Support to Poor can reduce COVID: UNDP Report

By Rahul Vaimal, Associate Editor
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A report released by U.N. Development Programme (UNDP) implies that temporary basic income support to the world’s poorest 2.7 billion people in 132 developing countries could help slow the spread of the coronavirus by allowing them to stay home. 

The report, titled, ‘Temporary Basic Income: Protecting Poor and Vulnerable People in Developing Countries’, estimates that it would cost from US$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.

A temporary basic income would give them the means to buy food and pay for health and education expenses. 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.

The report suggests three options – top-ups on existing average incomes, lump-sum transfers linked to differences in the median standard of living across a country or uniform lump-sum transfers regardless of where someone lives in a country.

“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. Bailouts and recovery plans cannot only focus on big markets and big business.”
Achim Steiner, UNDP Administrator 

The report concludes that the measure is feasible and urgently needed, with the pandemic now spreading at a rate of more than 1.5 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 programs 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.

United Nations has warned that the pandemic and associated global recession could trigger an increase in poverty worldwide for the first time since 1990 and push 265 million people to the brink of starvation.

One way for countries to pay for a temporary basic income would be to repurpose the funds they would use this year to service their debt. Developing and emerging economies will spend $3.1 trillion in debt repayment this year, according to official data. A comprehensive debt standstill for all developing countries, as called for by the UN Secretary-General, would allow countries to temporarily repurpose these funds into emergency measures to combat the effects of the COVID-19 crisis.

Several countries have already taken steps to introduce temporary basic incomes. The government of Togo has distributed over $19.5 million in monthly financial aid to over 12 percent of the population through its cash transfer program, mostly to women who work in the informal sector. Spain recently approved a monthly budget of $289.75 million to top up the incomes of 850,000 vulnerable families and 2.3 million individuals up to a minimum threshold.

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.