Security reduces poverty

Nepal is one of the top 20 countries in the world with fastest rising prosperity over the last 10 years, a trend to be celebrated by Nepal’s leaders and citizens.

Nepal is among middle and low-income Asia-Pacific countries like Indonesia and India which have shown the sharpest improvement in their levels of prosperity in the past decade.

The Legatum Prosperity Index tracks prosperity in 149 countries, and its report released last week has good news: global prosperity is at its highest level ever. More countries are becoming prosperous, and more people are living more prosperous lives.

The Index also shows that rising wellbeing is linked to rising levels of prosperity. This might sound obvious, but there is a less clear relationship between wealth levels and wellbeing, where rising wealth does not necessarily translate into greater happiness.

Prosperity entails much more than wealth, it reaches beyond the financial into the institutional, the judicial, and the wellbeing of the people of a nation – it is about creating an environment where each citizen can reach full potential. A nation is prosperous when it has an open economy, inclusive society, strong institutions and empowered people who are healthy, educated and safe. This leads to higher levels of wellbeing.

Our analysis of what the top 20 rising countries have in common shows they all score highly for Safety and Security, one of the nine pillars used to measure prosperity and the key building block for prosperity. Ending war and conflict has proved to be the single most significant contribution to unlocking the prosperity of most rising countries, enabling widespread improvements across all the other pillars of prosperity.

Nepal is a good example: having ended a decade long war in 2006 after a peace agreement was signed between Prime Minister Girija Prasad Koirala and Maoist leader Pushpa Kamal Dahal allowing the rebels to join a transitional government.

This was an achievement of leadership at a time when war, terrorism and deprivation are rising significantly around the world. The fact that 15 of the 20 rising countries have improved in this pillar illustrates that insecurity from conflict and oppression can and must be overcome, before more broad-based prosperity can be achieved.

In the past 12 years after the Comprehensive Peace Accord of November 2006, Nepal has witnessed a transition towards democracy, with the largest rises in the pillars of Personal Freedom, Business Environment, and Education.

Within Personal Freedom, the biggest changes have come from the increase in people reporting satisfaction with freedom, and increased tolerance of LGBT rights. This follows legal reforms, such as the anti-discrimination laws, which have been in effect since 2015. In fact, Nepal is the third highest scoring country in Asia-Pacific (after New Zealand and Australia) in the sub-pillar of Social Tolerance.

Nepal’s weakest pillar, however, is the deterioration of the natural environment with pressure on nature – in fact Nepal scores nearly at the bottom of the countries surveyed in terms of urban air pollution. There are also problems with labour market flexibility, anti-monopoly policies and health outcomes.

Two countries in Asia Pacific exemplify the significant increase in economic wellbeing and prosperity: China and India. In the last decade, both countries have lifted huge numbers of people out of absolute poverty and have created economies that are growing much faster than those in the West, moving up eleven and six places respectively since 2007.

Both countries, and the region more generally, are home to a growing middle class, who increasingly expect a higher standard of living, from the basics such as running water and electricity, to internet access and motor cars. However, there are significant differences in the way that they govern and the levels of freedom enjoyed by the citizens of these countries.

My ambition for the Prosperity Index is that it becomes a tool for leaders around the world to help set their agendas for growth and development. The measurement of national prosperity is an important task for governments and for those who hold them to account.

Nepal exemplifies that Safety and Security is a foundation of any successful nation-building and enables other pillars to follow.

Baroness Philippa Stroud is the CEO of the UK-based Legatum Institute.