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AN IMPROVED PARTNERSHIP FOR A BETTER DEVELOPMENT:

25TH MEETING OF ACP-EU ECONOMIC AND SOCIAL INTEREST GROUPS

Brussels, 4 – 6 March 2008

REPORT

on

"Human Resource development for Economic Development –
examples and lessons from ACP countries"

______

Rapporteur: Ms Brenda King

Member of the ACP-EU Follow-up Committee

President of the Specialised Section "Employment, Social Affairs and Citizenship" of the EESC

Chief Executive, ACDiversity

Commissioner, Women's National Commission (in the UK)

Advisory Board Member, Hays Executive

United Kingdom

Expert: Mr Eric Osei

Senior Economic Development Manager

London Development Agency

London, England

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DI CESE 16/2007 rev. EN/o

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The evidence in this paper has demonstrated the critical importance of investment by Governments in the education and training of its citizens or its human resources - irrespective of whether they are advanced economies or poor developing countries. The prime reason is that the education and training of a nation’s citizens leads to a number of economic and social benefits including jobs, reduction in poverty, increased standard of living and quality of life, new industries, foreign and other investment, better civil society, social cohesion and increased equity.

For developing countries, the economic and social impact as well as the return on investment in education and training is greater, if Governments play a central role by providing free and compulsory primary and secondary education from age 5 to 16, as well as provisions for tertiary education including university, technical, vocational and on-the-job training.

The paper recognises that ACP countries are at different stages of political, social and economic development, with many facing extreme poverty and under-development. Therefore some developing countries ability to invest in the education and training of its citizens will depend on a number of factors including: the level of economic development of the country; whether there is political stability and good governance of the country; the level of poverty or wealth of the country; the effectiveness of the management of the economy and its resources; the level of debt burden; the budget and infrastructure for education and other human resource development activities.

Many middle income developing countries like Barbados, Trinidad & Tobago and Bahamas continues to do relatively well in education and training of its citizens.

However in spite of the increasing economic improvements, many poor African countries continue to lag significantly behind other developing nations in the education and training of its people. This is mainly because the scale of the economic and social problems are as such, that even relatively stable African governments do not even have the funds to finance basic primary school education for all its children. Indeed for a large proportion of the population in these countries, the level of poverty is as such that, survival and meeting “basic human needs” such as food and water, naturally takes priority over basic education and training.

Compounding these social and economic problems are additional barriers which affect the development of human resources in poor ACP countries. Some of the key issues include:

  • Gender inequality-the continuing disadvantaged faced by girls and women in receiving basic education and training.
  • Inadequate budgets for education- least developed countries allocate less than 3.5% of GDP to education compared to more stable better performing ACP countries like Ghana and Barbados which spend between 28 to 40% (Ghana) and 33% (Barbados) of its annual budget on education and training since independence.
  • Unfair trade rules and tariffs which prevent or curtail poor countries from developing their economies and social infrastructure.
  • Limited foreign investment opportunities that could develop the education, training and job creation capacity of poorer ACP countries.
  • Continuing problems of skilled and essential ACP professional such as nurses, doctors, teachers , engineers, migrating to western countries, thereby exacerbating the “brain drain” problems experienced by the developing countries.
  • Continuing governance, democracy, corruption and civil liberty problems experience by a number of the ACP countries.

To address these issues, it is essential that ACP Governments and agencies working with the EU and other OECD countries consider and adopt the numerous recommendations highlighted in the various sections of the paper.

In spite of the economic problems and barriers, a number of ACP countries make significant investment in the education and training of its citizens. This has led to substantial reduction in poverty and increase in economic and social development through increase standard of living, new jobs and the wellbeing of its people. Exemplar countries which other ACP countries can learn from include Ghana, Kenya, Barbados and Samoa.

Finally the major economic transformation of Barbados from a low income country dependent on sugar production into a global middle- income economy based on tourism, light manufacturing and offshore financial services, is a testament to its internationally renowned policies towards the education and training of its citizens which all ACP countries can learn from. The Barbados case study demonstrates that small size and limited resources need not be a constraint to achieving high quality human resource development-driven economic and social advancement. It is hoped that some ACP countries would be able to adapt (taking into account the social, historical, cultural and political differences) and implement some of the lessons and good practice highlighted in the case study.

1.Introduction

1.1This paper outlines the key issues affecting the development of people– and provides examples of ACP countries whose education, training and other human resource policies and programmes are contributing to the economic development of their nations.

1.2It also argues that the development of human resources will invariably depend on a number of factors including: political stability and governance of the country; the effectiveness of the management of the economy and the country’s resource; the budget and infrastructure for education, training and other human resource development activities; the level of economic development of the country (i.e. whether it is a poor developing country, middle income developing nation or an advanced economy); the level of poverty or wealth of the country; and the level of debt burden.

