Uzair bin Farid

Universal Basic Income (UBI) is a fascinating social security idea but it is not implementable in a poor country like Pakistan, said Dr Ijaz Ali from the Karachi-based Centre for Business and Economic Research (CBER) while talking to WealthPK. ‘’Many famous and influential people have suggested UBI as a practical way to end poverty and extreme deprivation but Pakistan doesn’t have enough revenues to implement such a scheme,” Ijaz said.

“Famously, this idea was supported by the founder of Tesla and SpaceX. What he said was that when automation replaces the jobs of millions of people, there will be a need to institute a system where the wealth generated from technological advancements is distributed among jobless people,” he said.Ijaz said when people get a fixed income every month, they will no longer need to earn money for survival. Hence, they will have the opportunity to take risks, pursue education and entrepreneurship, and contribute towards the growth of society with new ideas.

“UBI has its drawbacks too. If people receive a fixed income, they may leave the labour market, causing a shortage of workers. This will cause some form of economic disruption,” Ijaz said.“Such an exodus of quitting the market will surely have its own unpredictable and unforeseen consequences. However, if there is a proper planning before the implementation of such a program, and if there are credible incentive structures to motivate people to participate in the job market, then UBI can prove to be a very effective bulwark against poverty and inequality,” he added.

This idea of social security has been supported by such people as the Nobel prize winner and Chicago school titan Milton Friedman and late civil rights activist Martin Luther King Jr.According to the proponents of the idea, a fixed income for every citizen will reduce poverty and income inequality in the country. It is an excellent way to protect the citizens from the vagaries of the job market and fluctuations in prices.

Credit: Independent News Pakistan-WealthPk