Human Development Index and Nepal – Unit 1

Human Development Index

Human Development Index (HDI) is an indicator that shows the level of achievements of progress in three basic dimensions of human development in a country. The three basic components are: (i) Long and healthy life, (ii) Knowledge and (iii) Decent standard of living. It was developed in 1990 AD by Indian economist Dr. Amartya Sen and Pakistani economist Mahbub Ul Haq.

Matters related to HDI is viewerd by the UNDP (United Nations Development Programme).

Purpose of measuring HDI

a) To identify the condition of human development
b) To compare and rank the social and economic development of different countries of the world
c) To find faults in areas of human development, improve them, and set future goals of any country.

Evaluation of HDI

HDI score ranges from 0 to 1 with four status as given below:

HDI Score	Level of Human Development
0.800 and above	Very High Human Development
0.700 – 0.799	High Human Development
0.550 – 0.699	Medium Human Development
Below 0.550	Low Human Development

Nepal’s status in HDI Report

Nepal’s status in HDI in 2019 improved two spots to 147 compared to the last year according to the report published by the UNDP in 2019 AD.

Measures to improve the status of Human Development

a) Develop and expand the basic infrastructures of development to produce skilled and productive manpower,
b) Extend industries and factories; develop tourism business,
c) Modernize agriculture in Nepal.

Measuring HDI of Nepal

Solution: In 2018 AD in Nepal,

Given,

Life Expectancy at Birth = 70.478
Expected years of schooling = 12.1952
Mean years of schooling = 4.856
GNI per capita = 2 748.200882

i) Calculation of Life Expectancy Index (LEI):

$$\text{LEI = } \dfrac{\text{LEI of Nepal – Minimum Life Expectancy}}{\text{Maximum Life Expectancy – Minimum Life Expectancy}}$$

$= \dfrac{70.478 – 20}{85 – 20}$

$= 0.7765$

$= 0.777$

ii) Calculating Education Index (EI):

$$\text{= }\dfrac{ \frac{\text{Mean Year of Schooling}}{15} \ + \ \frac{\text{Expected Year of Schooling}}{18}}{2}$$

$= \ \dfrac{ \frac{4.856}{15} \ + \ \frac{12.1952}{18}}{2}$

$= \ 0.50$

iii) Calculating Income Index (II):

$$\text{Income Index = }\dfrac{\text{ln(GNI per capita) – ln(100)}}{\text{ln(75000) – ln(100)}}$$

$= \ \dfrac{ ln(2748.200882) \ – \ ln(100)}{6.62}$

$= \ 0.500$

iv) Calculating Human Development Index (HDI):

$$\text{HDI = } \sqrt[3]{ \text{LEI x EI x II} }$$

$= \ \sqrt[3]{0.777 \times 0.50 \times 0.500}$

$= 0.579$

Hence, the score of Human Development Index of Nepal in 2018 AD was 0.579.