Talking in circles on Universal Basic Income in Namibia

Progress Namibia - Talking in circles on Universal Basic Income in Namibia
18 June 2018

[Picture Source:]

I am convinced that the BIG [Basic Income Grant] is not only able to eradicate destitution, hunger and malnutrition, but that it lays a strong foundation for economic empowerment, responsibility and ownership taking. The BIG, by restoring the human dignity of people, frees people to become active and proud members of this society. It is my sincere hope that this dream did not only become true for the people of Otjivero-Omitara, but indeed for the whole of Namibia.
Bishop Dr. Zephania Kameeta, 2009

Okay...the Universal Basic Income (or in Namibia we have been calling it the Basic Income Grant) is an age-old discussion that goes round and round - in the developed world, the answer to automation. In the developing world, the answer to poverty eradication. But we haven't covered it yet, and it indeed is important to discuss. So here goes, our very short snippet and thoughts on this concept.

Between 2007 and 2009, the BIG Coalition (a coalition of umbrella bodies spearheading and advocating for Basic Income Grants in Namibia) ran the first basic income grant pilot in the world. The pilot was run in Otjivero-Omitara, a community characterised by unemployment, hunger and poverty. Over the two years, everybody in the community received N$ 100 per month. The impact of this tiny monthly grant in the first year was impressive, illustrated by several indicators, namely malnutrition (dropped from 42% to 10% for children under five), food poverty (reduced from 76% to 16%), payment of school and clinic fees increased hugely, school drop-outs were drastically eliminated, poverty related crime fell by 42%, and small businesses in the village developed.

At the time when the assessment of the first 12 months of this pilot was published, the report did an analysis of how much it would cost for this to be extended across the entire Namibia. These costs were, then, at roughly N$1.6 billion per year. There were various suggestions on how this could be financed, including a moderate adjustment of VAT and income tax and a re-prioritisation of the national budget. Generally, it concluded that this amount could be affordable to Namibia. It also concluded that, based on the empirical evidence of their pilot, BIG would reduce poverty and unemployment, increase economic activities and productivity, and improve educational outcomes and the health status of most Namibians. So, if this is the case, and our Minister of Poverty Eradication has advocated this for many years, then why have we not implemented? What are the arguments against BIG?

Proponents of BIG argue that it could shrink a huge array of costly social welfare services like health care, food assistance, and unemployment support by providing a simple and inexpensive way to let individuals decide what to spend the money on. Those who are more dubious of the concept are concerned that a BIG would decrease incentives to work (i.e. people will become lazy). Others argue that employers might have an excuse to pay even lower wages.

We talk about economic growth bringing us more jobs. However, economic growth (particularly in the developed world) has reduced jobs because its main objective is the increase in output and efficiency - giving us the rise in automation (the great killer of jobs, and within this the move to 'zero-contracts', macjobs, etc). That of course is another discussion, and in a wellbeing economy, we try and focus on quality jobs and other indicators of success - not merely shareholder profit. Going back to automation - this has been a big argument for proponents on BIG in other parts of the world - dealing with how people will be surviving (and thriving) in a world where robots do most of the work. What is the point of humanity having automation, if humanity does not benefit from this? Should we increase labour and decrease automation - or should we give space and time (through BIG) to allow for more creative and higher job quality? Either one would be a better situation than we are in right now.

Anyway, the concept of BIG has indeed been rattling around in our government for the past few years, and has not quite been taken up. Food aid, and other things, have instead been implemented. The 2015 'Relief through Cash' (emergency cash grant assessment) further analysed this from the perspective of drought relief (something that will only get worse in the future) and found that cash grants were generally more helpful than other type of aid in these conditions. Of course, there have also been arguments about the level of BIG. From the pilots (here, and elsewhere in the world), there is no empirical evidence that basic income decreased work incentives (much like other social nets have done for the unemployed e.g. in Germany and other countries).

Generally, we are proponents of the BIG or Universal Basic Income (taking away the 'grant' element). It takes away the separation and labeling of the poor, and creates space for people, especially those who have no time beyond just trying to live hand to mouth, on dignity and empowerment, and ability, to do something and see hope in their future. This of course, in an ideal world where we could have a large initial investment, would be coupled with education centres focused on system thinking, literacy and creativity, as well as micro investment loans for small businesses.

The important thing is - we need to keep discussing this. The current interventions for decreasing the inequality issue in Namibia are obviously not working for most of us. Why not at least test it more broadly?