Namibia, in southwest Africa, is one of the poorest countries in the world, with a high rate of AIDS and many of its 2.1 million people living on less than $1 a day. But it may be leading the world in showing a way to end hunger and poverty.

The German magazine Der Spiegel has an article about the remarkable successes of a Basic Income Grant experiment in the village of Otjivero. I’ve been following the program since shortly after it began in January 2008, and I contributed money to help fund it. It’s scheduled to run through the end of this year, and the organizers hope it will become a model for the nation, the continent, and the world.

As the article describes, moreover, the program is doing much more than ending hunger and poverty. There have been dramatic improvements in health outcomes, school attendance, reduced crime and alcoholism, and a significant increase in entrepreneurial activity and employment.

This is one of the most hopeful and important breakthroughs in the world today, though it has not been reported by any American news outlet (there have been earlier stories in the BBC and AllAfrica.com). Please circulate this news widely.

This is how our government ought to be investing our foreign aid dollars, and what the Gates Foundation, World Bank, International Monetary Fund, and other aid agencies and charities ought to be supporting. They should pay for expanding the Otjivero program to the whole country — and could do so for less money than they are currently spending on piecemeal programs.

The Der Spiegel article is here. (It’s in three parts: Part one is “How a Basic Income Program Saved a Namibian Village. Part two is “A Village of Entrepreneurs.” Part three is “‘I’m Doing Very Well.’”)

The Namibia pilot program was organized by a coalition of church, labor, health, and social justice organizations. The coalition’s web site has a good description of the program and its advantages compared with conventional aid programs reasons, here.

The coalition recently prepared a comprehensive assessment report that includes a  discussion of how it could be implemented nationwide. For your convenience, copied below are the executive summary and concluding remarks. The complete report is a 103 page pdf, here .

Similar ideas can be applied in any country, including the United States. That’s the subject of my blog, IncomeSecurityForAll.org, and my book, Peaceful, Positive Revolution: Economic Security for Every American.

Steven Shafarman

MAKING THE DIFFERENCE! THE BIG IN NAMIBIA.

EXECUTIVE SUMMARY

In January 2008, the Basic Income Grant (BIG) pilot project

commenced in the Otjivero-Omitara area, about 100 kilometres

east of Windhoek. All residents below the age of 60 years receive

a Basic Income Grant of N$100 per person per month, without

any conditions being attached. The grant is being given to every

person registered as living there in July 2007, whatever their

social and economic status.

This BIG pilot project is designed and implemented by the Namibian

Basic Income Grant Coalition (established in 2004) and is

the first universal cash-transfer pilot project in the world. The

BIG Coalition aims to practically pilot the Namibian Government's

NAMTAX recommendation of a BIG for Namibia. Thus the

BIG Coalition regards this project as the first step towards a BIG

for all. The BIG Coalition consists of four big umbrella bodies in

Namibia, namely, Council of Churches (CCN), the Namibian

Union of Namibian Workers (NUNW), the Namibian NGO Forum

(NANGOF) and the Namibian Network of AIDS Service Organisations

(NANASO). Funds to start the pilot project were raised

through voluntary contributions from supporters of the idea

from all sections of Namibia's society, and by support from

people, churches, organisations and donors in other countries.

The BIG pilot project will run for a period of 24 months up to

December 2009.

The effects of the BIG pilot project are evaluated on an on-going

basis. Four complementary methods were used. First, a baseline

survey was conducted in November 2007. Second, panel surveys

were conducted in July and November 2008. Third, information

was gathered from key informants in the area. Fourth, a series of

detailed case studies of individuals living in Otjivero-Omitara

was carried out.

This report presents the socio-economic results after the implementation

of the BIG for 12 months. The key findings include

the following:

➢ Before the introduction of the BIG, Otjivero-Omitara was

characterised by unemployment, hunger and poverty.

Most residents had settled there because they had

nowhere else to go, their lives were shaped by deprivation

and they had little hope for the future.

➢ The introduction of the BIG ignited hope and the community

responded by establishing its own 18-member

committee to mobilise the community and to advise residents

on how to spend the BIG money wisely. This suggests

that the introduction of a BIG can effectively assist

with community mobilisation and empowerment.

➢ As the BIG was only introduced in one particular location,

there was a significant migration towards Otjivero-

Omitara. Impoverished family members moved into

Otjivero, attracted by the BIG, even if migrants themselves

did not receive the grant. This points to the need

to introduce the BIG as a universal national grant in order

to avoid migration to particular regions, towns or

households.

➢ The migration to Otjivero-Omitara affected the data obtained

for this study. Per capita income from the BIG

dropped from N$ 89 per month in January 2008 to N$ 67

in November 2008. We thus analysed the impact of the

BIG, taking the influence of migration into consideration.

➢ Since the introduction of the BIG, household poverty has

dropped significantly. Using the food poverty line, 76% of

residents fell below this line in November 2007. This was

reduced to 37% within one year of the BIG. Amongst

households that were not affected by in-migration, the

rate dropped to 16%. This shows that a national BIG

would have a dramatic impact on poverty levels in Namibia.

➢ The introduction of the BIG has led to an increase in

economic activity. The rate of those engaged in incomegenerating

activities (above the age of 15) increased from

44% to 55%. Thus the BIG enabled recipients to increase

their work both for pay, profit or family gain as

well as self-employment. The grant enabled recipients to

increase their productive income earned, particularly

through starting their own small business, including

brick-making, baking of bread and dress-making. The

BIG contributed to the creation of a local market by increasing

households' buying power. This finding contradicts

critics' claims that the BIG would lead to laziness

and dependency.

➢ The BIG resulted in a huge reduction of child malnutrition.

Using a WHO measurement technique, the data

shows that children's weight-for-age has improved significantly

in just six months from 42% of underweight

children in November 2007 to 17% in June 2008 and

10% in November 2008.

➢ HIV positive residents' access to ARVs was hampered by

poverty and a lack of transport before the BIG was introduced.

The BIG enabled them to afford nutritious food

and gain access to the medication. This was further enhanced

by government's decision to make ARVs available

in Otjivero, freeing residents from the need to travel to

Gobabis.

➢ Before the introduction of the BIG, almost half of the

school-going children did not attend school regularly.

Pass rates stood at about 40% and drop-out rates were

high. Many parents were unable to pay the school fee.

After the introduction of the BIG, more than double the

number of parents paid school fees (90%) and most of

the children now have school uniforms. Non-attendance

due to financial reasons dropped by 42% and this rate

would have been even higher without the effects of migration

towards Otjivero-Omitara. Drop-out rates at the

school fell from almost 40% in November 2007 to 5% in

June 2008 and further to almost 0% in November 2008.

➢ The residents have been using the settlement's health

clinic much more regularly since the introduction of the

BIG. Residents now pay the N$4 payment for each visit

and the income of the clinic has increased fivefold from

N$ 250 per month to about N$ 1,300.

➢ The BIG contributed to the reduction of household debt

with the average debt falling from N$ 1,215 to N$ 772

between November 2007 and November 2008. Savings

increased during that period, which was reflected in the

increasing ownership of large livestock, small livestock

and poultry.

➢ The BIG has contributed to a significant reduction of

crime. Overall crime rates – as reported to the local police

station – fell by 42% while stock theft fell by 43%

and other theft by nearly 20%.

➢ The introduction of the Basic Income Grant has reduced

the dependency of women on men for their survival. The

BIG has given women a measure of control over their

own sexuality, freeing them to some extent from the

pressure to engage in transactional sex.

➢ The criticism that the BIG is leading to increasing alcoholism

is not supported by empirical evidence. The community

committee is trying to curb alcoholism and has

reached an agreement with local shebeen owners not to

sell alcohol on the day of the pay-out of the grants.

➢ The BIG is a form of social protection, which reduces

poverty and supports pro-poor economic growth. As a

national policy it would greatly assist Namibia in achieving

the Millenium Development Goals to which the country

has committed itself.

➢ The costs of a national BIG in Namibia are substantial.

The net costs will be between N$ 1,2 – 1,6 billion per

year, equivalent to 2,2 – 3% of Namibia's GDP. There are

various options to finance such a national grant. A moderate

adjustment of VAT combined with an increase in

income taxes is one option. This would benefit all middle

and lower income households in terms of available incomes.

Other financing options include a re-prioritisation

of the national budget and the introduction of a special

levy on natural resources.

➢ An econometric analysis revealed that Namibia's tax capacity

exceeds 30% of the national income. The current

collection rate is below 25% and thus Namibia's excess

capacity to raise tax revenue significantly exceeds the

net costs of a Basic Income Grant. This makes the BIG

affordable in Namibia.

