Nov. 6 – 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.
India has the largest number of poor people, infant deaths, maternal deaths in childbirth, and highest child malnutrition in the world. 39% of its people live below poverty line. Armed insurgencies are raging in 40 % of its 600 districts. About 300 armed separatist groups are active in Kashmir and the North-East. Indian governments in all levels are notoriously known for their corruptions, inefficiency and ineffectiveness, etc – the symptoms of so called Indian demo-crazy.
I am curious as to how the above are figured into this PROPERITY Index. It seems that the index is so obviously not reflecting the reality and therefore rendered it useless.
…”They include personal freedoms, quality of life, entrepreneurship, health, education, innovation, governance and social capital in addition to economic fundamentals.”…
How the Legatum Institute defined each of the above and what weights were applied to each have important bearings on the final result of their model. For example take “Governance”. Is an ineffectual and inefficient democracy better than an autocratic relatively effective, relatively efficient one?
Also having done some statistics in my time I know you have to be very careful and consider the impact, if any, of each factor on all the other ones. Surely “Personal freedoms” is dependent to a lesser or stronger degree on all the other factors mentioned in the above quote.
http://www.timesonline.co.uk/tol/news/world/asia/article6837585.ece
I would suggest the above article to see how prosperous India really is. By no means is India more prosperous than Venezuela. The index is entirely based on the subjective ideological perception of its creators; it has no practical uses in business.
The Legatum index is fundamentally flawed as it doesn’t include BASIC measures such as FOOD!
46% of all India’s CHILDREN are malnourished, whereas China has eliminated this problem.
How can these children (and their families) even dream of anything except for their constant battle against HUNGER!
This ranking is nothing but a neo-conservative ultra-captalist delusion that
This ranking is nothing but a neo-conservative and ultra-capitalist delusion.
It does seem geared to upholding personal freedoms at the expense of poverty doesn’t it? It’s not much use to a starving crippled beggar to tell him he has the vote.
in America , the Indian Scientists are 12% whereas the number of doctors is 38% .
IBM has 28% Indian employees whereas Microsoft – an International World Software Company – has 34% Indian employees.
more than 600 top executives in Indian companies have earned salaries of over Rs. 1 crore in the last fiscal, a staggering 250 times of the country-per-capita income.
English proficiency has enabled the Indians to take advantage of demand for IT industry since India has 50 million English speaking people.
India has five million overseas workers from the information technology, finance, biotechnology, construction, healthcare, hospitality and agriculture sectors.
in Gurgaon (Haryana) and Noida (UP) there has been employment growth of 11% and 14% respectively.
Tata Consultancy has over 1,43,761 Indian and 10,000 foreign national employees.
the overall manpower strength of the Indian IT and BPO industry for FY10 continues to remain nearly 2.23 million.
the 1.5 million Indian Americans in the US continue to top as the besteducated, highest-paid and top-placed community among foreign-born population in the country.
the 1.5 million Indian Americans in the US continue to top as the besteducated, highest-paid and top-placed community among foreign-born population in the country.
Sumeet
That is all very true and it shows that Indians can succeed.
But the issue we’re highlighting is that the Legatum **Prosperity** Index ignores 880million desperately poor indians whilst celebrating the advantages that an elite of 50million enjoy.
I believe India CAN resolve this, but rankings like the Legatum Index delude people into thinking tyhat everything is ok, when it is actually a truly gigantic problem.
@Sumeet
You are mixing up your populations. The article was describing the Prosperity Index for China and India not Indian-Americans or other Indian overseas workers.
There is no question that the privileged in India do well but it can be said that they do so over the backs of the poor, lower castes and the Dalits who have to work long hours for very little pay.
When articles are written in India about her competitive advantages over China, two things always come up: (1) India is a democracy and, (2) wages are much lower than that of China. While I can see why the Indians might feel superior on the former point I find it ironic that those same authors don’t seem to find the latter troubling.
@ chris I disagree with you when you say “its not much use to crippled beggar to tell him he has right to vote”..
well we need to see into past, into all great revolutions of the world …. ponder .. who were the main ppl behind it .. were it the elite “proserous class” or were it the deprived ppl of the nation ?
