Measuring Economic Development: Human Development Index

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Table of Contents

Abstract
Introduction
Literature Review
Method of Analysis
Analysis
Conclusion
References

Abstract

This paper discusses the economic development of China and India on the basis of the Human Development Index. This topic started to attract scientists’ attention several years ago as they turned into the leaders in economic development and began to improve their performance every year. The work compares the achievements made by both countries in detail, explains all connected issues, and notices improvements. It includes both qualitative and quantitative research studies, which allows speaking about progress at different periods of time. With the help of comparative analysis, the country with the best development is identified.

Introduction

China and India are among the largest countries in the world. They are known for their long history, during which they experienced ups and downs. Being originally a mighty country, China lost its global economic power in the 19th century and still faced problems at the beginning of the 20th century. It was affected by civil unrest, foreign occupation, and other adverse events. In a similar way, India used to flourish in the past but suffered from invasions, communal violence, wars, and separation. However, at the end of the 20th century, both countries started restoring their condition. They implemented a range of various reforms to control their future and cope with overpopulation, environmental issues, poverty, unemployment, and corruption so that today everyone knows them as the fastest economies in the world. The fact that the stories of these countries have much in common as well as their rapid progress served as a trigger for this research. What is also significant, this topic attracted the attention of many researchers, including Zhou (2014) who focused on the economic growth of India and China and mentioned that they are in a “dragon-elephant competition” (455).

The purpose of this paper is to compare the economic development of India and China. To fulfill it, such objectives are met:

Overview of the background information about the countries;
General description of economic development;
Identification of the main constituencies of human development;
Identification of the connection between human development and economic development;
Measurement of human development and its comparison;
Measurement of economic development on the basis of the Human Development Index (HDI).

This paper is rather important because it can add significant knowledge to the field. Using it, the possibility to identify the world’s leader in economic development can be obtained. In addition to that, it can be advantageous for the representatives of the general public who are willing to move to one of these countries, because it discusses the life expectancy, education, and income in the framework of HDI.

Literature Review

China and India are often compared by different scientists in the framework of their economic development because these countries have been in a similar condition. Even though it is rarely measured with the help of HDI, lots of information can be found considering these points.

Zhou (2014) focuses on the economic growth of two countries, considering the most recent achievements, issues faced, and possible future changes. He underlines that professionals started discussing this topic about a decade ago because at that period of time India started to improve its state greatly catching up with China that had already revealed a range of positive changes and achieved noticeable progress. The author underlines that regardless of similar situations, China and India need to improve different aspects of their performance. What is more, he believes that the competition between these countries that is often emphasized by other professionals is likely to prevent India from moving forward. Zhou (2014) states that peaceful development is a key point to success. Thus, instead of confrontation and attempts to win the competition in the most rapid growth, China and India should cooperate. The author also believes that such an approach will be rather advantageous for India if it also starts investing more in its infrastructure just like China instead of focusing on military expenditure.

Basu (2009) compares the economic development of China and India on the basis of their development quality indexes (DQI), including those focused on different dimensions. With the help of the thoroughly conducted quantitative research study, the author identifies that during 1980-2004 the countries developed on the same level in the framework of knowledge quality (growth by 0.005%). The health index also did not differ much; it comprises 0.003% for India and 0.001% for China. However, in the framework of the economy, China reached 0.064%, while India had only 0.009%. The national-level DQI of China (0.036%) was also higher than India’s one (0.012%) (Basu, 2009). Using the obtained results, the researcher received an opportunity to state that China’s DQI grew three times faster than India’s DQI during the investigated period of time. However, the same can be said from the opposite perspective when discussing the improvement of health quality, which allows us to conclude that India narrows the gap in development outcomes. Still, overall regional DQI and inter-regional polarization improved in China more due to its economic reform policies. Following the competitor’s success, India also started to pay more attention to this issue recently, which proves that it can reach the same results soon.

China started improving its economic condition earlier than India and achieved more success in this process that is why Rigi (2011) believes that India can streamline its economic growth if it follows China’s example and utilizes its best practices in the framework of the 11th Five-year plan. To prove his point of view, the author refers to the comparison of the major economic indicators. He believes it to be extremely critical that “China is constantly maintaining its average annual growth rate of GDP at nearly by more than 7% whereas Indian economy was stick to hardly 3.6% during 1970 – 2008” (Rigi, 2011, p. 126). China exceeds India in the framework of their gross domestic product (GDP) per capita (by 2250), gross national income (GNI) per capita (by 3921), gross fixed capital formation (GFCF) (by 7.2% of GDP), and the amount of urban population (by 18.9% to total).

