Will coronavirus shock make Arab region ready for universal basic income?

Will coronavirus shock make Arab region ready for universal basic income?
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Foreign workers stand in line as they wait to be checked for the novel coronavirus at a testing centre in the Naif area of Dubai, on April 15, 2020. (AFP)
Will coronavirus shock make Arab region ready for universal basic income?
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A young boy drives a small vehicle loaded with recyclable items gathered at a landfill, to be sold for extra income, in the Iraqi holy city of Najaf on June 9, 2019. (AFP/File Photo)
Will coronavirus shock make Arab region ready for universal basic income?
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Palestinians sit by a fire at the Khan Yunis regugee camp in the southern Gaza Strip on January 28, 2020. (AFP/File Photo)
Will coronavirus shock make Arab region ready for universal basic income?
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An Iraqi street vendor sells worry beads after measures of social distancing were eased by the authorities, ahead of the fasting month of Ramadan, in central Baghdad on April 22, 2020. (AFP/File Photo)
Will coronavirus shock make Arab region ready for universal basic income?
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Emirati men, wearing protective masks to combat the spread coronavirus, walk in the Mall of Dubai on April 28, 2020, after the mall was reopened. (AFP)
Will coronavirus shock make Arab region ready for universal basic income?
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A vendor, wearing a mask for protection against the coronavirus, stands next to ladies handbags displayed for sale at a shop in the Mall of Dubai on April 28, 2020, after the shopping centre was reopened. (AFP)
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Updated 01 August 2020

Will coronavirus shock make Arab region ready for universal basic income?

Will coronavirus shock make Arab region ready for universal basic income?
  • How people will make basic ends meet under lockdown is a big question facing policymakers worldwide
  • Implementing universal basic income in the MENA region would cost 17.9% GDP, says an ILO study

DUBAI: Denmark’s government has guaranteed workers affected by the country’s lockdown a minimum of 75 percent of their salaries.

In Italy, populist politician Beppe Grillo is calling for regular payments to “Italians [who] won’t have a secure income in the next few months.”

In the US, House Speaker Nancy Pelosi is willing to look into instituting a universal basic income (UBI) for Americans, which was at the heart of former Democratic hopeful Andrew Yang's presidential campaign.

As people across the world are ordered to shelter in place to contain the spread of the coronavirus disease (COVID-19), how they will make basic ends meet has become one of the biggest questions facing policymakers.

Liberal activists are hoping that governments adopting cash transfers as a temporary emergency measure will be compelled to retain it once citizens have seen its benefits.

As in the rest of the world, however, the idea of guaranteeing everyone an income both tantalizes and terrifies the Arab region.

“No country in this world is ready for UBI, an unconditional payment to all residents without any conditions,” said Dr. Osman Gulseven, associate professor at Skyline University College in Sharjah.




A young boy drives a small vehicle loaded with recyclable items gathered at a landfill, to be sold for extra income, in the Iraqi holy city of Najaf on June 9, 2019. (AFP/File Photo)

“This is not only economically infeasible but also financially impossible for most Arab countries. Those payments will come from taxes, which will again be collected from society — specifically the working middle class.

“It is quite illogical to transfer money from the working people to everyone else.”

Although some countries have initiated UBI-like schemes to shore up their COVID-19-battered economies, he does not view it as a potential long-term solution.

“This is an unprecedented crisis period,” Gulseven told Arab News. “Typically, any money paid by the government has to be financed from somewhere. Printing money will cause inflation, which has devastating effects on the economy.”

Taxing more from sales and income will further crimp economic activity, in his view.

Opinion

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“It is also impossible to pay back everything without financial resources,” Gulseven said. “Arab countries do not have the financial means for UBI. Only a few Gulf countries with substantial currency reserves can afford UBI, that too only for their citizens.”

Gulseven’s view is seconded by George Politis, visiting lecturer at the Costas Grammenos Centre for Shipping, Trade and Finance, who says UBI will not work in periods of financial distress.

“We need normality, functioning economies, growth and prosperity,” he said. “Once normality is achieved, the key indicators to study will be GDP per capita, public spending-to-GDP ratio, and poverty levels in order to calculate how much is needed for a given population and whether the state can afford the cost.”




Palestinians sit by a fire at the Khan Yunis regugee camp in the southern Gaza Strip on January 28, 2020. (AFP/File Photo)

Politis said UBI in emerging markets could only work through an international or regional body since states cannot self-finance such a policy.

