Will Arab Youth Reach Their Potential? The World Bank’s ‘Human Capital Index’ Offers Predictions

Many young people born in the Arab region today will achieve a little more than half of their possible potential, a measure developed by the World Bank indicates.

According to the new metric, called the Human Capital Index, Bahrain is the region’s best performer, where youth can expect to achieve 67 percent of their potential. On the other hand, young people in Mauritania face the most obstacles in the region; the average newborn there is estimated to have only a 35-percent chance of fulfilling their potential.

But economists say the index’s metrics are only part of the picture—when a country’s income is taken into account, disparities begin to emerge. In terms of fostering human capital, some of the Gulf countries don’t appear to perform as well might be expected, considering their wealth, whereas some middle-income countries, like Jordan or Palestine, are actually doing better than expected.

“I would have thought the figures would be higher for countries in the GCC,” says Vito Tanzi, an assistant professor of health policy and management at the American University of Beirut. “Qatar is at 62 percent, yet they have seemingly all the money in the world.”

Singapore is the world’s best performer by this measure; its youth can expect to realize 90 percent of their potential. Chad, meanwhile, is the world’s worst performer at 29 percent. The global average, by comparison, is 57 percent.

The Cost of Neglecting Human Capital

The index, a key component of the World Bank’s Human Capital Project, brings together measurements of education, childhood survival and general health throughout a lifespan.

The questions the index seeks to answer are: Will a child survive to school age? If they do, will they learn to read, write and understand mathematics? If so, will they be in good health when they enter the labor market?

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Some have called the Human Capital initiative a pet project of the former president of the World Bank, Jim Yong Kim, who joined the bank after serving as president of Dartmouth College and then abruptly left in February, three years earlier than expected. The traditionally American-led bank is viewed with suspicion in some quarters in the Middle East, as being a neoliberal institution trying to push duplicated forms of Western free market capitalism on Arab countries.

That suspicion may spill over to projects like the Human Capital Index. Tanzi, however, says that while the metric isn’t perfect, it is a useful tool of measurement and research.

Critically, the index does more than simply point out that education and health are important to a country’s success. It quantifies the cost of not making improvements in these areas. For example, it predicts that the generation of Iraqis born today will only be 40 percent as productive as they could be if education and health care were perfect. That effectively means if Iraq were to carry on without reform and improvements, it would cost the country 60 percent of its income in the long run.

Measures of Health and Education

“The benchmark against which every country is measured is one where all children survive, go to school for 14 years and learn at a high level. None of them are stunted in their health and they all survive to age 60,” explains Roberta Gatti, chief economist of human development at the World Bank. “When you look at the index you won’t find any nation reaching 100 percent.”

To measure the quality of schooling, Gatti and her team use data from organizations such as the Program for International Student Assessment, better known as the PISA exam, which collects data on education performance around the world. (See a related article, “Looking at Arab Education Through PISA Tests.”)

To understand the quality of health care and survival rates, World Bank analysts use data collected by the United Nations. Recent research has revealed widespread inaccuracies in the Arab region’s death certificates—while this problem casts doubt on the precision of research using death certificates to determine the cause of death, it has a lesser impact on efforts to assess survival rates more generally. (See a related article, “Why Did People Die? Unreliable Data Can Affect Research in Many Arab Countries.”)

When a country’s wealth is considered, the index data for the Arab region begins to paint a more complicated picture. For example, Qatar’s gross domestic product per capita is over $65,000 and its Human Capital Index score is 61 percent—one of the best in the region. Jordan’s GDP per capita is a little over $4,000, but its Human Capital Index score is just five percentage points behind Qatar.

Tanzi, from the American University of Beirut, notes that the Gulf Cooperation Council countries have other advantages. “The GCC is more homogenous too,” he says. “They don’t have a refugee population to consider.”

‘A Good Basic Predictor’

This relatively lackluster performance has not gone unnoticed by governments in the Gulf, says Gatti. “There’s an acknowledgement that they need to move from infrastructure investment towards human capital investment.”

Her colleague, Haneen Sayed, a program leader for human development in Iraq, Lebanon and Syria for the World Bank, agrees.

“The GCC countries are very aware of their shortcomings,” she says. “The big issue they face is non-communicable diseases.”

Non-contagious diseases are harming the Gulf region’s productivity through premature death in adulthood and disability—for example, some experts estimate that diabetes onset in the United Arab Emirates happens as much as ten years sooner there compared to other populations. (See a related article, “UAE Researchers Tackle Diabetes From the Foot Up.”)

Instead, it’s the Arab world’s middle-income countries who are the relative success stories for the region—although they still have a lot of improvements to make. Tanzi says countries like Lebanon and Jordan have greater inequality between socioeconomic groups, which isn’t necessarily evident or explicitly considered in the workings of the Human Capital Index. He suspects this, along with a large refugee population, is a limiting factor for Lebanon’s performance in the rankings.

“The metric is a good basic predictor, but like everything in life you need to look at the details beyond the numbers,” he says. “Realistically, you can’t boil everything down into one single number.”

That’s a criticism that Sayed and Gatti, from the World Bank, readily acknowledge. They agree that not every measure of human capital is included in the metric, which would in fact be a near impossible task to complete.

Early Advantage for Girls

Across all countries in the Arab world, girls fared better than boys—usually by just a couple of percentage points. Qatar was the country with the largest gender difference, where girls are expected to achieve up to six percentage points more than their male counterparts. But that pattern only holds true up to the age of 18, says Sayed.

“In most all the indicators, girls do better than boys and that’s not the case in other regions,” says Sayed. “The flip side is when you enter the labor market there’s a different situation.”

That would seem to hold true in the gender makeup of the region’s academic posts; often there are many female professors in junior positions, but very few in high up roles. (See a related article, “Arab Women Are Left Out of University Leadership.”)

While it’s encouraging to see that young girls perform well in their younger years, the data suggest that more work is needed to ensure that their early advantage translates into success and productivity in later life. Much needed data from projects like the index can enable governments and ministries to tackle these issues with an evidence-based approach.