Sri Lanka makes strong gains in the Human Development Index

The latest United Nations Development Program (UNDP) report shows that Sri Lanka has made a significant gain in the Human Development Index scoring .780 for 2018.

The HDI is measured on a 0-1 scale, and in 1990 Sri Lanka was measured at .625. 

The 2019 report, titled "Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century," was released on Monday.

The HDI is a summary of several factors that can be categorised under three broad dimensions: long and healthy life, knowledge, and a decent standard of living.

Healthy life measures life expectancy at birth where Sri Lanka's average life expectancy is now just over 76 years. This is well above the World Health Organisation's 2016 global life expectancy rate of 72. That is the second-highest n South Asia where only the Maldives has Sri Lanka beat by one year. 

The knowledge dimension is measured through the expected years of schooling and mean years of schooling. Sri Lanka's expected years of schooling is 14 years and its mean years of schooling comes in at a little over 11 years. 

The decent standard of living is measured through Gross National Income per capita where Sri Lanka measures at $11,611 based on purchasing power parity (PPP).

Compared to Sri Lanka, other South Asian countries aside from the Maldives are in the Medium Human Development or Low Human Development categories. 

India has been ranked at 129, Bhutan at 134, Bangladesh at 135, Nepal at 147, Pakistan at 152, and Afghanistan at 170 in the 2019 index.

Post-election economic growth

Sri Lankan shares hit their highest level in more than a year last month, while the rupee rose to a three-month peak, as former wartime defence chief Gotabaya Rajapaksa assumed his presidential duties.

Rajapaksa assumed office as the seventh president of the island nation in November after winning elections over the weekend.

Rajapaksa made national security his top priority after being sworn in on Monday. Majority Sinhala Buddhists voted for him after he campaigned on promises to make the nation safer in the aftermath of the Easter bombings earlier this year.

The election outcome was positive for Sri Lanka and reduced political uncertainty, which should boost economic growth, Standard Chartered Bank said in a note. But the political establishment faced twin economic challenges of boosting growth and improving debt sustainability, it added.

Foreign investors were net sellers of riskier assets for the ninth straight session late last month.

They sold a net $1.43 million worth of shares on a single day in Novemeber, extending the net foreign outflow from the equities market to $45 million for the year, according to index data.

Equity market turnover was $7.7 million, well above this year’s daily average of about $3.8 million. Last year’s daily average was $4.6 million.