How real is this practice of helping citizens in a difficult period in Ukraine.
Unconditional basic income is the amount that is paid to citizens from the state budget in a certain amount and monthly. We found out whether the government can introduce such a practice in Ukraine during the period of hostilities, reports the Chronicle.info with reference to Focus.
Ukraine is considering the possibility of introducing an unconditional basic income so that people receive a fixed amount for a long time. Oleg Ustenko, Adviser to the President of Ukraine on Economic Affairs, said this.
«Such payments are easy to introduce and difficult to cancel», says Dmitry Boyarchuk, Executive Director of the analytical center «CASE Ukraine&# 187;. How real is this practice of helping citizens in a difficult period in Ukraine.
Where to get money for an unconditional basic income: sanctions will help
Oleg Ustenko notes that Ukraine hopes to receive compensation from Russia's frozen foreign exchange reserves. We are talking about $ 300 billion, and the arrested assets of Putin and his entourage can also become a source for paying citizens the amount of unconditional basic income.
This statement caused some skepticism among economists interviewed by Focus.
«Since the right of private property is respected in the West, such seizures can only go through the courts. I think it's a long process. Theoretically, the frozen $300-400 billion can be used. In practice, nothing can work out, or it can turn out in a much smaller volume. The state of Ukraine cannot guarantee something», says Daniil Monin, an expert on economic programs at the Ukrainian Institute for the Future.
Dmitry Boyarchuk warns: whatever the amount of compensation, they will eventually run out: «These are one-time receipts. It can be assumed that they will last for many years. But this is the same as planting a time bomb under our economy».
In the matter of donated money, there should also be a clear deadline when the payment of such funds by the state will be completed. For example, the president of the investment group «Univer» Taras Kozak proposes to clearly limit the period of payment of unconditional basic income: until the end of the war and plus one more month.Presidential adviser Oleg Ustenko said nothing about the amount of payments to Ukrainians as an unconditional basic income. International experience in this matter is too mixed, and experts disagree on this matter.
Taras Kozak says that in Ukraine, if an unconditional basic income is introduced, then the amount should be less than one that will cover all the expenses of a citizen within a month. He proposes to revise the cost of the consumer basket and rely on the amount received after that. According to him, this is more than 4 thousand UAH.
«I’m getting 5,000 UAH», says Taras Kozak.
Dmytro Boyarchuk agreed to theorize about how much money could become an unconditional basic income in Ukraine to cover basic needs person: & # 171; I think we need to talk about the average salary, 15 thousand UAH. On the minimum wage, maybe you can somehow live if there is subsistence farming. But if a person lives in a city and has children, I think that this is problematic», says Boyarchuk.
Recall that from January 1, 2022, the minimum wage in Ukraine is UAH 6,500.
Daniil Monin says that it would be better to support financially not everyone, but those who need it: « to the basic income for those who cannot find a job — as, for example, in March, when 6.5 thousand hryvnias were given to those who lost their jobs. I can support such an unconditional basic income plan. But not on a national scale».
Oleksandra Betliy, an expert in the field of public finance, also believes that the state should pay attention to an effective program of targeted social assistance, and not distribute money to everyone.
Risks of free cheese: an unconditional basic income as a threat to the economy
Introduction of an unconditional basic income in Ukraine will ambiguously affect the country's economy as a whole, Taras Kozak believes. He and other experts warn that if people earn a regular income without effort, they will lose interest in work.
«There are a number of pitfalls and dubious moments. On incentives: if there is a basic income, why work? Labor and the involvement of labor in the country's economy is one of the foundations. It’s not for nothing that everyone is now so worried that the labor force is leaving the country», — emphasizes Dmitry Boyarchuk.
Economists confirm that an increase in income will lead to an increase in consumption, and this seems to be good for GDP, but not everything is so simple.
«Growing consumption is good. But if this growth in consumption is not supported by the growth of domestic production, it turns into an increase in imports and, accordingly, into an increase in the trade deficit. As a result, it all turns into devaluation», Boyarchuk warns.
Daniil Monin also has concerns about the growth in consumption: «See, what a problem: I went to the store to buy Ukrainian pasta — but they are not. We need to raise our own production. Otherwise, they will give us money — and they will go to import. Thus, the economy does not develop».