Child Development Index

Save the Children, UK has released The Child Development Index, the first ever ranking of countries in terms of their performance on child-specific indicators in health, education, and nutrition. Here is a fascinating interactive chart about the index and country performance.

The report focuses on distributional effects of growth on children. It shows that there are still high levels of child poverty and depravation, income levels are a poor indicator of progress in reducing child depravation, children’s wellbeing does not linearly increase with adult’s wellbeing, and there are variations between and within country comparisons.

The three indicators used in the report are: health (under-five mortality rate), nutrition (under-fives who are moderately and severely underweight), and education (primary school-age children who are not enrolled in school). An average of these three indicators is taken by giving equal weight to each of them. A low score represents a low level of child deprivation. A zero score means that all children survive beyond their fifth birthday, all under fives are well-nourished, and all primary school-age children are enrolled in primary school.

According to the report, Japan ranks first with 0.41 score. The other in the top five are Spain, Canada, Italy, Finland, and Iceland. The worse country in terms of child deprivation is Niger (score 85.47). The ten worst countries in terms of child deprivation are all from Sub-Saharan Africa: Niger, Sierra Leone, Somalia, Burkina Faso, Angola, DRC, Chad, Mali, Central African Republic, and Guinea-Bissau. Latin America and the Caribbean performed best with 57% improvement over the three time periods (1990-94, 1995-99, and 2000-06) considered in the report.

The report is critical of slow progress in this front in South Asia (especially India), where high growth rate is not consistent with slacking progress on children poverty and depravation.Nepal’s CDI score is 25.62 and ranks 95 out of 137 countries considered in the ranking. In terms of GDP per capita adjusted ranking, Nepal performed even badly with a ranking of 109. This means that growth in income has not been translated into improvements in child poverty and deprivation!

South Asia has a high level of deprivation, scoring 26.4; this is 3 times worse than East Asia. It is also making slow progress, improving child well-being by just 32% over 1990-2006 (compared to East Asia’s 45% improvement). This is because India (where almost three-quarters of the region’s children live) made the least progress of any country in South Asia; just a 27% improvement. In this region, child nutrition is a substantial obstacle; almost 1 in 2 children is underweight. Malnutrition levels are not being reduced rapidly enough; the region’s enrolment indicator improved by 59% while its nutrition indicator improved by only 14%. Higher levels of economic growth in the region are not widely translating into reduced child deprivation.

Why so much attention on this dimension of poverty? Well, on average each year of schooling increases a person’s wage as an adult by nearly 10% and today’s children are tomorrow’s human capital required for economy.

The report warns that if the current trends in child poverty continues, then there will be more malnourished children in Afria by 2015 than there are today. By 2015, 58 countries will still fall short of meeting the the goal of universal primary education.

HDI vs. CDI:

The United Nations’ Human Development Index (HDI) is similar in concept to our Index, except it mainly uses adult-focused indicators like income and adult literacy.When we compared the ranking of countries in our Child Development Index against the HDI,we noticed substantial differences. Two-thirds of our Index countries are ranked significantly differently (a difference of more than five ranked places) in the 2000–06 CDI than in the current HDI. Several countries are performing much better in terms of the child index than the human index: Malawi,Tanzania and Honduras have moved up in the CDI between 20 and 30 places. And many countries are doing far worse in terms of the child index than the human one, with Oman, Pakistan and the Philippines sliding down in the CDI between 20 and 50 places.

The report suggests policymakers to focus attention on three main dimensions of child poverty and depravation: prioritizing child nutrition, promoting equitable development,and supporting women’s education and empowerment.

Some stats:

• 9.2 million children die every year before they turn 5 yrs old
• 97% of all child deaths occur in 68 countries
• 143 million children are malnourished
• 1/4 of all the children in the world are underweight
• 1/3 of all children have stunted growth
• 75 million primary school-age children are not enrolled in school

An international perspective about the MDGs

New book (fodder for winter break!) - Reaching the MDGs: An International Perspective

Recommendation by the authors to reach MDGs by 2015:

identify win-win policy options that can help raise productivity and reduce inequality at the same time

accompany the implementation of policy innovations with data collection that can assist policy monitoring

invest in impact evaluation strategies, as prioritisation may vary by country or region

apply extra effort in focusing monitoring on a small subset of indicators

further research the synergies between the various MDGs

identify poor households in terms of multiple poverty dimensions

balance growth-oriented investment with social service spending that directly addresses the non-income dimensions of poverty

in the case of donor countries, comply with their funding commitments and provide recipient countries with funding predictability

 

(via Eldis Poverty)

Impact of global financial crisis on the Nepali economy

That’s the title of my new op-ed published in a new news portal launched toady in Nepal. More on the new media house and news portal here.

Impact of global financial crisis on the Nepali economy

How will this crisis affect a small, landlocked country like Nepal? It will not directly affect the Nepali financial system, nor put strains on monetary policy, as Nepal is largely insulated from the toxic assets of big investment like in the West. However, it will indirectly affect economic growth, revenue collection, and development initiatives carried out by Non Government Organizations (NGOs). Potential monetary imbalance may arise from changes in Indian monetary policies and the exchange rate of NRs vs. INRs.

