PAKISTAN ECONOMIC POLICY
ASSIGNMENT# 01
ALVEENA KHURSHEED
20171-22731
HUMAN DEVELOPMENT INDEX:
HDI is a statistical tool that measures 3 dimensions of human development. HDI does
not only focus on economic growth but it focuses on people and the opportunities
available to them.
A long & healthy life – measured by life expectancy
- Life expectancy is a key tool for assessing health of population. It captures the
mortality along the entire life course and also tells us the average age of
death in a population. According to HDI report of 2019 the population of
Central African Republic has the lowest life expectancy of 52.8 years and
japan has highest life expectancy of 85 years
Access to education – measured by expected years of schooling of children at
school entry age and mean years of schooling of the adult population
- These two measures assess how many of a population in the country has
access to good quality education.
- Expected years of schooling measures that how many years of schooling a
child of average age of starting school can expect to achieve whereas the
measures the average number of years of schooling a person of age 25 or
above have received.
A decent standard of living – measured by Gross National Income per capita
adjusted by the purchasing power parity which considers exchange rates and
inflation adjustments when determining individual wealth.
These three components of HDI shows a country’s overall achievement in its economic
and social dimension.
LIFE EXPECTANCY INDEX EDUCATION INDEX INCOME INDEX
INDEX AGE MEAN YEAR EXPECTED INDEX GNI per
OF YEARS OF capita
SCHOOLING SCHOOLIN
G
0 20 15 18 (is the 0 US$ 100
(projected projected
maximum maximum)
for 2025)
1 85 1 US$ 75,000
or above
ADVANTAGES OF HDI OVER GDP AS A DEVELOPMENT INDICATOR:
GDP is a tool developed to measure the size of a country’s economy by considering the
value of goods and services produced in that country. Although GDP is a measurement of
wealth it left a lot of ground uncover. It does not consider the level of inequality within a
country or the methods of the creation or accumulation of wealth, such as the
destructive effects of the exploitation of natural resources. We can say that GDP only
measures productive capacity of a nation not overall well-being.
On the other hand HDI emphasizes more on human development as according to
economists besides economic growth the ultimate criteria for measuring the
development of a country should be its people and their capabilities. HDI takes quality
of life into account. The three indices of HDI discussed above provide a better and
holistic picture of progress than GDP. For example if two countries have similar GDP but
different HDI it can help the economist to identify the fundamental issues in the country
that need to be addressed.
In short HDI is doing and will do a better job in capturing the progress of a country than
GDP because it captures a deeper understanding of human development and focus on
individual’s life outcomes. E.g. if from one year to another all the employees in a
manufacturing industry joined health industry to develop vaccines and cures and treat
people etc. the GDP might not improve much but HDI index would change significantly
and will reflect the evolution in country’s development.
COMPARISON OF PAKISTAN FROM OTHER COUNTRIES ON THE BASIS OF HDI:
According to the HDI report of 2019 by UNDP Pakistan ranked at 152 nd position among
189 countries and it also was the lowest ranking among all South Asian countries. It
raked 13% below the average HDI of south Asia.
Pakistan falls in the medium human development category with Norway, Germany,
Switzerland, Ireland leading the rank and Central African Republic, Chad, and South
Sudan being the lowest in the rank.
Below is the comparison of Pakistan from other Asian countries on the basis of Different
indices of HDI.
Country Rank HDI LIFE EXPECTED MEAN GNI per
EXPECTANCY YEARS OF YEARS OF capita
AT BIRTH SCHOOLIN SCHOOLIN
G G
SAUDIARABI 36 0.857 75.0 17.0 9.7 49,338
A
CHINA 85 0.758 76.7 13.9 7.9 16,127
INDIA 129 0.647 69.4 12.3 6.5 6,829
PAKISTAN 152 0.560 67.1 8.5 5.2 5,190
HDI TREND OF PAKISTAN OVER THE PAST FEW YEARS:
Between 1990 and 2018, Pakistan’s HDI value increased from 0.404 to 0.560, an
increase of 38.6%. Pakistan’s progress in each of the HDI indicators is given below:
Between 1990 and 2018, Pakistan’s life expectancy at birth increased by 7.0 years (60.1
– 67.1), mean years of schooling increased by 2.9 years (2.3 – 5.2) and expected years of
schooling increased by 3.8 years (4.6 – 8.5). Pakistan’s GNI per capita increased by about
62.4 percent (3,195 – 5,190).
Although Pakistan has made progress in human development over the past years but it
still way behind other countries i.e. Pakistan’s 2018 HDI of 0.560 is below the average of
0.634 for countries in the medium human development group and below the average of
0.642 for countries in South Asia