1.3Finally Barbados, a middle income developing country, is used as a case study to demonstrate the positive impact that investment in people can have on the economic development of a country. Whilst it is recognised that in many cases it will not be possible for all ACP countries to adapt and implement many of the strategies and programme highlighted in the case study, it is hoped that for some ACP countries lessons and can be learnt and adapted for the development of their people.

2.Therelationship between the development of human resources and economic development

2.1Economic Development and growth is critical for any country – irrespective of whether it is an advanced or a developing economy. If managed well, economic development leads to reduction in poverty as well as an increase in prosperity allowing the majority of a country's population to benefit economically, politically and socially.

2.2Economic development is often driven by investment in the development of people or "human resources" through the provision of education, training and healthcare. Economic development also drives job creation and enterprise, the physical and infrastructural development of the country and attracts foreign investment.

2.3Empirical research in recent years has indicated that political stability and good governance in a country is also critical to the economic growth and development process[1], which reiterates the importance of good governance. This includes a respect for political rights and civil liberties and the involvement of civil society, which permits popular participation in the decision-making process and provides the population with vital information of national importance.

2.4Well managed economic development leads to highly developed educational and healthcare infrastructures; physical development; better quality of life; community development and equity with a safety net for the poor, sick and the under-privileged.

2.5 Categorisationof human resource development

2.5.1Since 1993, the United Nations Development Programme(UNDP) in its annual Human Development Report has produced a Human Development Index (HDI) for each country. UNmember states are listed and ranked according to these measures. The 2006 report ranked 177 countries and the HDI indices and rankings for ACP countries and the EU can be found in the annex. The HDI measures the average achievements in a country in three basic dimensions of human development:

  • A long and healthy life, as measured by life expectancy at birth.
  • Knowledge, as measured by the adult literacy rate and the combined primary, secondary, and tertiary gross enrolment ratio.
  • A decent standard of living, as measured by the log of gross domestic product (GDP) per capita at purchasing power parity (PPP) in USD.

It should be noted that the HDI isn’t a comprehensive measure of human development as it doesn’t include important indicators such as respect for human rights and political freedoms nor does it incorporate the degree of gender inequality in key areas of economic and political participation and decision-making. In the annex referred to earlier, proxies for these additional measures are included (i.e. political and press freedoms; % of female parliamentarians).

2.5.1.1High Development: These are countries with an HDI of 0.8 and above. It includes the 27EU member states from Ireland (4)[2] to Romania (60). It also includes the following ACPcountries Barbados (31), Seychelles (47), Cuba (50), Saint Kitts and Nevis (51), Bahamas (52), Tonga (55), Trinidad and Tobago (57), Antigua and Barbuda (59) and Mauritius (63). Many high development countries have state infrastructure and provision such as free education and health services for all citizens. For those countries with well-managed market economies, the Government plays a critical role in the development and management of the economy including setting macro-economic policies; intervening to address market failure; regulation; raising revenue through taxes and other activities.
2.5.1.1.1As mentioned earlier, these governments play a central role in education by providing free and compulsory education up to the age of 16.They also have policies in place for post 16 training and skills development for its citizens and workforceinvolving a range of further and higher education, vocational and educational training (VET) and workforce development through work-based training and management and leadership programmes.
2.5.1.2Low Development: These countries have a HDI below 0.5. Of the 31 countries in this category, 29 are located in Africa- the exceptions are Haiti and Yemen. These countries face extreme poverty, with approximately 56% of people earning less than 0.77 euros (US$ 1) per day.Human resource development is about addressing basic human needs such as providing at least one meal a day, safe water supply, very basic healthcare, education and housing;therefore the delivery of minimal public services.
2.5.1.3Middle Development. These are countries with an HDI between 0.5 and 0.8. Thirty ACP countries are located in this category ranging from Dominica ranked 68th to Swaziland ranked 146th. The highest ranking Pacific country is Samoa ranked 75th,while the highest-scoring Sub-Saharan countries are Equatorial Guinea and South Africa, ranked 120th and 121st respectively.

2.6Why focus on Human Resource development?

2.6.1In broad terms, Human Development is primarily about allowing people to lead a life they value and enabling them to realise their potential as human beings. To quote the UNDP[3] it is about “reducing extreme poverty, extending gender equality and advancing opportunities for health and education…it is a condition for building shared prosperity and collective security in our increasingly interdependent world.

2.6.2Human Resource Development (HRD) forms a critical component of the wider human development agenda as outlined above. HRD is important because it is a key driver and component of economic development. The impact of human resource development on economic development and poverty reduction - whether it is an advanced economy or a developing country - is well documented[4].

2.6.3It significantly contributes to economic growth by increasing job creation and other employment opportunities as well as increasing productivity and attracting further investment for economic development.

