Russia’s war has caused colossal losses in employment and income for Ukrainians, destroying nearly a third of all jobs in the country and threatening the loss of millions more if the conflict continues, the United Nations’ labor organization said on Wednesday.
Economic upheaval, coupled with a huge outflow of refugees and large-scale internal displacement, has wiped out 4.8 million jobs in Ukraine since Russia’s aggression began, the agency, the International Labor Organization, said in its first report on the economic consequences of the invasion. Should the military escalation continue, over 43 percent of jobs — about seven million — could be lost, it added.
The report underscored the grim economic toll of Russia’s aggression and the challenges that lie ahead for Ukraine, neighboring countries and the global economy in the event that the war widens into a protracted crisis.
Economic activity in Ukraine has essentially ground to a halt across much of the country, forcing the closure of an estimated 50 percent of Ukraine’s businesses — a situation made worse by the destruction of buildings, roads, hospitals and other essential physical assets. An estimated $60 billion to $100 billion worth of critical infrastructure was damaged or destroyed in the first month of the conflict alone.
Should the invasion fail to wind down quickly, up to 90 percent of the Ukrainian population could face poverty or vulnerability to poverty, the organization warned. The European Bank for Reconstruction and Development forecast on Tuesday that Ukraine’s economy will shrink 30 percent this year.
Ukraine’s neighbors are not being spared, either. Of the more than 5.2 million refugees who have fled the hostilities, many have landed in Hungary, Poland, Moldova, Romania and Slovakia. While those countries are working to integrate the newcomers, the prospect of a drawn-out conflict means that refugees could remain in exile longer than expected, putting pressure on labor markets and possibly raising unemployment in the countries hosting them, the I.L.O. said.
Russia’s own economic crisis in the wake of punishing international sanctions is also rippling beyond its borders. The economies of countries such as Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, which rely on remittances from hundreds of thousands of migrant workers in Russia. Should they lose work and be forced to return to their countries of origin, “there will be severe economic losses in Central Asia as a whole,” the I.L.O. said.
A protracted conflict would also continue to shock the global economy through higher commodity prices, especially food and fuel.
“Higher rates of inflation will have a negative impact on incomes and poverty, especially among the poor who rely on wages as their main income source,” the organization concluded.