Panel session on 'Malaysia's Human Development: Beyond Income, Beyond Averages, Beyond Today' at the Human Development Report 2019 dialogue. Photo: UNDP Malaysia

New report explores inequalities in human development by going beyond income, beyond averages, beyond today

Kuala Lumpur, 9 December 2019 – The Asia-Pacific region has witnessed the steepest rise globally in human development. It leads the world in access to broadband internet and is gaining on more developed regions in terms of life expectancy, education, and access to healthcare. Yet, the region continues to grapple with ever-widening income gap and persistent inequalities in key elements of human development such as health, education, dignity and respect for human rights. Beyond these challenges, the society is also becoming more vulnerable to new forms of inequalities arising from disruptive technology and climate resilience.

These are among the key findings of the 2019 Human Development Report (HDR), released today by the United Nations Development Programme (UNDP) entitled Beyond Income, Beyond Averages, Beyond Today: Inequalities in Human Development in the 21st Century.

Malaysia’s HDI score for 2018 is 0.804 compared to 0.802 last year, putting the country in the Very High Human Development category, or 61st place out of 189 countries. Malaysia’s score increased primarily because of improved life expectancy average, at 76.0 (75.8 in 2017) and Gross National Income per capita at (PPP USD) 27,227 (compared to (PPP USD) 26,555 in 2017).

Photo: UNDP Malaysia

Between 1990 and 2018, Malaysia has shown a steady progress in human development index from 0.644 to 0.804, an increase of 24.9% reflecting an average annual increase of 0.80%. Only two other ASEAN countries are categorized in the same Human Development category as Malaysia, Singapore and Brunei Darussalam.

South Asia is the fastest growing region with 46% growth over the period of 1990 to 2018, followed by East Asia and the Pacific at 43%. Of all countries on the HDI, Thailand had the second-highest increase after Ireland, moving up 12 ranks during 2013 to 2018. Indonesia and the Philippines both joined the ranks of countries with high human development

UNDP Administrator, Achim Steiner and the President of Colombia, President Iván Duque Márquez, jointly released the report today in Bogota, Colombia at 1900hours GMT. In his remarks, Mr Steiner said, “Almost 30 years since its inception, the HDR and its Human Development Index which ranks all countries in the world by their level of human development remains a powerful voice. This year's report is the first of a new generation of HDRs for UNDP, pushing boundaries as part of #NextGenUNDP to accelerate thought leadership, drive conversation on the future of development, and in doing so, advance process towards the 17 Sustainable Development Goals.”

“This Human Development Report sets out how systemic inequalities are deeply damaging our society and why. Inequality is not just about how much someone earns compared to their neighbor. It is about the unequal distribution of wealth and power; the entrenched social and political norms that are bringing people onto the streets today, and the triggers that will do so in the future unless something changes. Recognizing the real face of inequality is a first step. What happens next is a choice that each leader must make,” Mr Steiner continued.

The report has been prepared by the Human Development Report Office of UNDP under the advice and guidance of some of the world's leading economists, sociologists and thought leaders including Thomas Piketty and his team at the World Inequality Lab at the Paris School of Economics, and a series of eminent international figures including the former President of Costa Rica, Laura Chinchilla, and the former Prime Minister of Italy, Enrico Letta

The top five countries in the global HDI rankings are Norway (0.954), Switzerland (0.946), Ireland (0.942), Germany (0.939), and Hong Kong (0.939).

 “The Report demonstrates the enduring relevance of the human development approach in understanding the world around us, the inequalities which if unaddressed will hurt societies, weaken social cohesion and peoples’ trust in public institutions. It casts a new lens on past progress, and provides us with new, innovative tools to help us chart a better world. For Malaysia to keep improving in our Human Development performance, we need to consciously frame policy and drive engagements towards a more inclusive future,” said Mr Niloy Banerjee, UNDP Resident Representative for Malaysia, Singapore, and Brunei Darussalam.

The Human Development Report which pioneers a more rounded way to measure countries’ progress beyond just economic growth, says that the gap in basic standard capabilities is narrowing with an unprecedented number of people escaping poverty, hunger, and disease. The report analyses inequality in three trends; beyond income, beyond averages, and beyond today, proposing a battery of policy options to tackle it. It specifically recommends policies that look at, but also go beyond income, including:

  • Early childhood and lifelong investment: Inequality begins even before birth and can accumulate, amplified by difference in health and education into adulthood. Policies to address it therefore must also start at or before birth, including investing in young children’s learning, health, and nutrition.
  • Productivity: Such investments must continue through a person’s life, when they are earning in the labour market and after. Countries with a more productive workforce tend to have a lower concentration of wealth at the top, for example, enabled by policies that support stronger unions, set the right minimum wage, create a path from the informal to the formal economy, invest in social protection, and attract women to the workplace. Policies to enhance productivity alone are not enough. The growing market power of employers is linked to a declining income share for workers. Anti trust and other policies are key to address the imbalances of market power.
  • Public spending and fair taxation: the report argues that taxation cannot be looked at on its own, but it should be part of a system of policies, including public spending on health, education, and alternatives to a carbon-intensive lifestyle. More and more, domestic policies are framed by global corporate tax discussions, highlighting the importance of new principles for international taxation, to help ensure fair play, avoid a race to the bottom in corporate tax rates, especially as digitalization brings new forms of value to the economy, and to detect and deter tax evasion.

Looking beyond averages

Averages often hide what is really going on in society, says the HDR. While they can be helpful in telling a larger story, much more detailed information is needed to create policies to tackle inequality effectively. This is true in tackling the multiple dimensions of poverty, in meeting the needs of those being left furthest behind such as people with disabilities, and in promoting gender equality and empowerment. For example:

  • Gender equality: Based on current trends, it will take 202 years to close the gender gap in economic opportunity alone, cites the report. While the silence on abuse is breaking, the glass ceiling for women to progress is not. Instead, it is a story of bias and backlash. At the very time when progress is meant to be accelerating to reach the Sustainable Development Goals (SDGs) by 2030, the report’s 2019 Gender Inequality Index says progress actually is slowing.

Planning beyond today

Looking beyond today, the report asks how inequality may change in future, looking particularly at two seismic shifts that will shape life up to the 22nd century:

  • The climate crisis: As a range of global protests demonstrate, policies crucial to tackling the climate crisis like putting a price on carbon can be mis-managed, increasing perceived and actual inequalities for the less well-off, who spend more of their income on energy-intensive goods and services than their richer neighbours. If revenues from carbon pricing are ‘recycled’ to benefit taxpayers as part of a broader social policy package, the authors argue, then such policies could reduce rather than increase inequality.
  • Technological transformation: Technology, including in the form of renewables and energy efficiency, digital finance and digital health solutions, offers a glimpse of how the future of inequality may break from the past, if opportunities can be seized quickly and shared broadly. There is historical precedent for technological revolutions to carve deep, persistent inequalities – the Industrial Revolution not only opened up the great divergence between industrialized countries and those who depended on primary commodities; it also launched production pathways that culminated in the climate crisis.

The change that is coming goes beyond climate, says the report, but a ‘new great divergence’, driven by artificial intelligence and digital technologies, is not inevitable. The HDR recommends social protection policies that would, for example, ensure fair compensation for ‘crowdwork’, investment in lifelong learning to help workers adjust or change to new occupations, and international consensus on how to tax digital activities – all part of building a new, secure and stable digital economy as a force for convergence, not divergence, in human development.

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