Wednesday, October 27, 2010

Prosperity Index- 2010

Legatum Institute's 2010 Prosperity Index, published on 26th October 2010, has presented a broad view of wealth, happiness and prospects for the future of 110 countries, captured in eight sub-indexes from personal freedom to the economy. Legatum Institute is a London-based international think tank.
The survey has covered 90 percent of the world's population, taking into account factors that contribute to the overall prosperity -- such as education standards, health, personal freedom, safety, security and democracy.
In its fourth year, the Index Nepal has listed 91st. Bangladesh is in 96th & India in 88th. Sri Lanka has been ranked 59th.
The index has crowned Norway in the first place, followed by Denmark in the second, and Finland third. Free Markets the key to Nordic nations’ strong performances. Zimbabwe on last of all.

Index Comparisons (Rank/Number of countries)
Legatum Prosperity Index: 91st/110
Average Life Satisfaction Ranking: 83rd/110
Per Capita GDP Ranking : 103rd/110
WEF Global Competitiveness Index : 130th /139
UN Human Development Index : 144th/182
Heritage/WSJ Economic Freedom Index : 130th/179
TI Corruption Perceptions Index : 143rd/180
Vision of Humanity Global Peace Index : 82nd/149

Prosperity Index's detail on Nepal
Economy : Ranked 100th
Nepals economy is inherently weak and requires stronger fundamentals to attain steady growth
epals 2008 inflation rate of 11% did little to encourage an increase in gross domestic savings, which stood at 11% of its GDP, ranking in bottom quartile of the Index. Nepal also has the eighth highest rate of unemployment in the Index, recorded at 46%. According to a 2009 survey, only 41%* of the population reported being employed. A slightly above global** average proportion of Nepalese are able to afford adequate food and shelter*, but only half* are satisfied with their personal standard of living. GDP per capita grew at an average annual rate of 2.1% between 2004 and 2008 and the majority of the Nepalese population expect the economy to contract in the near future. Despite this, a surprising four in 10 are optimistic about their local job market. Nepals economic fundamentals seem weak and do not support future growth. In terms of market size and access to productive physical capital, Nepal ranks in the bottom 20 of the Index. Nepal places in the lowest 10 of the Index for its negligible rates of high-tech exports and foreign direct investment. Nepalese citizens have a very high level of confidence in their country’s financial institutions, placing Nepal 10th* on this variable, but there are no data available on the proportion of non-performing loans.

Entrepreneurship & Oppurtunity : Ranked 96th
Nepalese entrepreneurs are optimistic in the face of high start-up costs and poor infrastructure.
Innovative activity is extremely limited in Nepal. ICT exports constitute a low 0.1% of total goods exports, and domestic investment in R&D equates to only 0.6% of Nepals GDP. Nepal ranks third lowest on the Index with respect to mobile phone penetration, while internet connectivity and security is very weak, both of which point to a weak infrastructure for entrepreneurship. Starting a new business is difficult, as a result of extremely high start-up costs of 54% of GNI per capita. Yet, Nepalese citizens are exceptionally positive: more than eight in 10* people surveyed in 2009 believe their city is a good place to start a new business, placing the country 17th on this variable. Economic development is extremely unequal across socio-economic groups, yet 95%* of people believe that hard work is enough to guarantee success. This positive subjective assessment of the entrepreneurial environment places Nepal 11th on the Index for this variable. There are no data available on income earned from royalty receipts.

Governance : Ranked 94th
The government of Nepal places heavy restrictions on political rights and is perceived as corrupt by its citizens.
Nepals current government can be classified as a newly established democracy with an inefficient bureaucratic system that struggles to implement national policy effectively. Checks and balances, although present, are weak, as is the level of competition in the executive and legislative branches. According to a 2009 survey, approximately 45% of the population approves of the national government, and the country’s efforts to address poverty, placing Nepal 65th* and 40th*, respectively, for these variables. A higher 57%* approve of the country’s efforts to preserve the environment, placing the country above the global mean. However, corruption is perceived to be endemic in the political and business sectors, placing Nepal in the bottom 20* of the Index. This could be a consequence of ineffective regulation of commercial competition and lack of respect for the rule of law. Only two-thirds* of the population have confidence in the military, a rate below the global average, but an above average 64%* trust the judiciary. Restricted political rights result in limited political participation: only one in nine* Nepalese voiced their opinion to a public official, the 99th lowest rate, globally. This is further borne out by low confidence in the electoral process which places Nepal 84th on the Index.

