1. Background Information on the Project:
The ongoing military aggression of Russian Federation against Ukraine has had a direct and highly negative impact on social cohesion, resilience, livelihoods, community security, and the rule of law throughout the country. Recognizing the need to urgently address reconstruction, economic recovery and peacebuilding needs in areas affected both directly and indirectly by the war, the government of Ukraine requested technical assistance and financial support from the international community.
The United Nations Development Programme (UNDP) has been present and active in eastern Ukraine for the past decade, even prior to the conflict in 2014, with a focus on community development, civil society development, and environmental protection. Work on addressing the specific, conflict-related development challenges started in 2015 through the United Nations Recovery and Peacebuilding Programme (UN RPP), building on this earlier engagement and establishing new partnerships. Today, the UN RPP is being implemented by four United Nations agencies: The United Nations Development Programme (UNDP), the UN Entity for Gender Equality and the Empowerment of Women (UN Women), the United Nations Population Fund (UNFPA) and the Food and Agriculture Organization of the United Nations (FAO).
The programme is supported by 12 international partners: the European Union, the European Investment Bank and the governments of Canada, Denmark, Japan, the Netherlands, Norway, Poland, Sweden, Switzerland, UK and USA.
The UN RPP was designed to respond to, and mitigate, the causes and effects of the conflict in eastern Ukraine. It is based on the findings of the Recovery and Peacebuilding Assessment (RPA) and is aligned to the State Target Programme for Recovery, as well as to the two oblast (Donetsk and Luhansk) development strategies up to 2020. UN RPP is also fully adjusted to the humanitarian-development nexus. It is an integral component of the UNDP Country Programme and is therefore fully aligned with the United Nations Partnership Framework (UNPF).
The programme’s interventions are grouped under the following key programme components, which reflect the region’s priority needs:
- Component 1: Economic Recovery and Restoration of Critical Infrastructure
- Component 2: Local Governance and Decentralisation Reform
- Component 3: Community Security and Social Cohesion
The Programme, which operates on the basis of a pooled funding arrangement, follows a multi-sectoral programme-based approach and is implemented using an area-based methodology. It is a unifying interventions framework for 12 projects funded by 12 international partners, and is worth over 80 million USD.
In October 2018, four UN agencies (UNDP, UN Women, FAO and the UNFPA) countersigned a new joint project document, funded by the EU. The overall objective of the project is to restore effective governance and promote reconciliation in the crisis-affected communities of Donetsk, Luhansk and Zaporizhzhia oblasts of Ukraine, thereby enhancing the credibility and legitimacy of local authorities in the government-controlled areas (GCAs) of the oblasts. It will contribute to peace building and prevent further escalation of conflict in Ukraine through achieving effective and accountable decentralization, gender-responsive recovery planning, and equal access to services, as well as enhancing community security and social cohesion.
This will be achieved through the pursuit of the following specific objectives:
1. Enhance local capacity for gender-responsive decentralization and administrative reforms to improve governance, local development and the delivery of services.
2. Stimulate employment and economic growth by providing assistance to Micro, Small and Medium Enterprises (MSMEs) development through demand-driven business development services and professional skills training.
3. Enhance social cohesion and reconciliation through the promotion of civic initiatives.
4. Support sectoral reforms and structural adjustments in the health, education and critical public infrastructure to mitigate the direct impacts of the conflict.
One of the main objectives of UN RPP is to foster economic revitalization of the war-torn areas of Ukraine and, specifically, stimulate employment and economic growth by providing assistance to MSME development through demand-driven business development services and professional skills training as well as restoration and strengthening institutional and educational infrastructure needed for effective functioning of agriculture and non-agriculture sectors of regional economy.
In 2015-2021, some 4,300 new jobs were created in Ukraine with the support of UN RPP and the governments of Japan, Poland, the UK and the Czech Republic. Some 1,400 of them are in Donetsk and Luhansk oblasts. 1461 MSMEs were supported through business grants programme. The variety of fields and locations covered by the programme is impressive.
