A Revised Human Development Index (RHDI) for Sudan

Contents

Introduction

Sudan Profile

Methodology

Proposals to revise the HDI

Conclusion

References

Annexes

Abstract

This paper aims to measure human development in the Sudan during the period 1975- 2003, using a Revised Human Development Index (RHDI). The main argument of the paper is that the conventional Human Development Index (HDI) underestimates Sudan ’ s human development achievements scored during the last two decades, hence calling for a revised index. Results showed that there is a significant difference between human development performance in Sudan using the conventional HDI and the RHDI. Sudan had scored significant progress in the RHDI amounting to 4.5% per annum during the period 1975-2003, rising from 0.26 in 1975 to 0.62 in 2003.

This has been contrasted with an average growth of 2.2% per annum, from 0.34 to 0.45 for the same period, using the HDI. The reforms introduced by the government have contributed positively in this progress.

Keywords: Human development, Revised human development index, Sudan

Introduction:

Human Development Index (HDI) was basically developed to measure the enlarged people’s choices (ul Haq I, 1995), containing three components: life expectancy as an index of longevity, adult literacy as an index of knowledge, and gross national product (GNP) per capita adjusted for purchasing power parity (PPP) as an index of standard of living.

Since its inception in 1990, the index has been subjected to many criticisms. These criticisms concerned with the components of the index, particularly income which was seen as “restrictive” and that the logging mechanism “drastically” downwardly adjusts income by a factor greater than it should (Noorbakhsh, 1998), others criticized the quality and availability of data particularly of literacy rates, and mortality data (Harkness, 2004). A second version of criticism related to the fact that the HDI does not indicate how resources are allocated throughout a country and does not take into account the levels of inequality that may exist (Foster, 2005, & ul Haq I, 1995). The third criticism related to goal, measurement issues and actual calculation of the HDI score. (Panigrahi, 2002) showed that “an HDI-based country ranking or ordering is not robust or consistent with respect to the choice of limits. Also the equal weights assigned to each of the respective indicators of the index is not justified (Despotis, 2004). With regard to the goal, although when HDI was developed, it has been intended to give a better and more holistic view of human development as compared to the use of GNP per capita alone. However, the index falls short by not relating any information about the subjective reality that exists for people’s daily lives. While the objective and statistical numbers of a country might look good on paper, the reality and measurement of the subjective experience of people’s lives might prove to be a better indicator of their overall well-being (Harkness, 2004).

Accordingly different modifications have been thought to cater for the mentioned criticisms (e.g. Anand and Sen, 1992; Desai, 1991; Doessel and Gounder, 1991; Hopkins, 1991). The UNDP seemed to be participating in, even encouraging, this discussion (UNDP, 1993). The debate has, however, tapered off since then, although without completely disappearing (e.g. Ravallion, 1997; Lu¨ chters and Menkhoff, 1996; Streeten, 1995).

Sudan Profile:

Sudan is the largest country in Africa and the ninth largest country in the world (with a total area of approximately 2.5 million km/2), and shares borders with nine countries. According to the Central Bureau of Statistics (2005) the total number of population has been estimated as about 34 million, registering an annual growth rate of 2.2% per annum.

Before the 1990s, Sudan economy has been crippled by many difficulties manifested in huge internal and external deficits, mounting debts, high inflation, and low or negative gross domestic product (GDP) growth, with low human development index of 0.44 in 1989. However, starting from 1990 Sudan has embarked on ambitious economic and educational reforms, which resulted in impressive socio-economic indicators. The GDP for example, has indicated an average growth rate of 9.6% during the period 1990-2004, inflation has been kept within one digit, and huge investments have been attracted from Arab and other countries. In addition to these, the economy has received two big pushes represented in the discovery and exportation of oil in 1999 and signing of the Comprehensive Peace Agreement (CPA) in 2005 which ended a long devastating civil war in the South.

Accordingly, schooling enrollment has shown remarkable improvements. Enrollment rate at the primary level rose from about 47% in 1975 to about 60% in 2004, while that in secondary education has doubled from 17% to 35% during the same period. The higher education revolution undertaken in 1992 has expanded the higher education massively from 5 universities to more than 26 universities and institutes. Student’s intake increased from 1.5% in 1975 to 7% in 2000. Also, according to the Economic Survey (2004) infrastructure such as roads, dams, communications, and heath sector have witnessed significant improvements.

Despite all these achievements, the HDI for Sudan has been shown as 0.54 in 2003. Many researchers and policy makers in Sudan believe that this number is underestimating the many gains in human development that has been achieved during the last 20 years. Alternatively, this paper proposes a revised human development index (RHDI) to be used to assess human development in Sudan.

