India 2007: High growth, low development

The good news is that India's falling to rank 128 in the Human Development Index of the United Nations Development Programme (UNDP) is not really a decline. Even though it was ranked 126 last year. So say unnamed officials (at least, according to a report in one newspaper). It seems the truth is that we would have been 128 anyway, even last year, "had updated data been used for other countries." In short, we have not really slipped in rankings, you know, we were this bad all along. In Mumbai argot: "We are like this only."

To begin with, the rank of 128 puts us in the bottom 50 of the 177 nations that the UNDP Human Development Report looks at. Treat Adivasis and Dalits as a separate nation and you will find that nation in the bottom 25. Or subtract our per capita GDP ranking from the process and watch India as a whole do a slide. Meanwhile, even nations that are far below us in the rankings - and which have nothing like our growth numbers - do much better than us on many counts. So even if our HDI value took a tiny step up from 0.611 last year to 0.619, it means other nations did much better than us. And hence we went down to rank 128 this year.

Each year since 1990, the Human Development Report (HDR) of the UNDP publishes the Human Development Index (HDI). This index "looks beyond GDP to a broader definition of well-being." The HDI seeks to capture "three dimensions of human development: a long and healthy life (measured by life expectancy at birth). Being educated (measured by adult literacy and enrolment in primary, secondary and tertiary education). And third: GDP per capita measured in U.S. dollars at Purchasing Power Parity (PPP)."

Let us look at where we stand in the rankings of the index. El Salvador, which saw a bloody civil war for over a decade from the 1980s, ranks 25 places ahead of us at 103. Bolivia, often called South America's poorest nation, is 11 steps above us at 117. Guatemala, nearly half of whose citizens are poor indigenous people, saw the longest civil war in Central America. One that lasted close to four decades and which saw 200,000 people killed or disappear. That too, in a nation of just 12 million. Guatemala ranks 10 places above us at 118.

In Africa, Botswana - ranked below us in the 2006 HDI at 131 - climbed four places above us at 124 this time. It replaced fellow African nation Gabon which quit that slot to move upwards to 119 this year. (Gee, their updated data arrived on time. Must be using a different courier service.) The Occupied Palestinian Territories, with all their woes, slipped six places to 106. Still well ahead of India.

In Asia, countries like Vietnam - victim of the bloodiest conflict since World War II - rose further in the charts, to rank 105 this year. Sri Lanka, of course, is way ahead of us at 99. So are nations like Kazakhstan and Mongolia. They too have risen in the ranks. The former from 79 to 73 and the latter from 116 to 114.

Note that some of these nations rank up to 30 slots above us. Others fall within 30 nations below us. Not one of them has had our nine per cent growth. Few of them have been touted an emerging economic superpower. Nor even as a software superpower. Not even as a blossoming nuclear power. Together, they probably do not have as many billionaires as India does. In short, even nations much poorer than us in Asia, Africa and Latin America have done a lot better than we have.

India rose in the dollar billionaire rankings, though. From rank 8 in 2006 to number 4 in the Forbes list this year, but we slipped from 126 to 128 in human development. In the billionaire stakes, we are ahead of most of the planet and might even close in on two of the three nations ahead of us (Germany and Russia). It will, of course, be some time before we erase the national humiliation of lagging behind the top dog in that race, the United States. (Which, by the way, dropped from 8 to 12 in the HDI rankings this year.)

The Cuban example

Cuba has zero standing in the roll call of billionaires. In terms of per capita income, it ranks low in the world. But when it comes to human development, it ranks 51 that is, 77 places ahead of us. It figures in the HDI's 'High Human Development' group. This is a nation which has faced a huge economic blockade since its birth. U.S. sanctions ensure that almost everything is costlier in Cuba than in many other nations. In per capita terms, it spends four per cent of what the U.S. does on health but achieves better outcomes on most of the vital parameters of that sector. Despite its many disadvantages, it achieves a better HDI rank than Mexico, Russia or China. (All of which have gained more billionaires in recent times.)

But there is hope. Our top 10 billionaires are doing fine. "Their collective wealth has soared 27 per cent since July this year," The Times of India told us on its front page on October 8. The headline said they'd got "richer by $65.3 billion" in just three months since July. That is, by more than Rs.119 crore an hour. Or not far from Rs.2 crore every minute. Of the 10, the TOI tells us, Mukesh Ambani alone "increased his wealth by roughly Rs.40 lakh every single minute."

It is doubtful if the wages of agricultural labourers went up by just Rs.40 (just 40, not lakhs) in years, let alone by the minute. But then we rank fourth in super-rich and 128th in human development. Most of our billionaires seem to be from Mumbai, also home to a quarter of India's $100,000 millionaires. Mumbai is the capital of Maharashtra, perhaps our richest State on many counts. One that has seen close to 32,000 farmers commit suicide since 1995. Also a State where rural poverty has gone up even in official reckoning.

Meanwhile, the UNHDR records that almost a third of India's children, or 30 per cent, are below average weight at birth. In Sierra Leone, ranked at 177, rock bottom of the Human Development Index, it is 23 per cent. In Guinea Bissau and Burkina Faso, ranked 175 and 176, children with low birth weight account for 22 and 19 per cent. Even in Ethiopia, ranked 169, the figure is 15 per cent. So we're down there with the bottom five on that count.

Amongst children under the age of five, 47 per cent in India are underweight. In Ethiopia, that is 38 per cent. And in Sierra Leone, 27 per cent. We are home to the largest number of malnourished children in the world. When it comes to child nutrition and literacy, we jostle for space with the nations ranked lowest in HDI in the planet. And mostly we even beat them.

'Statistical glitch'

This week's papers report a curious new development. One which might further impact on our 'rank.' They report a World Bank study as saying that the Indian and Chinese economies might be smaller in size than we believe. Maybe almost 40 per cent smaller, says The International Herald Tribune (December 9, 2007). "What happened was a large statistical glitch," says the IHT. But it's a glitch that matters. "Suddenly the number of Chinese who live below the World Bank's poverty line of a dollar a day jumped from about 100 million to 300 million." It turns out the overpaid elite number crunchers have been using obsolete data for a very long time.

The Bank's own survey lists new purchasing power parities for 100 countries benchmarked for the year 2006. Well, India figured in the study for the first time since 1985 and China for the first time ever. And so, India's GDP in PPP terms, the TOI notes, was $3.8 trillion in 2005 before the new study. Going by the new data after the revision, it stands at $2.34 trillion. (In nominal dollar terms, roughly $800 billion.) Boy! These updated data are a nuisance. First it turns out we should have been HDI rank 128 last year, too. Now we learn that our economy is a lot smaller than we imagined. As the IHT says, "This is not a mere technicality." It shrinks the relative size of developing economies by quite a bit. India's GDP per capita (PPP) falls from $3,779 to $2,341 with the new data. Also, as the TOI sadly notes: "We ain't a trillion dollar economy yet."

It is not clear yet how agencies other than the Bank, like the UNDP for instance, were working with PPP. Were they using updated measures or the old data? If the latter (which seems the case), and given India's entry in the Bank survey is recent, even our awful HDI performance could get worse. The captain has switched on the seat belt sign. Buckle up: we could be landing soon on the updated numbers.