Economic Research Forum (ERF)

What would a basic income mean for the Arab world?

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The idea of a regular, unconditional and individual cash payment distributed to all citizens is gaining ground. This column argues that such a basic income would ensure that everyone is able to meet their basic needs unconditionally, thereby improving people’s resilience and solidifying communities. Ultimately, a basic income could help to rebuild the social contract in the Arab world where governments would uphold human dignity by awarding citizens economic security as a right.

In a nutshell

What a regular, individual and predictable basic income has done is make people more engaged in productive activities, start own-account work and carry out small productive investments such as purchase of cattle and sewing machines.

A key opportunity is to restructure peace-building programmes to include a basic income for countries coming out of conflict, ensuring that reconstruction funds reach those most often side-lined in traditional post-conflict situations.

While policy-makers are often reluctant to trust the poor with unconditional cash, it has been consistently shown that the most vulnerable are in fact best placed to know where their priorities lie and spend accordingly.

The policy tool called basic income – a regular, unconditional and individual cash payment distributed to all – has gained significant attention globally. The main driver is its potential to mitigate social and economic inequalities (Standing, 2020), which have been made only more visible through Covid-19 (Wignaraja and Horvath, 2020). There have been over 20 basic income pilots around the world, with particularly transformational results in trials in India (Davala et al, 2015) and Namibia (Haarmann et al, 2009).

Let’s contemplate what a basic income would mean for the citizens of Egypt, Iraq, Lebanon, Morocco, Syria and the rest of the Arab world. A monthly unconditional cash allowance would ensure basic economic security to recipients. Its predictability would decrease people’s stress levels in seeking to meet their needs. Citizens’ mental bandwidth could then expand beyond their immediate necessities.

A sense of dignity is restored as basic income is awarded as a right and is non-withdrawable. Rather than mere supplicants for welfare, people are thus treated as the adults they are. With their basic needs met, citizens are empowered to contemplate different productive activities in which to engage, ones that they are eager to sustain to contribute to their communities. With better prospects for the future, a sense of expanded trust towards others is then possible. This will strengthen overall resilience.

Some deem basic income a controversial policy tool because it essentially allocates a regular sum of cash without any behavioural conditions or considerations of poverty levels. But it is worth noting that the current economic system already awards considerable amounts of cash in exchange for ‘nothing’.

Think about wealth inheritance, exorbitant tax breaks to affluent companies or tax avoidance by the rich who use public services free of charge (Standing, 2017). If we accept these forms of wealth transfers and exemptions in exchange for what essentially is nothing particularly productive, a basic income may represent a form of reparation to equalise the playing field for those without access to such wealth transfers.

Others argue that a basic income will encourage laziness, idleness and the consumption of illicit goods. But no such behaviour has been evidenced in trials of basic income nor of the more traditional forms of cash transfers common in humanitarian and development settings (Bastagli et al, 2016; Evans and Popova, 2014).

Indeed, as shown in the basic income pilot in India, if anything, beneficiaries of unconditional cash work more and sit less, as they have less free time on their hands. What a regular, individual and predictable basic income has done is make people more engaged in productive activities, start own-account work and carry out small productive investments such as purchase of cattle and sewing machines.

Being awarded universally in the community where it has been tested, a basic income encourages common decision-making and solidarity (Davala et al, 2017). Reasons for this transformational impact rest in individual economic security and the empowerment it ensures.

How could such a policy tool be funded? One suggestion is to include a basic income in the development toolbox of international organisations (Bashur, 2022).

Specifically, a key opportunity is to restructure peace-building programmes to include a basic income for countries coming out of conflict. This would ensure that rather than channelling reconstruction funds through the private sector as was done in Lebanon and Iraq (Abboud, 2014), at least some funds reach those most often side-lined in traditional post-conflict reconstruction programmes. Failing to address the livelihoods and resilience of the most vulnerable would only entrench inequalities and deepen social fragmentation.

Other forms of funding include restructuring extensive subsidies on fossil fuel products (Standing, 2017), which take up large sums of public expenditure across the countries of the Middle East. Subsidised goods such as fuel and electricity are most often regressive in nature, meaning that they benefit those who consume more. The recent decision in Lebanon to lift subsidies goes in the right direction. But savings from reducing subsidies should be distributed directly to individuals by way of a basic income.

Beyond funding considerations, what is the main hurdle for implementing such a policy? What is essentially at stake is a question of trust: policy-makers are reluctant to trust the poor with unconditional cash for fear that they will squander it, spending it on unproductive endeavours and essentially wasting it.

But it has been consistently shown that the most vulnerable are in fact best placed to know where their priorities lie and spend accordingly. For this, supporting the introduction of a basic income would be a real test to the ultimate aims of entities funding colossal aid programmes designed to advance a country’s development.

Importantly, what a basic income could mean for the Arab world is extracting the all-too-pervasive footprint of donors and their embassies in countries’ internal affairs. Rather than foreign capitals, governments’ strongest backers are inevitably their citizens – as long as they treat them with respect and uphold their dignity.

This reality is how states function, yet it somehow seems to escape governments of the Middle East. A basic income could help to mend this broken social contract.

 

Further reading

Abboud, S (2014) ‘Comparative perspectives on the challenges of Syrian reconstruction’, Carnegie Middle East Center.

Bashur, D (2022, forthcoming) ‘Does Basic Income have a role in Peacebuilding?’

Bastagli, F, J Hagen-Zanker, L Harman, V Barca, G Sturge, T Schmidt and L Pellerano (2016) ‘Cash transfers: what does the evidence say? A rigorous review of programme impact and the role of design and implementation features’, Overseas Development Institute (ODI).

Evans, DK, and A Popova (2014) ‘Cash Transfers and Temptation Goods: A Review of Global Evidence’, World Bank, Africa Region, Policy Research Working Paper 6886.

Davala, S, R Jhabvala, S Kapoor Mehta and G Standing (2015) Basic Income: A Transformative Policy for India, Bloomsbury Academic.

Davala, S, R Jhabvala, G Standing and N Badyaiyan (2017) ‘Piloting Basic Income – A Legacy Study, Final Report’, SEWA Bharat and INBI.

Haarmann, C, D Haarmann, H Jauch, H Shindondola-Mote, N Nattrass, I van Niekerk and M Samson (2009) Making the Difference! The BIG in Namibia – Assessment Report – Basic Income Grant Pilot Project, Basic Income Grant.

Standing, G (2017) Basic Income: And How We Can Make It Happen, Pelican.

Standing, G (2020) Battling Eight Giants – Basic Income Now, IB Tauris.

Wignaraja, K, and B Horvath (2020) World Economic Forum.

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