Ukraine’s economy could lose $113 bln if forced migrants do not return home – Economic Recovery Center

The presentation of the study "Project on the development of human capital in Ukraine: facilitating the return of forced migrants" and a panel discussion discussing possible further actions to develop a policy for the return of Ukrainians from abroad took place on July 6.

The event organizers are the Economic Recovery Center (ERC) and NGO EasyBusiness, with the support of WNISEF. This is the second ERC event in the "Recovery Analytics" series of events.

Between 3.8 and 4.7 million people were forced to leave their homes to live abroad, excluding the aggressor countries. Around 1.4 million of those people are of working age. Ukraine needs to have them return to achieve quick and long–lasting economic growth: to grow at a rate of 7% annually, Ukraine needs to draw in between 3.1 and 4.5 million people in the labor force by 2032 – even if some of the forcibly displaced choose to return home. Over time, the desire of displaced people to return decreases due to their integration into receiving countries. More and more Ukrainians find employment abroad, send their children to local schools and kindergartens, and undergo vocational training to find a job there.

"If we do not start creating conditions for the return of forced migrants now, Ukraine may lose up to $113 billion of GDP in 10 years (in 2021 prices), which may also mean a loss of about $45 billion in tax revenues. This is a significant figure, considering that in 2022, according to the Ministry of Economy, the drop in GDP amounted to 29.2%," says Dmytro Lyvch, Chairman of the EasyBusiness Board, head of the analytical department of the Central Economic and Trade Center.

According to the Deputy Minister of Economy of Ukraine, Tetiana Berezhna, the issue of returning Ukrainians is a task "for yesterday."

"That is why the government is actively working on developing a policy for the return of Ukrainians. We are studying the experience of the Aliya agency, which deals with the return of Jews to Israel, and we are analyzing what we can use in our situation. All relevant structures are working in coordination."

According to Ella Libanova, director of the Institute of Demography and Social Research named after M.V. Birds of the National Academy of Sciences of Ukraine, about a third of forced migrants will definitely return to Ukraine. At the very least, this is evidenced by the fact that 200,000 men crossed the border with Ukraine at the beginning of the full-scale invasion – knowing that they would not be able to leave, they returned to protect their families and their country. She also believes that the work should be conducted at the level of the government and the level of every Ukrainian – it is necessary to communicate with colleagues, friends, and relatives who have left so that they do not feel separated from Ukrainian society.

According to Hleb Vyshlinsky, director of the Center for Economic Strategy, it is necessary to develop a policy for the return of Ukrainians home using the segmentation method. That is, based on the reason for the departure of each of them – the desire to protect children, the loss of a home, the occupation of their native place, or the lack of employment opportunities in Ukraine.

According to the EasyBusiness study, it is necessary to build a policy for the return of forced migrants in three directions:

• Analytical and communication work should become the foundation in the process of voluntary return of forced migrants. Ukraine needs to cooperate with other countries and establish effective communication with migrants already now to realize its own interests in the return of citizens.
• The second direction of work, which can take place in parallel with the first, is the provision of basic needs. That is, the reconstruction of housing and infrastructure is already underway today, and the government is working on the development of the labor market.
• The third direction is the introduction of incentives.

As noted by Yaroslava Z. Johnson, President and Chief Executive Officer (WNISEF), the presented research lays the foundation for developing an effective policy for returning forced migrants to Ukraine.

For reference:

You can get acquainted with the full version of the study at the link.

It should be noted that the Cabinet of Ministers [Ukraine's government – ed.] adopted a resolution specifying how to assist internally displaced persons.

Persons who stay abroad for 45 days without valid reasons will not be considered internally displaced persons and will be deprived of state benefits from August 1.