UBI in Asia

Israel

The Israeli government rejected the introduction of a basic income back in 2017. The reason for the refusal was a report by the National Insurance Authority, which justified the fact that to pay a basic income of 3,000 shekels a month would require an amount equivalent to almost half the country’s budget – 193 billion shekels.

Nevertheless, in December 2018 a study was published by economists Ori Katz and Michael Sarel, “Basic Income in Israel,” in which the scholars modeled the introduction of basic income in the country based on 2016 data. They assumed an immediate introduction of basic income under the then-existing conditions (without a gradual transition that would have been smoother and more favorable), that is, they considered the hardest option. The researchers calculated that with the replacement of existing benefits in the country and some increase in the income tax (personal income tax), the unconditional basic income would be:

  • for citizens 20-24 years old – 1,189 shekels (about 20,000 rubles) per month;
  • for citizens of 25-54 years – 1,297 NIS (about 22 thousand rubles) per month;
  • for citizens of 55-66 years – 1,622 shekels (about 28 thousand rubles) a month;
  • for citizens older than 67 years – 3221 NIS (about 55 thousand rubles) per month.

The amount of basic income for children varied as follows:

  • 1st child – 453 shekels (about 8 thousand rubles) per month;
  • 2nd child – 664 shekels (about 11,000 rubles) per month;
  • 3rd and 4th child – 188 NIS (about 3,000 rubles) a month;
  • 5th child – 150 shekels (about 2.5 thousand rubles) per month.

In the summer of 2020, the question of introducing a basic income was again raised in Israel. This was the subject of a report evaluating the government’s response to the economic crisis caused by the pandemic. The report was prepared by the Galilee Research Institute, which believes that an unconditional basic income should replace the system of unemployment benefits and selfemployment leaves practiced in Israel. Institute professor Nissim Ben-David suggested that citizens be paid a monthly unconditional basic income of 6,000 shekels (nearly 140,000 rubles).

India

Discussion and implementation

The India Network for Basic Income (INBI) operates in India.

In January 2017, the government of India endorsed the concept of basic income in its annual report. According to the country’s 2016-2017 Economic Survey, basic income is more effective in alleviating poverty than existing government benefits-about 30 percent of India’s 1.3 billion people live in poverty, especially in rural areas. As a result, a project was designed to pay a basic income equal to the urban minimum wage of 7,600 rupees a year ($113). Such payments would have reduced extreme poverty to 0.5%. The project did not come to fruition.

In May 2018, Telangana province became the first Indian state to pay unconditional amounts to farmers under the Rythu Bandhu (farmer investment support) program. The state government identified eight banks that submitted about 6 million checks to its tax department in the names of 57,000 farmers. The department issued the cheques to the farmers, who could cash them in authorized banks and spend them on agricultural inputs (seeds, fertilizers). This seemingly complicated check scheme was developed after 60 percent of the state’s farmers opted for cash assistance, rejecting bank transfers. The amount received by cheque depended on the area of land cultivated: 4,000 rupees (50 euros) per acre per season, that is 8,000 rupees (100 euros) per year. The average payment per farmer was 10,000 rupees.

On the eve of the 2019 elections, a number of political forces in India made statements about basic income:
– India’s main opposition party, the Congress party, has promised to introduce a minimum income for the poor as of May 2019;
– Prime Minister Narenda Modi’s government proposed a basic income for poor farmers as part of an interim budget from May through December 2019. The draft covered millions of small farmers, who were offered 6,000 rupees a year ($84). By comparison, an annual family living wage (Rs. 183,000);
Sikkim Democratic Front (SDF) officials considered financing basic income in Sikkim from tourism and hydropower revenues. The experiment was announced to begin in 2022, covering all 611,000 citizens of the state. In the upcoming regional parliamentary elections in May, the SDF had its only opponent, the Sikkim Revolutionary Front (SKM).

The Congress party (Congress party), Bharatiya Janata Party (BJP), Sikkim Democratic Front (SDF), Aam Aadmi Party (Aam Aadmi Party) support basic income in the country.

Experiment

In India, the experiment was conducted in Madhya Pradesh in 2011-2013 for 1.5 years. A total of about 6,000 people received basic income during the experiment period. The experiment was funded by the UN Children’s Fund Unicef and included two pilots.

The first main pilot lasted 18 months and included residents of 20 villages:
1) 8 villages received a small basic monthly income on bank cards, including 4 villages with SEWA (Self-Employed Women’s Association) and 4 villages without;
2) 12 villages were observed as a control group, half of them also had SEWA and the rest did not.

