Human Development’s Impact on a Country’s Path to Economic Sustainability


The following article is written by Laiba Bokhari, a student of Sir Syed Kazim Ali. Moreover, the article is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. Sir Kazim has uploaded his students’ solved past paper questions so other thousands of aspirants can understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.


Human development and economic sustainability work in tandem with each other in such a way that in the absence of the former, the latter dies away. In fact, an investment in human development results in an educated and healthier workforce, which ultimately promotes productivity and growth. However, economic sustainability and intergenerational equity depend on human development; for instance, countries, like South Korea, Norway, and China, have recognized the importance of human capital for economic growth, and they are enjoying high per capita income, education, and marginalized healthcare systems. Therefore, countries that regard human development as a primary consideration have a pathway leading them towards a more prosperous and equitable future for their nations and citizens.

“Inclusive growth and economic sustainability go hand in hand. It starts with empowering individuals, especially the most vulnerable, to be active economic participants.”  

(Michelle Bachelet, the former President of Chile and UN High Commissioner for Human Rights)

Overview of human development and economic sustainability

Human development improves people’s lives by investing in their education, healthcare, and skills, promoting innovation and social inclusion, and implementing sustainable practices. Through these efforts, governments may provide a stable basis for long-term economic growth and stability. On the other hand, economic sustainability refers to the ability of an economy to maintain its productive capacity and meet the needs of the present without compromising the needs of future generations. So, to achieve long-term economic growth and stability, the cornerstone is human development.

“The key to sustainable economic growth lies not just in resources but in nurturing human potential. Empower people, and they will drive progress.”  

(Helen Clark, the former Prime Minister of New Zealand and UNDP Administrator)

How can human development bring a country to economic sustainability?

  • Innovation and technological advancement 

The first and foremost factor that promulgate economic sustainability via human development is the promotion of technical breakthroughs by encouraging innovation and knowledge production through research and development. As a result, it helps improve productivity, reducing costs, and enhance the quality of goods and services. So, countries prioritizing human development are more likely to adopt and develop new technologies, thus staying competitive in the global market. For example, Silicon Valley in the United States is a hub of technological innovation and entrepreneurship, driven by a highly educated and skilled workforce. Hence, investments in human development, particularly in education and research, have contributed to the region’s economic sustainability and global technological leadership.

“The future belongs to those who innovate.”

(John F. Kennedy)

“Innovation is the specific instrument of entrepreneurship… the act that endows resources with a new capacity to create wealth.”   

(Peter Drucker)
  • Prudent Policies and strengthening Institutions (Good Governance)

Further, farsighted and proactive policies result from well-educated policymakers who efficiently manage and execute procedures and a well-informed population actively monitors outcomes and contributes to policy evaluation also help boost a country’s economic sustainability. For instance, the Saudi government has adopted policies offering various incentives to attract Foreign Direct Investments (FDIs), such as tax exemptions, customs duty waivers, and simplified business setting regulations. Furthermore, a strong bureaucracy and effective accountability institutions result in economic sustainability. Singapore’s bureaucracy is known for its professionalism, efficiency, and low corruption levels, ensuring a stable and predictable business environment. In addition, transparency and accountability in governance cultivate the grounds for economic activities, attract investment, and ensure the efficient allocation of resources. According to the Corruption Perceptions Index (CPI), “Nordic Countries and Singapore are perceived as the least corrupt nations in the world, ranking consistently high among international financial transparency”, and the World Bank’s Ease of Doing Business Report ranked Singapore as the second-best country for doing business in 2020.

“Sustainability requires that we think not in terms of days or years but in terms of decades and centuries.”

