Here - SAARC Human Resource Development Centre

Link between Human Resource Development, Growth and PovertyRelationship between per capita income and poverty: If we examine therelationship between per capita income and poverty we observe that Maldives andSri Lanka are the two top countries in terms of per capita income and also the leastpoor states among South Asian countries. Nepal has the lowest per capita income,yet in terms of poverty ratio it is better placed than India and Bangladesh. This is soin spite of high income inequality in Nepal. It may be noted that the relationshipbetween per capita income and poverty in terms of polynomial of degree 3 showsthat higher per capita income may be associated with falling and rising povertyratio. A linear approximation of course gives a very weak relationship between percapita income and poverty, as is evident from the regression equation given inChart-1.Chart-1Relationship between per capita income and human development noted that high percapita income is not associated with high human development index.While Sri Lanka, Maldives and Nepal have performed better than might have beenexpected, given their levels of per capita GDP, in India, Pakistan and Bangladesh,social progress has lagged behind economic growth. (Bhalla, 2007) It may be notedthat quite apart from the growth momentum in any country the progress in humandevelopment is the result of the initiative of the state in the free and efficientdelivery of social services. Sri Lanka runs a unique system of free health andeducation system. This is the reason behind impressive performance of Sri Lanka inthe area of human development. Chart-2 shows that only a large proportionatechange in per capita income makes an impact on HD index.5