Human Development Report 2013 - UNDP

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States have to beconscious that thenature of growth (and theintensity of labour use insectors that drive growth)evolves as the economytransforms, and to respondwith matching investmentsin people’s skillsover two decades, one study finds thatduring the first decade (1982–1990), 80%of annual economic growth was accountedfor by new employment and capital accumulation.31 Unemployment dropped from20% to below 3%, with the number of jobsgrowing 5.2% a year. Economic growth inthe next decade (1991–1999), however,was driven less by accumulation of capitaland more by the productivity growth ofworkers, a result of investment in humancapabilities. 32• Bangladesh. The more rapid decline inpoverty in the 1990s compared with the1980s 33 was attributed to both the expansionof labour- intensive exports (such as garmentsand fisheries) and the increase in employmentin the rural nonfarm sector (comprisingsmall and cottage industries, constructionand other nontradable services). The stimulus,however, came less from productivityimprovements within this sector than fromrising demand facilitated by an increase incrop production, an inflow of remittancesand growing exports. 34• Rwanda. Expansion in jobs does not alwayshave to come from export-oriented manufacturing.In Rwanda, jobs in tourism serviceshave increased over the past decade. Thesector now sees export earnings that exceedthose from coffee and tea and employs nearly75,000 people. 35• Uganda. Like Rwanda’s, Uganda’s highgrowth during the 1990s was poverty alleviatingbecause of income growth in agriculturethrough large scale absorption of labour,especially in the cash crops sector that wasbuoyed by world prices and improvement inagriculture’s terms of trade. 36• Thailand. Developing countries endowedwith arable land can continue to createstable jobs in agriculture, even thoughits share in total output typically declinesover time. This is the case in Thailand,whose employment pattern of the 1960s iscomparable to that of many Sub-SaharanAfrican countries today. While Thailandhas since become a manufacturing powerhouse,millions of stable jobs continue to becreated in nonmanufacturing sectors suchas retail, hospitality and construction, aswell as in commercial farming: the numberof stable jobs in agriculture increased from519,000 in 1960 to nearly 3 million in2008. Overall, in the 1990s alone, Thailandincreased its share of stable jobs by 11 percentagepoints (as Brazil did between 1970and 1988). 37• Indonesia. Indonesia before the 1997 Asianfinancial crisis stood out for pursuing growththat had a high labour intensity. Real wagesincreased at an average annual rate of 5% fortwo decades preceding the crisis. Between1990 and 1996 alone, formal nonagriculturalemployment increased from 28.1% of theworkforce to 37.9% and the share of workforcein agriculture declined from 55.1%to 43.5%. 38 Post-crisis, when some of thedevelopment gains were reversed, the proportionateincrease in poverty was lowest foragricultural workers. 39As these examples suggest, patterns of growthare rarely consistently pro-poor over consecutivedecades. This is because developmentaltransformation is synonymous with the changein the structure of production and sectors differin their capacities to create jobs. Skilled and unskilledjobs, for example, require a different mixof complementary inputs, such as formal educationand industry-specific training. The largerpoint is that human development–orientedpolicies require both growth and an equitableexpansion of opportunities. Developmentalstates, therefore, have to be conscious that thenature of growth (and the intensity of labouruse in sectors that drive growth) evolves as theeconomy transforms, and they need then torespond with matching investments in people’sskills.Fostering state–marketcomplementaritiesBoth markets and governments can fail, butthere are synergies when they work together.Development progress cannot be left tomarkets alone. Some markets not only failto function, but may not exist at all at earlystages of development. Most successful developmentalstates have introduced industrialand related policies that enhance the privatesector’s potential to contribute to human development,especially by creating jobs in newsectors.72 | HUMAN DEVELOPMENT REPORT 2013
• Turkey. The state created favourable economicconditions that encouraged constructionand the manufacture of furniture,textiles, food and automobiles—all industrieswith a high capacity to absorb labour.Turkey’s export basket has since moved towardsproducts that involve more processing,higher technology content and the use ofskilled labour. 40• Tunisia. Since the early 1970s, Tunisia hasrelied on financial and fiscal incentivesto attract foreign and domestic capital toexport-oriented industries, particularly forgarment production. 41 Various forms ofbusiness– government relations have enhancedindustrial upgrading and promotedindustry clusters. Today, Tunisia is among thetop five exporters of apparel to the EuropeanUnion. 42 It also has the potential to exporthealth services by providing treatment to visitorsfrom neighbouring countries, to a valueequivalent to a quarter of Tunisia’s privatehealth sector output. 43• Chile. After returning to democracy in the1990s, Chile encouraged investment andtechnological upgrading in sectors wherethe country had an intrinsic comparativeadvantage. It subsidized the formation andoperation of innovation-based consortiabetween private firms and universities andengaged in other innovation-promotingactivities. 44Committing to long-termdevelopment and reformAchieving enduring transformation is a longtermprocess that requires countries to chart aconsistent and balanced approach to development.Some technical or managerial solutionsmay appear to be attractive quick fixes, but theyare generally inadequate.• China. Since market-oriented reforms in thelate 1970s, China has experienced a “complexand interlocking set of changes: from acommand to a market economy; from ruralto urban; from agriculture to manufacturingand services; from informal to formaleconomic activities; from a fragmented setof fairly self-sufficient provincial economiesto a more integrated economy; and froman economy that was fairly shut off fromthe world to a powerhouse of internationaltrade”. 