Still, India’s tax revenue is 3.6% higher. In addition to that, the countries also have similar foreign direct investment net inflow (about 3.5% of GDP) (Rigi, 2011, p. 126). Unfortunately, India also has a higher annual growth rate of population than China, which affects the quality of life diversely and makes the issue of unemployment more critical. He also emphasizes that both countries have medium human development. In 2010, China was in the 89th position while India ranked 119 with “the value of HDI of China (0.663) greater than of India (0.519)” (Rigi, 2011, p. 126). India felt behind in all dimensions of HDI, including education, health, and gender equality. In this way, China’s supremacy in the sphere of the economy cannot be denied. It seems to be more determined to reach success, and those achievements that are already reached prove that India can enhance its condition if it follows China’s steps. Just like Basu (2009), the author believes that India and China can become equal partners in the future.

Siraj (2011), as well as Bosworth and Collins (2008), says that the fast economic growth of China and India depends largely on their ability to manage human resources. The professionals identify the source of economic development in India as the service sector while China enhances its performance due to manufacturing. Still, the regular wage in these countries is rather low, and it grows slowly so that the population does not benefit from it as it should, which affects the overall quality of life. The existence of unemployment problem cannot also be denied. The situation is likely to improve if India and China pay more attention to its human resources.

Method of Analysis

This paper is mainly based on the qualitative research study that is presented in the form of a structured text. The information for it is obtained with the help of a literature analysis. Those sources that contain up-to-date information about the economic development of both China and India are included in the sample. The information is analyzed using an inductive approach, which ensures the presence of an objective conclusion that is not biased by personal beliefs and ideas.

In addition to that, some parts of the paper focus on quantitative data. The comparison of the two countries’ HDI is maintained on the basis of the information received from the reports and other sources.

Due to the usage of such a methodology, the objectives of the study can be met, and all tasks can be fulfilled. Considering the fact that the focus is to be on economic development, there is a necessity to go back to the time when the countries started to improve their condition and track this process. It can be maintained only when referring to those works prepared by other scientists and professionals in the sphere. Still, comparing the obtained data, this paper reaches individual conclusions.

Of course, it could be possible to focus only on quantitative research and the comparison of the two countries’ HDI. However, then it would be impossible to explore such a broad topic and provide a detailed explanation of economic development observed in China and India.

Analysis

China and India are known today all over the world for their impressive economic growth, observed during the last several years. Their economies are integrated into the world’s markets, which provides them with the opportunity to move forward. China, for example, turned into the main exporter of various goods so that it even passed the USA. However, the country still faces a range of difficulties considering human resources. Its income per capita remains rather low, which affects people’s quality of life and their health. A similar situation is observed in India. The poverty rate is rather high, and a range of job opportunities available for the population is rather limited. In addition to that, the country is just turning into a market economy so that its industrial sector is not well developed yet (Marelli & Signorelli, 2011).

When speaking about the country’s growth and its performance, it is significant to discuss both economic wealth and human welfare. Even though economic and human development is two constituencies of the country’s overall development, they are greatly connected. In particular, HDI indicates the human development of countries, on the basis of its main dimensions. In this way, it discusses “a long and healthy life, measured by life expectancy at birth; the ability to acquire knowledge, measured by mean years of schooling and expected years of schooling; and the ability to achieve a decent standard of living, measured by GNI per capita” (UNDP, 2015, p. 3). With the course of time, professionals also started paying attention to empowerment, sustainability, and gender inequality in this framework (Rigi, 2011).

Six years ago, both countries represented those nations that had Medium Human Development. It was indicated that China’s HDI was greater than Indian’s so that the courtiers ranked 89 and 119 correspondingly (2point6billion, 2010). The life expectancy at birth in these countries differed by almost 10 years so that in India it was only 64 years, which was a critical notification of poor health condition and inability to improve it because of the lack of finances (Rigi, 2011). In addition to that, better results obtained by China can be explained by the fact that it has better educational status, which also means that the population knows more about the way it can stay safe and healthy. Almost all its citizens are able to write while India has just recently exceeded 60% of literacy (India vs. China, 2016). What is more, there are almost twice more teachers in China in comparison to India. Even though some students leave schools all over the world, they rarely do it in primary school. However, while in China this rate is minimal, India is the leader in this framework comparing to other countries with medium HDI. Of course, the majority of them are then not able to receive any well-paid job that can give them a chance to improve their living conditions.

It is also critical to mention that China’s population spends more than twice larger amount of money per capita to meet its healthcare needs and has more educated physicians who are able to make a diagnosis and treat a patient. More beds are available for inpatients who receive treatment in China. Infant mortality, death rate, and HIV among male teenagers and young adults dominate in India, which also supports the main point of view.

