Last updated on November 29, 2021
Koreans like to follow international rankings that show where Korea stands in relation to other countries.
During the boom years, Koreans followed the steady rise in Korea’s GDP ranking with interest and pride. In recent years, weaker than expected rankings in national competitiveness have hastened economic reforms.
For all the interest in rankings, the Human Development Index (HDI) introduced by the United Nations Development Program (UNDP) has received little attention. In 1990, Pakistani economist Mahbub ul Haq and a number of other noted economists developed the index to “to shift the focus of development economics from national income accounting to people centered policies.” Drawing on the work of Nobel laureate Amartya Sen, the index aims to promote the idea that human well-being, not wealth accumulation, should sit at the center of discussions of “development.”
From 1990 to 2009, HDI was based on three components: life expectancy, education, and per capita GDP. The education component was based on adult literary and an index of gross enrolment in educational institutions. From 2010, the education component of HDI was revised, with a “Mean Years of Schooling Index” and an “Expected Years of Schooling Index.”
The GDP component was changed to account for gross national income (GNI). The theory behind the revised 2010 is that development should be defined broadly as “a long and healthy life,” “access to knowledge,” and a “decent standard of living.”
Though HDI has contributed much to shift discussions of development away from measures of wealth, it has not addressed democratic development and ecological considerations. Critics of the HDI argue that the components are arbitrary and that they do not provide an adequate measure of individual well-being. To address the issue of democracy, the Democracy Index developed by the Economist Intelligence Unit is frequently used with HDI.
According to the 2010 Human Development Report, which was released in June 2011, Korea ranked No. 12 out of 170 countries surveyed. That is an outstanding achievement. Korea now ranks one above Switzerland and one below Japan. Korea ranks higher than many countries, such as Denmark, Finland, and France, which are considered models for advanced development in various fields.
In Asia, it ranks second only to Japan. Using the revised 2010 formula for calculating HDI, Korea has made steady progress since 1980, when it ranked No. 34. By the 1988 Olympics, it ranked No. 29 and by 1995, it ranked No. 25. It continued to rise, despite the economic crisis of the late 1990s, reaching No. 22 in 2000 and No. 20 in 2005. In 1980, Japan ranked No. 10, but dropped a notch to No. 11 in 2010.
Of the three components of HDI, Korea is the strongest in health, followed by education and then GNI. Long life expectancy and access to good healthcare have helped Koreans live longer and healthier lives. Strong social support for education has given Korea high levels of educational attainment at all levels.
The 2010 Democracy Index, meanwhile, revealed that Korea ranked No. 20 out of 167 countries surveyed and was classified as a “full democracy.” The United Kingdom, the birthplace of parliamentary democracy ranked No. 19, and Japan was the only other Asian country to be classified as a “full democracy.” Considering that democratization began in the late 1980s, this, too, is an outstanding achievement. In 2006, the same index classified Korea as a “flawed democracy” and ranked it No. 31.
Korea in 2011 thus finds itself ranked one of the most developed and democratic countries in the world. Considering its population, Korea’s achievement is even more amazing. Among nations with a population of about 50 million or more, only the United States, Germany and Japan rank higher than Korea in HDI and only Germany, the United States, Spain and the United Kingdom rank higher in the Democracy Index.
Ironically, Koreans are not aware of their nation’s successes. They know that Korea has gone from rags to riches, but still feel that it is behind, that has yet to join the ranks of advanced nations. Why is this? And what does it mean?
A look at the economic component of HDI offers a possible answer. The 2010 Human Development Report was the first to include an inequality-adjusted HDI that aimed to give a better measure of individual well-being. When adjusted for inequality, Korea dropped from No. 12 to No. 27.
The 15-place drop is the largest among nations considered as “very highly developed.” The other top ranking country with a large loss was the United States, which dropped from No. 4 to No. 12. Except for Ireland and Italy, all European countries moved up in rank when inequality was factored into HDI.
Though Korea and the United States differ in many ways, they have a common problem with inequality and, equally important, the perception of inequality. Developing a European-style social safety net may help improve inequality, but it comes at an increasingly high cost, as the ongoing turmoil Europe shows.
With debt still low and a keen ability to learn from the missteps of others, Korea has the potential to create a new model of “sustainable equality” for others to follow.