‘Human capital’ good, ‘Inequality’ bad: Apples to oranges?


The Human Capital Index measures an entirely different set of outcomes, compared to the Inequality Index

I refer to the article “Heng slams Oxfam report on inequality, saying outcomes matter” (Straits Times, Oct 13).

It states that “Outcomes, not measures of input, are what matters, Finance Minister Heng Swee Keat said yesterday, in a sharp criticism of the way a report arrived at its conclusion that Singapore was among the 10 worst-performing countries at tackling the gap between the rich and the poor.

“Since resources are limited, it is very important that we can achieve good outcomes with the required inputs and not to wrongly measure inputs, and then treat it as outcomes,” Mr Heng told reporters in Bali yesterday. “That is a completely wrong analysis.””

As to “While Singapore fared dismally in the Oxfam report, it clinched the top spot in the World Bank’s inaugural Human Capital Index launched on Thursday, which ranks countries according to how well they are developing their human capital.

The Oxfam report, Mr Heng said, “erroneously measured” performance by the amount of money the public sector spent” – it may be interesting to note that the subject Straits Times article does not say anything else about the Human Capital Index.

Had it mentioned what it had written just a day ago – “It measures how well economies are developing their human capital based on five indicators – the probability of survival to age five, a child’s expected years of schooling, test scores, adult survival rate, and the stunting rate among children.” (“Singapore tops new World Bank human capital rankings“, Straits Times, Oct 12) – then, arguably, it may become quite obvious to its readers that it is akin to an apples to oranges comparison.

The Human Capital Index measures children until they grow up – a far cry and a world of difference from inequality and the Inequality Index.

As to the issue of outcomes versus inputs – you may like to read

Ranked last in ‘Taxation progressivity’: Tax the most, spend the least?” (Oct 11)

Refuting the ‘refute’ of the ‘149th’ Inequality Index?” (Oct 10)

Inequality Index: S’pore bottom 10?” (Oct 9)

Is it any wonder why our Press Freedom ranking is at 151st?

Leong Sze Hian


About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.