(James Gustave Speth)
  • Resilience and Adaptability

Next, investing in human development, including healthcare and education, enhances a country’s resilience to economic shocks and crisis and allows it to withstand challenges and recover quickly. According to the BBC, “In China, Xia Tangshan Hospital and a 1,500-room temporary hospital in Beijing were built in seven days, allegedly breaking the world record for the fastest construction of a hospital.” Moreover, a well-educated and healthy population can better adapt to changing economic conditions, reducing the impact of economic downturns. For example, the COVID-19 pandemic highlighted the significance of resilience and adaptability in ensuring financial sustainability, as is demonstrated by adopting remote work and digital technologies and quickly adjusting to the surge in demand. At the same time, governments implemented support measures to safeguard their economies. According to the Global Resilience Index by FM, Global countries, like Scandinavian Countries and Singapore, etc., can manage and recover from disruptive events, are more likely to attract investment, and have more stable economic growth.

  • Diversification in dependency

Adding more to it, human development fosters diversification by reducing dependence on a single sector and creating opportunities for sustainable development. When a country diversifies its economic activities, it opens up new avenues for growth and reduces the risks associated with relying heavily on a single industry or commodity. For instance, the United Arab Emirates (UAE), reliant on oil revenues, diversifies its economy to ensure long-term growth after recognizing the importance and mitigating the impact of fluctuating oil prices. As a result, the UAE has invested heavily in non-oil sectors. It has become a global tourism hub, attracting millions of yearly visitors to its iconic landmarks, luxury hotels, and entertainment attractions. Also, the NEOM Project under the Saudi government’s Vision 2030 plan aims to diversify the economy and reduce its dependence on oil revenues. Therefore, radical transformations from resource-based to innovation-driven and knowledge-based economies are required to achieve sustainable economic development.

  • Prudent Resource Management

Likewise, human development cultivates the ground for efficient and responsible use of resources, such as water, plants, oil, gas, etc., to achieve economic sustainability. Additionally, countries and companies, recognizing the limitations of natural resources, are increasingly investing in renewableenergy sources, like solar, wind, and hydroelectric power, to reduce reliance on fossil fuels and lower carbon emissions. For instance, Germany’s Energiewende initiative prioritizes human development, education, and research, leading to advancements in solar and wind technologies and making it a global leader in renewable energy deployment. Furthermore, promoting sustainable consumption, eco-friendly production methods, waste reduction, recycling, and circular economy practices are essential for economic sustainability, such as Japan’s Energy Conservation Centre that after the Fukushima nuclear disaster in 2011 implemented public awareness campaigns and competitions to reduce energy demand and improve efficiency in the long run.

“Do not save what is left after spending; instead, spend what is left after saving.” (Warren Buffett)

  • Reduction in unemployment and poverty

Lastly, human development unquestionably leads to a reduction in unemployment and poverty. According to the Human Development Report 2020 by the United Nations Development Program (UNDP), “Every additional year of education can increase a person’s income by 10%.” Further, when people have skills that match the demands of the job market and meet their basic needs, they become more productive contributors to the economy and less dependent on social safety nets. This, in turn, leads to increased consumer spending, investment, and overall economic prosperity. For example, China’s success in reducing poverty is evidence of financial sustainability. By implementing targeted policies, infrastructure investments, and poverty alleviation programs, China’s poverty rate decreased from 756 million to less than 10 million between 1990 and 2015, according to the World Bank. Thus, procuring more jobs among the masses helps enhance a country’s economic sustainability.

“Investing in people’s capabilities is the best way to reduce poverty and ensure sustainable development.”

(Amartya Sen, Indian economist and Nobel laureate)

Critical Analysis

A country’s level of human development directly impacts its economic growth and overall prosperity. When governments need to prioritize human development and invest in their people, they often need help to achieve sustained economic growth. For example, countries like Afghanistan, Pakistan, and Sub-Saharan Africa need a skilled workforce; limited innovation and poor resource management lead to high dependency on loans and aid. 


In conclusion, human development plays a profound role in achieving sustainable development by utilizing the power of well-educated blue- and white-collar laborer’s, academics, politicians, and people from every societal and economic layer. So, by prioritizing investments in people, education, innovation, social inclusion, and sustainable practices, a country can transform into a thriving, resilient, and prosperous nation. The model’s success in China, Singapore, and Scandinavian countries demonstrates the importance of human development in achieving long-term economic growth, stability, and the overall well-being of a nation and its people.

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