Pakistan's Human Capital Deficit

Pakistan's human capital has doubled from three years of learning in 1990 to six years of learning in 2016, according to a human capital study of 195 countries recently published in the journal The Lancet.  However, Pakistan still ranks a poor 164th in the first-ever scientific study ranking countries for their levels of human capital. India has also more than doubled its human capital from 3 years to 7 years but Bangladesh stands out by tripling its human capital from two years to six years of learning since 1990.  In 2016, the Lancet study shows that 44 countries achieved more than 20 years of expected human capital while 68 countries had expected human capital of less than 10 years. Bangladesh, India and Pakistan have less than 10 years of learning, putting them in the category of low human capital countries. Learning is based on average student scores on internationally comparable tests.

What is Human Capital?

Dictionary defines human capital as "the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community".

The Lancet study says it "provides a new measure of expected human capital for 195 countries, consisting of four components: educational attainment, learning, health, and survival, based on a systematic analysis of all available data. This measure, in units of health, education, and learning-adjusted expected years lived between age 20 and 64 years, is estimated each year from 1990 to 2016 and can be updated annually."  Learning is based on average student scores on internationally comparable tests.

Human Capital Growth in South Asia. Source: The Lancet
South Asia's Low Human Capital:

Both Pakistan and India have seen their human capital double from three years of learning in 1990 to six years of learning in 2016 but both still rank low with significantly less than 10 years of learning,  according to a human capital study of 195 countries recently published in the journal The Lancet.

In fact, the entire South Asia region continues to rank low in terms of human capital. Among South Asian nations, Sri Lanka ranks the highest at 102 (13 years), Maldives 116 (12 years), Bhutan 133 (9 years),  Nepal 156 (7 years),  India 158 (7 years),  Bangladesh 161 (6 years), Pakistan 164 (6 years) and Afghanistan 188 (4 years). Countries with less than 10 years of learning are considered having "low human capital" by the authors of the study.

In 2016, the Lancet study shows that 44 countries achieved more than 20 years of expected human capital while 68 countries had expected human capital of less than 10 years. Bangladesh, India and Pakistan have less than 10 years of learning, putting them in the category of low human capital countries.


Change in Global Human Capital Maps. Top 1990, Bottom 2016. Source: Lancet

Global Human Capital Rankings:

Finland tops the human capital charts with 28.4 years of learning, United States ranks 27th with 23 years of learning and Turkey and China rank 43rd and 44th respectively, each with 20 years of learning. The countries with the least human capital are those in sub-Saharan Africa. Mali ranks 191st (3 years), Burkina Faso 192nd (3 years), Chad 193rd (2 years), South Sudan 194th (2 years) and Niger (2 years)  at the very bottom ranked 195th.

Conducted by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington in collaboration with University of California, Los Angeles (UCLA), the study on the measurement of human capital has been published in the journal The Lancet.

Impact of Human Capital on Economic Growth:

The Lancet report says that "human capital is characterized as the aggregate levels of education, training, skills, and health in a population, affecting the rate at which technologies can be developed, adopted, and employed to increase productivity".

Growth in human capital is associated with faster economic growth. The top quartile of countries in terms of absolute change in human capital from 1990 to 2016 had a median annualized growth in gross domestic product of 2·60% (IQR 1·85–3·69) compared with 1·45% (0·18–2·19) for countries in the bottom quartile, according to the Lancet report.

Human Development in Pakistan: 

In addition to the human capital report by The Lancet, UNDP’s Human Development Index (HDI) is another indicator of human progress that combines information on people’s health, education and income. The latest Human Development Report (HDR) shows Pakistan's HDI ranking sank to a new low of 150 in 2018.

Pakistan's Human Development Growth Rate By Decades. Source: HDR 2018

Pakistan saw average annual HDI (Human Development Index) growth rate of 1.08% in 1990-2000, 1.57% in 2000-2010 and 0.95% in 2010-2017, according to Human Development Indices and Indicators 2018 Statistical Update.  The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018.

