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In a pandemic, investment in human capital is a key priority for Kazakhstan

October 6, 2020

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A healthy, well-educated and skilled person has the opportunity to reach their full potential and thus contribute to the prosperity and development of society. Jean-François Marteau, World Bank Resident Representative in Kazakhstan, said this at an online event dedicated to human capital development.

He said that Kazakhstan is performing relatively well in the Human Capital Index (HCI) for 2020. Since 2010, the value of the HCI in Kazakhstan has increased from 0.59 to 0.63. This means that a child born in Kazakhstan before the outbreak of the pandemic can achieve an average of 63% of its potential level of productivity. Although the index shows a number of achievements made over the past decade, the quality of education in the country has declined, according to the international financial institution. This figure is on average lower than in Europe and Central Asia, but higher than in upper-middle-income countries.

The World Bank established and first applied the Human Capital Index in 2018. It measures the level of knowledge and skills that a child now born can acquire by age 18, taking into account the risks associated with the education and health system in a particular country.

The World Bank predicts the global average of potential productivity for a child born in 2020 could reach 56% upon reaching adulthood. However, these calculations reflect the situation in countries prior to the outbreak of the COVID -19 pandemic.

The HCI indicator in Kazakhstan increased mainly due to an improvement in the survival rate of the adult population to 84%, as well as a decrease in the level of developmental delay among children under 5 years of age (92% of children do not have developmental delays), according to the presented World Bank survey.

It is clear that the pandemic will negatively affect health and education.
“According to our recent estimates, 7 out of 10 students in Kazakhstan may turn out to be functionally illiterate, that is, they will not have enough skills and competencies that allow people to succeed in modern society. This is a consequence of the loss in training as a result of COVID -19, which will reduce the expected income of this group of people by about 2.9% and can lead to total economic losses of up to $ 1.9 billion per year, "the head said during an online event. World Bank's Global Education Practice for Europe and Central Asia Harry Patrinos.

According to him, vulnerable groups of the population, including students from a disadvantaged socio-economic environment and students with disabilities, will continue to lag behind in terms of indicators. He explained that the decline in the level of human capital would differ depending on the socio-economic conditions of the child. A child born to 20% of the richest families has a chance of reaching 64% of his potential productivity, while a child born to 20% of the poorest families will reach 53% of his potential, said Harry Patrinos.

Susanna Hayrapetyan, Head of Human Capital Programs at the World Bank for Central Asia, noted that the gap in academic performance between the richest and the poorest students has not ceased to decrease since 2010. This is a positive factor. “16% of students from the poorest segments of the population in 2020 showed academic performance that is 25% of the highest academic performance, up 11% on average in the OECD,” she said. Thus, poverty should not be an obstacle to academic achievement, and every child, with proper government policy in terms of providing quality education, can have good results.

The representative of the Center for Research and Consulting (CRC) Kuanysh Zhaikov believes that when calculating the human capital index, two important factors were underestimated that go beyond education and health: values within society and the spatial aspect. Especially if we look through the prism of countries' modernization. Such conclusions were drawn based on the analysis carried out by his organization.  

“For countries such as Kazakhstan, such international indices should be used with maximum caution, because Kazakhstan is a very large country, whose population is dispersed around the perimeter. When we compared the socio-demographic indicators of the HC, we found that in different parts of the country, in fact, we have formed different human capital. For example, the difference between the richest and the poorest regions is 4 times, in developed countries - 1.5-2 times,”explained Kuanysh Zhaikov .  

One of the advantages of measuring the human capital index is that the state can control the stage of formation of its citizens up to the age of 18.

“But the problem is that children are not only the state and the education system, they are also their parents with their values, motivation and behavior, they simply do not transform. And we are moving away from human capital into the classical socio-economic policies of the state in order to change their values, to give them a different experience. These are liberalization, decentralization, urbanization, digitalization, etc.,”the expert explained.

According to Jean-François Marteau, World Bank Resident Representative in Kazakhstan, Kazakhstan needs to continue to invest in human capital development to maintain the pace of transformation even in difficult macroeconomic conditions and taking into account the threats to public health in a pandemic.

“The World Bank will continue to assist the country in its efforts to strengthen human capital through projects aimed at improving citizens' health, modernizing the education system, stimulating innovation, developing skills and more,” he stressed.

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