17 December 2015

TL's Human Development Index dropping, but data is lacking

The United Nations Human Development Program (UNDP) just released its 2015 Human Development Report, with statistics and rankings for nearly every country in the world. The report calculates a Human Development Index (HDI) – combining measures of income (GNI per capita), health (life expectancy) and education (years of schooling) – to assess how people are doing. The results are discouraging for Timor-Leste: our HDI is 0.595, ranking 133rd out of 188 countries and territories. Even worse, our HDI has dropped steadily since 2011.

Download the report textstatistical annex (Excel)Country Profile for Timor-Leste, and Explanatory Note for Timor-Leste.

Although the HDI was created as an alternative to Gross Domestic Product (GDP) which would consider quality of life as well as money, it does not work this way for this country. Unfortunately, UNDP has no health or education data newer than the 2009-2010 Demographic and Health Survey (DHS). Progress in education in the last six years is not shown, while progress in lifespan is based on a statistical model. Therefore, changes in HDI for Timor-Leste primarily reflect changes in Gross National Income (GNI) per capita, which has been falling since 2011 as oil and gas production drops because the fields are being depleted, exacerbated by last year’s drop in market prices.

Nevertheless, the new Human Development Report is more accurate for this country than the one issued last year, which included overly optimistic projections for GNI. UNDP improved its estimates after discussions with La’o Hamutuk, and the new report also revises Timor-Leste’s HDI for past years. The heavy black line on the graph at right shows Timor-Leste’s HDI trend from the 2015 report. HDI has dropped since 2011 because GNI pc (dotted black line) has been falling.  The thinner red solid and dotted lines show the erroneous values UNDP reported in 2014, which the Government said “confirms good progress”.

Unfortunately the 2014 report was incorrect. With new data and better methodology, the 2015 report shows that Timor-Leste’s global HDI rank is 133, and it has been 132 or 133 every year since 2010, indicating no progress. UNDP calculates an “average annual HDI Growth 2010-2014” for each country. Timor-Leste’s value of negative 0.22%/year is among the worst – only five other countries (Cuba, Libya, Jamaica, Syria and Central African Republic) are losing human development as rapidly as Timor-Leste.

In addition to its narrative report and analysis, the Human Development Report (HDR) includes a statistical annex with valuable information on nearly all countries regarding health, education, economy, inequality, labor, gender, poverty, population, environment and other topics. Unfortunately, some of the information on Timor-Leste is outdated – for example, Multidimensional Poverty comes from the 2009-2010 DHS. We hope that the imminent publication of the 2015 census, Livings Standards Survey and 2016 Demographic and Health Survey will improve knowledge and policy-making about Timor-Leste’s current situation.

The 2015 HDR focuses on how work can enhance human development. Unfortunately, labor statisticians exclude subsistence farmers and fisherpeople from the labor force, limiting the relevance of this report for the more than 2/3 of Timor-Leste’s adults who are outside the formal economy. According to the HDR, Timor-Leste’s “labor force participation rate” of 37.9% is the lowest in the world.

Users of UNDP’s statistical data for Timor-Leste (and the World Bank’s World Development Indicators which is the source for many of them) should be careful. For example, UNDP reports that Timor-Leste spent 1.3% of its GDP on health (the lowest in the world). However, it lists public spending on education as 9.4% of GDP, the sixth highest in the world. Unfortunately, the education figure is wrong – it should be 2.7%, which ranks us 137th out of 160 countries with data. UNDP and the WB apparently calculated education as a percentage of non-oil GDP, ignoring the nearly three-quarters of Timor-Leste’s current economy which is based on petroleum activities.

Such data errors can be propagated in other reports.  For example, the U.S. government’s Millennium Challenge Corporation recently released annual scorecards for MCC candidate countries. Timor-Leste’s “Health Expenditure” rating plunged from 85% in last year’s scorecard to 4% in the latest one. We are disappointed that RDTL spends a little less on health each year, but this drastic drop results from correcting previously erroneous statistics.
Natural human optimism (and politicians’ wish to take credit for improvements) sometimes leads to conclusions which are not justified by facts. In another example, last month the Government celebrated that “Timor-Leste is one of only nine countries estimated to have reduced its Maternal Mortality Ratio [MMR] by over 75% since 1990.” Unfortunately, there is no data to show this. The government press release was based on an article in The Lancet which summarized a 200-page UN interagency report Trends in Maternal Mortality: 1990 to 2015. As that report says, “Timor-Leste had little to no country-level data.”

More specifically, the report uses a statistical model to extrapolate Timor-Leste’s maternal mortality rates over a 25 year period from two data points in a single year: the 2010 census and the 2009-2010 DHS. The authors assume that changes in GDP (mostly going into the Petroleum Fund in our outlier economy), fertility rate and the fraction of births attended by a health professional must have prevented women from dying in childbirth, but they had no actual information. (See Q&A on the report and Timor-Leste country profile.) According to a UN expert who works here, “maternal mortality still is a serious problem in Timor-Leste” and the interagency group’s estimate of 215 (range 150-300) maternal deaths per 100,000 live births is probably too optimistic – the 2010 census and DHS figures of 570 and 527 could be closer to reality. We await better information from the 2015 Census.

As Timor-Leste's oil and investment income declines, we are at a crossroads and face many critical decisions. Policy-makers need accurate and up-to-date evidence to inform their actions. The government has spent a lot of money over the last eight years, but the benefits for the impoverished rural majority are not yet clear.  We need to know where we are today in order to decide in what direction to go … and we need to change direction if we don’t want to end up where we are headed.

Timor-Leste’s health care and education systems do not yet respond to the needs of most of our people, and the government allocates lower funding to them in each year’s State Budget.  It would be a shame – a crime – if misleading statistics are used to justify policies which will not improve the lives and the futures of the excluded majority: women, children, farmers and the rural poor.

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