In 2008, a coalition of NGOs and umbrella church organisations started a small revolution in Namibia and the world took no notice. In January of that year, the BIG (Basic Income Grant) Project started to pay out 100 Namibian Dollars (8.6 British Pound in today's money) per month to every citizen of the small rural town of Omitara in cash. The only requirement for the monthly grant was to be an actual citizen of Omitara, a status that was established during a baseline study in mid 2007, and to be aged below 60 years of age (Namibians of 60 years and older are eligible for a 500 N$ / month national pension). The BIG thus became the first Basic Income Scheme ever tested in a field trial.
Basic Income Schemes have been discussed as solutions to poverty and social inequality both in the developed and developing world for some time now. The basic idea is simple: Every citizen, regardless of age, sex, social status or employment gets a monthly grant which covers the basic costs of life from the state without any obligations attached to it. In Namibia, this is a sum off 100N$. In Germany, different interest groups discuss sums ranging from 600 to 1200 Euros. Advocates of a basic income predict that this would improve the standard of living especially for the poorest parts of the population, would secure their access to education and empower them to break through the vicious circle of poverty. Opponents of such a scheme argue that "free money" would make people lazy and keep them from taking up honest work. They add that it would be financially unsustainable, especially in developing countries.
The pilot project of Omitara should give the nay-sayers a pause. Reading through the final report, some striking figures come up: Household poverty was halved in one year, child malnutrition was cut from 42% to 10% and school dropouts fell from 40% to zero. The overall crime rate fell by 42% and lifestock ownership increased. At the same time, the rate of those engaged in income generating activities rose by 10% - refuting the claim that a basic income would make people lazy.
These effects are at the heart what proponents of a universal basic income hope to achieve. The guarantee to receive a basic income enables everybody to guarantee themselves and their family a basic standard of living. It gives the security to invest in health and education. It is especially liberating for marginalized parts of the society, like women, who win a measure of independence. But it is also good for those who already have had success in their lives. Shop owners can count on a greater demand and entrepreneurs on better educated employees. It is also beneficial for the state, as it gives families the funds to pay for basic healthcare and education, thus liberating society from a lot of consequential costs in the mid term.
Of course there were some downsides in the case of Omitara as well: the project triggered substantial migration to the town, which limited some of the positive effects (but did not reverse them). In the beginning some fights broke out on the payment days, probably induced by the fear of some citizens of not getting their part. This was resolved, when the people realized that there was enough for everybody every month and by introducing the possibility to pick up the payment up to six month later. Some fears were voiced that the money may increase alcoholism. This was mitigated (though probably not solved completely) by an arrangement with the local bar owners, that they would not sell alcohol on payment days.
One big question remains: is it even financially possible for developing countries to guarantee their citizens a basic income? In many cases, the answer may be no. Many countries, especially in Africa, lack the financial resources needed to back such a scheme. But not all of them. Countries like Namibia, Angola or Ghana, with a potentially high income from natural resources and a administrative infrastructure capable of handling the registration and payment could easily put up with the initial costs. I say initial, because in the mid to long term, the positive impacts of a basic income would offset the costs of paying it. Namibia for example would need a sum equivalent to 2.2 to 3% of its GDP to implement the BIG on a national level. This could be arranged by some simple tax adjustments.
Basic income schemes are certainly not the panacea of development. There are many countries which would find it impossible to implement and sustain one. But for those - and their international partners - that are capable of doing it, there is really no excuse.
A revolution started in Namibia in 2008. But the World took no notice. In 2010, Namibian President Pohamba refused a national basic income because it would make the recipients lazy. Let's hope that Namibia will rethink this decision. Otherwise, a basic income for everybody may well end as another forgotten development idea.