November 2020 / Stephanie Guha, Policy Adviser Poverty/LNOB, Swiss Agency for Development and Cooperation (SDC)
COVID-19 and the response to the pandemic is driving millions of people into poverty. How to mitigate those effects? In developing countries, seven out of ten workers make a living in informal markets. These approximately two billion people have no access to social safety nets, such as social insurance or social assistance support, and are often not even counted in a government registry.
A recent United Nations Development Programme (UNDP) report discusses the introduction of a Temporary Basic Income (TBI) for the world's poorest and most vulnerable people. A TBI would allow poor families with no access to social safety nets to buy food and health services and protect them from the worst effects of the crisis. Last week, a WEF-article reiterated the necessity to introduce a TBI along with universal healthcare to support people through these difficult times and build back more resilient and sustainable communities.
In their report 'Temporary Basic Income: Protecting Poor and Vulnerable People in Developing Countries', UNDP finds that the majority of TBI schemes would cost most developing countries far less than 1% of their GDP per month, while providing substantial benefits. According to the report, it would financially be feasible.
UNDP Administrator Achim Steiner says: “Bailouts and recovery plans cannot only focus on big markets and big business. A Temporary Basic Income might enable governments to give people in lockdown a financial lifeline, inject cash back into local economies to help keep small businesses afloat, and slow the devastating spread of COVID-19."
Some countries have already taken up the idea. The government of Togo has distributed financial aid through its cash transfer programme. The Colombian government, introduced the 'Solidarity Income' scheme to deliver resources to an additional three million vulnerable households.
Click here to access the article and the report»