Russia's invasion set Ukraine back 15 years in poverty reduction, but reforms soften decline and to help fast recovery – World Bank

KYIV. Feb 23 (Interfax-Ukraine) – Russia’s invasion of Ukraine, according to the World Bank, led to the fact that 8 million additional Ukrainians are now living in poverty compared to before the war, but the result could have been even worse if the country had not carried out reforms before the war, World Bank Regional Country Director for Eastern Europe Arup Banerji has said.

“A 15-year setback in poverty reduction in Ukraine. At the same time, the remarkable resilience Ukraine and Ukrainians have shown is in large part attributable to the difficult and successful reforms in macroeconomic management and institution-building that the authorities undertook in recent years, prior to the war,” he said in an interview with Interfax-Ukraine.

Banerji said that this attention to reform and deepening the capacity and transparency of governance will be essential for the transition to post-war recovery.

“Throughout the recent reform period – both before and during the war – Ukraine has managed to balance efforts towards enhancing competition and economic efficiency with the protection of the most vulnerable,” he said, answering a question about the possibility of carrying out liberal reforms, move to market tariffs and pension reform.

Banerji added that this is exemplified by the authorities’ ability to maintain critical social assistance and pension payments even as the war has squeezed its fiscal space.

“Maintaining this balance by continuing to realize opportunities that a more competitive market economy offers while strengthening the coverage and targeting of social assistance systems will be key to realize inclusive post-war growth that benefits all Ukrainians,” the World Bank representative said.