All pre-launch materials for the Human Development Report 2010 are confidential and meant for

the exclusive use of UNDP offices. The embargo release is 4 November 2010, 10:00am EST.
Please do not cite or circulate.

Human Development
Report 2010

The Real Wealth of Nations:

Pathways to Human Development

Frequently Asked Questions about the

2010 Human Development Report
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

Frequently Asked Questions about the 2010 Human Development Report

What is the purpose of the Human Development Report?

The Report’s ultimate goal is to help advance human development. As the first Human Development
Report in 1990 simply and eloquently asserted in its opening sentence,” the real wealth of a nation
is its people.” The 2010 Report reaffirms the basic concept of human development as the expansion
of people’s freedoms to live long, healthy and creative lives, advance other goals they value, and
engage actively in shaping development equitably and sustainably on a shared planet. This year’s
Report seeks to demonstrate that the human development approach remains as vibrant, flexible
and relevant as ever, providing invaluable new insights and policy guidance for the challenges of
the 21st century.

How is the Human Development Report independent from UNDP and the United Nations when
it is endorsed by UNDP’s Administrator and launched by UN offices around the world?
Since its inception in 1990, the Report has been intellectually and editorially independent, and
often provocative, though with firm grounding in empirical research. The Human Development
Report is commissioned by UNDP but does not represent UN policy, nor the views of UNDP’s
executive board or management. The Report depends on statistics from a wide array of UN and
other multilateral agencies, but its analysis and conclusions are the product and responsibility of
the Report’s authors alone.

What has been the impact of the Human Development Report?

With its wealth of empirical data and innovative approach to measuring development, the Human
Development Reports have had a profound impact on development thinking around the world.
They have prompted and informed discussions and debates, and have pioneered ideas that have
since become widely accepted. For example, a need for the Millennium Development Goals (MDGs)
can be traced back to the 1991 Report on financing development. Human security, the theme of the
1994 Report, was also in many ways ahead of its time. Looking at issues around environmental
sustainability in terms of development and impacts on people are found in several Reports. In
addition to the global Human Development Reports, related themes have been explored in more
than 600 national and regional reports.

What is new in the 20th anniversary edition of the Human Development Report?
The 2010 Human Development Report shows new insights on human development trends and
patterns in 135 countries over 40 years as part of a systematic review of the Human Development
Index. The Report shows that human development achievements are possible even without fast
growth and income increases, particularly due to technological gains and changes in societal
structures. The trends analysis also shows that many of the countries improving the most in human
development over 40 years – the “Top HDI Movers” – are very different from a conventional list of
national development successes. The Report demonstrates that there is enormous diversity of
experience, even from similar starting points, with institutions, policies and politics all playing a
role in explaining trends in human development.

The 2010 Report casts important new light on the major challenges that persist even in countries
that have registered good overall gains in human development. The Report presents a refined
Human Development Index (HDI) and introduces three new indices designed to systematically
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

capture disparities and deprivation: Inequality-adjusted Human Development Index, Gender

Inequality Index and Multidimensional Poverty.

Is the human development approach still relevant?

The 2010 Human Development Report shows that the approach is as relevant as ever to making
sense of our changing world and finding ways to improve people’s well-being. Human development
is an evolving idea, not a fixed, static set of rules – as the world changes, analytical tools and
concepts evolve. Thus, the Report is about how the human development approach can adjust to
meet the challenges of the new millennium. It is committed to concentrating on what remains
undone, what demands most attention in today’s world – from poverty and deprivation to
inequality and insecurity. The Report will continue to push the frontiers in development thinking
with new ideas and innovations to address major global challenges to human development.

Are there any changes to the 2010 Human Development Index (HDI) from previous years?
The HDI has been refined using better indicators than was available for most countries when the
HDI was introduced in 1990. The new HDI retains the three basic dimensions of education, health
and income, but adjusts or replaces some of the indicators within these dimensions.

In education, expected years of schooling for school-age children replaces gross enrolment, and
average years of schooling in the adult population replaces adult literacy rates, to permit deeper
understanding of education levels. The indicators were changed for several reasons. For example,
adult literacy as used in the old HDI is an insufficient measure for getting a complete picture of
education achievements, especially since many countries have attained universal literacy. By
including average years of schooling and expected years of schooling, one can capture recent
changes in education and school enrolment.

Gross National Income (GNI) per capita replaces Gross Domestic Product (GDP) because this
captures the income accrued to residents of a country, including international flows such as
remittances and aid, and excluding income generated in the country but repatriated abroad. As
shown in the Report, large differences could exist between the income of a country’s residents,
measured by GNI or GDP.

