You can say that a person is prosperous when he is successful and happy with his life and career. The same is true with a nation.
A country’s prosperity can be achieved not just through wealth creation, but also by ensuring the well-being of its people. Who they are becoming weighs more than what they are getting. And there are several conditions that can affect a country’s level of prosperity.
Understanding the different pillars that affect a country’s prosperity is the focus of a study conducted by The Legatum Institute, an independent educational charity institution. Every year, they release their Prosperity Index that ranks 149 countries based on the total scores they get from these pillars.
Measuring the prosperity of a nation depends on the following pillars that the study used as metrics:
1. Economic Quality: This refers to the openness of the country’s economy, economic opportunity, foundations for growth, macroeconomic indicators, and financial sector efficiency.
2. Education: This refers to the ease of access to education, human capital, and quality of education.
3. Governance: This indicates how the country performed in three areas – effective governance, rule of law, and political participation and democracy.
4. Business Environment: This shows the entrepreneurial environment of the country. It can depend on innovation, infrastructure, and property development possibilities with or without the help of business service providers like Lincoln Frost.
5. Natural Environment: This indicates how the country performed in three areas – preservation efforts, environmental pressures, and the quality of the natural environment.
6. Social Capital: This refers to the strength of the country’s social network support, civic participation, social norms, and personal relationships.
8. Health: This indicates how the country performed in three areas – health infrastructure, preventative care, and basic physical and mental health.
9. Safety and Security: This refers to the country’s status in terms of personal safety and national security.
The State of Global Prosperity
Global prosperity is rising. This means that there is an increasing number of people living prosperous lives than in the past couple of years. In 2018, 113 countries showed significant improvements in their prosperity. This is primarily because of the significant role of Personal Freedom, Governance, Safety and Security, and Social Capital in sustaining wealth and well-being. Countries that have improved over the years include Paraguay, Estonia, and Sri Lanka.
Positive changes in the Business Environment and Economy Quality have greatly contributed to the continuous reduction of poverty among different countries. Kazakhstan and Bangladesh, for instance, have made a significant improvement in their economy as evidenced by their doubling increase in GDP per capita.
However, this progress is not universal because 36 countries have declined in ranking. What’s worse, countries ranked at the bottom continue to decline. Take Venezuela, for instance; it faces a continued decline. El Salvador is also experiencing a similar fate as it suffered a fall in eight pillars.
Personal Freedom is one of the reasons for countries to fail to prosper. Poor personal freedom made nations susceptible to external shocks, and this lack of resilience has caused prosperity levels to fall. Libya, for example, has suffered an event during the start of the second Libyan Civil War in 2014, which caused a decline in the well-being of its people.
The Safety and Security pillar continues to decline as well. Much of this can be seen in the regions of MENA and Sub-Saharan Africa. This indicates that a number of people in these regions are struggling to buy food and pay for shelter, and that there is an increasing number of individuals who have died due to terrorism.
By having in-depth knowledge and understanding of how countries have improved or declined in prosperity, leaders and policymakers will have an idea of how they can make their country prosper. This way, they can develop the best investment opportunities and strategies to alleviate poverty and improve their people’s well-being.
After all, prosperity is highly dependent on great leadership to determine and set domestic priorities, organizing support for growth and development.