Human Assets Index

How well are we doing?

Ultimately, overcoming these systematic obstacles will require a lot more than just a generic focus on economic growth and poverty reduction.

As Bangladesh braces for take-off from the LDC (Least developed country) status, the need for increasing attention on quality education and healthcare have become even more central than before. Not only are these two areas essential drivers of continued progress, they are also critical components of human development.

One of the major criteria of LDC graduation is the aggregated score of countries in the Human Assets Index (HAI). HAI is a composite index of education and health which is used as an identification criterion of the LDCs by the Committee for Development Policy of the UN. FERDI, an independent and not-for-profit think tank in collaboration with UNDESA (United Nations Department of Economic and Social Affairs) has built a retrospective series of this index that tracks the improvements made by countries in this domain. In 2011, the HAI was available in an annual database covering the period 1970-2008 for 147 developing countries and the first update was done in 2014 by Closet, Feindouno and Goujon. At present, the index is available in an annual database covering the period 1990-2016 for 145 developing countries.

This new index focuses on two dimensions: health and education. The two health dimension indicators are the undernourishment prevalence index and the under-five mortality rate index. Likewise, the two education dimension indicators are the adult literacy index and the secondary enrolment index. The primary data for each variable of the Human Assets Index are rescaled and converted into index values using a max-min procedure and the aggregate index is then calculated as a simple average of the four components indices.

Each component carries an equal weight of 25 percent in the HAI and the normalised scores vary between 0 and 100. In order to graduate from the LDC category, a country must have a score of 66 or above in the Human Asset index. Although Bangladesh already fulfilled this eligibility criterion for graduation in 2018, there are still some room for improvements, particularly in order to successfully overcome the post-LDC graduation challenges.

According to the new data set of the HAI, Bangladesh has made significant progress in the under-five mortality rate index over the years. Likewise, the score of Bangladesh has also steadily improved in the adult literacy index. There has been an overall improvement in the aggregated score of the HAI index of Bangladesh as well. While Bangladesh's score in the secondary enrolment index continued to improve from the year 1990 and onwards, the score began to decline starting from 2004. The position of Bangladesh in this index improved for the second time around in the year 2012 to 2014. However, the score in the undernourishment prevalence index began to significantly worsen in the early 1990s and while some improvements were made in the later years, the score has remained stagnant for over a decade now.

This appears as a Catch-22. Because during the same period, the GDP growth of Bangladesh continued to rise significantly and yet there seems to be an inadequate reflection of the upward trend of GDP growth on the undernourishment index of the HAI.

Similarly, Bangladesh still has a long way to go to further advance the state of adult literacy and secondary enrolment. In the traditional literature, it is often argued that there is a bi-directional causality between economic growth and human development. Nevertheless, contrary to popular belief, it can be seen that despite economic growth, there could also be systematic impediments within the individual components of human development. Ultimately, overcoming these systematic obstacles will require a lot more than just a generic focus on economic growth and poverty reduction.

In Bangladesh, stunting is still quite a common problem and unfortunately the damage that it causes to the development in children is permanent. This alone robs people of many vital opportunities in life. Malnutrition can severely hamper the development of physiological and cognitive abilities in children which in turn can deprive them of fulfilling their full potential. Stunted children have weaker immune systems and consequently, are more vulnerable to diseases.

According to Unicef, the deficits in brain-cell size and connectivity in stunted children translate to a loss of between two to three years of learning. Furthermore, when stunted children enter the workforce, their diminished physical and intellectual ability can reduce their earning capacity by as much as 22 percent. Hence, it is evident that the cumulative effect of malnutrition has considerable impact on the broader socio-economic development of a country.

Numerous studies have already established that investments in both nutrition and education have a very high benefit to cost ratio.

In the post-LDC graduation phase, the government must focus on ensuring gender equity and increasing investment in the health and education sector of the country. Because without increased investment in human capital development, Bangladesh will struggle to meet the challenges of the post-LDC graduation phase. Therefore, all relevant stakeholders must flag this issue right away and adopt a well thought out and thorough strategy starting now.


Rafiqua Ferdousi is Research Economist, SANEM.

Email: [email protected]


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