Singapore is the best country for developing human capital, according to a report released by the World Bank on Thursday (Oct 11).
It ranked first out of 157 economies, beating South Korea, Japan and Hong Kong into second, third and fourth positions, respectively.
Singapore’s effort to invest in its human capital will allow children born today to fulfil 88 per cent of their potential to be productive when they grow up, given that they get a full education and enjoy good health.
The report noted that Singapore’s human capital index (HCI) measure is higher for girls than boys.
The 2018 Human Capital Index, part of the Washington-based lender’s initiative to help economies improve their investment in people, was launched at the start of the IMF-World Bank meetings.
It measures how well economies are developing their human capital based on five indicators – the probability of survival to age five, a child’s expected years of schooling, test scores, adult survival rate, and the stunting rate among children.
Some 56 per cent of all children born today will lose more than half of their potential lifetime earnings if governments do not take appropriate steps to prepare for a healthy and educated population.
World Bank Group president Jim Yong Kim called for economies to enhance their human capital, which is the sum of the knowledge, skills and health, among other things, that people gain throughout their lives.
“Policies to build human capital are some of the smartest investments that countries can make to boost long-term, inclusive economic growth,” he said, pointing out a quarter of children are likely to fail to meet their full potential because of malnutrition and diseases that cause stunting.
“If a country’s children grow up unable to meet the needs of the future workplace, that country will find itself incapable of employing its people, unable to increase its output, and utterly unprepared to compete economically,” Dr Kim added.
He also took note the success of Vietnam, among the best performers in South-east Asia, as an economy that manages to improve its educational outcome through increased expenditure – following the paths taken by other Asian peers, such as China, South Korea, Japan and Hong Kong.
Vietnam ranked 48th in the index, with its population set to achieve 67 per cent of their future economic potential. Indonesia, however, only ranked 87th, and it will see its population realise 53 per cent of their potential.
Dr Kim said that Indonesia is one of the “early adapters” of advice suggested by the World Bank to climb the index, pointing out a 20 per cent allocation of spending in the state budget for education. However, he said, that Indonesia still needs to work on some issues, such as reducing stunted growth among children.