[Graeme]

Four Major Changes in Global Prosperity

Over recent years, governments too have increasingly begun to realize that focusing on GDP growth alone does not necessarily lead to improvements in living standards of their citizens. Put simply, what’s good for increasing GDP may not be good for the long-term betterment of society. The outcome of this is the realization that what we measure needs to catch up with what we value.

Over the last seven years, the Legatum Institute has been at the forefront of this “beyond GDP” discussion. Our annual Prosperity Index –- the 2013 edition of which we released yesterday –- measures national prosperity based on eight core pillars that combine “hard” data with survey data. The result is the most comprehensive assessment of national prosperity of its kind.

This year the Prosperity Index offers five consecutive years of comparable data. The world has changed a lot over the last five years, and events have occurred that changed the course of history for millions of people — the financial crisis of 2008, the Arab Spring, and the ongoing civil war in Syria, to name just a few.

In assessing national prosperity, considering trends over five years of data allows us to step back from the twists and turns of specific circumstances and, instead, consider the general direction of travel. And so what do we observe from this vantage point? Here are four observations that stand out.

Global Prosperity is Rising

Latin America is Rising

Europe’s Loss is Asia’s Gain

Bangladesh overtakes India

hbr

[ROCKMAN]

Interesting Graeme...mucho thanks. It seems that a one common factor for both positive and negative movement of many of the countries relates to changes in energy revenue or expense. The oil exporting nations are obvious. And while some like to highlight the increase in US oil production and a decrease in imports. But look at the cash flow: in addition to a huge increase in energy costs there was also a huge increase in wealth transfer from us to the oil exporters despite the decrease in imports.

Just a random observation.

[Plantagenet]

Its easy to see why the US has fallen on this list over the last four years when you look at the eight factors Legatum considers in making their rating:

1. Economy: The US economy has been crappy for the last four years. We've got record poverty, record foodstamp use, record longterm unemployment etc etc and very slow GDP growth.
2. Governance: totally and completely crappy for the last four years
3. Opportunity: completely crappy----33% of people under 30 are on the government dole in the US and many people who find jobs are hired part time and paid minimum wage.
4. Education: crappy for the last four years. US companies can't even find educated tech-savy Americans to hire anymore
5. Personal freedom: Can you spell N-S-A?
6. Safety and Security: Chicago---murder city USA. The increasing murder rate in Chicago is probably enought to drag the whole US rating down
7. Health: Millions in the US go without healthcare insurance and now millions more are having their insurance cancelled
8. Social Capital: More poverty means more societal and Racial tensions over the last four years.

I can't imagine how low the US will fall in another four years

[ralfy]

What is taking place in the U.S. is the result of three decades of consumer spending in a reserve currency economy. It is also pulling down the other rich countries.

Meanwhile, resource consumption is increasing in other countries, negating peak demand.

Given peak oil....

[Plantagenet]

What is taking place in the U.S. is ... pulling down the other rich countries..

Nah.

Japan was collapsing long before 2009 and the EU countries are responsible for their own real-estate bubbles and their own problems in their own economies, including an inability to adjust to higher priced energy.

Its easy to blame the US, but the rich countries are all mostly all declining due to their own failed policies.

[Keith_McClary]

Its easy to see why the US has fallen on this list over the last four years when you look at the eight factors Legatum considers in making their rating:
...

On this page you can click on the country name to see changes in each factor since 2011:
http://www.prosperity.com/#!/ranking

Also ranking by each factor and within groups of countries.

More interactive goodies here:
http://www.prosperity.com/#!/

[rollin]

The sad part is that it took this long for professionals and authorities to realize that profiteering and capital shifting to a few percent of the population is not an indicator of the general welfare. Duhhh.
Even so most governments and agencies do not abide by these results, it's GDP all the way. Greed and sucking the life out of the people dominates to this day.

[Plantagenet]

it's GDP all the way. Greed and sucking the life out of the people dominates to this day.

GDP has nothing to do with greed. Its just a number that calculates the amount of economic activity that occurs in a country. Poor Socialist countries like cuba and North Korea have GDPs just like wealthy capitalist countries do.

A growing GDP is good---the greater a countries GDP, the more wealth there is in the country.

Poverty occurs when GDP is too low, or when income inequality concentrates too much wealth in the hands of too few people. Right now in the US GDP is growing very slowly and poverty is at record rates because government policies are designed to enrich Wall Street while doing little or nothing for most Americans.

[ralfy]

Nah.

Japan was collapsing long before 2009 and the EU countries are responsible for their own real-estate bubbles and their own problems in their own economies, including an inability to adjust to higher priced energy.

Its easy to blame the US, but the rich countries are all mostly all declining due to their own failed policies.

I am not referring to the U.S. but to a global capitalist system that eventually leads to all sorts of "bubbles," "higher priced energy," and other "failed policies."

[ralfy]

Related:

"Does High GDP Mean Economic Prosperity?"

http://www.investopedia.com/articles/ec ... or-gpi.asp