Two 2018 reports dealing with Human Development that do not give the same results (certainly using different methods of calculation) were published. It is that of the UNDP and recently on 11 October 2018 that of the World Bank. These two reports show the urgency of adapting to the new global geo-strategic mutations, the world being at the dawn of the Fourth World Economic Revolution, which will be dominated by the primacy of knowledge and good governance in the world as the two pillars in the foundation of the development of the 21st century.

The UNDP’s

The latest report of the United Nations Development Programme (UNDP), examines the positive and negative linkages between work and human development in a rapidly evolving world, where rapid globalisation, demographic transitions, environmental challenges and many other factors create new opportunities, but also pose risks, that generates winners and losers.

In its recent publication of the Human Development Index (HDI) report 2018, the UNDP confirms the weak positioning of Africa. The ten least well-ranked countries out of a total of 179 assessed by the report are African. The UNDP reveals that, beyond the overall improvement in the living conditions of peoples, many challenges remain.  Men may live longer, but that does not change much in their quality of life. Hundreds of thousands of young people are completing school and yet they have no guarantee of finding decent work.  According to the UNDP for the year 2017, (edition of 2018), average HDI levels have risen significantly since 1990 – by 22% worldwide and by 51% in the least developed countries. A further examination of the elements constituting the HDI provides data on the unequal distribution of results in education, life expectancy and income within countries. The inequality-adjusted human development index makes it possible to compare the levels of international inequality: the higher this level, the lower the HDI of a country.  Considerable variations in the quality of education, healthcare and many essential aspects of life are observed from one country to another.  A primary school class has an average of 39 students for one teacher in sub-Saharan Africa and 35 in South Asia, but 16 to 18 in OECD countries, East Asia and the Pacific, as well as in Europe and Central Asia.

On the other hand, while 28 and 27 doctors respectively care for 10 000 people in OECD and European countries, and in the countries of East Asia and the Pacific, these figures are reduced to only eight in South Asia and fewer than two in sub-Saharan Africa.  Norway, Switzerland, Australia, Ireland and Germany dominate the ranking of the 189 countries and territories of the most recent HDI released today by the United Nations Development Programme, while Niger, Central African Republic, southern Sudan, Chad and Burundi are at the bottom of the table of national health, education and income outcomes. The transition from a large number of countries to the higher category of the HDI reflects a global trend towards continuous improvement in human development: of the 189 countries for which the HDI is calculated, 59 now belong to the category “Very high human Development” and 38 only at the category “Low Human development”, compared to 46 and 49 respectively eight years ago (2010).  The HDI was developed in 1990 by the Pakistani economist Mahbub Ul Haq and the Indian economist, Nobel Prize in Economics Amartya Sen.  The HDI is a composite index, ranging from 0 (appalling) to 1 (excellent), calculated by the average of three indices. The first aspect (A) quantifies health/longevity (measured by life expectancy at birth), which provides an indirect measure of the satisfaction of essential material needs such as access to healthy eating, drinking water, housing, good hygiene and medical care adopted by the United Nations Development Programme (UNDP) in 1990. It is more reliable than the previously indicator used, per capita GDP, that does not provide information on individual or collective well-being but quantifies economic output. The second aspect (B) is the knowledge or level of education measured by the adult literacy rate (percentage of 15 years and older who are able to quickly write and understand a short and straightforward text dealing with daily life) and the gross enrolment rate ( Combined rate measurement for primary, secondary and higher levels). It reflects the satisfaction of intangible needs such as the ability to participate in decision making in the workplace or society. The third aspect (C) is the standard of living (logarithm of the gross domestic product per capita in purchasing power parity), to encompass the elements of quality of life that are not described by the first two indices such as mobility or access to Culture thus giving HDI = ADE divided by three.

The World Bank’s

Unveiled at the annual meetings of the World Bank and the IMF in October 2018, the Human Capital Index is one of the issues addressed in the 2019 edition of the World Development Report entitled “The Changing Nature of Work”, which deals with the importance of investing in human capital to prepare for tomorrow’s work.

For 126 of the 157 countries covered by the index, the data broken down by gender, the new Human capital Index shows that 56% of children born today in the world will be deprived of more than half of their potential income in adulthood because states do not make the necessary investments to produce an educated, resilient and well-off population, ready for the world of work of tomorrow.  The human capital index measures the level of human capital that a child born today is likely to achieve by the age of 18, given the health and education services in his country. It measures the distance between a country and the excellent situation of schooling and health.

According to this report, “Human capital is often the only capital of the poorest people”.  It is one of the key factors in sustainable and inclusive economic growth. Investments in health and education have not received the attention they deserve. This index establishes a direct link between improved health and population education, productivity and economic growth. Hoping that it will encourage countries to take urgent action and invest more and better in their population. All countries, regardless of their income levels, must develop their human capital to be able to compete in the economy of the future.

Thus, this measure incorporates three factors:

  • Survival: a child born today will he reach an age to go to school?
  • Schooling: what will be the duration of his or her education and what will he have acquired?
  • Health: will this child leave the school system in good health, ready to continue his education or enter the labour market

Also, it is within this framework that special global attention should be given to the human development indexes of UNDP and the Bank which are a significant breakthrough in the use of more credible indicators than the gross domestic product (GDP). According to many international experts, these indicators include essential shortcomings, mainly: the selection and weighting of the selected indicators; i.e. the quality and reliability of the data used to calculate them which are highly variable from one country to another; the use of averages, without considering both socio-professional and spatial inequalities. The level of both schooling and health varies considerably between countries, and finally, some social indicators are difficult to quantify distorting comparisons from one country to another. Also, the qualitative analysis must necessarily supplement the quantitative deficiency. It is also desirable for both the UNDP and the World Bank reports supplementing their indices with new indicators that would consider, participation, gender, enjoyment of human rights, civil liberties, social integration, environmental sustainability and for third world countries, the weight of their ‘informal’ sphere.  All of this will assume a statistical apparatus that is efficient and adapted to social situations including standards of good governance and indices of corruption and transparency.