Gender discrimination is a critical issue that tends to be successfully dealt with by many developed countries, as females receive an opportunity to work in the same position as men, etc. In order to understand whether a country has a high gender inequality level or not, professionals measure “maternal mortality ratio, reservation for females in parliaments and labor force participation” (Rigi, 2011, p. 127). Considering this aspect, China goes ahead of India, regardless of its communist approaches that are rather conservative. In India, women have only about 10 seats in the parliament, which is more than twice less in comparison to China (Rigi, 2011). In addition to that, the workforce in India constitutes mainly males while China has an almost equal labor force of both genres.

The issue of empowerment is critical for both countries. Even though India and China represent different systems of government, which presupposes that their expectations of people’s actions are not the same just as understanding of freedom and normal behavior. Of course, political freedom in India exists in a more explicit form. In China, for example, a lot of journalists, including foreign ones, were imprisoned. One more problem in this framework that is present in both countries is corruption that can also be considered as a violation of human rights. The information that is available to the general population that leaves in China is totally controlled by the government so that they do not have a chance to reach a wide range of information. In India, this issue exists because of the less developed technological sphere, as many people do not have the Internet and phones (India vs. China, 2016). As a result, people are not empowered to lead their countries to a better future.

The vulnerability of the population also increases because of environmental issues. Carbon dioxide emission in China is a rather critical problem because of manufacturing. Both countries have about 12% of citizens without improved water supply (UNDP, 2010). Only about 30% of India’s population has access to improve sanitation, which leads to the development of various health issues (UNDP, 2010). In China, this issue is not so critical but still, more than 40% of people are affected (UNDP, 2010). Air and water pollution causes deaths in both countries as well.

The general perspective of the discussed issue did not change much during several next years. Still, according to the Human Development Report 2015, HDI of both countries changed to do that China started to represent countries with high human development even though its rank was 90, while India remained among those with medium human development and ranking of 130 (UNDP, 2015). Both countries improve their HDI every year, which can be seen in Figure 1.

Figure 1. HDI of China and India (1990-2014).

In order to compare the current development of China and India, the most current HDI of 2014 can be considered in detail. Figure 2 shows that China tends to have higher points in every component of HDI.

Figure 2. China’s and India’s HDI Components (2014).

Its population receives education at least 2 years longer than people in India, which allows it to obtain more knowledge of how to improve one’s quality of life and health and get a job. In addition to that, better healthcare services improved access to medications, and sanitation increased China’s life expectancy at birth years so that it exceeds India’s for more than 7 years. GNI in China is more than twice higher.

Conclusion

Thus, improved human development leads to an economic one in China faster than in India. Its population has better education, health, and living conditions, which makes it more productive in the sphere of manufacturing, attracts foreign investment, and results in economic development. Even though the progress is not extreme, China and India move forward constantly, maintaining the progress that was previously observed during the 5-10 years just in 1 year. Even though China leads in this race, it still has much to improve, and India is not going to fall behind.

This research shows that economic and human developments are tightly connected. The population’s income that refers to the sphere of the economy has an enormous influence on those dimensions that are discussed in the framework of human development. For example, having no job or/and not enough money, many people from China and Indian countries do not have commonly accepted standards of living; they exist in an unsafe environment, have health issues, etc. All in all, this paper also reveals the human and economic development of India and China in detail, identifying measurement parameters and comparing countries’ achievements, which totally meets the objectives of this research mentioned at the beginning of the paper.

References

2point6billion. (2010). China 89th, India 119th in human development index. Web.

Basu, S. (2009). Comparing China and India: Is the dividend of economic reforms polarized? The European Journal of Comparative Economics, 6(1), 57-99.

Bosworth, B., & Collins, S. (2008). Accounting for growth: Comparing China and India. Journal of Economic Perspectives, 22(1), 45–66.

India vs. China. (2016). Web.

Marelli, E., & Signorelli, M. (2011). China and India: Openness, trade and effects on economic growth. The European Journal of Comparative Economics, 8(1), 129-154.

Rigi, F. (2011). A brief comparison between India and China as emerging economy in Asia. International Journal of Economics and Research, 2(6), 125-130.

Siraj, M. (2011). China and India: A comparative analysis of their integration into the global economy. Real-world Economics Review, 57(1), 60-70.

UNDP. (2010). Human development report 2010. Web.

UNDP. (2015). Human development report 2015. Web.

Zhou, W. (2014). Comparing the economic growth of China and India: Current situation, problems, and prospects. World Review of Political Economy, 5(4), 455-471.

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