The main objective of this paper is to develop an RHDI that reflects the recent human development changes in Sudan. The paper will explore whether there is a significant difference in human development performance as measured by this index and the conventional HDI.

The paper will also assess the impact of the reforms introduced by the government on the performance of the human development index, using both the HDI and the RHDI.

Methodology:

According to the UNDP, the HDI is a combination of three main indicators: education, health and income, calculated on the following basis:

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where

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Each of these indicators (HDIi) is derived as follows:

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The income index has been calculated based on the per capita in the GDP and adjusted income, health index was based on life expectancy at birth, while the education index was composed of the rate of literacy among adults and the enrollment at the primary and secondary levels.

In this paper, the derivation of the RHDI includes some improvements in the conventional HDI. These proposed improvements are in the application of the Gini coefficient to improve the income index, the combination rates of primary and secondary education enrollments to improve the education index, and using of the health deprivation rate to improve the health index. In spite of our dependence on the core concepts of the conventional index, the contribution of this work will be on the computational side.

On the application side, the performance of human development in Sudan during the period 1975-2004, using the conventional HDI and the RHDI, will be compared to see whether there is a significant difference between the two indices applying pair-sample t-test. . Because of the structural breaks observed in the series, the paper will use before-after approach (where 1975-1990 stands for before, and 1991-2004 for after the reforms) to explore the impact of the reforms on human development status. Although the link between the reforms and the HDI is still debatable, some have concluded that they lead to a positive improvement in HDI, particularly those of the public sector management and macroeconomic stabilization policy (Noorbakhsh F. and Noorbakhsh S., 2005).

Proposals to revise the HDI:

Indicators of income index:

For improving the income index, the paper proposes the economic development indicator (EDI) which is composed of two components: the GDP per capita and the distribution of income among population using the Gini coefficient. The selection of these two indicators emphasizes the economic development which focuses on the growth of the per capita income and distribution of that income in a fair and equitable manner. Thus, development can be perceived as a high rate of per capita income plus the lowest income inequality between individuals.

The component of the GDP per capita is calculated on the basis of four values: the maximum and minimum values of the average GDP per capita worldwide, the maximum and minimum values of the average GDP per capita at the country (Sudan) level during the period under study, as follows:

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Where y is the GDP per capita, min and max indicating minimum and maximum values in the data series for the country c, region r (in the case of a comparison of the Sudan status with the territories around it), and the world w (in the case of a comparison of Sudan with the rest of the world). This computation approach helps in comparing Sudan’s performance with that of its regional counterpart and world countries, and in previous and subsequent years.

As regards to the criterion for the distribution of income among the population, the Gini coefficient is used as follows:

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where INEQ is the Gini coefficient of disparity in income distribution, while if the coefficient was calculated on the basis of the centennial fracture, the treatment will be as follows:

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Combining the two components, the EDI is expressed as follows:

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Education Index:

The education index is a combination of enrollment basis at the primary and secondary levels, and literacy rates among adults. It is calculated on the

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Health Index:

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Life expectancy at birth is taken as an indicator for assessing the health status using the following formula:

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The health deprivation index is calculated on the following basis:

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where

e0: years of life expectancy at birth during the period under consideration;

e0max: maximum year of life expectancy at birth during the period under consideration;

e0min: minimum year of life expectancy at birth during the period under consideration.

Accordingly the RHDI is as calculate as follows:

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where

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The performance of human development in Sudan using RHDI:

Table (A-1), at the appendix, indicates that the RHDI for Sudan showed a continuous improvement, rising from 0.26 in 1975 to 0.62 in 2003, with a growth rate amounting to 4.5% per annum. This contrasted with an average growth of 2.2% per annum, from 0.34 to 0.45 for the same period, using the HDI.

Figure (1) shows the trend of the HDI, and the RHDI during the period 1975- 2003. It indicated that although RHDI started lagging behind the HDI until 1990, it then picked up and exceeded the HDI thereafter.

FIGURE (1) HDI and RHDI performance during the period 1975-2003)

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This may be attributed to the economic and educational reforms implemented by the government in the early 1990s. For this reason, we tested the impact of the reforms on the human development performance, the results of which are given in table (2) .

