Universal Basic Income: A Safe Harbor for Paradise in the AI Era?

In the wake of the Third Industrial Revolution, driven by the internet and mobile technologies, artificial intelligence (AI) and its ability to harness big data are propelling us into the Fourth Industrial Revolution. This revolution brings extraordinary potential, but also profound economic risks. The idyllic shores of the Maldives belie the looming storm of these transformations; as AI promises to reshape industries worldwide, the Maldives’ dependence on tourism, fishing sectors, and its sizeable workforce in government and private offices – jobs also at high risk of AI-driven displacement – make it particularly vulnerable to job displacement and growing economic inequality. To navigate these turbulent waters, proactive policy changes are essential. Universal Basic Income (UBI) has garnered global interest as a potential solution, and the Maldives may be a compelling case study for its implementation.

Global UBI Experiments: Lessons and Inconsistencies

While no nation has a full-fledged, permanent UBI system, experiments offer valuable insights. Finland’s 2017-2018 UBI trial, targeting unemployed citizens, showed mixed results. Though there were no large-scale work disincentives, neither was there a significant boost in employment. However, participants reported reduced stress, enhanced well-being, and greater trust in social institutions. The Stockton Economic Empowerment Demonstration (SEED) in California also demonstrated positive outcomes. Recipients experienced improved financial stability, reduced income volatility, and, notably, increased full-time employment, challenging the notion that UBI discourages work. These experiments highlight the complex nuances of UBI implementation, demonstrating that outcomes are likely to be context-specific and heavily influenced by how the program is designed and funded.

The Maldives’ AI Vulnerability

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The Maldivian economy’s unique structure makes it particularly susceptible to AI disruptions. AI-powered travel booking platforms, chatbots, and even robotic hotel employees threaten jobs that form the backbone of the tourism-reliant economy. A 2019 McKinsey report estimates that up to 46% of jobs in the accommodation and food service sector globally are at high risk of automation. Additionally, AI-enhanced fishing, including sonar technology and predictive analytics, could displace traditional fishermen, harming a significant source of income for coastal communities. Without proactive measures, the wealth created by AI could concentrate disproportionately with the few who own and control AI technology, exacerbating existing economic disparities in a nation already marked by income inequality.

UBI as a Potential Lifeline

A carefully calibrated UBI could offer the Maldives a buffer against these challenges. A steady basic income floor would safeguard Maldivians against extreme poverty caused by job losses, ensuring essential necessities are met. As economist Jason Hickel aptly states, “When people live in a fair, caring society, where everyone has equal access to social goods, they don’t have to spend their time worrying about how to cover their basic needs day to day – they can enjoy the art of living.”

UBI can provide the breathing room for people to pursue entrepreneurship, exploring areas like sustainable tourism, AI-adjacent services, and creative industries potentially less susceptible to immediate automation. When UBI is paired with robust retraining and skill-building programs, it can facilitate the transition of the workforce to in-demand jobs in emerging sectors. Reducing economic desperation stemming from job losses could stem the tide of skilled Maldivians leaving in search of better opportunities abroad.

Addressing Concerns and Designing a Maldivian UBI

Critics rightly raise questions about the cost, work disincentive, and potential inflationary pressure stemming from UBI. These concerns can be addressed through a context-driven program. A phased-in approach would begin with smaller grants, gradually increasing as the impact of AI becomes clearer, allowing for policy adjustments as needed. Initially focusing UBI on vulnerable populations most impacted by automation and those engaged in traditional Maldivian livelihoods at risk ensures targeted support.

A tourism-focused tax, levied mainly on luxury resorts, offers a potential source of UBI revenue. Such a tax would ensure that the very sector benefiting most from automation contributes towards securing the workforce it potentially displaces.

The Path to a Resilient Future

The Maldives can’t afford to be on the wrong side of the AI revolution. If harnessed properly, UBI could create an economic foundation that fosters innovation, protects its people, and builds a more equitable, resilient future for this island nation. As Martin Luther King Jr. powerfully asserted, “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” UBI, paired with careful design, data-driven implementation, and a commitment to fairness, could be a vital part of ensuring the Maldives uses this disruptive moment to build the society it seeks to become.

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