Is Human Development Index Still Relevant?

An Introduction to the Human Development Index

The 21st century has seen the world being digitalised, globalised, and interconnected in all aspects; without delving into the pros and cons of this modern era and its technological advancements, this article explores how global trends have shaped human prosperity and the quality of life. For this purpose, a commonly used index, the Human Development Index (HDI), is considered for this analysis as a measurement of human progress. But as the world evolves and inequalities divide the world further, more and more questions arise over the capability of the HDI to measure variables across heterogeneous societies. These reservations are taken into consideration and analysed below.

What’s the Human Development Index?

In 1990, the United Nations Development Programme (UNDP) introduced in its report the Human Development Index (HDI), which revolutionised the way policymakers and governments can measure their domestic growth and draw conclusions on existing or new regulations. The objective was to create a simplified yet comprehensive tool that could capture the development rate of a country without being limited to the economic aspects. Practically, the HDI is calculated based on the geometric mean of three variables: the life expectancy, the literacy rate (measured by years of schooling for adults aged 25 years plus), and the standard of living (calculated by the Gross National Income (GNI) per capita). The next section examines the efficacy of this socio-economic indicator.

How effective is HDI?

Advocates of the HDI refer to the early studies on human development when national income was falsely used as a metric to determine the prosperity rate per country. Consequently, the breakthrough of the HDI relies on the incorporation of two additional indicators, of non-financial nature, for the assessment of human development. Nowadays, the UNDP index constitutes a valuable tool for political experts and researchers that wish to conduct a comparative analysis of two or more countries with the same GNI but different human development outcomes; or for governments and institutions that use the HDI as a foundation to introduce regulations and policies (UNDP, 2023).

Despite its strengths, some critics outline some weaknesses of this index. First of all, it fails to capture the reality by omitting other socio-economic indicators (such as poverty, inequality, human security, well-being, and sustainability) from its analysis, which are an integral part of society. Secondly, governments and decision-makers are in peril of driving the wrong policies as a result of the previous argument.

Adding a new index to the equation

To fill in the gaps and improve the HDI, the UNDP partnered with the Oxford Poverty and Human Development Initiative of the University of Oxford. The result was the creation of a Multidimensional Poverty Index (MPI), which aims to identify the deprivation variable in a society. As a complementary index to HDI’s variables (health, education, and standard of living), the poverty index calculates the poverty rate based on the nature of the poverty and its intensity. As a tool, it enables a cross-country analysis with projections on long-term trends. Therefore, by conducting frequent surveys, governments can develop strategic mechanisms to tackle poverty amid times of uncertainty.

The outbreak of the pandemic and a world in turmoil

The year 2022 found the world in turmoil. Climate disasters continued, Covid-19 kept spreading, and a war in Ukraine ignited, leading to inflation and a global recession.

In the same year, UNDP released the 2022 Human Development Report¹. By reading the report, one can understand that the topics discussed in this edition vary significantly from previous HDRs, whose sole focus was the study of inequalities. The unprecedented drop in the global HDI can explain this shift in the content of the 2022 report, which impacted 90% of the countries worldwide. At this point, it is only natural to wonder what caused this sudden drop; it is true that in the past, humanity survived disasters, wars, and diseases.

The difference lies in the imminent impact of modern challenges on human suffering. On the one hand, there is a group of pre-pandemic challenges – such as food insecurity and the rising cost of living – which are a by-product of human activity and the pursuit of economic growth. The UNDP’s 2022 Special Report on Human Security notices that pre-Covid, six in seven people felt insecure. Therefore, the pandemic did nothing more than intensify these challenges.

On the other hand, the confluence of these long-term challenges has given space to a climate of uncertainty and insecurity to grow and stir social upheaval. The result is a historical record of internal displacements of approximately one hundred million people and a “damaged” mental well-being, which has already been reflected in the low rates of school attendance and employment during and after Covid.

What’s the verdict?

All in all, the significance of the HDI to research analysis allows governments and institutions to evaluate human progress and productivity. And although HDI does not account for the full spectrum of human development, it has proven to be a valuable tool thanks to its simplicity and transparency.

Yet, the struggle of human society has shifted from financial hardships towards human rights violations. Until recently, economic growth had been the driving force of domestic and global affairs at the expense of the environment and the suffering of less favoured nations. This realisation shows how the human development theorem was unsustainable. Despite that many blame the pandemic for human suffering and the economic downturn, the truth is that the global transmission of the virus was only the trigger that resurfaced threats that existed in parallel with the so-called economic growth.

This argument explains why many critics of the HDI warned that relying on three indicators (education, employment, and life expectancy) is dangerous and should encompass more dimensions of human development. Towards this direction, UNDP seems to be moving. With the creation of the Multidimensional Index, The Global Multidimensional Poverty Index 2022² report reaches some remarkable conclusions: that different types of deprivation co-exist in society and are interlinked. For instance, no access to clean water can also mean no sanitation. That explains why governments need to inject policies across various sectors to mitigate the interconnections of poverty.

At a deeper level, the realisation that insecurity scores high across all human development indexes explains why the UNDP urges humanity to return to its core value, human security³. It is only left to see whether national and global priorities on human development have changed and that wealth is no more the driving force for progress.

At a macro-economic and regulatory level, the conclusions drawn by the latest UNDPR reports call for solidarity and collection. By working together, humanity can act proactively towards small challenges from being escalated, establish inclusivity and restore the trust that could otherwise ignite violence and a war for survival. Finally, the fast pace at that artificial intelligence and green economy evolve leaves no other option than “adapt, experiment, and cooperate to thrive. We must learn to live with today’s uncertainty complex, just as we must learn to live with Covid-19” (UNDP, 2022b).

Photo: United Nations Development Programme in Europe and CIS. Human Development Report (2011). Source: (flickr.com)| (CC BY-NC 2.0)

Footnotes

[1] The 2022 Human Development Report:

A summary of pre-Covid challenges the 2022 HDR has captured:

• Inequalities have been exacerbated between high-income and low-income societies during the pandemic, as the disproportionate vaccination rate of the population has shown between the two.
• Floods, storms, and heat waves are the results of climate change.
• The uprising food crisis is linked back to the planetary changes caused by the destruction of ecosystems and the extinction of biodiversity.

[2] The Global Multidimensional Poverty Index 2022 report:

Some key findings of the 2022 report:

• The studied population included 6.1 billion people across 111 countries.
• 19% of the population in Sub-Saharan Africa lives in acute poverty, with half of them being children under 18, followed by 83% in South Asia.
• The highest poverty rate is found in rural areas reaching 83% of the population compared to 17% of those living in urban areas.
• From the worst affected sectors, education and nutrition stood out. Children stopped attending school during the pandemic and later never returned, while food crisis hit 193 million people in 2021.

[3] Human security:

The United Nations General Assembly resolution 66/290 defines human security as “an approach to assist Member States in identifying and addressing widespread and cross-cutting challenges to the survival, livelihood, and dignity of their people (United Nations Trust Fund for Human Security, 2018).

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