Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago

This policy brief analyzes human capital trends in Ethiopia, Indonesia, and Trinidad and Tobago from 1995 to 2020. While Indonesia and Ethiopia saw overall growth that stalled recently, Trinidad and Tobago experienced a significant decline after 2008. The report emphasizes that human capital constitutes over half of the comprehensive wealth in these nations and urges diversification away from concentrated sectors (like agriculture in Ethiopia and services in Indonesia) and declining industries (like petroleum in Trinidad and Tobago) to ensure future prosperity.

• Human capital trends varied significantly across the three studied countries between 1995 and 2020. Indonesia saw an average annual growth of 4.4%, rising from USD 67,200 in 1995 to USD 190,700 in 2020, though it experienced a 6% decline after a 2019 peak. Ethiopia's real human capital per capita grew by an average of 4.3% over 25 years, from USD 6,073 in 1994/1995 to USD 15,921 in 2020, but stagnated after 2017/2018. Trinidad and Tobago experienced near stagnation with an average annual growth of only 0.5%; after a peak in 2008 of USD 217,779, it fell by 29% to USD 155,319 by 2020.
• Human capital is a dominant asset in the comprehensive wealth of these nations, representing more than 50% of the total stock. Because of this high share, fluctuations in human capital have a disproportionate impact on overall national wealth and the long-term well-being of the population.
• Human capital is heavily concentrated in specific sectors in Ethiopia and Indonesia, creating a lack of diversification that may hinder resilience. In Ethiopia, agriculture accounts for nearly 55% of human capital, while the service sector contributes 27%. In Indonesia, the service sector is the primary contributor with a share of nearly 60%, followed by agriculture (15.3%) and manufacturing (14.5%).
• Trinidad and Tobago faces a specific challenge with the decline of human capital in its petroleum industry. The industry's contribution to human capital fell from a peak of 7% in 2005 to 2.7% in 2020. This decline is linked to the industry being capital-intensive rather than labour-intensive and a reduction in the workforce, which fell by approximately 41% since 2007 to 12,800 workers in 2020.
• To sustain well-being and foster resilience against external shocks, the document recommends diversifying human capital into high-growth sectors. For Trinidad and Tobago, the government has identified seven priority areas for diversification: tourism, creative industries, energy services, nearshore financial services, manufacturing for export, digital platforms and business process outsourcing, and trans-shipment, ship repair, and maritime-related services.
• Increasing productivity in key sectors requires targeted investments in technology and infrastructure. For Ethiopia's agriculture sector, this includes mechanization, improved seeds, and chemical inputs. For the service sector, digital transformation is essential, though Ethiopia faces a significant gap in internet access, with only 17% of the population having access in 2021, compared to 62% in Indonesia and 79% in Trinidad and Tobago.
• The authors highlight a critical need for investment in statistical capacity to generate disaggregated data. Current limitations forced the use of aggregated labour income data, preventing a detailed analysis of human capital by age, gender, and education level.

APA

Zoundi, Z., Bizikova, L., & Smith, R. (2024). Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-05/human-capital-trends-policy-implications.pdf

Chicago

Zoundi, Zakaria, Livia Bizikova, and Robert Smith. Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-05/human-capital-trends-policy-implications.pdf.

Wikipedia

{{cite report |last1=Zoundi |first1=Zakaria |last2=Bizikova |first2=Livia |last3=Smith |first3=Robert |title=Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago |publisher=International Institute for Sustainable Development |date=April 2024 |url=https://www.iisd.org/system/files/2024-05/human-capital-trends-policy-implications.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{zoundi2024human, author = {Zoundi, Zakaria and Bizikova, Livia and Smith, Robert}, title = {{Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = apr, url = {https://www.iisd.org/system/files/2024-05/human-capital-trends-policy-implications.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }