Investing in People, the Cornerstone of our Nation

John Michael Flores, a student at Ragay Science and Math Oriented High School Ragay, Camarines Sur, shared with us his essay titled “Investing in People: Cornerstone of our Nation.”

The essay is an entry for the Essay Writing Competition on Asean Community and Sustainable Development Goals (DepEd Division Level).

Grateful acknowledgement is made to his coach, Mr. Jeric O. Negre, and school principal, Mr. Ceasario L. Quirona for their invaluable support.

Investing in People, the Cornerstone of our Nation

by John Michael Flores
Ragay Science and Math Oriented High School
Ragay, Camarines Sur

Ever since the impact of digital technology to a tremendous extent came to light, along with the growing significance of emerging technologies, such as Artificial Intelligence (AI), that have the potential to displace millions of jobs and threaten to affect all facets of our lives, my initial sense of hope and admiration for these innovations is replaced with dread. I begin to argue with and wonder to myself, "Am I living at a place and time that will be seen as ground zero for the downfall of modern human capital?"

Innovation and technological advances have caused disruption, but more opportunities have been generated than they have destroyed. Yet, today, as the pace of innovation persists to accelerate and technology impacts every aspect of our lives, we have found ourselves riding a new massive phase of uncertainty.

Innovation will drive growth, but rapid measures will have to be taken by developing countries to ensure that they can thrive and engage in a rapidly changing environment. With a fierce sense of urgency, they will have to critically invest in their people--especially in health and education, which are the building blocks of human capital--to leverage technology to their benefit and to mitigate its worst disruptions.

As per Frank & Bemanke, human capital is “an amalgam of factors such as education, experience, training, intelligence, energy, work habits, trustworthiness, and initiative that affect the value of a worker’s marginal product”. Such personal experiences have led me to define human capital beyond the definition in my Araling Panlipunan (AP) textbook. Human capital--the potential of individuals--is indeed the main base of the competition in the long run, for it is the thing that runs our businesses and is widely considered to be an important factor for industrialization and modernization of countries. Therefore, it is imperative to understand that growth and development of people is the highest calling of a positive change.

Even more than that, developing human capital is particularly about investing in people for greater social equity and economic growth in the future. Investing in human capital relates mainly to investing in children. Studies indicate that these resources have very high yields, far beyond those of infrastructure and physical capital investments. It is this power to shape their own lives that human capital confers upon the people, as well as its ensuing flexibility, that makes it indispensable and worth protecting. Nevertheless, where should human capital development lead off?

“The most effective way to acquire the skills demanded by the changing nature of work is to start early,” World Bank Country Manager for Thailand Dr. Birgit Hansl emphasized. “Early investments in nutrition, health, social protection, and education lay strong foundations for the future acquisition of cognitive and socio-behavioral skills.” This will be key to building strong human capital, ending poverty, and creating more inclusive societies for Association of Southeast Asian Nations (ASEAN) to provide a more sustainable, equitable and progressive future for all its people.

The world has immersed into crisis of unprecedented scope and scale, and socio-economic circumstances have plunged into recession. In the midst of rapid global changes in climate, fragility, and technology, human capital disparities are at risk of widening. With conflict events and pandemics, such as the long ongoing corona virus disease 2019 (CoViD-19) crisis, devastating effects on human are evident through loss of lives, livelihoods, nutrition, and deterioration of necessary health and education services. These consequences are probably to resonate across the lifespan of many people, thus diminishing their productivity. True enough, this pandemic owes a severe cost to humanity.

A critical question that comes across my mind when studying development and growth across countries is that why some countries move quicker on top of heap, while some are stranded in their poverty traps. Underlying this, I am profoundly confident that the value of governance and quality of institutions has become increasingly regarded.

Corruption is one of the fundamental issues of development, and several international development organizations have been at the forefront of the agenda. According to Sen, “Corruption is one of the major stumbling blocks in the path to successful economic progress”. It can take many forms, but the main form of corruption, which is prevalent throughout the world and exists in almost every society at varying levels, is the poor allocation and misuse of public funds. While this hurts the society in general, the marginalized sector, who may find themselves denied of basic public services which may offer their only means of escaping from their plight, bears the greatest burden.

Evidences from the past confirm that many poor countries are unable to escape their traps of poverty, because they are impotent in confronting the forces of corruption. The abuse of authority by public officials twists the role of the government in resource allocation and hampers growth prospects. Corruption runs rampant, accountability disappears. Consequently, corruption not only decreases the effect of public spending on social outcomes but also lessens the provision of social services and impedes the accumulation of human capital.