Well if you say preperity index .. there are diffrent refernce poitns for the same.. it all depends on what refernce point you take up for dicsussion..
I feel the vibrancy on the streets of india is much greater than what you see in many developed nations …
The defintion of prospertity for indians is very diffrent from westerner..
Ask an indian .. when he would be happy? the answer would certainly be .. if he has a happy family life ..
India is mix of all cultures … diffrent races .. multi lingual society…. Do some study for the budget spending of India .. you would find that education and poor segment of the society is largest pending secotrs of indian Govt.
Look at any agenda of the political party contesting for an election … poor ppl are on top priorty..
China .. well I must say .. they must have done a commendable work in uplifting the living standard of ppl … but are ppl really happy is the question ..
The figures were in response to Roland’s response.. I thought he might come up with similar figures for venezuala..
The biggest strenght and weakness of India is its population …
If you take GDP as a prosperity index .. I guess india would feature amongst top 10 nations interms of Prospertiy… If you take per capita income .. India would be ranked much lower ..
The biggest diffrence btwn india and china is that Chinese Govt is more of Authoritarian … and Indian govt works more on consensus model….
I guess though now China has taken a lead … China has its own problems and India has its own share of issues ..
India’s development will time consuming .. but in the long run I guess it would be sustainable.
On the other hand if we look into history of most authortarian form of Govts such as germany before world war 2 … North korea … Russsia .. It woudl take only one bad Govt for china to put things in reverse gear …
the fators taken into consideration in the present article
personal freedoms, quality of life, entrepreneurship, health, education, innovation, governance and social capital
I guess india ranks much higher than reported..
leave out economic development comparison btween india and china
Sumeet, these are valuable statements, and quite rightly you highlighted a key Legatum issue – prosperity must also be matched with happiness. In that case, controversial it may be, but I would agree with you that Indian’s are generally a happier society than the Chinese. Its also true to say that the vibrancy in India is far greater. I shuttle a lot between Mumbai and Shanghai, and it’s Mumbai that has the buzz – something I wrote about in my India BRIC article here: http://www.2point6billion.com/news/2009/10/16/the-india-bric-mumbai-has-the-global-buzz-2613.html
It’s also correct to point out that India can and is solving it’s problems with poverty – and equally valid to point out that China still has some way to go to fully conquer the issue there. It is China, not India, after all that has the world’s largest income disparity, and while individuals sitting in Shanghai, Beijing or even the second tier cities may not see much lack of wealth, the fact is China remains, for much of its population, economically poor.
Reports such as the Legatum Institute are valuable and do need to be taken into consideration along with other findings. – Thanks for your comments – Chris
Chris
I’d like to put another perspective into the mix.
“Happiness”, at the end of the day, is always a reflection of 2 elements:
1. What are your expectations of life?
2. How well does your life meet those expectations?
It would be interesting to see a comparison of these expectations across different countries.
The impression I get in China is that peoples’ expectations (at most levels) are very high compared to what can be “realistically” achieved, given that it is yet not a rich country.
…one of the reasons China censors certain advertising campaigns in some of the provinces. There’s no point in promoting washing machines, HDTV or expensive cars to people earning an average of USD1000 or less per annum. And also the reason why market research companies struggle to get accurate data or permission to conduct F2F interviews in these same locations. Thanks – Chris
Chris
Quoting your statement:
“while individuals sitting in Shanghai, Beijing or even the second tier cities may not see much lack of wealth, the fact is China remains, for much of its population, economically poor. ”
Obviously, you did not visit other cities or villages in China. I encourage you to do so and go to the 3rd tier/fourth tier Chinese cities. Please also go to so called underdeveloped are of China. Compare what you see with the Indian counterpart.
Or just search the Internet and type a name of the 3rd tier/fourth tier Chinese city and see the pictures posted on the Internet.
Do not try to ignore the facts.
Please remember, 50% of the world starving people are living in India. Bad mouthing China does not help feed them.