The Human Development Index Is Vast Improvement on Measures of Development in Terms of Income

The critical difference between most development models and human development index is that most development models exclusively focus on the expansion of income while the human development index embraces embraces the enlargement of all human choices – economic, political, social and cultural which all affect income. Comparing countries’ GNP (or GDP) per capita is the most common way of assessing their level of development. This model of economic growth was based on a very weak foundation that was not sustainable over the long-term politically, economically or ethically. Higher per capita income in a country does not always mean that its people are better off than those in a country with lower income, because there are many aspects of human well being that these indicators do not capture. Sometimes a country with a very high level of national income recorded a very high percentage of population in poverty, illiteracy, in poor health, and a huge disparity based on gender, ethnicity and income. “The Human Development Index (HDI) is a composite statistic of life expectancy, education, and income indices used to rank countries into four tiers of human development, well-being concept based on capability approach. In which poverty is investigated as an indicator of standard of living.” It is a simple average of three indexes reflecting a country’s achievements in health, life expectancy at birth, education (measured by adult literacy and combined primary, secondary, and tertiary enrolments), and living standard (measured by GDP per capita in purchasing power parity terms). Achievement in each area is measured by how far a country has gone in attaining the following goal: life expectancy of 85 years, adult literacy and enrolments of 100 ...

... middle of paper ...

...ise policies to change course. Comparison with other countries with similar incomes reassures them that it is possible to generate greater human welfare at that level of income. The advantage of the human development index it allows countries to be ranked in order of their achievements in human development. In the recent ranking, based on 1997 data, the top five countries were Canada, Norway, the United States, Japan, and Belgium. The bottom five countries were, Sierra Leone, Niger, Ethiopia, Burkina Faso, and Burundi. The top five developing economies were Singapore, Hong Kong (China), Brunei, Cyprus, and the Republic of Korea. Sri Lanka has been a shining example in South Asia in providing education and health to its people at a very modest level of GDP. So there should be no tension between HDI and GDP measures. Both are equally useful to inform public policy.