“The lesson from the EU is that there is little appetite among larger and smaller economies for mutual financial collaboration towards surviving the current crisis,” he said.

The International Labor Organization (ILO) estimated in 2018 that UBI’s impact on poverty and inequality depends on such factors as the level of benefits, their capacity to meet people’s needs, and sources of funding.

FASTFACT

17.9%

GDP cost of UBI if adopted in MENA. (Source: ILO)

The study found that the cost would range from 17.9 percent of GDP in the Middle East and North Africa (MENA) region to about 25 percent of GDP in Asia, Europe and Latin America.

“Some UBI proposals have the potential to advance equity and social justice, and others do not,” the ILO report said.

“Governments that consider implementing a UBI should carefully examine all options, including the progressive or regressive aspects of the proposed measures, the winners and losers, and the potential risks and trade-offs.”




An Iraqi street vendor sells worry beads after measures of social distancing were eased by the authorities, ahead of the fasting month of Ramadan, in central Baghdad on April 22, 2020. (AFP/File Photo)

According to Dr. Albadr Al-Shateri, former politics professor at the National Defense College in Abu Dhabi, UBI would be an excellent idea for the Arab world, but the groundwork has yet to be laid.

“The development of citizenship in the Western context passed through three phases: first civil liberties, then political participation and finally economic rights,” he told Arab News.

“The Arab world, or any other region for that matter, cannot skip stages.”

He said most Arab countries will be hard-pressed to implement UBI as such a scheme requires sustainable economic structures, something most of them lack.

“Many Arab countries rely on one or two products to maintain their income, which are subject to the vagaries of the international market,” Al-Shateri said.

“Even if states in the Levant can maintain a sustainable economy, UBI would be hard to sustain. And if a good segment of the population expects regular income from the government, failure to meet that expectation would have dire political consequences.”

Al-Shateri says the dual shock of wars and the COVID-19 pandemic does not bode well for the future of the MENA region.

“Gulf Cooperation Council (GCC) countries are not in position to extend a helping hand because of the fall of oil prices, the economic slowdown and the war in Yemen,” he said.

Even before the COVID-19 storm hit, economic conditions in many Arab countries were precarious at best.

Lebanon was already on the verge of collapse, and Syria was reeling from the aftermath of the civil war, which had also damaged the Jordanian economy.

The Palestinian economy remains heavily dependent on the generosity of foreign donors.




A vendor, wearing a mask for protection against the coronavirus, stands next to ladies handbags displayed for sale at a shop in the Mall of Dubai on April 28, 2020, after the shopping centre was reopened. (AFP)

“The Levant region might experience more political conflict as a result of the economic woes,” Al-Shateri said.

Cyril Widdershoven, director at Verocy, a Dutch consultancy advising on investments, energy and infrastructure risks and opportunities in the Arab region, concurs with Al-Shateri’s gloomy prognosis.

“Jordan is struggling owing to a lack of reserves, desert agriculture and high unemployment,” he told Arab News.

If the GCC countries are hit by an economic crisis, foreign workers from Egypt, Jordan and Lebanon would face unemployment, which in turn would affect the budgets of their home countries because of the dependence on Gulf remittances, Widdershoven explained.

“Priority should be given in the post-coronavirus era to diversification of economy, population control and sustainable GDP growth. Demand for migration will increase as fewer opportunities at home will force young people to look towards the US, EU and Australia.”

The potential and most obvious solution for many is International Monetary Fund (IMF) assistance, although it already has applications for support from more than 90 countries, says Politis, who is also a part of the Faculty of Finance at Cass Business School at the University of London.

“The terms for funding will probably be more relaxed than before. After all, this is a global humanitarian problem,” he told Arab News.

“Additionally, a number of local foundations and ultra-wealthy individuals could support people in need, such as refugees and immigrants.”

Some experts expect Levant countries to seek IMF support and use Arab Monetary Fund help for the financing of essential activities.

“There is a very sharp decline from remittances to Levant countries. I expect a devaluation in the Jordanian dinar as there are just not enough reserves to keep the exchange rate pegged to the US dollar,” Gulseven said.




Emirati men, wearing protective masks to combat the spread coronavirus, walk in the Mall of Dubai on April 28, 2020, after the mall was reopened. (AFP)

“Poverty and income inequality have always been a significant problem in the region. While I think poverty will increase, I do not see any mass hunger situation.

