tend to be the primary decision-makers when it comes to household purchases. “Without them it will be super hard,” he added.
Many refugees will likely come home in time, according to Bloomberg, but persuading them to come back becomes more difficult the longer the war goes on.
It took almost a decade after the end of Europe’s last war, in Bosnia in the 1990s, for only half the conflict’s 2 million refugees and IDPs to return home, according to the UNHCR.
According to Isakov’s calculations, a similar outcome for Ukraine, in which half of all refugees return, would cost the Ukraine economy $10 billion per year.
That’s 5 percent of GDP, after accounting for some husbands and families moving to join those women who decide to stay abroad, as reported by Bloomberg.
