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19 March 2024

UAE is world's 30th most prosperous country

The United Arab Emirates is the top-ranking Middle Eastern country on the Prosperity Index. (FILE)

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By Staff

The United Arab Emirates is the top-ranking Middle Eastern country on the Prosperity Index, coming at 30th overall.

The London-based Legatum Institute released the latest edition of its index, which comprehensively ranks the level of prosperity in 110 countries by taking into account both economic growth and citizens' quality of life.

The UAE’s high ranking is thanks largely to a strong entrepreneurial culture.

Yemen, Iran, Lebanon, and Syria all ranked in the bottom third worldwide. And Pakistan finished third-to-last.

Entrepreneurship is a key indicator of overall prosperity.

The Index reveals that the countries with the most well-rounded prosperity are found in Northern Europe: the top three ranked countries are Norway, Denmark, and Finland ahead of Sweden, Switzerland, and the Netherlands ranking 6th, 8th, and 9th, respectively. Other top ranking countries are Australia (4th), New Zealand (5th), Canada (7th), and the US (10th). The United Kingdom ranks just outside of the top 10 at 13th in overall prosperity. Thirteen of the top 20 countries in the 2010 Prosperity Index are located in Europe.

"The Legatum Prosperity Index is the world's only global assessment of wealth and wellbeing. It uses a holistic definition of prosperity, which includes factors ranging from economic growth to health and education, to personal freedom and governance," said Dr. Ashley Lenihan, Senior Fellow at the Legatum Institute.

Dr. Lenihan continued, "The recession has had an impact on how well many countries perform on economic measures but the Prosperity Index finds countries that are able to foster a strong culture of entrepreneurship are best positioned to overcome the current financial difficulties."

The most populous nations in the world are not the most prosperous. Of the countries in the world with more than 125 million people, only the US ranks among the top 10 countries in the Prosperity Index, ranking 10th overall.

The Brics (Brazil, Russia, India and China), which have more than 40 per cent of the world's population, also fail to rank highly in the Index. Of these countries, only Brazil ranks in the top half of the Index (45th) while China places 58th, Russia 63rd, and India is at 88th.

Once again the lowest ranking country in the index is Zimbabwe, with Pakistan, Central African Republic, Ethiopia, and Nigeria making up the bottom five.

Entrepreneurship and opportunity correlate more closely to a nation's overall prosperity than any other factor. While other foundations such as health and education, are critical, levels of entrepreneurship and access to new opportunities actually provide the best proxy to understanding how prosperous a society can be.

It pays to be a democracy. Twenty-three out of the top 25 societies in the Prosperity Index are electoral democracies, and the other two (Singapore and Hong Kong) are semi-democratic societies.

Changes in the "social fabric" of a country can lead to big changes in national prosperity. Shifts in tolerance, satisfaction with freedom of choice and other social attitudes and practices clearly have direct implications on national prosperity.

Prosperity is about balance. All of the top ranking countries in the Index perform well across all eight sub-indexes.

Material wealth cannot be explained only by economic factors, and happiness cannot be explained only by subjective emotions. "Soft issues", such as people's perceptions of each other's trustworthiness, have a strong positive correlation with economic performance and similarly "hard issues" such as higher levels of GDP per capita, have a strong impact on people's life satisfaction.

Choice and opportunity matter more to happiness than making a lot of money quickly. Being free to choose the course of your life and experiencing the satisfaction that comes from pursuing new opportunities matter more than quickly making a lot of money.

Two Europes are emerging. In the overall rankings, the Baltic countries are rapidly falling behind the rest of the EU. Additionally, none of the four original so-called PIGS (Portugal, Italy, Greece, and Spain) score higher in prosperity than the remaining Western European nations.

Improved governance is emerging as a key driver of prosperity in Sub-Saharan Africa. The index shows that the most successful African countries owe their success to radical improvements in the quality of their governance, particularly in establishing confidence in the military and in the judicial system.

It's hard to be prosperous as a large country.

Of the 10 countries in the world with more than 125 million people, only the United States ranks among the top 10 countries in the Prosperity Index.

Economic growth is not enough for the Brics. Despite being regarded as leaders among emerging economies, in order to develop into prosperous nations, the Brics will have to foster improvements in areas beyond economic factors.

The Legatum Prosperity Index identified eight key factors that drive economic growth and personal wellbeing, which are foundations of prosperity. Each of these eight factors is represented in a sub-index and a country's final Prosperity Index ranking is generated by averaging its scores across all eight sub-indexes, equally weighted.