Comment: UN HUMAN DEVELOPMENT REPORT 2004
IRISH RICHER THAN AMERICANS; SECOND IN POVERTY INDEX
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July 19,2004--Ireland has moved to 10th place in the UN Human Development Quality of Life Index, up 2 places from 2003 and eight places since 2002. However, we have the second highest level of poverty in the western world after a decade of economic growth that has only been surpassed by China.
The Irish are now richer than Americans. Our GDP per capita adjusted for purchasing power is $36,360 compared with a US figure of $35,750. The Irish economy grew by an annual average of 6.8% in the period 1990-2002, only behind China which had an annual average growth of 8.6 per cent. We remain one of the world's most open economies with 83% of our goods and services imported and 98% exported. Our web usage at 271 per 1,000 is low compared with other European countries.
The human development index (HDI) is a composite index that 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 gross enrolment ratio for primary, secondary and tertiary schools; and a decent standard of living, as measured by GDP per capita in purchasing power parity (PPP) US dollars. The index is constructed using indicators that are currently available globally, and a methodology that is simple and transparent. While the concept of human development is much broader than any single composite index can measure, the HDI offers a powerful alternative to income as a summary measure of human well-being. It provides a useful entry point into the rich information contained in the subsequent indicator tables on different aspects of human development.
The HDI in the United Nation's Report is constructed to compare country achievements across all levels of human development. The indicators currently used in the HDI yield very small differences among the top HDI countries, and thus the top of the HDI rankings often reflects only the very small differences in these underlying indicators. For these high-income countries an alternative index—the human poverty index. The state of human development)—can better reflect the extent of human deprivation that still exists among these populations and help direct the focus of public policies.
The human poverty index ranking for selected 17 OECD countries, reflects deprivations in four dimensions:
Ireland ranks in second last place, ahead of the US, of the 17 country sample, with 15.3% of Irish people living in poverty. We spend less on health and education than our European neighbours and income inequality, illiteracy and lower life expectancy among poorer people confirm that we are a very unequal society. Last month we wrote of the dark side of the Celtic Tiger (see article below). The comparative poverty statistics in this very comprehensive report are an indictment of how we have handled an economic good fortune for which we owe much to both the US and European Union for ( See article below: The Celtic Tiger and Public Squalor in Modern Ireland)
The report notes that Human Development is about enlarging people’s choices. 'We value achievements that do not show up in economic growth figures: such as knowledge, health, and political freedoms.Every country is diverse and increasingly so:
n1 in 7 people belong to groups that are discriminated against or disadvantaged as a result of their cultural identities
à Much more work on measurement of exclusion needed; inequality has a cultural dimension
This report argues that embracing diversity is the only sustainable solution because:
Source: UN Human Development Report 2004
Click for background, charts etc on Report
Click for Complete Report (size 2.9MB- in pdf format
The difference between GNP and GDP is a matter of the nationality of the producers and the location of production:
Final goods are goods that are ultimately consumed rather than used in the production of another good. For example, a car sold to a consumer is a final good; the components such as tires sold to the car manufacturer are not; they are intermediate goods used to make the final good. The same tires, if sold to a consumer, would be a final good.
Ireland's GDP is significantly higher than its GNP because of the large number of foreign owned business organisations which operate in Ireland.
GDP is a better measure of the state of production in the short term. GNP is a better measure when analysing sources and uses of income. Click here for more information.
Click here for Global GNP Per Capita by Country
- Michael Hennigan
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