U.S. Rated 7th in Human Development : Benefits: Japan and Canada top U.N.’s list in annual report on economic and social advantages.

The U.N. Development Program on Wednesday ranked Japan and Canada as the countries leading the world in human development, their peoples enjoying greater economic and social benefits than anyone else. The United States was ranked seventh.

The rankings came in an annual report on human development in which the U.N. agency called for great changes in the way developing countries spend money on their growth and in the way industrialized nations allocate foreign aid to the Third World.

To illustrate differences in development, the report displayed indexes of human development, freedom and other characteristics, which offered insights into the economic and social progress of nations.

Using an index that combined per capita income with education and life expectancy, the agency, which coordinates development projects in poor countries, concluded that the 10 leading countries in human development are Japan, Canada, Iceland, Sweden, Switzerland, Norway, the United States, the Netherlands, Australia and France.

Most measures of development by other organizations usually rank countries only by per-capita income. But the report said the Development Program believes that “this concentration is at best an oversimplification and at worst a gross distortion of reality.”

Thus, Saudi Arabia, a rich oil-producing country, ranks 32nd in the world in per-capita income but 69th in the U.N. agency’s human development index because of its poor educational system and extremely uneven distribution of wealth. Saudi Arabia’s per-capita income is 15 times larger than that of Sri Lanka, but its adult literacy level is lower.

“Just as economic growth is necessary for human development,” the agency’s report said, “human development is critical to economic growth.” As an example, the report went on, “a healthy, well-nourished, well-educated and skilled labor force is the best foundation for growth.”

The countries ranked lowest in human development were all African except one, Afghanistan. The rankings at the bottom of the scale, in descending order, are Guinea-Bissau, Chad, Djibouti, Burkina Faso, Niger, Mali, Afghanistan, Guinea, Gambia and Sierra Leone.

The index lifts the United States from 19th place in 1989 to seventh in 1990. But agency officials said this change was due mainly to technical refinements in the index rather than any significant change in the way Americans live.

The refinements, however, did not change the ranking of Japan; it was first in both years. But Canada rose from fifth to second place.

Using data from 1985, the U.N. agency also ranked 88 countries on a so-called human freedom index. Sweden and Denmark tied for first place while Iraq finished last. Iraq, in fact, was the only country that was lacking in every one of the 40 indicators of freedom used by the agency. The United States ranked 13th on the list.

On another index, the U.N. agency ranked countries on discrimination against women. Finland, Sweden, Denmark, France and Norway came closest to achieving political and social equality between the sexes. The United States ranked 10th.

Finding a good deal of distress within industrial societies, the report said that the United States had the highest murder rate in the industrialized world (11 times the rate in Japan and Ireland, the industrial countries with the lowest murder rates), the highest percentage of its population in prison (more than 10 times that of the country with the lowest rate, the Netherlands) and the highest rate of reported rape (28 times the lowest rate, in Ireland and Portugal).

Drawing on the wide array of statistics in its report, the U.N. Development Program concluded that the developing world could have $50 billion more to spend every year on “urgent human concerns” if the poor countries change their priorities and systems of funding.

“There are far too many examples of wasted resources and wasted opportunities,” said William H. Draper III, the agency’s administrator. He listed these wastes as “rising military expenditures, inefficient public enterprises, numerous prestige projects, growing capital flight and extensive corruption.”

The agency also faulted foreign aid programs for failing to target basic education, primary health care, rural water supply, family planning and other “human concerns.”

The report singled out the United States as a major laggard in foreign aid. Unlike the Scandinavian countries, which contribute almost 1% of their gross national product to foreign aid, the United States contributes only 0.15%. And most of this is military aid to Israel, Egypt, Turkey, Pakistan and the Philippines.

In all, the agency said, the developing world spends more than 5% of its gross national product on military expenses. Military spending by the Third World has increased from $24 billion in 1960 to $173 billion in 1987. The developing world now buys 75% of all the arms sold every year.