More notably, institutions contribute substantially in shaping the way human capital fuels growth through their influence on fiscal policy discipline as well as efficient channeling of resources towards infrastructural development. “Better institutional quality play a vital role in promoting both direct and indirect capabilities of people as well as output productivity, because good institutions create equitable development opportunities”, as per De Muro and Tridico.

Having said that, institutional inefficiency inhibits less developed countries from extracting the best out of their resources. In less developed countries, poor quality of institutions serves as a stumbling block to development, as individuals are prone to diverting resources to unproductive purposes.

Governments have long invested in economic growth through concentrating on physical capital such as roads, bridges, airports, and the likes. However, they have often under-invested in their people, partially because the gains have been much slower and more complex to evaluate. In many countries, therefore, the workforce is unprepared for the future that is fast unfolding.

The first edition of the Human Capital Index (HCI), issued in October 2018 by the World Bank Group and updated in 2020, reveals that at best, approximately 60 percent of children--the workforce of the future--born nowadays will only be one-third to one-half as productive as they could be with full health and high-quality education. This represents a grave human capital crisis, with major implications on the economic growth and the collective efforts of the world to put a halt on extreme poverty.

One in four children under five years of age in ASEAN has stunted by chronic malnutrition, placing them at high risk of cognitive and physical limitations that can last a lifetime, according to World Bank. Moreover, learning crisis is holding back several countries. Data revealed that in some countries, children acquire significantly less years of learning as compared to other countries, despite having the same length of time at school.

Fortunately, even within budgetary constraints, governments are taking actions. They optimize resources and enhance the efficiency of spending, aligning policies with investments based on results, and resolve measurement and analytical gaps. Governments are now exhibiting interests in the desire to transform their human capital outcomes; this will contribute in making the global system effective for everyone.

Numerous countries have made great strides in reducing gaps in human capital outcomes between males and females. The distance to the human capital frontier for children overall is comparably greater in most nations than the remaining differences between the two sexes. In education sector, girls in middle- and high-income countries have, to a large degree, kept up with or even surpassed boys in terms of enrolment and learning.

Additionally, in certain components of the health index, most countries establish a relatively moderate advantage for girls over boys. If we do not render the other group with sufficient access to education, health, and employment, we lose, at least, half of our potential. For this reason, gender equality as well as empowerment of women indubitably bring enormous economic benefits. As such, gaps and constraints must be addressed for all people to be able to reap the highest possible returns of human capital investment. If we truly want to move forward, we must strive toward creating a world that is built for women just as much as it is built for men.

The pandemic, in the perspective of millions of people, is turning their lives upside down. The human capital of an entire generation of children, particularly those from poor household, may also get perpetually stripped away. The deterioration of knowledge, well-being, skills and opportunities owing to the pandemic will undermine economic recovery and stability for the nations in the future without swift and coordinated actions.

Globally, according to the United Nations (UN), an estimated 130 million more children are expected to suffer from malnutrition, and 80 million children may lose out on life-saving vaccine shots. At the height of the pandemic, nearly 1.6 billion children worldwide were out of school. The World Bank figures show that this cohort could lose as much as $10 trillion in lifetime earnings as an outcome of learning disturbances.

Through the concerted efforts of governments, people, and the private sectors to close human capital gaps, ASEAN has been successfully dealing with tough challenges. Take Thailand, which has dramatically dropped stunting rates from 25 to 11 percent in the past three decades. Thanks to active, community-based nutrition programs in areas with high poverty levels. Nutrition services were initiated and progress was tracked across the country by a corps of trained community health volunteers.

With its high-quality education, which has been achieved by a strong commitment to intellectual development and significant public expenditure, Vietnam also stands out in the region. It recruited and funded high caliber teachers, invested in preschool, and carried out assessments to keep the quality of education they deliver accountable to teachers and schools.

True enough, these two aspects--education and healthcare--of our development are deeply interwoven. Simply put, better health makes learning easier. It provides a stronger foundation on which to build an education. Nothing is more important than our health; it is above all else. As the saying goes, “Better to have a degree of sanity than just a degree.”

Over the past four decades, successive administrations in the Philippines have embraced integrated approaches, implemented and enacted policies that involved different sectors, and facilitated greater stakeholder engagement in the delivery of services. The effective execution of the conditional cash transfer programs demanded collaboration with regional offices and local actors, along with 13,000 personnel on the ground, aiding the program to reach targeted throughout a huge, decentralized country with population dispersed among hundreds of islands. Such serious efforts have helped alleviate poverty, although further work needs to be done.

