Lessons from the Human Development Index

I love looking at this document.(pdf file, 129kb) It's essentially an attempt by the United Nations to quantify living conditions around the world. It's based on a number of different things, including GDP per capita, literacy, child mortality rates and so on.

Each nation (mostly) has been investigated since 1975 and given a 3 digit number expressed in decimal points. Australia, for example, has a HDI value of 0.957 and is third on the list (Norway is 1st with 0.965). The poorest nation, Niger, has a HDI value of 0.311.

Essentially, any growth in the number over time reflects an improvement in that nation's standard of living. "High Human Development" nations are those with HDI values of 0.800 and over, and could be classed as "first world" countries (although, looking at that list I would probably define "first world" as any value over 0.900). "Medium Human Development" nations are those with HDI values between 0.500 and 0.799, and could be classed as "second world" countries. "Low Human Development" nations are those with a HDI value of 0.499 and lower, and could be classed as "Third world" nations.

What's so great about this document is that it can actually identify which countries have been doing well over time, and which ones are going backwards. Changes in the HDI can also reflect major events in the life of that country.

China, for example, had a HDI of 0.527 in 1975 and a HDI of 0.768 today. This means that, back in 1975, China was barely out of being described as a third world nation, but today is approaching first world status.

Another interesting example is Australia. Back in 1975 Australia's HDI was 0.848 (very high for 1975). By comparison, nations today around that HDI level include Uruguay, Croatia, Latvia and Qatar. This means that people living in these four nations have the same standard of living as Australians did back in 1975. For me, who grew up as a child in the 1970s, this gives a good point of comparison.

Historical events affect the HDI as well. Here's a few I've chosen.

As many of us know, over 800,000 people were killed in the Rwandan Genocide in 1994. Strangely, The HDI index doesn't seem to reflect this. The 1990 HDI figure is 0.339 while the 1995 figure is 0.337 - only a slight drop in the nation's (abysmal) standard of living between 1990 and 1995, yet with a genocide occurring in between.

There are obviously statistical anomalies here. The study would have only applied to living people so the loss of 800,000 Rwandans did not overtly affect the (albeit poor) living conditions of the 6 million or so who survived. The 1994 genocide was also preceded by a civil war, which began in 1990.

But what's interesting about Rwanda's HDI figure is not the comparison between the 1990 and 1995 figures, but the 1985 figure - 0.401. What this indicates is that there was a massive drop in the standard of living between 1985 and 1990, a drop which preceded the civil war and the eventual genocide. There's no doubt in my mind that Rwanda's drop in the standard of living was at least partly responsible for the civil war and genocide that followed. What this shows is a link between civil unrest and living standards.

In 2004, Rwanda's HDI figure was 0.450. The highest it has ever been. Let's hope and pray it continues to improve.

Because of the closed nature of its politics, Russia's HDI figures only begin in 1990 where they show a HDI figure of 0.818. These stats were taken in between the period when Russia was rejecting communism and the eventual end of the USSR in December 1991. Many of us know that in those years a great deal of hardship was endured by the Russian people (as they have always done in their history unfortunately) and this is reflected in the 1995 HDI figure of 0.771. The political turmoil in those years naturally eroded people's standard of living. The HDI figure for 2000 was 0.785 and in 2004 it was 0.797, which shows that in the decade or so since 1995, life for ordinary Russians has improved, but has yet to reach the standard set in the last days of the Soviet Union.

South Africa
South Africa is a shrinking nation. According to the CIA World factbook, South Africa's population is shrinking at an annual rate of -0.46%. While the birth rate is high (17.94 births per 1000 people) the death rate is even higher (22.45 deaths per 1000 people). With people also leaving the country faster than people come in, South Africa appears to be doomed.

It was not always so. We all rejoiced when Apartheid collapsed and Nelson Mandela was elected president in 1994. Yet since then there has been a rising tide of violence and economic misery - hardly the sort of thing you'd like to see in a nation that successfully overthrew a system of government that was immoral. In fact, given the sad state of affairs, it would seem understandable for white South Africans to praise "the good old days" - after all, they had a better standard of living.

South Africa's HDI index in 1990 was 0.735, and in 1995 it was 0.741. A slight rise but a rise nonetheless. Since then it has all been downhill. In 2000 it was 0.691 and in 2004 it was 0.653. The 2004 figure is important because the 1975 figure was also 0.653. This means that the standard of living amongst South Africans has gone backwards by 30 years.

