New York, 23 July 2020 – The introduction of a Temporary Basic Income for the world’s poorest people could slow the current surge in COVID-19 cases by enabling nearly three billion people to stay at home, according to a United Nations Development Programme (UNDP) report released today.
The report, Temporary Basic Income: Protecting Poor and Vulnerable People in Developing Countries estimates that it would cost from $199 billion per month to provide a time-bound, guaranteed basic income to the 2.7 billion people living below or just above the poverty line in 132 developing countries.
The report concludes that the measure is needed, with the pandemic now spreading at a rate of more than 1.6 million new cases per week, particularly in developing countries, where seven out of ten workers make a living through informal markets and cannot earn money if they are at 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. UNDP has carried out assessments on the socio-economic effects of COVID-19 in more than 60 countries in the past few months and the evidence shows that workers who are not covered by social protection cannot stay at home without an income.
In the case of Latin America and the Caribbean - the region’s hardest hit in terms of economic growth and which has over 3.5 million confirmed cases and close to 160 thousand confirmed COVID deaths – more than two-thirds of workers are in the informal sector and 61% of them do not benefit from any form of social protection and are unable to mitigate risks such as quarantine or rising healthcare spending.
These temporary cash transfers would allow those most impacted by the social and economic effects of COVID-19 to pay for food, childcare, health, and education services, even if they are not able to work and required to stay at home - however, the complexity of reaching these populations timely should not be underestimated. It is also financially within reach: a six-month Temporary Basic Income, for example, would require just 12 percent of the total financial response to COVID-19 expected in 2020, or the equivalent of one-third of what developing countries owe in external debt payments in 2020.
“Unprecedented times call for unprecedented social and economic measures. Introducing a Temporary Basic Income for the world’s poorest people has emerged as one option. This might have seemed impossible just a few months ago,” said UNDP Administrator Achim Steiner.
“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,” he said.
A Temporary Basic Income is not a silver bullet solution to the economic hardship this pandemic has brought, however. Protecting jobs, expanding support to micro, small and medium enterprises, and using digital solutions to identify and access people who are excluded, are all measures that countries can take.
Over 20 countries in the region have either expanded or introduced cash measures to respond to the COVID19 crisis. Some of these are new programmes, mostly temporary, some are expansions of existing ones, both to reach new beneficiaries, and/or to increase the amount of benefit.
To expand cash transfers, some countries in the region are benefiting from beneficiary registries that already include large portions of the population. This is the case of Colombia and Chile, for examples, whose registries already included 73% and 75% of the population, respectively. Both countries have been able to expand cash transfer programmes, based on these registries, adding 14 and 25% of the population as new beneficiaries, respectively.
Other countries which did not have this kind of administrative records prior to the crisis are looking for innovative ways to expand their programmes. In Honduras for example, with support from UNDP, the government is expanding its social registry to include a larger portion of the population to whom benefits can be extended in times of crisis.
Brazil, whose registry covers 45% of the population, embarked in a self-enrollment campaign, where people signed up to the registry online (with a potential site visit to confirm veracity of information). Through this mechanism they were able to enroll 1.2 million new households.
COVID-19 has exacerbated existing global and national inequalities and has created new disparities that are hitting the most vulnerable people the hardest. With up to 100 million more people being pushed into extreme poverty in 2020, 1.4 billion children affected by school closures, and record-level unemployment and loss of livelihoods, UNDP predicts that global human development is on course to decline this year for the first time since the concept was introduced.
UNDP is the socio-economic lead for the UN system on COVID-19 recovery and is implementing social and economic recovery strategies in countries across the world.