The critical difference between most development models and human development index is that most development models exclusively focus on the expansion of income while the human development index embraces embraces the enlargement of all human choices – economic, political, social and cultural which all affect income. Comparing countries’ GNP (or GDP) per capita is the most common way of assessing their level of development. This model of economic growth was based on a very weak foundation that was not sustainable over the long-term politically, economically or ethically. Higher per capita income in a country does not always mean that its people are better off than those in a country with lower income, because there are many aspects of human well being that these indicators do not capture. Sometimes a country with a very high level of national income recorded a very high percentage of population in poverty, illiteracy, in poor health, and a huge disparity based on gender, ethnicity and income. “The Human Development Index (HDI) is a composite statistic of life expectancy, education, and income indices used to rank countries into four tiers of human development, well-being concept based on capability approach. In which poverty is investigated as an indicator of standard of living.” It is a simple average of three indexes reflecting a country’s achievements in health, life expectancy at birth, education (measured by adult literacy and combined primary, secondary, and tertiary enrolments), and living standard (measured by GDP per capita in purchasing power parity terms). Achievement in each area is measured by how far a country has gone in attaining the following goal: life expectancy of 85 years, adult literacy and enrolments of 100 percent, and real GDP per capita of $40,000 in purchasing power parity terms. Although highly desirable, these goals have not yet been fully attained by any country, so the actual indicators are expressed as decimal shares of the ideal. The human development index regards economic growth as essential, but pays equal attention to its quality and distribution, its link to human lives and to its sustainability. It does not replace GDP, but it adds considerably to an understanding of the real position of a society in several aspects, it is multi dimensional.
Poverty promotes vulnerability. By focusing on improving the education, health and skills of people, it enables people to participate in the economy because there is a more equitable distribution of income and assets, which results in a growth process as well as a share of benefits, particularly through employment. Basically, if a country has already built up considerable human capital then by choosing the correct policies and frameworks that allow the exploitation of these capabilities, room for progress is created. Income is influx, consumption that at the end of a period will leave an individual with the same amount goods as from the beginning of that particular...
