Nepal stalls in Prosperity Index


Nepal has only slightly progressed in the annual overall prosperity rankings this year, but rose 15 steps over the last decade with substantial improvement in security and social capital. Worldwide, global prosperity was at its highest ever level when Covid-19 struck.

The London-based Legatum Institute’s 2020 Prosperity Index released on Tuesday analyses 167 countries around the world on 12 measures in three broad metrics: inclusive societies, open economics and empowered people.

With an overall ranking of 114, Nepal still maintains its position of 22nd poorest out of the 29 countries in Asia-Pacific. It has made the most dramatic progress over the last decade in prosperity measures such as safety and security (scoring from 47.2 to 68.5, a jump of 66 points in the global ranking) and social capital (37.5 to 50.5, up 59 position).

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But this is countered by the fact that there was little to no improvement in the country’s investment environment and enterprise condition, highlighting Nepal’s less than friendly investment climate, further proving that the openness of the economy has stagnated. Nepal’s enterprise condition has fallen by 22 points in the global ranking, from 100th to 122th in the world and 25th in South Asia.

There were also minimal gains in economic quality and governance, largely owing to the local elections in 2017, the first one in two decades that led to some grassroots development and accountability in the recent years.


As expected there was some healthy development in market access and infrastructure, health, education and living condition of Nepalis but keeping up with the regional trend, Nepal dropped in personal freedom and natural environment measures. While not a major loss in terms of points, these are significant indicators of the changing times.

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Prior to the pandemic, prosperity stood at a record high, with 147 out of 167 countries seeing prosperity rise over the last decade, driven by improved health, education, and living conditions, and more open economies. However, weaker personal freedom and deteriorating governance are holding back further improvements in prosperity.

In fact, the improvement seen in the last 12 months had not kept pace with the progress of the previous two years, as Asia-Pacific and Western Europe stalled and North America deteriorated slightly. In addition, stagnating personal freedom and governance around the world is holding back further improvement in prosperity.

“There is never a good time for a worldwide health crisis, but if there has to be one, the progress that has been made over the last decade provides emerging nations with a better context in which to tackle it. But the Western world must beware the trap of falling into a mindset of an overdeveloped society, vulnerable to entitlement and complacency,” says CEO of the Legatum Institute Philippa Stroud.

She adds: “Never has it been more important for leaders to recognise the holistic nature of prosperity and make strategic choices to further build inclusive societies and more open economies, and to improve the lived experience of all citizens.”


The Index also shows that further growth in global prosperity is being held back by stagnating personal freedom and governance. Globally 121 countries had seen a decline in the freedom to speak and access information and 116 had seen a reduction in the freedom to assemble and associate over the past 10 years, and political accountability and executive constraints – which measures the checks and balances on elected governments and their officials – had both weakened.

This deterioration is even more pronounced in the post Covid era where government across the world have tried to downplay their inability to control the pandemic and rather undermined it in multiple ways, including by withholding vital information and by creating roadblocks for journalists reporting from the frontlines.

Decisions that build prosperity and respect freedom and responsibility is crucial to lead world through Covid, says the Legatum Institute urging the leaders globally to hold firm to a holistic view of prosperity and the core principles of freedom and responsibility as they respond to the ongoing Covid-19 pandemic.

Says Stephen Brien, Director of Policy at the Legatum Institute: “Prosperity is underpinned by an inclusive society, with a strong social contract that protects the fundamental liberties and security of every individual. It is driven by an open economy that harnesses ideas and talent to create sustainable pathways out of poverty. And it is built by empowered people, who play their part in creating a society that promotes wellbeing.”

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