Prosperity 2020: Now you See it – Now you Don’t

The Legatum Institute’s 2020 Prosperity Index measures the prosperity over the last decade of 167 nations that together contain 99.4% of the global population.

Global prosperity reached its highest ever level in 2020. However, only 61% of the global population lived in countries experiencing prosperity in 2020, a substantial decline from 86% in just 2018. Falling prosperity rates pre-COVID raise serious concerns about the capacity of nations to recover from the crises brought about by the current pandemic. It is estimated that COVID could increase poverty rates by up to 10%, setting back reductions in this area by 20 years. This is a particularly grave threat to the Sub-Saharan Africa and MENA regions that have seen a deterioration in economic quality over the last decade. The fact that MENA and Sub-Saharan Africa have fallen further away from the average global prosperity increases have similarly demonstrated the critical need for development assistance today, particularly in these areas.

This kind of assistance is something that the British government has begun to disregard. The merger of the Department for International Development (DfID) into the Foreign and Commonwealth Office (FCO) earlier this year signalled a lack of will within the British government to continue critical development work. This could impact the least prosperous nations heavily, with DfID having spent £280m over the last two years in South Sudan. Having a well-resourced and independent development department like DfID was largely unique among wealthier nations, and turned the UK into a vital development provider. Recently, chancellor Rishi Sunak has also outlined his intentions to breach a manifesto pledge by reducing the development and aid budget from 0.7% of GDP to 0.5%, in the hopes of saving nearly £4bn.

This is a disastrous decision for a number of reasons. As outlined by Andrew Mitchell, a conservative MP and former international development secretary, this could have tragic impacts and could lead to: 1m fewer girls receiving an education; 3.8m left without access to clean water; 5.6m fewer vaccinations and 100,000 preventable deaths, mainly among children. The impact of reducing the UKs development commitments to the least prosperous nations will thus be devastating, particularly in the midst of a COVID crisis. Due to the pandemic the World Bank estimates that 2020 will bring the first increase in extreme poverty in two decades. This demonstrates that now more than ever development commitments from countries like the UK are needed, particularly to the least prosperous nations and regions. Although the government argues this cut has been forced due to the pandemic, a cut comprising 0.2% of GDP is going to have an extremely minimal impact on overall government finances. The UK government has also committed to a £16.5bn increase in defence spending over the next four years. Britain’s contemporary safety depends in part on the stability of places thousands of miles away, and particularly in regions such as MENA and Sub-Saharan Africa. This is where the Prosperity Index has indicated safety and security, particularly relating to terrorism, has been substantially declining. Reducing investment in these areas could therefore pose a security risk to the UK, and it would represent a much shrewder use of money to invest in the long term development of these areas, as opposed to an increase in the defence budget. Whilst there is a need to have a debate about the aid budget, in light of the COVID crisis and the findings of the Prosperity Index it is clear that many regions and nations are currently facing critical challenges in their development. The potential removal of capital and expertise from development in these regions by the UK government should be seen as a major concern.

Taking the problem apart

The Legatum Institute’s 2020 Prosperity Index works by grouping together almost 300 country-level indicators into 66 elements of prosperity. These elements have been further categorised into 12 ‘pillars’ of prosperity which divide evenly into three domains (illustrated in Figure 1 below).

Figure 1 – A visual summary of the elements, pillars and domains that constitute overall prosperity.

Each of the 66 elements of prosperity have been designed to be recognisable and discrete areas of domestic policy. The elements of prosperity are measured using a combination of publicly available and verifiable data sources, which enables a cross-country comparison of prosperity over the last decade. Within the last decade, all seven regions and 147 out of 167 countries saw an overall increase in prosperity, with global prosperity being at its highest ever level in 2020.

Figure 2 – A summary of the increases in global and regional prosperity between 2010 and 2020.

This near-universal increase in prosperity can be attributed to a multitude of factors. There have been significant improvements almost universally in healthcare, education and social capital. This has resulted in an improved lived experience and living conditions, in particular reducing poverty, improving digital connectedness and access to water and sanitation services. Key facts outlining these improvements are:

  • Health improved in all but 12 countries (including the United States) over the past decade.
  • 150 countries have improved their education over the last decade. Enrolment has increased globally in all levels of education, but particularly tertiary education in which global enrolment has risen from 31% in 2010 to 42% in 2020.
  • Global 2G, 3G and 4G coverage has risen to cover 89% of the global population in 2020, compared to 62% in 2010.
  • Half of the world’s population now use the internet in 2020, compared to 23% in 2010.
  • Since 2010, 152 countries have improved living conditions for their citizens. This has led to the global population on less than $3.20 a day falling from almost 50% in 2010 to less than 10% currently. The percentage of those who survive on less than $5.50 a day has been reduced from nearly 80% of the population in 2010 to less than 25% in 2020.

