Last week (Oct 28/Oct 29) the Weekend FT ran a series of articles on India. This was inside the Money section which is a bit of a backyard for the publication if you ask me. This time there were plenty of golden nuggets to be dug out and closely examined for a non-specialist in Indian affairs.
The number that caught my attention was the Human Capital Index for India and China. This was published by the World Bank back in 2020 in updated after the pandemic. The index is based on a relatively straight forward calculation and is a function of a child’s chances of surviving, getting educated and working until retirement[1].
For China, the Human Capital Index is 0.65 and for India is 0.49. The average for high-income economies is around 0.70. Singapore has the maximum among the 174 counties, and it is 0.88. The reasons behind the India/China gap are better explained by specialists (see the same FT articles – excellent, in my view, though behind the paywall), but what about the rest of us?
A quick Google search led to the report itself and the country data, all neatly arranged and easily accessible. I looked at China, India, Russia, Ukraine and the US (this is in an alphabetical order). The US has the highest value for the index at 0.70, Russia is at 0.68, Ukraine’s Human Capital Index is 0.63. The data is pre-pandemic and pre-war.
There is a good but not a linear correlation between the human development index and the country economic success (as measured by the GDP per capita). The charts below give a bit more detail on key components of the index: infant survival rates, years in education and text scores achieved. At a very superficial level, the figures indicate the US is running close to its human capital capacity while China, India, Russia and Ukraine should do much better economically for the quality of the people. Not much of a discovery, perhaps, but food for thought, nevertheless.
The World Bank Human Capital Index 2020 and its components
Source: World Bank[2]
P.S. It is stating the obvious that investment in people might have a better pay-off than investment in various warring tribes.
P.P.S. And there might be a room to redefine the concept of “national security” as making own nation/people secure, which means healthier, less anxious, having more spare time, etc. Could it be “Americans first” as an election slogan? And could Russians do better then figuring out that their national security depends on presidential elections at home, not in the US.
[1] The official definition in the publication: The Human Capital Index (HCI) measures the human capital that a child born today can expect to attain by her 18th birthday, given the risks of poor health and poor education prevailing in her country.
[2]“World Bank. 2020. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19. © World Bank, Washington, DC