|Since 1990, the United Nations Development Program (UNDP) has issued its Human Development Report almost every year. The edition published on 14 March 2013 is entitled The Rise of the South: Human Progress in a Diverse World, and includes important trends and examples of developing countries in the South improving the lives of their people. In addition to the thematic discussion and a wealth of statistical data on health, education, gender, economics and other aspects of human society, the UNDP calculates a “Human Development Index” (HDI) for each country. The HDI combines life expectancy, education (years of school enrollment) and income (Gross National Income/GNI per capita) to produce a composite measure of human development.|
The new report, based mainly on data from 2011, calculates a 2012 HDI for Timor-Leste of 0.576. UNDP categorizes Timor-Leste in the "medium human development group," ranking 134th of 187 countries with data. See UNDP's Timor-Leste-specific press release, statistical summary (Excel or PDF) and explanatory note which provides detail for the general discussion in the previous paragraph. We also posted UNDP's global data spreadsheet (with a few additions by La'o Hamutuk; you can also get the original spreadsheet, PDF and Technical Notes from UNDP). It is a gold mine with data on hundreds of indicators for nearly 200 countries and territories.
Although Timor-Leste moved up 13 rank positions compared with last year's 2011 report, UNDP cautions not to compare reports published at different times. Using a revised methodology and updated data for prior years, UNDP recalculated Timor-Leste's 2011 HDI to be 0.571, and our 2010 HDI is now 0.565. Timor-Leste's ranking did not change; we ranked 134 out of 187 countries in 2010, 2011 and 2012. LUSA and other media reported this incorrectly, but UNDP had explained it clearly:
Comparing with past years (from UNDP's Timor-Leste explanatory note, emphasis added by La'o Hamutuk)
Timor-Leste's HDI value for 2012 is 0.576 -- in the medium human development category -- positioning the country at 134 out of 187 countries and territories. Between 2000 and 2012, Timor-Leste's HDI value increased from 0.418 to 0.576, an increase of 38 percent or average annual increase of about 2.7 percent. The rank of Timor-Leste's HDI for 2011 based on data available in 2012 and methods used in 2012 was 134 out of 187 countries. In the 2011 HDR, Timor-Leste was ranked 147 out of 187 countries. However, it is misleading to compare values and rankings with those of previously published reports, because the underlying data and methods have changed.
The slight HDI improvement over the last two years is largely because GNI (gross national income per capita, adjusted for inflation) increased from $4,700 to $5,400 between 2010 and 2012, and because people are living a little longer. Three-fourths of our GNI is petroleum revenues, which do not go directly to Timorese people as the projects are offshore, run by foreign companies. The larger HDI gains since 2000 and 2005 reflect that oil revenues were zero in 2000 and have increased five-fold since 2005, as the green dotted line on the graph shows.
Is GNI the best measure of Timorese people's income? (by La'o Hamutuk)
All of Timor-Leste's gas and oil income goes to the state, which appropriately saves most of it in our Petroleum Fund for future use. La'o Hamutuk thinks that oil income is not an appropriate component for measuring Human Development. Timor-Leste's Petroleum Fund and our overwhelming dependence on offshore petroleum exploitation makes us a statistical outlier and requires caution when analyzing our data. Timor-Leste's GNI (including oil income) is nearly four times larger than our (non-oil) GDP (in no other country is it even double), and some agencies use GNI to calculate indicators, while others use GDP.
The image at right, from a presentation La'o Hamutuk made to the Timor-Leste Coalition for Education, shows how UN ESCAP overstated Timor-Leste's public spending on education (yellow) in their October 2012 Statistical Yearbook. La'o Hamutuk added the red numbers to show the result if the calculations were based on GNI rather than GDP. Although this distortion doesn't affect the UNDP Human Development Index, it illustrates a problem which reduces the usefulness of many indicators in UNDP's and other statistical databases.
