The issue of social protection may be viewed from three perspectives: as a concept linked to the notion of a welfare state; as a support to those who cannot fend for themselves and are outside the growth loop; and also as a tool to reduce poverty and inequality in a society. Social protection has various programmes and instruments, ranging from disability assistance to unemployment insurance to childcare allowances to conditional cash transfers. Over the years, one of the social protection instruments that has been piloted in many countries is the universal basic income (UBI).

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Time to equip the poor with a basic income

Some of the issues concerning UBI need to be clarified. First, the word "universal" in UBI is sometimes misunderstood. Universal here does not mean everyone in the society, but it refers to everyone who qualifies for it, irrespective of all other social assistance they receive. Second, even though UBI has been discussed for decades, no country in the world currently has a national UBI. Over the years, many countries have tried UBI as pilot programmes on a local scale. Thus, in 1974, Canada ran its basic income pilot programme in Mincome, in the province of Manitoba. In 2008-09, Namibia provided every resident of Otjivero-Omitara with 100 Namibian dollars per month. In 2017-18, Finland paid 2,000 unemployed people a monthly income of 560 euros. Third, even now, experiments with UBI are still going on. For example, in England, a pilot programme is planned to trial a UBI of 1,600 pounds per month. The programme will pay 30 people a lump sum each month for two years.

Three issues are pertinent to the UBI pilot programmes in different countries. One, they were to test whether this basic income transfer could reduce poverty and social exclusion, and also to assess the modus operandi of such programmes. Two, it was to identify whether a basic income to people would act as a disincentive for them to work. Three, the pilot programmes were a test case to determine whether the cost implications for an UBI programme would be high. These concerns are of importance for scaling up the current UBI programmes as well as for their replication in other countries.

All these issues are relevant to contextualise the present discussions that have been taking place in Bangladesh on introducing a UBI programme, in line with the aspiration of the people to create a society without disparities. The idea is that such an initiative in Bangladesh will improve the living conditions of its poor, will protect those who are outside the market structures and are unable to fend for themselves, and will pave the way for a welfare state. A UBI programme for Bangladesh has recently been proposed as a promising tool to reduce poverty, empower citizens, and streamline social protection even within the constraints of the current fiscal framework.

Some of the characteristics of the proposed programme are: first, it would include a periodic, unconditional, and uniform cash payment system, offering financial security to all members of the society. Second, it has been maintained that at this point, a partial UBI would be perfect for Bangladesh. Third, a poverty scorecard has been recommended as a reliable and cost-effective tool to assess poverty levels and identify target groups. The threshold of the proposed poverty scorecard is supposed to indicate the households' susceptibility to poverty with the implication that those scoring below the threshold are more vulnerable to poverty, while those above are not. This will ensure an effective implementation of the programme.

In moving forward with the proposal, it will be of critical importance to pay attention to some crucial issues. First, the proposed UBI programme has been referred to as an initiative that could be more effective than the current social safety net programmes in alleviating poverty in the country. Does it mean that other social safety net programmes will be scrapped? Or would it lead to a combined integrated social protection package for the country? Similarly, if there is duplication of benefits (for example, if someone gets some other social safety benefits in addition to UBI), will the other benefits be stopped? Second, the proposed UBI will be an unconditional cash transfer. As there is an intense global debate on the efficacy of unconditional versus conditional income transfers, the issue may be revisited in the context of Bangladesh. This is because conditional cash transfers can bring in additional benefits in areas of children's education, health and nutrition. Bolsa Familia, the conditional cash transfer programme in Brazil, is a prime example. Third, the implementation mechanism of UBI should be thought through. The bureaucracy around UBI can be stifling.

Two other major issues need to be tackled in the context of UBI for Bangladesh. First is the question of targeting. The proposed UBI has indicated that the threshold of the poverty scorecard would be determined by analysing values in urban and rural areas, aligning them to represent households that fall below the upper poverty line, as defined by the 2022 Household Income and Expenditure Survey (HIES) of the Bangladesh Bureau of Statistics (BBS). According to the proposal, urban households with a score below 48, and rural areas below 52, would be eligible to receive allowances. In this context, two questions need to be answered: one, how the scoring was done—if there was any subjectivity behind those scoring; and two, if, in future, the upper poverty line was adjusted up or down, how the scoring would change.

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Time to overhaul the social safety net programme

Second, the resource implications of UBI everywhere in the world is huge, and Bangladesh is no exception. If each eligible person here is handed over, as proposed, Tk 4,540 per month, a national UBI programme would cost the treasury about Tk 75,000 crore. With the country's tax-GDP ratio at eight percent, the scale of the challenge to implement a national UBI programme will be daunting. There is also a related question: even if it is possible to sustain this cost of UBI, would the resources for other social safety net programmes dry up?

Finally, it is good to know that like other relevant countries, the UBI proposal is focusing on it first as a programme on a limited scale and coverage. A proposal has been made to roll it out in 11 most poverty vulnerable districts in the country. This is a prudent and a pragmatic approach. If, on monitoring and evaluation, it seems promising, the UBI programme can then be scaled up nationally and sustained.

Selim Jahan is director of the Human Development Report Office under the United Nations Development Programme (UNDP) and lead author of the Human Development Report.

Views expressed in this article are the author's own.

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