“The Levantine area has fertile soil suitable for many kinds of agricultural activities and the region is a major exporter of grain, fruit and vegetable.”

Gulseven says the crisis is likely to give a boost to agricultural activities in the Arab region, adding that it is essential that enough of this food supply stays within the region.

“As long as we stay in peace together, we can withstand these difficult times,” he told Arab News. “However, standing together means a fair sharing of income and reduced inequality.

“People in the Levant are already questioning the role of the government in society, and the hungry and desperate will start taking action because they will think they have nothing to lose.

“Now is not the right time for any kind of internal or regional conflicts, so decision-makers should treat the ensuring of food and social safety for all as a matter of utmost importance.”


EU sees must-not-miss chance to revive Iran nuclear deal

EU sees must-not-miss chance to revive Iran nuclear deal
Updated 19 min 21 sec ago

EU sees must-not-miss chance to revive Iran nuclear deal

EU sees must-not-miss chance to revive Iran nuclear deal
  • Nuclear deal almost collapsed after the Trump administration unilaterally pulled the US out three years ago

BRUSSELS: The top European Union diplomat supervising the international agreement aimed at curbing Iran’s nuclear ambitions called Friday for a concerted effort to reinvigorate the pact even as Tehran appears to be reneging on some of its commitments.
“This is an occasion that we cannot miss,” to revive the 2015 Joint Comprehensive Plan of Action, or JCPOA, EU foreign policy chief Josep Borrell told reporters via video-link.
The deal almost collapsed after the Trump administration unilaterally pulled the US out three years ago, triggering crippling economic sanctions on Iran. Britain, France and Germany notably struggled to keep it alive and have been heartened by President Joe Biden’s willingness to bring the US back in.
“I am convinced as coordinator of the JCPOA that we do have diplomatic space, a diplomatic window of opportunity to dialogue” in line with Biden’s aims, Borrell said. “We need to use this opportunity and focus on solutions to bring the JCPOA back on track in order for everybody (to fulfil) their commitments.”
Iran this week effectively set a deadline to lift the US sanctions within three months, after which it said it would erase surveillance footage of its nuclear facilities. It has also limited some monitoring of its activities, which the EU says are meant to help ensure that Tehran’s nuclear work is peaceful.
The UN’s nuclear watchdog, the International Atomic Energy Agency, has also reported that Iran has added 17.6 kilograms (38.8 pounds) of uranium enriched up to 20 percent to its stockpile as of Feb. 16 — far past the 3.67 percent purity allowed under the JCPOA.
Borrell said that Iran’s latest moves “are very much concerning.”

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HRW urges Iran to probe deadly shooting on Pakistan border

HRW urges Iran to probe deadly shooting on Pakistan border
Updated 26 February 2021

HRW urges Iran to probe deadly shooting on Pakistan border

HRW urges Iran to probe deadly shooting on Pakistan border
  • Shooting in the border area near the town of Saravan killed at least 10 people and wounded five
BEIRUT: Human Rights Watch called on Iran Friday to investigate a deadly shooting by Revolutionary Guards against smugglers attempting to transport fuel into neighboring Pakistan for excessive use of force.
Monday’s shooting in the border area near the town of Saravan killed at least 10 people and wounded five, HRW said, citing Baluchi activists.
Iran’s Islamic Revolutionary Guard Corps had blocked a road used to transport fuel before apparently opening fire at people attempting to reopen the route, it added.
The action has prompted attacks by angry protesters on government buildings in both Saravan and the Sistan-Baluchistan provincial capital Zahedan.
“The Iranian authorities should urgently conduct a transparent and impartial investigation into the shootings at the Saravan border,” said HRW Iran researcher Tara Sepehri Far.
“The authorities should hold those responsible for wrongdoing to account, appropriately compensate victims and ensure that border guards are taking the utmost precautions to respect the right to life and other human rights.”
Provincial deputy governor Mohammad-Hadi Marashi said Tuesday that the shooting had started from the Pakistani side of the border and one person had been killed and four wounded.
Sistan-Baluchistan province has long been a security headache for the Iranian government.
Its large ethnic Baluch population, which staddles the frontier, has made it a flashpoint for cross-border attacks on government or Shiite targets by separatists and Sunni extremists.
HRW said the lack of employment opportunities in the province had left its ethnic Baluch population few alternatives to black market trading with their fellow Baluchs across the border.
“Similar to the western provinces of Western Azerbaijan and Kurdistan (on the border with Iraq), its lack of economic opportunities has led many residents to engage in unlawful cross-border commerce with Pakistan,” the New York-based watchdog.