A better base than either GNI or GDP could be an "effective GDP" -- calculated as the non-oil GDP added to the amount of money withdrawn from the Petroleum Fund during a given year. La'o Hamutuk believes this could allow more meaningful comparison with other countries, but academically trained economists are uncomfortable with this, and international agencies prefer inconsistencies to country-specific methodology. Whatever indicator is used, it should be adjusted for population, purchasing power parity (which varies even among countries which use the same currency) and inflation over time.
UNDP also calculates a Multi-Dimensional Poverty Index (MPI) for each country, representing the percentage of people living in households where at least one person is deprived of education, health or standard of living. Based on data from the 2009/2010 Demographic and Health Survey, UNDP calculated that 68.1% of Timor-Leste's people live in multidimensional poverty, with an additional 18.2% "vulnerable to multiple deprivations." In other words, six out of every seven Timor-Leste citizens face major obstacles to improving their lives, which creates a huge challenge for Government, international agencies, civil society organizations and our people.
Some local media inaccurately reported that UNDP had said that 68.1% of Timor-Leste's people live below the poverty line. These press reports angered the Minister of Finance, who abruptly cancelled two meetings with UN agencies.
Multidimensional Poverty Index (MPI) (by UNDP)
The 2010 HDR introduced the Multidimensional Poverty Index (MPI), which identifies multiple deprivations in the same households in education, health and standard of living. The education and health dimensions are based on two indicators each while the standard of living dimension is based on six indicators. All of the indicators needed to construct the MPI for a household are taken from the same household survey. The indicators are weighted, and the deprivation scores are computed for each household in the survey. A cut-off of 33.3 percent, which is the equivalent of one-third of the weighted indicators, is used to distinguish between the poor and nonpoor. If the household deprivation score is 33.3 percent or greater, that household (and everyone in it) is multidimensionally poor. Households with a deprivation score greater than or equal to 20 percent but less than 33.3 percent are vulnerable to or at risk of becoming multidimensionally poor.
The most recent survey data available for estimating MPI figures for Timor-Leste were collected in 2009/2010. In Timor-Leste 68.1 percent of the population lived in multidimensional poverty (the MPI ‘head count’) while an additional 18.2 percent were vulnerable to multiple deprivations. The intensity of deprivation – that is, the average percentage of deprivation experienced by people living in multidimensional poverty – in Timor-Leste was 52.9 percent. The country’s MPI value, which is the share of the population that is multi-dimensionally poor adjusted by the intensity of the deprivations, was 0.36.
UNDP recognizes that income is not the best measure of human development, so they also calculate a "non-income HDI" based only on health and education, which was .569 for Timor-Leste in 2012. When ranked in comparison with other countries, Timor-Leste ranks 29 places better on income than our HDI ranking, meaning that our people have lower human development than other countries with the same cash income.
The Human Development Report also measures how much inequality there is in each country, and Timor-Leste's "inequality-adjusted Human Development Index" is .386, 33% lower than our HDI when inequality is not considered. Because many other impoverished countries are also very unequal, our ranking only drops three places when inequality is considered.
Inequality Adjusted Human Development Index (IHDI) (by UNDP)
The IHDI takes into account not only the average achievements of a country on health, education and income, but also how those achievements are distributed among its citizens by “discounting” each dimension’s average value according to its level of inequality. The interpretation is, therefore, that while the HDI can be viewed as an index of “potential” human development that could be obtained if achievements were distributed equally, the IHDI is the “actual” level of human development (accounting for inequality in the distribution of achievements across people in a society). Hence, the IHDI will be equal to the HDI when there is no inequality in the distribution of achievement across people in society, but falls below the HDI as inequality rises. The loss in potential human development due to inequality is the difference between the HDI and IHDI, expressed as a percentage.
The following table shows some of the data for Timor-Leste and a few other countries in the 2013 Human Development Report. Much more is in the Timor-Leste and global statistical tables.