Page 19 - Echoes of the Global South V2

Foreign direct Foreign direct Portfolio equity
investment, net inflows investment, net inflows
Region
$ millions % of GDP $ millions

East Asia & Pacific 8,13,388 2.6 1,20,050

Europe & Central Asia 5,32,366 2.1 12,65,402

Latin America & Caribbean 1,80,434 2.8 5,894

Middle East & North Africa 86,632 2.3 16,815

North America 5,52,260 2.2 -16,778

South Asia 50,057 1.2 4,353

Sub-Saharan Africa 71,392 3.7 -17,746

Source: World Development Indicators

c. Human Capital
Human capital in the Global South, encompassing countries in Africa, Latin America, and parts of Asia, is a vital factor
in determining economic growth and development in the region. Still, it faces several challenges and opportunities
shaped by demographic trends, economic structures, social factors, and policy environments. While access to
education has improved, issues of quality, retention, and a mismatch between skills and labour market demand
persist, exacerbated by inadequate funding and infrastructure. On the other hand, health outcomes remain marked
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by high child and maternal mortality rates, malnutrition, and a rising burden of non-communicable diseases, coupled
with limited access to healthcare, especially in rural areas.
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The labour markets are characterised by high levels of informality, underemployment, and youth unemployment
despite a growing youth population. Moreover, most countries in the region are undergoing different stages of
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demographic transition toward a “youth bulge” with significant potential for a demographic dividend but a limited
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window of opportunity. If harnessed effectively, these demographic trends could lead to sustained economic
growth by increasing labour supply, productivity, and innovation, but they require significant investments in education,
healthcare, and job creation. Inequality in access to opportunities, exacerbated by gender, geography, and social
status, remains a critical barrier to human capital development and inclusive growth.

To leverage its human capital, the Global South must invest in quality education and skills development, strengthen
healthcare systems, promote inclusive economic policies to harness the demographic dividend, and address gender
inequality. These strategic investments and policies are essential to transforming human capital into a driver of
sustainable growth, poverty reduction, and long-term development. Many Global South countries, particularly in
sub-Saharan Africa and South Asia, continue to rank low on the HDI, reflecting the ongoing challenges of poverty,
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inequality, and limited access to healthcare and education. For example, countries like Niger, Chad, and the Central
African Republic have some of the lowest HDI scores globally. In contrast, countries like Singapore, Qatar, and the
UAE rank much higher, reflecting significant disparities within the Global South. Moreover, as early signs of ageing
start to set in for some countries in the next few decades, there will likely be an impact on social services and public
healthcare that the countries must prepare for.

40. Daniele Vieira, Takudzwa Mutize and Jaime Roser Chinchilla, “Understanding access to higher education in the last two decades”, UNESCO International
Institute for Higher Education in Latin America and the Caribbean, December 21, 2020, https://www.iesalc.unesco.org/en/2020/12/23/understanding-
access-to-higher-education-in-the-last-two-decades/
41. Juel Chowdhury and Rejoice Puthuchira Ravi, “Healthcare Accessibility in Developing Countries: A Global Healthcare Challenge”, Journal of Clinical &
Biomedical Research, 4, pp: 1-5, http://dx.doi.org/10.47363/JCBR/2022(4)152
42. Franziska Ohnsorge and Shu Yu, The Long Shadow of Informality: Challenges and Policies, World Bank Group, 2022, https://openknowledge.worldbank.
org/server/api/core/bitstreams/005c14aa-8ba6-5c91-8c11-ecaea3527feb/content
43. Justin Yifu Lin, “Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”, World Bank Blogs, January 05, 2012, https://
blogs.worldbank.org/en/developmenttalk/youth-bulge-a-demographic-dividend-or-a-demographic-bomb-in-developing-countries
44. “Breaking the gridlock: Reimagining cooperation in a polarized world”, Human Development Report 2024, United Nations Development Programme, New
York, March 13, 2024, https://hdr.undp.org/content/human-development-report-2023-24

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