New research on the Kenya pilot project

New research on the Kenya pilot project

Innovations for Poverty Action has published a research paper, ‘Effects of a Universal Basic Income During the Pandemic’.

We examine some effects of Universal Basic Income (UBI) during the COVID-19 pandemic using a large-scale experiment in rural Kenya. Transfers significantly improved well-being on common measures such as hunger, sickness and depression in spite of the pandemic, but with modest effect sizes. They may have had public health benefits, as they reduced hospital visits and decreased social (but not commercial) interactions that influence contagion rates. During the pandemic (and contemporaneous agricultural lean season) recipients lost the income gains from starting new non-agricultural enterprises that they had initially obtained, but also suffered smaller increases in hunger. This pattern is consistent with the idea that UBI induced recipients to take on more income risk in part by mitigating the most harmful consequences of adverse shocks.

To download the paper, click here.

Mongolia’s resource-to-cash transfers

Mongolia’s resource-to-cash transfers

Mongolia is an East Asian country located between the two giant powers of the world: China in the South, and Russia in the north. As a classic example of a mineral-rich developing country, Mongolia has an export-driven economy in which 90% of the exports come from its minerals[1].

The country’s quick and vigorous action on preventing the spread of COVID-19 resulted in a notable success in fighting the pandemic so far. The country has relatively few cases with 310 confirmed cases and still no deaths in the middle of September 2020. But this success has come at a price.

According to the UN, in the first quarter of 2020, Mongolia’s economy contracted by 10.7 per cent, and government revenue fell by 8.6 per cent year on year, whilst expenditure went up 19.3 per cent[2]. On the other hand, the country struggles to boost its export-driven economy that is tightly tied to China. Asian Development Bank (ADB) estimates show that Mongolia will suffer significant investment and consumption shocks in addition to negative global demand spillovers in 2020. In addition to that, there is mounting international debt[3].

However, Mongolia is an interesting country that the world can learn some lessons from regarding the role of states in the ongoing health crisis of COVID-19. The country perhaps was the first developing country that introduced a resources-to-cash scheme[4], and with the COVID crisis this scheme is back on the agenda.

With the outbreak of COVID-19 during the winter of 2019-2020, Mongolian citizens were promised a cheque of up to 96,480 tugrugs (USD 34), but this promise was not a usual handout like in other countries. Mongolians who were born before April 11th 2014 are shareholders of a company called Erdenes Tavan Tolgoi (ETT) that manages a massive coal deposit on the state’s behalf; do these cash payments are dividends distributed by the company to its shareholders[5].

In 2019, the company made USD 1 billion and 30 million from its sales. For this reason, the dividend per share was calculated to be MNT 90, which results in MNT 96 thousand being given to each individual’s 1,072 shares. Minister D.Sumiyabazar said that the amount of the dividend will be raised further if the company’s revenue goes up[6].

As mentioned above, this resource-to-cash payment was not a new experience for Mongolians. In 2004, the government started to experiment with universal resource-financed payments for children. In 2010, the child-oriented payments were replaced with the new Human Development Fund (HDF) that was financed from mining dividends to provide a universal basic income that was paid monthly to every citizen. Mongolians monthly received MNT 21 thousand between 2010 and 2012 through the HDF. This experience provided a unique perspective on public ownership and revenue sharing in the mineral sector as citizens got a direct and equal share of their country’s wealth as co-owners of their country[7].

However, these payments were based on election promises and resulted in a vast deficit in the HDF as the expenditures were exceeding the actual mineral revenues[8]. In 2012, HDF was stopped and child-oriented payments were brought back.

On the other hand, in 2011, through a new scheme, every citizen received 1,072 shares in the ETT. Mongolians could use these shares for different purposes including tuition fees for students, health insurance coverage, or cash through a stock repurchase program by the government. Around 1.08 million Mongolians have kept all their shares and are entitled to a full dividend payout of MNT 96,480 (USD 34)[9].

Although these cash transfers have reduced poverty and inequality, and increased the transparency of the company’s actions and performance, the experience has taught the important lesson that it is not enough just to give cash payouts if the scheme is poorly designed and implemented[10]. As mentioned above, these cash payments have been used as tools to win elections, and this has resulted in an increased debt and an increase in inflation. In this regard, in 2019 the country passed an Election Law that prohibited the political parties from using the promise of cash transfers for elections.

Although the cash payments that were promised a few months ago are different from the previous cash transfers, as “The board (of ETT) has approved for the first time to distribute dividends to shareholders according to the Company Law. In the past, the state used its preferential rights to buy stakes from some people in cash. This time, it’s not a cash payout but a legal dividend distribution”, Minister D.Sumiyabazar said[11], we can still see something of the old tendency: a connection between elections and cash transfers.

On May 1, it was announced by the Minister of Mining and Heavy Industry that 100 thousand MNT was going to be distributed, but one month later there was still no payment. Erdenes Tavan Tolgoi company had already transferred 60 billion MNT to Mongolian Central Securities Depository but it is obvious that the government was holding it up due to the parliamentary election[12].

As we can see, the Mongolia experiment contains very important lessons in regard to the resource-to-cash payments. This experience underlines the importance of independent institutions from governments being tasked with the distribution of basic income type payments. If we understand these experiences and learn from them, it could provide a new perspective for governments in their fight with COVID-19.

Despite all kind of criticism regarding the government’s approach on resource-to-cash payments; people are losing their jobs, hopes, and voices all over the world, and this kind of resource-to-cash scheme gives a sense of certainty and security to people (without the burden of stigmatization), especially in such uncertain and volatile times.

