Could a basic income save Libya?
Much of the discussion about ‘basic income’ has been centred on advanced economies in Europe and North America. The idea to provide each citizen with a guaranteed, monthly level of income promises to emancipate the middle-class and boost the quality of life for the working-class. But the concept has some powerful potential to stabilise troubled states in the developing world. Specifically a troubled nation I spent a large part of my childhood in — Libya.
Libya is a pretty common dysfunctional African state, resource rich with a terrible legacy of dictatorship and economic underdevelopment. Four decades of despotic rule by Muammar Gaddafi were underlined by old school socialism that destoryed the private sector, created bloated state enterprises, with a crippling lack of investment in education, heath, infrastrucure and manufacturing.
Fast forward to 2016, it’s five years after Gaddafi was overthrown and the legacy of his mismanagement and the struggle for oil resources has driven Libya to the point of fragmentation and complete failure as a functioning state. There are rival governments, ISIS encrouchments and widespread lawlessness. There is no single silver-bullet that can solve these problems but a guaranteed basic income could be a powerful driver of stability and peace.
In a way, Libyans already kind of rely on a basic income, the vast majority of people are employed by the public sector. Oil revenue comes into the central government coffers (or more specifically the Central Bank) and are then redistributed top-down to government ministries, loss-making state firms and state employees. But this approach is problematic for a number of reasons.
Firstly it creates a perfect breeding ground for corruption. Unlike developed democracies where government funding is derived from taxes, the oil revenues slosh directly into government resulting in ‘no representeation without taxation’. This has the additional negative effect of citizens lacking ownership over state insfrasturuce and assets ‘the state paid for this so why should we care!’.
Secondly this approach cripples local government, already badly limited under Gaddafi’s years of iron rule, local authorities have to go cap in hand to the central government for almost all funding, rather than being able to generate income from local taxation. This removes the incentive for delivering better services or assuming accountability to local communities.
Thirdly, this approach has a limited positive effect on stabilisation and national cohesion. A salary, even from a government employer, doesn’t carry the same symbolism or emotion of the consitutionally enshrined right to a monthly basic income. Or share of the nations resource-wealth.
A basic income in Libya addresses the old saying about ‘money talking and bullshit walking’. It’s a tangible, monetary expression of the equality of all Libyan citizens, young old, rich poor, west, east or south (Libya is about the size of Western Europe so regional disparity is a hot political topic). It clearly articulates the need for Libyans to work together for peace and stability to protect their shared right. In addition it provides the required safety blanket for the desperately needed restructuring of the Libyan economy and public sector workforce. If ministries and state firms need to be streamlined, the basic income will ensure citizens don’t go without.
For an even more dramatic impact, Libya could make the basic income taxable. This drastically flips the equation between citizen and government. Truning citizen taxes into a powerful source of income and ensuring they feel invested in state infrastructure and development. Ensuring a sufficient percentage of this tax is allocated to local government will help boost decentralised development and service provision.
Finally, the timing for considering a basic income is very pertinent. An elected committee has been drafting a new Libyan constitution over the past 2 years with plans to present a first draft soon. Placing economic equality at the heard of such a foundational document will be a critical requirement to stabilise and rebuild Libya.