The Human Development Index (HDI) is a composite index focusing on three basic dimensions of human development: the ability to lead a long and healthy life, measured by life expectancy at birth; the ability to acquire knowledge, measured by mean years of schooling and expected years of schooling; and the ability to achieve a decent standard of living, measured by gross national income per capita.

Not only has Pakistan's economy slowed since 2008 but its progress in education sector has seen a dramatic slowdown. Data shows that Pakistan's literacy and enrollment rates are not rising in spite of significantly increased education spending over the last several years. Education budgets at federal and provincial levels have seen double digit increase of 17.5% a year on average since 2010. And yet, school enrollment and literacy rate have remained essentially flat during this period.  This lack of progress in education stands in sharp contrast to the significant improvements in outcomes seen from increase education spending during Musharraf years in 2001-2008. Why is it?

Is the money not being spent honestly and wisely? Is the education budget being used by the ruling politicians to create teacher jobs solely for political patronage? Are the teachers not showing up for work? Is the money being siphoned off by bureaucrats and politicians by hiring "ghost teachers" in "ghost schools"? Let's try and examine the data and the causes of lack of tangible results from education spending.

Pakistan Education Budget:

The total money budgeted for education by the governments at the federal and provincial levels has increased from Rs. 304 billion in 2010-11 to Rs. 790 billion in 2016-17,  representing an average of 17.5% increase per year since 2010.



Education and Literacy Rates:

Pakistan's net primary enrollment rose from 42% in 2001-2002 to 57% in 2008-9 during Musharraf years. It has been essentially flat at 57% since 2009 under PPP and PML(N) governments.

Source: Economic Survey of Pakistan 2015-16

Similarly, the literacy rate for Pakistan 10 years or older rose from 45% in 2001-2002 to 56% in 2007-2008 during Musharraf years. It has increased just 4% to 60% since 2009-2010 under PPP and PML(N) governments.

Source: Economic Survey of Pakistan 2015-16

Four Levels of Development:

The extensive data compilation and research by Professor Hans Rosling of Sweden has shown that the binary categorization of nations into developed and developing is no longer useful. Instead, he has proposed using 4 levels of development based on health and wealth indicators, a proposal that has now been accepted by the United Nations and the World Bank. Here's how Rosling and the United Nations define these 4 levels:

1. Level 1: One billion people live on level 1. This is what we think of as extreme poverty. If you’re on level 1, you survive on less than $2 a day and get around by walking barefoot. Your food is cooked over an open fire, and you spend most of your day traveling to fetch water. At night, you and your children sleep on a dirt floor.

2. Level 2: Three billion people live on level 2, between $2 and $8 a day. Level 2 means that you can buy shoes and maybe a bike, so it doesn’t take so long to get water. Your kids go to school instead of working all day. Dinner is made over a gas stove, and your family sleeps on mattresses instead of the floor.

Level 3: Two billion people live on level 3, between $8 and $32 a day. You have running water and a fridge in your home. You can also afford a motorbike to make getting around easier. Some of your kids start (and even finish) high school.

Level 4: One billion people live on level 4. If you spend more than $32 a day, you’re on level 4. You have at least a high school education and can probably afford to buy a car and take a vacation once in a while.

Imran Khan's Ambitious Agenda:

Imran Khan laid out his agenda in his first speech to the nation after taking the office of the prime minister.  It was more like a fireside chat in which he spoke directly to the people to explain his priorities that emphasize education,  health care and human development. These are the keys to leading Pakistan from level 2 to level 3. In order to pursue his priorities, Mr. Khan needs to first address the more urgent economic crisis which he acknowledged. Pakistan needs to deal with excessive public debt and pay for the necessary imports to move forward.  He must also deal with financial corruption and mismanagement to free up the resources for his ambitious agenda of economic and human development of the nation.

