Feedback

Ukraine to introduce economic passports: What does the world practice say?

Author : 112.ua News Agency

Source : 112 Ukraine

Ukrainians, upon reaching the age of majority, will receive income to personal accounts for the use of subsoil
09:24, 6 December 2021

vlasno.info

President Volodymyr Zelenskyy announced the introduction of the so-called economic passport:

"I want to thank the Verkhovna Rada of Ukraine - yesterday we voted a very important tax law No. 5600, which increases rent: payments for the use of natural resources. We will direct these funds to our children. Therefore, by December 10, for the first time in history, I will submit a bill on an economic passport Ukrainian,” he stated.

It is planned that children will be able to use these savings to get an education in Ukraine or buy a home.

While everyone is waiting for the text of the bill and further details of this innovation, we will consider what this initiative means, whether something similar exists in the world and how exactly other countries share their income with the population.

Related: Why introducing economic passport is a bad idea for Ukrainians?

Where did the idea of ​​unconditional basic income come from?

The idea of ​​"giving money to people just like that" was first proposed by philosophers in the 16th century; Milton Friedman, Friedrich von Hayek and others racked their brains over it. The first experiments took place in the twentieth century and continue now all over the world: in Africa, Brazil, Mexico, India, Iran, and the USA. The map can be viewed here:

Open source

This is the minimum amount to replace unemployment benefits or save money. With a few exceptions, basic income programs offer money to small groups of a few hundred or a few thousand people, not an entire nation. A Finnish experiment in 2017 showed that people continued to work and perceived this money as a "bonus".

Proponents argue it's a way to end poverty, boost the economy, and tackle the coming era of unemployment. Critics fear that the payments will discourage people to work and create a stratum of "young unemployed retirees."

Where does the money come from? Some countries may allow oil payments to be paid, but for others, the solution is to raise taxes. Also in experiments, some pay an unconditional basic income in experiments from contributions to private foundations.

UAE experience

This is perhaps the most famous example of sharing income from the use of mineral resources with citizens. With the discovery of oil and natural gas reserves, the population moved from poverty to one of the highest income levels in the world.

The compensator for the formation of children's capital is the percentage of oil sales transferred to the budget. By the 18th birthday, on average, about $ 100,000 accumulates on the accounts of citizen children. The level of payments is divided into several categories: a UAE citizen can count on $ 19,000 at a wedding (both must be citizens), a large subsidy after the birth of a child, and financial assistance to create a family. Other benefits: tax-free income, subsidized education, healthcare, pensions from age 49.

Related: Zelensky announces introduction of "economic passport" for Ukrainians

But there is a condition - the child must be a citizen of the country. And citizenship is not offered to foreigners in the Gulf countries, it cannot be obtained by everyone by birth.

Citizenship was offered only to wives and children of Emirati men. Children of Emirati women who are married to foreigners do not automatically acquire citizenship (must apply, which can take years).

Norway

Norway has a savings account set up from scratch in 1998 with oil and natural gas revenues.

Norway created the fund because the electorate voted to preserve some of the profits from oil and gas for future generations. The country opens accounts for newborns and thus distributes oil revenues.

Oil and gas are limited resources and will eventually run out. Instead of spending all the wealth created by these resources on this generation, they chose to invest so that future generations can benefit as well. The fund is now 2.5 times the country's gross domestic product. The government is allowed to spend 3% of the fund per year.

Related: Ukrainians to get up to $20,000 on economic passport accounts

Alaska

The state has paid dividends to every citizen annually since 1982 from the Permanent Fund, funded by oil revenues.

The amount paid can vary from $ 1,000 to $ 2,000 per person and depends on the oil price at any given time period. The dividends did not affect employment in general, people continued to work.

There have been several experiments with basic income in the US, but most of them were short-lived. Therefore, Alaska is an exception.

Kuwait

Kuwait is an emirate in the north of the Persian Gulf bordering Saudi Arabia and Iraq. Kuwait has a fund for Future Generations - as of the end of last fiscal year (March 31), it was $ 700 billion.

A bank account is set up for every newborn citizen. The state credits there the initial amount, approximately equal to $ 3 thousand. In the future, the account is increased due to interest.

Saudi Arabia

Citizens are co-owners of the country's resources (oil) and have the right to share benefits and income.

The state transfers the amount at the birth of a child, and also finances education in any country. There are 9 programs to support citizens with low income, the state finances the purchase of furniture, food, insurance.

Related: Zelensky's amnesty. Ukrainian to legalize "money under a mattress" and envelope wages?

Why hasn't the idea been realized in other countries?

In 2016, the Swiss abandoned the introduction of payments in the amount of 2,250 euros in a referendum. Thus, 80% of the votes were against the decision. Among the reasons: those who earn more would have to pay the poor from their taxes, unwillingness to provide for migrants and the unemployed.

In 2017, the Canadian government launched a basic income project in 3 cities: Hamilton, Lindsay and Thunder Bay. It was supposed to help 4,000 poor people and last 3 years. But then a new government came to power, in 2018 they canceled the project.

Topics:
Система Orphus

If you find an error, highlight the desired text and press Ctrl + Enter, to tell about it

Comments
see more