The amount of basic income in this pilot was:
– Rs. 200 ($2.8) for an adult and Rs. 100 ($1.4) for a child in the first year of the pilot;
– Rs. 300 ($4.2) for the adult and Rs. 150 for the child for the remainder of the period.

The second study (tribal pilot) was conducted in parallel for 12 months and covered only 2 villages. Residents of one village received 300 rupees ($4.2) per adult and 150 rupees per child, while the second was observed as a control group.

As a result of the baseline income experiment in India:
– the quality of nutrition improved: consumption of meat increased 6-fold, and fresh fruits and vegetables almost 9-fold;
– health care improved as people could afford to go to doctors and get vaccinations against malaria;
– the health of children and adults improved, and anxiety levels decreased;
– housing conditions improved, sanitation improved, and minor repairs were made;
– school attendance and performance has increased;
– economic activity increased, resulting in increased labor hours and labor income;
– there was a shift from temporary wage labor to private enterprise: individual farms and small businesses;
– there was growth in the rural economy;
– Caste-based disadvantage diminished, as basic income was paid to all in the same amount;
– the socio-economic status of women, the elderly, and the disabled increased;
– Domestic violence practically disappeared – its level dropped to almost zero;
– years of debt with huge interest rates were paid off; there was, in Guy Standing’s words, a “liberating effect” as a result of “buying families out of debt bondage.

Some of the results had a prolonged effect, which intensified some time after the end of the experiment. For example, before basic income, women made decisions about how to spend the money in about 9% of cases, at the end of the initial study of the experiment results in 25% already, and in subsequent studies it was found that they could manage money independently, already in 1/3 of cases.

After the experiment, the book “Basic Income: The Politics of Change in India” was released.

Iraq

The possibility of introducing a basic income in the country was discussed in 2011-2012. In 2011 Iraqi leader Muqtada al-Sadr considered oil revenues as a source of financing the payments on the principle of dividends from the Permanent Fund of Alaska and the Human Development Fund in Mongolia.

Open Oil’s Johnny West calculated that the annual base income in the country could be $220, with the possibility of further growth.

Nevertheless, the issue in the war-torn country was never put into practice.

Iran

Iran is one of only two countries in the world in which the equivalent of basic income was paid throughout the state (the other is Mongolia). The country’s nationwide unconditional payments program began in late 2010 and replaced subsidies for bread, electricity, water, and fuel. The monthly amount was 29% of the average family income, i.e. about $40, and was paid once every 2 months – at once about $80.

The Iranian entitlement program was not basic income in the full meaning of the term because:

1) only heads of households received payments, not every citizen;

2) the amount was not sufficient to support a family (about $200 per family of five per month).

This program was sometimes called the oil dividend because it was financed by government oil revenues, 50% of which went to unconditional payments to the population.

The first nationwide payments went to 60.5 million Iranians, or 81% of the population. The remaining 19% of Iranians did not participate in the program voluntarily, mostly because they did not need the money.

Over time, the country’s growing budget deficit led to the following measures:

  • In January 2016, the Iranian government excluded 3.3 million citizens from receiving benefits based on an assessment of their financial situation;
  • In April 2016, the Iranian parliament passed a bill that made another 24 million citizens, approximately 1/3 of the population, ineligible for benefits. The innovations came into force in September 2016.

After 5 years of existence, the unconditional payment program was canceled. The U.S. sanctions played no small part in this.

Because the amount paid by the government was not indexed by the government, it lost 80% of its original purchasing power by the end of the program.

A 2017 report on the results of the program reported that the payments did not lead to a reduction in employment, and services, for example, saw an increase in labor activity. Experts have difficulty determining the economic effect of the program, but the positive social result is clear, as millions of people have moved beyond absolute, or extreme, poverty.

Kazakhstan

In Kazakhstan, the discussion of basic income began after the publication of the UN Development Program report in July 2020. According to the UN, in the country, the least protected part of the population in need of support is 13 million people, i.e. approximately 70% of the population of the Republic.

A proposal to pay this social group a guaranteed minimum income of 42,500 tenge (approximately $100) for 1-2 years was made by Nurzhan Altayev, a deputy of the Majilis of the Parliament and chairman of the Union of Industrialists and Entrepreneurs.

In July 2020 a working group of experts was created on the basis of the Union of Industrialists and Entrepreneurs in order to find the possibility of paying a guaranteed minimum income.

