**Policy Research**

# **National Economic Managemen^t**

**WPS 811**

This paper-a product of the National Economic Management Division, Economic Development Institute - is a revised version of a paper presented at the Seminar on Planning and Evaluation of Social Scctors in Latin America, held in Rio de Janeiro, Brazil in December 1989, and organized by EDI's fluman Resources Division. Copies are available free from the World Bank, 1818 H Street NW, Washington DC 20433. Please contact Dulce Afzal, room M7-035, extension 36335 (20 pages). December 1991.

The quality of a country's human resources will determine its ability to compete in international markets and assure the well-being of its citizens in the next century as it does in this one. Considering rapidly advancing technology, expanding global links, and threats to the ecology, it is clear that whether a society maintains or improves its competitiveness, ensures social equity, "adjusts" - or indeed survives - will ultimately depend on its success in developing its human resources. But in devising their development strategies and public expenditure portfolios, many developing societies - and among them Latin Ameriic . - ones are prominent have yet to accord due attention to their most vital resource. A major issue is whether Latin American countries will be forced to sell cheap labor and over-exploit their natural resources to maintain even current, inadequate living standards. Or will these countries follow the lead of successful European, North American, and now Asian countries that have invested heavily in their human resources?

Reviewing statistics compiled for selected Latin American countries and two reference groups of countries in East Asia and northern/ southem Europe, Knight and Wasty emphasize the need to increase attention to and expenditure on education and health systems in many developing countries, especially in Latin America, to improve the coverage and quality of the services they provide.

The paper notes that wider access to secondary education and greater emphasis on the quality of higher education tend to be a distinguishing feature of the better performers (East Asian and northem/southem European countries). Much of East Asia's success can be attributed to the region's consistcnt efforts to - improve technical and higher education particularly in research and development and in engineering and other technical applications. The Nordic countries, too, have provided thorough on-the-job training and established first-rate educational institutions, led by world-class research scientists in technical fields and social sciences.

In sum, since specialized technical human resources take time to develop, no country today can afford not to provide enough financial resouirces to develop critical human resources.

The Policy Research Working Paper Series disseminates thc fmdings of work under way in the Bank. An objective of thc scries is to get these findings out quickly, even if presentations are less than fully polished. The findings, interpretations,<sup>and</sup> conclusions in these papers do not necessarily reprcsent official B1ank policy.

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