When human capital investments begin in the early years of life, they lay a strong foundation for prosperity and resilience of individuals. VICTORIA KWAKWA from the World Bank writes about this issue
Imagine, for a moment, that all children in the Pacific had access to the right health and nutrition, that every child had access to quality education.
What would it mean for their future?
What would it mean for the future of their country and the region?
It is difficult to overemphasize the difference the right kind of investments in people can make.
The knowledge, skills, and health that people accumulate over their lives – also known as human capital – has been a key factor behind the sustained economic growth and poverty reduction rates of many countries in recent history.
When human capital investments begin in the early years of life, they lay a strong foundation for prosperity and resilience of individuals, and the growth and competitiveness of nations.
Last year, the World Bank launched the Human Capital Project, an ambitious global initiative to accelerate investments in people around the world.
A key motivation is that we know transformational results are possible even in very poor countries or in particularly vulnerable ones such as most of the Pacific Islands countries.
The project includes a Human Capital Index (HCI), which we hope will create the political space for national leaders to prioritise transformational human capital investments.
It measures the amount of human capital a child born today can expect to attain by the age of 18 given the quality of health and education in the country where he or she lives.
The index, which could be calculated for nearly half of all Pacific Island countries, showed that on average, a child born today in this part of the world will be only 47 per cent as productive when he or she grows up as would have been the case with optimal health and education services.
In Papua New Guinea, the index falls to 38 per cent.
Ministers of Finance from the Pacific met on May 6 in Fiji for the first Pacific Human Capital Summit, organised by the World Bank, to discuss the challenges the region faces on this front and to prioritise investments.
Nutrition and education should be at the top of those priorities.
Today, deficiencies in nutrition, hygiene, and healthcare in the Pacific have led to stunting – a red flag indicator for future losses in cognitive ability and earning capacity – in one out of four children on average and as high as one in two in PNG.
When it comes to education, Pacific children are not staying in school long enough and are simply not learning enough.
In PNG, for example, an average child will complete only eight years of school and learn only the equivalent of about five years’ worth of learning by global standards.
The good news is that global experience shows that progress is possible.
In the Philippines, we supported a program that reduced severe stunting by 10 percent among participating children and contributed to near-universal primary school enrolment, and Vietnam has achieved excellent secondary school outcomes that now far exceed the average for richer countries.
To its credit, PNG, which had sobering results in HCI, was one of the first countries worldwide to commit to the Human Capital Project.
Imagine the potential for PNG if, by 2030, all of its people could read, write and solve complex math problems?
By the government’s own calculations (in PNG’s Development Strategic Plan 2010-2030), PNG’s economy would be K3.5 billion better off than today.
Hence, we are working with PNG on a plan to accelerate progress in human capital, which will complement the government’s development plans.
We are also supporting a training and skills program in Tonga; early age reading in Kiribati, Tonga and Tuvalu; and health and nutrition across the Pacific region.
Just this month we launched a new early childhood development program in Marshall Islands together with several partners, including Unicef.
HCI measures outcomes in education and health, but governments need to take a whole of government approach to improvements in human capital.
The central ministries – and especially Ministries of Finance – play a key role in promoting cross-ministerial collaboration around the human capital spectrum, and this Summit sends an unequivocal signal of the Pacific governments’ commitment to accelerate progress on human capital outcomes.
We, at the World Bank, are equally committed to continue investing in the people of the Pacific.
Together with the governments of the region, our goal is to help countries build their human capital, and with it, a more prosperous future for all.