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julio 1, 2012 0

Estimating a CARICOM Human Development Index

By Leida Mercado, Advisor on Human Development-UNDP

Foto: Erwan Varas

During the process of producing the First Caribbean Human Development Report[1], and with the purpose of providing an overview of the evolution of human development in the Caribbean Community (CARICOM) an aggregate, population-weighted average of UNDP Human Development Index (HDI) for CARICOM member states was calculated[2].  This allows (I) to analyze the available HDI data and corresponding components for CARICOM member states, in an effort to broaden our understanding of human development trends in the region; and (ii) to summarize intra-regional variations among HDI indicators and draw comparisons with other regions, principally Latin American and the Caribbean (LAC) and the Small Island Developing States (SIDS). The analysis also examines the three indices recently incorporated by the UNDP —the Inequality-adjusted Human Development Index, the Gender Inequality Index, and the Multidimensional Poverty Index— and how they affect HDI calculation within countries and across the region.

 

Source; http://caribbeanclimate.bz

Methodology

There are fifteen (15) CARICOM member states (Box 1). Based on the UNDP Human Development Report Office (HDRO) dataset, there is a major data constraint for calculating an aggregate CARICOM HDI: the dearth of data available on the education component. Given this limitation, three options for calculating aggregate CARICOM indices were considered: 1) using a sample of only the “group of five” (Belize, Guyana, Haiti, Jamaica and Trinidad and Tobago), which includes the countries with the larger time series data from 1980 on; 2) using a sample of the “group of nine” (Bahamas, Barbados, Belize, Dominica, Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago), which includes the countries with time series data from 2005 on; or 3) using a sample of the “group of fourteen”, which includes all the CARICOM member states except Montserrat, but only with data from 2010-2011.

To evaluate which estimate is more accurate for the region overall, we compared the indices resulting from the “group of five” and the “group of nine” with the estimates product of the Group of fourteen in an effort to measure of goodness-of-fit. Such a comparison provides a reliable way to test whether or not estimates can be considered to be a close enough approximation of the real CARICOM regional indices. Estimates based on the “group of five” underestimate all indices compared to estimates based on the “group of nine” and the “Group of fifteen. The main reason for this is that all countries with missing values in this sample tend to have a higher index in all HDI components relative to the rest of the CARICOM member states. This feature is repeated in the case of the “group of nine” as compared to estimates based on the group of fourteen. However, the underestimation is smaller when using the group of nine. Thus, the aggregated CARICOM HDI estimates presented are based on the “group of nine” data because it offers a better representation of all CARICOM member states and a larger data set to analyze trends.

 

Human Development in CARICOM

Source: UNDP – HDRO website

According to UNDP HDRO calculations and classifications, only Barbados of all CARICOM economies belongs to the group of Very High Human Development countries. Antigua and Barbuda, Bahamas, Belize, Dominica, Grenada, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines and Trinidad and Tobago belong to the group of High Human Development countries. Guyana and Suriname belong to the group of Medium Human Development countries. Finally, Haiti belongs to the group of Low Human Development countries.

Figure 1 shows the HDI evolution for all CARICOM member states except Montserrat and compares it with the rest of the world. As shown, there is a positive upward trend in the HDI value for all CARICOM countries. Figure 2 shows similar trends for all HDI components. While there is a universal positive trend for both education and health indices, this is not as clear in the case of the Income Index.

 

 

 

 

Source: UNDP – HDRO website

 

 

CARICOM HDI trends for the Group of Nine

Focusing on the Group of Nine countries, HDI trends from 2005 onward are shown in Figure 3 for individual countries as well as for the CARICOM aggregate.  Figure 3 shows that all countries, except for Haiti, consistently post HDI values above the aggregate CARICOM HDI. Guyana, Haiti and Trinidad and Tobago show the most dramatic HDI increases over the 2005-2011 period, while Bahamas and Barbados show somewhat slower progress. Most countries, except for Bahamas, Barbados and Trinidad and Tobago, show positive growth rates throughout the 2006-2011 period.  The average growth rate was highest for Guyana and Haiti, the lower HDI value countries. The aggregate CARICOM HDI shows positive growth throughout the period, as well, with an average rate of 0.66%.  Analyzing average annual growth rates of the HDI along with its components, it is possible to better identify differences among the countries despite the CARICOM average positive annual growth in each area, as well as specific drivers of growth in each country.  For example, Bahamas registers negative annual growth rates in education and income, but these effects are offset by advances in health. Barbados and Jamaica experienced negative annual growth of income, but positive growth in health and education. Guyana shows negative growth in education, but this is compensated for with positive annual growth in health and income. Belize, Dominica, Haiti and Trinidad and Tobago show steady annual growth across all HDI components. Finally, Suriname shows steady positive trends for health and income, but not for education[3].

