Investing in the People of Europe and Central Asia

The Human Capital Project (HCP) is predicated on the conviction that cognitive capital is critical in a world where entrepreneurial and socioemotional skills are required for productive employment. Countries will only build human capital if children survive, are nourished and stimulated, learn skills and  live long productive healthy lives. The Human Capital Index (HCI), launched in October 2018 aims to capture these facets for 157 countries where data is available and where efforts are underway to both refine the index, as well as increase the number of participating countries.

Since its launch, 63 countries have signed up as HCP countries as of July 1, 2019. At the onset, it is important to note that about half them are middle-income countries (MICs), many in Europe and Central Asia (ECA), and they face different issues than low income countries, which are more likely to lack basic education and healthcare services. Investing in the people of Europe and Central Asia through better education, health, and social safety nets matter for greater equity and growth, and strengthens the foundation for them to become more competitive as the nature of work changes due to technology. It is great that these ECA countries are also a part of the HCP, as they make it a truly global project where everyone can aspire to get closer to realizing the full potential of their people.

Middle-income countries in ECA and beyond face specific challenges

Let’s explore a few examples. In Russia, child survival, nutrition and literacy are high. However, Russia recognizes that it has major regional disparities in these areas, particularly skills. Life expectancy has barely grown since the end of the Soviet Union and men still live almost a decade less than women.  The human capital challenges in Russia remain considerable.

The challenges are not limited to ECA countries. While some Latin American countries have achieved important human capital advances, a relative higher number of children remain stunted and fail to acquire basic skills. Non-communicable diseases (NCDs), including obesity, threaten to reverse life expectancy gains, just as NCDs, suicide and the opioid crisis have halted life expectancy gains in much of the US. Finally, aging societies across the world are facing several challenges that affects their human capital and productivity including healthy aging, integrated care and so forth. 

In some countries, many students tested are unable to understand a short story, meaning they could struggle to learn the skills to function in the modern workplace. For instance, a child who starts school at age 4 now in Georgia is expected to complete 12.5 years of school (out of a possible 14) by the time they are 18. These are very strong results. However, when we look at learning-adjusted years of schooling—a new indicator that compares years spent in schools against educational assessment outcomes—the number drops to only 8.9 years of school. These point to important efficiency and distributional issues of services, in this case education, that are affecting the human capital of MICs.

Moreover, most education systems in middle-income-countries (MICs) are still preparing students for industrial jobs, which will decrease in number as technology is changing the nature of work. Instead, we need 21st century skills and motivated self-learners who can absorb social skills and socioemotional learning, integrated with technology.

How we’re working to build Human Capital in Europe and Central Asia

HCP has energized the discussion about Human Capital across the world. Countries like Poland are looking to ‘mainstream’ budgeting for human capital across ministries, and Uzbekistan has committed to join a major international educational assessment—PISA—in 2020.

In other countries, whole-of-government approaches are underway to take Human Capital issues forward. In Georgia, discussions with government counterparts identified several priorities with the World Bank Board approving a new operation designed to respond to this challenge by focusing on innovation and quality of education. Ukraine has also recognized HCP as a priority and the Prime Minister has called for government agencies to operationalize human capital into their priority action plan for 2020. We’ve also engaged with youth communities across the five Central Asia countries, reaching out to university students in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, as the new generation will shape their countries’ future.

We look forward to accelerating our engagement with ECA countries. The HCP can bring ideas and practices from around the world to create a future where each person can have the health, education, and support to achieve their potential.