Life expectancy remains the indicator for health.

For more information, please see the 2010 HDI FAQs

Removing literacy rates and adding mean years of schooling in the HDI education indicator
has changed many countries’ overall HDI rankings this year. Does this new indicator penalize
some developed countries where technical training after secondary school is often done within
professional institutions, or the private sector, rather than at the university level? Under the
refined HDI, expected years of schooling for school-age children replaces gross enrolment, and
average years of schooling in the adult population replaces adult literacy rates, to permit deeper
understanding of education levels. The indicators were changed for several reasons. For example,
adult literacy as used previously in the HDI is an insufficient measure for getting a complete picture
of today’s educational field. By including average years of schooling and expected years of
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

schooling, one can capture recent changes in education and school enrolment, as well as get a better
idea of a country’s human capital.

For many countries, however, vocational and technical training programmes are not included in
expected years of schooling for the adult population because they are not considered university
level schooling. This may be the case in many developing countries, but for Australia, Denmark,
Canada and other developed countries, vocational and technical education programmes, including
nursing and engineering, are considered part of post-secondary adult education.
The 2009 HDI covered 182 countries. Why does the 2010 HDI only include 169?
Data availability determines HDI country coverage. Where reliable data are unavailable and there is
significant uncertainty about the validity of existing data estimates, countries are excluded to
ensure the credibility of the Human Development Report.

Some countries were dropped from the HDI because of a lack of GNI data (Cuba, Iraq, Marshall
Islands and Palau), while other countries have been dropped because of lack of data on mean years
of schooling, which is one of the new components in the education dimension.

The countries omitted from the 2010 HDI are: Antigua and Barbuda, Bhutan, Cuba, Dominica,
Eritrea, Grenada, Lebanon, the Occupied Palestinian Territories, Oman, Saint Kitts and Nevis, Saint
Lucia, Saint Vincent and the Grenadines, Samoa, Seychelles and Vanuatu. Micronesia entered the
HDI tables for the first time this year, while Zimbabwe re-entered after being excluded in 2009 due
to income data problems. We expect to be able to include more countries in the 2011 HDI.

Cuba has been in the HDI since 1990. Is this the first year Cuban income data was unavailable?
Cuba’s GNI and GDP are not estimated officially by the World Bank or IMF. In the past, GDP per
capita (PPP US$) was estimated by the Center for International Comparisons of Production, Income
and Prices (ICP) at the University of Pennsylvania to calculate the HDI for Cuba. These estimates
rely on data from assumed price levels that are converted using the official exchange rate. However,
because the markets in which foreigners purchase goods and services tend to be separated from the
rest of the economy, such estimates do not well reflect the prices faced by people in practice. The
ICP recognizes this limitation and has graded its latest estimate of Cuba’s GDP as a “D” – the lowest
grade. It was also the judgment of Human Development Report Office (HDRO) that this current
estimate was not sufficiently reliable. This is why Cuba is not in the 2010 HDI. The HDRO hopes to
include Cuba in future HDIs as the quality of data improves.

For more information, please see the 2010 HDI FAQs

The United States was ranked 13th on the 2009 HDI but 4thon the 2010 HDI. How is this
possible? First, it must be noted that the 2009 HDI is not comparable to the 2010 HDI because of
the different methodology and indicators. Using the same method and indicators as in 2010, there
has been no improvement in the US ranking over time – in fact the US has fallen in rank over time.
Second, the new indicators and method mean that the US performs better than under the previous
approach. This is mainly due to the education indicator: the use of mean years of schooling instead
of literacy was the main driver of the increased rank. The mean years of schooling in the United
States is 12.4 years, only 0.2 years behind top-ranking Norway; whereas when literacy was used, 25
developed countries had a literacy rate of 99 percent, so that literacy could not discriminate
between them. Previous versions of the HDI capped income at US$40,000, but the US and other
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

countries had higher incomes. This year the income cap was removed. However, lifting the cap on
income for the US plays only a minor role. There are seven countries with higher incomes that are
ranked lower than the US (Liechtenstein, Luxembourg, Singapore, United Arab Emirates, Brunei
Darussalam, Qatar and Kuwait). Even if the income was capped at US$51,300 (equivalent to
PPP$40,000 in 1998, expressed in $PPP2008 dollars), the US would stay in the 4th position.

