Human Development Index:

Khondokar Sabera Hamid,

Master in Development Studies (MDS),
United International University, Dhaka, Bangladesh.

Human Development Index:

The Human Development Index (HDI) is a comparative measure of life expectancy, literacy,
education, and standard of living for countries worldwide. It is a standard means of measuring
well-being, especially child welfare. It is used to determine and indicate whether a country is a
developed, developing, or underdeveloped country and also to measure the impact of economic
policies on quality of life.
The index was developed in 1990 by Pakistani economist Mahbub ul Haq and has been used
since 1993 by the United Nations Development Programme in its annual Human Development
Report.

Dimensions of HDI:
Life expectancy at birth, as an index of population health and longevity.
Knowledge and education, as measured by the adult literacy rate (with two-thirds
weighting) and the combined primary, secondary, and tertiary gross enrollment ratio
(with one-third weighting).
Standard of living, as measured by the natural logarithm of gross domestic product
(GDP) per capita at purchasing power parity (PPP) in United States dollars.

Human Development Index Background:

The United Nations has calculated the HDI for its member states since 1975. The first Human
Development Report was published in 1990 with leadership from Pakistani economist and
finance minister Mahbub ul Haq and Indian Nobel Prize Laureate for Economics, Amartya Sen.
The main motivation for the Human Development Report itself was a focus on only real income
per capita as the basis for a countrys development and prosperity. The UNDP claimed that
economic prosperity as shown with real income per capita, was not the only factor in measuring
human development because these numbers do not necessarily mean a countrys people as a
whole are better off. Thus, the first Human Development Report used the HDI and examined
such concepts as health and life expectancy, education, and work and leisure time.

Mahbub ul haq-Founder of the Human Development Index

The Human Development Index Today:

Today, the HDI examines three basic dimensions to measure a countrys growth and
achievements in human development. The first of these is health for the countrys people. This
is measured by life expectancy at birth and those with higher life expectancies rank higher than
those with lower life expectancies.
The second dimension measured in the HDI is a countrys overall knowledge level as measured
by the adult literacy rate combined with the gross enrollment ratios of students in primary school
through the university level.
The third and final dimension in the HDI is a countrys standard of living. Those with higher
standards of living rank higher than those with lower standards of living. This dimension is
measured with the gross domestic product per capita in purchasing power parity terms, based on
United States dollars.
In order to accurately calculate each of these dimensions for the HDI, a separate index is
calculated for each of them based on the raw data gathered during studies. The raw data is then
put into a formula with minimum and maximum values to create an index. The HDI for each
country is then calculated as an average of the three indices which include the life expectancy
index, the gross enrollment index and the gross domestic product.

Categories of HDI:
The 2011 Human Development Index is divided into four quartilesVery High Human Development Index- HDI 0.900 to 1
High Human Development Index-

HDI 0.699 to 0.899

Medium Human Development Index-

HDI 0.522 to 0.698

Low Human Development Index-

HDI below 0.521

2011 Human Development Report:

On November 2, 2011, the UNDP released the 2011 Human Development report. The top
countries in the Human Development Index portion of the report were grouped into a category
called Very High Human Development and are considered developed. The top five countries
based on 2011 HDI were:
1) Norway
2) Australia
3) Netherlands
4) United States
5) New Zealand
The category of Very High Human Development" includes places like Bahrain, Israel, Estonia
and Poland. Countries with High Human Development are next and include Armenia, the
Ukraine and Azerbaijan. There is a category called "Medium Human Development" which
includes Jordan, Honduras, and South Africa. Finally, countries with Low Human
Development include such places as Togo, Malawi and Benin.

Bangladeshs HDI value and rank:

Bangladeshs HDI value for 2011 is 0.500in the low human development category positioning the country at 146 out of 187 countries and territories. Between 1980 and 2011,
Bangladeshs HDI value increased from 0.303 to 0.500, an increase of 65.0 per cent or average
annual increase of about 1.6 per cent. The rank of Bangladeshs HDI for 2010 based on data
available in 2011 and methods used in 2011 is 146 out of 187 countries. In the 2010 HDR,

Bangladesh was ranked 129 out of 169 countries. However, it is misleading to compare values
and rankings with those of previously published reports, because the underlying data and
methods have changed, as well as the number of countries included in the HDI.
Table A reviews Bangladeshs progress in each of the HDI indicators. Between 1980 and 2011,
Bangladeshs life expectancy at birth increased by 13.7 years, mean years of schooling increased
by 2.8 years and expected years of schooling increased by 3.7 years. Bangladeshs GNI per
capita increased by about 162.0 per cent between 1980 and 2011.

