July 9, 2017

Universal Basic Income, AI, and Developing Countries

Waikiki Beach by Diego Delso, delso.photo, License CC-BY-SA

Hawaii has already passed the first draft of universal basic income program bill (see article: http://www.independent.co.uk/news/world-0/hawaii-universal-basic-income-salary-wages-wealth-distribution-chris-lee-a7826931.html). For the reference of the majority, universal basic income program aims to provide income to each and every people without needing to work, in short, you will be able to receive money without working! But before we get too excited, where will the government get money for this program? My hunch is AI (artificial intelligence) and robots, yes you heard it right falks. AI and Robots would probably be working for Hawaii's economy and the income of these machines would be distributed to its citizens.

So what is the implication to the Philippines and other developing countries? Well I see Hawaii as a small island were big countries like US can conduct a policy experiment (well Hawaii is part of US). If the experiment succeed, this policy can be copied all over the world; resulting to replacement of low skilled workers with AI and robots, and giving the salary of these machines to the people (as universal basic income). There is nothing wrong with universal basic income program, since this is seen to be beneficial to the people of implementing country. But I believe that this will have a big impact on developing countries which relies on Business Process Outsourcing (BPO) investments. Most of the jobs being employed by BPOs are low skilled and can be replaced by an AI. Thus, if AI and robots replaced the jobs low skilled employees in developed countries, BPOs will also be most likely replaced by AIs, resulting to massive unemployment in developing countries. To further explain, because AI and robots can now do the job of low skilled workers in developed countries, and because these developed countries have universal basic income program, then there is no need for them to outsource these jobs to developing countries.

If these protectionist scenario happens, developing countries should be prepared to develop pretectionist policy as well or adapt to the changing technology economics.

1 comment:

  1. I totally agree that time will come that robots will play a big role in the economic growth, but I think there should be proper transition before robots takeover human jobs. When this time come, robots should help the human race improve and rather than be a competitor in the consumption of earths resources. Economic development has always aim for the betterment of human race, hope that genius of robot inventors and supporters think the same.


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