COVID-19 doesn’t distinguish between rich or poor, and neither can we. More than ever we need schemes that don’t differentiate between people, because in these unprecedented times no-one knows if they will be the next one who is going to be affected by this crisis one way or another.













An online ‘march’ for Basic Income

An online ‘march’ for Basic Income

‘UBI-Talk on our Walk’: A Zoom based (due pandemic) Basic Income March; ‘UBI-Talk on our Walk’, which will be facilitated by ‘Worldwide Meetings of UBI Advocates and UBI Networks’ and organized by UBI Networks, to be held on 19th of September 2020, Saturday, at GMT 12:00, or at GMT 14:30, or at GMT 19:00, as a participation in the 2nd Basic Income March (an initiative by; Income Movement), during the 13th International Basic Income Week.

UBI Advocates, together with their friends and networks, are all invited to this event to participate with a shoe of them. During the event, screen shots in groups will be taken and these will be used for promotion of the UBI idea. During the events, as time permits, limited number of participants will be able to give their short messages regarding UBI, too.

Considering different time zones and in order to host more number of participants from different corners of the World; there will be three separate Zoom sessions, whose details are given at the end of this article. The participants may choose at least one of them,

Thank should be forwarded to our dear friends Alexander de Roo (Netherlands), Claudia Leduc (Canada), Peter Knight (Brazil) and Ali Mutlu Köylüoğlu (Turkey) for their contributions during development of this project, and to our dear friends Gerdur Palmadottir (Iceland) for her proposal regarding the title of the event (‘UBI-Talk on our Walked’) and Gaylene Middleton (New Zealand) for seconding the proposal.

Special thanks to our dear friends Klaus Sambor (Austria), Peter Knight (Brazil), Ivaylo Kirilov (Bulgaria), Sheila Regehr (Canada), Fabricio Bonilla (Costa Rica ), Marek Hrubek (Czech Republic), Jaanus Nurmoja (Estonia), Michaela Kerstan (Germany), Evamaria Langer-Dombrady (Hungary), Gerdur Palmadottir (Iceland), Shobana Nelasco (India), Paul Harnett (Ireland), Robin Ketelars (Netherlands), Kristine Endsjo (Norway), Claudia Leduc (Quebec, Canada), Annie Miller (Scotland), Angle Bravo (Spain), Ali Mutlu Köylüoğlu (Turkey), Barb Jacobson (United Kingdom), Stacey Rutland (United States of America), Paul Ettl (Austria), Cory Neudorf (Canada), Milus Kotisova (Czech Republic), Sabine Heisnerr (Germany), Mike Danson (Scotland), Kimberly Woods (United States of America), and Georg Sorst (Austria) for participation of them in the invitation message with their screen shots (photos).

The timing of the Zoom meetings are all announced as GMT (Greenwich Mean Time).

All the meetings will be recorded and will be shared partially or fully, especially for other UBI Advocates, who were not able to participate.

The capacity for the Zoom meetings is 500 participants and in case the sessions are full, please see the Facebook page “UBI Advocates and UBI Networks” for additional meetings (in addition to the below listed pre-scheduled ones.)

Hopes are to see as many participants as possible during the ‘UBI-Talk on our Walk’,

Details of the Scheduled Zoom Meetings on 19th of September, 2020, Saturday :

at GMT 12:00, Meeting ID: 881 0151 7059, Passcode: UBI4H

at GMT 14:30, Meeting ID: 824 2830 2351, Passcode: UBI4H

at GMT 19:00, Meeting ID: 836 6318 8855, Passcode: UBI4H

Global Map of Universal Basic Income Networks

Global Map of Universal Basic Income Networks

A new tool for communication, interaction and collaboration among Universal Basic Income (UBI) Advocates and UBI Networks was launched on the 15th September as part of the 13th International Basic Income Week.

The tool, ‘Global Map of UBI Networks’, has been developed under the umbrella of ‘Worldwide Meetings of UBI Advocates and UBI Networks’. It is a digital map of UBI Networks, and at its launch there were 132 UBI Networks from more than 45 different countries participating in it’s first version.

At the moment, the map is still under construction: but you can see the current state of the working map at this link. (Click on the markers to see the details of the UBI Networks.)

The HTML Codes of and an explanatory text regarding the map will be shared with the participating UBI Networks so that if they wish they can embed the map directly into their website pages.

The map references not only networks with the sole purpose of advocating UBI, but also all organizations (networks, foundations, platforms, political parties, working groups within political parties, societies, study groups, etc.) that advocate for UBI.

If a UBI Network wishes to participate in the ‘Global Map of UBI Networks’, the details of the network should be filled in in the Google Form accessible from this link.

The working group carrying out this project is composed of Hannes Mehrer (Germany), Ali Mutlu Köylüoğlu (Turkey) and Peter Knight (USA and Brazil). Also, special thanks to Luc Gosselin (Canada) and Robin Ketelars (Netherlands) for their help.

For further information, see the UBI-Advocates website.

Thank you to Louise Haagh

Thank you to Louise Haagh

Louise Haagh has served as Co-chair and Chair of BIEN for a total of three terms of office, and has decided not to stand again for the post of Chair at the forthcoming Executive Committee elections. At its meeting on the 6th September the Executive Committee expressed its thanks to Louise in the following terms:

The meeting expressed its thanks to Louise for the commitment evidenced in her three terms as Co-chair and then Chair; for her initiatives, such as the BIEN Conversations; for the robust intellectual basis that she had established for BIEN; for her registration of BIEN as an NGO in Belgium, and for encouraging the decision to register in the UK; and for her many other contributions to the Basic Income movement. The meeting wished Louise well in her future endeavours, and hoped to continue to collaborate with her in the future.