Despite these global improvements, 15 countries have seen a deterioration in their living conditions. In addition to this, stagnating governance and personal freedom around the world is preventing further improvements in prosperity. Political accountability and executive constraints have weakened in many countries, and particularly in the Middle East and North Africa (MENA) region. Rather shockingly, more than 100 countries have seen a decline in Freedom of Speech and Freedom of Assembly in the past decade. 87 countries now have weaker governance now than in 2010, and 74 have weaker personal freedoms. The focus of this article will be on the MENA and Sub-Saharan Africa regions, due to these areas being the primary concern of the Next Century Foundation (NCF). This is particularly poignant given that the least prosperous ten nations all fall within these regions. The NCF is also currently engaged in projects involving five out of the bottom ten nations which include: Afghanistan, South Sudan, Sudan, Syria and Yemen. The fact that these nations rank so lowly in the prosperity index emphasises the importance of conducting work regarding these nations.

Figure 3 – The 10 least prosperous nations in 2020.

Middle East and North Africa and Sub-Saharan Africa

Figure 4 – Overall regional rankings of prosperity.

Figure 4 demonstrates that the MENA region is the sixth most prosperous global region, followed by Sub-Saharan Africa. This makes them the two least prosperous regions in the world, and they always rank within the bottom three regions for each pillar of prosperity. This indicates these regions fall behind the rest of the globe across a holistic range of factors that constitute prosperity, which points to the importance of work that aims to improve prosperity in these areas. Figure 5 highlights the regional changes in each pillar of prosperity and overall prosperity in the past decade. It highlights that although the overall prosperity for both MENA and Sub-Saharan Africa has increased over the last decade, the gap between their regional prosperity average and the global prosperity average has widened, making these regions relatively less prosperous. As the decade has progressed, these regions have fallen behind in achieving the benefits from global prosperity. It is critical that work is done to help bring these regions prosperity in line with global improvements, to prevent continued regional underdevelopment.

Figure 5 – Overall Prosperity and Prosperity Pillar performance of the MENA (left) and Sub-Saharan Africa (right) regions.

Figure 5 demonstrates a remarkably similar trend in performance over the last decade within each of the prosperity pillars. Within the ‘Empowered People’ domain, both regions have seen relatively large prosperity improvements in living conditions, health and education but with a slight decrease in their natural environments. Similarly, both regions have seen vast improvements in the ‘Open Economies’ domain, but within that have experienced deteriorations of their economic quality. Where both these regions have struggled the most over the last decade is within the ‘Inclusive Societies’ domain, particularly the MENA region. Although both regions have improved their social capital, there has been an alarming decline in governance and particularly in safety and security. Where these regions differ is there has been a small increase in personal freedoms within Sub-Saharan Africa, but a substantial decline within the MENA region. This points to the critical need for the continuation of work carried out by the NCF and similar organisations whose principal work is to find resolutions to conflict, security and governance issues that have deteriorated in these regions over the last decade.

The MENA region has performed slowly in prosperity due to sustained instability over the region, with protracted conflicts in countries such as Syria, Yemen and Libya continuing to destabilise the region. The number of deaths due to terrorism across the region has more than doubled since 2010, and the number from two-sided conflicts has increased ten-fold to 90 deaths per million people. This highlights the extent that safety and security has deteriorated for many nations in this region, emphasising the critical need for swift peace to bring stability and security. The MENA region has also experienced a considerable decline in the quality of its governance, with 13 out of 19 countries seeing a weaker performance than in 2010 as democracy and democratic values are being challenged across the region.

Although Sub-Saharan Africa is the third most improved region for prosperity since 2010, it remains the weakest overall. There have been big regional improvements in healthcare systems and telecommunications infrastructure. However Sub-Saharan Africa has seen, after the MENA region, the biggest regional decline in safety and security that can principally be attributed to terrorism. Economic quality has also deteriorated in the two least prosperous regions. It is important to recognise the advances in prosperity that these regions have made, but for organisations similar to the NCF that specialise in peacebuilding, the declines in economic quality, safety and security, personal Freedoms and governance are extremely alarming and merit greater focus. This is especially important considering these issues have caused both regions to fall behind the rate of global prosperity improvements.