Mr. Khan will almost certainly face stiff opposition from the status quo forces which stand to lose from the changes he seeks. They will fight to preserve their patronage networks and their power and privilege. They will try to bring down his coalition government with all they have got. They might even threaten his personal safety and security.

Democracy and Development:

Professor Hans Rosling has compiled extensive socioeconomic data and done serious research to understand how nations develop. He has shared his work in "Factfulness" that he co-wrote with his son Ola Rosling and daughter Anna Rosling Ronnlund. Here's an except on democracy and development from Factfulness:

"This is risky but I am going to argue it anyway. I strongly believe that liberal democracy is the best way to run a country. People like me, who believe this, are often tempted to argue that democracy leads to, or its even a requirement for, other good things, like peace, social progress, health improvement, and economic growth. But here's the thing, and it is hard to accept: the evidence does not support this stance.

Most countries that make great economic and social progress are not democracies. South Korea moved from Level 1 to Level 3 faster than any other country had ever done (without finding oil), all the time as a military dictatorship. Of the ten countries with the fastest economic growth, nine of them score low on democracy.

Anyone who claims that democracy is a necessity for economic growth and health improvements will risk getting contradicted by reality. It's better to argue for democracy as a goal in itself instead of as a superior means to other goals we like."

Summary:

Pakistan's human capital has doubled from three years of learning in 1990 to six years of learning in 2016, according to a human capital study of 195 countries recently published in the journal The Lancet.  However, Pakistan still ranks a poor 164th in the first-ever scientific study ranking countries for their levels of human capital. India has also doubled its human capital from 3 years to 6 years but Bangladesh stands out by tripling its human capital from two years to six years of learning since 1990.  Learning is based on average student scores on internationally comparable tests.

Pakistan saw average annual HDI (Human Development Index) growth rate of 1.08% in 1990-2000, 1.57% in 2000-2010 and 0.95% in 2010-2017, according to Human Development Indices and Indicators 2018 Statistical Update.  The fastest growth in Pakistan human development was seen in 2000-2010, a decade dominated by President Musharraf's rule, according to the latest Human Development Report 2018. Pakistan's newly elected Prime Minister Mr. Imran Khan has laid out an ambitious agenda that could accelerate Pakistan's human development progress to take his country from level 2 to level 3 of socioeconomic development. It is achievable but the odds are against him because he faces stiff opposition from the status quo forces. The powerful dynastic duopoly of PPP and PMLN still dominates Pakistan's Senate whose support will be required for major reforms. The research by Professor Hans Rosling shows: "Of the ten countries with the fastest economic growth, nine of them score low on democracy." It's also supported by Pakistan's economic history where pace of development has consistently been faster under military governments than during civilian democratic rule. Can Prime Minister Imran Khan's leadership change the course of history and deliver faster human progress under democratic rule? Let's wait and see.

Comments

Riaz Haq said…
While 72% of Pakistan's 8th graders can do simple division, the comparable figure for Indian 8th graders is just 57%. Among 5th graders, 63% of Pakistanis and 73% of Indians CAN NOT divide a 3 digit number by a single digit number, according to the World Bank report titled "Student Learning in South Asia: Challenges, Opportunities, and Policy Priorities". The performance edge of Pakistani kids over their Indian counterparts is particularly noticeable in rural areas. The report also shows that Pakistani children do better than Indian children in reading ability.

