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Ukraine's Refugee Crisis and the Global Economy

Vladimir Putin declared war on Ukraine on the 24th of February 2022. In only one month, the war has created the worst refugee crisis in Europe since World War II. These refugees need basic means of survival, such as food, water, shelter and safety, as well as educational or employment opportunities. Needless to say, among several other things, this group of people requires immediate considerable funding from the international community. But it doesn't stop there. Here with more on this, and the impact of this refugee crisis on the global economy, is Perspectoverse’s Ishana Kandhari.


As of 25th March 2022, the war has created over 10 million refugees. 3.7 million have fled the country, while another 6.5 million have been internally displaced, according to data provided by the International Organization for Migration (IOM). Their research also suggests that women constitute more than half this number. The United Nations Children’s Fund (UNICEF) has estimated that the war is creating one child refugee every second. Women and children are in more vulnerable positions due to obstacles faced in terms of legal, job and reproductive security, as well as being more at risk for violence or human trafficking.

Approximately 60% of the migrants have escaped to Poland, while the others have predominantly fled to Romania, Moldova, Hungary or Slovakia. As of 25th March, Poland has welcomed over 2.2 million refugees, making it the world’s second-largest refugee host. This has increased the Polish population by nearly 5%. This can have an extremely positive impact on the country’s economy. The education level and rate of employment in Ukraine is high, and most of the refugees are well-equipped to take up jobs, making it relatively easier and faster for them to find employment opportunities and improve their host countries’ national output.

Poland also happens to have a rapidly declining population, creating a shortage of workers in their labour force. However, the influx of refugees could add to their workforce, consequently speeding up the growth of the country’s economy.

However, along with this advantage, come various problems. Warsaw has warned that Poland would have to spend up to 24 billion euros in 2022 itself, to host Ukrainian refugees. Costs not only include providing them with food, water and housing, but also integrating them into the country’s educational and healthcare sector. Currently, they have set up a 1.75 billion euro fund to help Ukrainian refugees. They have appealed to the European Union (EU), asking them for more funding than what is currently being provided.

Moldova has taken in over 400,000 refugees since the beginning of the war. They have been providing Ukrainians with hot meals at the Palanca border crossing. However, the refugees arriving are being given the option to leave immediately, because Moldova is the fourth poorest country in Europe. Although they are providing help, they do not have adequate resources to look after the multitude of Ukrainian individuals seeking refuge from their country.

Maia Sandu, the President of the country, has requested international assistance for providing support to these refugees. The United States of America has loaned 30 million dollars to Moldova, while the European Union has pledged 90 million euros. However, several questions still arise about how the EU will be able to afford such high costs.

The European Union has pledged 500 million euros in humanitarian assistance to Ukraine. However, estimates show that the total cost for looking after refugees, including housing, transportation, feeding and integrating them into a country’s infrastructure will require over 30 billion dollars in 2022 alone.

Ukraine has asked for 1.4 billion dollars under the International Monetary Fund’s (IMF) Rapid Financing Instrument. Europe is still recovering from the economic damage caused by the Coronavirus pandemic, including problems with the supply chain and high inflation. The IMF has warned that the growth of the global economy will stagger due to the effects of rising prices of basic essentials such as food and fuel. The United Nations World Food Programme has reported that Ukraine grows enough food to feed 400 million people. During the war, farmers may not be able to attend to their crops, causing devastating food shortages, affecting the whole world.

The European Union has activated a Temporary Protection Directive, which has never been used before, to help Ukrainian refugees. This initiative gives them the right to live and work in host countries for up to three years. However, this is a mere short-term solution. History has shown that refugee crises almost always extend to longer periods of time than initially expected. The EU will have to decide whether they would grant the refugees permanent asylum, as well as redistribute them to ease pressure on the dominant host countries.

Even after the ending of the war, Ukraine would need immense international support for several years. The damage that has been done to the country already amounts to over 100 billion dollars, and is only increasing. Day by day, the stakes get higher for not just these refugees, but even more so for the rest of the world, that sits and watches as all hopes of international peace come tumbling down.

International support is crucial, now more than ever.

Written by Ishana Kandhari

Illustrated by Rishita Banerjee

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