In November 2020, Burikhan Nurmukhamedov stated at the congress of the Ak Zhol party about the need to “offer an unconditional basic income to every citizen.”

China

Macau, a former possession of Portugal and now an autonomous region of China, has had a basic income since 2008. It is a small but unconditional and distributed to all adults in the region as part of the “Wealth Participation Program” (WPS), which is funded primarily by revenues from the local lottery industry.

All residents of the region are eligible for this benefit once they reach the age of 22, as long as they have been resident in Macau during the previous year (and have stayed in the region for at least 183 days per year). Non-residents (non-permanent residents of the region) receive 60% less than locals.

Each year, the regional government determines the amount to be distributed to all residents:

  • In 2008, permanent residents received 5,000 patacas ($0,600);
  • In 2011-2012, payments to permanent residents were 7,000 patacas ($0.9k);
  • in 2013, 8,000 patacas ($1.0k);
  • In 2014-2017, locals received 9,000 patacas ($1,100) and non-residents received 5,400 patacas ($0,700);
  • In 2018, the amount for locals was increased to 10 thousand patacas ($1.0 thousand per year) and 6 thousand patacas ($0.7 thousand per year) for non-residents.

By comparison, in 2016, the average monthly income of Macau citizens was 15,000 patacas ($1,900) and the minimum wage was about 6,000 patacas per month.

In 2015, 676,000 people received an annual basic income, of which 608,000 were locals eligible for the full amount.

Mongolia

Mongolia is one of only two countries in the world in which a basic income has been paid statewide (Iran is the other).

Experiments with basic income began in Mongolia in 2004 with child benefits of 3,000 tugriks per month. Initially the payments were for low-income families with at least 3 children, but later the program was expanded to all children in Mongolia.

In 2010, instead of child benefits, the country switched to unconditional basic income payments to all citizens who were positioned as shareholders in the coal mining company Erdenes Tavan Tolgoi (Treasures of the Five Hills). To distribute dividends from Mongolia’s mining sector to its citizens, the Human Development Fund (HDF) was created in 2009, operating on a “resource cash” basis similar to the Alaska Permanent Fund.

The base income was funded by the HDF from 2010-2012 and was 2,000 tugriks per month (equivalent to $7-$17 due to exchange rate fluctuations during the payout period).

In 2012, in connection with the upcoming elections, all elderly Mongolians received an additional lump sum payment of 1 million tugriks (about 25 thousand rubles).

After the 2012 elections, the country abandoned the basic income and reverted to child payments of 20 thousand tugriks, and the HDF was stopped. This was due to the deficit of the Human Development Fund: payments to citizens in 2012 almost twice exceeded the budget of the fund.

Nevertheless, in 2011 all Mongolian citizens received 1,072 shares of Erdenes Tavan Tolgoi with which they can pay for health insurance, education, as well as exchange them for cash by selling them to the state. Approximately one-third of the country’s population kept their shares to receive dividends (more than 96,000 tugrik for 2019).

In 2016, a new sovereign wealth fund (Future Heritage Fund) was created, to which the former debts of the HDF were transferred. In 2019, the newly established fund covered the former debts and began to accumulate and distribute the savings that financed the child benefits. In May 2020, child payments were increased to 100,000 tugriks (equivalent to $34).

So why did Mongolia abandon the basic income? There are a number of reasons. First of all, there was a discrepancy between the size of the payments and actual resource income, since the amount of basic income was largely determined by pre-election promises. The beginning of the basic income payments was accompanied by the development of the country’s mining sector and GDP growth of almost 14% per year on average, but later there was a decline in the prices of extracted raw materials. Another reason was to cover the shortfall in payments with borrowed funds, which led to an increase in the country’s public debt. As a result, the country’s economic growth slowed down, and the foreign debt grew.

Nevertheless, the positive effects of basic income payments in Mongolia in 2010-2012 are evident:

  • poverty reduction by 1/3;
  • reduction of inequality;
  • involving 100% of the population in Mongolia’s banking system – a very significant result for a country where about half of the residents live in a nomadic way;
  • the country’s citizens felt like full owners of its resources, receiving a share of the nation’s total wealth.

Saudi Arabia

The Kingdom of Saudi Arabia is one of the countries on the Arabian Peninsula whose economy is based on oil exports-the so-called “resource” economy. In these countries, almost 2/3 of working citizens are employed in the economically sustainable public sector, earning much more than migrants and those who work in the private sector. Citizens pay virtually no taxes, so they are not positioned as taxpayers; rather, they are more co-owners of the country’s resources and are entitled to share in the benefits and income.

