Singapore is richest country in the world, says Legatum

Asia Briefing comes from Singapore this week, which has just been named the most successful economy in the world by the Legatum Prosperity Index, which ranks a country's wealth based on income and well-being.

The island-state ousted Switzerland to top the table of 142 countries, while neighbouring Indonesia also performed strongly, with China in third.

The report provides an overview of what makes a country truly prosperous, comparing a wide range of data, from traditional measures of material wealth to capturing citizens’ sense of wellbeing.

Countries are ranked in eight categories: economy, entrepreneurship and opportunity, governance, education, health, safety and security, personal freedom and social capital. Ireland came in 10th place in the overall listings, while the Irish economy was in 18th place – Ireland was boosted by strong readings in the safety and security category, and personal freedom.

Radical improvements

In terms of overall prosperity,

Norway

wins for the seventh year running, but in Asia, Indonesia has made the most radical improvements since 2009, while the least prosperous countries are in sub-Saharan

Africa

.

Singapore beat 142 other countries such as Switzerland, which held the spot last year and is now second, and China, which came in third.

Overall, Singapore came in 17th place, with its strong economic reading offset by much lower rankings in social capital (25th) and personal freedom (38th). Hong Kong, Singapore's great regional rival, came in 20th place overall, but it won on the safety and security score.

Singapore has the second highest capital per worker in the world: $240,750 (€221,379) per worker while 47 per cent of the country’s manufactured exports are classified as “high-tech”, the third highest in the world.

There are few surprises at the other end of the scale, with Syria down 23 places, Tunisia down 28 places and Venezuela down 16 places.

The report does express concern about underlying weakness in the Chinese economy, particularly in the “labour market, despite the rise to third place”.

“The magnificence of the Chinese economic miracle has long enticed the world. However, recent jitters are beginning to cast doubt on the virility of the Chinese dragon,” it said.

Stable inflation

“Whilst rising to third in the economy sub-index this year (reflecting 2014 data), this is predominantly a result of stable inflation, high domestic savings, broad satisfaction with living standards, and FDI inflows. However, unemployment has been ticking up (China risks falling into the region’s bottom third) and job market expectations are still some of the lowest in the region,” Legatum said.

There are other problem areas – Japan has fallen from seventh to 25th in the economy sub-index since 2009 and Hong Kong from 11th to 24th, but overall the index this year has good news about the southeast Asian (ASEAN) nations. "Singapore has always ranked highly on the economy (1st this year), but other ASEAN nations have posted large seven-year improvements: Thailand rises from 27th to 15th, overtaking Hong Kong, Korea, and Taiwan, despite the latter two rising up the ranks. Vietnam rises from 41st to 32nd, Cambodia rises eight places to 80th, and Indonesia from 60th to 39th," Legatum said.

"For policymakers in ASEAN nations, upward progress relies on sustaining the improvements we have seen, but also focussing on the areas where the region is making little impression on east Asian dominance, namely health where the gap is fairly constant, and safety and security where the gap is widening. Here there may be chances for the likes of New Zealand to help drive prosperity growth," the London-based group said.