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The Role of Social Economy in Times of war and Post-war period in Ukraine – Statement of the Ukrainian Social Academy

According to the Ukrainian government, the losses from full-scale Russian aggression in the first three weeks amounted to 565 billion dollars. At the same time, 6.7 million Ukrainians became refugees within the country and another 4 million people left the territory of Ukraine. At the same time, most Ukrainian companies have temporarily ceased operations and 25% of them have ceased to exist at all. In this text, the Ukrainian Social Academy proposes a solution to economic and social problems by attracting the potential of a socially oriented economy. Read more below.

Russia’s war against Ukraine has caused one of the fastest-growing refugee emergencies in UN history. According to forecasts, the number of internally displaced persons in Ukraine may reach 6.7 million (compared to 854 thousand before the Full-scale War), 4.3 million of whom will need humanitarian rescue assistance. This is stated in the Office of the UN High Commissioner for Human Rights report on Wednesday, March 9, 2022.

The UN estimates that in addition to 6.7 million internally displaced persons, there will also be about 4 million refugees from Ukraine abroad, compared to just 53,000 before the war. Those are people who need support with new homes, jobs, and first humanitarian aid.

According to the most recent data provided by the ‘Advanter Group’, collected during the period of war, 79% of them temporarily stopped their activities. 25% of companies have already been closed. Only 19% are in process or have already relocated their business to the West of Ukraine or abroad. 30% did not manage it because of not enough time. For the first two weeks of the war, the small and medium-sized businesses have lost more than 60 bil USD.

All these demonstrate the issues of increasing unemployment in Ukraine in general, worsening the well-being of the IDPs, overload of social service providers and social infrastructure in local communities and regions hosting IDPs, economic crisis due to closing the SMEs. As a response to the ongoing social and economic issues, we see the potential of a social economy that can address the social issues with IDPs’ reintegration and economic renewal of the country in times of war and further in a post-war period.

In this regard, we have elaborated on the five priorities supporting the Ukrainian social economy:

1.    Strengthening capacities of social economy enterprises that provide immediate humanitarian support to those suffering from the war. Under this initiative, we foresee the initiatives providing equipment, raw materials, and other resources for businesses to let them stay active, produce goods and services, keep jobs, generate income and stay profitable to be able to provide any humanitarian support needed in their regions. This will also allow social businesses to provide more products and get new employees among the IDPs. This priority also foresees professional consulting to existing social enterprises on rebuilding business models, anti-crisis management, investment attraction, and operations.

2.    Fostering the creation of new social enterprises with the purpose of job creation for IDPs. This foresees the activities of accelerators and incubators as well as the creation of business development programs for IDPs, ex-combatants and their families. This will contribute to the social and economic reintegration of IDPs in their new communities and inhibit migration.  Fostering new business creation will also serve as complementary activities to the state actions in support of business – reduced taxes, simplified procedures for business registration and relocation.

3.    Creating access to financial resources. Lack of access to finance is one of the main obstacles to micro and small social economy enterprises in a peaceful life. In times of war, this need is more critical. In this regard, we see the opportunities to create funds to grant access to finances for re-starting existing enterprises and for launching new social startups among volunteers, IDPs, and other spontaneous initiatives that can become financially sustainable and then profitable.

4.    Building an ecosystem for developing the social market economy through building new supply chains, new partnerships, reaching new markets including the international ones, and new clients for Ukrainian enterprises, especially the social economy enterprises.

5.    Fostering community development through social economy entrepreneurship. To ensure effective and peaceful co-existence and further integration of the IDPs in new communities, there is a necessity of new programs for integrating IDPs with local communities and the capacity building of social service providers and local authorities. We see the crucial role of social economy and social entrepreneurship especially in these programs since it ensures social and economic benefits to the local communities.

The Ukrainian Social Academy, being an ecosystemic player in the field of social entrepreneurship and social economy in Ukraine also expresses its willingness and readiness to take the responsibility for implementation of this action plan in Ukraine in partnership with other peer organizations, public authorities, business, the nonprofit sector, and other stakeholders.