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Module 11-13b What is Human Development?

At the end of this module, you are expected to:

1. Learn and understand the history of human development
2. Know the roles of trade, industrialization, global governance, aid, and
Philanthropy in human development
3. Learn what are the global flatteners and unflattened

History

Improving people's well-being and enlarging their freedoms and opportunities is the process of
Human Development. It is about the freedom to choose and decide who we want to be, what to
do, and how to live our lives.
The concept of Human Development was developed by Dr. Mahbub ul Haq, a Pakistani
Economist during the 1970s at the World Bank. He posited that the true purpose of
development is to improve people’s lives. He believed that GDP or Gross Domestic Product
measures failed to measure true human progress or well-being. He worked with Nobel Laureate
Amartya Sen and other great economists, and in 1990 he published the first Human
Development Report, commissioned by the United Nations Development Programme.
Central to human development is the Capability Approach, where the concept of capabilities is
the equipment one has to strive for and pursue to have a life of value. Capabilities are the things
that people can do and what they can become; these are what they value for a fulfilling life.
Aside from our own doing, societal conditions and institutions either expand or constrain our
capabilities. Virtually everyone values good health, access to knowledge, and a decent standard
of living. Other capabilities are participating in decision-making that affects people’s lives, a
certain control in one’s living environment, freedom from violence, respect, and time to relax
and have fun.

Certain aspects of the Capability Approach may be linked to Aristotle and Adam Smith. Still,
more recently, Martha Nussbaum and Amartya Sen are credited for their development and
proliferation. At the core of this approach is that “ well-being should be defined by people’s real
and actual opportunities to undertake the pursuits that they desire (often referred to as
‘capabilities to function’) – and through these freedoms, be whom they would like to be.”

In contrast with other theories of well-being that focus on subjective measures or material
things and means such as income, the capability approach prioritizes the actual opportunity of
the ability of "beings and doings."

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 A new approach in advance of human well-being was introduced in the first Human Development
Report of Dr. Mahbub ul Haq. He stated, "The basic objective of development is to create an
enabling environment for people to enjoy long, healthy and creative lives." It also defined human
development as "a process of enlarging people's choices" "and strengthening human capabilities”
that enables people to lead fuller, healthier, and longer lives. The approach focused on people,
their opportunities, and their choices. In this same report, Dr. Mahbub ul Haq presented the
concept of the Human Development Index. It was developed as an alternative to money metrics
like the GDP. It has since then become one of the most widely used metrics that measures well-
being around the world than just indices confined to income. And in some countries, the Human
Development Index is being used as an official government statistic.

Human Development encompasses all aspects of development; it is holistic in its approach. True
development is people-centered, unlike traditional development economics, where development
is the per capita real income growth. Economic growth only becomes a subset of the whole human
development paradigm.

Trade and Industrialization

Foreign trade actually came ahead of industrialization by thousands of years. Nations or people
from communities or islands traveled far and wide just to trade, as evidenced by the travels of the
early explorers.

Industrialization began around the middle of the eighteenth century in Great Britain. It involved
innovations in iron smelting, the invention of the steam engine, the production of steel and railways,
steamships, and other transport, among others. Industrialization boosted trade, and the trade
spread industrialization to other nations. From the start, industrialization has involved the
interaction of three things technology, specialization, and trade. This interaction is the catalyst of
structural change within economies.

Trade and industrialization are integral to human development, even if they are mainly related to
economic growth; their ensuing opportunities enlarge people’s opportunities and choices for better
well-being. Economists and policymakers agree that governments in developing countries need to
provide the infrastructure, promote market efficiency, and foster a stable macroeconomic
environment to ensure that trade and industrialization happen in and outside their country.

Global Governance
The UN Millennium Summit held last September of the year 2000 adopted 8 Millennium
Development Goals or MDGs. It is a set of time-bound and measurable goals. It did not list
economic growth, which means that it is only a means to achieve development targets and not
an end in itself.
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World leaders adopted the Millennium Declaration and agreed on a set of ambitious development
goals and targets to be achieved by 2015. The Millennium Development Goals (MDGs) involve
eight goals and represent a holistic approach to development with targets in the areas of
economic, social, health, education, gender, and the environment.

These are:

1 Eradicate extreme poverty and hunger

2 Achieve universal primary education
3 Promote gender equality and empowering women
4 Reduce child mortality
5 Improve maternal health
6 Combat HIV/AIDS, malaria, and other diseases
7 Ensure environmental sustainability
8 Develop a global partnership for the development

Aid and Philanthropy

Love of humanity is the broad definition of Philanthropy. It is where private resources are
voluntarily mobilized to meet human needs, alleviate suffering, and tackle the systemic challenges
that hinder human development. Through the institutions of civil society, Philanthropy becomes
a contributor to social change and advancement. These institutions range from small community
foundations to large private and professional grant-makers. These grant-makers and social
investors respond relatively quickly and provide a source of funds for new ideas. An appropriate
scale of support to community development can be realized.

For aid and Philanthropy to succeed, it needs an infrastructure or an environment that

possesses five main features:

1) a legal framework that empowers

2) a tax structure that provides incentives
3) an accountability system that builds confidence in Philanthropy and civil society
4) sufficient institutional capacity to implement effective activities
5) enough resources to undertake activities

Previously seen as a marginal player in international cooperation discourse, Philanthropy now

plays a growing role. Philanthropy flows or aid is ever increasing as a proportion of overall
financial flows. Grant-making combined with new forms of social investing attracts the interest
of development agents. Philanthropy has much to contribute to development.

