Country ranks low in most parameters, says World Economic Forum report

As a nation, we love titles and rankings, especially if we — or at least those we can claim as our own — figure somewhere near the top. This is why the Indian spin-off of the Guinness Book of World Records was more popular than the original.

A report by the World Economic Forum (WEF), which essentially looks at growth and development from the perspective of equity — of how growth has impacted a society as a whole and not just its creamy layer — is unlikely to figure high in the popularity rankings, simply because India figures very poorly in it.

Inequality as a concept is difficult to define precisely. Measuring it becomes even more difficult. The WEF’s researchers have not tried to do a grand global ranking, but have clumped economies with roughly comparable GDP per capita (in purchasing power parity terms) into sub-groups.

The first sobering reminder of the scale of the task before India is the group that it finds itself in — the lower middle income group. The rest of the BRICS all figure in the upper middle income grouping.

Of the countries that India likes to compare itself with when it comes to growth and development, perhaps only Thailand figures in the list. The rest, a motley assembly ranging from Albania to Mongolia to Swaziland and Zambia, would be considered by most Indians — policy makers and politicians included — as belonging to the ‘poor countries’ club, which India thinks it has moved out from.

But it has not, it appears. In the seven ‘pillars’ that were considered to arrive at the rankings — education, employment, asset building, financial intermediation, corruption and rents, basic services and fiscal transfers — India figures pretty much at the bottom in its peer group.

Ukraine tops the lot in education, Vietnam in employment, Iran in asset building, Thailand in financial intermediation, Macedonia is best in corruption levels, Jordan in basic services, and the tiny African kingdom of Lesotho in using fiscal transfers to better the lot of its citizens.

The only area where India is not in the bottom five in this group is in corruption (eighth out of 38) and basic services, where it comes in 27th. Even here, countries like Ghana, Mongolia and Kyrgyzstan do better.

This is the first such exercise by the WEF; so there are no trends to compare.

But the report has studied 10 years of data, which itself provides a clue to what may be going right, and what may not, in each country.

On basic growth, India is clearly doing something right. Over the past decade, its GDP per capita growth outpaced the rest of the peer group (except Mongolia, whose natural resources boom has made a thinly populated country quite well off in per capita terms).

Problem areas

But drill down a bit and the problem areas emerge. Take job creation, for instance. In creating productive employment, India ranks 28th out of 38. But when it comes to wages (including non-wage compensation), it slips to 35 out of 36 (two countries don’t have data for comparison). But getting a job does not mean escape from the clutches of poverty. India comes last in the ranking for working poverty — it has the highest proportion of its workforce in the employed, but earning less than $2 per day.

Education is another area that shows how unequally the benefits of growth are flowing. India ranks reasonably well in enrolment, though even this trails off at the secondary, tertiary and vocational levels; the average years spent in school is just 4.4, making it 32 out of 38.

Access is clearly driven by financial status — the gap between the lowest quintile and the highest quintile in average years spent in school is among the highest in India.