Human Capital in Ethiopia, Indonesia, and Trinidad and Tobago

The document examines human capital as a component of comprehensive wealth in Ethiopia, Indonesia, and Trinidad and Tobago. It finds that while Indonesia and Ethiopia saw significant growth between 1995 and 2020, this progress stalled recently. Trinidad and Tobago experienced a severe decline after 2008, erasing previous gains. The authors argue that diversifying human capital away from dominant sectors—such as agriculture in Ethiopia and services in Indonesia—and investing in health, education, and data capacity are essential for long-term prosperity.

• Human capital grew in Indonesia and Ethiopia between 1995 and 2020, but experienced recent stagnation or decline. Indonesia's real per capita human capital grew by an average of 4.4% annually, rising from USD 67,200 in 1995 to USD 190,700 in 2020, though it saw a 6% decline from its 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 growth "ended abruptly in 2017/2018".
• Trinidad and Tobago's human capital stagnated over the study period, with an average annual growth of only 0.5%. A strong increase from USD 139,477 in 1995 to a peak of USD 217,779 in 2008 was followed by a 29% decrease to USD 155,319 in 2020, effectively cancelling out the gains made before the 2008 global financial crisis.
• Human capital is a critical driver of total wealth and well-being, representing more than 50% of the comprehensive wealth stock in Ethiopia, Indonesia, and Trinidad and Tobago.
• Human capital is heavily concentrated in specific sectors: agriculture contributed nearly 55% in Ethiopia, and the service sector contributed nearly 60% in Indonesia. In Trinidad and Tobago, the petroleum industry's contribution to human capital declined from 7% in 2005 to 2.7% in 2020, partly because the industry's labour force fell by about 41% since 2007 to 12,800 workers.
• To maintain long-term well-being and resilience against external shocks, these countries must diversify human capital into high-growth sectors. Trinidad and Tobago has identified seven diversification areas: tourism, creative industries, nearshore financial services, energy services, manufacturing for export, digital platforms and business process outsourcing, and trans-shipment, ship repair, and maritime-related services.
• Productivity gains in key sectors require targeted investments: agriculture in Ethiopia needs mechanization and improved inputs to reduce biodiversity loss and land degradation, while the service sector requires digital transformation. Internet access is a significant barrier in Ethiopia, where only 17% of the population had access in 2021, compared to 62% in Indonesia and 79% in Trinidad and Tobago.

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} }