The introduction of a temporary basic income (TBI) for the poor in Kazakhstan and other developing countries could slow the surge of COVID-19 and allow people to stay at home, according to a United Nations Development Programme (UNDP) report, which was published on July 23.
The authors of the report offer several scenarios for paying a TBI. The first option is to pay an amount monthly which the recipient lacks to go above the poverty line. The second option is to pay an amount equivalent to half the median standard of living.
In Kazakhstan, if going with the first option, the government would pay out $136.91 (56.6 thousand tenge) per person monthly. If going with the second one, the payout would be $150.23 (62.2 thousand tenge) per person monthly. According to UNDP estimates, monthly expenditure as a share of GDP would be 0.35% and 0.38%, respectively.
The authors of the report describe introduction of a TBI as a “feasible” measure which is urgently needed, as the pandemic continues to affect more than 1.5 million people globally per week, particularly in developing countries where 7 out of 10 workers are employed in informal markets and cannot earn a living while staying home.
“Many of the huge numbers of people not covered by social insurance programmes are informal workers, low-waged, women and young people, refugees and migrants, and people with disabilities – and they are the ones hardest hit by this crisis,” reads the corresponding press release.
Due to this, according to UNDP, it’s necessary to provide “a guaranteed basic income with a fixed time frame” for 2.7 billion people living below or just above the poverty line in 132 developing countries. Total government spending on this measure, according to the authors’ estimates, would exceed $199 billion per month.
“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,” said Achim Steiner, UNDP Administrator.
While many countries have expanded social protection measures in response to the pandemic, the lion’s share of such spending is accounted for by high-income economies, the authors note. Total social protection spending of low- and middle-income countries amounts to just $77.9 billion, or 13.2% of the world’s total. In per capita terms, these countries are spending an average of $7 in social assistance, or $9.50 if social insurance and labor market programs are added. This contrasts sharply with the corresponding averages of $121 to $123 recorded by high-income economies.
It bears reminding that in Kazakhstan during the public emergency period caused by the spread of the coronavirus infection (from March 16 to May 11), workers who were laid off or sent by employers on unpaid leave were paid an allowance by the state in the amount of the minimum wage, 42.5 thousand tenge (about $102).
During the public emergency period the allowance was paid several times: for the first month of forced downtime 4.5 million Kazakhstanis received it, for the second month, 3.8 million.
In July, President Qasym-Jomart Toqayev approved social payments to citizens who’ve suffered a complete loss of income due to the introduction of quarantine measures. As of July 24, almost 1.6 million Kazakhstanis received payments of 42.5 thousand tenge due to loss of income following the July quarantine measures.