Human Development Report 2013 - UNDP

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The South needs theNorth, and increasinglythe North needs the Southrecovery and the sustainability of future progressand limits poverty reduction, as well asserious concerns about the environment.While focusing on the rise of the Southand its implications for human development,this Report is also about this changing world,driven in large measure by the rise of the South.It examines the progress being made, the challengesarising (some as a result of that verysuccess) and the opportunities emerging forrepresentative global and regional governance.The headline story of a resurgent South isboth uplifting and in some ways misleading.The South needs the North, and increasinglythe North needs the South. The world is gettingmore connected, not less. Recent yearshave seen a remarkable reorientation of globalproduction, with much more destined for internationaltrade, which, by 2011, accountedfor nearly 60% of global output. Developingcountries have played a big part: between 1980and 2010, they increased their share of worldmerchandise trade from 25% to 47% andtheir share of world output from 33% to 45%.Developing regions have also been strengtheninglinks with each other: between 1980 and2011, South–South trade increased from lessthan 8% of world merchandise trade to morethan 26%.Yet the United States remains the largesteconomy in the world in monetary terms andwill remain so for the foreseeable future. If theUS recovery hesitates and Europe is unableto pull itself out of its current economic andsocial doldrums, there will be a large knock‐oneffect on the developing world. Global challengessuch as climate change and stressedecosystems require countries to cooperateeven more than before. While the rise of theSouth is reshaping power relations in manyimportant respects, hard-won gains in humandevelopment will be more difficult to protectif cooperation fails and difficult decisions arepostponed.Indeed, one can go further and state thatthere is a “south” in the North and a “north” inthe South. Elites, whether from the North orthe South, are increasingly global and connected,and they benefit the most from the enormouswealth generation over the past decade, inpart due to accelerating globalization. Theyare educated at the same universities and sharesimilar lifestyles and perhaps values.The changing global economy is creatingunprecedented challenges and opportunitiesfor continued progress in human development.Global economic and political structures are influx at a time when the world faces recurrentfinancial crises, worsening climate change andgrowing social unrest. Global institutions appearunable to accommodate changing powerrelations, ensure adequate provision of globalpublic goods to meet global and regional challengesand respond to the growing need forgreater equity and sustainability.This phenomenon, coupled with the diversedevelopment paths followed by these countriesfrom the South, presents an opportunity: theprinciples that have driven post–Second WorldWar institutions and guided policymakers needrecalibration, if not a reset, to accommodatethe growing diversity in voice and power andto sustain development progress over the longterm. These principles require reconsideration,and global institutions need greater flexibilityto reinforce directions that put people firstand nudge institutions to aim forcefully at afairer, more just world. Potentially, the growingdiversity in development patterns is creatingspace, even demands, for such a global dialogueand restructuring. There is scope thenfor innovation, and the emergence of global,regional and national governance frameworksthat embody principles of democracy, equityand sustainability.The developmental paths of Brazil, Chinaand India, as well as less well recognized successstories such as Bangladesh, Mauritiusand Turkey, are reshaping ideas about how toattain human development. The success ofthese countries calls into question the notionof “right” policies, but that does not mean thatvaluable lessons cannot be drawn from theexperiences of these successful countries. Onthe contrary, key drivers and principles of developmentbegin to emerge from the diversityof development paths that include deepeningthe developmental role of states, dedication tohuman development and social welfare, andopenness to trade and innovation. And whilethis Report acknowledges the positive aspectsof the rise of the South, it also underlines theimperatives of ensuring that concerns of equity2 | HUMAN DEVELOPMENT REPORT 2013
and sustainability are fully incorporated intofuture policies and strategies. As the 2011Human Development Report also stressed, continuedhuman development progress is unlikelyif inequality and environmental destruction arenot moved to the forefront of policy discussions.Under worst case scenarios, a businessas usual approach to development combinedwith environmental crises could reverse humandevelopment gains in the South or make thisprogress unsustainable.Concerns for the future apply in the Northas well, where low economic growth, highunemployment rates and austerity measuresthreaten the high levels of human development.In both the North and the South, ruling elitescannot afford to ignore these threats to socialinclusion and social welfare, given the risingcall for fairness and accountability—from citizens,communities and civil organizations athome and abroad, facilitated by the explosionof social media.To support policymaking and research thatadequately address these contemporary andemerging global realities, measures and analyticsare needed that broaden the human developmentconcept. The Human DevelopmentReport and the family of human developmentindices must meet this challenge by movingbeyond a focus on measuring individual capabilitiesto incorporate society-level capacities,concerns and perceptions. Individual achievementsin health, education and income, whileessential, do not guarantee progress in humandevelopment if social conditions constrain individualachievements and if perceptions aboutprogress differ. The turmoil in several countriesin the Arab States is a reminder that people,especially the young, who are better educatedand healthier than previous generations put ahigh premium on meaningful employment, onexercising a voice in affairs that influence theirlives and on being treated with respect.Furthermore, the promotion of social cohesionand social integration, a stated objectiveof development strategies of countries suchas Brazil, is based on evidence of the positivedevelopment impact of a unified society. Moreequalsocieties tend to do better in most measuresof human development—from teenagepregnancies to suicide rates—than do unequalsocieties. This finding is borne out by studiesin both developed and developing countries.These society-level aspects of developmenthave been underappreciated in past conceptualizationsof development but are proving to beessential elements of any viable and desirablelong-term development path.Helping other countries catch upAll developing countries are not yet participatingfully in the rise of the South. The pace ofchange is slower, for instance, in the majorityof the 49 least developed countries, especiallythose that are landlocked or distant fromworld markets. Nevertheless, many of thesecountries have also begun to benefit fromSouth–South trade, investment, finance andtechnology transfer. For example, there havebeen positive growth spillovers from China toother countries, particularly close trading partners.To some extent, this has offset slackeningdemand from developed countries. Growthin low- income countries would have been anestimated 0.3–1.1 percentage points lower in2007–2010 had growth fallen at the same ratein China and India as in developed economies. 