Russia’s invasion of Ukraine have triggered economic disruptions at four levels: direct, blowback, spillover, and systemic. Ukraine’s economy is expected to shrink by an estimated 45% this year, although the magnitude of the contraction will depend on the duration and intensity of the war, according to World Bank[1]. Already, the war has led to thousands of civilian casualties and driven millions of Ukrainians to flee to neighboring countries, with millions more on the move internally.
On 9 May, Ukraine’s government reported that the country loses USD 170 million every day due to cut off from access to the sea and the national export capacity had been more than halved[2]. The country’s four seaports in the Programme’s target areas in Donetsk, Kherson, and Zaporizhzhia oblasts are being occupied by the Russian forces (namely, the ports of Berdiansk, Kherson, Mariupol, and Skadovsk).
The exact magnitude of the contraction will depend on the duration and intensity of the war, and the levels of destruction of productive capacity, damage to arable lands, and labour supply. The UNDP analysis also suggests that development setbacks for Ukraine will be significant, including increased inequalities and poverty rates; the country’s economy, its social fabric, and the environment will also suffer. Eighteen years of socio-economic achievements in Ukraine are at risk, and to mitigate such dramatic development setbacks, an effective humanitarian-development-peace nexus approach will be critical including the strategic interventions to increase resilience of MSME sector. According to Ukraine’s Ministry of Economy, as of late April 2022, the government has processed more than a thousand applications for the relocation of businesses from the areas under active military hostilities[3]. At the same time, as of November 2021, there were 31400 active enterprises in Donetsk Oblast and 14801 in Luhansk Oblast[4]. According to a survey conducted by the European Business Association[5] between 11 and 14 of March, among Small and Medium Enterprises (SME) representatives in Ukraine, 42% of all small businesses are not operational anymore and 31% have suspended their operations with plans for resumption in the future. Similarly, the results of the Kyiv School of Economics survey conducted on 22 March 2022, showed that 86% of companies slowed down, reduced, and even stopped their activities, while the estimated total economic losses from the war were up to USD 600 billion as of 2 May 2022[6]. Thus, there are over a quarter MSMEs still operational in the GSAs of Luhansk and Donetsk oblasts or those who moved to the safer areas and are in urgent need of operational consulting and support in reintegration in the host communities.
To support MSMEs producing essential products and services, create new business opportunities for entrepreneurs relocated from the war-affected regions, and facilitate their access to new markets, UNDP seeks for a highly qualified and experienced Ukrainian professional for the position of the National Consultant on provision of coaching services for MSMEs on access to the European Union (hereafter – EU) markets during crisis times.
[1] Russian Invasion to Shrink Ukraine Economy by 45 Percent this Year https://www.worldbank.org/en/news/press-release/2022/04/10/russian-invasion-to-shrink-ukraine-economy-by-45-percent-this-year
[2] Prime Minister of Ukraine and President of the European Council coordinated joint steps to solve the problem of exporting Ukrainian agricultural products https://www.kmu.gov.ua/en/news/premyer-ministr-ukrayini-ta-prezident-yevroradi-skoordinuvali-spilni-kroki-dlya-rozvyazannya-problemi-eksportu-ukrayinskoyi-agroprodukciyi
[3] Business Relocation: More than 200 businesses have resumed operations in safe areashttps://www.me.gov.ua/News/Detail?lang=uk-UA&id=b0867fbf-b443-41f0-a10d-4a369f5c304b&title=RelokatsiiaBiznesu-Ponad200-PidprimstvVidnoviliSvoiuRobotuUBezpechnikhOblastiakh
[4] State Statistic Service of Ukraine http://www.ukrstat.gov.ua/operativ/operativ2022/kap/kap_ue_22.xls
[5] A quarter of small businesses in Ukraine have already exhausted their financial resources https://eba.com.ua/en/finansovi-rezervy-chverti-predstavnykiv-malogo-biznesu-vzhe-vycherpani
[6] Ukrainian business expects from the government tax holidays https://kse.ua/about-the-school/news/naybilshe-ochikuvannya-biznesa-vid-uryadu-sogodni-podatkovi-kanikuli
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