Nordic countries top the list of the 2009 Legatum Prosperity Index published last week. The supposedly mightiest nation on the earth, the United State of America, ranks only ninth.
Interestingly India is well ahead of China in the index, though GDP-wise the country is yet to enter the big league.
The Index compiled by the Singapore-based Legatum Institute finds that the most prosperous nations in the world are not necessarily those that have only a high GDP, but are those that also have happy, healthy, and free citizens. Now in its third year, the Index builds on the previous versions with expanded data and refined analysis and assesses 104 nations covering 90 percent of the world's population.
The top 10 countries are: 1) Finland 2) Switzerland 3) Sweden 4) Denmark 5) Norway 6) Australia 7) Canada 8) Netherlands 9) United States 10) New Zealand
The bottom 10 countries are: 95) Kenya 96) Algeria 97) Tanzania 98) Nigeria 99) Pakistan 100) Cameroon 101=) Central African Republic 101=) Yemen 103) Sudan 104) Zimbabwe
The following are ten key findings of the Prosperity Index: 1. Prosperous countries are strong across the board.
Prosperous countries which lead the Index do well in all nine sub-indexes, indicating that the foundations of prosperity reinforce each other. 2. Entrepreneurs at the micro level need good economic policies at the macro level.
Innovation and entrepreneurship are more strongly related to economic fundamentals than any other factor in a society. Aspiring entrepreneurs will often hit a "ceiling" limiting their success if a nation's economy is not fundamentally strong. 3. Freedom cannot be divided.
While some nations seek to allow one aspect of freedom while restricting other aspects, prosperous nations respect freedom in all of its dimensions: economic, political, religious, and personal. 4. Prosperity is concentrated in the North Atlantic - for now.
Sixteen of the top 20 most prosperous countries sit in North America and Europe. 5. History is not destiny.
Highly ranked nations include those with a long history of productive economies, effective and limited government, and social capital. Yet several other nations rank high that not long ago were afflicted with poverty, oppression, and unhappiness. 6. Good governance is central to life satisfaction and economic progress.
Countries in which sound governance creates satisfied citizens are also the most likely to have the healthiest economic fundamentals and the most entrepreneurial societies. 7. Prosperity means security.
Security and safety function as both a cause and an effect of overall prosperity. A secure nation enables its citizens to flourish without fear of attack or harm, and prosperous citizens provide the financial resources and social capital to maintain safety and security. 8. Happiness is ... opportunity, good health, relationships, and the freedom to choose who you want to be
The highest levels of overall life satisfaction are reported in countries which score best in the areas of health, safety, personal freedom, and social capital. 9. Strong communities are better than weak governments.
Some countries with ineffective governments still score well on social capital, indicating that healthy networks of families and friends play an essential role in helping a nation function. 10. It's true that money can't buy happiness ... unless you are poor.
Only in the poorest countries do increases in income have a significant effect on people's life satisfaction.
In Asia, Japan was the region's highest ranked country at number 16, followed by Hong Kong (18th place) and Singapore (23rd place) and Taiwan (24th place).
Although outperformed by China on several economic indicators, India's superior overall ranking is achieved through its performance in the critical non-economic factors such as personal freedom which encompasses freedom of speech and religion, national tolerance for immigrants and ethnic and racial minorities.
India also ranks highly on measures of social capital, reflected in the percentage of citizens who volunteer, give to charity, help strangers, and who feel they can rely on family and friends. In this area, India ranks fifth in the world, ahead of the United States, the United Kingdom and Finland.
"India is a classic example of a country whose prosperity stems largely from its social capital and quality of life rather than its performance on the purely economic measures. Although China outperforms India on several economic indicators, India is 30 places higher in the final rankings because of China's poor levels of personal freedom and democracy," said William Inboden, senior vice president of the Legatum Institute.
"However, there are some areas of concern for India, particularly in the quality of healthcare and education for which India ranks 88th and 86th respectively," concluded Inboden.
India's low global ranking on health indicators results from a number of factors: severe underinvestment in medical facilities resulting in poor standards of healthcare; low levels of improved sanitation facilities; undernourishment affecting 20 per cent of Indian citizens; a low average health adjusted life expectancy of 53 years; and a high number of citizens are reporting that they suffer from health problems. It is ranked 55th in entrepreneurship and innovation.