Ukraine running short of people

Ukraine’s manpower shortage is beginning to bite.

The same drain on personnel that’s weakened Ukrainian forces staving off Russia’s onslaught on the battlefield is also sapping the productivity of the war-battered nation’s factory floors, construction sites, mines and restaurants, according to Bloomberg.

The squeeze on labor has become one of the top concerns of businesses struggling to hire, with job searches taking up more of managers’ energy. In a time of war, wages are set to exceed their levels before Russia’s invasion in February 2022.

A mobilization law that went into effect last month is aimed at replenishing Ukraine’s military ranks with hundreds of thousands of troops. But the lack of able-bodied men and women is emerging as a burden for businesses large and small that make up the backbone of a wartime economy.

It’s a conundrum for Ukrainian President Volodymyr Zelenskyy, who is desperate to replenish his forces while ensuring that the shortage doesn’t damage an economy he needs to keep afloat.

“We are now in a war of attrition,” Ukrainian Deputy Central Bank Governor Sergiy Nikolaychuk said in an interview in Kyiv. “It is very difficult to choose between butter and guns.”

The problem will only intensify as the Russian invasion drags well into its third year and Kyiv is forced to fill a gap left by millions who have either fled the country, joined the army or fallen in battle. As Ukraine’s military struggles to hold the line against a fresh Russian offensive, its economy — which has lost a quarter of its output since the invasion began — risks being further weakened by the shrinking workforce.

Nikolaychuk said a collapse in economic output compared with 2021 was linked with a contraction of about 27 per cent in the available labor force from pre-war levels. In addition to an estimated more than six million people who fled the war, the vacuum has been exacerbated by men who’ve disappeared into a shadow economy of unregistered employees ducking conscription.

It’s a policy challenge that can’t be fixed with help from allies, who are dispatching ammunition and air-defense equipment. Manpower is a finite issue — one that gives Russia and its vast resources an advantage.