Ukraine Article

Addressing Economic Insecurity in Eastern Ukraine

The Covid-19 pandemic has opened the door to a new era of financial uncertainty and economic inequality which has touched every country in the world. Ukraine is no exception.

Both the pandemic and the prolonged geopolitical crisis in Eastern Ukraine have caused significant economic stagnation in the country. It is in this context that ACTED initiated an economic development programme targeting the Donbas region.

This project, entitled ‘Securing Women’s Economic Empowerment in Donbas,’ aims to enhance economic security and employment opportunities for the most marginalized populations

An economy shattered by conflict

The Donbas economy is based around mining, metallurgy, and chemical processing. However, these sectors faced a number of challenges, including: the obsolescence of production facilities, the limited application of innovative technologies, a lack of competition, and weak financial and credit support.

The combination of these factors created the preconditions for the economic and industrial crisis which the region now faces.

The conflict in Donbas, which began in 2014, was the final blow for many businesses; forcing many firms to shut down and lay off their workforce. This led to a dramatic reduction in employment opportunities.

The national unemployment rate in the Ukraine increased from 8.7% in 2019 to 10% as of 2nd quarter of 2020.

The conflict disrupted economic networks, leading to a loss of economic opportunities for the entire region. Small cities and rural areas were cut-off from the urban centers, which represented regional economic hubs. Settlements in Government Controlled Areas (GCAs) located close to the Line of Contact (LoC) remain disconnected from key markets located in Non-Government Controlled Areas (NGCA):

« The military conflict has created unfavorable conditions for finding new business partners and ensuring competitiveness in the region. The regions of Donetsk and Luhansk oblasts have thus become less attractive to investors and are experiencing a significant decrease in the level of outside investment. »

Natalia, Technical Coordinator on Economic Security, ACTED Ukraine

Absolute poverty is expected to increase from 27.2% to 43.6% in 2021, with 6.3 million people believed to be living in poverty.

How is ACTED trying to address this challenge?

This 36-month project will benefit 62,000 people through: livelihood grants, capacity building of labor centers and civil society organizations,  IT scholarships, local economic participation assessments, and the implementation of interactive high school Science, Technology, Engineering and Mathematics (STEM) awareness campaigns in the region.

Through these activities, ACTED will increase the economic security of Ukraine’s most vulnerable citizens (especially those living in conflict-affected households) and promote employment opportunities for women in new, innovative, and better-paying fields.

In Eastern Ukraine, women traditionally make up a lower proportion of the active workforce than their male counterparts. The reasons for this are multiple:

“In Eastern Ukraine, due to: outmigration of youth and men of working-age in search of livelihood opportunities, a gap in life expectancy between men and women, and the persistence of traditional gender norms, women tend be marginally more vulnerable and/or marginalized than their male counterparts.”

– Margot, Project Development Manager of ACTED Ukraine.

 

For this reason, this project aims to ensure that at least 65% of project participants are women and girls

 

The project is funded by Global Affairs Canada (GAC)

 

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