Inclusive Societies 

Inclusive societies are essential for prosperity, a society can only prosper and attract investment in an environment of safety and security for all its citizens. Nations also benefit from higher levels of national income when citizens’ personal liberties are protected. The rule of law, strong institutions and regulatory quality also significantly contribute to economic growth. Particularly poorly performing countries in this domain overall include: Libya (rank 159), Sudan (163), Afghanistan (164), Yemen (165), South Sudan (166) and Syria (167). These nations are in particular need of resolutions to their conflict and governance issues within the MENA and Sub-Saharan Africa regions. Below is a break-down of the worst performing countries in these regions for pillars that have experienced decline and are relevant to the work of the NCF, to highlight the most pressing areas where resolutions are needed.

Safety and Security

Safety and Security is an integral component of prosperity. Nations can only prosper in an environment of safety and security for all their citizens. Measures within this pillar of prosperity include issues relating to crime, terrorism and war. Figure 6 demonstrates the alarming decrease in Safety and Security across the Sub-Saharan Africa and MENA region. It also highlights an alarming increase in terrorism that has caused declines in regional Safety and Security. The weakest 7 performing global countries for this pillar are contained within these regions: Sudan (161), Libya (162), Iraq (163), Yemen (164), Syria (165), Afghanistan (166), South Sudan (167). This highlights the critical need for conflict resolution strategies in these regions and nations in particular.

Figure 6 – Regional and Element changes in Safety and Security between 2010 and 2020.

Personal Freedom

The Personal Freedom pillar measures the extent to which the population of a country is free to determine the course of their lives. This includes freedom from coercion and discrimination, as well as freedoms of movement, speech and assembly. Although the Sub-Saharan Africa region overall saw a small increase in this pillar over the last decade, many nations within this region perform extremely poorly. The MENA region also saw a considerable decrease in Personal Freedom over the last decades. It is also important to recognise that there are big discrepancies within this pillar. There have been substantial improvements in social tolerance over the last decade, but the declines in Personal Freedom have been brought about by an alarming and significant deterioration in Freedom of Speech and Access to Information, as well as Freedom of Assembly and Association. This emphasises the urgent need for work that rebuilds individual freedoms, and states that allow these freedoms within nations that perform poorly in the Personal Freedom domain. Particularly this includes: Sudan (158), South Sudan (163), Yemen (164), Iran (165) and Syria (167) who find themselves within the bottom 10 nations for this domain.

Figure 7 – Regional and Element changes in Personal Freedom between 2010 and 2020.

Governance

The governance pillar measures the extent to which there are restraints on political and executive power, and whether states can operate effectively and without corruption. It also includes issues relating to political accountability, and the effectiveness of the rule of law and regulations. Good governance is important in driving a strong economy. Of the 80 nations seeing an improvement in their governance in the 2020 Prosperity Index, 77 also saw an improvement in the openness of their economy. The Sub-Saharan Africa region has seen small regional decline in governance, but there has been a large decline in the MENA region. This particularly concerns executive constraints, political accountability and the rule of law. This identifies the need for particular focus to be paid in this region to ways forward for governance that successfully delivers accountability and responsibility to both citizens and the law. Although Sub-Saharan Africa overall was not the worst performing region, within the bottom 10 nations there is Sudan (162) and South Sudan (165) showing certain countries in this region still require considerable governance improvements.

Figure 8 – Regional and Element changes in Governance between 2010 and 2020.

Economic Quality 

Both the Sub-Saharan Africa and MENA region also saw a decrease in prosperity regarding economic quality. This measures how robust an economy is, as well as how stable and sustainable these economies are. Economic quality is therefore an essential component in delivering prolonged prosperity. There has been a particular decline in the areas of fiscal sustainability and macroeconomic stability of national economies within both regions. This is particularly the case for South Sudan (164), Sudan (166) and Yemen (167) who rank as three of the bottom four nations for economic quality.

Figure 9 – Regional and Element  changes in Economic Quality between 2010 and 2020.

South Sudan

As the overall least prosperous nation, South Sudan is in an alarming situation. What is further damaging for the nation is that it is performing much below the regional average of Sub-Saharan Africa, particularly in the ‘Empowered People’ domain which includes key issues such as living conditions, health and education. This is important because national development entails far more than GDP growth, it requires the right socio-economic conditions that allow populations to flourish.

South Sudan is the weakest overall nation in the ‘Empowered People’ domain. It is the weakest global nation for education, the second weakest for living conditions and the third weakest for health. This is despite the Sub-Saharan Africa region seeing large increases in prosperity across all of these factors, particularly in regional health where it was the best performing region in the 2020 Index. This exemplifies that while regional trends in prosperity are useful indicators, there exists key national level anomalies within these regional trends. The example of South Sudan highlights the critical need for targeted assistance to be attentive to specific national contexts.

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