The World Bank has developed a new way to measure an economy’s success. It is the Human Capital Index, which was presented in Bali, and classifies countries according to how well they invest on their youth.

This Index aims at raising the alarm of the urging need that countries have in investing in talent in order to succeed.

“Human capital is the knowledge, skills and health that people accumulate during their lives, enabling them to develop their potential as productive members of society”, states the report.

“This provides benefits for individuals, societies and countries”, it adds.

The World Bank is not oblivious to the short term needs that politicians tend to prioritize. “As human capital investments may not produce payback for several years, politicians tend to come up with shorter term alternatives”, points out the report.

Jaime Saavedra, Senior Director of Global Practice of Education at the WB, said: “it is key for Ministers of Finances to understand that human capital investment is equally important, or even more important than physical capital investments”.

Chile, Costa Rica and Argentina lead the Latin American ranking, but they fall way behind when compared to countries that are at the top of the list. Chile is number 45, Costa Rica 57 and Argentina 63, among 157 countries.

The global top 10 includes Singapore, South Korea, Japan, Hong Kong, Finland, Ireland, Australia, Sweden, Holland and Canada.

It is interesting to note that, in this index, impacts are achieved through policies that are enforced through time.

For instance, back in 1950 an average adult in Singapore had only completed two years of formal education. This country currently has one of the best results in education in the world and is number one in the Human Capital Index.