DLP candidate says UBI can improve welfare system

A Democratic Labour Party (DLP) candidate has suggested that Barbados’ welfare system can be significantly improved or fully overhauled with a universal basic income (UBI) programme.

Delivering opening remarks during Sunday’s James Tudor Institute of Politics webinar, the DLP’s St James South candidate Dr Ronnie Yearwood said such a programme could provide much-needed additional benefits for Barbadians.

Special Envoy to the Prime Minister on Investment and Financial Services, Avinash Persaud recently indicated that Government is moving ahead with a plan to provide UBI, which may come in the form of a “citizen’s dividend”.

“What makes UBI compelling is that you are trying to stop folks from falling through the cracks in the first place. Many welfare schemes are after the fact. UBI occurs before the fact, so you do not get into a poverty trap in the first place, with the financial costs and societal costs such as loss of talent and people,” Yearwood said.

“It also addresses issues regarding mental health, because there is nothing probably more devastating than not knowing how you will eat or pay basic bills. The point is that UBI, though not a silver or magic bullet, can reduce poverty, inequality, provide predictability and security of income, improve satisfaction in material needs, change behaviour, improve health and well-being, which then addresses other issues such as reduction in crime, increased entrepreneurship, etcetera – a number of indirect socio-economic outcomes,” he added.

Senior Fellow at the Inter-American Dialogue, Rasheed Griffith, who was also part of the discussion, said while a UBI as an economic policy can provide benefits for Barbadians, inefficiencies in many state-run systems need to be addressed in order for a UBI to function correctly.

“For example, Barbados has a Film Censorship Board that is like $50,000 a year…. We do not really need things like that. So, just by having some simplification of different government accounts, conservatively you can get to about $500 million just by doing some accounting differences to [put forward] the UBI.

“It’s doable, which makes it just a prioritization problem, and not an economic problem. I think when people realize it’s a prioritization problem, not necessarily an economic problem, then I think it becomes a bit more palatable,” Griffith said.

Pro Vice-Chancellor of the Board for Undergraduate Studies (BUS) at The University of the West Indies, Professor Justin Robinson agreed that a UBI would be a ground-breaking policy change that could lift many Barbadians off the poverty line.

However, he said, the current economic downturn would pose many challenges to such a shift.

“I think the financing challenge is quite distinctive and different in a middle-income country. We have seen the multilateral system provide assistance to poor countries, seeking to introduce some form of cash transfer; we may not qualify for that as a middle-income country. Where we have had experiments in upper-income countries, these are wealthy countries that have fiscal surpluses, they have windfalls from energy and other areas,” Professor Robinson said.

“So, how we finance this in a middle-income country, I think is something that we still very much need to address.” (SB)