TABLE (2) Comparison of HDI and RHDI before and after reforms

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Source: own calculations based on table (A-1)

For both periods, there is a significant difference between the average performance of the HDI and the RHDI at 5% level of significance (P-value <5%). During the first period (1975-1990), the average of the HDI was 0.3953 exceeding that of the RHDI of 0.3627. During the second period (1991-2003) the reverse is true, the average of the RHDI was 0.5150 compared with 0.4621 for the HDI. This shows that the conventional HDI underestimating the great achievements in human development in Sudan scored during the last two decades.

For assessing the impact of the reforms, it is obvious that the average performance of human development using the RHDI before the reforms was

0.362 and after the reforms was 0.515 and the difference is statistically significant at 5% indicating that the reforms have positively affected the index. This was also true for the HDI, where the index before the reforms was 0.395 and after the reforms was 0.462. See Figure (2).

FIGURE (2) Impact of the reforms on the HDI and RHDI

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Regarding the various components of the RHDI (appendix: TABLE (A-2) for income index; table (A-3) for education index, and table (A-4) for health index).

The economic development indicator showed an average performance of 50.0 during the period 1975-2004. This indicates that the Sudan stands half way in the pursuit of economic development. The 2003 ranked first in terms of improvement in the index (50.27), while the year 1990 was at the bottom of the ladder with the lowest index value (49.84) The average value of the index in the seventies was 49.96 and declined to 49.89 in the era of the eighties with an increase to 50.20 in the nineties.

Regarding the GDP per capita index, the highest value was of 0.50 was obtained in 1981. In contrast, the lowest value for the second component of the index is 0.26 obtained during the years 1991 and 1996. These have been based on the assumption that the supreme value is 1 which is the target, obtained in the year 1990.

By tracking the results of the two indices we note the following: the value of the first component ranges between 0.50 and 0.26; with an average value of 0.39. The average value of the second component amounted to 0.48. In other words, the Sudan has lost about 0.42 percent as it managed to maintain an average income of $ 610.

Results had shown that the year 1990 came first with a 0.42 index, 0.50 less than the income index of the first method applied in 1981, with a difference equals to 0.08. This means that with adoption of the factor of income distribution amongst individuals the index fell, as a result of uneven distribution of income.

The year 1991 ranked last (0.16) when the revised rate of index value was applied, while the value of the first index for the same year was 0.26, with 0.10 differences, this is higher than the difference for the first rank.

Concerning the human capital as measured by a decrease in illiteracy rate , we find that the rate showed a persistent decline from 80% in 1975 to 41% in 2004.

School enrollment is considered another indicator measuring human capital. The rate of enrollment in primary schooling has been witnessing a progressive increase, from 47% in 1975, to 50% in 1990, reaching 60% in 2004. The year 1993 registered the lowest rate of 43%. Sudan was doing fine in this component compared to the developing countries that scoring an average of 23.1% in 1995. (UNDP, 1995).

The enrollment rate in the secondary education level showed also a persistent increase, though less than that of the primary schools. The index rose from 14% in 1975 to 35% in 2004.

Sudan has also been witnessing a clear improvement in the rate of enrollment in higher education, increasing from 1.5% in 1975 to 7% in 2004. The Higher Education Revolution initiated in 1992 expanded the higher education substantially from 6 universities to more than 26 with the private sector occupying the lion share.

The result indicates that the highest index of education in Sudan during the period 1975-2004 amounting to 0.71 has been obtained during the years 2003 and 2004. This registering a continuous increase in Sudan; indicating an accumulated stock of human capital. The index rose from 0.34 in 1975 to 0.40 in 1988, then to 0.46 in 1992 and to 0.64 and 0.71 in the years 2001 and 2004 respectively.

Concerning the health situation, the health index for Sudan has been continuously improving during the period 1975-2004. It rose from 0.33 in 1975 to 0.38 in 1980. It maintained this level until 1984 when it rose to 0.42 for the period 1984-1989. The index has improved to 0.48 in 1995, reaching its highest level of 0.56 in 2002.

Using the deprivation index, the index showed that the years from 1975 to 1979 witnessed a clear decline in the level of health in the country. The deprivation index was high amounting to 0.67 but improved in the period from 1980 to 1982 to 0.62 and settled at the level of 0.58 during the period from 1985 to 1990. During the nineties, it registered moderate levels amounting to 0.53 on average. It then improved further to 0.44 in 2002 indicating a least level of health deprivation within thirty years.

Conclusion:

Results showed that there is a significant difference in measuring the average human development in the Sudan using the RHDI and the conventional HDI, with the latter underestimating the gains achieved in human development during the last 20 years.

Sudan had scored significant progress in the RHDI amounting to 4.5% per annum during the period 1975-2003, rising from 0.26 in 1975 to 0.62 in 2003, whereas that progress according to the HDI has been shown rising from 0.34 to 0.45 with an average rate of growth of 2.2% per annum.

