by Don Paskini

The US Basic Income Group reports that Mongolia is to become the first country in the world to introduce a basic income for all its citizens:

The Mongolian government has taken the initial steps to create a basic income in the form of an Alaskan-style resource dividend. That would make it only the second regular basic income in the world and the first on a national level.

Bloomberg News reports that the Mongolian government has pledged to set up a “sovereign wealth fund” using mining royalties from new gold and copper mines, which are expected to begin generating large tax revenues within the next three to five years. The fund is expected to distribute part of its revenue as an annual income to every Mongolian.

Although the government has not yet published estimates of how large the annual income might turn out to be, this program could eventually make a large impact on Mongolians, because Mongolia is a small, poor country with a large amount of newly discovered resource wealth. During the elections this year, both parties discussed distributing as much as $1000US to each citizen. Although the government might not follow through with such a large grant, the size of the new mines brings this size of a dividend into the realm of possibility.

A $1000 dividend might not seem terribly significant, but the potential impact of the dividend has to be looked at in relation to how wealthy the citizens already are. According to Bloomberg, per capita income in Mongolia is only $1,680US. A dividend of only $50 per year would have the same relative impact on the average Mongolian’s budget as Alaska’s $1300 dividend has on the average Alaskan’s budget. The impact of a dividend of $500 or $1000 could be astounding, but we should be cautious about expecting anything like this in the short run.

Whatever happens, basic income supporters will probably want to keep an eye on developments in Mongolia.

More information here