New data on the Human Development Index (HDI)

Escrito el 5 octubre 2009 por Gonzalo Garland en Economía Mundial, Miscelánea

Next year it is going to be 20 years since the United Nations Development Program (UNDP) started producing the “Human Development Index”, widely known as the HDI, which ranks countries in the world in categories of very high, high, medium and low human development. When this index started it addressed the need for an alternative measure of “welfare” or “development” to that of per capita income. Measuring per capita income was quite straightforward but sparked extensive debate. During the oil shocks of the 1970’s and 1980’s it was well known that some oil producing and exporting countries had seen their total GDP’s go up at a very fast rate, thus making their per capita incomes very high.  Thus, these countries quickly moved up in the list of the countries with the highest “income levels”.  However, it was known that these countries did not enjoy the same standard of living of other countries with similar, or even lower, per capita incomes. A very high per capita income in a country such as Kuwait or Saudi Arabia may have suggested that the standard of living in these countries was significantly higher than that in several European countries, when analysts knew otherwise.

So partly to try to “fix” this distortion and to respond to an old debate about how to measure “welfare” rather than just income, the UNDP started to produce this new indicator, the Human Development Index, that combines income per capita (measured at Purchasing Power Parity), with life expectancy at birth and an educational index.  So health and education also become an important measure of development. The relative weight of each of the components has also been subject to discussion in the past, and the indicator is in no way perfect. However, it is accepted as possibly the best approximation to what economists understand as a sound measurement of development.

Today the Human Development Report of 2009 has been published, including the HDI measurements based on data for 2007.  There is always a delay of a couple of years while all data is analyzed and cleaned. The very high human development group is headed by Norway, Australia, Iceland, Canada and Ireland. Japan is in 10th position, United States in position 13 and Spain in position 15. Most of the other countries in this group of 38 are European, although New Zealand, Singapore, Korea, Hong Kong and Brunei represent Asia and Oceania, and the Gulf countries are represented by Kuwait, Qatar and the United Arab Emirates, although in all three of these cases the position in the list is significantly lower than when measuring just per capita incomes.

The High Human Development group starts with Bahrain, Estonia, Poland, Slovakia, Hungary and Chile, and ends with Kazakhstan and Lebanon, including in between many Latin American countries such as Argentina, Mexico, Venezuela, Brazil, Colombia and Peru, but it also includes Libya, Saudi Arabia, Russia and Turkey.

The Medium Human Development group starts with Armenia, Ukraine, Azerbaijan, Thailand and Iran, and ends with Uganda and Nigeria, and it includes China, Algeria, Philippines, Indonesia, Bolivia, Vietnam, Egypt, South Africa, Morocco, India, Pakistan and Tanzania.

Finally, the Low Human Development group starts with Togo, Malawi and Benin and ends with Sierra Leone, Afghanistan and Niger. With the exception of Afghanistan and Timor-Leste, all other countries in this group are in Africa.  This is why it is so vital for the dynamism of other regions of the world to impact Africa. Some years ago there were a few Asian countries included in the group of the poorest of the world along with these African countries, but many of them have moved upwards through improvements in health and education and through economic growth. It is important that this also be the case in Africa in the future.

For more information on the Human Development Report go to http://hdr.undp.org


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