The U.S. slid from the top ten most prosperous nations for the first time in a league table which ranked three Scandinavian nations the best for wealth and wellbeing.
The U.S. fell to 12th position from 10th in the Legatum Institute’s annual prosperity index amid increased doubts about the health of its economy and ability of politicians. Norway, Denmark and Sweden were declared the most prosperous in the index, published in London today.
With the presidential election just a week away, the research group said the standing of the U.S. economy has deteriorated to beneath that of 19 rivals. The report also showed that respect for the government has fallen, fewer Americans perceive working hard gets you ahead, while companies face higher startup costs and the export of high-technology products is dropping.
“As the U.S. struggles to reclaim the building blocks of the American Dream, now is a good time to consider who is best placed to lead the country back to prosperity and compete with the more agile countries,” Jeffrey Gedmin, the Legatum Institute’s president and chief executive officer, said in a statement.
The six-year-old Legatum Prosperity Index is a study of wealth and wellbeing in 142 countries, based on eight categories such as economic strength, education and governance. Covering 96 percent of the world’s population, it is an attempt to broaden measurement of a nation’s economic health beyond indicators such as gross domestic product.
The Legatum Institute is the public policy research arm of the Legatum Group, a Dubai-based private investment group founded in 2006 by New Zealand billionaire Christopher Chandler.
The report shows that even amid the worst financial crisis since the Great Depression, global prosperity has increased across all regions in the past four years, although the sense of safety and security is decreasing amid tension in the Middle East and fear of crime in Latin America.
Norway and Denmark retained the pole positions they held last year in the overall prosperity measure, while Sweden leapfrogged Australia and New Zealand into third. Canada, Finland, the Netherlands, Switzerland and Ireland rounded out the top ten. The Central African Republic was ranked bottom.
In its sub-indexes, Legatum named Switzerland the strongest economy and home to the best system of governance. Denmark is the most entrepreneurial and New Zealand has the best education, while health is best in Luxembourg and Iceland is the safest. Canadians enjoy the most personal freedom and Norwegians have the greatest social capital.
With President Barack Obama and Republican challenger Mitt Romney tussling for the White House, Legatum said the U.S. economy declined two places from last year to 20th. It found that 89 percent of Americans believe hard work produces results, up from 88 percent last year, and the government’s approval rate dropped to 39 percent from 42 percent.
Plagued by the euro-area debt crisis, 24 out of 33 European nations have witnessed a decline in their economic score since 2009, according to Legatum. On the prosperity scale, Greece recorded the biggest drop in 2012, falling 10 places since 2009 to 49th. Spain held on to 23rd place.
The U.K remained 13th, one place ahead of Germany, and Legatum predicted it will overtake the U.S. by 2014 as it scores well for entrepreneurship and governance. Nevertheless, the status of its economy remains a weakness as it slid five places to 26th on that score and job satisfaction is low.
In Asia, Hong Kong, Singapore and Taiwan all ranked in the top ten for their economies and the top 20 overall. So-called tiger cub economies Vietnam and Indonesia also rose. Indonesia experienced the largest gain in prosperity of any country since 2009, jumping 26 positions to 63rd.
Switzerland, Norway and Singapore topped the economy sub- index, which measures satisfaction with the economy and expectations for it, the efficiency of the financial sector and foundations for growth. In a gauge of entrepreneurship, Denmark ran ahead of Sweden and Finland for the strength of innovation and access to opportunity.
Switzerland also topped the rankings for best government. It was followed by New Zealand and Denmark in a measure determined by the effectiveness and accountability of lawmakers, the fairness of elections, the participation of people in the political process and rule of law. The highest marks for education went to New Zealand, Australia and Canada.
Luxembourg, the U.S. and Switzerland were graded the best for health treatments and infrastructure as well as preventative care and satisfaction with the service. Iceland, Norway and Finland topped the chart for safety and security; Chad, Congo and Afghanistan ranked the lowest on that index.
Canadians, New Zealanders and Australians enjoy the most freedom and social tolerance, Legatum said. Norway, Denmark and Australia had the highest scores for social capital as monitored by social cohesion and family and community networks.
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