Economic and Policy Analysis Unit UNDP Maputo December 2011 Mozambique’s Performance in the HDI . A comparative Assessment Author: Thomas Kring Technical Note Mozambique’s Performance in the HDI Published by The Economic and Policy Analysis Unit (EPAU) UNDP Mozambique Av. Kenneth Kaunda 931 Maputo, Mozambique Technical Notes from EPAU are intended to be informal notes on economic and technical issues relevant for the work of the UNDP in Mozambique. The views expressed are those of the author and may not be attributed to the UNDP. 1 Technical Note Mozambique’s Performance in the HDI Introduction Since 1990 the UNDP has published the Human Development Report (HDR) on an annual basis. One significant component of the HDR has traditionally been advanced statistics seeking to measure economic and human development in more comprehensive and informative ways. One of the best known measures in the HDR is the Human Development Index (HDI). The HDI provides a broad overview of human progress and the complex relationship between income and well-being. The HDI looks beyond the GDP to a broader definition of well-being by including health and knowledge. By doing so it corrects, to some extent, for the inherent weaknesses in traditional measurements of growth and wealth (see Annex 2 for more detail). The recently released Global HDR 2011 provides, as in previous years, a HDI value for a 187 countries in the world. Mozambique’s performance this year, as in previous years, continues to baffle observers. The country has made significant progress in the past ten years or more. It is among the five highest performers in the world measured in terms of average annual increase in the HDI since 2000 in relative terms, and among the top 25 in absolute terms (see Annex 1). Nevertheless, the country continues to be among the lowest ranked in the HDI and is currently 184 out of 187. Mozambique’s low ranking has created some debate among the development partners in the country as to what the main causes are. There is broad acceptance that the devastating civil war which followed Mozambique’s independence had a severe impact on the country’s economic and social infrastructure and continues to have an impact on the country’s capacity to promote human development to this day. However, Mozambique is not unique in that regard. Several other African countries have a similar history, but have nevertheless managed to achieve a higher HDI value and thereby higher ranking. In order to facilitate a better understanding of how Mozambique is faring relative to other countries with a similar recent history this paper makes a comparative assessment of the recent developments in HDI value for five countries. The countries chosen are, in addition to Mozambique, the Central African Republic, Chad, Guinea-Bissau and Sierra Leone. These countries were chosen based on their recent history, including recent conflict, which to some degree resembles that of Mozambique. The countries rank and HDI values are (HDI rank/HDI value): Mozambique 184/0.322; CAR 179/0.343; Chad 183/0.328; Guinea-Bissau 176/0.353; Sierra-Leone 180/0.336. The analysis covers the period 2000 – 2011. 2 Technical Note Mozambique’s Performance in the HDI Developments in the HDI Value over Time When making a comparison of the HDI values of five countries (Mozambique, the Central African Republic, Chad, Guinea-Bissau and Sierra Leone) over the period between 2000 and 2011 an interesting pattern emerges. During this period, all five countries have experienced an upward trend in the HDI value (Table 1). However while Mozambique has been making progress, it has continuously remained at a lower level than the four other countries. Since 2000 Mozambique’s HDI value has grown at 2.49% a year, while the best performer of the five countries, Sierra Leone, has grown at 2.65%. Table 1 Human Development Index for select countries 0.400 0.350 0.300 0.250 0.200 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea -Bissau Mozambique Sierra Leone One criticism often made of Mozambique’s performance is that even though a low HDI is understandable given its war-torn history, it should be expected to trace, at a minimum, the same trajectory as other countries emerging from conflict. However, as illustrated in Table 1, this makes an assumption that is not quite correct as the country’s starting point was lower in terms of HDI value than the other four despite their similar histories; only Sierra Leone came close. While Mozambique has been making progress, so have the other countries in the comparison and Mozambique has remained in the bottom of the group. This being said, as the HDI consists of three components, an analysis of the development of each of these separately will provide a more detailed picture of what is influencing it. 3 Technical Note Mozambique’s Performance in the HDI HDI Health Looking at the health component of the HDI (Table 2) it can be seen that Mozambique started relatively higher than the other countries in the comparison except Chad over the period. Mozambique has remained in the top and even overtaken Chad. Again all five countries have experienced an upward trend though Chad and Guinea-Bissau have had a relatively lower rate of growth. Table 2 HDI Health index 0.500 0.450 0.400 0.350 0.300 0.250 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea-Bissau Mozambique Sierra Leone Education Education has been one of the priorities for the Government of Mozambique and its development partners. Enrolment and completion rates have increased significantly over the past 10 – 15 years. However, at first glance, the HDI education component does not seem to reflect any impact of this development. As mentioned, the HDI education component consists of two sub-components. When analyzing the two separately the impact of each on the overall HDI education index becomes clearer. Looking first at Expected Years of Schooling, Mozambique was in the middle of the field in 2000 of the five countries, but has now risen and is together with Guinea-Bissau at the top (Table 3). Table 3 Expected years of schooling 9.0 7.0 5.0 3.0 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea -Bissau Mozambique Sierra Leone 4 Technical Note Mozambique’s Performance in the HDI The second sub-component is where Mozambique’s history becomes evident (Table 4). It is interesting to note that though the other countries in the comparison have similar recent histories to that of Mozambique, they nevertheless still have significantly higher Mean Years of Schooling. In the case of CAR, the level is about three times greater than Mozambique’s, and Sierra Leone almost 2.5 times greater. Table 4 also illustrate the point that changes in this indicator sub-component are slow, and only take place over the long term. Regardless of Government efforts to ensure education for all, the indicator will only start to change significantly when those children who benefitted from the massive investments in the education sector turn 25 and are included in the measure. Table 4 Mean Years of Schooling 4.0 3.0 2.0 1.0 0.0 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea -Bissau Mozambique Sierra Leone It is also interesting to note that while Mozambique was outperforming the other countries in the Expected Years of Schooling, the low performance in Mean Years of Schooling is sufficient to drag the overall score on HDI Education down so that the country is at the bottom of the group, together with the Chad (Table 5). Given the slow moving nature of the Mean Years of Schooling component it also means that Mozambique cannot expect to experience any significant improvements in the HDI education value except for the medium to long term. Table 5 HDI Education index 0.350 0.300 0.250 0.200 0.150 0.100 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea-Bissau Mozambique Sierra Leone 5 Technical Note Mozambique’s Performance in the HDI HDI Income The final component of the HDI is income measured as GNI per capita. Again Mozambique has managed to grow significantly since 2000, in no small part due to the boom in extractive industries the country has experienced in recent years. Mozambique has outperformed the other countries in this comparison, and is poised to overtake Guinea-Bissau and Chad in the near future if current trends continue. Table 6 HDI – income index 0.400 0.350 0.300 0.250 0.200 0.150 2000 2005 2006 2007 2008 2009 2010 2011 CAR Chad Guinea-Bissau Mozambique Sierra Leone A final point which has been made regarding the HDI concerns the different trends which are evident between Mozambique’s performance in the HDI and national poverty levels. While the HDI value has increased by 2.49% per year since 2000, poverty levels appear to have stagnated between 2002/03 and 2008/09 at about 54.7%. In that regard there are two main issues. The first is that the HDI is an indicator for human development, where income is only one component and not measured in terms of household consumption. Poverty on the other hand is measured in terms of income and consumption at the household level. The HDI complements other poverty indicators, but it is not an income poverty measure per see, such as the percentage of the population living below the poverty line, or the GINI coefficient. The second issue is that as illustrated in the study by Bart van den Boom (2011), poverty does appear to have fallen in Mozambique over the past six years.