Gery Petrova, Author at BIEN — Basic Income Earth Network

A European Basic Income pilot project would be good for Bulgaria

by Gery Petrova | Aug 3, 2020 | News, Opinion

The EU Commission has said from the 25th September 2020 signatures can be collected from EU residents in connection with a new European Citizens Initiative. If the European UBI family succeeds in gathering 1 000 000 signatures, divided among a minimum of seven countries, then ECI delegates will be able to present a proposal to the European Commission which, if approved, would hopefully convince EU governments to start paying Basic Incomes to all of their citizens.

Bulgaria suffers from a number of problems, and in particular population loss and economically active citizens leave the country for better opportunities elsewhere. Angel Petrov writes:

The population decline carries long-term economic costs. Over time, a shrinking workforce becomes unattractive to investors and unable to subsidise the pension and healthcare needs of an ageing population.

Poverty and inequality are significant problems in Bulgaria. Bulgarian people currently receive the lowest income in the European Union while the cost of living is increasing. This is paradoxically occurring during 25 years of steady rise in productivity and mostly rising GDP. The Gini coefficient (2019) is 40.8 and rising.

The Corona crisis measures

All government ‘aid’ described below is highly bureaucratised and full of conditions, and in addition the funds are often paid late due to the complicated and sluggish administrative processes citizens are subjected to. The aid consists of:

Cash payments of €192 only for families with 14 year old children for the duration of the state of emergency (2 or 3 months)
over 2 months the unemployment fund will pay 60% of the income of the employees from sectors most heavily influenced by the COVID-19 crisis for up to three months. In addition to employers in sectors where operations have been suspended as a result of the social distancing measures (tourism, sports, culture, etc.), any other employer that can prove a 20% y/y drop in revenue in March is also eligible for the 60% salary subsidy.
The measure has been extended until 30th of September 2020.

This is the main stimulus. However, the working population has doubts that the administrative process will be efficient enough (it is expected that most companies will receive the aid in October and November 2020). Furthermore, many small and medium businesses don’t have the means to pay 40% of the salaries. Some critics see this policy as supporting big companies which will absorb the unemployment caused by the lack of help for small and medium companies.

To date (1st August 2020) 129 million leva (64,5 million EUR) have been distributed to 8400 employers, that is 13% of the 1 billion leva (511 million EUR) allocated by the government. Close to 35% from these people have taken aid only for one month.
On the 10th of April the Bulgarian Central Bank enacted a moratorium on debt repayments. Overall the number of people who have debts in Bulgaria is almost 3 million. By the 10th of May, 102 000 have applied for temporary cancellation on payments (usually 6 months) towards their loans, and 80 300 have been approved. Changes in these numbers are expected.
The processes are not transparent, efficient and timely
The measures are conditional and selective and not universal
Most of the governments support is expressed in loans rather than direct payments

In conclusion the measures so far have the potential to create another wave of workforce immigration towards Western countries, weakening further the economic future of Bulgaria because:

The case for a UBI emergency pilot in Bulgaria

The unnecessary agony of the Bulgarian nature and people can be prevented, and UBI is a key step that can be collectively taken to compensate over three generations who have given their talents, energy and time towards creating shared wealth spreading beyond the country borders. It’s time for common dividends to be distributed to their rightful owners.

Bulgarian UBI advocates are working hard to unite the people around the idea that once social and economic stability is achieved through unconditional payments of around 1000lv (500 EUR) Bulgarians will have the time and capacity to build a new system that meets their needs and corresponds to a consensus based on democratic values. Due to the inflexibility of the national currency (it is tied to the euro), the dominant proposal on how to implement Basic Income in Bulgaria at the moment is by restructuring the tax system and national budget in a way that will pay the UBI bill with the collection of Value Added Taxes and Excise Taxes paid by the sellers. The idea is for every Bulgarian citizen with an active address registration to own a bank card issued by the Bulgarian Central Bank which will serve people as a payment method to be used to receive a Basic Income that would meet basic needs like rent, utility bills, food, clothes etc.

A UBI emergency pilot hosted in Bulgaria would not a utopia, and the EU could rescue its reputation by supporting it. It is an opportunity to trial universal basic income on a national level using the Bulgarian state financial infrastructure to distribute funds to the people.

The EU Commission would also have a vested interest in embracing the project, as the positive results would increase cohesion and trust, and would give hope to other states that the European experiment is not another way to practice concentration of power.