In the Persian Gulf countries (Qatar, Kuwait, Saudi Arabia, UAE), no unconditional basic income is paid in pure form – national wealth is distributed differently. As a rule, the state transfers a solid sum at the birth of a child, allocates land, finances education, including in any country of the world.

In Saudi Arabia, there are 9 programs to support low-income citizens (less than 1725 riyals, the equivalent of $460): the state fully or partially finances the purchase of furniture, food, health insurance, etc.

“Arab Spring” in 2011 led to the adoption of additional support measures: the authorities of Saudi Arabia allocated $ 36 billion to provide financial assistance to the population, and Kuwait – about $4 thousand to each citizen with additional provision of free food for more than a year.

Taiwan

Taiwan has had a UBI Taiwan movement since 2016. According to the movement’s proposal made in 2017, every adult citizen of Taiwan can receive 10,000 NTD per month ($330), and children can receive 5,000 NTD per month ($165). Such payments will significantly reduce the number of low-income families in the country from 25% to 8.5% of the population.

Taiwan’s low tax burden and developed economy favor the introduction of a basic income.

The UBI Taiwan Group proposes to finance basic income through a carbon tax, creating a Taiwan Permanent Fund (TPF) similar to the Alaska Permanent Fund. The proposed TPF would require a tax increase of 5.2% of GDP, but 70% of Taiwanese would benefit from such a policy.

South Korea (Republic of Korea)

The Korea Basic Income Network (BIKN) was founded in June 2009. Koreans formed the Basic Income Coalition (BIC) in 2010 to support candidates in favor of basic income in the upcoming local elections. The coalition includes 28 candidates: 23 from the Socialist Party, 3 from the Democratic Workers’ Party, and 2 from the New Progressive Party. It did not come to a governmental discussion of the issue.

The Tio Su-ki experiment for youth

In 2016, a group of young people from Daejeon initiated the Tio Su-ki pilot. The project was funded by donations from more than 200 participants, 3 of whom were identified as winners through a lottery drawing. Winners received 500,000 won (about 370 euros) each for 6 months.

The participants noted an improved quality of life, increased vitality and determination, and a variety of interests.

One of the objectives of the project was to raise public awareness about basic income.

Basic Income for Gyeonggi Youth

In April 2019, Korea’s Gyeonggi Province began paying a so-called basic income to young people. Each 24-year-old living in the province for 3 consecutive years or 10 years in the aggregate receives 4 quarterly payments of 250,000 won ($220) – a total of 1 million won per year.

The project is funded by the Gyeonggi provincial government and reaches 175,000 young people a year. Its budget is estimated at about 175 billion South Korean won.

An analysis of the results, released in December 2019, showed:

  • food quality has improved, as young people tend to save precisely on food during exam preparation periods when they are preparing for employment or entering the civil service, when people have to give up part-time jobs;
  • relationships in the family and in the team have improved, and self-esteem has risen;
  • motivation to work increased;
  • increased life satisfaction.

Japan

Discussion

The BIEN Japan movement has existed in Japan since 2007.

The most heated debate about basic income in the country took place in 2009 and involved scholars, citizens, politicians, activists, and the media.

  • in the political arena in Japan, there is support for the basic income:
  • in 2009, the idea was endorsed by two very different political currents at once: left-wing radicals and neoliberals;
  • since 2012, the Green Party has supported a basic income;
  • in 2015, Seisyu Makino, an MP from Japan’s largest opposition Democratic Party, highlighted the basic income idea through his blog posts.

Toru Yamamori, professor of economics at Doshisha University, and Haori Katada, social welfare assistant at Saitama City Security, have contributed greatly to the economic rationale and dissemination of the basic income idea in the country. In 2014, Toru Yamamori co-published with Yannick Vanderborgt the book “Basic Income in Japan. Perspectives on a Radical Idea in a Transforming Welfare State.”

There has been no official government response to public discussion of the issue in the country.

Billionaire Yusaku Maezawa’s private experiment

Japanese billionaire Yusaku Maezawa, who supports the idea of a basic income, has allocated $9 million and from January 1, 2020, began unconditionally giving out $9,000 each to 1,000 randomly selected people in his Twitter followers group.

The billionaire has 2 goals: to conduct a social experiment and to raise interest in basic income in the country.

Share to friends
Universal Basic Income: pros and cons, countries with UBI