Every year, the London-based think-tank the Legatum Institute generates an annual ranking of 149 countries around the world, considering nine pillars, namely:
- Economic quality
- Business environment
- Safety and security
- Personal freedom
- Social capital
- Natural environment
The rankings are well-received around the globe due to being both comprehensive and annually generated. To know more about the salient aspects of the report, read on for the top four trends revealed in the Legatum Prosperity Index 2018.
1. The business environment is on an upward trajectory
The Business Environment pillar “measures a country’s entrepreneurial environment, it’s business infrastructure, barriers to innovation, and labor market flexibility” and has seen the most substantial one year gain at a global level, as it rose in every region. This year, the United States takes the top spot for Business Environment, followed by New Zealand, Canada, United Kingdom, and Singapore.
In particular, countries in Asia, Sub-Saharan Africa, and Eastern Europe have seen the most significant increases in this area mainly due to an improvement in their entrepreneurial environment. Sub-Saharan Africa has seen significant developments in the ease of starting a business which has, consequently, improved their overall Business Environment score.
Eastern Europe has also witnessed robust and continuous growth in its Business Environment pillar score, thanks to a focus on investor protection and the ease of starting a business. At this point, the region almost has the same score as the rest of the world average; however, it must be pointed out that there are significant differences within countries across the region.
2. Safety and security is an urgent global concern
For nations around the world, in every region, safety and security continue to be a significant concern as it is the only pillar that has a lower average this year than it did a decade ago. This year, Norway takes the top ranking in the Safety and Security pillar, followed by Japan, Singapore, Hong Kong, and Ireland. Iraq holds the bottom spot, with Afghanistan, the Central African Republic, Democratic Republic of Congo, and Nigeria rounding out the base five.
This drop in score is mainly due to a decrease in the standard of people’s living conditions which is a continuous trend particularly in Latin America and the Caribbean where more people than ever before are reporting that they are unable to afford and procure enough food and appropriate shelter. Additionally, a small though a significant increase in the number of terrorist deaths around the world remains another security threat.
3. Women’s participation is growing
Back in 2007, women only had 15% representation in parliaments around the world. Over the past decade, the number of women holding government seats has been steadily increasing and now, in 2018, it sits at 20.7%. Out of all the countries in the world, Rwanda (95th in the overall Prosperity Index rankings) has the most significant proportion of women in parliament, as females hold 49 out of 80 seats.
Conversely, the MENA region is the lowest ranked, as women occupy a mere 16% of government seats. Interestingly, despite a vast majority of the world experiencing an increase in prosperity, the MENA region is one of two that has seen a decline in overall well-being, with 11 of its 18 countries’ scores dropping.
All countries in this region face a common challenge regarding personal freedom, as they all rank outside the top 100.
One of the most alarming findings from the Legatum Prosperity Index 2018 concerns the set of countries who already find themselves at the bottom of the rankings and are continuing to decline further.
These countries include Venezuela which has continued to squander its prosperity over the past few years. Additionally, this year saw El Salvador, fall in eight of the nine Index pillars.
Furthermore, due to conflict or political oppression, several countries are not included in the index because of incomplete data. These countries include Myanmar, North Korea, and Syria and are (unfortunately) presumed to have even lower standards of prosperity than those states that are included.
Have you ever read the Legatum Prosperity Index before?
If so, what do you think are some of the most important findings from their data? If not, do you think this is a more holistic way of ranking a country’s prosperity?
Let us know your thoughts and any insights you have in the comments below!