The economy could feel the impact of global financial crisis through four different routes- a slowing down in inflow remittances, a recessionary tourism sector, decline in aid, and a demand-deficient manufacturing sector. While a slowing of the first three components will affect poverty reduction and development initiatives, the decline in global demand for Nepali-manufactured products will put direct downward pressure on growth rate. The rate is expected to hover around 5% during 2009.

A global economic meltdown will decrease demand for products made in India, where a majority of low-skilled Nepali laborers work. Meanwhile, a slowing down of the construction and service sectors in the Middle East, the other major source of remittances, and in countries such as South Korea, Malaysia, and Japan, will result in lowering demand for Nepali labor abroad. Put simply, fewer workers leaving the country in days ahead will decrease remittances inflow in a number of ways. This could affect the rate of progress made in poverty alleviation and potentially lower domestic demand, as households will be more hesitant to spend money due to declining income.

Remittances, which currently account for 19% of the Gross Domestic Product (GDP), have been extending the economy a lifeline for almost a decade. It is chiefly due to these remittances that the balance of payments is still in surplus despite a huge balance of trade deficit. Remittances have furthermore helped decrease the poverty rate from 42 percent in 1995/96, to 31 percent in 2003/04. More than 34% of households receive remittances, an increase of more than 80% since 1994/95. Over one million Nepalis working abroad send money directly to their families, a portion of which is generally used to meet regular expenditures, and the remainder saved in domestic financial institutions.

A global slow-down and recession in Western economies will also affect the Nepali service industry, which contributed 50.9% of GDP in 2007. Global recovery is not expected any time soon as the Western financial crisis steadily worsens. This means potential tourists are likely to postpone or cancel travel plans. By working with the government and launching promotional packages, Hotel Association of Nepal (HAN) is hoping to entice about a million tourists in 2010. If the global economic slow-down continues past 2010, this dream seems unachievable

Meanwhile, the aid industry will also not be spared from the crisis. NGOs operating in Nepal receive funding from corporate donors, governments and large foundations in the West. The global slow-down will limit this funding, forcing the organizations to scale back development initiatives. This will have a negative impact on the fight against poverty and other development challenges. The manufacturing sector will also suffer. Export to major Western countries is expected to slow in the coming years. The Confederation of Nepalese Industries (CNI) recently estimated that the manufacturing sector would incur a loss of $256.16 million as a result of the global economic slow-down.

An extended and original version of the article is available here.

Snapshot of the new news portal:

Krugman’s Nobel lecture

Paul Krugman’s Nobel lecture slides here and here.

The ultimate news source about Nepal

A new news portal is launched today in Nepal. It is titled Republica, a national daily plus news portal about Nepal. Senior journalists, some of whom I know and have worked with in the past, are working in this new media house (Dhumbarahai Media). It is going to be the ultimate one-stop source of news and information about Nepal. A Nepali version is named Dainikee.

Below is a snapshot of the first-ever homepage of www.myrepublica.com:

Stiglitz and Keynes

Stiglitz argues that the financial crisis has made it clear that we all are Keynesians- admit it or not! The two quite vocal Keynesians- Krugman and Stiglitz, both Nobel laureates, have been arguing that monetary policy might not work now as the interest rate has already hit rock bottom and increase in money supply has not been able to affect economic activity. So, time to raise Keynesian wand! He worries about the potential misuse of Keynesian doctrines.

Economic theory had long explained why unfettered markets were not self-correcting, why regulation was needed, why there was an important role for government to play in the economy. But many, especially people working in the financial markets, pushed a type of “market fundamentalism.”

Keynes argued not only that markets are not self-correcting, but that in a severe downturn, monetary policy was likely to be ineffective. Fiscal policy was required. But not all fiscal policies are equivalent. In the US today, with an overhang of household debt and high uncertainty, tax cuts are likely to be ineffective (as they were in Japan in the 1990s). Much, if not most, of last February’s US tax cut went into savings.

...That necessitates restructuring both tax and expenditure programs. Lowering taxes on the poor and raising unemployment benefits while simultaneously increasing taxes on the rich can stimulate the economy, reduce the deficit, and reduce inequality. Cutting expenditures on the Iraq war and increasing expenditures on education can simultaneously increase output in the short and long run and reduce the deficit.

Today, the risk is that the new Keynesian doctrines will be used and abused to serve some of the same interests. Have those who pushed deregulation 10 years ago learned their lesson? Or will they simply push for cosmetic reforms — the minimum required to justify the mega-trillion dollar bailouts? Has there been a change of heart, or only a change in strategy? After all, in today’s context, the pursuit of Keynesian policies looks even more profitable than the pursuit of market fundamentalism!

More on similar stuff here.

Top ten missed stories this year

Foreign Policy lists the top ten stories missed in 2008.