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COLUMN: Human development

Namik Colakovic

The phenomenon of economic development is certainly one of the fundamental tendencies in civilizational history, which has been crucial for the survival and continued prosperity of the human species. Each of its movements is related to numerous changes and transformations, which, under the influence of scientific and technical progress and changes in the social and natural environment, influence the increase of all economic parameters.

It is not enough to observe, analyze and draw conclusions about trends and effects of economic development only through the prism of a series of successive changes in the economic structure. It is necessary to include all changes in human consciousness, as the most important factor in the overall economic dynamics. Therefore, misinterpretations are that the fundamental goal of economic development is the greater production of goods and services. It must be reformulated and should state that the main objective of development is to strengthen human capacity for a fulfilled, productive and dignified life.

Development is directly linked to investment in human capital, which includes investment in formal education, health care and all that directly or indirectly contributes to increasing human productivity and creativity. Likewise, development is linked to distribution of benefits from economic activities and shows the extent to which it is distributed among individuals. This is particularly underlined because the unequal distribution of these benefits produces an unequal distribution of the quality of life of the people participating in that distribution. However, reality indicates that economists have increased their production as an obsession, while at the same time reducing their interest in the quality of life of a person.

The UN has launched activities to come up with a calculation model that measures poverty, literacy, education, life expectancy, and other factors in different countries around the world. That is how the HDI – the Human Development Index – was created in 1990, through which countries are ranked in several categories. The UNDP has been using this index since 1993 and has been publishing it in its annual development reports, and its primary purpose is to draw attention to current and future generations of their own development responsibilities. Considering the fact that inequality in the world today has become more pronounced and the number of people who survive or have difficulty living is multiplying, which produces negative repercussions on economic development, this project aims to show that personal and social security can only be acquired in development which enables a decent life, where the benefits of economic activities are distributed as evenly as possible to all participants.

The Human Development Index covers three parameters: life expectancy, knowledge and education through the coverage of literacy and the number of years spent in education and economic wealth through the Gross Domestic Product per capita, so that larger indexes have countries where life expectancy, education period and per capita income is higher, ie smaller indexes are in countries with lower parameters. Although there are serious and well-founded criticisms of this index and a methodological approach to calculating this index, it still treats it as the most relevant way of measuring social well-being.

The UN reports are based on data from 189 countries that are categorized into four broad categories of human development: very high human development, high human development, medium human development and low human development. Norway, Switzerland, Australia, Ireland and Germany have the highest human development index in the 2018 Report, ranging from 0.953 to 0.936 respectively, while the smallest index characterizes several countries from the African continent, including Niger, Central African Republic, South Sudan, Chad and Burundi, where the index value ranges from 0.354 to 0.417 respectively. For example, in countries with high HDI life expectancy exceeds 81 years, average expected years of education is greater than 18, and GDP per capita according to purchasing power parity is greater than  46,000 dollars. On the other hand, in countries with the lowest HDI, life expectancy is around 60 years, education expectancy is 9 years, and GDP per capita according to purchasing power parity is lowest in the Central African Republic, 663 and Burundi 702 dollars.

Of all the countries in the region, Croatia has the highest HDIs at 46th and Montenegro at 50th position and they are classified in the group of countries with very high human development, while Serbia at 67, Bosnia and Herzegovina at 77 and Macedonia at 81st, are ranked into a group of high human development countries. From some characteristic data for Bosnia and Herzegovina it can be mentioned that life expectancy is 77.1 years, education expectancy is 14.2 years, and GDP per capita according to purchasing power parity is 11.716 dollars (the lowest in the region).

All this shows that in order to improve the situation of human development in Bosnia and Herzegovina, a more intensive and consistent approach is required to monitor all indicators and take into account all lessons learned, and to continuously monitor new solutions in modern methodology and indicators of human development. Therefore, the Latin saying “Salas rei publicae lex maxima“ is now more than ever topical – the welfare of society is the highest law.

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