Since the outbreak of the COVID-19 pandemic, the unemployment rate has continuously risen. Even if people didn’t lose their jobs during this period; their living standards have significantly declined due to shortened working hours, forced pay cuts, or lack of digital transformation skills. The pandemic subsidy programs/packages successively launched by governments of various countries seem to still have a few limitations and encountered various complaints from the ground, such as “it can help only for a while but not for long”, “only for B40? While the middle class is being left out”, “I need subsidies urgently, but I don’t know how to apply”, “Why is my application rejected? The review process must be tricky!” It is in such a dilemma that the concept of “free money for everyone” = “UBI (Universal Basic Income)” quickly became popular.
UBI (Universal Basic Income) is a government program in which every adult citizen receives a set amount of money regularly; there are no conditions attached, no threshold restrictions, and no qualification review process. The goals of a basic income system are to alleviate poverty by helping people to meet their basic living conditions and replace other need-based social programs that potentially require greater bureaucratic involvement. Such an unconditional form of “free money” for all people might be able to eliminate people’s dissatisfaction and complaints about the existing government welfare mechanisms and subsidy programs which we mentioned in the last section.
This concept, which sounds a bit “utopian”, actually has already been carried out by many countries even before the pandemic. Earlier on, countries who actively explored the possibility of UBI and tested its effectiveness mainly due to the concern about the accelerated automation progress around the world (AI may gradually replace existing jobs) and about the ever-increasing global income gap between the rich and the poor. According to public statistics, nearly 40 UBI experiments have been carried out in nearly 20 countries around the world. Developed economies such as the United States, Canada, and Finland have unsurprisingly led the experiments, while developing countries such as India, Kenya, and Uganda have also participated in the experimental programs in recent years.
“Lying down and taking free money” will naturally cause countless worries, such as “UBI = reward for laziness and punishment for diligence”? Lazy people may permanently “lie down” without looking for job and randomly consume these “free money” given by the government without a careful plan. Is it true? In the drug-ridden Namibia, the local residents under the UBI experiment program not only did not take money to buy drugs, they even spontaneously set up an advisory committee, led by local teachers and nurses, to advise recipients on how to use UBI rationally. In India, a country with large population size, the recipients not only did not reduce their workload, but even worked harder to earn a better life. During the experiment, the productivity of the treatment village was significantly improved. Let’s take a look at the results of experiments in two developed countries, the United States and Canada. Although some participants temporarily chose not to work, they spend time to go to school/vocational training center to improve skills, or to accompany their children to obtain happiness. Isn’t this short-term “lazy” behaviour good for long-term benefit, both at the household level and country level?
If UBI can be implemented in Malaysia one day, will it have the same positive and significant impacts? We don’t know yet for the time being, since there are no experimental programs that has been carried in Malaysia for reference. However, the possibility of staying away from poverty and violence and gaining equality, staying away from being forced to oppress and gaining freedom in choosing jobs, and staying away from missing the chance of education and training that they dream of which can be brought by UBI, is definitely something worth looking forward. Our life, in this world, is by no means limited to the struggles and difficulties of the current pandemic. Beyond the clouds, there will be light.
This op-ed is invited by the Money Matters Column of 8TV Malaysia, Dr. Saizi Xiao together with Tan Sri Andrew Sheng and another three researchers take turns to contribute to this column weekly. Original op-ed in Chinese can be accessed through