2.6.4In advanced economies their long term economic development, in particular efforts to raise productivity, depends on the availability of a well educated, skilled and specialist workforce. This strategy emphasises that while skills needs vary by sector, there is a clear need for continual improvement of skills and qualifications for those in work.

2.6.5In developing countries and emerging economies, education training and wider human resource development of women is found to yield higher return than men[5].

2.6.6In developing countries, the development of human resources - through education, vocational and skills training - is found to be more conducive to economic development than investment in physical infrastructure[6].

2.7 Current EconomicPosition in ACP Countries

2.7.1Economic trends suggest that middle income developing countries like Barbados, Trinidad & Tobago and Bahamas are doing well economically. This is characterised by relatively high employment, low poverty levels, good social infrastructure - including those for education, training and healthcare - and the attraction of foreign investment.

2.7.2Over the past few years, economic improvement, stable governments, economic reforms and investment in human resources are slowly helping to tackle poverty in many of the poorer ACP counties. OECD recently confirmed that Africa has achieved average economic growth of 5.5%, its fastest growth in 30 years. In some African countries the economic growth is significant. For example, in Mozambique[7], since the end of civil war economic growth has significantly increased. Economic growth averaged 10% in the 1990s and currently stands 7.7%. The Government is tackling corruption and reducing poverty. Poverty levels have been cut from 69% in 1997 to 54% in 2003 - one of the fastest declines in Africa - while other human development indicators, such as child mortality, are improving.

2.7.3However despite this respectable growth, the scale of poverty and other social and economic problems - caused by a combination of factors including economic mismanagement, poor governments, civil war, debt burden, natural disasters, AIDS and other health pandemics - has meant that for a large proportion of Africa's population it has been about survival and meeting the "basic human needs" rather than human resource development through education and skills training. The facts about the least developed countries speak for themselves[8]:

  • More than 44 million children do not go primary school.
  • More than 300 million Africans do not have access to clean water.
  • 1 in 5 of the poorest African people living in the continent survive on just 1Euro (US$1.30) a day.
  • More than 10 million children die of hunger and preventable diseases each year, one child every 3 seconds, while over 25 million in Sub-Saharan Africa are infected with HIV or AIDS.

3.Key issues affecting human resource development in ACP and other developing countries

3.1In addition to the reasons mentioned above, there are many other factors which prevent the very poor ACP countries from developing their human resources. Some of these are summarised below:

3.2 Genderinequality in Education[9]

3.2.1Education is a key economic asset for individuals and for nations. It is a critical asset and a fundamental human right for all.Countries could raise per capita economic growth by about 0.3% percentage points per year – or 3 percentage points in the next decade - if they simply attained parity in girls' and boys' enrolments[10].

3.2.2 Causes of disparity

Overwhelmingly, girls are not in school because of poverty. The more expensive education is, the less likely families will invest in education for girls. In Kenya, for example, before school fees were abolished, girls were more than twice as likely as boys to be withdrawn from school on cost grounds[11]. "Opportunity costs" are also a real deterrent for poor households: children's labour, paid or unpaid, is often an important part of household survival, and sending girls to school may mean less food on the table at the end of every day.

3.2.3 Examples of good practice

However, like Kenya, there are many examples of poor countries that have made remarkable progress. Mauritania, which made a commitment to free and compulsory primary education, increased the proportion of girls in schools from 67% to 93% between 1990 and 1996. Mali cut a steep gender gap by more than 10 percentage points in the 1990s, at the same time raising primary completion rates among both boys and girls by more than 20 percentage points. The achievements of these countries are among several other success stories that could be cited, are highlighted below:

  • After Uganda abolished fees, girls' enrolment increased by 20% almost overnight; among the poorest fifth of girls, it went from 46% to 82%[12].
  • A few years ago, AIDS was causing a mass exodus from Lesotho's schools. But in some schools, free education combined with school feeding is bringing orphans back[13].

3.2.4Therefore neither poverty nor HIV/AIDS need deny any child her right to education. Among the pro-girl steps taken by "success story" countries, some of the most effective have been abolishing fees and charges; making primary education free and compulsory; prohibiting the worst forms of child work; and providing extra incentives to help compensate poor families for girls' labour[14].

3.2.5Measures to eradicate the educational disadvantage facing poor girls cannot stop at the door of primary school, however. To learn and acquire real skills, girls need reasonable class sizes, adequate hours of instruction, adequate supplies of learning materials that are gender-sensitive, and probably most important, better trained and supported teachers – including more female teachers[15]. They need to be freed from the threat of sexual harassment and abuse, and from gender-biased assumptions of what and how children should learn. They need equitable opportunities to advance up the educational ladder, to secondary and even tertiary level. Schools need to support girls to acquire knowledge and skills that society generally denies to women: whether this means maths and science, or sexual and reproductive health instruction and life skills programmes to build self-confidence and negotiating skills.