Big bucks in human capital

The World Bank Group unveils a new system to rank countries based on its development of future productivity. Singapore tops the list.

NUSA DUA: The World Bank Group has unveiled a new system to rank countries based on their success in developing human capital, an effort to prod governments to invest more effectively in education and healthcare.

The bank’s Human Capital Index showed that poor African countries fared the worst in the rankings, with Chad and South Sudan taking the two lowest spots while Singapore topped the list, followed by South Korea, Japan and Hong Kong.

The rankings, based on health, education and survivability measures, assess the future productivity and earnings potential for citizens of 157 of the World Bank’s member nations, and ultimately those countries’ potential economic growth.

The index was unveiled yesterday at the World Bank and International Monetary Fund annual meetings on the Indonesian island of Bali.

It found that on average, 56% of children born today will forego over half their potential lifetime earnings as governments were not investing adequately to ensure that their people are healthy, educated and ready for an evolving workplace.

World Bank Group President Jim Yong Kim said he hoped the new index would encourage governments to take steps aimed at moving up the rankings, much as they seek to with the bank’s popular Doing Business survey, which ranks countries based on ease of doing business, with lowtax, low regulation economies faring better.

Kim acknowledged that the rankings would be controversial, but said the need for more and better investment in people was “such that we couldn’t shy away from making leaders uncomfortable”.

“This is about drawing their attention to a crisis that we think is real. This is connected to productivity, this is connected to economic growth,” Kim said.

He added that there was “unanimous” acceptance among World Bank member countries and the bank’s board. The index measures the mortality rate for children under five, early childhood stunting rates due to malnutrition and other factors, and health outcomes based on the proportion of 15yearolds who survive until age 60.

It measures a country’s educational achievement based on the years of schooling a child can expect to obtain by age 18, plus a country’s relative performance on international student achievement tests.

Countries in Africa with high childhood stunting rates and low access to formal education fared worst, while wealthier nations with strong educational systems fared best.