➢ A national BIG would have several medium to long-term

benefits. Based on the developments in Otjivero-Omitara,

it is safe to argue that the BIG will reduce poverty

and unemployment, increase economic activities and

productivity, improve educational outcomes and the

health status of most Namibians.

CONCLUDING REMARKS

The BIG pilot project in Otjivero-Omitara has shown

the wide-ranging benefits of a universal income grant in

addressing poverty. The findings contained in this report

document the social and economic changes that

occurred during the past 12 months – some of them being

nothing less than spectacular.

The Basic Income Grant is more than an income support

programme. It provides security that reinforces human

dignity and empowerment. It has the capacity to

be the most significant poverty-reducing programme in

Namibia, while supporting household development,

economic growth and job creation. A BIG has various

developmental impacts. A grant of N$ 100 per person

per month would generate a net benefit of over N$ 900

million a year reaching the rural communities in Namibia.

It can be argued that this would work as an engine

for local economic development. The poor would have

the ability to spend larger amounts on locally produced

goods and services. This would create more viable and

sustainable opportunities for employment in the rural

areas. Furthermore, if people are constantly confronted

with economic insecurity, they will not be able to engage

in entrepreneurial activities. The BIG would therefore

provide income security, which has the ability to

free resources for entrepreneurial risk taking. A BIG is

not an added burden at a time of economic crisis, but

an appropriate intervention that will stimulate demand

- particularly for basic consumer goods.

The BIG is a form of social protection which reduces extreme

poverty and supports pro-poor economic growth.

As a national policy it would greatly assist Namibia in

achieving the Millenium Development Goals to which

the country has committed itself. These goals include

the eradication of extreme poverty and hunger, the pro-

motion of gender equality, the reduction of child mortality,

combating diseases like HIV/AIDS and malaria,

and ensuring environmental sustainability. The empirical

results in Otjivero-Omitara have shown that a BIG

will have a positive impact in all these areas.

While the BIG alone cannot solve all of Namibia's social

and economic problems, it will certainly make a substantial

contribution. One of our findings in Otjivero-

Omitara was that the grant has reduced the dependency

of young women on men for their survival. The

BIG has given women a measure of control over their

own sexuality, freeing them to some extent from the

pressure to engage in transactional sex.

There is no doubt that the cost of a BIG is substantial -

ranging from 2.2% to 3.0% of national income. As

shown by the calculations in this report, Namibia has

the capacity to mobilise the necessary resources

without undermining financial stability. On the contrary,

over time, as Namibia benefits from the long term

growth impact, the Basic Income Grant will become increasingly

more affordable. Moderate adjustments to

VAT and income tax, alternatively royalties levied on

natural resources, or a shift in budget priorities or a

combination of these interventions, will make a national

BIG an immediate option for Namibia. Its implementation

is thus merely a question of political will.

“Pope Benedict XVI says modern capitalism is failing.”

That was the caption on a CNN website story, here, about the Pope’s encyclical published just ahead of President Obama and other G8 leaders arrival in Italy.

Too bad the Pope didn’t go a step further and present the solution: a guaranteed basic income.

“Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers,” according to the Pope. Income security for all, a guaranteed basic income for every adult will create a a real safety net so no one is exploited or totally excluded from the market. Free markets can then promote and serve ethics, social justice, and the common good. Everyone will be able to participate in the market.

In the United States, the amount might be $1,000 a month for every adult citizen. In poorer countries the basic income might be $500, or $200, or $50, or even less. The basic income experiment underway in Namibia is using the equivalent of $14 U.S. each month.

The question and nature of capitalism is the subject of a book about basic income, Real Freedom for All: What (if anything) can justify capitalism? by Philippe Van Parijs, (Oxford Univ. Press, 1998).

Millions of Americans demanded guaranteed income in the 1930s, and that’s how we won Social Security. In the 1960s, Martin Luther King Jr. and many moderate politicians and many leading economists also endorsed guaranteed income. It’s time to update the idea and enact it.

The complete plan, the idea, the benefits, and how we can make it happen, is in Peaceful, Positive Revolution,.

Additional information is on the home page and elsewhere on this web site.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

Obama’s speech yesterday in Cairo is receiving enormous attention around the world, and that makes sense. Here’s the conclusion:

The Holy Koran tells us: “O mankind! We have created you male and a female; and we have made you into nations and tribes so that you may know one another.”

