MercoPress. South Atlantic News Agency

Uruguay the most prosperous country in Latinamerica says Legatum Institute

Money but also quality of life: Uruguayans enjoying their beaches

Uruguay is the highest positioned Latinamerican country in the 2010 list ranking the prosperity of 110 of the world’s nations by the London analytical centre Legatum Institute and its Legatum Prosperity Index.

“The Prosperity Index seeks to understand how economic fundamentals, health, freedom, governance, safety, education, entrepreneurial opportunity, and social capital influence a country's economic growth and the happiness of its citizens,” the group says.

Europe dominates the Top 10, taking six of the spots: Norway, Denmark, Finland, Sweden, Switzerland and Netherlands. The United States and Canada represent North America, while Australia and New Zealand check in from the Pacific-Asia nations.

In Latinamerica the most prosperous is Uruguay, positioned 28, followed by Chile, 32 and Costa Rica, 33. Argentina ranks 41 and Brazil stands at position 45.

Other Latinamerican countries positions include: Panama, 40; Mexico, 53; Colombia, 65; Paraguay, 67; Peru, 73; Venezuela, 75; Ecuador, 77 and Bolivia 82.

In Europe, UK is ranked 13; Germany, 15; France, 19 and Spain, 23.

Now in its fourth year, the Index analyses 110 nations covering more than 90% of the world’s population and includes both material wealth and quality of life, and then employs a rigorous set of estimation methods to determine which factors matter most to nations’ overall prosperity.

“Most people would intuitively agree that “prosperity” is not just money but also quality of life. The Prosperity Index is the first global index that provides an empirical basis for this belief: it finds that successful countries enjoy a “virtuous cycle” of economic liberty and growth, political freedom and good governance, and enterprising and happy citizens, which mutually reinforce each other on the path to prosperity” points out Legatum Institute.

The most prosperous states are not so much the fastest-growing economies but those democracies that have been able adjust successfully to the emerging reality. At the top of the list are the northern democracies, led by Scandinavian countries Norway, Denmark, Finland and Sweden. These are joined by other small, compact cold-weather states such as the Netherlands and Switzerland. Rounding out the top 9 on the list are three resource-rich Anglo-American states, Australia, New Zealand and Canada.

All these countries sell either resources – Norway, Australia and Canada – to emerging Asian super-powers or expertise and services. Most countries possess powerful niches that drive their economies and promote exports to developing countries. These include green technology (Denmark), motor vehicles, telecommunications, pharmaceuticals and forestry (Sweden), information technology (Finland), engineering and finance (Switzerland), business services, chemicals and plant science (Netherlands). The tiny Netherlands, for example, is China’s second largest European trading partner.

The ability to shift gears also can be seen in Germany which improved its ranking to 15 due in part to rising industrial exports to emerging economies. Like the Scandinavian countries, Germany economy has also become significantly less regulated in the past decade. They are no longer the ultra-generous social welfare states imagined by some liberals , but increasingly adapted to a tougher global marketplace.

This strong performance contrasts dramatically with the emergence of what might called ”a second Europe”, Spain, Portugal, Italy, and Greece which remain functioning democracies but without the kind of effective governance found in their better managed, more fiscally responsible northern neighbours. These states have all fallen in over the past year in the Legatum rankings, falling into the 20s and even 30s, something very rare for long established European economies.

In Latin America, liberal democracies such as Uruguay, Chile and Costa Rica sit on top while minerals rich but autocratic Venezuela and Bolivia sink closer to the bottom.