eBusiness Weekly
Elias Pacheso
The United Nations this week launched an important report focussing on human development, an important component of every economy in the world. Through the Human Development Index (“HDI”) the UN measures the knowledge, living standards and health of a population. In simple terms they look at the healthy lives measured by life expectancy and at knowledge they look at expected number of years spent in school. It also looks at Gross National Income per capita which is a measure of purchasing power of each citizen reduced to United States dollars.
I decided to focus on the report this week in order to unpack it in the Zimbabwean context with the hope that policy makers and other stakeholders can take advantage of its findings to craft fitting policies that continue to help us improve our ranking which came out at number 150, compared to 153 in the previous report. South Africa was number 113. India is number 129. Norway was number 1. Niger is last. 189 countries were ranked in the report.
Although all nations are grappling with the same challenges and trying to eradicate poverty, their responses differ and determine where each country is placed on the HDI. In the past we used to measure prosperity using Gross Domestic Product per capita alone but this is no longer enough. We need better ways of measuring inequality.
Clearly the world we live in has changed and continues to do so, fast. Things that didn’t matter not so long ago, now do, like the type and quality of education, quality of food, speed and cost of internet. As incomes increases so too do our tastes and inequalities. This has brought to the fore a number of problems that are increasing unrest. This is not surprising, yet if policy makers do not understand these changes they risk not creating the right policies to address the growing challenges that their citizens face.
As its main the thread, the Report points out that although poverty levels have reduced worldwide, inequalities continue to widen across many nations and within communities and the society at large, robbing people of their dignity and destroying their future.
Hope, a key ingredient to industry and purpose is disappearing for many, and this is destroying lives even for future generations. This is sad and is more obvious in some countries than others.
Why should Zimbabwean policy makers worry about the findings of this report? Zimbabwe for a long time has existed in isolation, whether by choice or circumstances, the truth of the matter is the country has suffered more than many on the human development front. What has this got to do with economics and the success of the country? Everything!
According to the United Nations report, parents’ incomes and wealth affect the upbringing of their children which in turn affects their access to health, education and eventually incomes.
The more the economy continues to deny its people opportunities to increase income and wealth the more it destroys its human development capacity and ability to create wealth for future generations.
It’s sad to note that this observation rings true in Zimbabwe and has remained so for more than a decade now. The report correctly notes that our children’s futures are tied to our level of income. It is not a secret that incomes are low at the moment and the report recommends that governments act now to address these imbalances to ensure that they don’t become politically entrenched. Observations were made in the report that due to these inequalities there is growing unrest which is disruptive and destroys the ability of a nation to focus on economic growth.
Inequality destroys ambition and leads to more problems for countries.
We are all aware of the over 90-day health sector crisis which has crippled public health delivery in the country. There are no easy solutions to the problems being faced by many nations today but it is important for policy makers to recognise why these problems arise and act on them well before they become unmanageable. This requires proactive planning and recognition that the world we live in so inter-connected and volatile.
Due to the fact that economic situations have improved over time, to get ahead and become more prosperous countries must now go beyond the basic and strive to improve the quality of education and health as an example. A lot of money is wasted developing irrelevant skills in some cases and this is why it is important for the country to ensure that the right skills are being taught in educational institutions.
On the other hand, climate change is increasingly become a major threat to development in general and policy makers must take its impact into account when coming up with programmes. Flash floods in Centurion South Africa for example destroyed property and points to the fact that climate change is real and can affect anyone. The report notes that climate change will affect countries in many unexpected ways, in Zimbabwe’s case its making food more expensive due to repeated droughts and crop failure. I do not want to be drawn into discussing the importance of the changing agriculture production models. I have already covered it in previous articles.
Aside from climate change, technological advances are widening the inequality gap and policy makers must be nimble footed in ensuring that their citizens are keeping abreast and using technology to improve productivity and reduce costs. Countries that are slow to adopt technology even developed ones have been leapfrogged by those that allow the adoption and use of technology.
Allowing innovation and creating conducive environment for the creation of new industries is also important and countries that ignore this risk creating more inequalities. The report notes that what we care about is now a moving target as our conditions change. The general takeaway from the report is that governments must be responsive to the changing environment and ensure that there is quality access to services and livelihoods. It is no longer enough to have basic access to services and the inequality gaps need to be closed to ensure a sustainable future where productivity is properly rewarded.
