Building human capital means investing in the science of hope

by Fazle Hasan Abed | BRAC - Bangladesh
Wednesday, 17 October 2018 12:08 GMT

ARCHIVE PHOTO: Girls play in front of torn election campaign posters in Dhaka, Bangladesh, January 4, 2014. REUTERS/Andrew Biraj

Image Caption and Rights Information

* Any views expressed in this article are those of the author and not of Thomson Reuters Foundation.

Asking policymakers to invest in optimism and self-worth may sound like a vague, soft-hearted appeal but it is anything but that

Fazle Hasan Abed is the founder and chairperson of BRAC, a Bangladesh-based anti-poverty organization. 

At the World Bank's annual meeting in Indonesia last week, there was much talk of “the human capital project,” reflecting the institution’s efforts, under the leadership of Jim Yong Kim, to move beyond investments in physical capital such as roads, bridges and airports. Building human capital means investing in people -- in their health care and education, and in the work skills that make up a nation’s productive potential. With that in mind, Kim and his team of economists have created a human capital index, akin to the institution’s closely watched “ease of doing business” ranking. The idea is that policymakers will watch their country’s position and try to do better, year by year.

This is undoubtedly a positive move. The human capital project will bring us closer to the eradication of extreme poverty, which is a realistic goal for the first time in human history. But we have to be clear about what constitutes a true investment in human capital. It is not a mechanical exercise of building more schools and hospitals, or creating job training programs for underemployed youth. Real human capital initiatives must activate people’s sense of self-worth, which remains dormant for much of the world’s population. 

There is science behind this. One recent study measured a psychology-based “personal initiative training” for entrepreneurs in Togo and found that it outperformed internationally accredited business training in terms of increasing firms’ profits. Boosting confidence pays huge dividends. In Uganda, a BRAC program for adolescent girls pairs vocational training with “life skills” on issues like menstruation, peer pressure, sexual health and emotions. Researchers found a 48 percent rise in income generation for girls in villages with these clubs compared to control villages, which is remarkable considering that most standalone job training programs in low-income countries have almost no impact.

Around the world, “graduation programs” for the ultra-poor help destitute women on the fringes of society, often living on a meal a day or less, move into sustainable livelihoods. The programs give people assets like cash, goats and cows, supplementing these with one-on-one coaching in entrepreneurship, healthcare, and the myriad social problems these women face. Research shows that the assets and training have only limited effect when given alone. The real transformation comes through the one-on-one support, which gives the women hope that things can change.

In my native Bangladesh, where I have worked for decades to improve the lives of people in poverty, public health conditions have improved dramatically. In just over 40 years, the under-5 death rate went from 1 in 4 to less than 40 per 1,000. It was not simply because we opened more hospitals. Impoverished people began to feel they had a measure of control over their families’ healthcare, thanks to programs like oral rehydration therapy, which trained mothers to mix their own oral saline and thus drastically reduced childhood deaths from diarrheal dehydration. Through similar human capital investments, we have an opportunity now to make inroads against malnutrition and stunting, which blunts lifelong potential in the earliest days of life.

Building schools will do little to improve failing national education systems if the quality of learning remains as it is now. Education programs succeed when they create an atmosphere of joyful learning. They fail when they rely on rote memorization, as they often do in developing countries. The educator cannot shape his or her students the way an artist creates a painting or a sculpture. In the words of the great Brazilian pedagogue Paulo Freire, true education “makes it possible for students to become themselves” by nurturing their capacity to think independently, critically and creatively.

Asking policymakers to invest in optimism and self-worth may sound like a vague, soft-hearted appeal. It is anything but that. For too long, people thought poverty was something ordained by a higher power, as immutable as the sun and the moon. This is a myth. We would do well to start paying attention to the evidence, which says that giving people hope and self-esteem may be the greatest investment in human capital that any country can make.