Ukraine: Household Economic Resilience Assessment - Government-controlled areas of Donestk and Luhansk oblasts, April 2021

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In early 2014, Eastern Ukraine saw the beginning of an armed conflict between the Ukrainian government and nonstate armed actors from the self-proclaimed Donestsk People’s Republic (DPR) and Luhansk People’s Republic (LPR). The outcome of the war was the separation of the Government controlled areas (GCA) and the Nongovernment controlled areas (NGCA), a demarcation that cut through the socio-economic fabric of both sides. According to the 2020 Humanitarian Response Plan (HRP), it is estimated that more than 3,4 million people divided by the contact line in GCA and NGCA are in need of humanitarian assistance and protection.

Ukraine reported the first case of COVID-19 on March 3, 2020. After implementing an extended lockdown, Ukraine switched to an adaptive quarantine system, with localised measures in areas of high-incidence of the virus. One year after, in January 2020, Ukraine passed the one million confirmed cases threshold. The economic and social pressure of COVID-19 could have a long term impact on the economic development of Ukraine, with a possible reduction of the national gross domestic product (GDP) by -11.2% by the end of the year due to the closure of manufacturing, retail trade and transportation sectors.

The COVID-19 could disproportionally affect Eastern Ukraine, amplyfing pre-existing vulnerabilities due to the ageing population and the economic decline from the ongoing conflict. Moreover, the health crisis could turn into an economic crisis, putting a further strain on the access of conflict-affected population to adequate livelihoods, and basic food and non-food items in the immediate future.

In order to fill the information gaps surrounding the potential impact of COVID-19 on a population already affected by conflict in Eastern Ukraine, REACH Initiative (REACH) facilitated a household economic resilience assessment, with support from the United States Agency for International Development (USAID) through the Bureau for Humanitarian Assistance (BHA) and in coordination with the Food Security and Livelihood Cluster (FSLC) partners in Ukraine. The exercise aimed to provide accurate information on who is most in need of assistance as a result of COVID-19 and conflict compounded crises and to provide humanitarian partners relevant information about the pre-winter material depravation of households living close to the contact line, coupled with households’ post-winter status, identifying the coping strategies that strenghtened their resilience.

The assessment was conducted in three separate phases:

  • A comprehensive secondary data analysis aimed to determine household-level vulnerability in a compounded conflict and COVID-19 context through identifying the socio-economic and demographic characteristics of households at risk of relative poverty. The analyis is built on data collected for the 2020 GCA Multi-Sector Needs Assessment (MSNA). The factsheet is available online.

  • A pre-winter comprehensive household economic resilience assessment covering six strata based on level of urbanisation (“large” urban areas, urban areas and rural areas dissagregated by Donetsk and Luhansk oblasts) - presented in detail in the current publication. The sampling strategy allows an analysis by livelihood zones, coming from the assumption that urban centres are more affected by restrictions related to limiting the spread of COVID-19 and changes in the households’ economic security.

  • A three strata post-winter household survey planned to be completed in March 2021 covering “large” urban areas, urban areas and rural areas that will measure the post-winter macro-level change in the economic security by the level of urbanisation. Findings, including pre-winter and post-winter comparisions will be made available online on the REACH resource centre.

The second phase of the assessment, the pre-winter survey, was implemented between November 23 and December 10, 2020 and comprised a statistically representative weighted household survey conducted with 2,390 households covering six strata: Mariupol, Donetsk urban area, Donetsk rural area, Luhansk “large” urban area, Luhansk urban area, and Luhasnk rural area. Unless otherwise noted, findings are statistically significant at 95% confidence level and 5% margin of error for each stratum.

Due to the COVID-19 epidemiological situation in Ukraine, REACH collected data through remote telephone surveys with randomly selected respondents among households who had a previous interaction with REACH and consented to be contacted again or from randomized contact details shared with consent by local public authorities or local partners. As such, this could result in an underrepresentation of households who did not own a phone, did not have a contact with either REACH, local authorities or local partners, or are in an area with limited phone signal. As a result, findings are not generalizable to the status of all GCA residents and indicator comparisions with previous assessments or secondary data should be considered indicative only.

Key findings

The assessment identified only a partial reported impact of the COVID-19 crisis, mostly related to a reduction of economic activities of households. Seven in ten households (68%) reported no impact of the COVID-19 on their household income. Notably, households in Mariupol strata were more likely to report at least one impact on their income of the COVID-19 related restrictions compared to other strata. All areas expressed a high variation of indicators related to economic security. Notably, households residing in Mariupol area seemed to express the highest levels of economic security on indicators related to level of income, access to liquidity to rely on in case of economic shocks or high levels of employment. On the other hand, households residing in Luhansk areas were found to be worse off in terms of economic security compared to other areas assessed.

Overall, a large proportion of households was found to have an “acceptable” food consumption score, with proportions comparable to findings from previous REACH assessments. However, households in Luhansk areas, notably in Luhansk “large” urban area, were more likely to be found as having poor or borderline food consumption scores compared to the other areas. In a similar note, households residing in Luhansk “large” urban area were more likely to report resorting to spending their savings (a stress level livelihood coping strategy) or reducing their healthcare expenditure (a crisis level coping strategy), compared to the other areas, in the 30 days prior to data collection. Households residing in Mariupol were found to have more favorable indicators related to food consumption or a lower proportion of households reporting reliance on livelihood coping strategies, compared to the other areas. The food consumption vulnerabilities seem to overlap with preexisting socio-economic and demographic vulnerabilities in each of the assessed area.

Households reporting using solid fuel were found generally to be prepared for winter (2020 – 2021), with residents of rural areas being more likely to report having enough fuel for the whole winter, compared to residents in urban areas. Four in ten households (39%) reported on being in the situation of not having enough fuel in the past winter (2019 – 2020). Two in ten households (21%) reported having received state support for winter by the time of the interview. However, since households are receiving state support for winter throughout the cold season, the actual proportion of households receiving support for winter could be higher. The monthly cost of utilities (including heating) in the 2020 – 2021 winter was found to be comparable to the monthly average amount paid in the past winter (2019 – 2020).

The assessment aimed to study the impact of the compounded conflict and COVID-19 crises on households living close to the contact line in Eastern Ukraine. First, results show that the COVID-19 crisis seemed to have a disproportionate impact on households living close to the contact line, with households residing in urban areas, being more likely to be affected than rural areas. However, high level of vulnerability is still affecting households in all areas, notably in every area in Luhansk oblast, where household residents in Luhansk “large” urban area and Luhansk urban area seem to have a worse food consumption than households residing in Luhansk rural area. A more resilience-focused humanitarian response could help in addressing challenges related to access to more nutritious food. Secondly, five out of six areas are characterised by an ageing population, which seem to influence the sources of household income. With a high proportion of retirees, households seem to have a high reliance on pensions. While this could be beneficial in terms of stability of income, the assessment revealed that the increase in income since 2019 did not seem to keep pace with the absolute increase in the reported food expenses. On the medium term, in the possibility of a sudden larger increase in food prices, this could lead to potential food insecurity leading to a disproportionate impact on more vulnerable populations. With the end of conflict nowhere in sight and multiple waves of COVID-19 worldwide, a more in-depth approach towards studying means to improve resilience of populations is necessary.