Comparison between the components of the various indicators of human development index for the Sudan indicated that education index witnessed continuous improvements compared with other indicators of income and health, the latter being better than the income indicator.

The economic and education reforms introduced by the government in early 1990s have contributed positively in the progress of human development in Sudan. The RHDI increased from 0.3627 to 0.5150 (an increase of 41.9 %) as a result of the reforms.

Continuation in the economic reforms and directing the resource gains generated from the reforms towards the education and health sectors is a viable strategy for promoting human development in the Sudan.

References:

Anand, S., Sen, A., 1992. “Human Development Index: Methodology and Measurement”. Human Development Report Office Occasional Paper No. 12, UNDP, New York.

Desai, M., 1991. “Human development: concepts and measurement”. Eur. Econ. Rev. 35 (2:3), 350-357.

Despotis, D.K. “A Reassessment of The Human Development Index Via Data Envelopment Analysis.” Journal of the Operational Research Society (2004): 1-12.

Doessel, D.P., Gounder, R., 1991. “International Comparisons of the Standards of Living and the Human Development Index” Discussion Papers in Economics No. 72, Department of Economics, University of Queensland, Brisbane.

Foster, James E., et al. “Measuring the Distribution of Human Development: Methodology and an Application to Mexico.” Journal of Human Development 6, no. 1 (March 2005): 5-29.

Harkness, Susan. “Social and Political Indicators of Human Well-Being.” United Nations University: World Institute for Development Economics Research (WIDER), Research Paper No. 2004/33 (May 2004): i-22.

Hopkins, M., 1991. “Human development revisited: a new UNDP report”. World Dev. 19 (10), 1469-1473.

Human Development Index.” International Review of Sociology 14, no. 2 (2004): 151-169.

Lu chters, G., Menkhoff, L., 1996. “Human development as a statistical abstract”. World Dev. 24 (8), 1385-1392.

Ministry of Finance and National Economy (2004) “Economic Survey”, Khartoum

Noorbakhsh, Farhad. “A Modified Human Development Index.” World Development 26, no. 3 (1998): 517-528.

Noorbakhsh, F. and Noorbakhsh, S.(2005) “The effects of Compliance with Structural Adjustment Programmes on Human Development in Sub- Saharan Africa” , in (A. Paloni and M.Zanardi, eds.), the IMF, the World Bank and Policy Reforms, London: Routledge.

Panigrahi, Ramakrushna and Sashi Sivramkrishna. “An Adjusted Human Development Index: Robust Country Rankings With Respect to the Choice of Fixed Maximum and Minimum Indicator Values.” Journal of Human Development 3, no. 2 (2002): 301-311.

Ravallion, M., 1997. “Good and bad growth: the human development reports”. World Dev. 25 (5), 631-638.

Streeten, P., 1995. “Human development: the debate about the index”. Int. Soc. Sci. J. 47 (1), 25-37.

Streeten, Paul. “Looking Ahead: Areas of Future Research in Human Development.” Journal of Human Development 1, no. 1 (2000): 25-48.

Ul Haq, Mahmoud , “Reflections on Human Development.” New York: Oxford University Press (1995).

UNDP. Human Development Reports 1990-2005. New York: United Nations. University Press (2005). http://hdr.undp.org/

Annexes:

TABLE (A-1)

Sudan HDI and RHDI (1975-2004)

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Annexes:

TABLE (A-2)

THE INCOME INDEX AND THE REVISED INCOME INDEX FOR SUDAN (1975-2003)

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FIGURE (A-2)

TRENDS OF THE REVISED INCOME AND INCOME INDEX FOR SUDAN (1975-2003)

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Annexes:

TABLE (A-3)

EDUCATION INDEX AND REVERSED EDUCATION INDEX FOR SUDAN (1975-2003)

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FIGURE (A-3)

TRENDS OF THE REVISED EDUCATION INDEX AND EDUCATION INDEX FOR SUDAN (1975-2003)

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Annexes:

TABLE (A-4)

HEALTH INDEX AND REVIRESED HELATH INDEX FOR SUDAN (1975-2003)

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FIGURE (A-4)

TRENDS OF THE REVISED HEALTH AND HEALTH INDEX FOR SUDAN (1975-2003)

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¹ Assistant Professor, Dept of Econometrics and Social Statistics, Faculty of Economics, University of Khartoum.

² Assistant Professor, Dept of Econometrics and Social Statistics, Faculty of Economics, University of Khartoum,