Planning well for social security

NAIROBI: In January 2016, the American Association for the Advancement of Science annual meeting in Washington was informed that in 50 years, technology will have taken half of our jobs. Developed countries are already worrying over how they will deal with the redundant human labour.

And they are planning ahead. States are considering reframing public policy in order to meet the needs of the emerging scenario.
Earlier this month, Switzerland held a referendum to decide on Unconditional Basic Pay (UBP) for all her citizens.

Though the Swiss rejected the proposal to pay everyone 2,500 euros every month whether one works or not, 64 per cent of European Union citizens are in favour of the idea.

Most likely Belgium, Italy, Spain and Greece will vote for it, maybe triggering an avalanche of other union countries to adopt mandatory pay in their social security systems.

These are rich countries with very advanced social security systems. Most are welfare states, meaning the government provides free education, health and in some cases, even heavily subsidised housing. Before you start salivating over that, these things will have been paid for through heavy taxation.

The big question is: Did these countries bribe God to become so rich and to have efficient social systems? Such a thing never happened. We are also heavily taxed in Kenya.

The difference is that advanced countries have learnt to be accountable to their citizens. They are ‘advanced’ because of that.

Through visionary leadership, these societies laboured, often through conflict and bloodletting, to build efficient social security systems.

Both the public and their governments have over the years developed a strong culture of respecting the social contract; the collective resolve to make rules and obey them under a set of powerful institutions called serikali, which enforces the contract.

Africa’s backwardness is due to the thinness of awareness among the citizens on what this contract entails. This makes it easier for the citizens and government to regularly dishonour the contract. It is not about resources.

The UN says Africa loses about Sh6 trillion annually through tax evasions and other economic forms of malfeasance by multinationals and their local musketeers.

This represents over 30 per cent of Africa’s GDP. Another 60 per cent is lost through grand corruption and mismanagement.

This is enough to build modern social welfare programmes and leave a balance for the one million tractors and other inputs needed to pull African agricultural production to 21st century level.

The Mandatory Basic Pay debate in Europe comes at a time when reports say that many Kenyans can no longer depend on their income for their up-keep.

Most people in the country spend over 45 per cent of their income on food and drink. This means there is little left for investment and emergency. It is therefore disconcerting that this year’s budget proposals come with plans to further burden the people in the low-income bracket. The prices of paraffin, used by the poor for lighting and cooking, will shoot up.

The Government may do this to encourage more people to use gas for cooking, but the majority of people in urban and rural areas still use biomass sources like firewood, cow dung, saw dust and charcoal for cooking and heating. If we want more people to afford gas, let equipment like gas cylinders and cookers be zero rated or even subsidised. This should have been factored in while drawing the budget. The majority who use gas for cooking are mostly the middle and the upper classes.

According to the African Development Bank, these classes make only about 20 per cent of the Kenya’s population.

These segments obviously benefit most when gas and electricity prices fall. A budget is several things. It is an economic and ideological tool. For the latter, it is a statement of government ideological commitment, social model and policy.

The ‘serikali saidia’ cry is not so farfetched, because as an economic tool, the budget is meant to serve the public good. It is part of the social contract. No one should expect the government to take care of all the social, psychological and financial needs of every one.

But for a long time to come, the government will still be expected to provide public goods. The welfare model of social organisation is based on the true sense of the social contract where this serikali provides the right atmosphere for citizens to create wealth.

Switzerland and other countries mulling over minimum pay are beyond the bare provision of basic public goods; roads, railways, water or security.

In Africa, we are still struggling to meet these needs. We may not have the funds to doll out to everyone in UBP schemes.

However, if we make sure that the market is efficiently organised and it is not presided over by hyenas, we can create even more wealth. And what’s wrong with sharing the surplus?