A Proposal
Recently, Switzerland has been considering a new welfare program for its citizens. It entails a minimum income transfer to every citizen regardless of their income level, age and employment status. The only prerequisite is to be a living Swiss citizen. Many economists and policy-makers have always been divided over the issue of minimum income transfers. In this case, minimum income transfers refer to the minimum amount of income required to achieve very basic standards of living. Some economic theories suggest that government transfers often generate a disincentive to work, increase unemployment and lead to free-riding of welfare benefits. Above all, they are often costly to implement. Despite these criticisms, a basic minimum income policy for every citizen would allow for unprecedented levels of economic development in a state, if some conditions are met first.
Now, I am sure you are wondering what Lebanon has to do with current affairs in Switzerland, but, let me paint an interesting proposal for you. The interesting thing about Switzerland is that it is not very large in size; it also has a very popular and secure banking system and a very neutral and stable role in its political life. Small states present a more favourable climate for administering income transfers, they are easier to facilitate, monitor and to distribute across the population. It is rational to say that Lebanon fits this criterion of a ‘small state.’ Also, the Lebanese banking system is one of the most stable banking systems in the Middle East. It is still able to absorb remittances from abroad despite the Syrian civil war across the border. Now, for the final and most vital property: a stable and neutral political life in Lebanon? Out of the question. But isn’t it absurd? Switzerland faced two world wars across its borders and lives on the doorstep of today’s Eurozone crisis. Also keep in mind that Switzerland has three main ethnic groups among its citizens: German, French and Italian. If the Swiss have the capacity to consider such a proposal to benefit its people, diminish its poverty levels and improve its standard of life, then why is it so irrational to think that maybe Lebanese politicians should discuss the same benefits for its citizens? Federal administrations could decrease (for example: Daman), less subsidies and unemployment benefits would need to be provided. Fears of labour disincentive would be negligible because the transfer would only cover the bare minimum. It would entail a short term cost, but could reward us with a long term benefit. An experiment was carried out on a small town in Manitoba, Canada that provided minimum monthly income to all its citizens. Results showed that hospitalization rates decreased, poverty declined and rates of high school drop outs also decreased.
Given the current state of affairs in domestic and regional politics, I admit this proposal is very far-fetched, not to mention the poor financial state of the Lebanese government. There are many, many, many loopholes left in our social system that still needs to be addressed before such a policy could follow through. I am aware that this proposal might not be feasible or even effective in Lebanon, but there is no harm in discussing it. I think we can all agree that our social system needs development and improvement. The ‘take home’ idea is that, perhaps, considering this ideology of social welfare could help diminish the single and most toxic threat to daily life in Lebanon: sectarian strife. Sectarian groups are looking for relative gains rather than absolute gains. It is preferred to gain at the expense of your opponent than for both you and your opponent to become better off; a zero sum game. If policy-makers choose to remain in this mindset then the chances of lubricating engines of economic development are quite slim.
The Lebanese economy follows a relatively laissez-faire system, but this system has not proved to be very fruitful. The income levels are unequally distributed, leaving a large gap between rich and poor. Furthermore, the middle class accounts for a minimal proportion of the population. Provision of a basic transfer to every Lebanese citizen, residing in Lebanon, regardless of status, could harmonize social values across the state. It sounds like utopia. However, it requires a very vigorous study of the Lebanese economy and I encourage such an endeavour. But for now, it is just a proposal to change a mindset, some food for thought. At the end of the day, I would like to ask: Why not discuss it?
N.C
Recently, Switzerland has been considering a new welfare program for its citizens. It entails a minimum income transfer to every citizen regardless of their income level, age and employment status. The only prerequisite is to be a living Swiss citizen. Many economists and policy-makers have always been divided over the issue of minimum income transfers. In this case, minimum income transfers refer to the minimum amount of income required to achieve very basic standards of living. Some economic theories suggest that government transfers often generate a disincentive to work, increase unemployment and lead to free-riding of welfare benefits. Above all, they are often costly to implement. Despite these criticisms, a basic minimum income policy for every citizen would allow for unprecedented levels of economic development in a state, if some conditions are met first.
Now, I am sure you are wondering what Lebanon has to do with current affairs in Switzerland, but, let me paint an interesting proposal for you. The interesting thing about Switzerland is that it is not very large in size; it also has a very popular and secure banking system and a very neutral and stable role in its political life. Small states present a more favourable climate for administering income transfers, they are easier to facilitate, monitor and to distribute across the population. It is rational to say that Lebanon fits this criterion of a ‘small state.’ Also, the Lebanese banking system is one of the most stable banking systems in the Middle East. It is still able to absorb remittances from abroad despite the Syrian civil war across the border. Now, for the final and most vital property: a stable and neutral political life in Lebanon? Out of the question. But isn’t it absurd? Switzerland faced two world wars across its borders and lives on the doorstep of today’s Eurozone crisis. Also keep in mind that Switzerland has three main ethnic groups among its citizens: German, French and Italian. If the Swiss have the capacity to consider such a proposal to benefit its people, diminish its poverty levels and improve its standard of life, then why is it so irrational to think that maybe Lebanese politicians should discuss the same benefits for its citizens? Federal administrations could decrease (for example: Daman), less subsidies and unemployment benefits would need to be provided. Fears of labour disincentive would be negligible because the transfer would only cover the bare minimum. It would entail a short term cost, but could reward us with a long term benefit. An experiment was carried out on a small town in Manitoba, Canada that provided minimum monthly income to all its citizens. Results showed that hospitalization rates decreased, poverty declined and rates of high school drop outs also decreased.
Given the current state of affairs in domestic and regional politics, I admit this proposal is very far-fetched, not to mention the poor financial state of the Lebanese government. There are many, many, many loopholes left in our social system that still needs to be addressed before such a policy could follow through. I am aware that this proposal might not be feasible or even effective in Lebanon, but there is no harm in discussing it. I think we can all agree that our social system needs development and improvement. The ‘take home’ idea is that, perhaps, considering this ideology of social welfare could help diminish the single and most toxic threat to daily life in Lebanon: sectarian strife. Sectarian groups are looking for relative gains rather than absolute gains. It is preferred to gain at the expense of your opponent than for both you and your opponent to become better off; a zero sum game. If policy-makers choose to remain in this mindset then the chances of lubricating engines of economic development are quite slim.
The Lebanese economy follows a relatively laissez-faire system, but this system has not proved to be very fruitful. The income levels are unequally distributed, leaving a large gap between rich and poor. Furthermore, the middle class accounts for a minimal proportion of the population. Provision of a basic transfer to every Lebanese citizen, residing in Lebanon, regardless of status, could harmonize social values across the state. It sounds like utopia. However, it requires a very vigorous study of the Lebanese economy and I encourage such an endeavour. But for now, it is just a proposal to change a mindset, some food for thought. At the end of the day, I would like to ask: Why not discuss it?
N.C