It’s time for evolution not only for Bulgaria but also for the EU. UBI is a win-win solution and will literally bring Bulgaria back to life. People outside long to return to their roots and work for the wellbeing of their parents and the next generations. The EU owes this to the people of Bulgaria and Bulgarians owe it to themselves, their ancestors, the children, and the European natural environment that happens to be surrounded by Bulgarian borders. We have too much to gain and nothing to lose.

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RESOURCES:

More details on COVID related government aid.

Interview (Georgi Nedelchev, in Bulgarian)

UBI Project Paper (in Bulgarian)

Videos:

Discussion on Universal Basic Income (in Bulgarian)

Is UBI possible? Discussion (in Bulgarian)

UBI and Poverty (in Bulgarian)

Namibia – UBI success and institutional failure

by Gery Petrova | Jul 14, 2020 | News, Opinion

1. Namibia – country background

A South West African state with a troublesome colonial history, Namibia has a population of around 2,5 million people and is one of the least populated countries in Africa due to its extremely dry climate. The country is rich in natural resources like – diamonds (annual value of mined diamonds around 1 billion US dollars)¹ , uranium (4th largest producer in the world), gold, zinc, copper ². Other important industries are fishing, agriculture and tourism.

Unfortunately for the majority of the Namibian people the benefits from an abundant national wealth are not equally distributed. Namibia ranks as one of the most unequal places on the planet where 50% of the population live on less than 5.50 USD per day ³ and in 2017 27% ⁴were living below the poverty line. A place where people have not enough food to sustain their nutritional needs.

On top of poverty, hunger and the impact of climate change contributing to suffering, there are some additional challenges:

Unemployment rate 2018 – 33.4% where female joblessness is prevalent ⁵
HIV/AIDS epidemic – number one cause of death ⁶
Gender inequality and violence against women and children ⁸
Child forced labour and child trafficking ⁷

Children are trafficked within Namibia for forced labor in agriculture, cattle herding, domestic work, and commercial sexual exploitation. San children are particularly vulnerable to forced labor on farms or in homes. ⁷

The list goes on.

2. The Universal Basic Income Pilot Project in Namibia ⁹

In the context of the socio-economic situation described above The Basic Income Grant Coalition comprised of citizens’ organisations (the Council of Churches, the National Union of Namibian Workers, the National NGO Forum, the Namibian Network of AIDS Service Organisations, the Legal Assistance Centre, and The Labour, Resource and Research Institute) funded and ran a pilot project the purpose of which was to trial and study the application of Universal Basic Income in Namibia.

From January 2008 to December 2009 every resident of Otjivero – Omitara (about 1,000 people) received a monthly allowance of (N$80 = USD 4.5 ) which was paid regularly until March 2012.

The research had the following results:

social cohesion – the community established an 18-member committee to advise members on how to spend their allowance wisely
it attracted migrants who could benefit from the favourable environment. More sharing meant that the value of the monthly allowance dropped from N$89 (USD 5) per month in January 2008 to N$67 (USD 4) in November 2008
poverty dropped by 39% among residents who were sharing with migrants and 60% in cases where the allowance was spent only by the resident
income-generating activities like brick-making, baking of bread and dress-making jumped 15% and a local market was created as people had a bigger purchasing power
by November 2008 child malnutrition decreased 32%
people with HIV could afford better food and medication
school drop-out rate fell to almost 0%
healthcare became more accessible to residents as they could afford it
crime fell by 42%
the basic income grant empowered women and made them more secure as they did not have to engage in transactional sex services

In conclusion, the pilot project had a dramatic overall positive effect on the selected community. The Basic Income Grant Coalition calculated that the cost for nationwide implementation of unconditional universal basic income for all would be N$ 1.2 – 1.6 billion (USD 71 – 95 million) per year, equivalent to 2.2 – 3% of Namibia’s GDP (2019 – 12.37 USD Billion) ¹⁰

In short, UBI in Namibia was and is feasible. The missing component then and now remains the lack of political will to apply the project on a national level.

3. Government response regarding the pandemic crisis in Namibia

Following from the brief summary of state of affairs in Namibia and an example of a possible solution to the human suffering caused by institutional inadequacy and economic logic that produces inequality, I will now list the measures that the Namibian government has taken to tackle the health/economic crisis triggered by COVID-19.

1. Emergency Income Grant ¹¹ – one off payment of N$750 (USD 45) for people experiencing financial difficulties caused by COVID. The government allowance should cover 749 000 people in need and will cost the government N$562 million (USD 34 million).

