It’s official: Australia is the No.1 place to be” (Crikey, Friday March 4, item 16), was Damian Kingsbury’s article concerning the UN’s Human Development Report, which, if my memory is correct, Richard Farmer reported well on at the time of its release four months ago.

Kingsbury perhaps reasonably equates standard of living with that report’s Human Development Index (HDI), in that it has — since the first publication of that annual report in 1990 — moved beyond simply measuring progress in terms of income per capita as per the World Bank’s longer-running annual World Development Report. But the perennial concern with the HDI (perhaps confusing to the reader of Friday’s article in moving between the “index” and broader “human development indicators”) is that of how it is used.

Which of the most affluent countries is top of the pile in a publication aimed to assist development planning seems to me to be a moot point. Nevertheless, Norway — not Australia — remains in that position; by 1995 Australia was ahead of Norway and not “approaching” it (from the UN table that Kingsbury refers to, it would seem that Australia lost its edge over Norway during the period starting with Howard’s prime ministership and may now be improving its comparative position); Ireland is ranked 5th (not 4th); and progress in UN statistical systems means that the 2010 indicators are 2010 estimates, and not the 2-3-year lag time of earlier years’ HDI tables.

This latter point still means, as Kingsbury says, that the effect of recent disasters in Australia is not factored in, but I’m not sure whether this will raise or lower such measures, given likely boosts to public expenditure and associated employment and consumption by recovery efforts  and the limitations or quirks of GNI/GDP measures.

Also, it is important to clarify that one value of the HDI has been that it has remained a composite of a small number of the core and more “causal” development indicators: life expectancy, education and income per capita, so that it is only “longevity” and education that are factored into the HDI from among Kingsbury’s “complex range of factors, including income distribution, longevity, infant and maternal mortality rates, education, crime rates, natural disasters and so on”.

The situation in sub-Saharan African countries is — as Kingsbury points out — “all but unbelievably bad”, although the primary factor in that region’s infant mortality and life expectancy data has been AIDS rather than wars, and such data are showing promising signs of improvement, mainly due to improved access to drugs, improved rates of HIV testing, and improved awareness by younger people of safe s-xual practices.  This includes Zimbabwe, which, as Kingsbury notes, has the lowest HDI in the world.  This is overwhelmingly due to its economic situation, as its other HDI components (AIDS-related life expectancy and education rates) are not significantly worse and in some cases better than many of its neighbours.  There is even a chance that Zimbabwe’s HDI is on the rise: improving in 2010 more than any of the other 168 countries, albeit from an alarmingly low point in 2009.

However, the importance of the latest (2010) HDI data is not whether Australia or Norway is the “best” country to live in (and, to be fair, this may not have been Kingsbury’s main concern), but the progress in statistical measures of inequality that have, since the early 1990s, been mainly confined to gender inequality.

Measuring inequality certainly drives a wedge between Australia and Norway, and Australia does not fare so well. The political and policy failure of governments, UN agencies, and international donors alike to grapple with increasing income inequality is likely the greatest development failure, mainly thanks to the combination of the continuing effects of World Bank/IMF ideology of the ’80s and ’90s, the character of quasi-democratic regimes in newly independent countries, and the crony capitalism of private foreign corporations entering vulnerable and/or opportunistic resource-rich states.

The stronger focus in the 2010 HDI report  on measures of inequality is therefore an important development, and better places inequality at the core of analysis and policy responses to poverty and under-development.  Countries with high rates of inequality — including Australia, notably on income-based inequality — do not fare so well on such an analysis (Norway and Australia diverge on inequality data).

I’ve just read this in a leading international development journal (extract available here):

“The first thing people do when they get hold of the Human Development Report … is not to read the executive summary on the particular topic of the year.  Most look first at the HDI league table and compare the position of their country to previous years and other countries.”

Hopefully, the stronger inequality data for countries will be of more policy utility than looking at where a country sits on a global list.  Although, I’m also interested in such things, as I presently live in Namibia, which has an income inequality rate much higher than any other country in the world (well entrenched at the top of the global list of national measures of the Gini coefficient), in a country deemed stable and democratic and with a wealth of natural resources such as diamonds, copper and uranium.

The capital, Windhoek, has a standard of living up there with many Western cities, and the chronic poverty of the more remote populations is well concealed by national measures of human development such the HDI. But the same is true of Australia and several other countries at the top of lists of “standards of living”.

Peter Fray

A lot can happen in 3 months.

3 months is a long time in 2020. Join us to make sense of it all.

Get you first 12 weeks of Crikey for just $12. Cancel anytime.

Peter Fray
Editor-in-chief of Crikey

12 weeks for $12