Nepal rises in Prosperity Index

Nepal has risen in this year’s overall prosperity rankings, but is still the 22nd poorest out of the 29 countries in Asia-Pacific.

The London-based Legatum Institute’s 2019 Prosperity Index released on Monday analyses 167 countries around the world on 12 different measures of prosperity from economic metrics to safety and security, personal freedom, health, education and living conditions.

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The 2019 Legatum Prosperity Index shows that Nepal is currently ranked 115th in the world for overall prosperity, a rise of 13 places since 2009 when it was ranked 128th.

"Over the last decade, Nepal has seen the biggest improvement in safety and security, in which it rose from 158th to 78th globally, but it has also seen improvements across the other institutional pillars of Personal Freedom and Social Capital,” said Shaun Flanagan, Director of the Metrics Team at The Legatum Prosperity Index which is issued every year.

However, despite an improvement in Nepal’s economic quality, the openness of the economy has stagnated, and consequently the country has fallen from 117th to 130th in the world rankings in the last 10 years.

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"Personal freedom is important for a country to be prosperous. The Personal Freedom pillar incorporate elements such as freedom of assembly and association, freedom of speech, absence of legal discrimination, and social tolerance. This is Nepal's strongest pillar, ranking 67th in the world. The country bucks the global trend of decline in personal freedom over the past decade, and its improvement has resulted in it moving up 14 places in the rankings,” Flanagan told Nepali Times.

The 2019 Legatum Prosperity Index reveals that global prosperity is at its highest ever level, with 148 out of 167 countries experiencing higher levels of prosperity than a decade ago – mostly in the Asia-Pacific.

This increase has been driven by more open economies and improved lived experiences due to better health, education, and living conditions around the world. However, weaker personal freedom and deteriorating governance are holding back further improvements in prosperity.

The Index reveals that:

Global prosperity continues to improve, but the gap between the strongest and weakest performing countries continues to widen.

Economies are more open due to improvement in the investment environment and digital connectivity, as well as a reduction in administrative burdens.

Stagnating institutions are holding back further improvements to global prosperity.

People are more tolerant, but there is less freedom to speak, associate, and assemble.

Nepal’s peace process, and freedoms guaranteed in the new constitution have positive factors, but Nepal needs to work on improving its investment climate and protecting its environment, the Institute says.

Adds Flanagan: “With the strong improvement seen in safety and security, Nepal is well set to build upon this and strengthen other areas of prosperity. In particular, Nepal could improve its prosperity by strengthening its investment environment and enterprise conditions, as well as improving the quality of its natural environment, all of which have seen a decline over the past decade."

He said a nation is genuinely prosperous when it has effective institutions, an open economy, and empowered people -- all three domains are important. However, safety and security is the foundation of any successful nation building, as it enables the other pillars of prosperity to follow.