SYNTHETIC INDICATORS OF SUSTAINABLE DEVELOPMENT AND THE ROLE OF HUMAN CAPITAL

With the adoption of the Agenda 2030, the concept of sustainable development was formally accepted as the dominant development paradigm at the global level. Sustainability in the context of sustainable development does not mean maintaining the status quo, but preserving development opportunities, which is very important for future generations, as well as from the point of view of measuring sustainable development. Among the synthetic indicators that measure sustainable development in a comprehensive manner, special attention should be paid to wealth of nations and adjusted net saving. Wealth is broadly defined to include produced capital, natural capital, human capital, and net foreign assets. Human capital, according to research by the World Bank is the most important component of wealth at the global level and for most countries. The convergence in wealth that is observed between middle-income and high-income countries during the period 1995-2014 is mostly due to the accumulation of human capital, which have raised from massive investments to improve education and health outcomes. The aim of the paper is to point out the significance of measuring sustainable development, as well as the advantages in the use of synthetic indicators, such as wealth and related adjusted net saving. The focus is on the role of human capital in selected synthetic indicators as the leading factor for sustainable development in the 21st century. Measuring of changes in the volume and composition of total and per capita wealth over 20 years in 141 countries, carried out by the World Bank, permits us to monitor, analyze and compare the sustainability of development process worldwide. This is also possible by using adjusted net saving, which help us understand some of the dynamics that drive the changes in wealth. Paper also provides insight into how available wealth and adjusted net saving data can be used to guide a policy towards sustainable development.