Biggest basic income experiment slated for East Africa

Given the interest it has generated worldwide, it is certain the idea of Universal Basic Income (UBI) has gained some traction, promising a more practical solution to address poverty and inequality.

Given the interest it has generated worldwide, it is certain the idea of Universal Basic Income (UBI) has gained some traction, promising a more practical solution to address poverty and inequality.

UBI assures every person – the employed and unemployed, the rich and poor – a small income to cover basic living costs and no questions asked.

Anthropologist James Ferguson, in his book Give a Man a Fish: Reflections on the New Politics of Distribution, captures it best. As the title of the book suggests, he turns around the compelling Chinese proverb, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”

Ferguson asserts that giving a man a fish might be more useful than teaching him to fish. He persuasively “discards the assumption that in order to get the income you need to survive, you should be employed or at least engaged in productive labour.”

Indeed, the idea of UBI has already passed the proof of concept stage, and is about to be fully tested in the biggest social experiment ever in Uganda and Kenya, moving it to the next step from where it has previously been implemented – Canada, India, Finland, the Netherlands, Namibia, the US and elsewhere (see “8 basic income experiments to watch out for in 2017”).

Various studies have already established “that when people receive [UBI] cash, they don’t blow it on alcohol or stop working. Instead, they invest it in things that improve their incomes, security, and psychological well-being.”

To better understand the full impact and all its social ramifications, a two-year experiment by the non-profit organization, Eight, is expected to have already started in Uganda. The initiative is awarding a basic income of 8 Euros a week each to 50 households in a village in the Fort Portal region.

But what is expected to be the biggest UBI social experiment is being undertaken in Kenya by the charity organisation, GiveDirectly.

In October last year the organisation launched an initiative that will involve 120 villages and a total of 32,000 participants in the experiment.

Up to 6,000 people in 40 of the villages will receive $0.75 per adult per day over a period of 12 years. This will amount to $22.50 per month.  

26,000 recipients in the remaining 80 villages will receive the $22.50 in a lump sum payment per month over two years.

Employing “an unprecedented level of rigor and ambition”, it is expected to produce some of the most comprehensive basic income data yet.

Similar experiments are currently being undertaken in more financially able countries such as the Netherlands for 250 people at $1,100 each, or Finland involving only 2,000 unemployed recipients, but each receiving $600 per month over two years.

This brings me to the argument that to effect UBI, should it prove true, we don’t need anyone’s charity (Also see “Africa should consider basic income social experiments”, The New Times, April 02, 2016; http://www.newtimes.co.rw/section/article/2016-04-02/198584/).

It has been estimated that 700 million people around the world live in extreme poverty and that, through UBI, it would take $80 billion in cash transfers to move everyone above this poverty line.

But consider the startling findings in a recent report by the US-based Global Financial Integrity (GFI) and the Centre for Applied Research at the Norwegian School of Economics that for every $1 in aid to developing countries, including Africa, we return more than $2 so that “aid is effectively flowing in reverse”: that, rich countries aren’t developing poor countries; poor countries are developing rich ones.

As told in The Guardian, developing countries received a total of $1.3 trillion, including all aid, investment, and income from abroad in 2012, the last year of recorded data.

But that same year some $3.3 trillion flowed out of them. In other words, developing countries sent $2 trillion more to the rest of the world than they received.

If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3 trillion – that’s how much money has been drained out of the global south over the past few decades.

Enough said.

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