UN officials on poverty alleviation in Ukraine

On the International Day for the Eradication of Poverty UN officer in Ukraine jointly with UNDP Millennium Development Goals Project conducted the press-club with the participation of international and Ukrainian experts, UN press office reported.

The experts of the press club were Mr. Francis M. O’DONNELL, Resident Representative, United Nations Development Programme in Ukraine; Mr. Jeffrey FRANKS, Senior Resident Representative, International Monetary Fund; Mr. Hideki MORI, Country Sector Coordinator Human Development Sector in Ukraine, Belarus and Moldova, International Bank for Reconstruction and Development; Ms. Ludmyla MUSINA, Deputy Minister, Ministry of Economy of Ukraine; Mr. Ruslan DOROSHKEVICH, Deputy Director of Social and Humanitarian Development Department, Ministry of Economy of Ukraine; Ms. Natalia OPARINA, Economic Policy Advisor to the Millennium Development Goals Project, UNDP.

Mr. Francis M. O’Donnell mentioned Ukraine had all favorable conditions for economic growth: rich human potential, good strategic allocation, but the most important reason negatively affecting Ukraine’s development was high level of corruption. “Corruption keeps the poor in poor state, it makes the rich richer increasing the gap” – noted Mr. Francis M. O’Donnell. In his opinion economic reform is not only possible but essential on the way of poverty alleviation.

Ms. Ludmyla Musina stressed, that one of the most effective ways of poverty alleviation is providing working population with a possibility of getting certain income level thanks to their experience and skills. Unfortunately, in June 2006 about 25% of the working population got their wages below the subsistence minimum amount, less than 496 UAH. Government programme documents, especially project of state economic and social development for Ukraine in 2007 set the target to create not less than 1mln working places, stimulate employers to hire graduated specialists and also legal productive employment, which provides higher level of wages. It can be performed on one hand by modernization of real sector, renovation of village factories and on the other by reducing of barriers for business development.

Ms. Ludmyla Musina pointed out that it is the typical way of transformation for remuneration of labour and systems of social guarantees from centralized planned economy to market. Priority of human capital development in Ukraine is making the qualified specialists competitive at the job market. To increase the human capital cost and its effective use is the necessary prerequisite for economic growth. Over the last years the real population income growth rate exceeded both GDP growth rate and labor productivity rate. In an effort to accelerate poverty reduction significant increases of social payments were implemented and they resulted in substantial increase in pension fund deficit and slowdown of investments. Today we should change that trend by increasing resources for development and creating well-paid working places for different groups of the population of Ukraine.     

Mr. Jeffrey Franks stated that 2 million people live on less than 10 UAH a day , in other words they are  below the poverty line. The most acute problem is poverty in some oblasts, rural areas, high poverty rate among youth and families with 2, 3, and 4 children.”  In his opinion social programmes in Ukraine should be more effective and regulated, money should go to those most needing.

Mr. Ruslan Doroshkevich noted that increase in labor productivity, GDP per capita and shadow economy alleviation would provide the population of Ukraine with high level of social standards.

Almost 30 journalists from leading mass media took part in the press club and had a possibility of discussing the poverty problem in Ukraine with the experts.