South Asia’s human capital is the resilience it needs


    In News

    • The pandemic has put at risk the decade’s progress in building human capital, including the improvements in health, survival rates, school enrollment, and reduced stunting.  

    About Human Capital

    • Meaning:
      • It consists of the knowledge, skills, and health that people accumulate over their lives, enabling them to realize their potential as productive members of society.
        • Research indicates that human capital investments have high economic returns.
    • Need of Human Capital:
      • The last few years have ushered in a harsh new reality where crises are the norm rather than the exception, examples being pandemics, economic slumps, extreme weather events, etc.
      • The knowledge, skills, and health that people accumulate their human capital is a critical source of the resilience that countries rely on for recovery. 
    • South Asia’s human capital:
      • With nearly half its population under the age of 24 and over one million young people set to enter the labour force every month until 2030, the region could reap an enviably high demographic dividend.
      • To strengthen resilience and protect the well-being of future generations, governments across South Asia need to take urgent policy action and invest in human capital.

    Issues & challenges

    • Shortcomings:
      • South Asia is home to over one-third of the world’s stunted children
      • And a child born in the region today can, by the age of 18, expect to attain only 48% of their full productive potential
        • If the quantity and quality of South Asia’s human capital were to improve, regional GDP per worker could double.
    • Lack of resources & monetary support:
      • These numbers are alarming but will be hard to shift without more resources. 
      • South Asian governments on average spend just 1% of GDP on health and 2.5% on education.
        • In comparison, the global average is 5.9% on health and 3.7% on education.
    • Impacts of COVID 19:
      • Extreme poverty:
        • The COVID-19 pandemic has pushed an additional 35 million people across South Asia into extreme poverty. 
      • Learning poverty
        • Learning poverty, or the inability to read and understand a simple text by age 10. 
        • While around the world, on average, schools remained closed for in-person learning between 2020 and 2022 for 141 days, in South Asia they were shut for 225 days. 
        • Coupled with ineffective remote instruction, this increased South Asia’s learning poverty from 60% to 78%.
        • The poorest and most vulnerable people fell further behind. For example, in Bangladesh, the poorest students lost 50% more in terms of learning than the richest students. 
        • Several countries still show little to no signs of recovery, and South Asia’s students could lose up to 14.4% of their future earnings.


    • Quality over quantity:
      • Well-designed and implemented interventions can make a difference if governments act fast. 
      • Recent evidence suggests that even simple and low-cost education programmes can lead to sizable gains in skills. 
      • Examples:
        • In Bangladesh, for example, attending a year of additional pre-school through two-hour sessions significantly improved literacy, numeracy, and social-development scores. 
        • In Tamil Nadu, six months of extra remedial classes after school helped students catch up on about two-thirds of lost learning linked to 18 months of school closures.
        • In Nepal, government teachers ran a phone tutoring programme that helped increase students’ foundational numeracy by 30%.
      • Given the high returns to human capital, the huge losses inflicted by the pandemic, and the region’s vulnerability to a variety of shocks, even with constrained government budgets, scaling up these interventions should be a no brainer.
    • Acting before crisis:
      • Globally, countries that have systems in place to support individuals and families before a crisis strikes, can better protect their citizens during the crisis.
    • Interdependent focus:
      • The health, education, and skills people acquire at various stages of their lives, build and depend on each other. 
      • To be effective, human development systems must recognise and exploit these overlapping connections. In other words, they should be agile, resilient and adaptive.

    Way ahead

    • A robust human development system would not only mitigate the damage but also help ensure lives and livelihoods are protected. 
    • It could provide the resilience South Asia needs to prosper in an increasingly volatile world.

    Human Capital Index (HCI)

    • The Human Capital Index is an annual measurement prepared by the World Bank.
    • It claims to seek to measure the amount of human capital that a child born today can expect to attain by age 18.
    • The HCI has three components:
      • Survival: as measured by under-5 mortality rates
      • Expected years of Quality-Adjusted School: which combines information on the quantity and quality of education
      • Health environment: Using two proxies of (a) adult survival rates and (b) the rate of stunting for children under age 5.
    • Significance of the Index:
      • Countries can use it to assess how much income they are foregoing because of Human Capital gaps, and how much faster they can turn these losses into gains if they act now.
    • India’s position:
      • In the Human Capital Index (HCI) 2020, India is placed 116th out of 180 countries.


    Daily Mains Question

    [Q] Examine the role of Human Capital in strengthening resilience in crisis & post-crisis recovery. Suggest ways to improve Human Capital in South Asia to prosper in an increasingly volatile world.