Some concern regarding the stimulus: ¹²

the sum is insufficient to sustain an ongoing lockdown and future economic inactivity
the grant is conditional – employed persons and people who already receive social benefits do not qualify being supported by this policy
to obtain the one off payment citizens must own a mobile phone and an ID number

The EIG is a self-nomination process. Therefore applicants are required to have, or make use of an active cell phone number, and a valid Namibian ID number.

Applicants must SMS their name and ‘EIG’ to 141222 to start the registration process, or dial *141*222#. After the approval of the application by the ministry, applicants will receive a token from the bank they have selected in the application process. ¹²

there is a considerable distrust among the population about potential problems with the distribution system and application process
the policy is not universal, it does not cover every single Namibian which means it fails to act as an emergency safety net for all

2. Tax-related measures:¹³

repayment of overdue VAT to companies, N$3 billion (these are funds the government already owes to VAT paying enterprises)
payment of overdue invoices for goods and services provided to the government – N$800 million
Tax-back loan scheme for tax registered and tax paying (PAYE) employees and self-employed affected by the pandemic.
Extended deadline for filing taxes. Mandatory payment date remains the same.

These measures are very far from a policy supporting the business community given the implications of the crisis.

3. Employment-related measures ¹⁴

3.1. Subsidy for employers in the construction, tourism and aviation sectors. Workers will receive 17% of their wage for 3 months.

3.2. Employers who are benefiting from measures should not be firing any of their workers or reducing their salaries with more than 50%

3.3. The programme will benefit 7,900 employers employing 65,420 employees. The budget amounts to N$150 million (USD 8 million) which is approximately 25% of the total wage bill.

3.4. Grants for workers affected by COVID-19. These are conditional application based stimulus that has the potential to help 56,000 to 117,000 applicants.

3.5. Government and business owners will be allowed to negotiate a temporary 20% drop in salaries.

How these measures can be interpreted:

insufficient funding of affected workers
conditions and administrative obstacles for receiving help
potential to undermine workers income for a long period of time
the policy does not cover all workers in Namibia

4. The Economic stimulus measures which will be administered by banks consist in: ¹⁵

4.1. Tax-back loan scheme for businesses and individuals

4.2. Agricultural and non-agricultural and small business loan programmes

Here the government enables the banks to make businesses dependent on loans which creates more instability by increasing debt in society. Hardly an adequate solution for the needs of business owners, workers and their families.

5. Water subsidy equal to N$10 million. This will enable water points to be kept open without people needing to use water cards.

Probably the bare minimum a state can do to prevent riots and social breakdown.

There is a general concern about administration and distribution of emergency funds based on past and present experiences. In a report called COVID-19 Emergency Procurement ¹⁶ by Frederico Links the author outlines issues with transparency on spending by government institutions which raises doubts about how much of the already unsatisfactory help will reach people at the bottom of the income chain.

Another report Analysis – Namibia’s National Budget 2020/21 ¹⁷ comments on potential problems with the financial stability of Namibia and its economic future which has direct implications on the wellbeing of the Namibian people.

In conclusion, based on the information above:

Emergency spending to alleviate poverty and tackle social and economic inequalities was and is needed regardless of COVID-19.
The ongoing crisis requires working solutions based on unconditional, regular distribution of wealth for all Namibian people in order to sustain their individual sovereignty, dignity and human rights permanently.
The measures announced by the government are inadequate, insufficient and cruel as they don’t meet the needs of the population.
Basic Unconditional Income, proven by the BIG pilot project, is feasible and has the potential to create social cohesion, improve the local economy and bring back trust in existing institutions and political leadership.
To achieve the above the citizens of Namibia have the opportunity to unite and stand behind a clear demand for the implementation of Basic Unconditional Income for all.
All people have the right to determine their present and future. An unconditional basic income is what will enable them to fulfil their fundamental human rights.

Sources:

1 https://www.kimberleyprocess.com/en/namibia-0

2 https://assets.kpmg/content/dam/kpmg/pdf/2014/09/namibia-mining-guide.pdf

3 https://www.macrotrends.net/countries/NAM/namibia/poverty-rate

4 https://www.macrotrends.net/countries/NAM/namibia/hunger-statistics

5 https://tradingeconomics.com/namibia/unemployment-rate

6 https://www.cdc.gov/globalhealth/countries/namibia/pdf/namibia_factsheet.pdf

7 https://www.dol.gov/agencies/ilab/resources/reports/child-labor/namibia

8 https://evaw-global-database.unwomen.org/en/countries/africa/namibia

9 https://tradingeconomics.com/namibia/gdp

10 http://www.bignam.org/BIG_pilot.html

10 https://www.centreforpublicimpact.org/case-study/basic-income-grant-big-namibia/