A universal basic income for all Guyanese: Part II

Almost one year ago to the day I said, ‘I believe that every citizen in Guyana should have direct access to a proportion of the revenues flowing from our oil and gas resources. … Therefore, I (also) believe that from the inception a reasonable percent of the oil/gas revenue should be permanently set aside as direct cash grants to the most vulnerable but gradually, as revenue increases, reaching the level of a UBI (an amount sufficient to secure basic needs as a permanent earnings floor no one could fall beneath) for all Guyanese’ (A universal basic income for all Guyanese. SN: 30/08/2017).

Of course, it is impossible to make such a suggestion in any country and not elicit conflicting opinions such as we have recently witnessed since Professor Clive Thomas and the Working People’s Alliance (WPA) made a similar proposal. The noises we hear from the opposing sides are largely rooted in our ideological positions, but in the above article, I said sufficient to indicate that UBI-type proposals have been long in the making and are coming from serious people of varying ideological persuasions who have given the issue much thought. Nevertheless, in the political struggle for the public purse to implement UBI, one’s stance has to be, philosophically and empirically, persistently defended.

Ideologically, I can easily visualise how much more pleasant our lives, our human and material environments and our security will be if we can afford to provide everyone with the basic necessities of living without them having to work.  In the interest of solidifying citizenship, I proposed that ultimately a UBI be given to all Guyanese, but our perceptions usually view cash grants as directed towards the poor and the types of class societies in which we have lived for centuries have ingrained in us a worldview that seeks to protect the interest of capital over its producers – the labourers. Given the drudgery and anomy that have historically been associated with work, it is not surprising that notions of giving the poor money for nothing are easily dismissed as dangerous and destabilizing. 

The evidence suggests that this is a myth, and far from being a disincentive to work and innovation, UBIs are essential to the modern work environment. ‘Fascinatingly, improved incentives are where basic income really shines. Studies of motivation reveal that rewarding activities with money is a good motivator for mechanistic work but a poor motivator for creative work. … we’re looking at a future where increasingly the work that’s left for humans is not best motivated extrinsically with money, but intrinsically out of the pursuit of more important goals.’ (https://www. weforum.org/agenda/2017/01/why-we-should-all-have-a-basic-income/).

As a matter of fact, the Guyana government has already signed on to the 2016 United Nations Sustainable Development Goals, the first one of which commits it to ‘Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.’ Floors are a kind of UBI: ‘a basic set of essential social rights and transfers in cash and kind to provide a minimum income and livelihood security for all and to facilitate effective demand for and access to essential goods and services.’

The usual government poverty alleviation programmes to create such floors tend to be inefficient. ‘Countries like India have a host of subsidies and transfer schemes aimed at helping poor people. Many of these programmes fail to reach the poor. The leakage rate of India’s Public Distribution System has been estimated at 40 percent. Replacing these inefficient subsidies with cash transfers would ensure at the very least that the poor are getting the intended monetary benefit.’ Subsidizing food items means that the poor must consume these items regardless of their quality: ‘By contrast, a cash transfer means that the poor person can choose how to spend the money. If the quality is poor, they have alternatives. There is also the question of whether the transfer should be universal or targeted to the poor.  While targeting is preferable in principle, in practice there are so many problems in identifying the poor that a universal scheme may do just as well’ (https://www.brookings.edu/blog/future-development/2017/02/15/three-reasons-for-universal-basic-income/)

Another usual objection associated with cash transfers is that they encourage binging on parties, alcohol, cigarettes, etc., but  nineteen studies ‘almost without exception, … find either no significant impact or a significant negative impact of transfers on expenditures on alcohol and tobacco. … It is also consistent across conditional and unconditional cash transfer programmes. The evidence suggests that cash transfers are not used for alcohol and tobacco at any significant levels.’ And for those wanting to focus on education and health, it has been demonstrated that cash transfers improve education, health outcomes and alleviate poverty. ‘The evidence on the impact of cash transfers on poverty outcomes shows an overwhelmingly positive picture. Cash transfers are mostly having a statistically significant effect on beneficiary’s expenditure and poverty levels and when they do, they increase expenditure and (improve) poverty indicators’ (http://documents.worldbank.org/curated/ en/617631468001 808739/pdf/ WPS6886.pdf).  (Ibid).

It has been suggested that ‘a simple transfer of 10 percent of oil revenues could effectively eliminate poverty in several oil-exporting countries’ (Ibid), and thus the notion that UBIs can be obstacles to more important social development goals can only be the result of  ideological bias. That said, these matters must be carefully considered and it should be noted that the studies found ‘at least one statistically significant effect, suggesting that design and implementation features matter in shaping poverty impacts.’ Two potentially important design and implementation features are for ‘transfer levels need to be meaningful in order to reduce poverty rates. (and) … for the transfer to have a bigger and more sustainable impact, beneficiaries should be receiving the transfer for longer periods of time’ (https://www.odi.org/sites/ odi.org.uk/files/resource-documents/11316.pdf).

To emphasise, what the preceding paragraph indicates and the salient point of this presentation is that unless Guyana wishes to suffer another Exxon/Mobil moment, the level of available financing, conceptualization, design and implementation of these kinds of relatively novel programmes are best not left to amateurs – real experts in this field will be required. But ultimately, given the prevalent ideological environment, it is the party of the working people that needs to win for UBI projects to see the light of day.

henryjeffrey@yahoo.com

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