From Herbert Jauch:
(thanks to Dante Monson for the reference)
“Namibia, a vast country inhabited by two million people, is one of the smaller economies in Southern Africa. It adopted a market-based economic system after achieving independence from apartheid- era South Africa in 1990. Despite creating favourable investment conditions and its high levels of political stability, Namibia, with its ample mineral and marine resources, could not break the vicious cycle of mass unemployment, inequality, and poverty.
In 2002, the Namibian government appointed the Namibia Tax Consortium to review Namibia’s tax system and to explore ways of addressing poverty and inequality. The subsequent report found “that by far the best method of addressing poverty and inequality would be a universal income grant.” The commission further suggested that the BIG should be set at a level of at least N$ 100 (USD$ 12) per person per month.
A BIG would cover all Namibians from birth until they reach the age of 60, at which time the national old age pension scheme (currently N$ 470 per month) would kick in. The consortium pointed out that the net costs of the Basic Income Grant would amount to about 3% of Namibia’s GDP and could be recovered through changes in the tax system, whose collection rate is currently below 25%, thus making a BIG affordable.
The Namibian government was divided over the question of a BIG. Some regarded it as an unaffordable welfare measure, while the International Monetary Fund did its utmost to discourage Namibia’s policy makers from implementing it. Undeterred, in 2004 a coalition of churches, trade unions, NGOs, and AIDS Service organisations formed the Basic Income Grant Coalition to advocate for the introduction of a BIG in Namibia.
After three years of debating and lobbying, no breakthrough was achieved ; government ministers and parliamentarians were still divided over the merits of a BIG. Finally, the Coalition decided to implement a basic income grant in a single village.
The chosen location was the settlement of Otjivero in the Omitara district of Eastern Namibia. About 1,000 people reside there. Most of them are retrenched former farm workers and their families, all of whom have nowhere else to go. Poverty and desperation were widespread and the Coalition believed that if the BIG could make a difference in the lives of the residents of Ojtivero, it would certainly be able to make a difference in the rest of the country.
The pilot project started in January 2008. All residents below the age of 60 years received a Basic Income Grant of N$100 per person per month— no strings attached. A local and international research team has accompanied the introduction of the BIG ; their task is to closely monitor its impact over a two-year period.
The community itself responded to the introduction of the BIG by establishing their own eighteen-member committee to mobilize the community and advise residents on how they could improve their lives with the money. This suggests that the introduction of a BIG can effectively assist with community mobilisation and empowerment.
The first to benefit have been the children. In just six months child malnutrition plummeted from 42% to 17%, while the number of parents paying for school fees doubled to 90%. More children are now attending school and the stronger financial situation has enabled the school to improve teaching materials for the pupils. The school principal reported that dropout rates at her school were 30-40% before the introduction of the BIG. By July 2008, these rates were reduced to a mere 5% and by November 2008, they were almost nil.
Another striking fact is that income has risen by more than the amount of the grants. People are now able to engage in more productive activities, which has fostered local economic growth and development ; several small industries have sprouted up in Otjivero, such as dressmaking, baking, and brick making. Indeed, since the introduction of the BIG, the majority of people have been able to increase their work and their income dramatically. Average monthly household incomes increased substantially over and above the value of the BIG payments : household incomes from wages increased by 19%, income from farming increased by 36%, and income from self- employment increased by 301% during the first year. These findings contradict critics’ claims that the BIG would lead to laziness and dependency.
Worries that the grants would lead to more alcoholism proved likewise unfounded. On the contrary, the introduction of the BIG has induced the community to set up a committee that is trying to curb alcoholism. An agreement has also been reached with local shebeen owners not to sell alcohol on the day of the payout of the grants.
Meanwhile, economic and poverty- related crime (illegal hunting, theft and trespassing) has fallen by over 50%. The Basic Income Grant has also helped young women to take charge of their own lives. Several cases document that young women have been freed from having to engage in transactional sex.
A further boon is that the BIG has supported and strengthened government efforts to provide antiretroviral treatment to people suffering from HIV/AIDS by improving access to government services and enabling people to afford nutrition. The settlement’s health clinic was visited much more frequently ; residents were able to pay the N$ 4 and it has seen its income increase fivefold.
The initial results of this pilot project are encouraging and have, thus far, exceeded the expectations of the BIG Coalition. The local community has embraced the pilot project and is determined to make it a success. The BIG Coalition now hopes to convince the Namibian government to introduce a countrywide BIG in the near future.
All these positives aside, there is no doubt that the BIG is a limited measure and cannot be a panacea for Namibia’s considerable socio-economic challenges. The initiative has to be accompanied by other measures of resource redistribution, job creation and structural change. However, the BIG represents a promising starting point that can make an immediate dent in the debilitating and violent poverty that undermines the lives of so many Namibians.”
For further information on the BIG, visit www.bignam.org