Assessing the index
Ibrahim El-Issawy* writes on the strengths and weaknesses of the Arab Human Development Report
This brief commentary on the Arab Human Development Report (A-HDR) should begin with an expression of appreciation for the initiative which led to the birth of this report, and an acknowledgment of the commendable efforts of the individuals and institutions that supported its production and publication of this report. In spite of many critical remarks I shall make on the report, its compilation and dissemination was a praiseworthy undertaking, satisfying a pressing need too long neglected in the Arab World.
Indeed, the absence of a collective work reviewing the development situation in the Arab world as a whole, indicating where the Arab region stands in relation to other regions in the world, and pinpointing the challenges to its development and highlighting some ways and means to tackle such challenges, was a serious cultural anomaly. It is a good thing that an A-HDR has emerged to fill this gap.
Opinions differ as to what is new in the A-HDR, and as to the usefulness of the material presented. The real contribution of the A-HDR lies in its synthesising of many pieces of information, most of which may have been known to many, though by no means all, potential readers of the report. Indeed, by pulling various strands of information together and constructing a broad and comprehensive picture of the Arab development situation, the report has performed a valuable service. It serves as a wake-up- call to many professionals and public opinion makers, helping them realise the depth of the gap between our region and other regions in the world in terms of a variety of sustainable human development (SHD) indicators. The report sharpened their perception of the challenges of development in a globalised world and has helped them see that in spite of past achievements, which the report recorded, much remains necessary if the risks of marginalisation and dependency are to be avoided.
Human development reports, in spite of their technical language, are not intended to exclusively address scholars and professionals. They are meant to address a wider public, both directly through press releases and similar public statements conveyed to the media, and indirectly through professionals and intellectuals. The idea is to use HDRs as an instrument for enriching public debate on development issues. From this point of view what matters is the strength of the messages the reports deliver, rather than the novelty of the information or arguments as such. Judged by this standard, the A-HDR has performed a useful function.
This said, the report falls short of expectations in many respects. There are several issues which the report either failed to incorporate or should have dealt with more fully or more critically.
As regards economic growth and economic performance at large, wasteful patterns of consumption and excessive importation of many items of non- essential consumption, and the related problems of low saving and investment rates should have received greater attention. Their treatment should have taken account of such novel concepts as genuine saving and comprehensive capital.
The issue of the role of the state in development at a time when evidence is accumulating regarding the weaknesses of the private sector, the poor functioning and fragmentation of domestic markets in which the private sector is expected to operate and undertake a disproportionate share of the development effort should also have been comprehensively tackled, as should the issue of trade liberalisation and the rush of Arab countries to open up their economies before building solid foundations for upgrading their competitiveness.
The emphasis placed (or misplaced) on attracting foreign direct investment (FDI), in conditions of low saving and investment rates and sluggish growth of the economy, also needed further consideration.
The A-HDR appeared to deal with these issues as if they had been settled once and for all in favour of economic liberalism. Little attention was paid to the grave consequences of applying stabilisation and structural adjustment policies in almost every Arab country. These consequences include intolerable levels of poverty and unemployment, growing disparities in the distribution of income and wealth, and economic stagnation. Structural adjustment programmes have proven to be anti-human development. They have failed to stimulate economic growth, a fact which is ignored or, at best, dealt with casually in the report. It is worth noting that in a recent article the principal author of the A-HDR -- Nader Fergany -- appeared to agree with this remark and to regret that the report quoted World Bank estimates of poverty levels and income distribution which suffer from huge downward bias.
Another issue which ought to have been discussed in the report concerns natural resources and the conservation of the environment. This is obviously important in a region where a large number of countries extract non-renewable energy resources, or are subject to high levels of desertification and various sorts of environmental degradation, or both.
Two more issues should have received greater care and attention in the report. One is the issue of global and regional challenges to development and the threats they pose to the Arab region's progress. The other issue is pan-Arab collective action in general and Arab economic integration in particular. Here again, in his recent criticism of the report Fergany appeared to agree. However, he reaffirmed the approach taken by the report -- that the first priority is for the Arabs to put their own house in order. I agree with this view, which does not imply acquitting the West of the crimes committed against Arab countries during the imperialist era and during that of global capitalism.
