THE LEGATUM PROSPERITY INDEX™ 2019

Creating the Pathways from Poverty to Prosperity

Glimmers of hope, causes for concern

The Prosperity Index provides rich data for analysis. With 13 years’ worth of data, 167 countries, and just shy of 300 indicators, the Prosperity Index offers considerable analytical opportunities. This year we have examined the group of countries that have seen one of the 20 greatest improvements in prosperity over the last five years.

From these, we selected just eight countries whose notable recent improvements are in fact part of a long-term trend, or have seen substantial and consistent improvement in prosperity over the last few years. Similarly, we looked at those countries that have seen one of the 20 greatest deteriorations in prosperity over the last five years, and selected eight whose recent deterioration is part of a longer-term trend, or of a significant magnitude.

The two groups of countries highlighted on the following pages have either exhibited a ‘glimmer of hope’ in improving their prosperity, or shown a ‘cause for concern’. By ‘glimmer of hope’, we refer to those countries who are showing encouraging signs of progress over recent years. By ‘cause for concern’, we refer to countries that are exhibiting worrying signs of deterioration. Both groups are countries that require observation in the coming years, either to continue tracking successful outcomes, or to see if, and how, countries and governments address recent failures.

For those showing a glimmer of hope, some were in the bottom 25 places in the rankings as recently as 2014, but their improvements have been sustained enough to move them closer to the middle of the rankings. Others, sitting near the middle portion of the index, have seen an acceleration of growth in prosperity over the last couple of years. We chose not to highlight nations that have seen significant gains in prosperity over the last couple of years, yet remain in the bottom 25 places in the rankings this year, such as Togo, which has seen a notable improvement rising 7 ranks since 2014, yet still ranks 144th this year. Whilst these nations have made progress, significant challenges still remain across multiple aspects of prosperity.

The Prosperity Index provides rich data for analysis. With 13 years’ worth of data, 167 countries, and just shy of 300 indicators.

Myanmar is the second most improved country since 2014 and now ranks 124th, therefore qualifying to be included in the analysis. However, the country still faces significant challenges relating to the treatment of Rohingya muslims.

As seen in last year’s report, a deterioration in prosperity can often be a sharp change over just a handful of years. For this reason, the deterioration of prosperity in many nations highlighted over recent years is a cause for concern, due to the potential of rapidly deteriorating prosperity. Using a similar rationale to the selection of countries as glimmers of hope, countries who have seen a large decline yet remain in the top 40 places in the rankings have not deteriorated far enough to exhibit a cause for concern, although these countries should be closely observed for further deterioration.

Glimmers of hope
Glimmers of hope, causes for concern_Spotlights page_GRAPH 3.jpg

Albania

Albania’s prosperity has consistently improved over the last five years, driven by the opening of its economy. Tourism has played a key part in Albania’s economic growth, providing an estimated €1.5 billion annually for the nation, and Albania has also strengthened investors’ protections. Alongside economic growth, Albania has also experienced increasing enrolment and completion rates at all levels of education.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 4.jpg

Armenia
Armenia experienced the third greatest improvement in prosperity since 2016, with all 12 pillars improving. The greatest improvement has been in social capital, due to confidence in the national government rising to 67% this year, from 25% in 2018, following the mass anti-government protests and elections in 2018 that forced out President Serzh Sargsyan, who had held office since 2008.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 5.jpg

Côte d’Ivoire
Côte d’Ivoire’s improving safety and security, following the end of two civil wars between 2002 and 2011, has driven its improvement in prosperity. The improving security situation has enabled other improvements, particularly enterprise conditions and education. Doing business has become easier and wages are more flexible. Since 2014, primary school enrolment and completion rates have increased by 18 and 9 percentage points to 86% and 65% respectively.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 6.jpg

Myanmar
Myanmar has experienced the second greatest improvement in prosperity of any country over the last five years. Myanmar has experienced improvements in personal freedom, with freedom of association and organisation strengthening. Market access and infrastructure has also strengthened, with network coverage more than tripling since 2014, to 59%. Despite this, Myanmar has faced significant criticism of its ongoing treatment of Rohingya muslims, with an estimated 745,000 Rohingya having fled Myanmar into Bangladesh since just August 2017.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 7.jpg

Pakistan
Pakistan’s prosperity has improved since 2015. Safety and security improved, albeit from a low base, due to an easing of intensity in the ongoing war in the North-eastern Pakistan. Governance has also improved, with Bertelsmann Siftung’s 2018 country report on Pakistan surmising “grounds for optimism” due to the stability of the transition from the Chief of Army Staff to his successor. Health and education have also improved, particularly due to longevity, and enrolment in each level of education has improved.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 8.jpg

