Saturday, 1 July 2017

Prosperity Is more than having money

The record levels of financial aid, over the last 30 years, to reduce poverty in the poorest nations of Africa has failed. The message is simple: Money as the lone transformative power for lasting national prosperity is not enough. A country needs more than just wealth to be prosperous. It needs to endow its citizens with basic human freedoms, that come from a safe water supply, a roof over their heads and the ability to hold politicians to account for these and other essentials of life. It needs to educate its children and take care of its elderly. It needs to develop a society in which people trust one another. It needs to foster a climate of entrepreneurship and innovation. None of these are achievable without the rule of law and strong, democratic governments. 
  • If you ask the average person what she believes is the definition of prosperity, the typical response would be monetary wealth. True prosperity encompasses abundance of wealth, happiness, health, career, relationships, home & family and wisdom. Money has little utility after certain level.
  • Wealth alone does not make for a happy and successful society. 
  • Happy citizens are produced as much by democracy, freedom, and entrepreneurial opportunity as they are by a growing economy.
  • Looking at one's bank balance, we may discover whether the man is rich or poor but we learn nothing about his character, his enjoyment of life, the state of his health, the quality of his education or his attitude toward the people around him.
  • GDP is a measure from an age dominated by heavy industry, designed to calculate a nation’s economic production. It has evolved to become the key device used to weigh a country’s economic success, tweak taxes and tackle inflation. The measure works less well with the growing importance of services.
  • Finland’s GDP per capita have decreased sharply, but its real wealth, in terms of its citizens living in a free, safe and successful nation, has improved.
  • The findings of the 2010 Prosperity Index are: smaller northern European countries rank highest while the bottom two places are occupied by Zimbabwe and Pakistan. The U.K. ranks 13th (same as last year) while the U.S. ranks 10th. 
  • Progress and prosperity is as much about well being and contentment as economic success. 
  • The critical factors fueling prosperity are open markets, high personal freedom and strong civil society. But given the fragility of such ideas, fury against globalization and rising mood of ugly intolerance, it is always good to restate these important points.
  • Nations at the bottom are improving faster than those at the top - but there are important exceptions.
  • Plenty of countries, from China to Chile, have shown convergence towards the United States, the world’s biggest economy.
  • Britons come third for generating prosperity, despite sluggish growth due to structural reforms but the ratings down to tenth due to their failure to share wealth. This is seen helping open divisions in societies to alarming degree. 
  • Oil is exposed as a curse for developing countries, corroding democracy while fueling corruption and rent-seeking activities.
  • New Zealand is picked as the planet’s most prosperous place, edging out Norway and Finland. This isolated nation is reliant on agriculture for its economy and its exports – a sector that thrived after government started to ditch subsidies in 1984. Farmers screamed this would be driving them in droves from the land. Instead they were forced to cut costs, innovate and respond to demands from consumers rather than bureaucrats. Now, they are some of the world’s most efficient and inventive producers.
Before national leaders can create effective policy to increase economic growth and social well-being in their country, they must first answer two fundamental questions: What is prosperity, and how is it achieved? 

Gross Domestic Product is an incomplete way of measuring 
a country’s progress, GDP captured  everything except that 
which makes life worthwhile ... Robert F. Kennedy.

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