 

Inequality-adjusted Human Development Index (IHDI), Gender Inequality Index (GII) and Multidimensional Poverty Index (MPI)

With the 20th anniversary edition of the UNDP HDR in 2010, three new indices were introduced: the Inequality-adjusted Human

Development Index (IHDI), the Gender Inequality Index (GII) and the Multidimensional Poverty Index (MPI). Because of the information constraints alluded to earlier it was only possible to estimate two of them:

  • The Aggregate CARICOM IHDI, was calculated based only in data from six countries Bahamas, Guyana, Haiti, Jamaica, Suriname and Trinidad, and Tobago— but which represents nearly 93%, of the total CARICOM population. However, these six countries represent nearly 93% of the CARICOM population.  With the IDHI adjustment, the average value for the CARICOM is cut by 31.0%6. This loss is similar to that suffered by the SIDS and South Asia (28.4% and 28.3% respectively), but 5% above the LAC loss and about 8% above the average global loss.
  • The aggregated CARICOM GII was calculated using data on seven countries which represent over 93 percent of the CARICOM population including Bahamas, Barbados, Belize, Guyana, Haiti, Jamaica and Trinidad and Tobago. CARICOM’s gender record lags behind all regions except for the Arab States, Sub-Saharan Africa and South Asia and continues to be a major barrier to human development.

 

Comparison of Regional Human Development Index trends

When analyzing regional HDI trends for the period 2005-2011, it is possible to observe that CARICOM post similar values to South Asia.  If these regions were individual countries CARICOM, South Asia, East Asia and the Pacific, the Arab States, and SIDS would belong to the Medium Human Development grouping.  Europe and Central Asia and Latin America and the Caribbean post the post consistently higher HDI values throughout. If these two regions were individual countries, they would belong to the High Human Development grouping. Finally, Sub- Saharan Africa posts the lowest HDI values.  If this region were a country, it would belong to Low Human Development grouping (Figure 3).

 

Figure 3. HDI Regional comparison, 2005-2011

Source: Elaborated based on HDRO dataset

 

When comparing life expectancy at birth, mean years of schooling, expected years of schooling and GNI per capita, the regions that beat the world average on life expectancy at birth are Latin America and the Caribbean, East Asia and the Pacific, Europe and Central Asia and the Arab States. SIDS life expectancy at birth is very close to the world average, but that of CARICOM is below it along with South Asia and Sub-Saharan Africa.  Europe and Central Asia and Latin America and the Caribbean also perform above the world average on mean years of schooling.  SIDS and East Asia and the Pacific perform close to the world average for this variable, and, again, CARICOM, the Arab States, South Asia and Sub-Saharan Africa are below the world average. Similar trends are noticeable for expected years of schooling, though with less spread among regions, as well as for GNI per capita.

 

Leida Mercado, Advisor on Human Development-UNDP

Regional aggregate versus national Human Development Index values

It is useful to calculate and compare regional HDI values as a means to determining specific areas that may benefit from regional focus, research and collaborative policy-making.  Nevertheless, these aggregate measures obscure the range of differences that exist across and within individual countries. This is true for both the HDI values in general, along with each of its components and the IHDI, GII and MPI. Disaggregating HDI data for each CARICOM member state allows us to focus more precisely on the strengths, weaknesses and trends of individual countries. This, in turn, facilitates the identification of both individual and collective human development priorities as well as where there are best practice lessons to be learned among the group. A complete breakdown of HDI data and analysis by country for each CARICOM member state can be found in the document Caribbean Human Development Report 2012: Estimating a CARICOM Human Development Index can be downloaded at http://hdr-caribbean.regionalcentrelac-undp.org/.

 

 


[1] This article represents a summary of the full document that was prepared within the framework of the 1st Caribbean Human Development Report 2012. The CARICOM HDI was estimated in coordination and close collaboration with the UNDP´s Human Development Report Office

[2] The UNDP Human Development Index (HDI) is a summary measure of human development based on a country’s performance in three basic dimensions of human development: long and healthy life, access to knowledge, and a decent standard of living.

[3] This may be due to a lack of recent education data.

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