Human development concept and index The practical application in regional context

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 The essence of the concept An approach to development, which puts people at the centre of development process A process of widening people's choices and the level of their achieved well- being through: Extension of human capabilities (such as improved health or knowledge) The utilization of the acquired capabilities for productive and meaningful life.

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Basic assumptions It assumes that three major areas of people’s life are crucial: To enjoy long and healthy life To have access to knowledge and; To have access to resources necessary for decent standard of living In other words, apart from wealth and money, Extending people’s choices and freedoms is key Increasing and focusing on human capabilities is crucial Thus human development is broader than human capital development, responding to basic needs concepts, social sector development

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Relationship to economic growth Two-way connections: Economic growth provides the resources necessary Improvements in the level of education, health, people’s capacities make sustainable growth possible Not any growth is desirable! As the Global HDR 1996 argues, we should avoid jobless growth - that does not expand the opportunities for employment ruthless growth – its fruits mostly benefit the rich, voiceless growth – has not been accompanied by expansion of democracy and empowerment, rootless growth – at the expense of people’s cultural identity futureless growth – at the expense of future generations (squandered resources, debt burden etc.).

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Major principles Productivity. People should be able to productively participate in development process, in income generation and receive decent pay for their work Equity. People should have equal opportunities Sustainability. Access to resources and opportunities cannot be at the expense of next generations’ opportunities Extending opportunities and participation. Development is not just for people but by people. People should be involved in decision- making processes that affect their life

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Related concepts Social solidarity and human development Socialism with human face and human development Sustainable development and human development Rights-based approach Social inclusion MDGs

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Why particularly relevant for transition economies? New development paradigm after the collapse of “socialist system” “Pendulum” swing in the neo-liberal extreme The individual dimensions – response to the phenomenon of the “orphaned individual” facing the need of everyday individual choice The main difficulty - bringing back the attribute “human” out of the old socialist ideological context

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 The nominal human- centered nature hand in hand with negligible price of individual (can be easily sacrificed) Two parallel narratives – personal and official Extensive informal sector (“second economy”) needed to make system work Gradual internalization of the ideological propaganda The old regime… Everything for the benefit of the people

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 The old regime – gender equality Dramatic improvement in regards professional advance of women, particularly in Central Europe Often drawn to extremes

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Major areas of sustainable HD Poverty Education Health Housing Participation and access to information Human rights Personal security Environmental status HD reflects the concept of opportunity cost and the multiple policy choices

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Approximating development measurement Human Development can be approximated and its measure is not just monitoring wealth HD is broader than HDI HDI – a composite index Allows measuring progress in major areas of HD – but not all Same values of the index can be reached in variety of ways – opportunity cost of policy options

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 HDI components Education Literacy rate Enrollment rate Health – life expectancy Economy – GDP per capita in PPP$ Various attempts to add additional components but they reduce the index reliability and international comparability

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 The big questions: How to make the HD concept relevant to national development policies? How to go beyond advocacy to policy change? How to reconcile HD paradigm with current trends in economic thinking (HD versus neo- liberal agenda)

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Arguments against HD The concept itself brings together apples and oranges Even if relevant, as advocacy tool only Pretends to be scientific HDI is not statistically robust All these arguments relate to some extent HDI, not to human development paradigm itself. Even the relevant criticism doesn’t deny the need to put people at the centre of development process

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 UNDP approach Choosing between national adequacy and global comparability, the former is preferable Disaggregating the analysis whenever possible Using comparable statistics and methodologies whenever possible Linking to national development priorities whenever possible Complementary and not substitutive to other social statistics

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Other contextually similar indices Human freedom index (1991) Political freedom index (1992) Gender development freedom index (1994) Gender empowerment measure (GEM) (1994) Human Poverty Index – 1 (1997) Human Poverty Index – 2 (1998) Technological Achievement Index (2001) “Greening” the HDI (2003) Robustness, relevance and utility questionable Rarely go beyond advocacy, primarily at international level

Europe and CIS The concept of human development. HD/MDG CoP meeting, May 2008 Links to other initiatives Millennium Development Goals Extended number of indicators Commitments from Governments Clear time-frame and targets Global Compact Corporate Social Responsibility