The Legatum Institute, an academic investment group think tank based in London, has just released its latest global prosperity report. The 2009 Prosperity Index values prosperity in a number of ways, and not purely based on economic indicators. They include personal freedoms, quality of life, entrepreneurship, health, education, innovation, governance and social capital in addition to economic fundamentals.
In the results, India scored 45th on the index, while China ranked low in 75th place, below even pariah state Venezuela. The reasons for this have to do in the way Indian governance contributes to its economy according to Ryan Streeter, of the Legatum Institute. Coupled with that other key measurements of governance, such as freedoms and social capital, India is far more prosperous than China.
According to the institutes web site, the Legatum Prosperity Index is the world’s only global assessment of wealth and wellbeing; unlike other studies that rank countries by actual levels of wealth, life satisfaction or development, the prosperity Index produces rankings based upon the very foundations of prosperity – those factors that help drive economic growth and produce happy citizens over the long term.
Roger Bate, a researcher at the American Enterprise Institute, commented on the report in Mint: China outperforms India in the two main economic sub-indices because it provides greater economic certainty to investors, receiving far more foreign investment than India. Still, the overall index implies that trouble is brewing for China as it loses out to India in all other indices, especially in its lack of democracy and personal freedoms.
The index social capital, where India ranked fifth globally, is interesting. According to the report, Indian citizens report high levels of membership of community organizations, allowing for a broader network of social capital states the report, whereas in China such groups must be monitored by the state.
We’d be interested to hear what 2point6billion.com readers think about the definition of prosperity and whether this can be, or should be measured in social and economic terms or purely on an economic basis. Your comments are welcome.
This article was written for 2point6billion.com, a news source dedicated to China and India business news . The site is contributed to by Dezan Shira & Associates, who maintain accountants in Delhi , Mumbai and other Indian cities, as well as accountants in hong kong Shanghai, and other cities in China.