Table A: Bangladeshs HDI trends based on consistent time series data, new
component indicators and new methodology

1980
1985
1990
1995
2000
2005
2010
2011

Life
Expected
expectancy years of
at birth
schooling

Means
years of
schooling

GNI per
HDI
capita(2005 value
PPP$)

55.2
56.9
59.5
62.1
64.7
66.9
68.6
68.9

2.0
2.4
2.9
3.3
3.7
4.2
4.8
4.8

584
646
690
784
905
1,120
1,459
1,529

4.4
4.5
5.0
6.0
7.0
8.0
8.1
8.1

0.303
0.324
0.352
0.388
0.422
0.462
0.496
0.500

Figure: Trends in Bangladeshs HDI component indices 1980-2011:

The HDI and GDP:

The HDI does not replace GDP, but it adds considerably to an understanding of the reality of a
society in several aspects:

1. Besides income, the HDI measures education and health and is thus multidimensional.
2. It focuses the attention of policy-makers on the ultimate objective of development, which is
peoples wellbeing.
3. It is more meaningful as a national average than income as there are much greater extremes in
income distribution than in the distribution of life expectancy or literacy.
4. It shows that human development gaps between nations could be reduced faster than gaps in
income.
5. The HDI can be usefully disaggregated by gender, geographic region or in many other ways to
present relevant policy choices.

GDP by itself reveals little about how the people in a society live and breathe. It is the actual
distribution and use of income that is decisive. To examine the link between economic and social
progress, we must see how income is distributed and used in a society and how far it has been
translated into the lives of people.
If a countrys HDI rank is higher than its GDP per capita rank, this should reassure policymakers that their social priorities are headed in the right direction and that the country is building
up an adequate base of human capital for accelerated growth. On the other hand, this should also
remind them that social progress cannot be sustained for long without an adequate economic
base, so they should correct the imbalance on the economic growth side.
But if the HDI rank is lower than the GDP per capita rank, this should signal policy-makers that
the benefits of economic growth are not being distributed equitably among all sections of
society. It should prompt them to devise policies to change course. So there should be no tension
between HDI and GDP measures. Both are equally useful to inform public policy.

What is the relevance of HDI for developing countries?

Human development model improves the economic growth model in several ways:
First, by focusing on improving education, health and skills of people, it enables people to
participate in the growth process as well as share its benefits, particularly through employment.

Secondly, human development focuses on a more equitable distribution of income and assets
which create a closer link between economic growth and human development. This is where
human development goes beyond programs of social development or social welfare. It goes
beyond developing human capabilities or providing social safety nets, very important though
these are, to policies for creating jobs, opening up opportunities and empowering people to
participate in economic and political institutions of a country.
For policy makers of developing countries, human development model is useful in several
critical areas:
1. It gives a wake-up call to national policy makers. A quick look at HDI rankings shows which
countries are combining economic growth with social development and which lag behind.
HDI rankings put pressure on governments to improve their performance if their neighbors or
competitors are doing better.
2. It identifies the areas that need priority policy attention. Despite reasonable GDP per capita,
some countries may have comparatively low HDI. So the focus of these governments has to
be on improving the institutions/facilities that promote human development. Pakistan, for
example, has got very low educational indicators. That is why we see numerous policy
discussions to improve the situation.
3. It identifies potential for growth of a country. HDI can reveal the future potential of a
countrys economic growth. If a country has already built up considerable human capital then
by choosing the right macro-economic policies the economic growth can be accelerated in a
reasonably short time period. This has been true for India, for example. But if the human
capital is missing, it would take a country a considerable time to create the human
infrastructure to support and sustain economic growth.
4. Disaggregated HDI becomes a powerful tool for improving governance. HDI disaggregated
by income, class, gender, ethnicity and geographical region points out critical areas for policy
interventions.
5. HDI can be used as early warning system. Disaggregated HDI can reveal the weak points in a
country such as poverty density in a particular region of a country, lack of education or
employment of a particular group etc. Left unaddressed, these can lead to violence and
conflicts within a country or can spill over outside the country.

6. HDI allows countries to track its performance over time.

Criticisms:
1. HDI is not a comprehensive measure of human development. It only focuses on three
dimensions of capabilities. It cannot provide a complete picture of human development.
2. The HDI is not designed to assess progress in human development over a short-term period
because two of its component indicatorsadult literacy and life expectancy at birthare
not responsive to short-term policy changes.
3. Like any average country measure, the HDI does not account for variations in human
development within the country.
4. Countries with the same HDI may be very different in how human development is
distributed, either from region to region, or from social group to social group.
5. It does not focus on ecological considerations while ranking the countries.
6. It measures those aspects of development which have been already studied worldwide and
the HDI is only a duplication of the works already carried out previously.
7. HDI does not consider moral development.

Conclusion:
Despite these criticisms, the HDI continues to be used today and is important because it
consistently draws the attention of governments, corporations and international organizations to
portions of development which focus on aspects other than income like health and education.

Reference:
From different book, publications and websites related to Human Development
Index...pictures are taken from different websites..