The human development index annual report came out today. It is perhaps the most relevant index out there to measure the social indicators worldwide. What makes HDI unique is its reliance on several factors–rather than method of using on factor—preferred by most of the other indexes. The three main factors used in HDI index are Health, Education and Income. Recently, it has added some other factors such as Inequality, Gender, and Human Security.
This year Pakistan is ranked 125th out of 169 countries included in the index. For comparison, other countries in South Asia have the following ranking: Sri Lanka (91), Maldives (107), India (119), Pakistan (125), Bangladesh (129), Nepal (138), and Afghanistan (155).
This is how some other key countries in the world were ranked: Norway (1), Israel (15), UK (26), UAE (32), Qatar (38), Saudi Arabia (55), Iran (70), Brazil (73), Turkey (83), China (89), and Zimbabwe (169).
The HDI index which came out today used data from 2008. Looking at this data, these are some of the observation that can be made about some key social indicators in Pakistan: Life expectancy 67; Mean years of schooling for adults 4.872; GNI per capita PPP 2678.259.
If we look at HDI index of 2009, Pakistan was ranked 141st. It has improved 16 positions from last year. The main reason for this is that leading up to the year 2008 and during 2008, Pakistan had strong macroeconomic indicators. GDP was growing strongly during years 2002-2008. This led to overall increase in most of the other indicators as well.
The situation in the last two years has been different; GDP growth has more or less stagnated. IMF is projecting Pakistan’s GDP to grow by 4.8% in 2010 and 2.8% in 2011. When these numbers are compared regionally, they present a startling picture. India is projected to have a GDP growth rate of 9.7% in 2010 and 8.4% in 2011; similarly Bangladesh is projected to have a healthy GDP growth rate of 5.8% in 2010 and 6.3% in 2011. What this means is that India is moving ahead at a rapid speed, and Bangladesh will overtake Pakistan in coming few years.
GDP growth rate is one key to improving a country’s social indicators; it is not the only one. For example, when we compare Pakistan and Bangladesh, Bangladesh has far lower income than Pakistan’s; it has GNI per capita PPPP 1,587.236—compared with Pakistan’s 2678.259; it has life expectancy of 66 years—compared with Pakistan’s 67. At the same time it is rapidly catching up with Pakistan. The reason for this is–despite having relatively low income compared to Pakistan–it is focusing and spending much more on health and education. Bangladesh has far lower infant mortality rate than Pakistan’s; infant mortality rate is one key factor when looking at the health sector of a country.
It is very likely that Pakistan’s GDP growth rate will be dismal in coming few years, but it still can improve health and education by utilizing the existing resources. Eventually GDP growth rate will come back to growing at 6 to 7%; in the meantime, it needs to work with what it has. According to Asian development bank, power shortages alone are holding back GDP growth rate from 2 to 3%.
HDI clearly shows that Pakistan’s social indicators improved considerably when it was growing strong. Government needs to create the kind of environment where GDP could grow again. It will be hard to keep up with other countries without strong GDP growth rate, but HDI index still can be improved by giving due focus to Education and Health sectors. When GDP growth rate will improve again, these improved sectors of Education and Health will help Pakistan grow faster. It is hard to focus on these sectors when a country is not growing, but not impossible. We need to learn from other countries in these hard economic times.