Measuring Malaysias Human Development Progress and Challenges

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Measuring Malaysias Human DevelopmentProgress
and Challenges

• Richard Leete, PhD
• UNDP Resident Representative for Malaysia,
• Singapore and Brunei Darussalam
• National Statistical Conference 2006
• Department of Statistics, Malaysia

4-5 September 2006 PutraJaya
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What is human development?
Measuring Malaysias Human Development Progress
and Challenges

• Conceptual approach to development that goes
  beyond income
• Process of increasing peoples capabilities and
  choices
• Vision of realization of human rights and human
  feedom
• Multidimensional concept with 3 key measurable
  dimensions
• to have capacity to live a long and healthy life
• to be educated and knowledgeable
• to have access to assets, decent employment and
  income

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Human Development Index (HDI)
Measuring Malaysias Human Development Progress
and Challenges

• Composite index measuring key dimensions of human
  capabilities
• HDI introduced in HDR of 1990, with an HDI for
  1987, and has since become universally known
• UNDPs annual HD report eagerly awaited globally
• Statistical indicators used in HDI are
• life expectancy at birth
• adult literacy and gross enrolment in primary,
  secondary and tertiary levels
• per capita GDP (PPP US)

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Current limits of indicators used in calculating
HDI
Measuring Malaysias Human Development Progress
and Challenges
Minimum value
Maximum value
Life expectancy at birth (years) 85
25
Adult literacy rate () 100 0
Combined gross enrolment ratio ()
100 0
GDP per capita (PPP US) 40,000 100
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Computing the HDI
Measuring Malaysias Human Development Progress
and Challenges
Dit is one of 3 indexed dimensions of HDI in
given year i HDI dimension Xit is the value
achieved and Xi, min and Xi, max are the minimum
and maximum value selected

• Dit Xit Xi, min
• Xi, max Xi, min
• O Dit 1.0
• HDIt 1/3 ? Dit
• Malaysia as an example
• HDI (2003) 1/3 0.80 0.83 0.76
• 0.796
• Malaysia currently ranks 59th out of 177
  countries the same ranking as 10 years ago

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i 1
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Measuring Malaysias Human Development Progress
and Challenges
Malaysias progress relative to worlds top 5
HDI countries
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For Malaysia to leapfrog other countries requires
big increase in per capita GDP
Measuring Malaysias Human Development Progress
and Challenges
HDI value 2003
Life expectancy index
Education index
GDP index
Average HDI of top 5 countries 0.91
0.98 0.97 0.95
HDI of Malaysia 0.80 0.83
0.76 0.80
Ratio of Malaysias HDI over top 5 ()
87.5 85.0 78.2
83.4
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Strengths and weaknesses of HDI
Measuring Malaysias Human Development Progress
and Challenges

• Advantages
• Promotes human dimensions of well-being of
  individuals, in addition to income, as indicator
  of development
• Some countries with low levels of income can
  still achieve moderate levels of human
  development, and vice versa
• Widely used summary measure of human development
  that has stood test of time
• Comparable across countries and over time
• Simple and amenable to refinements
• Disadvantages
• Include only 3 dimensions of human development
  ignores some key dimensions of human rights
• Like GDP per capita, HDI does not show inequities
• Gender insensitive hence GDI
• Not directly amenable to policy prescriptions

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HDI highly correlated with GDP per capita but
dispersion high at lower GDP per capita levels
Measuring Malaysias Human Development Progress
and Challenges
r2 0.84
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Measuring Malaysias Human Development Progress
and Challenges
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Measuring Malaysias Human Development Progress
and Challenges
As human development increases poverty declines
18 Asian countries
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Measuring Malaysias Human Development Progress
and Challenges
As human development increases so too does gender
equality
18 Asian countries
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Measuring Malaysias Human Development Progress
and Challenges
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Conclusions
Measuring Malaysias Human Development Progress
and Challenges

• Since first publication in 1990, HDI widely used
  as summary indicator of a countrys development
• Simplicity and modest data requirements make it
  practical for UNDP to publish HDI annually
• Currently Malaysia classified on threshold of a
  high human development country
• - Important to provide HD Office with
  updated data
• Compared to top 5 countries, Malaysias
  achievements in health and education are
  exemplary per capita GDP, however, only 78 of
  top 5
• - Further human capital investments
  essential for K-economy