Ranking of Algeria?

At a time, when and contrary to the speeches of most Algerian officials, we also witnessed two declarations by two principal partners of Algeria, who translated the concerns of both domestic and foreign investors. The Ambassador of the United States of America, Mr John Desrocher, for whom Algeria, in order to “attract other investments, will require more transparency, predictability and better market access”, the other of Jean Louis Leven, senior French official in charge of technological and industrial cooperation between France and Algeria, who deplores the “moving economic regulations of Algeria and for which the Algerians do not sell their country well enough to foreign investors and tourists”.  According to the UNDP index, between 1990 and 2017, the Algerian HDI rose from 0.577 to 0.754, an increase of 30.6 per cent, according to the UNDP report. The index shows an upward curve from 0.644 in 2000 to 0.749 in 2015 and then to 0.754 in 2017 in the category of countries with a high level of human development. Algeria came in 2017 to the 85th place of this ranking of the countries; an increase compared to 0.752 obtained in 2016 but which had, then, placed Algeria in the 83rd place of this chart which evaluates the efforts of 189 countries and territories in this field. Algeria has significantly improved its ranking at the African level and thus points to second place, just after Seychelles nearly having figured fifth in the edition of 2016. In the Maghreb, Algeria is ahead of Morocco (123rd place), Tunisia (95th place), Libya (108th place), Mauritania (159th place) and the HDI of Algeria in 2017 remains above the average of 0.699 obtained by the Arab countries, according to the explanatory note which was consecrated to him.  Life expectancy at birth in Algeria recorded a slight progression of 76.1 years in 2016 to 76.3 years in 2017, but with a slight difference of 77.6 years for women and 75.1 years for men. Following the same trend, the expected duration of schooling increased from 14.3 years to 14.4 years, while the average duration remained the same for the two years to 8 years. Enrolment is a little higher among women than men whom last year was 14.6 years old compared with 14.1 years. The gender gap is widening as shown by the GNP per capita index, where men earn $23,181, compared to only $4,232 for women. The global index for GNP per capita was $13,802 last year compared to $13,809 in 2016. According to the World Bank index of 2018, the 28 “Pioneer” countries are Saudi Arabia, Armenia, Bhutan, Costa Rica, Egypt, the United Arab Emirates, Ethiopia, Georgia, Indonesia, Iraq, Jordan, Kenya, Kuwait, Lesotho, Lebanon, Malawi, Morocco, Uzbekistan, Pakistan, Papua New Guinea, Peru, the Philippines, Poland, Rwanda, Senegal, Sierra Leone, Tunisia and Ukraine. However, Africa is at the bottom of the scale.  In this table of 157 countries, Seychelles 43rd World achieves a national index of 0.68 points, which means for the bank, that the “Economic potential” and the future of the population (and the country as a whole) is amputated by 32%. It also implies heavy economic losses and an annual reduction in GDP growth in the years to come.  Seychelles is followed by Mauritius (world 52nd with 0.63), Algeria (World 93rd with 0.52), Kenya (World 94th with 0.52), Tunisia (World 96th with 0.51) and Morocco (98th worldwide with 0.50). As for other greats on the mainland, they have no better clues and are lost at the bottom of the leader-board. This is, for instance, Egypt (World 104th with 0.49), South Africa (World 126th with 0.41) and Nigeria (152nd worldwide with 0.34).

Meanwhile, it must be recognised that in Algeria, a lot of effort in education in investments was made.   However, the alarming drop in the educational levels could be explained by mainly relying on the quantity factor rather on the quality, of both school and universities ending up by obvious inadequacy of the vocational training to the new mutations, a significant loss from primary to secondary, then from secondary to universities, except for about 20% (part of which is expatriated through brain drain) .  From 1974 to 2018, the improvement of the purchasing power of Algerians goes through a reorientation of the current socio-economic policy in order to necessarily have a growth rate higher than the population growth rate otherwise the unemployment rate will go up (growth rate higher than 7/8% over several years to create 350.000/400,000 new workstations per year).  This growth rate depends on the new governance and the improvement of human capital eternal resource much more important than all the ephemeral mining resources by a fight against mismanagement, over costs, corruption, and targeting projects creator of value added within the framework of universal values. What helps alleviate social tensions is paradoxically the social subsidies/transfers, the housing crisis and the ‘informal’ sphere that allow for combined income (sharing the same charges). Generalised subsidies without targeting and the resolution of the housing crisis without an economic stimulus.  Its recognition of an important state effort for subsidies and social but generalised transfers are a source of social injustice and wastefulness. Social transfers budgeted for 2019 will amount to 1,772,500,000,000 Algerian Dinars (DZD), representing 8.2% of GDP and up DZD12.5 billion (+ 0.7%) compared to 2018 and about 21% of the total state budget which is close to DZD8.56 trillion.  Social transfers have reached DZD1,625 billion in 2017 versus DZD1,239 billion in 2010. This amount was increased to DZD1.76 trillion in the fiscal year 2018, up by almost 8% compared to 2017. The rate of social transfers had reached 22.8% of the state’s general budget over the period 2000-2004, then 24.5% over the period 2005-2009, then 25% of the state budget in 2010-2015 and 23% between 2016 and 2017.