Here are some excepts from the World Bank report:

Unfortunately, although more children are in school, the region still has a major learning challenge in that the children are not acquiring basic skills. For example, only 50 percent of grade 3 students in Punjab, Pakistan, have a complete grasp of grade 1 mathematics (Andrabi et al. 2007). In India, on a test of reading comprehension administered to grade 5 students across the country, only 46 percent were able to correctly identify the cause of an event, and only a third of the students could compute the difference between two decimal numbers (NCERT 2011). Another recent study found that about 43 percent of grade 8 students could not solve a simple division problem. Even recognition of two-digit numbers, supposed to be taught in grade 2, is often not achieved until grade 4 or 5 (Pratham 2011). In Bangladesh, only 25 percent of fifth-grade students have mastered Bangla and 33 percent have mastered the mathematics competencies specified in the national curriculum (World Bank 2013). In the current environment, there is little evidence that learning outcomes will improve by simply increasing school inputs in a business-as-usual manner (Muralidharan and Zieleniak 2012).

In rural Pakistan, the Annual State of Education Report (ASER) 2011 assessment suggests, arithmetic competency is very low in absolute terms. For instance, only 37 percent of grade 5 students can divide three-digit numbers by a single-digit number (and only 27 percent in India); and 28 percent of grade 8 students cannot perform simple division. Unlike in rural India, however, in rural Pakistan recognition of two-digit numbers is widespread by grade 3 (SAFED 2012). The Learning and Educational Achievement in Punjab Schools (LEAPS) survey—a 2003 assessment of 12,000 children in grade 3 in the province—also found that children were performing significantly below curricular standards (Andrabi et al. 2007). Most could not answer simple math questions, and many children finished grade 3 unable to perform mathematical operations covered in the grade 1 curriculum. A 2009 assessment of 40,000 grade 4 students in the province of Sindh similarly found that while 74 percent of students could add two numbers, only 49 percent could subtract two numbers (PEACE 2010).

https://www.riazhaq.com/2014/08/pakistani-children-outperform-indian.html
Riaz Haq said…
Pakistan ranks 164th in terms of human capital
By Asma Ghan

https://tribune.com.pk/story/1811588/1-pakistan-ranks-164th-terms-human-capital/


The rankings are determined after calculating six years of expected human capital, measured as the number of years a person can be expected to work in the years of peak productivity, taking into account life expectancy, functional health, years of schooling, and learning.

The study “Measuring human capital: A systematic analysis of 195 countries and territories, 1990 to 2016” was published on Tuesday in the international medical journal The Lancet.

“Our findings show the association between investments in education and health and improved human capital and GDP – which policymakers ignore at their own peril,” said Dr Christopher Murray, the director of the Institute for Health Metrics and Evaluation (IHME).

“As the world economy grows increasingly dependent on digital technology, from agriculture to manufacturing to the service industry, human capital grows increasingly important for stimulating local and national economies,” he said.

According to the survey, Pakistanis only have 5.7 years of expected human capital while Finland’s level of expected human capital in 2016 was 28 years. It reveals that people do not live as long in the workforce as most people in the world, taking into account number of years between ages of 20 and 65 – a time when people are the most active in the workforce. On average, Pakistanis lived 39 of those 45 years, putting Pakistan at number 140 of the 195 countries.

Overall, Pakistan’s residents had 39 out of a possible 45 years of life between the ages of 20 and 64; expected educational attainment of nine years out of a possible of 18 years in school and a learning score of 68 along with a functional health score of 45, both out of 100.

76% Pakistan youth drop out of education: UNDP

The research also shows Pakistanis spend fewer years in school than most in Asia and around the world. An average national spends 8.6 years out of a possible of 18 years in school; as compared to Bangladesh’s 8.2 years and India’s 10.4 years. That puts Pakistan at number 171 in the world in terms of educational attainment. The country has, however, moved up five places since 1990, when it ranked 176.

Meanwhile, Pakistan has done slightly better in terms of education quality. The study measures quality of learning in school and Pakistan ranked 135 in the world – lower than Nepal (127) but higher than India (150).

But the country struggles with illness and disability hampering its workforce. The study’s measure of functional health – which calculates the work impact of ailments like stunting, hearing and vision loss, or infectious diseases like malaria or tuberculosis – ranked Pakistan 177th in the world while India’s functional health ranking is much worse at 187.

