Development Economics

1. Development Economics

2. Development Economics Human Resources and Economic Development

3. Introduction: • There was a time when people did not pay much attention over the development of human resources i.e. • The development of human education, • Human skills, • Human talents and • Human training • Moreover, the special emphasis over nutrition, clean drinking water and housing facilities remain neglected. • But • With the passage of time, it was realized that if the efforts are made to develop human resources by providing better education, better trainings, better nutrition, safe drinking water and shelter, like facilities all such will be equal to “Investment in Man” or “Human Capital Formation”.

4. Human Capital? Human Capital can be described as the skills, training and health acquired through on-the-job training and education. Human Capital refers to the skill and knowledge of human beings. It can be increased though formal education, on-the-job training and improved health and psychological wellbeing. To be more precise, if the people of a country are well educated, skilled and healthy, they are said to have more human capital.

5. Human Capital….. continued • There are four ways of developing human capital • Provision of health facilities which affect the life expectancy, strength and vitality of the people. • Provision of on-the-job training which enhances the skill of labour force. • Arranging education at the primary, secondary and higher levels. • Study and extension programme for the adults.

6. Problems of Human Capital Formation in LDCs The main problems of human capital formation in less developing countries (LDCs) are as under: 1. Faster increase in population: The population of almost all developing countries of world including Afghanistan is increasing faster than rate of accumulation of human capital. As a result thereof, these countries are not making satisfactory use of their natural resources and physical capital. 2. Behavior of administration and politicians: In case of UDCs the administrative and bureaucratic setup is of such a nature that they pay little attention on investment in man and human capital formation. The same is the case with politicians who are least interested in promoting, formal and informal education, extending housing facilities to homeless and providing water supply facilities to the rural population. As a result, the supply of qualified teachers and efficient workers remains obstructed.

7. Problems of Human Capital Formation in LDCs 3. Defective Pattern of Investment in Education: In the developing countries of the world, the governments are giving priority to primary education for increasing literacy rate. Secondary education which provides critical skills needed for economic development remains neglected. Another problem related to investment in education is that in the public and private sectors there is a mushroom growth of universities without trying to improve their standard of education. There are also mass failures at primary, secondary & higher levels of education resulting in wastage of the scarce resources of the country.

8. Problems of Human Capital Formation in LDCs 4.More stress on the provision of building and equipments not on staff: Another major problem of investment in human capital in developing countries of the world is that politicians and administrators lay more stress on the construction of buildings and provisions of equipments than on the provision of qualified staff. It has been observed that foreign qualified teachers and doctors are appointed in rural areas where there is little usefulness of them.

9. Problems of Human Capital Formation in LDCs 5. Shortage of health and nutrition facilities: In the less developed countries of the world, there is shortage of trained nurses, qualified doctors, medical equipment, medicines etc. the less availability of health facilities pose threat to the millions of the people living there. The people are faced with unsatisfactory sanitary conditions, polluted water, high fertility and high death rate, illiteracy etc. all these deficiencies after the health of the people and reduce heir life expectancy. 6. No facilities of on the job training: On the job training or in service training is very essential for improving or acquiring of new skills to the persons employed in various occupations. In the underdeveloped countries of the world, least emphasis or importance is given on the job training for the employees. The result is that the efficiency and knowledge of the workers remains outdated and in most cases obsolete. In service training for the doctors, teachers, technicians etc is therefore of utmost importance for the efficient use of human resources.

10. Problems of Human Capital Formation in LDCs 7. Study programmes for adults: Study programmes for adults can also be introduced for improving literacy rate. Programmes for adults was introduced in may under developed countries of the world for providing basic education, increasing skills to farmers and small industrialists. The scheme has miserably failed as no interest was shown by the adults in getting such training. 8. Half hearted measures for promotion of employment: In most of the developing countries of the world, the ratio of unemployed or underemployed persons is very large. For increasing employment and reducing under employment proper investment in human capital is required which is lacking in LDCs.

11. Problems of Human Capital Formation in LDCs 9. No Manpower Planning: Due to non-availability of reliable data, there is little manpower planning in less developed countries of the world including ofcourse Afghanistan. As a result thereof, there is no matching of demand and supply of different type of skills. The result is that large number of skilled and highly qualified persons remain underemployed. The frustration and discontentment among the unemployed or underemployed graduate and postgraduates result in brain-drain from the country. It is a huge loss to resources of developing countries. 10. Neglect of Agriculture education: In LDCs, where agriculture is the major sector of the economy, very little attention is paid for educating the farmers to the use of modern agricultural practices. Unless the farmers are provided agricultural education and training on the fields, they will not be able to raise the agricultural production to the desired level. Agricultural education is necessary for changing the outlook of the farmers.

12. Human Resource Development (HRD) and its Importance: The importance of HRD is explained as follows: 1. Better Use of Physical Capital: For the sake of economic development, the poor countries have to construct the roads, bridges, dams, powerhouses, hospitals, schools and colleges. To run these units the engineers, technicians, scientists, doctors, teachers, accountants and economists etc will be required. Therefore, to make a regular supply of all these persons, government will have to pay attention on making investment on human resources. The shortages of the skilled, trained and educated persons will result in misuse of resources, mishandling of capital and poor quality of education.

13. Importance of Human Resource Development: 2. Increase in Productivity: The better education, improved skill and provision of healthy atmosphere will result in a proper and most efficient use of resources – both artificial and natural. In this way, on the one side the production of the economy will increase. While on the other side, the efficiency of factors of production will increase. The increased efficiency will result in more remunerations for the factors of production. This means that the reduced expenditures for human resources will result in deficiency in knowledge, training and health services. All this will result in reduced productivity and reduced factor prices.

14. Importance of Human Resource Development: 3. Abolition of Social and Economic Backwardness: The human resource development will have the effect of removing social and economic backwardness. The expenditures made on education will reduce illiteracy; the educational system will improve; and the skill will improve. The expenditures made on health services will result in reducing the diseases by reducing death rates and increasing the life expectancy. Again the expenditures made on anti-pollution activities will have the effect of removing ecological problems.

15. Importance of Human Resource Development: 4. Increase in Employment Opportunities: When in any country the facilities regarding health, education and skills are promoted they make the availability of trained, educated and skilled personnel. In addition to this most of the activates pertaining to education and health are job creating. To carry out the educational plans, to remove illiteracy and cater the technical education etc a fairly large number of people will be required. Again to provide health services, to launch malaria eradication programmes, to start campaigns against diseases, birth controls and infant mortality more health workers and staff will be needed. Thus the human resources development will open opportunities for jobs.

16. Importance of Human Resource Development: 5. Social Revolution: Because of human resources development, the social and economic life of the people of LDCs changes. The literacy rate rises, the outlook changes, the migration from rural to urban areas takes place, the industrialization starts, the proportion of agriculture in GDP falls, the feudalism shrinks, the unequal income distributions are reduced, the infant mortality rate declines and the people become the development oriented.