A Look Back at 2018: Prosperity Differs Across Global Regions
May 02, 2019 00:34
What defines a nation’s prosperity? Is it its economy? Its quality of life? Its natural resources?
According to the Legatum Institute, a country’s prosperity can be analyzed across nine sub-indices. It is more than just the country’s GNP or amassing of material possessions. Rather, prosperity measures include the joy of daily life and the promise of an even better tomorrow for a nation’s citizens.
Path to Prosperity
The London-based think tank and educational charity has long endeavored to find pathways to lift people all over the world out of poverty. With their three-pronged approach – using the Centre for Metrics as well as their research and practical programs – they come up with real-world data that are instrumental in creating solutions to help alleviate poverty.
One of the most significant contributions of the Legatum Institute is the Legatum Prosperity Index. This index contains in-depth information about how each of the 149 countries in the research fares across the nine sub-indices of prosperity.
Key findings in 2018 show that while prosperity is rising globally, there are glaring differences among nations. While some may enjoy developments in terms of their business environment, personal freedom still suffers because of political turmoil. Even on a sub-national level, there are still disparities brought on by differences in the availability of natural resources, human capital, or certain cultural factors.
To give a more in-depth look, here are some highlights of the year 2018 and how prosperity is felt in different spots in the world:
In Focus: Prosperity Across the Global Regions
Findings between countries within regions and even on a sub-national level display slight variations.
In North America, glaring differences in basic living conditions and living standards can be seen between Canada and other regions of the USA. Regardless of the disparities between these two countries, North America still clinched top rank in the 2018 Legatum Prosperity Index.
After a small dip in the 2017 rankings, North America has regained its footing and claimed its title as the number one region in terms of overall prosperity in 2018. The four main drivers for this prosperous move are Business Environment, Economic Quality, Governance, and Personal Freedom. The region also scored high in the Education and Social Capital pillars.
Meanwhile, Latin America and the Caribbean rank third in the prosperity ratings. Despite effectively staying in the same prosperity levels, it is still below their peak points back in 2013. A slow growth is observed, mainly driven by lower scores in Business Environment, Economic Quality, and Governance. The region has low performing governments, with widespread corruption and poor rule of law.
With strong and continuously improving scores in Business Environment and Economic Quality, the Asia-Pacific region is steadily moving towards long-term growth.
Dubbed as the fastest- growing region over the past ten years, the Asia-Pacific forges ahead and posted a rise in the 2018 Legatum Prosperity Index. The declining scores of 24 countries didn’t hamper its ascent and posted an increase in all pillars, save for Safety and Security, which stayed the same.
The region has displayed an astounding ascent in the charts compared to any other region since the first application of the Prosperity Index. It is also home to the some of the world’s most unprecedented success stories especially in terms of Business Environment, Economic Quality, and Governance.
With these pillars as essential elements in the foundation for economic well-being, it is noteworthy to mention two countries that have contributed greatly to this: China and India. Both countries have economies that are outrunning their Western neighbors, have lifted a multitude of people from absolute poverty, and have gone up the index eleven and six places respectively since 2007.
While there are improvements in all prosperity pillars, there’s still a marked weakness when it comes to political and personal freedom. This may be attributed to the need to maintain a stable political climate to make way for sustained economic growth. Singapore is a good example, ranking 21st in Prosperity but 98th in terms of Personal Freedom.
Prosperity levels as well as the challenges and opportunities also differ within the European regions.
Eastern Europe has seen a steady rise in its prosperity ratings, with 2017 scores marking the second largest in any region. All countries within the region, except Ukraine, have increased overall scores.
Different zones in the region also differ with regard to the main drivers of prosperity. For example, the “industrial hinterlands”, made up of parts of the Czech Republic, Hungary, Poland, Slovakia, and Slovenia, is the most prosperous zone in this region.
Thanks to their focus on engineering excellence as well as the opportunities brought on by a flourishing vehicle production industry, this zone scores high on Business Environment and Economic Quality pillars. Also, the Baltic “entrepreneurial sea” consisting mainly of Estonia, Latvia, and Lithuania, perform strongly across all entrepreneurial aspects.
While Eastern Europe enjoys the fruits of prosperity, Western Europe experiences the stark divergence in prosperity levels on its northern and southern points. Southern Europe, in particular, figures in the steady decline of political participation, with people reporting a lack of confidence in the election results. Effectiveness and integrity of governance, poor rule of law, and a decline in Safety and Security levels are some of the main drivers of descent in the index ratings for Southern Europe.
On the bright side, Western Europe displayed huge developments in the Economic Quality, Natural Environment, and Social Capital pillars. For 2018, countries like Cyprus, Portugal, and Norway are cited as the largest risers, with the latter positioning as the world’s top-ranked country.
4. Middle East and North Africa (MENA)
Ranking 6th in the global prosperity charts, the MENA region has seen a staggering decline, with dropping scores since 2017.
Facing a common challenge with Personal Freedom, all countries in the region have ranked outside of the 100 mark in the index. There is also a reported decline in the Safety pillar, due to political strife, threats to national security, and restrictions on freedom of expression and civil liberties. Obesity in the adult population has also driven a dip in the Health pillar, with 26% to 38% of the population across the region classified as obese.
Prosperity varies among the three various zones in the region, with the countries in the Arabian Peninsula, except Yemen, experiencing a broadly prosperous climate. The Gulf performs well in terms of Economic Quality, Health, and Safety and Security, in particular.
North Africa’s prosperity levels has started to decline over the past decade while countries in the Old Persian Empire have enjoyed a slight improvement since 2007 but still at a lower rate compared to the rest of the world.
5. Sub-Saharan Africa
Despite being the weakest performer, the Sub-Saharan region still indicated a slight rise in the 2018 Legatum Prosperity Index. Different countries in the region posted mixed success, with 35 countries increasing their prosperity scores over the course of the past 10 years.
As a whole, the Sub-Saharan African region has grown in leaps and bounds in the Business Environment pillar over the past decade. It also picked up in the Social Capital pillar.
However, it needs to improve on its Safety and Security pillar and, most importantly, in the Education arena. Thirty-six Sub-Saharan countries are part of the bottom 50 in the Education sub-index. This area needs to be radically developed for the region to maximize its economic potential.
Education is a vital foundation for prosperity. It not only enhances people’s ability to live a fulfilling life but also drives up the productivity of its citizens. Access to education and improving its quality will greatly harness the skills of the populace.
Steps Towards Success
It is undeniable that prosperity levels vary around the globe due to a variety of factors. There are peaks and lows, risers and fallers.
However, what is important is for the global population to find unity in diversity. Each global citizen has immeasurable personal value and potential. They only need to find the means and opportunity to fulfil their abilities and help others realize theirs.
With many employers making the decision to return to the workplace, there are many employees who want to continue working from home. While there may not be a perfect solution for every situation, a hybrid workplace comes the closest. It allows employees to work in the office and at home, providing them opportunities for in-person and online collaboration and enables them to be as productive as possible while remaining comfortable. It is important to carefully consider the hybrid workplace to make sure everything is set up properly. Read more
Many healthcare organizations today struggle to handle all tasks required of them. While the Affordable Care Act was meant to simplify healthcare delivery, the accompanying paperwork takes time. In addition, the organizations must ensure they remain in compliance with changing regulations related to this act. Read more