The study places Finland at the top. Turkey showed the most dramatic increase in human capital between 1990 and 2016. Asian countries with notable improvement include China, Thailand, Singapore, and Vietnam.

Over the past quarter century, there has been limited progress in building human capital in selected countries that started at a high baseline. The US was ranked sixth in human capital in 1990 but dropped to 27th in 2016 because of minimal progress, particularly in educational attainment, which declined from 13 years to 12.
Riaz Haq said…
Impressive improvement in quality of Bangladesh's human capital

https://menafn.com/1097503189/Impressive-improvement-in-quality-of-Bangladeshs-human-capital

A study conducted by the Institute for Health Metrics and Evaluation (IHME) at the request of the World Bank president, has found that Bangladesh's human capital has improved in quality between 1990 and 2016, reflecting growth in the economy.

The improvement in Bangladesh's case has been better as compared to India and Pakistan, the study reveals.

Bangladesh's ranking of 161th out of 195 countries in 2016 represents an improvement of nine notches from its 1990 ranking of 170th.

However, during that period, India improved only 4 notches from 162 to 158 and Pakistan only one from 165 to 164.

Bangladeshis have 6.1 years of expected human capital, measured as the number of years a person will work in the years of peak productivity, taking into account life expectancy, functional health, years of schooling, and learning.

The study looks at how many years between the ages of 20 and 65 – when people are most active in the workforce – they can expect to live.

On average, Bangladeshis lived 40.7 of those 45 years. That put Bangladesh at 118 of 195 countries. Nepal, Pakistan and India all scored below Bangladesh in this component of the study, but Sri Lanka scored better.

Bangladeshis have an expected educational attainment of 8.2 years out of a possible of 18 years in school; as compared to Pakistan 8.6 years and India 10.4 years out of a possible of 18 years in school.

Bangladeshis struggle with sickness and disability at work. The study's measure of functional health – which calculates the work impact of ailments like stunting, hearing and vision loss, or infectious diseases like malaria or tuberculosis – ranked Bangladesh at 165 in the world. India's functional health ranking is significantly lower at 187.

Bangladesh does slightly better in terms of education quality. The study measures the quality of learning in school and Bangladesh ranked 132 in the world – lower than Nepal (ranked 127), Bhutan (120), and Myanmar (106), but higher than India (150).

Learning is based on average student scores on internationally comparable tests.

The study places Finland at the top, with the highest human capital score in the world.

Turkey showed the most dramatic increase in human capital between 1990 and 2016. Asian countries with notable improvement include China, Thailand, Singapore, and Vietnam.

Within Latin America, Brazil stands out for improvement.

All these countries have had faster economic growth over this period than peer countries with lower levels of human capital improvement.

In addition, the greatest increase among sub-Saharan African countries was in Equatorial Guinea. Some of the world's most rapid improvements were in the Middle East, including Saudi Arabia and Kuwait.

(The featured image at the top shows a female civil engineer supervises men at a Bangladesh construction site. Photo: Dhaka Tribune)
Riaz Haq said…
India inches ahead on “Human Capital” study

https://www.thehindubusinessline.com/economy/india-inches-ahead-on-human-capital-study/article25034783.ece

Explaining India’s ranking of 158th in 2016, an improvement from its 1990 ranking of 162, an IHME note said that it came from seven years of expected human capital, measured as the number of years a person can be expected to work in the years of peak productivity, taking into account life expectancy, functional health, years of schooling, and learning.

“Overall, India’s residents had 39 out of a possible 45 years of life between the ages of 20 and 64; expected educational attainment of 10 years out of a possible of 18 years in school; and a learning score of 66 and a functional health score of 43, both out of 100. Learning is based on average student scores on internationally comparable tests. Components measured in the functional health score include stunting, wasting, anemia, cognitive impairments, hearing and vision loss, and infectious diseases such as HIV/AIDS, malaria, and tuberculosis”, the note said.

Finland topped the study, while Turkey showed the most dramatic increase in human capital. Asian countries that showed an improvement in the period included China, Thailand, Singapore, and Vietnam. Within Latin America, Brazil stood out for its improvement, the IHME said, adding that all these countries showed a faster economic growth than peer countries with lower levels of human capital improvement.

Over the past quarter century, there has been limited progress in building human capital in selected countries that started at a high baseline. The US was ranked sixth in human capital in 1990 but dropped to 27th in 2016 because of minimal progress, particularly in educational attainment, which declined from 13 years to 12, the note explained.
Riaz Haq said…
Four out of 5 top ranking nations in human capital index are #Asian: #Singapore, #Korea, #Japan and #HongKong. 5th is #Finland. Their investment in #HumanCapital is paying off very well. #humancapitalindex https://www.weforum.org/agenda/2018/10/these-asian-economies-invested-in-their-people-and-it-paid-off/ via @wef

Automation and malnutrition could create a global underclass and provoke unrest on a par with the Arab Spring.

This isn’t the opening sentence of a dystopian novel, it’s the bleak picture painted by the head of the World Bank, Jim Yong Kim in a speech at Stanford University about the Bank’s new Human Capital Index, which measures the knowledge, skills and health of populations.

The index is a wake-up call to countries that don’t invest in the health and education of their populations. Some countries, however, are getting it right.

Top scores for advanced Asian economies


The World Bank’s Human Capital Index aims to capture the amount of “human capital” a child born today could expect to accumulate by age 18.

It does this by breaking down human capital into a series of indicators on health and education.

For instance, the index looks at how likely it is that a child will reach the age of five, how many years of schooling they can expect to receive and the quality of that education, as well as whether they eat a full and complete diet and how likely they are to live to the age of 60.

The index scores countries between 0 and 1. In a country with a score of 1, all adults can expect to survive until the age of 60, every child can expect to receive 14 years of high-quality education and no child would suffer stunting (when children don’t grow and develop properly and are too short for their age because of poor nutrition).

Asian economies take four of the first five places, with Singapore at the top, with a score of 0.88.

The vast majority (98%) of Singaporean children can expect to reach the international benchmark for basic levels of proficiency in secondary school.

Human capital index Image: World Bank in Forum Social Images
The Republic of Korea and Japan are next with scores of 0.84. A girl born in 2018 in the Republic of Korea can expect to live more than 85 years.

Hong Kong SAR is in fourth place with 0.82. Finland completes the top five.

‘Left behind’


However, too many countries achieve a low score.

Children in rich countries can expect to receive the full 14 years of schooling used by the index as a benchmark. But in the poorest countries, children can expect to complete only half of that.

Meanwhile, 115 million children are stunted as a result of malnutrition, leaving them vulnerable to poor cognitive development and hampering their ability to learn.

The World Bank estimates that 250,000 children are in school but aren’t learning because of the poor quality of educational provision.

These issues become a stark reality when you compare Singapore’s index rating with that of South Africa’s.

In South Africa, which scores 0.41 on the index, only 26% of children can expect to complete secondary school to the same standard as their Singaporean counterparts. In Singapore, a child born today can expect to live until they are 89. In South Africa, it’s 68.

Adjusting to an automated future

This gap in human potential becomes even more urgent when we consider the changing nature of work. Technological advancements will require us to adapt to machines and algorithms taking over tasks previously done by humans.

According to the World Economic Forum’s Future of Jobs Report, the Fourth Industrial Revolution will bring significant job disruption.

The shift in the division of labour between humans, machines and algorithms could displace 75 million current jobs, but the report also finds that 133 million new roles may emerge at the same time.

The World Bank report argues that workers will need “advanced cognitive and sociobehavioral skills" such as “problem-solving, critical thinking and adaptation to new methods”. Otherwise, they will be unable to adjust to the coming changes.

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