Mongolia’s Human Development Index: How accurate is it?


I cannot say that I am an economist by profession since I have not been formally practicing it since I left America for my PhD (in Social Policy) in the UK 12 years ago. But I have always been intrigued by statistics and trends of various countries – particularly of the ones I have lived and worked in. The figures are annually look out for are the United Nation’s Human Development Indices (HDI). Their 2013 report already came out and the first few pages I turned to were the last ones on the country summaries of their HDIs.
Since 1990, the United Nations Human Development Programme (UNDP) has been computing the HDI in both developed and developing countries. The HDI is a composite statistic of life expectancy, education, and income measures that serves as an indication of improvements in the quality of life of the country’s citizens. The measurement of education is two-fold with the use of the adult literacy rate and gross enrollment ratio. This index is based on the assumption that human development is not just dependent on one’s salary or wages, but also on how long he lives, how literate he is, and how many years of education he has completed.
For the year 2012, the latest statistics show that Mongolia’s HDI is at 0.675 (1.0 is the highest). It is ranked as a country with Medium Human Development, as opposed to those who are classified as Very High, High, and Low. Norway is classified as Very High with an HDI of 0.96. This country is actually No. 1 in the year’s list of more than 183 countries and has consistently been in the top spot since 2009. Mongolia is ranked No. 108, up two rankings from last year and still (a little) below the world average of 0.69. As a reference, the Democratic Republic of the Congo and Niger both rank last at No. 186 with an HDI of 0.30.
Looking at Mongolia’s statistics from 1980 and each HDI component, life expectancy then was only at 57.3 years old. In short, most people lived up to that age. After more than 10 years, the improved difference is worth nothing since, nowadays, human life continues, on average, at the age of 68.8. The biggest improvement was from the year 2000 until 2005 when life expectancy increased by more than three years. In fact, there has not been any decrease in this figure since 1980 which just goes to prove that people are becoming much healthier in the country as the years go by.
In terms of the mean years of schooling of a Mongolian (the only statistics on education that is available during this time period), it was only 5.7 in 1980. The figure drastically increased to 8.3 in 2010. The biggest increase was from 1985 to 1990 when the average Mongolian went to school for one more year. Even though this improvement was consistent until two years ago, there was a steady increase in the number of years that Mongolia’s citizens go to school. This evidently shows that Mongolians are becoming more and more educated as time passes.
The third HDI component is income, and it is this statistic that has shown the fastest and largest increase in the country. Twenty-two years ago, a Mongolian earned an average salary of 2,257 USD (based on the adjusted purchasing power parity in 2005 – nothing high falutin here as it only makes the comparisons valid by taking out inflation in the figures). In 2012, this amount significantly went up to 4,245 USD. In other words, there was an 88 percent increase during more than two decades in Mongolia. Economic growth has, in fact, trickled down to majority of the population.
Yes, the abovementioned figures tell us a success story that human development in Mongolia has improved a lot over more than a twenty-year period. People are now living a longer life than before, more years of education have been added to the average Mongolian, and the incomes of most of the country’s citizens have almost doubled. But how accurate are these figures? How true and successful is this story? The problem with averages is that they fail to show the whole picture. Simple arithmetic explains that if, for example, people who already have high incomes receive an even higher income, the average increases even though those with middle or low incomes do not get a salary increase.
I have not been in Mongolia long enough to experience for myself and to see from those around me these positive changes that its HDI indices over the years suggest. I did remember speaking with an expat who started living in this country 10 years ago, and she recounted to me how there were still horses with carriages on the streets of Ulaanbaatar. These days, you never see them anymore as they have been replaced with cars. Parking is a big problem in the capital and pollution, even bigger. So does this mean that Mongolians are much better off? That their quality of life has increased?
My students have also told me how very, very few people knew how to speak English many years ago. Moving forward to the present time, most of the students know the language and you can stop some people on the street and they can understand your simple questions in English. I even got inside a number of taxi where the driver asked me, in my native language, where I am from and what I am doing here in Mongolia. If this is a positive sign of improved education outcomes in Mongolia, then maybe the HDI figures, particularly in terms of schooling, do show some part of reality in the country.
Beyond the statistics, the concept and measure of human development cannot be limited to numbers alone. I received an undergraduate degree in Economics but I am still not convinced that the improvement in one’s quality of life is calculated only by life expectancy, years of education, and income. Personally, human development can be equated to happiness and one’s satisfaction in his life. With all of the happy and smiling faces of Mongolians I encounter in my work and outside in my free time, it is probably the case that Mongolia is, indeed, a country with Medium Human Development, if not at all High.

Short URL: http://ubpost.mongolnews.mn/?p=3906

Posted by on May 1 2013. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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