For more information, please see the 2010 HDI FAQs

What is the “hybrid HDI”?

The hybrid HDI is a different version of the HDI that applies the same aggregation formula as the
new HDI, but to the same set of indicators as in the previous HDI – life expectancy, adult literacy,
gross enrolment ratio and GDP per capita. It is used in the 20th anniversary edition of the Report for
analysis of HDI trends since 1970 because there is much more historical data available. The 135
countries covered in this analysis represent 92% of the world’s population.

For more information, please see the 2010 HDI FAQs

In the long-term trends analysis between 1970 and 2010, only 135 countries are evaluate and
the missing countries include Afghanistan, Iraq and Sierra Leone and others affected by
conflict and natural disasters. Are the overall results representative?
Many countries are missing, primarily due to data constraints – however the 135 countries
evaluated in the HDI trends analysis represent 92% of the world’s population. Among the countries
missing are not only low human development countries like Afghanistan but also high human
development countries like Germany. Our analysis suggests that the trends for the group of 135 are
representative of the world as a whole.

Why is Oman the top mover on the HDI trends analysis over time, but not part of the 2010 HDI?
The HDI trends analysis or hybrid HDI notes that the top HDI movers – countries that have made
the greatest progress in HDI improvements – include well-known income “growth miracles” such as
China and South Korea, but they include other countries, such as Nepal, Tunisia and Oman, where
progress in non-income dimensions of human development (health and education) has been
equally remarkable. It is striking that the top 10 list of movers contains several countries not
typically described as top performers. Oman has had the fastest progress in the HDI. Abundant oil
and gas were discovered in the late 1960s, so our data captured the evolution from a very poor to a
very rich country, showing a quadrupling of gross enrolment and literacy rates and a 27-year
increase in life expectancy. Unfortunately, however, Oman was not part of the 2010 HDI rankings
because data for mean years of schooling were not available.

For more information, please see the 2010 HDI FAQs

Why are there no top movers in the Latin American and Caribbean region?

Guatemala, the highest ranking 'top mover' in Latin America, ranks just twenty-second in our list of
'top movers' globally. However, HDI in the Latin American and Caribbean region rose by almost
one-third from 1970 to 2010 (from .58 to .77). We underline that this improvement is better than
would have been predicted given its 1970 starting point.

What is the relationship between the HDI and the Millennium Development Goals?
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

The MDGs are a set of goals adopted by the UN General Assembly to reduce poverty, hunger,
disease, illiteracy, environmental destruction and gender discrimination, and to commit the
international community to an expanded partnership for development by 2015.

The human development paradigm and the MDGs are complementary because both aim to improve
people’s lives. When first developed, the MDGs drew on the human development framework by
looking at health and education indicators to measure progress. Early Human Development Reports
urged the adoption of agreed international development priorities supported by consistent
empirical indicators. Many contributors to the Reports contributed to the conception of and
continuing advocacy for the MDGs, such as Jeffrey Sachs, the Secretary-General’s advisor for the
Millennium Development Goals.

What has been the impact of the global financial crisis on the HDI and development in general?
The recent global financial crisis and the East Asian financial crisis of 1997-1998 remind us that
progress is not linear, even for countries that perform well. Economic crises can throw countries off
track. Clearly, the global financial crisis affected and continues to affect human development.
Unemployment and poverty worsened sharply: 34 million people lost their jobs and 64 million
more people fell under the US$1.25 a day poverty threshold. This stands on top of the 160-200
million people who fell into poverty as a result of higher commodity prices in the preceding years.
In 2010, unemployment averaged 9 percent in developed countries and reached 10 percent in the
US and 20 percent in Spain. Recovery started in 2009, but is by no means assured: the risks of
“double-dip” recession and “jobless growth” remain, and full recovery could take years. The
consequences of crises can persist even after growth returns because the labour market typically
lags behind output in a recovery. Large increases in poverty are common in financial crises. The
effects of crises on human development go beyond income, and can last longer. For example, poor
families may decide to take their children out of school, to the detriment of children’s future
opportunities.

Despite its harsh effects, it is important to view the current crisis from a long-term perspective. This
crisis was the worst since the Great Depression only for developed countries. Most developing
countries saw much worse declines in the early 1980s, and some – like China and India – have
continued to grow robustly. Indeed, world output is projected to be 1 percent higher at the end of
2010 than before the crisis. Our estimates also indicate that life expectancy and enrolment
continued to increase, yielding a world HDI in 2010 of 0.68, 2 percent higher than in 2007. In
developed countries, however, the HDI has grown only slightly, as large drops in income have offset
gains in health and education.

