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FEATURE STORY October 22, 2018

At 74 on the Human Capital Index, Sri Lanka leads South Asia


Story Highlights

  • Investing in people early, and often, can lay a strong foundation for the growth and competitiveness of nations.
  • At 74 on the new Human Capital Index, Sri Lanka leads the South Asia region.
  • For Sri Lanka the main areas of concern are the nutrition challenges associated with stunting, and the importance of improving learning outcomes.

Yasuri Chamathka is only 4 years old. She lives in Horana, Sri Lanka, with her parents Neel and Sanjeevani. The little girl attends a nearby Montessori, where her teacher says she is one of the brightest children in class. What will Yasuri grow up to be? How long will she stay in school? When she graduates, will she be in good health, ready for further learning or work? 

In 2017, the World Bank announced the Human Capital Project. Human Capital – essentially the knowledge, skills, and health that people accumulate over their lives – can determine how effectively countries compete in the global economy.

With the project underway, the Bank released its new Human Capital Index (HCI) this October. Measuring productivity-related human capital outcomes, the index was designed to serve as a crucial resource for both policymakers and citizens.

In Yasuri’s case, it means considering not only what her chances were of survival as an infant but whether Neel, Sanjeevani and the state invested sufficiently in early childhood education to hardwire her for success. The index also measures student learning and adult health to arrive at a national ranking – giving us a glimpse of what Yasuri’s future might look like.

Investing in human capital is an urgent task

The report reveals that 56 percent of children born today across the world will lose more than half their potential lifetime earnings because governments are not currently making effective investments in their people to ensure a healthy, educated, and resilient population ready for the workplace of the future.

Nearly a quarter of all young children are stunted (low height for their age) and a learning crisis is holding many countries back. Half the world’s population cannot access essential health services, and many are pushed into poverty each year because of out-of-pocket health expenses.


Sri Lanka’s HCI is higher than could be expected for its income level

The report ranked 157 economies on parameters like child mortality, health and education.

Topping the index is Singapore, which boasts a robust universal health care system, good education exams results, and high life expectancy figures. In second place comes South Korea, followed by Japan, Hong Kong and Finland.

Between 2012 and 2017, the HCI value for Sri Lanka remained approximately the same at 0.58. As in 2017, Sri Lanka’s HCI this year is higher than the average for its region and income group. Children here can expect to complete 13 years of pre-primary, primary and secondary school by age 18.

Sri Lanka has consistently had higher human capital outcomes compared to its income level,” said Harsha Aturupane, Lead Economist, Education Global Practice at The World Bank. He added: “This can mainly be attributed to good policy attention to human capital development by successive governments over a long period of time.”

The cost of inaction is going up

Explaining that the report highlights the continuing importance of investing in human capital, Harsha Aturupane adds that “For Sri Lanka the main areas of concern are the nutrition challenges associated with stunting and the importance of improving learning outcomes of children.”

The report also notes that when the years of schooling (estimated to be 13, by age 18) are adjusted for quality of learning, it is only equivalent to 8.3 years: this learning gap of 4.7 years requires attention.

The goal now must be to have more and better investments in people. Countries can strengthen their human capital strategies and investments to enable rapid improvements in outcomes.

It is in this context that the new Human Capital Index sets out to offer an appropriate analytical framework, presenting the clear evidence countries can use to make the choices that will secure their future and empower their youth and future citizens.