A New Approach to Aid How a Basic Income Program Saved a Namibian Village

It sounds like a communist utopia, but a basic income program pioneered by German aid workers has helped alleviate poverty in a Nambian village. Crime is down and children can finally attend school. Only the local white farmers are unhappy.

By Dialika Krahe in Otjivero, Namibia

The full, red Namibian sun is setting outside his living room window, the workers are returning to their corrugated metal huts, and Siggi von Lüttwitz is hitting a wooden table with the palm of his hand to explain why the experiment cannot work.

"They all drink, you know," he says, smoking an unfiltered cigarette, "and if you give them 100 dollars, they'll just drink more." By "they" Lüttwitz means the people of Otjivero, a settlement adjacent to his farmland. And by "they" he means people who are poor and black.

Lüttwitz, a Namibian of German descent, is a farmer. He is sitting at his dining table, which is covered with wax cloth. A calendar of prize bulls is on the wall. "Stealing, having children, that's what it's like here."

He pays his workers, his "cadets," the minimum hourly wage of 2.21 Namibian dollars, which is about 20 euro cents, as well as rations of meat and milk, which he believes is sufficient. He knows that the people in Otjivero are hungry. "They're poor wretches," he says, "and in some ways I feel sorry for them." But giving them money? "An idiotic idea," says Lüttwitz, insisting that it isn't the right way to teach them to be hardworking.

Is Africa Beyond Help?

Most farmers in the area agree with Lüttwitz, and so do most people in the Western world. The general consensus is that Africa's poor need to be educated first before they can be given the right of self-determination, and that they should be given food vouchers and wells, but no responsibility.

The African continent receives roughly €30 billion in annual development aid, through charitable organizations, humanitarian assistance projects or direct payments to governments. The money flows into thousands of aid projects, into things like well-digging and malaria prevention, but some of it also ends up in the private bank accounts of corrupt statesmen or is spent on wars, and often never reaches its intended recipients. Indeed, the results of half a century of aid to the developing world are devastating: Out of the 40 nations that the International Monetary Fund (IMF) categorizes as "heavily indebted poor countries," 33 are in Africa.

It seems that the financial assistance coming from donor nations is barely keeping the continent alive, which leads to two possible conclusions: Either development aid is not a solution, or Africa is beyond help.

In the small Namibian village of Otjivero, a coalition of aid organizations is attempting to prove that both conclusions are wrong. They insist that Africa can be helped -- provided it gets the right kind of help, which requires a new and different approach to aid.

The idea is simple: The payment of a basic monthly income, funded with tax revenues, of 100 Namibia dollars, or about €9 ($13), for each citizen. There are no conditions, and nothing is expected in return. The money comes from various organizations, including AIDS foundations, the Friedrich Ebert Foundation and Protestant churches in Germany's Rhineland and Westphalia regions.

The organizers of the trial want to know what their subjects will do with the 100 Namibian dollars, whether they will invest the money or waste it on drink, and whether it will deter them from working or motivate them to work harder. Most of all, they want to know if it alleviates poverty.

'The Only Way Out of Poverty'

"This country is a time bomb," says Dirk Haarmann, reaching for his black laptop. "There is no time to lose," he says, opening documents that contain numbers he hopes will support his case. Haarmann and his wife Claudia, both of them economists and theologians from Mettmann in western Germany, were the ones who calculated the basic income for Namibia. And both are convinced that "this is the only way out of poverty."

Haarmann is a slight, unshaven man, quiet but determined. He is sitting at an oval wooden table at the headquarters of the Evangelical Lutheran Church at Churchstreet 8 in the capital Windhoek, talking about Namibia the way a doctor discusses a patient's symptoms. "Here," he says, scrolling through his statistics, "more than two-thirds of the population live on less than $1 a day." His office is filled with ring binders and books with titles like "Being a Christian" and "Heaven is Open," and others like "Basic Income and Finances" and "Income Security." According to Haarmann, in no other country is income distribution as inequitable as it is here. "This will undoubtedly cause problems eventually."

Six years ago, at the request of their bishop, Haarmann and his wife established the church's social welfare group. Since then, they have been living and working on the church premises here in Windhoek, attending mass in the morning and devising ways to fight poverty in the afternoon.

"The basic income scheme," says Haarmann, "doesn't work like charity, but like a constitutional right." Under the plan, every citizen, rich or poor, would be entitled to it starting at birth. There would be no poverty test, no conditions and, therefore, no social bureaucracy. And no one would be told what he or she is permitted to do with the money.

The concept is being discussed in many countries of the world. In Germany, it has gained the support of politicians across the political spectrum, including Dieter Althaus, the conservative governor of the eastern state of Thuringia, and businessmen like drugstore chain owner Götz Werner. More than 50,000 German citizens have signed a petition to the German parliament, the Bundestag.

In a country like Namibia, says Haarmann, a basic income would achieve what conventional development aid could never do: provide a broad basis for human development, both personal and economic. The first major objective of the program is to feed 2.1 million Namibians.

Behind the Fences

The pilot project is taking place in Otjivero, a settlement of 1,000 inhabitants in a hot and dusty region 100 kilometers (62 miles) east of Windhoek. The village, home to people as thin as their livestock, has one school and one clinic. Until recently, the unemployment rate was over 70 percent, 42 percent of children were malnourished, and few children attended school. Instead, the place had a reputation for alcoholism, crime and AIDS. Otjivero is surrounded on all four sides by the electric fences of rich, white farmers like Lüttwitz. The settlement offers a cross-section of a society with people at the bottom and people at the top, but little in the middle. Otjivero is a microcosm of Namibia, Africa and the world.

In other words, Otjivero is the perfect place to test ways to make the world a more just place. The pilot project began in early 2008, says Haarmann, when he, together with the coalition of aid organizations, led by the bishop, introduced a basic income in Otjivero on a trial basis. Between now and December, each of Otjivero's roughly 1,000 residents under 60 years of age will receive the "Basic Income Grant," or BIG for short, of the equivalent of €9 a month, initially paid for with donations. For a woman with seven children, this translates into 800 Namibian dollars a month, which is considered a moderate income.

In Haarmann's files, Sarah Katangolo's hut has been assigned the registration number eight. It is noon, and she is doing her bookkeeping, which involves crouching on the floor and writing a few numbers in the sand with her middle finger. She writes the number 5 to represent how many of her children go to school, then the number 40 -- the tuition per child each month --, and multiplies the numbers. She slowly writes the product, 200 Namibian dollars, or €18, in the sand. Under normal circumstances, says Katangolo, 39 and dirt-poor, this would be completely unaffordable.

Katangolo grew up on property owned by white farmers. She has never owned her own home or learned a profession or trade. She is standing in front of her hut, made of corrugated metal and flattened oil drums, wearing a Chicago Bulls stocking cap on her head. Her life has become more difficult since her husband died, she says, although it was difficult enough before that. She has never had work, but she does have children, who need corn porridge, clothing and medicine. "What can you do?" Katangolo has written in blue chalk on her plywood wall.

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