45 The scale of these changes requireda committed state pursuing a long-term visionto build the necessary institutions andcapacities. The leadership deliberately replacedthe old guard, who might have beenexpected to resist change, with a younger,more open and better educated governmentbureaucracy. By 1988, a remarkable 90% ofofficials above the county level had beenappointed since 1982. 46 Capacity upgradingis still a priority, and the education levelsof officials have risen continuously. TheChinese bureaucracy has been designedwith a strong results orientation, linkingcareer development to the achievement ofcentral objectives of modernization andeconomic progress. 47People-friendly developmental states needstrong political leadership committed to equityand sustainability. Effective leadershipaligns the long-term goals of policymakers andenables constituencies to appreciate the state’swork in fostering individual capabilities andsocial integration for human development. Thisrequires a balanced approach to developmentand an ability to convert crises into opportunitiesfor introducing broad-based economicreforms.• Brazil. By the time the Brazilian transformationto a developmental state began(around 1994), the government had implementedmacroeconomic reforms to controlhyperinflation through the Real Plan andconcluded the trade liberalization that hadbegun in 1988 with tariff reductions andthe removal of other restrictions. 48 Tradeopenness and prudent monetary and fiscalpolicy followed, as did innovative socialprogrammes that reduced poverty and incomeinequality.In large and complex societies, the outcomeof any particular policy is inevitably uncertain.Developmental states need to be pragmatic andtest a range of different approaches.• China. China’s reform and opening resultedfrom an explicit choice in the late1970s to relax constraints on people’s participationin economic decisions. But theinstitutional innovations that went on tounderpin China’s transformation resembledDeng Xiaoping’s approach to “crossing thePeople-friendlydevelopmental statesneed strong politicalleadership committed toequity and sustainabilityChapter 3 Drivers of development transformation | 73
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WNSEHuman DevelopmentReport 2013The
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Human Development Report 2013The Ri
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Human Development Report 2013 TeamD
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Finally, the Report also calls for
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Heather Simpson, Ben Slay, Mounir T
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3.6 India’s Supreme Court issues
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OverviewOne of the most heartening
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and sustainability are fully incorp
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Without investment in people, retur
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opportunity to reap the full benefi
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Woods institutions, the United Nati
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IntroductionWhen developed economie
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leading economies—Brazil, China a
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comparable access to information, e
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mobile phones: cellular banking is
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“The political problem ofmankind
Page 34 and 35: BOX 1.1Fairness, macroeconomics and
Page 36 and 37: BOX 1.3Amartya Sen, Nobel Laureate
Page 38 and 39: FIGURE 1.1Income per capita is risi
Page 40 and 41: BOX 1.4Subjective indicators of wel
Page 42 and 43: FIGURE 1.4There is notable variatio
Page 44 and 45: FIGURE 1.6Most regions show declini
Page 46 and 47: Progress in humandevelopment achiev
Page 48 and 49: BOX 1.7Social competencies: human d
Page 50 and 51: TABLE 1.3Inequality and satisfactio
Page 52 and 53: Not all countries havethe precondit
Page 54 and 55: “When the music changes,so does t
Page 56 and 57: BOX 2.1The South’s integration wi
Page 58 and 59: FIGURE 2.1As a share of world merch
Page 60 and 61: BOX 2.2Acquisitions by the South of
Page 62 and 63: FIGURE 2.3Between 2000 and 2010, In
Page 64 and 65: FIGURE 2.4Export earnings per capit
Page 66 and 67: BOX 2.6Final assembly is about more
Page 68 and 69: Instead of having a centreof indust
Page 70 and 71: FIGURE 2.6Emerging market economies
Page 72 and 73: Developing countriestrade more amon
Page 74 and 75: “We cannot expect thatall nations
Page 76 and 77: TABLE 3.1Selected developing countr
Page 78 and 79: A common featureof countries thatha
Page 80 and 81: More important thangetting prices r
Page 82 and 83: BOX 3.5Eastern Europe and Central A
Page 86 and 87: As countries develop,they tend to d
Page 88 and 89: Having weathered theAsian financial
Page 90 and 91: Providing publicservices that contr
Page 92 and 93: Advancing health requiresmore than
Page 94 and 95: Universal public healthand educatio
Page 96 and 97: • China. The Minimum Livelihood G
Page 98 and 99: “Each generation will reap whatth
Page 100 and 101: concerns will make for a complex en
Page 102 and 103: A greater emphasison education cans
Page 104 and 105: FIGURE 4.1Under the fast track scen
Page 106 and 107: Around the worldpeople are calling
Page 108 and 109: FIGURE 4.4Different environmental s
Page 110 and 111: FIGURE 4.5Education policies can al
Page 112 and 113: BOX 4.2China and Ghana: who benefit
Page 114 and 115: FIGURE 4.8countries thus converge t
Page 116 and 117: “Let us join hands to try tocreat
Page 118 and 119: Areas of globalinternational concer
Page 120 and 121: Addressing climatechange requires t
Page 122 and 123: International governanceis increasi
Page 124 and 125: BOX 5.2Jo Leinen, Member of the Eur
Page 126 and 127: facilitates reserve investments and
Page 128 and 129: Responsible sovereigntytakes the lo
Page 130 and 131: FIGURE 5.1Under the accelerated pro
Page 132 and 133: 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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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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