Member News
28th October 2010
In the third instalment of ePolitix.com's interview to mark the release of the Legatum Institute's 2010 Prosperity Index, we talk to Jiaehae Choi about why countries have moved up or down the index since 2009.
One of the major insights that comes from looking at the results of both the 2009 and 2010 Prosperity Indexes is that prosperity is not a short-term issue.
Since 2009 three countries have seen a large shift in their position of prosperity: Indonesia, Algeria and Nicaragua.
Whilst Indonesia and Algeria have improved their rankings by 15 and 12 places respectively, Nicaragua has seen the largest decrease in prosperity, dropping 14 places. This, Jiehae says, is due to a change in people's perceptions:
"One of the things we measure is people's perception of social tolerance and people's sense of trust in one another; that has been one of the driving forces for the biggest drop in positions we have seen for any one country on the index," she says.
Although all three countries' prosperity rankings altered due to changes in public attitudes, according to Jiehae a large drop generally occurs because a country's foundations for prosperity are "weak".
The index is not to be viewed as a straightforward assessment of who is prosperous and who is not, but an overall assessment of which countries have the foundations for prosperity.
"If you have those foundations, it is very unlikely you will fall very much. If the social fabric within a country and the tolerance levels are weak, fluctuating and volatile, then that is going to create volatility within a country as well," she says.
Another key finding taken from the 2010 index, demonstrates that economic growth is not enough to ensure provision of overall prosperity.
Although the BRIC countries (Brazil, Russia, India and China), have gone from strength to strength recently in terms of economic fundamentals and growth, they are still languishing in the middle of table when it comes to prosperity.
"We are not discounting the importance of economic growth, but it is only one of eight measurements of prosperity," Jiehae says. "There is a limit to how prosperous you can be if you are only looking at one factor."
India is a country which exemplifies this notion, as it has recently seen a drop in its safety and security and an even larger decrease in the personal freedom sub-index, due to a drop in levels of tolerance for immigrants and minorities. This, Jiehae notes, is not even India's fault, as it is India's neighbouring countries that are making it a less secure place to live.
"If India does not start addressing this issue and influencing its neighbours or figuring out how to maintain a safe and secure environment, then however much its economy or governance continue to improve, it won't be a fully prosperous nation," she says.
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