NZ falls in world prosperity rankings

• Marty G
• 13 years ago
• Categories: Economy
• Tags: international ratings, legatum prosperity index, prosperity

The Legatum Prosperity Index looks beyond GDP, a failed measure that counts rebuilding after an earthquake and building prisons as gains. The Index is a broad measure of nations’ prosperity comprising 88 components. It shows that New Zealand is a relatively prosperous nation. It also shows that relative prosperity is falling under National.

In 2009, New Zealand was ranked the third-most prosperous nation in the world, behind only Norway and Denmark. In 2010, using the same methodology, we’ve fallen behind Finland and Australia as well.

It’s notable, as you look at the 2009 vs 2010 scores, that the all declines among the top 10 are countries led by right-wing governments. We’re down from 3 to 5, Canada from 6 to 7, Ireland from 9 to 11 – vastly different experiences of the recession but all mismanaged.

I dug into the sub-components of the Index to see what makes the more properous countries better off than us:

• The more prosperous countries have more even economic development than us – ie. fewer people are left behind, there isn’t such a gap between rich and poor
• They have a more positive expectation of the economy in the future.
• We have a much lower perception that working hard gets you ahead (a sign that many people are locked out of wealth eg. home ownership and wealth is concentrated in a small elite that isn’t accessible merely by merit)
• We have higher incidents of theft (again a reflection that people don’t see work as a route to obtaining wealth, so resort to another)
• More people are satisfied with their standard of living (93% in Norway and Denmark) compared to here (79%)
• Fewer of them work (75% of Kiwis said they had a paid or unpaid job, compared to 56% of Finns).
• We also report low job availability
• They have better national savings
• We have by far the lowest capital per worker (the flip-side of not saving enough)
• We have the most foreign investment/foreign ownership of our economy (also a factor of not saving enough ourselves)
• We are way down in high-tech exports
• Our internet bandwidth is a fifth of theirs

There’s heaps of measures where we’re tops though:

• We come first in education overall (this is pre-National Standards data)
• We have low health problems
• We rank highly in volunteering and helping strangers
• We have the lowest political constraints
• We have the lowest undernourishment rate
• We have the highest tolerance for ethnic minorities

Interestingly, we’re also the most religious of the top five with 27% of people attending church weekly vs 12% in Finland. I’m not putting that as good or bad, just interesting 🙂

For me, the message is clear: if we want to be a more prosperous country we need a fairer distribution of wealth which improves the economy but also encourages people on lower incomes to believe in the system and discourages crimes; we need to control our economic destiny by saving ourselves and not borrowing from abroad; we need to invest more, especially in high-tech R&D.