Why is the Multidimensional Poverty Index (MPI) a complementary measure of poverty to the
the dollar a day figures used to monitor MDG 1? The MPI complements but also goes beyond
what is assessed by the MDGs to delve deeper into poverty. It directly measures overlapping
deprivations in health and educational outcomes as well as key services such as water, sanitation
and electricity. It reveals not only how many people are poor but also the composition of their
poverty. Eight of these 10 indicators are used in the MDGs that address these non-income aspects of
poverty. The MPI also reflects the intensity of poverty – how many deprivations that each
household faces at the same time.
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

A household is identified as multidimensionally poor if, and only if, it is deprived in some
combination of indicators whose weighted sum exceeds 30 percent of deprivations. The
dimensions, indicators and deprivation criteria are presented below:

1. Health (each indicator weighted equally at 1/6)

Child Mortality: If any child has died in the family
Nutrition: If any adult or child in the family is malnourished
2. Education (each indicator weighted equally at 1/6)
Years of Schooling: If no household member has completed 5 years of schooling
Child Enrolment: If any school-aged child is out of school in years 1 to 8
3. Standard of Living (each of the six indicators weighted equally at 1/18)
Electricity: If household does not have electricity
Drinking Water: If it does not meet MDG definitions, or is more than 30 minutes walk
Sanitation: If it does not meet MDG definitions, or the toilet is shared
Flooring: If the floor is dirt, sand or dung
Cooking Fuel: If they cook with wood, charcoal or dung
Assets: If they do not own more than one of: radio, television, telephone, bike, motorbike

The 10 indicators are almost the only set of indicators that could have been used to compare about
100 countries. In fact, one of the main lessons of this first exercise of estimating multidimensional
poverty for developing countries is the urgent need for investments in data to better capture the
broader aspects of poverty.

For more information, please see the MPI FAQs

What is the rationale behind the Gender Inequality Index ? and why replace the Gender-related
Development Index (GDI) and the Gender Empowerment Measure (GEM)?

Gender remains a major dimension of inequality around the world – and needs to be monitored.
Reproductive health was chosen as a dimension because the well-being of women during childbirth
is intrinsically important and a clear signal of women’s status in society. The indicators for
reproductive health are maternal ratio and adolescent fertility rate. Empowerment was chosen
because women have traditionally been disadvantaged in the political arena, and higher
educational attainment expands women’s freedoms. The indicators for empowerment are the share
of parliamentary seats held by each sex and the levels of attainment at secondary and higher
education. Labour market participation is another way of assessing women’s status in a society.
This is why female labour market participation rate was chosen as an indicator because both the
employed and unemployed (those actively looking for work) as well as those seeking part-time
work are captured. Labour force participation, however, neglects occupational segregation in the
labour market and the gender wage gap. The choice of indicators for the Gender Inequality Index
was limited by data availability; the expectation is that the Index’s design can be improved over
time.

The introduction in 1995 of the GDI and GEM coincided with growing international recognition of
the importance of monitoring progress in the elimination of gender gaps in all aspects of life. While
the GDI and the GEM have contributed immensely to the gender debate, they have conceptual and
major empirical limitations and thus have been replaced this year by the Gender Inequality Index.
All pre-launch materials for the Human Development Report 2010 are confidential and under strict
embargo until their release is 4 November 2010, 10:00am EDT.
Please do not cite or circulate.

Estimated for 138 countries, the Gender Inequality Index shows the extent and nature of disparities
between men and women, and key national and regional patterns. The Gender Inequality Index is a
tool to inform advocacy and policy debates about gender disparities.

For more information, please see the GII FAQs

What is the main insight from the Inequality-adjusted Human Development Index (IHDI)?
The main insight of the IHDI is that inequalities happen in dimensions beyond income, and the gaps
in inequality in these other dimensions are often as wide if not wider than in income, especially in
developing countries. Thus, to continue the focus on income only – as is common – misses the larger
issues of inequality within a society, which the IHDI attempts to capture in a broader societal
context.

How is the Inequality-adjusted Human Development Index (IHDI) different from the Gini
coefficient and Gini index? The Gini coefficient is a commonly used measure of inequality, but has
the disadvantage that the measure is not consistent for all subgroups. Moreover, the Gini index does
not emphasize the lower part of the distribution, but instead places the same weight throughout the
distribution. For more information, please see the IHDI FAQs