Prosperity Index 2017

Prosperity Index 2017

 

NORWAY TOPS THE 2017 LEGATUM PROSPERITY INDEX

Norway comes first in the 2017 Legatum Prosperity Index™ beating New Zealand into second place.

Achieving the highest prosperity score since the Index began eleven years ago, Norway ranks first in the world in the Natural Environment pillar, and is in the global top five in Governance, Social Capital, Safety and Security and Education. Starting a business in the country has become more straightforward in the last decade, and its citizens are now the most optimistic in Western Europe about getting a business up and running.

Norway and New Zealand each represent two distinct groups of countries and two distinct models for delivering prosperity: Nordic and Anglosphere.

The Nordics have stronger Governance, Economic Quality and Safety and Security, as well as better Health and Natural Environment — and even more significantly, they have improved on their already strong position in all five areas in 2017.

The Anglosphere nations have a better Business Environment thanks to much greater access to credit, fewer hurdles in getting businesses started and a more flexible labour market. Per capita GDP growth in the Anglosphere has been faster in the last five years than in the Nordics, while a greater proportion of the Anglosphere’s adult population is engaged in the labour force.

Both groups of countries have the highest prosperity scores in the world and each group demonstrates that more than one path to prosperity is possible.

Read the 2017 Prosperity Index here 

GLOBAL PROSPERITY AT ITS HIGHEST LEVEL

This year’s Index shows that global prosperity continues to rise, and currently sits at its highest level since the Index was first published in 2017.

This seems remarkable given the turbulence facing our world today. To name a few, we have seen the rise of terrorism, a vast number of people forced to flee their homes and we’ve seen divisive elections in countries across the globe.

Despite this, more countries experienced growing prosperity than falling in the last year. The Asia-Pacific region continued its strong improvements in prosperity, with the greatest increases in prosperity this year.

The 11th edition of the Index reveals a number of surprising global, regional and national trends in economic and social wellbeing, including an alarming deterioration in global security and a widening gap between the most and least prosperous nations.

While it’s positive to see prosperity increasing, it is concerning that this growth is not being enjoyed equally across the globe. For the past five years, the gap between the top and bottom scorers in the Index has been growing. Yemen, the lowest ranking nation in the Index is at its lowest prosperity level in eight years.

This imbalance in prosperity threatens wellbeing as well as wealth, most notably in Safety and Security.

Too few people are enjoying the fact that prosperity is at its highest point in a decade. A lot needs to change to enable all nations to fulfil their potential in the nine pillars of prosperity set out in our Index and to ensure every individual has the opportunity to flourish and create their own pathways to prosperity.

UK PROSPERITY RANKING UNCHANGED SINCE THE EU REFERENDUM

Britain remains in 10th place in this year’s Legatum Prosperity Index, driven by a Business Environment which is the best in Europe and fifth best in the world.

Economic openness is one of the standout features of prosperity in the UK this year. The nation’s leading Business Environment has its origins in strong intellectual property rights, a flexible labour market, and excellent business infrastructure.

Adding to its economic strength, exports from the UK are considerably more diverse and of a higher quality, government is perceived as being more open to competition, and those in business report that barriers to trade are not as prevalent as elsewhere.

However, when we look beyond economic prosperity, the picture is not so rosy. The UK’s greatest deficit compared with the rest of the Anglosphere is in Social Tolerance. The UK also has a deficit in key indicators of bridging Social Capital such as willingness to volunteer, willingness to come to the aid of strangers and trust in the police.

These faltering social attitudes in the UK have a clear economic impact. Strong bridging Social Capital is a key element of a well-functioning economy, as effective business can only be carried out in an environment of trust.

The UK’s standing in the world may have improved in economic terms, but in order to be truly prosperous the country’s future must be about wellbeing as much as it is about wealth.

THIS YEAR’S KEY FINDINGS

Despite turbulence in many areas, global prosperity has increased

Prosperity now sits at its highest level in the last decade, 2.6% higher than in 2007. More countries have shown improvement than those who haven’t, however the gap between the most and least prosperous 30 nations continues to grow.

Western European prosperity overtook North America for the first time in the Index

Western European prosperity remained broadly constant; but North America fell faster than any other region, due to an increase in the number of homicides and greater societal pressure on citizens’ freedom of religion.

The UK has maintained its tenth place in the rankings

Britain stays in 10th place, driven by the best Business Environment in Europe, and fifth best in the world. Economic Quality in the UK has also begun to recover, and now sits ahead of both Canada and the US.

The greatest gains in prosperity have come from the Asia-Pacific region

Gains came through a fast-improving Business Environment, especially in the population centres of India (100th), China (90th), Pakistan (137th) and Indonesia (59th).

The world has become less safe and secure

Safety and Security continued its decade-long decline, deteriorating in nearly two-thirds of nations and by five times more than any of the Index’s other pillars. The most concentrated declines have come in the MENA region, in part as a result of Syria’s civil war.

Norway has regained the number one spot from New Zealand

Norway’s #1 ranking has been the result of improvements in the country’s Business Environment and Governance in the past twelve months, with Norwegians more optimistic about starting a business and more confident in their government than last year.

Governance improved in every region in 2017, with Asia and Sub-Saharan Africa rising fastest

Across the world judiciaries became more independent from state interference and the process of challenging governmental regulation became easier. People also became more confident in the outcomes of elections.

Latin America is showing the most concentrated declines in prosperity

While overall prosperity increased in Latin America and the Caribbean, the region also contains some notable fallers, including Venezuela but also Nicaragua, Ecuador and El Salvador.

India is catching up with China

India has narrowed the gap on China to a quarter of what it was in 2012. It has improved by four ranks in the past year, the result of gains in Business Environment, Economic Quality and Governance.

The Nordic and Anglosphere nations have enjoyed the highest overall prosperity in the world.

There has been a representative from each at the number one spot the last eleven years, with consistently high quality of life especially in the Health and the Natural Environment pillars.

ABOUT THE PROSPERITY INDEX

At the Legatum Institute, we believe prosperity should provide people with the opportunity to fulfil their potential and to help others realise theirs.

The Legatum Prosperity Index is the world’s leading global measure of economic and social wellbeing. Covering 149 nations and based on 104 indicators and 15,000 data points, it presents a unique insight into international wellbeing by identifying the conditions required for prosperous nations.

Its broad range of indicators allows the Prosperity Index to pinpoint not only the drivers, but also the obstacles to a nation’s prosperity. These are organised into nine pillars of prosperity: Economic Quality, Business Environment, Governance, Personal Freedom, Social Capital, Safety and Security, Education, Health and Natural Environment.

Once again, this year’s Index is helping us all identify how we can create more prosperous lives, building stronger economies, societies and nations. Searching out the areas in which nations have potential to grow is a crucial part of realising this goal. Our hope is that our Index can continue to help governments and policy-makers to identify and promote policies that create pathways from poverty to prosperity.”

Philippa Stroud, CEO Legatum Institute

 

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