The World Bank recently released a report titled “The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19” (HCI) in which it emphasized on the sizeable gaps across the globe in terms of investments in human capital, spotting the light on the “costs of inaction” in that area, and proposing a set of solutions to address these gaps. In fact, the HCI report was released in 2018 as part of the Human Capital Project (HCP) as a global effort to allow children to reach their full potential. The report however, noted that the COVID-19 pandemic has threatened to destroy all progress made by countries in improving their human capital and that urgent action must be taken to protect said capital, particularly among the poor and vulnerable population. In this aspect, the report unveiled that human capital consists of people’s level of knowledge, skills and health accumulated over their lifetime, noting that human capital is key for sustainable growth and poverty reduction. The HCI 2020 update now incorporates data from 174 countries (up by 17 from the 2018 edition) and quantifies the COVID-19’s impact on human capital, which is according to the report, placing human capital gains at risk. In addition, the report highlighted that past pandemics and crises had a ripple effect across populations and sometimes even generations, calling for the urgent need to protect and rebuild human capital to promote recovery on the short and longer terms.

In this vein, the HCI calculates the amount of human capital “a child born today can expect to attain by the age of 18”. The index is composed of the following factors:

• “Survival”, which takes into account the mortality rate for children aged beneath 5,
• “Expected learning-adjusted years of school”, which measures the quantity (expected years of school) and quality (gauged by the Harmonized Learning Outcome or Harmonized Test Scores) of education accumulated by children until the age of 18, and
• “Health”, which includes the stunting rate for children aged below 5 and the adult survival rate (i.e. the rate of 15 year-olds who will live until at least the age of 60).

The resulting HCI values range between 0 and 1, noting that an HCI value of 0.50 for a specific country, for instance, means that children born in this country today are anticipated to have, by the time they grow up, 50% of the productivity they could have enjoyed had they benefited from a complete education and full health. Countries were accordingly classified under six groups according to their HCI values for the year 2020, as follows: HCI ≥ 0.80 (best category); 0.70 ≤ HCI < 0.80; 0.60 ≤ HCI < 0.70; 0.50 ≤ HCI < 0.60; 0.40 ≤ HCI < 0.50; and HCI < 0.40 (worst category). The best category of countries englobed, on a respective basis, Singapore (HCI value: 0.88), Hong Kong SAR (0.81), followed by Korea, Japan, Canada, Finland, Macao SAR & Sweden which shared the same HCI value of 0.80. On the other hand, the worst performing countries in the 2020 HCI included the Central African Republic (HCI value: 0.29), Chad (0.30), South Sudan (0.31), Niger, Mali & Liberia (0.32 each), and Nigeria, Mozambique, Angola, and Sierra Leone (0.36 each), only to name a few. On a regional basis, the United Arab Emirates (UAE) topped the list of countries in the Middle East and North Africa (MENA) region with a 2020 HCI value of 0.67, followed closely by Bahrain and Turkey (HCI value: 0.65 each), Qatar (0.64), and Oman (0.61).

Locally, Lebanon recorded a Human Capital Index value of 0.52 for the year 2020, unchanged from its 2018 value. In other words, children who are born in Lebanon today will only have, by the time they grow up, 52% of the productivity they could have enjoyed had they benefited from a complete education and full health, compared to a world average of 56%. In detail, and as far as the “survival” factor is concerned, Lebanon registered a “probability of survival to age 5” of 0.99, meaning that 99% of children born in Lebanon will survive past the age of 5. In parallel, Lebanon’s “expected years of learning-adjusted school” stood at 6.3 (i.e. somewhere in the middle compared to other countries), broken down into 10.2 expected years of school and a 390 Harmonized Test Score (noting that 300 stands for the minimum attainment and 625 for advanced learning attainment). As for the health component of the HCI, Lebanon’s adult survival rate reached 0.93, with no data available pertaining to child stunting. It is worth noting that the parameters by gender were not provided in the 2020 edition of the HCI.