Most research proposals are just what they are—proposals. However, in a country driven by human capital, these proposals are approved. That a team of young scientists and innovators from Vietnam could brave the storm to develop a game-changing facemask through incorporating the concept of isolation room into a helmet is an advancement that can be realized in human capital. Innovations that have the potential of causing meaningful, positive change are embraced by the government and the people; this encourages people to invest in education and skills training.

I have associated with and witnessed innovative youths aiming toward a positive change in their communities. They are the masterminds behind many initiatives that are centered on economic empowerment, leadership of women, and development of good schools and quality healthcare facilities. In line with this, I am firmly convinced that the true wealth of tomorrow lies not only in the rich and diverse natural resources of our lands but also in the ennobling mosaic of an emerging generation of devoted, intelligent young leaders.

ASEAN has been a standout success story in its overall development. To protect the impressive gains of association over the past decades is to prioritize investments in people. No country can afford to under-invest in its human capital, for it provides the most equal mechanism in which people can participate to decide the future of themselves and of their own state. It is imperative to remind ourselves that the most valuable of all capital is invested in people.

This calls for a challenge on governments and ASEAN leaders to take better care of their citizens and for a minimum standard of social protection that is guaranteed and universal. It can be achieved through right and suitable reforms, such as eradicating unhelpful subsidies; strengthening labor market regulations; and overhauling taxation policies globally. It is not merely a concern for minister of health and education to invest in people, but rather ought to be a top priority for heads of state and ministers of finance as well.

Noted as a key insight in the World Development Report (WDR) 2019: The Changing Nature of Work, the skills frontier is moving faster than ever. There is mounting evidence that unless we reinforce our human capital, we will not be able to maintain dynamic economic growth, will not have a workforce that is ready for the more highly skilled occupations of the future, and will not be able to gain competitive advantage in the global economy. The cost of inaction on human capital development has made a growing trend.

Both capability and productivity constraints need to be jointly tackled by the public and private sectors in preparation of new entrants, especially the youth, to the workforce. Similarly, systemic problems are to be addressed in order to motivate institutions to improve the quality of skills they produce. Particularly, Southeast Asian countries should strive to improve the legal system, property rights and the regulatory system. Improving this will not only increase economic incentives but will also help distribute more efficient utilization of capital.

Notwithstanding all the above, to think that our present human capital development is without challenges is to live in a paradise of fools. It is flawed, as is everything else, and monumental failures have taken place. To many of us in Philippines, however, our country represents a stark transcendence from problems that held us down in the past, even though there is a long way to go. The answers to the problems in our societies lie in the choice of the people—and success or failure is also in the hands of each individual. Countries powered by human capital, however, have an inherent quality to heal themselves and can overcome certain challenges if necessary mechanisms are set right and put in place.

Like Hydra, the multi-headed serpent-like monster of Greek mythology, even a year after the first case was confirmed in Wuhan, CoViD-19 is proving hard to suppress. However, just as Hydra was prevailed over with bravery and ingenuity, ASEAN can turn this crisis to its long-term advantage through adopting and implementing bold and innovative policies today.

As a student of the Department of Education (DepEd), an institution funded by the government, I can testify that human capital becomes very real when I have reached the secondary level and perceived adulthood, employment, training and college on the horizon. Decision-making skills come into play anew as we look at a variety of career options, the education needed, and the potential future payoff to consider what we might choose.

All things considered, it goes without saying that the more the government invests in us, the more productive and profitable we could be. While the government creates an enabling space for us, we bring to the table what we have to and can offer to foster that space.

Whilst I concur that it is crucial to live in a country led by human capital to benefit from its many advantages as an individual citizen, I boldly argue that it is way more imperative to participate in it rather than risk losing it to a plethora of ways that it can be destroyed. I am living neither at a place nor time that will be seen as ground zero for the downfall of modern human capital. Truth be told, this is a win for Southeast Asian countries--this is a triumph for human capital.

Works Cited

(2019). Retrieved from World Bank:
World Development Report 2019: The Changing Nature of Work. (2019). Retrieved from World Bank:
(2020). Retrieved from UNICEF:
Frank, R. H. (2007). Retrieved from
Sen. (1999). Retrieved from Google Books: +(1999),+Corruption+is+one+of+the+major+stumbling+blocks+in+the+path+to+successful+e conomic+progress.&source=bl&ots=iUkl_a8tzM&sig=ACfU3U08qvAFS1gaFlxo2WTZ8y_I xKEVBg&hl=fil&sa=X&ve
Tridico, D. M. (2008). Retrieved from Research Gate: evelopment