Serbia
Serbia has risen 13 places in the rankings over the past five years. The largest improvements have occurred in the nation’s enterprise conditions since 2014, due to reductions in the number of business tax payments per year and the time businesses spend filing taxes. Social capital has also experienced a considerable improvement, with family and other social networks strengthening and trust in strangers and institutions improving.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 9.jpg

The Gambia
The Gambia’s prosperity has risen every year since 2016, following a moderate decline between 2009 and 2016. Improvements in personal freedom and safety and security have driven this improvement. Adama Barrow now governs The Gambia following an election victory in 2016, after two decades of rule under former president Yahya Jammeh. Since then, political terror and violence has reduced, alongside improvements in the freedoms of association, assembly, and speech.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 10.jpg

Vietnam
Vietnam has seen consistent improvements in prosperity, driven by both economic and social measures. The total net value of Vietnam’s domestic and international market for services increased by $10 billion to $37 billion over the last five years, with a landmark free trade deal signed with the EU in June of this year, which will reduce tariffs on 99% of goods traded with the EU. This has translated into improvements in living conditions; the percentage of people under the national poverty line fell from 17% to 10% between 2014 and today.

Causes for concern
Glimmers of hope, causes for concern_Spotlights page_GRAPH 11.jpg

Brazil
Brazil’s prosperity has fallen since 2014, primarily due to its economy declining, despite an improvement over the previous five years. Since the recession of 2015, government debt-to-GDP ratio has risen from 62% to 90% and new business density has dropped. Despite this, Brazil has started to restore fiscal sustainability and macroeconomic stability. Over the last two years, the government budget balance steadied, and inflation volatility fell. As a result, prosperity saw a slight improvement since last year, but significant challenges remain.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 12.jpg

Burundi
Burundi is struggling to emerge from a 12 year civil war that ended in 2005. Initial stability followed, resulting in governance and personal freedoms improving, alongside concurrent improvements in health, education, and living conditions. These improvements have started being undone, as a result of increasing authoritarianism by the incumbent president. There have been reports of repression of opposition parties, resulting in increased political terror and violence, which in 2015 caused hundreds of thousands to flee.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 13.jpg

Cameroon
Cameroon’s prosperity has been deteriorating since 2014 due to intensifying conflict and repression. Boko Haram has continued attacks on civilians in the northern part of the country and conflict between security forces and separatists in the northwest and southwest has led to widespread civilian death and displacement. There are now 668,000 Cameroonians displaced internally from conflict, whereas there were none in 2013. As a result, Cameroon has fallen 38 places for the Safety and Security pillar since 2014.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 14.jpg

Congo
Congo has seen a sharp decline in its prosperity since 2016, primarily due to weakening safety and security, personal freedom, and economic quality. In 2016, the government launched a military campaign in the Pool region, with some observers accusing the regime of genocide against those of Lari ethnicity. Perceived tolerance of ethnic minorities has fallen from 68% in 2016 to 52% this year, and the military campaign has resulted in 100,000 people being displaced.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 15.jpg

El Salvador
El Salvador has seen a decline in both safety and security and governance since 2013, despite slight improvements in these areas in the preceding years. In 2012, a truce between two powerful street gangs, MS-13 and Barrio 18, initially led to lower homicide rates. However, the truce unravelled in late 2013, and by 2015 the homicide rate had increased to 105 homicides per 100,000 people (increasing from 70 in 2011, and 40 in 2013), and is now the highest in the world.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 16.jpg

Kuwait

Kuwait has experienced a steady decline in prosperity since 2013, due to deteriorations in governance. Snap parliamentary elections occurred in 2012 and 2013. The 2013 elections largely boycotted by an opposition coalition of Sunni Islamists, tribal populists, and some liberals. The rule of law has also deteriorated in Kuwait, with experts judging the legal system to have less integrity, and the judiciary to be less independent than it was five years ago.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 17.jpg

Lebanon
Lebanon’s prosperity has been in steady decline since 2014, with governance, safety and security, and economic quality deteriorating. Many observers attribute Lebanon’s challenges to the extra strain on the nation due to an estimated 1.5 million Syrian refugees who have settled there since 2011. Despite this influx of people, Lebanon has managed to maintain the living conditions of its citizens, with more people having access to basic services than five years ago.

Glimmers of hope, causes for concern_Spotlights page_GRAPH 18.jpg

Mali
Mali’s prosperity has been weakened by the Northern Mali Conflict, which began in 2012. Although the government brokered a 2015 peace deal, fighting persisted. A 2019 Human Rights Watch report noted a further deterioration of the security situation, reporting a spike in attacks by armed Islamist groups, and atrocities committed by the army during counter-terrorism operations. Already ranking 142nd for Safety and Security in 2014, Mali has fallen a further 9 places in the pillar over the past five years.