India figures near bottom in prosperity survey

BS Reporter / Mumbai July 02, 2007

With a +9% plus economic growth, rising stock prices and many people becoming richer, Indians should be getting happier, more fulfilled, and feeling better about life, right?

No. On the contrary, India, along with Pakistan and Egypt figures near the bottom of the table of nations, as per the first survey to rank nations in terms of prosperity. The three countries are better than only Zimbabwe. The survey by Legatum, a privately owned Dubai-based international investment firm, through its Legatum Prosperity Index, saw a three-way tie between Norway, Sweden and the United States for the title of the most prosperous nation.

“India’s low position may seem puzzling, given the country’s achievement of democracy and Indians’ oft-noted spiritual strength,” says Legatum, in a press release. But these strengths, it seems, cannot make up for an extreme deficiency in health. “Health is the second-strongest determinant of life satisfaction, trailing only freedom of choice, and India has one of the three lowest values in our study,” it explains.

The first annual edition of the Legatum Prosperity Index, which covered 50 countries, is the result of an investigation into the various factors that drive prosperity in different countries. Recent research advances have made it possible to compare not only the material wealth but also the life satisfaction of people in countries worldwide. Accordingly, Legatum has defined national prosperity as the well-rounded combination of both of these factors.

While no country has poor scores in every category, Zimbabwe comes closest. Although its people report that they maintain strong religious faith, this does not make up for extreme levels of ill-health, poverty and unemployment, as well as high divorce rates.

Through responsible management of its natural resource wealth, Norway has achieved rapid economic growth as well as excellent social conditions. Sweden may perform less well economically, but has world-leading scores on the most important social indicators including political and civil liberties, community life, health, leisure time and equality of opportunity. The United States has respectable scores in most areas and is exceptional in the degree to which its citizens maintain strong religious faith and report that they feel secure in their ability to make free choices and control their own lives. Both of these are factors that, other things being equal, correlate strongly with life satisfaction.

Material wealth and life satisfactions constituted two key drivers for prosperity of nations. Some of the factors much-required for increasing material wealth, via sustained long-term economic growth, are growth in invested capital, low dependence on foreign aid, high levels of education, good governance, low dependence on commodity exports, low costs of bureaucracy and economic openness.

Similarly, the most important drivers of high levels of life satisfaction are freedom of choice good health, equality of opportunity, strong religious faith, high levels of income, favourable climate, political rights and civil liberties, low unemployment rates and low divorce rates.

Though India figures among the bottom overall, Legatum points out that complete data are not available for every country in the world, so there are many countries that may rank far below these countries.