Remittances in War: How Money from Abroad is Helping Ukraine

Before the Russian invasion, Ukraine was the largest recipient of remittances in Europe and Central Asia with record-high inflows of USD 18.2bn last year, according to the World Bank. But in March and April, the National Bank of Ukraine recorded a 10 per cent decrease in the volume of private remittances sent to Ukraine, compared to the monthly average in 2020-2021. 

The primary reason is mass displacement of Ukrainians, including those who fled abroad and are hosted by their family members already staying outside Ukraine, experts explain. “We observed a significant decrease in family remittances transferred to Ukraine by Ukrainian migrants. We assume it can be related to the fact that these households decided that it would be easier if their family members leave Ukraine and stay with them,” said Yevhen Stepaniuk, the deputy head of the Secretariat of the Council at the National Bank of Ukraine.  

For those that have remained in Ukraine, however, remittances have continued to flow in and have played an essential role in the past few months.  Experts expect that the flow of private remittances to Ukraine will increase by 20 per cent, according to the World Bank, as millions of migrants and refugees will be driven to transfer funds to friends and family facing the economic impact of the Russian invasion. 
  

A new IOM survey revealed a severe livelihood crisis among displaced persons in Ukraine. Almost two-thirds of people who were employed before displacement have lost their jobs and one in five displaced people reported having no income. If, as seems likely, the war becomes protracted, 90 per cent of the country’s population risks facing poverty and extreme vulnerability, according to the United Nations Development Programme (UNDP).  

People like 57-year-old Valentyna Husaruk, a migrant worker in Italy, and her family in Ukraine. Valentyna left the country 22 years ago and has settled in Italy. In the past months, her home region of Kherson in the south of Ukraine, known for its vast farmlands and endless wheat fields, has been taken under the control of the Russian forces, devastating lives of the local population and profoundly affecting their livelihoods.

Just before the war, anticipating the worst-case scenario, Valentyna’s daughter Oleksandra and four-year-old granddaughter Solomiia moved to Milan where they remain safe. However, her expanded family, including her elderly mother and a sister with a husband and children, now live in the occupied areas near the town of Nova Kakhovka. Contacting them is becoming more and more difficult as access to internet and mobile phone connections are regularly disrupted. 

Throughout her 22 years in Italy, Valentyna has worked as a babysitter, an interpreter, a Russian teacher and a cultural mediator. She has never stopped supporting her family with money and goods. This assistance has become even more vital as needs are growing in the occupied areas amidst uncertainty over the future of the region. “I am glad that in these critical times, I can support my family at least financially. These remittances help them to cover basic needs, and also to support others in the community.” 

“Millions of families in Ukraine risk losing a lifeline. While humanitarian and development actors are addressing the most urgent needs of war-affected Ukrainians, support provided by Ukrainian diaspora will be crucial in these times. It is important to strengthen measures that would facilitate remittance flows to Ukraine, such as decreasing costs for senders and recipients, promoting the use of digital tools and developing collaboration between public authorities and diaspora groups for financing of community support initiatives,” said Anh Nguyen, Chief of Mission at IOM Ukraine. 

The Ukrainian diaspora also helps those who were forced to flee from the war to integrate in their host communities. As part of her work at the Ukrainian diaspora association “Ukraine Più Milano”, Valentyna organizes evening classes for Ukrainians who want to learn Italian. The Association also promotes cultural exchange and has recently opened a second Ukrainian library in Milan.  

“Staying close with each other helps us during this crisis. But the majority of Ukrainians that I have met are determined to return home, including my daughter and granddaughter. They want to reunite with their families and re-build their lives in Ukraine. Even now, when the risks are still extremely high, people are returning, because they feel this is where they belong,” says Valentyna.