By Murad Rakhimov | 2024-10-30

KYIV -- As Russia's illegal invasion of Ukraine approaches its third anniversary in February, Kyiv is implementing measures to help its citizens financially.

According to the country's approved draft budget, 419.2 billion UAH (€9.4 billion) will be earmarked for social protection in 2025.

The projected expenditures will help ensure living wages for struggling families.

The budget includes plans to spend 127.9 billion UAH (€2.9 billion) to help those dealing with difficult life circumstances, children and low-income families. The recipients comprise two separate groups: 4.5 million individuals and 230,000 families.

Kyiv also plans to aid those with disabilities -- including through rehabilitation and free prosthetics -- and veterans.

Fighting off an invasion, Kyiv expects to spend 26.3% of its GDP on defense and internal security in 2025. As a comparison, the United States devoted an estimated 2.9% of GDP to defense in 2024.

The government will also index pensions to inflation starting on March 1, if the new draft budget takes effect. It would raise the minimum monthly salary to 8,000 UAH (€179.1) and the minimum hourly wage to 48 UAH (€1.07).

The state also raised the minimum unemployment benefit from 1,000 to 1,500 UAH (€22.4 to €33.6) per month. In wartime, the payment of this benefit may not exceed 90 calendar days. Displaced persons are to receive 2,500 UAH (€56) per month.

"Many people are now finding that their income keeps shrinking. It's very hard to live," Talai Sary, an entrepreneur from Kyiv, told Kontur. "No one knows when the war will end."

Set back 15 years

The war has set Ukraine back about 15 years in its efforts to combat poverty, according to Arup Banerji, the World Bank regional country director for Eastern Europe.

An additional 8 million Ukrainians have fallen below the poverty line compared to before the war, he told Interfax-Ukraine in February 2023.

However, these figures would have been much worse if not for reforms Kyiv had implemented in 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," Banerji said.

Even in wartime, one can see Ukraine's economic promise, said Alisher Ilkhamov, director of the London-based organization Central Asia Due Diligence.

He recommended Ukraine "create a tax haven ... to attract business and capital from around the world," Ilkhamov told Kontur.

Another tool is the $300 billion (€278 billion) in Russian assets that are frozen in the West. Ukraine has already begun to receive money from the interest earned on these assets.

"But the most important thing is that Ukraine needs ... to create an institutional environment that is most conducive to economic activity," Ilkhamov said.

Helping those in need

Kateryna Tatsii's family provides an example of how Kyiv's social protection program is helping Ukrainians survive deep poverty.

Before the war, Tatsii worked as a journalist at a newspaper in Kupiansk city, Kharkiv province. She lived there with her husband, Andrii; their son born in 2018; and twins who were born in 2021.

On February 24, 2022, she sent her husband off to war. Three days later, Russian troops occupied the city.

"I was alone with three small children under the occupation. It was very hard," Tatsii told Kontur.

At the time, Tatsii was bottle-feeding her twins, and the situation deteriorated. Her baby food quickly ran out. The family lived without electricity or natural gas.

When her mother died, she could not even go to the funeral.

The "combat allowance" Andrii earned helped them survive. In September 2022, a Ukrainian counteroffensive liberated the city.

"I didn't think my children and I would survive," Tatsii recalled.

At one point, the family was almost killed by a shell exploding 10 meters from the house.

In February 2023, the family moved to Shevchenkove, a village 30km away from Kupiansk.

Now Tatsii's biggest expense is food. Her family also has to pay for utilities but is in debt for them. Fortunately, they live rent-free in her parents' former house.

"And the kids are growing," Tatsii said. "They like to draw and use Play-Doh, and they love building sets and books. But all those things cost money."

The Tatsiis bake their own bread and have a vegetable garden to help reduce food costs, but this year came with severe frosts, a drought and a bad harvest.

"We won't be able to provide vegetables for ourselves even for the winter," Tatsii said.

The family's salvation is humanitarian aid: food packages containing cereals, canned goods and flour.

Too many needs, not enough money

Their six-member household (Tatsii, her husband, her mother-in-law and three children) has cumulative pensions and benefits of 30,600 UAH per month (€684) while the draft budget is pending.

The family receives 15,000 UAH (€337) per month for having three adult and three minor displaced persons (2,000 UAH or €45 per adult and 3,000 UAH or €67 per child).

Tatsii, who has been disabled since childhood, receives a 3,000-UAH (€67) monthly pension. Per month, her husband's military pension is 9,200 UAH (€207), while her mother-in-law's pension is 3,400 UAH (€76).

In addition, Tatsii works part-time on local radio for 4,500 UAH (€100) per month.

"If you calculate our budget and allocate all the expenses, we're poor," Tatsii said.

"We scrimp. We buy clothes only for the kids. I can't allow myself that luxury. The adults manage mainly with secondhand things from the humanitarian supplies," she said. "That's the reality for many ordinary families."