The A-HDR focused on three major shortcomings which must be addressed in order to promote human development in the Arab world, namely the democratic deficit, the knowledge deficit and the women's empowerment deficit. Without denying that these are real deficiencies in Arab development, this characterisation raises two problems. One is that the list of deficiencies is not complete. For instance, it leaves out poverty, the deficit of productive capabilities, the domestic saving and capital accumulation deficit and Arab economic integration.
The other problem concerns the question of priorities. It could be argued that the question of women's empowerment should not have been included in the list of problems calling for priority action. Improving the status of Arab women is better regarded as an outcome rather than as a condition of human development. Women's empowerment is bound to increase in response to improvements in general economic, social and political conditions, rather than in response to pro-women social and political legislation.
The emphasis on democracy and civil and political freedoms should have been justified on stronger grounds than appears in the report. On the one hand, some may argue on the basis of historical evidence that democracy has not been a precondition for development in several countries regarded as "success stories". On the other hand, it could be argued that the huge weight assigned to democracy and the pursuit of freedom tends to marginalise the material aspects without which human development cannot be achieved. People do not live on freedom. They need decent jobs, sufficient incomes, goods and services at affordable prices, etc. These comment are not meant to depreciate the value of freedom and participation and other democratic rights which are critical for development in the contemporary world. Human development, after all, is concerned with enlarging people's choices.
There is another negative aspect of the treatment of freedom in the A-HDR, namely the freedom index used and the concept of freedom underlying that index. I do not have to elaborate this point as Fergany himself has admitted that it was wrong to use the index developed by the US-based Freedom House. On the one hand, the political and ideological biases of this index cannot be easily overlooked. The concept of freedom it uses over- emphasises civil and political aspects and tends to understate or ignore the economic and social dimensions of freedom. The focus is on individual freedom to the neglect of society's freedom, i.e. the freedom of nations to pursue policies of their own choice, without external pressures of threats.
As for the knowledge deficit, the report was fully justified in including it as a priority area, and has adequately treated the related problems of knowledge absorption via education, scientific research, knowledge creation acquisition, and communication.
The human development index (HDI), which has been proposed as a better substitute for the conventional index developed by global HDRs since 1990, is based on three indicators: life expectancy at birth, educational attainment, and real per capita income. The index suggested by the report retains the first two indicators, omits per capita income, and adds four indicators, namely civil and political freedoms, women's empowerment, capturing the benefits of globalisation in terms of information and communication technologies (more Internet connectivity), and the contribution to global environmental degradation. The HDI suffers from a number of defects, even from the viewpoint of the authors of the report. They regarded it as preliminary and open to several improvements. They also admit that the chosen indicators may not be the best ones. We do not, though, have to dwell on the imperfections of the proposed HDI except in respect of the income indicator: the report considered its exclusion from the index to be an improvement upon the conventional UNDP HDI. Although it cannot be argued that per capita income is a good measure of human welfare, this consideration is by no means sufficient to exclude income from such a summary measure of development. After all income is an indispensable means for acquiring and promoting human capabilities, enlarging human choices, and even enjoying many kinds of freedom.
It should be noted that the HDI proposed by the report turned out to be strongly correlated with the conventional HDI. The report viewed this finding as proof that the two indexes belong to the same family of development measures. But this finding could be more accurately interpreted as proof that the proposed index contains no significant additional information than the conventional UNDP index.
The A-HDR assigns a crucial role to knowledge creation, absorption and communication in promoting Arab human development. Without denying the critical place of knowledge in the development process I would take issue with two propositions related to knowledge in the report. First, the report asserts that education could be a motor of progress in Arab countries. Development, though, needs multiple motors. There is no single key. Several keys, including education, have to be used simultaneously in order to liberate our countries from underdevelopment and dependency.
Second, the report pins great hopes on the role of knowledge acquisition and the development of an information and communications sector in achieving economic prosperity in Arab countries. This hope is based on the observation that the services sector in general and the information and communication sector in particular contribute a large and increasing proportion of GNP in advanced countries. In my view the potential role of information and communication in Arab development is grossly overstated in the report. The development of this sector in advanced countries has been preceded by the development of a solid agricultural and industrial base and a strong socio-economic and technical infrastructure over a long period of time. These two pillars are lacking in Arab countries, and must be built first in order for a high- value added services or information and communication sector to emerge and contribute significantly to Arab human development.
* The writer is professor of economics at the Institute of National Planning, Cairo.