The Talmud tells us: “The whole of the Torah is for the purpose of promoting peace.”

The Holy Bible tells us: “Blessed are the peacemakers, for they shall be called sons of God.”

The people of the world can live together in peace. We know that is God’s vision. Now that must be our work here on Earth.

A practical path to peace is to start with income security for all. It’s easy to understand how and why that is so.

From my perspective, the major obstacles to world peace are habitual ideas and attitudes, particularly the conventional practice of thinking in terms of abstractions, such as “war,” “peace,” “terrorism,” and “the economy.”

Instead of abstractions, the way thinking at the core of income security for all starts with individuals and our everyday lives.

Imagine that everyone in, say, Palestine has a guaranteed basic income, enough for food and shelter.

Ordinary Palestinians have never known economic security, no matter who governed their territory, Turkey, Great Britain, Egypt, Jordan, Israel, or the Palestinian Authority. There have been reports for years that the Palestinian Authority is corrupt, inefficient, ineffectual; that was the main reason for the emergence of Hamas. About half of the 4.1 million Palestinians live below the regional poverty line of $2 a day. Unemployment is more than 40 percent overall, more than 60 percent in some areas.

Suppose the international community offered to provide the funds and help the Palestinians establish their own version of Citizen Dividends. Just $3 billion a year would double the incomes of the poorest. Every Palestinian would have a more direct stake in seeking peace, ending terrorism, and remaking the Palestinian Authority into an effective government that can negotiate with Israel. The plight of the Palestinians will no longer be a rallying point for Hezbollah, Syria, Iran, and other enemies of Israel, including Osama bin Laden and al-Qaeda. Moderate voices might finally be heard over the shouting of militants and fundamentalists.

A few billion dollars a year. That’s a lot less than current international aid to the region. It’s less, in fact, than the current aid that pays for weapons.

Does this make sense? Could it work, do you think? Have you heard anything else that might lead to peace in the Middle East?

The complete proposal, the benefits, and the plan to make it happen is in my book, Peaceful, Positive Revolution,.

A lot of additional information about Citizen Dividends is on this web site, IncomeSecurityForAll.org.

Please explore the web site, read the book, and help spread the word.

We can achieve world peace, and we will, when We the People demand it.

Steven Shafarman

When everyone has a guaranteed basic income, we’ll be much more able to stop the spread of the disease. And much better prepared to cope with whatever happens. If it becomes a pandemic, in particular, basic income can be a critical component of public health.

In this case, moreover, to get the maximum benefits from the basic income, it ought to be universal. We in the United States will benefit directly if Mexicans also have basic income. And Guatemalans. And Canadians, Chinese, and so on.

Before I write about why this is so, here are a few headlines that, by themselves, tell a large part of the story;

U.S. Declares Public Health Emergency Over Swine Flu New York Times

Mexico Takes Powers to Isolate Cases of Swine Flu New York Times

U.S. Steps Up Alert as More Swine Flu Is Found  Washington Post

In Mexico, Young Adults Appear Most at Risk: Capital Grinds to a Halt as Suspected Deaths Rise to 103 Washington Post

Swine Flu Outbreak Could Deepen Mexico’s Recession Washington Post

Suppose there is a pandemic here in the United States, and government orders the closing of airports, train stations, shopping malls, and other public facilities. What will happen to the people who work in those places or commute through them? How will they cope with the lost income and other disruptions in their lives? What about their families? Their communities?

Imagine that for your family, your neighbors, your community, your town or city. Imagine that for your workplace, company, industry.

What if public facilities stay closed for a few weeks, or a month or longer?

Now suppose we have Citizen Dividends and everyone has some guaranteed income independent of any job. At the very least, there will be much less fear about how to manage financially, much less stress about how to pay the bills.

Secure income independent of any job will give people the resources to adapt by, for example, working from home by computer and phone, homeschooling the children, rescheduling vacations, planting gardens, organizing community support networks.

Containing a pandemic will require everyone’s cooperation, and Citizen Dividends will affirm that we’re all in this together.

Steven Shafarman

They can achieve that with guaranteed basic income worldwide. Citizen Dividends for people in every country.

Here’s the photo:

Suppose we had Citizen Dividends of, say, $1,000 a month for every adult citizen in the United States; maybe $500-800 in Germany or Japan; $100 in Mexico or Turkey or India; $10-30 in poor countries in Africa.