Education : Ranked 92nd
Nepalese schools do not provide a high quality education, resulting in a poorly educated workforce.
Nepal has an extremely poor educational system. Only 78% of children attend primary school, and gross secondary and tertiary enrolment rates are far below the global mean, at 48% and 9%, respectively. In Nepal, there is near gender equality in primary and secondary education, but there is only one primary school teacher for every 38 pupils, suggesting that a very poor level of education is offered in Nepal. As a result, only 54%* of people surveyed in 2009 believe that children are given sufficient opportunities to learn. However, despite this lack of opportunities, an above global average 77%* of people are content with their local educational facility, indicating low public expectations. The Nepalese workforce is poorly educated, placing the country in the bottom 30 of the Index for the average secondary and tertiary education of its workers.

Health : Ranked 97th
Low health expenditure results in an inefficient healthcare system and low levels of public health.
Nepals healthcare system is lacking on many fronts. One in every 20 children die within the first year of their birth and more than a fifth of the population is malnourished. Additionally, life expectancy, when adjusted for healthy years lived, is only 52 years. Nepal places in the bottom 25 countries of the Index on all four of these variables. Only 82% of children are immunised against infectious diseases or measles, placing Nepal in the bottom third of the Index on both variables. Health expenditure is very low, at just $90 (PPP) per capita. This low level of spending results in an inadequate healthcare infrastructure: there are very few hospital beds available and just 27% of the population have access to sanitation facilities. In addition, a below global average 72%* of people are content with the quality of their water. Many Nepalese die as a result of respiratory diseases or tuberculosis, ranking Nepal in the bottom quartile of the Index. Subjective assessments of public health are somewhat mixed. An above global average 84%* of people surveyed in 2009 were satisfied with their level of personal health and only 27%* had felt worried the previous day. However, an extremely low 58%* of people felt well-rested and almost a third* reported severe health problems, placing Nepal in the bottom 10 of the Index for these two variables. The fact that only six in 10* people take pleasure in their immediate environment places Nepal a low 92nd on the Index for this variable.

Safety & Security : Ranked 87th
Nepals national security is threatened by high levels of political violence and internal displacement.
Nepal suffers from endemic social and political instability. Tensions arising from the presence of group grievances based on historic injustices, as well as demographic instability resulting from border disputes, ownership or occupancy of land, access to transportation outlets, control of religious or historical sites, or proximity to environmental hazards, cause the most important threats to Nepal’s national security. Although there were no reports of ethnic or civil strife in 2008, the government of Nepal often sponsors acts of violence against political dissidents. All of these factors contribute to a high rate of human flight, as many Nepalese professionals choose to emigrate to safer countries. One in 20 Nepalese are mugged or physically assaulted every year, a rate above the global average. However, rates of property theft are extremely low, with just 6% of people being victims of theft every year. These figures place Nepal 51st* and sixth*, respectively. Yet more than four in 10* people say that they do not feel safe walking alone at night, a rate far below the global mean. In contrast, only some* would be afraid to express a political view, indicating a very high level of freedom of expression.

Personal Freedom : Ranked 44th
Although Nepalese citizens enjoy only limited individual freedom, they remain open to outsiders.
The government of Nepal restricts civil liberties, limiting citizens’ ability to speak freely, associate with others, express their beliefs or exercise personal autonomy. The country places a low 73rd on this variable. Unsurprisingly, a low 62%* of people express satisfaction with this level of individual freedom, placing Nepal in the bottom third of the Index for this variable. Yet most Nepalese perceive their country as tolerant and welcoming. According to a 2009 survey, 79%* and 87%* of the population believe that immigrants and racial and ethnic minorities can live peacefully in their city, respectively. These high proportions place Nepal in the top 20 countries of the Index.

Social Capital : Ranked 84th
Nepalese citizens are unlikely to trust others or help strangers, outside the family unit.
Nepalese society lacks cohesion. In a 2009 survey, a low 14%* of respondents felt they could trust others and just four in five* indicated being able to rely on family and friends in times of need. On both occasions, Nepals performance is below average and indicative of weak social cohesion. Social engagement is also sub par: a below global average 22%* and 36%* of people donate and help strangers, respectively, while a slightly above global average 20% volunteer their time. Nepalese citizens have good potential access to familial networks, as almost two-thirds* of the population are married. Potential access to religious networks is weaker, with fewer than four in 10* people regularly attending a place of worship.

* Data taken from the Gallup World Poll
** The terms 'international', 'global', or 'world' are used to reference the 110 Prosperity Index countries, which represent approximately 93% of the world’s population and 97% of global GDP.