The Prospects of Universal Basic Income in Indonesia

Abstraksi

It is said that Indonesia’s working-age population is growing and will account for 68% of the population by 2030. While this is seen as an opportunity for growth, given the current global trends it might as well be interpreted as a risk for large-scale structural unemployment instead. With automotion taking place at an accelerating rate, many jobs have already been replaced by machines and softwares, putting a large portion of the labour force out of work. This trend is likely to continue, and eventually even jobs like accountants and attorneys would be replaced too. Seeing a contraction of demand for labor, a lot of people would not have work anymore; Or, a more optimistic way of phrasing this is that a lot of people would not have to work anymore. Regardless, Indonesia must think of policies to mitigate the effects of such on its giant working-age population. In response to this many parts of the world, including Switzerland and Finland, has began discussions and even experimentations of Universal Basic Income (UBI). The idea of UBI has even become the basis of American Presidential Candidate Andrew Yang’s campaign platform. The basic theories of UBI are as such: all citizens, regardless of economic status, will receive a sum of money from the government unconditionally. This sum would allow people to make ends meet, provide a surplus for people to spend and hence propagate economic development through domestic demand. The expenses can be paid by revenue from taxation, or from the profits of government owned corporations. Might UBI work as a solution for a more economically and socially sustainable Indonesia? This is what the paper seeks to investigate. The structure of this paper will be as follows: First, the concept of Universal Basic Income will be explained thoroughly, from its inception to its experimentation. The entire picture of a society running UBI will be painted out for the readers. The second part focuses on the pre-existing conditions and future trends in Indonesia. The implementation of UBI has a few prerequisites, and this part studies whether Indonesia has met these prerequisites. The first two parts will culminate in an analysis section that shall apply lessons from UBI elsewhere and evaluate whether, and how Indonesia can learn from them. As a conclusion, this paper will shed light on the prospects of UBI implemented in Indonesia, the strengths and weaknesses of UBI in an Indonesian context and how Indonesia may brace herself in face of technological transformations. UBI is seen as a concept which may promote employment, economic sustainability and social sustainability. This paper is particularly significant due to the impacts of the policy it discusses - UBI has the potential to change the societal structure entirely, and perhaps make lives easier for a majority of the population displaced from work. Ultimately, this paper shall be an intriguing and imaginative thought experiment for many, and perhaps even a potential guideline in steering public policy towards a more sustainable Indonesia.