Stability, because people in each country will have secure incomes from their governments, and with that a direct interest in making sure governments are reliable and trustworthy. Current conventional policies rely on transnational corporations that often profit from instability, most notably military build-ups and exploitation of natural resources.

Growth, of the most useful and qualitative sort, growth in health care, literacy, human rights, individual happiness, and other positive values. Current conventional measures of growth focus on GDP and other economic abstractions that gloss over and obscure the lives and needs of ordinary individuals.

Jobs, with individuals having the freedom to find or create the jobs that are most appropriate and meaningful for themselves. Current conventional policies too often treat jobs as a goal, without adequate concern for specifics, such as wages, employment conditions, and social and environmental impacts.

Will world leaders endorse basic income any time soon? Perhaps so, if we find ways to educate them.

Steven Shafarman

London streets have been filled with protesters, many of them focusing, not surprisingly, on economic issues in England and around the world. Too bad the protesters are not calling for guaranteed income.

It’s not enough to protest and say No!. Real change requires some Yes!, some viable alternative.  Basic income ought to be the demand of protestors around the world.

Here are two paragraphs from Nicholas Kristof in the New York Times:

The 500 richest people in the world, according to a U.N. calculation a few years ago, earned more than the 416 million poorest people. It’s worth bearing in mind that the first group bears a measure of responsibility for the global economic mess but will get by just fine, while the latter group has no responsibility and will suffer the worst consequences.

If the G-20 leaders want to address these needs, there are many ways they can do so with negligible sums. Mr. Zoellick at the World Bank is pushing a trade support program to help developing countries sustain their trade. Muhammad Yunus, the microfinance pioneer who won the Nobel Peace Prize, urges the G-20 leaders to create a fund to invest in organizations that offer small loans or otherwise bolster commerce in poor countries.

(The complete piece is here.)

A much better approach would be some type of basic income. Better for the people in extremely poor countries, and much more cost-effective for whoever provides the funds. Trade and micro-loans only help small numbers of people, and can never reach the most needy.

Wealthier countries at the G-20 might commit to an experiment in, say, Haiti, which has horrendous poverty that Kristof describes in his piece. Give every adult some basic amount, even if it’s just $5-10 a month. Yes, that would require police, banking, and other civic infrastructure, but those institutions are necessary for any real progress. The international community would have to help the Haitian government establish that.

This is a big topic, obviously. But it’s something we ought to be thinking about actively.  I’ll be writing more from time to time, and I hope others will join me in promoting this idea.

Steven Shafarman

The article, here, opens by describing an employer calling a meeting of the 50 workers at his factory:

But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.

…

The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.

Europe’s extensive job protections and unemployment benefits are “bad in the upswing, because firms don’t dare to hire people, because then they are glued to them,” said Hans-Werner Sinn, president of the Ifo Institute for Economic Research in Munich. “In the downswing, it’s good if the people are glued to the companies. They keep their jobs. They keep their income. They keep consuming.”

European workers are “glued” to their companies. Those companies are constrained and dependent on their governments. That’s what makes European society and economies more stable than ours.

Citizen Dividends, in contrast, will provide greater freedom to workers and companies. Workers will have an absolute financial safety net regardless of economic conditions. Companies will be more able to innovate; they won’t be “glued” to workers or government.

European approaches are fairly static. The basic income alternative will be much more dynamic.

European approaches are bureaucratic and paternalistic. The basic income alternative is more minimalist and libertarian.

It’s during downturns that European approaches are especially attractive, and that’s illustrated in two more paragraphs from the Times article:

Indeed, to travel between the United States and Germany is to find two countries experiencing the economic slowdown completely differently. The severity of the downturn does not appear to have sunk in yet in for Germans. There was no real estate bubble here, and few people have a substantial portion of their savings or retirement accounts invested in the stock market. The unemployment rate has risen more than a percentage point, to 8.5 percent in February from 7.1 percent last November. But, significantly, the latest figure is still lower than it was just a year ago.

“In contrast to America, our social systems are not on the decline right now,” Mrs. Merkel said Sunday night in a widely watched interview on a television talk show. “Pensions are not cut, unemployment insurance is not reduced. On the contrary, we can register stable and, in some sectors, also rising expenditures, and this makes me hope that our social market economy will enable us to cope with this complicated situation.”

Basic income will protect us and liberate us at the same time, in the downturns and the upswings.

Steven Shafarman