South Africa's death rate is the fifth worst in the world. South Africa also has the 5th highest AIDS rate in the world - 21.5% of the adult population. When you factor in AIDS amongst infants, it is no wonder that the HDI report shows that a South African infant has a 43.3% chance of not surviving to age 40. With death figures and infant mortality rates currently so high, South Africa's HDI index will probably continue to drop. Given the example of Rwanda above - where a drop in living standards led to political turmoil - expect to see the "New South Africa" undergo some pretty bad times ahead.

We are all concerned about Zimbabwe, especially under the infantile and destructive rule of Robert Mugabe. We've heard stories of land grabs, hyperinflation and mob violence. Things are bad. Do the HDI figures match this scenario? They sure do, but they tell more to the tale.

Robert Mugabe is undoubtedly to blame for Zimbabwe's decent into the darkness, yet he was once not so universally disliked. Mugabe was instrumental in Zimbabwe overthrowing its own form of Apartheid back in the 1970s, and was actually much like Nelson Mandela in being a freedom fighter turned president.

The impression I had was that Zimbabwe's ills really only started about 5-6 years ago when he started to turf white farmers out of their farms. But the HDI figures show much more than that.

In 1985, Zimbabwe's HDI reached a peak of 0.642. In 1990 it dropped to 0.639. In 1995 it dropped to 0.591 and in 2000 it dropped to 0.525. In 2004 it had dropped down to 0.491. Under Mugabe's reign, Zimbabwe, once one of the more respectable African nations, is now considered a third world country.

Mugabe has led Zimbabwe since 1980, first as Prime Minister and then as President. Before Mugabe, Ian Smith, a white, ruled over Rhodesia (as it was then called) from 1964-1979. Smith's government ran a similar form of apartheid to South Africa. Despite the fact that Smith and the Whites ruled unjustly, living standards did rise between 1975 and 1980.

The HDI figrues show that Zimbabwe's descent did not start in 2000, but in the early 1980s. Obviously Mugabe's desire to dismantle the social and economic infrastructure of the previous white government has led to poverty for all - whites and blacks. Once a fairly respectable developing nation, Zimbabwe has been going backwards for over 20 years.

And like South Africa, Zimbabwe has a massive AIDS problem, but without the economic resources that South Africa has. The HDI study shows that only one infant in three is likely to survive to the age of 40.

Say what you will about Apartheid, the experience of both South Africa and Zimbabwe show that racist paternalism is far better than ignorant anarchy. We in the west should be proud of our efforts to rid these two nations of their immoral governments, but we should be ashamed that our lack of fortitude and will has led these nations to a far worse fate.

The United Kingdom
Tony Blair has been in power for nearly ten years. The Labor Party, supposedly the worker's friend, has been in control since that period as well. But let's look at the historic HDI figures and compare them to the politics of the time:

Date HDI Party in control Change in HDI
1975 0.851 Conservative -
1980 0.859 Labor +0.9% +8pts
1985 0.868 Conservative +1.0% +9pts
1990 0.889 Conservative +2.4% +9pts
1995 0.927 Conservative +4.3% +38pts
2000 0.939 Labor +1.3% +12pts
2004 0.940 Labor +0.1% +1pts

The first thing to note is that Britain's standard of living has been going up for years and is one of the highest in the world. We need to remember that fact as we examine what is going on here.

The next thing to note is that the Conservative party seems to be more able to raise the standard of living than the Labor party. Note that the "party in control" is the political party responsible for the previous 5 years of statistics. Margaret Thatcher is credited with much of the turmoil which went on in early 1980s Britain with her economic reforms ("Thatchernomics"). The HDI figures show that the reforms she put in place between 1980 and 1985 had little effect at the time, but obviously led to some good results for the ten years after that.

Yet when you look at Labor - specifically the Blair government - the figures seem to stagnate. Part of the problem with this is that the HDI figures will never go above 0.999 so the higher the fgures get the harder it is to improve them (the UN may have to re-jig the entire formula in the future). Yet it is interesting that Britain's standard of living only increased by 0.001 between 2000 and 2004. What it might indicate is that economic reforms either dwindled out under Labor or had simply reached their limit. It also might indicate a growth in wealth amongst the rich while the poor are left out, which would result in higher GDP per capita figures but increasingly lower standards of living amongst ordinary people. This is where "trickle down economics" is probably trickling down from the super rich to the rich only.

Whatever the reasons for the current situation, the fact remains that economic growth did improve Britain's standard of living from 1985 to 1995, and that much of that growth did have its basis in Thatcher's Reforms. I would argue, however, that it is a combination of a gutless Blair Labor party and a failure of the "trickle down" theory begun by Thatcher that is probably to blame for the current malaise.

© 2007 Neil McKenzie Cameron, http://one-salient-oversight.blogspot.com/

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