Israel vaccinates 50% of its population against COVID-19

Israel vaccinates 50% of its population against COVID-19
Updated 26 February 2021

Israel vaccinates 50% of its population against COVID-19

Israel vaccinates 50% of its population against COVID-19
  • About 35 percent of Israel’s population had received both doses of the Pfizer vaccine

JERUSALEM: Israel has administered at least one COVID-19 vaccine dose to 50 percent of its 9.3 million population, Health Minister Yuli Edelstein said on Friday.
Israel counts East Jerusalem Palestinians, who have been included in the vaccine campaign that began on Dec 19, as part of its population. Palestinians in the occupied West Bank and the Gaza Strip are not part of the Israeli campaign.
Edelstein said 35 percent of Israel’s population had received both doses of the Pfizer vaccine, putting them on course to receive a so-called “Green Pass” with access to leisure sites that the country has been gradually reopening.


Libya’s new PM delays naming Cabinet as deadline looms

Libya’s new PM delays naming Cabinet as deadline looms
Updated 26 February 2021

Libya’s new PM delays naming Cabinet as deadline looms

Libya’s new PM delays naming Cabinet as deadline looms
  • Appointing the Cabinet is part of a UN-backed transitional roadmap
  • Since 2015, Libyan state institutions have been divided between two administrations

CAIRO: Libya’s newly-elected prime minister failed to name members of a much-anticipated Cabinet ahead of an expected deadline Thursday, raising questions over whether his transitional government can unite Libya’s factions.
Prime Minister designate Abdul Hamid Mohammed Dbeibah was set to announce his Cabinet in a news conference from the capital, Tripoli, and send it to Libya’s House of Representatives for approval.
Instead, Dbeibah told reporters he only shared with Libyan lawmakers proposed guidelines for the selection of Cabinet members and an outline of his priorities in the coming period.
Appointing the Cabinet is part of a UN-backed transitional roadmap, which envisages holding general elections in the war-torn North African country by the end of the year.
Since 2015, Libyan state institutions have been divided between two administrations: One in the east and another in the west, each supported by a vast array of militias and foreign governments.
“We are ready to submit the names (of Cabinet ministers) but we should consult among ourselves and examine candidate names meticulously,” Dbeibah told reporters in Tripoli without specifying when he will actually make the submission.
Dbeibah said he envisages a Cabinet of technocrats who would represent Libya’s different geographic areas and social segments.
“These are critical times and we are taking into consideration that the Cabinet must genuinely achieve national unity and seek consensus and reconciliation,” he said.
He added that the country’s sovereign ministerial portfolios should be equally divided between candidates from Libya’s three key geographic areas in the east, the west and the south.
Earlier this month, Dbeibah was elected as prime minister by Libyan delegates at a UN-sponsored conference near Geneva.
The 75-member Libyan Political Dialogue Forum also elected a three-member Presidential Council, which along with Dbeibah should lead the country through general elections on December 24. Mohammad Younes Menfi, a Libyan diplomat from the country’s east, was selected as chairman of the council.


Bahrain introduces fifth vaccine, extends COVID-19 safety measures

Bahrain introduces fifth vaccine, extends COVID-19 safety measures
Updated 26 February 2021

Bahrain introduces fifth vaccine, extends COVID-19 safety measures

Bahrain introduces fifth vaccine, extends COVID-19 safety measures
  • The Janssen Covid-19 Vaccine will be the fifth vaccine authorized in Bahrain in the fight against the spread of COVID-19
  • The announcement comes as the Government Executive Committee extended precautionary measures

DUBAI: Bahrain’s National Health Regulatory Authority (NHRA) has authorized the use of Johnson and Johnson’s vaccine for coronavirus the Bahrain News Agency reported on Friday.

The Janssen Covid-19 Vaccine will be the fifth vaccine authorized in Bahrain in the fight against the spread of COVID-19 and will be given to those most at risk, suchas the elderly, people with chronic diseases and other groups identified by the Health Ministry.

The announcement comes as the Government Executive Committee extended precautionary measures, aimed at slowing the spread of the virus, for an additional three months.

The measures involve the continued enforcement of  social distancing and screening of people at commercial and industrial premises for a further three months.