A U.N. program is calling for a guaranteed Temporary Basic Income for nearly 3 billion of the world’s poorest people to shield them from the worst impact of COVID-19. The proposal argues the financial aid would help slow the spread of the pandemic by enabling impoverished beneficiaries to stay home.
The United Nations Development Program says that 1 billion people live below the poverty line on $1.90 a day. Nearly 2 billion others live just above the poverty line but are at risk of falling below. About 70 percent work in the informal sector. They are self-employed, unpaid and not protected by any social insurance program.
Despite COVID-19 lockdown measures, people who work in the informal sector are forced to leave their homes to eke out enough money to support themselves and their families. U.N. Development Fund chief economist and lead author of the report George Gray Molina told VOA their prospects of weathering the current crisis without a guaranteed income are bleak.
“What we will see is quite horrific,” he said. “People with no jobs, no livelihoods, no income, with containment policies that are variable. Some are working, some are not working. If they do not work, then you see a spread of the virus. It gets worse and worse. So, it is a vicious cycle, and this can be part, we think, of breaking that vicious cycle.”
The UNDP estimates $1.2 trillion would be needed to provide a Temporary Basic Income for nearly 3 billion of the poorest people in 132 developing countries for six months.
Molina notes this sum is nearly equivalent to the $1.3 trillion of what developing countries owe in external debt payments this year. He says one way that countries could pay for the Temporary Basic Income, or TBI, would be to defer payment of their external debt for a year.
“The Secretary General of the U.N. has called for a comprehensive debt standstill, which would include all private creditors and also official bilateral creditors,” he said. “So, that is one source that we think could work. It is a standstill for one year, so, you would stop paying the bank for a year, but then you would repart paying the bank as soon as the TBI is over.”
Several countries already have taken steps to introduce a Temporary Basic Income. For example, UNDP reports Togo has distributed more than $19.5 million in monthly financial aid to nearly 13 percent of the population through its cash transfer program. Women who work in the informal sector are the main beneficiaries.
It says Brazil and Colombia recently began registering people as a prelude to receiving financial aid. It adds that Spain recently approved a monthly budget of $289 million to supplement the incomes of 850,000 vulnerable families and 2.3 million individuals.