New Zealand tops 2016 prosperity index

by Ray Clancy on November 28, 2016

New Zealand has been ranked first in the world in an annual index that rates prosperity across 149 countries, up from fourth position in 2015,

The country came top for economic quality and social capital, second for business environment and governance and third for personal freedom in the 2016 global prosperity index from the Legatum Institute.

new-zealand-flagIn second place is Norway then Finland, Switzerland and Canada completing the top five. The rest of the top 10 is comprised of Australia, the Netherlands, Sweden, Denmark and the UK. While at the bottom is the Central African Republic, Afghanistan and Yemen.

Overall the report says that after a lacklustre performance during the 2008 and 2009 global financial crisis, global prosperity has risen to unprecedented levels and driving this trend are improvements in personal freedom, particularly in Western Europe and Central and Latin America, improvements in health and education in Asia and a better business environment in the Middle East and North Africa, Sub-Saharan Africa and Eastern Europe.

However, in North America prosperity has stagnated over the past decade and even countries that were less badly affected by the financial crisis, like Australia, have seen prosperity decline over the past decade. Indeed, it is the only country in the top 20 to have seen prosperity fall.

‘This demonstrates that despite the upward trend, countries cannot take rising prosperity for granted. To keep global prosperity rising requires resolving ongoing conflicts, mitigating against economic disruption, and tackling the stagnation of key social outcomes in major developed economies,’ the report says.

It reveals that compared to other top 20 countries, North American prosperity has seen marked stagnation over the past decade. Canadian prosperity has risen marginally, while US prosperity is no different in 2016 than it was in 2007. Compared to progress in countries like the United Kingdom, North American prosperity is stagnating.

It says that to reverse the trend of stagnation, North America must progress in areas where prosperity is weak and in both Canada and the US this included health, safety and security.

It also suggests that while economic growth rates in the US have improved and unemployment is now lower than in Canada and most of Western Europe, stagnating prosperity and a declining prosperity surplus are fuelling discontent among Americans. Satisfaction with living standards and household incomes is falling. ‘While the US’s comparatively strong recovery from the global financial crisis is a matter of record, it has not seen improvement in the lives of Americans,’ the report adds.

Interestingly this sentiment seems to have been played out in the US election with discontent with President Obama’s administration regarded as being a key reason behind Donald Trump being voted in as the next President.

The report says that in the US household income in real terms is now below 1990s levels while safety and security is in serious decline, driven by violence and terrorism. Serious issues exist in healthcare, where satisfaction with the current system has fallen and key problems such as obesity and mental health are on the rise. Personal freedom has been hit by falling levels of tolerance and together, these social issues are a significant obstacle to an increase in American prosperity.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: