Last updated on September 17th, 2022 at 08:58 pm
A country that pays little or no attention to human capital development cannot possibly reduce poverty to the minimum. A conducive environment and enabling policies are needed for people to achieve their potential.
Singapore is ranked as the best country in the latest World Bank’s Human Capital Index. The Asian country scores 0.9, the highest because of its suitable policies in place targeted at developing human capital.
Economies which followed Singapore scoring 0.8 include South Korea, Belgium, Japan, Hong Kong, Canada, and Switzerland.
Other countries which score 0.8 include Sweden, the United Kingdom, Denmark, and Australia
The Index which ranges between 0 and 1 was first published by the World Bank in October 2018, ranking 157 countries. 1 means that there are indices that make citizens of a country achieve reach their potential. 0 worst.
For instance, a country where is insecurity like terrorism, poor power supply, inadequate potable water, high rate of poverty, ethnic-religious violence and poor healthcare facilities will definitely not be able to achieve anything reasonable in the Human Capital Index (HCI).
What is Human Capital Index?
The World Bank Human Capital Index measures how much capital a country deploys to ensure that its citizens achieve their maximum productivity.
This means that countries mobilize the economic and professional potential of their citizens. For instance, a country that fails to develop human capital will lose capital in the long term due to the lack of education and health it fails to provide.
In essence, the contribution of quality education will improve communication skills, spur problem-solving skills, and personal resilience; reduce of poverty through great economic policies will improve the mental health of business owners among others.
For instance, the mental health of a child who is born in a violent and poverty-ridden environment will be badly affected, and the technical skills of those without vocational training will be impacted. These are some of the indices the World Bank uses to gauge countries with the best HCI.
How Human Capital Index is calculated
The World Bank’s HCI combines indicators of education and health to measure human capital that a child born today can expect to obtain by the time she turns 18-year-old, given the risks of poor education and health that prevail in the country she lives
3 Pillars of HCI
The Index is hinged on three major pillars:
Share of children surviving past the age of five (5) in percentage. We may begin to ask ourselves how would children who are born in a terribly war zone survive past age 5?
Quantity of education that is expected years of schooling by age 18. The education policy of a country will directly or indirectly impact the children. For instance, there is an archaic education policy in Nigeria which forbids below-16 to gain admission into government-owned tertiary institutions.
The quality of education that is harmonized with test scores plays a significant role.
Adult survival rates that is the share of 15-year-olds who survive until age 60 in percentage.
Healthy growth among children that is stunting rates of children under 5 in percentage.
Countries with Highest Human Capital Index in the World
The latest HCI ranking shows that only Singapore scored 0.9 out of 1. The data shows that 24 economies score 0.8, 22 countries fall under 0.7 while the number of economies that score 0.6 is the highest with 44; 37 countries score 0.5
The two biggest economies: the United States and China has 0.7 point, falling under the same group as Belarus, Russia, Serbia, Greece, United Arab Emirates, and Austria among others in the HCI.
|6||Hong Kong (SAR)||0.8|
|11||Macao SAR (China)||0.8|
Countries with Lowest Human Capital Index in the World
39 countries dominated by African countries including Nigeria score 0.4 while six countries have 0.3, including Mali, Niger, Central African Republic (CAR), South Africa, Liberia, and Chad.
Specifically, the World Bank pointed out that Nigeria, which scored 0.4, has some of the worst human capital according to the 2020 Human Capital Index (HCI).
Sometimes in 2021, the Buhari-led government vowed to lift 100 million Nigerians out of poverty, but the country has failed to invest in developing its human capital.
|Central Africa Republic||0.3|
|Papua New Guinea||0.4|
|Democratic Republic of Congo||0.4|
The index is one of the projects by The World Bank designed to encourage economies around the world to massively invest in their citizens “for greater equity and economic growth.”