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 As an expression of human generosity, the culture of giving is present in every culture and
reflects the world’s cultures and religions. Global Philanthropy is central to the sustainability of
global civil society.

Global Flatteners and Unflatteners

‘The World is Flat: A Brief History of the Twenty-First Century, a book by Thomas Friedman
(2007), proposes and emphasizes that due to certain events and developments, the world is
becoming flat. This is metaphorical in nature where he meant that the world is becoming more
of a level playing field when it comes to business for every country or company. Equal
opportunities to compete are given to each. Flatteners are what Friedman calls these events and
developments. For Friedman, ten flatteners made the business field the way it is today, where
geography and history are marred.

The coming down of the Berlin Wall on the 11th of September 1989 (Beck, 2000) is the first
flattener. The Cold War has ended, and countries, companies, and individuals are able to join
the economic mainstream - capitalism. Countries that allow connections and trades to prosper
showed an increase in interdependence. Friedman called the period of the 90s ‘The New Age of
Creativity because of the opportunity of each individual to access and share information through
computers.

The second flattener is Netscape going public (Beck, 2000) and introducing new tools such as
web browsers and the Internet. The world has become smaller because the Internet eliminates
physical barriers. Communication and transfer of information through long distances are made
faster and easier.

The third flattener is “the existence of a wide range of software standards that allows every
individual to do more using their computers (Boudreaux, 2008)”. This workflow software of
codes is the language of computers that makes it possible for the said computers to send,
receive, and read data anywhere in the world.

The fourth force is the ability to upload information and content from the computer onto a
network (Boudreaux, 2008). Through open-source software like Wikipedia and YouTube, every
individual can be an actual contributor or creator of new information. However, according to
Friedman (2007), creating and uploading information can be very disruptive. Nobody really
knows if the information is true or false. It may also lead to the downfall of many companies.

Third-party sub-contracting to cut costs and increase efficiency has been the trend for more and
more companies. Outsourcing (Eriksen, 2007) is the fifth flattener. Whether it be the
distribution of services or manufacturing products, outsourcing is the way for companies to
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perform better and save money. This endeavor is made easier through the installation of fiber
optics cables worldwide, which makes information and data transfer faster.

The sixth flattener is offshoring (Eriksen, 2007). When the production plant of a company is
moved from one country to another, it is called offshoring. This happens because of several
reasons, like lower taxes or cheaper labor.

Supply chaining is the 7th flattener (Holmes, 2008). Supply chaining is increasing the connection
between suppliers, retailers, to consumers. Boundaries between consumers and manufacturers
are virtually eliminated or minimized. Coupled with the use of advanced technology, supply
chaining is found to be one of the best methods to promote efficiency.

The 8th flattener is insourcing (Holmes, 2008). This happens when one company hires another
company to handle its supply chain.

The 9th flattener is informing (Scholte, 2005). It deals with the easy access to obtaining
information specifically provided by the World Wide Web through various search engines. A lot
of power is placed into the people's hands, all with just a click of the mouse.

The 10th and final flattener is called the steroids (Waters, 2001). According to Friedman, there
are three types of steroids. The ever-changing trends in computer technology are digital
steroids. Mobile steroids allow users to work from anywhere, such as wireless Internet, and
personal steroids are when inventions are cheap and small enough to be utilized by individuals.

But many experts believe that Friedman’s ten flatteners are somewhat lopsided because he has
only concentrated on the effects of globalization in the economic field. To provide a thorough
conclusion on the ways globalization affects a country, political and social sectors should also be
taken into account.

According to experts, there are also seven unflatteners that do not make the word flat or create
an imbalance. These are:

Poverty – is the main cause of global inequality. As long as it exists, there will be no flat world

USA vs. World Economy – the world is generally dependent on the US Dollar, creating an
imbalance in the world economy

Half flat world – this is when local governments fail, which could be due to corrupt officials or
mismanaged governments

Middle East – the never-ending wars in the Middle East and the threat of terrorism worldwide
could set up walls in different countries.

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Digital Divide – people are either connected to the Internet or not, creating division and
imbalance.

Suppression – suppression from within the family, culture, or governments

Tribalization – a strong cultural and personal identity could lead to misunderstanding and could
lead to wars when taken to the extreme. An example could be the ongoing tensions in the South
China Sea, territorial disputes of countries could trigger wars, and there is a definite imbalance
as to who is more technologically advanced in weaponry.
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References and Supplementary Materials

Online Supplementary Reading Materials

About Human Development;

http://www.measureofamerica.org/human-development/
About Human Development;
http://hdr.undp.org/en/humandev
Human Development: Meaning and Objectives
http://www.economicsdiscussion.net/human-development/human-development-
meaning-objectives-and-components/11754

https://openknowledge.worldbank.org/bitstream/handle/10986/5970/9780195205633_c
h01.pdf

https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr03_chap2a_e.pdf

http://civicus.org/images/SOCS2015_ESSAY19_PhilanthropyInfrastructure.pdf

Friedman’s Ten Flatteners and their influence on Asian Countries;

https://ncys82.wordpress.com/2013/03/15/friedmans-ten-flatteners-and-their-influence-
on-asian-countries/; the 15th of March, 2013

How Flat is Flat?;

http://slideplayer.com/slide/10749553/

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