By Daniel Hunter
While the Government fights to get the economy back on track, the UK has fallen down the global prosperity rankings for the first time since the financial crash five years ago.
The 2013 Legatum Prosperity Index reveals that the UK is now the 16th most prosperous nation in the world, a fall of three places in just one year, with Austria (15th), Iceland (13th) and Germany (14th) all leapfrogging the country.
Since last year, the UK has experienced a drop in six of the eight categories that the Index benchmarks against, including Economy, Governance and Personal Freedom1. In addition, emerging economies, including Taiwan (16th), South Korea (19th) and Mexico (27th), have all overtaken the UK (28th) for economic prosperity.
European nations, particularly in Scandinavia, continue to dominate the world’s top thirty with Norway (1st) Switzerland (2nd) and Sweden (4th) all ranking highly.
Jeffrey Gedmin, President and CEO of the Legatum Institute, said: “There is no denying that the prosperity of the UK is suffering following a long period of financial uncertainty.
“As emerging nations start to leapfrog the country, the government needs to address the causes of falling prosperity and consider how to ensure citizens do not face a continued drop in living standards.”
The Legatum Prosperity Index™ is a unique and robust assessment of global wealth and wellbeing, which benchmarks 142 countries around the world in eight sub-indices.
The UK’s economic struggle is set to continue, with citizens saving less (down 0.4 per cent of GDP since 2010), high unemployment rates (7.8 per cent compared to 4.3 per cent in Taiwan) and lower levels of high tech exports than rising nations (21 per cent compared to 43 per cent in Malaysia and 25 per cent in South Korea).
Public opinion reflects these economic issues, with just one in ten people agreeing that now is a good time to enter the job market. Less than a third (30 per cent) of Britons believe that the economic situation is improving and fewer people have confidence in the country’s financial institutions (down nine per cent since 2010).
As a result, citizens are increasingly unhappy with their standard of living, with a seven per cent drop in satisfaction since 2010.
However, over the same period, there has been a nine per cent increase in the belief that hard works pays.
Jeffrey Gedmin adds: “The UK’s politicians must take action now or face the very real prospect of falling out of the top thirty most economically prosperous nations in the world.
“This year’s Index shows that citizens are troubled by the ongoing economic issues and this will continue unless levels of investment and savings increase and trust in the financial sector is rebuilt.
“But there is hope — more people believe that working hard will get them ahead and the government should embrace this by continuing to encourage citizens into work and opening up opportunities for entrepreneurialism.”
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