Each year, a privately funded think tank based in London known as The Legatum Institute releases the Legatum Prosperity Index which takes into account different variables that are analyzed through 149 countries. According to the index, Asia Pacific has been the fastest growing region over the past decade. Except for Safety & Security, which remained at the same level, all the other pillars in this region have significantly improved.
In determining a nation’s prosperity, the strength of its Business Environment is a vital factor. Over the past 10 years, Asia Pacific has significantly increased its score in this pillar. And based on the Legatum Prosperity Index 2018, sponsored by the Legatum Foundation, this region has gained the third highest score for Business Environment, with increasing scores in the access to investor and credit protection sub-pillars. With a strong and growing business environment, this region will certainly provide an entrepreneurial climate, allowing new opportunities and ideas to be chased. And this can result in greater social well-being and more wealth.
In the Natural Environment pillar, Asia Pacific is not currently at the lowest rank. Because of its relevant improvements in wastewater treatment facilities, it has been found to surpass Sub-Saharan Africa.
In the Personal Freedom pillar, Asia Pacific remains low. But in the past three years, it has increased slowly in rank because of greater social tolerance. Still, the region’s basic legal rights have declined simultaneously.
Asia Pacific Countries That Have Risen and Fallen
China
Overall, China is currently ranked at 82. In the Business Environment pillar, it is now at 43. Though it has a poor score when it comes to ease of starting a business, its rank (75th) is still higher than Japan (85th). At present, China comprises one of the biggest pools of unlisted companies that have billion-dollar valuations.
When it comes to measures of business infrastructure, China also performs well. However, it scores poorly on Personal Freedom and political participation.
India
Currently ranked at 94, India’s prosperity score has increased from the previous year in all pillars improving except Social Capital. Its highest-ranking pillar is Governance because the confidence of its citizens in their government has dramatically increased. This country is strong on measures of government integrity, rule of law, and political participation.
However, its minority rights and treatment of women are often called into question. An example of this is the creation of the Citizenship Amendment Bill that grants citizenship based on religion but disregards provisions for Muslims.
Another significant improvement in India is the improved entrepreneurial environment. Access to credit has gotten much better, which helped India surpass 11 places in the Business Environment pillar – now ranked at 51.
Pakistan
In Pakistan, there has been a decrease in the number of deaths due to terrorism over the past five years. Also, there is a continuing improvement in the country’s standard of living. These changes have greatly contributed to increasing the region’s prosperity rank over the past year.
Cambodia
Cambodia is ranked 100th overall. In the Governance pillar, it fell to the 130th place because of the reduction in their democracy level. Hun Sen, their leader, has been in power for over three decades and has prompted a one-party state.
Laos
Laos fell in both Personal Freedom and Social Capital pillars. This country is less satisfied with the level of freedom it has and is less tolerant of immigrants.
Afghanistan
Afghanistan is currently at the lowest rank. It fell most in Safety and Security and Social Capital pillars.
Indonesia and Malaysia
Indonesia and Malaysia are experiencing vast growth because of their strong performance in Economic Quality and Business Environment.
Since the Prosperity Index started, Asia Pacific has improved more than any other region in the world. Today, some countries in this region have the biggest economic success stories. Though it is fifth in the overall ranking, this region comes third in the Business Environment, Economic Quality, and Governance – the three most important pillars for the great foundation of economic well-being.
However, the region has a poor ranking in the Personal Freedom pillar. Perhaps, this is because of the desire to maintain political stability to achieve economic growth. Take Singapore, for instance; it is ranked 21st for prosperity but 98th for Personal Freedom.
As people are creating wealth and becoming richer, it is most likely that they will ask for more influence and political freedom.