Monday, November 16, 2020

Decisions that build prosperity and respect freedom and responsibility crucial to lead World through Covid

 The Legatum Institute – in its 2020 Prosperity Index report – is urging leaders around the world to hold firm to a holistic view of prosperity and the core principles of freedom and responsibility as they respond to the ongoing Covid-19 pandemic.

The report notes that China was the first country to be impacted by Covid-19, and its response framed the context for how the rest of the world responded. The approach it took was to withhold information about the virus, restrict people’s freedoms, and lock down the country’s economic engine, and subsequently many other countries responded to the pandemic by severely curtailing civil rights and economic freedoms, a press note issued by the Legutum Institute reads. “The report highlights that these actions are consistent with China’s ranking of 90th for governance and 159th for personal freedom, but they are actions that weaken, rather than build, prosperity.”

The Institute highlights that prosperity is built when governments make decisions in such a way that engenders trust and with integrity, respecting the freedom of their citizens; prosperous nations are ones where governments govern with the agreement of the people, and where citizens take responsibility.

Likewise, economic decisions are taken responsibly to sustain an enabling environment for productive employment, sustained economic growth and personal development, and the principles of personal responsibility and freedom go hand in hand; citizens are free and order their lives taking responsibility for their own families and communities, it reads, adding that people take care of their own physical health and mental wellbeing and healthcare is accessible to all; they do not make decisions that threaten the health of others.

The Index reveals that, prior to the pandemic, global prosperity stood at a record high, with 147 out of 167 countries seeing prosperity rise over the last decade, driven by improved health, education, and living conditions, and more open economies. However, the improvement seen in the last 12 months had not kept pace with the progress of the previous two years, as Asia-Pacific and Western Europe stalled and North America deteriorated slightly. In addition, stagnating personal freedom and governance around the world is holding back further improvement in prosperity.

“The coronavirus pandemic is highlighting the holistic nature of true prosperity and testing all nations’ institutional, economic, and social resilience,” chief executive officer (CEO) of the Legatum Institute Philippa Stroud said, adding that the virus, and national efforts to contain it, is impacting not just health, but also jobs, children’s educations, and relationships with each other and with the state. “As each nation navigates its way through and out of the pandemic, good governance and the full involvement of a society where personal freedoms are protected will be crucial.”

 “There are significant challenges ahead, but the good news is that the Index shows that global prosperity was at its highest ever level when Covid-19 struck,” Stroud added. “However, there are also warnings in the Index, especially for more developed nations.”

The 2020 Legatum Prosperity Index reveals that, prior to the coronavirus pandemic, global prosperity had risen continuously over the previous decade, driven by improved health, education, and living conditions, and more open economies around the world.

Health improved across the globe since 2010, with all but 12 countries seeing an improvement. Expansions in immunisation programmes for diphtheria, measles, and hepatitis had resulted in a greater percentage of the population being inoculated against these life-threatening diseases. This, together with antenatal care now covering over 90 per cent of women around the world, had led to an improvement in preventative interventions.

All regions had seen an improvement in education in the last 10 years, with people starting education earlier and continuing later in life. Tertiary education, in particular, saw a big improvement in enrolment rates, from 31 per cent in 2010 to 42 per cent in 2020. The improvements across the global education system meant that the adult population was more skilled than a decade ago. 

Living conditions had also improved in all but 15 countries over the last decade, with four of the five most improved countries located in Asia-Pacific. This had been driven in particular by reductions in poverty, greater access to water and sanitation services, and increased digital connectedness. 

Economies around the world had become more open due to improvements to digital and transport infrastructure. Likewise, mobile network coverage had expanded, with nearly 90 per cent of the global population having access to 2G, 3G or 4G networks and over 50 per cent of the global population using the internet. In addition, many of the financial protections that are necessary to provide investors with confidence – property rights, investor protections, contract enforcement – had strengthened around the world. 

However, the Index highlights that the rate of improvement in global prosperity had slowed in the last 12 months. While 86 per cent of the global population lived in countries that experienced an increase in their prosperity between 2017 and 2018, and 81 per cent lived in countries that saw increased prosperity between2018 and 2019, only 61 per cent of people lived in countries that saw an improvement between 2019 and 2020. This was particularly driven by stagnation in Asia-Pacific, as safety and security, personal freedom, economic quality, and education had all deteriorated over the last year, and the rate of improvement in enterprise conditions and market access and infrastructure had slowed.

In addition, prosperity had deteriorated in North America and Western Europe over the last 12 months, with these historically successful regions starting to see a potential turning point in the quality of their investment environment and enterprise conditions. There had also been a deterioration in education across North America over the past year.

The Index also shows that further growth in global prosperity is being held back by stagnating personal freedom and governance. Globally 121 countries had seen a decline in the freedom to speak and access information and 116 had seen a reduction in the freedom to assemble and associate over the past 10 years, and political accountability and executive constraints – which measures the checks and balances on elected governments and their officials – had both weakened. 

“The Covid-19 pandemic has placed enormous constraints on prosperity at a time when we had been seeing a general trend of improvements across health, education, and living conditions, and more open economies,” director of Policy at the Legatum Institute Dr Stephen Brien said, adding that the emergence of the coronavirus has put all these areas under considerable strain, and the historic improvements are now at risk. “In addition, recent deteriorations in prosperity, particularly in developed regions, highlight that progress cannot be taken for granted and we must not become complacent.”

The Index, now in its 14th year, measures prosperity in 167 countries representing over 99 per cent of the world’s population, and how it has changed in the last decade. It comprises three domains – Inclusive Societies, Open Economies, and Empowered People – underpinned by 12 pillars, consisting of 66 different policy-focused elements. A rich dataset of nearly 300 individual country-level indicators, drawn from a wide range of international sources, provides the detailed measurement of national performance.

Top 10 countries 

1 Denmark

2 Norway

3 Switzerland

4 Sweden

5 Finland

6 Netherlands

7 New Zealand

8 Germany

9 Luxembourg

10 Austria 

Bottom 10 countries

158 Syria

159 Sudan

160 Eritrea

161 Democratic Republic of Congo

162 Afghanistan

163 Somalia

164 Chad

165 Yemen

166 Central African Republic

167 South Sudan

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