2Many countries have also benefited fromspillovers into important human developmentsectors, especially health. Indian firms, forexample, are supplying affordable medicines,medical equipment, and information and communicationstechnology products and servicesto countries in Africa. Brazilian and SouthAfrican companies are having a similar impact.Rising competitive pressuresNevertheless, the arrival of exports from largercountries can also have disadvantages. Largecountries generate competitive pressures thatmight stifle economic diversification and industrializationin smaller countries. Yet thereare examples of industrial revival followingsuch competitive jolts. A competitive roletoday may easily turn into a complementaryrole in the future. Moving from competition tocooperation seems to depend on policies thatenable local agents to make the most of the newsituation.Increasingly, the most important engineof growth for countries of the South is theirdomestic market. The middle class is growingIndividual achievementsin health, education andincome, while essential,do not guarantee progressin human development ifsocial conditions constrainindividual achievementsand if perceptionsabout progress differOverview | 3
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Page 7 and 8: Finally, the Report also calls for
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Page 13: OverviewOne of the most heartening
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Page 23 and 24: IntroductionWhen developed economie
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Page 36 and 37: BOX 1.3Amartya Sen, Nobel Laureate
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FIGURE 2.4Export earnings per capit
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BOX 2.6Final assembly is about more
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Instead of having a centreof indust
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FIGURE 2.6Emerging market economies
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Developing countriestrade more amon
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“We cannot expect thatall nations
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TABLE 3.1Selected developing countr
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A common featureof countries thatha
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More important thangetting prices r
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BOX 3.5Eastern Europe and Central A
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States have to beconscious that the
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As countries develop,they tend to d
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Having weathered theAsian financial
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Providing publicservices that contr
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Advancing health requiresmore than
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Universal public healthand educatio
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• China. The Minimum Livelihood G
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“Each generation will reap whatth
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concerns will make for a complex en
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A greater emphasison education cans
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FIGURE 4.1Under the fast track scen
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Around the worldpeople are calling
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FIGURE 4.4Different environmental s
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FIGURE 4.5Education policies can al
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BOX 4.2China and Ghana: who benefit
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FIGURE 4.8countries thus converge t
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“Let us join hands to try tocreat
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Areas of globalinternational concer
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Addressing climatechange requires t
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International governanceis increasi
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BOX 5.2Jo Leinen, Member of the Eur
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facilitates reserve investments and
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Responsible sovereigntytakes the lo
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FIGURE 5.1Under the accelerated pro
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Good policymakingrequires greater f
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A fair and less unequalworld requir
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NotesOverview1 Atsmon and others 20
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25 Blinder 2006.26 UNIDO 2009.27 UN
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which is 61.7 deaths per 1,000 live
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ReferencesAbdurazakov, A., A. Minsa
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urban_world_cities_and_the_rise_of_
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Kamau, P., D. McCormick, and N. Pin
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Labor Administration. Geneva: Inter
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Human Development Report 2013The Ri
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Statistical acknowledgementsThe Rep
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Key to HDI countries and ranks, 201
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Statistical referencesADB (Asian De
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Core features of the model pertinen
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Countries and HDI ranks in 2012 and
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