Australia ranks second in Asia Pacific in global prosperity ranking

Australia has been named the Asia Pacific’s second most prosperous country in 2018 behind only Singapore. According to a study by the Boston Consulting Group – the Sustainable Economic Development Assessment (SEDA)  – Australia is one of the best at turning economic prosperity into citizen wellbeing in the region.

Placing 13th out of 152 in the ranking, Australia is the one of the first non-European countries to appear on the list topped by Norway. Following the oil-rich Scandinavian country, which has turned it’s riches into prosperity for the majority of its population, was Switzerland, Iceland and Luxembourg. Singapore appeared 7th, sandwiched between two more Scandinavian countries; Sweden and Finland. 

The top 20 represents a more diverse group with New Zealand appearing at number 14 and Canada, the US, the UK and Japan taking the remaining non-European spots. The Sustainable Economic Development Assessment (SEDA) measures wellbeing in ten dimensions split across three categories; economics, investments and sustainability.

For the economic category, each country is given a score based on three factors. Firstly GDP per-capita – the usual basis to determine a country’s prosperity – is included, followed by economic stability (rate of inflation vs GDP volatility) and employment statistics (rate of unemployment/underemployment). 

Investments is also split across three categories in the SEDA ranking; health, education and infrastructure. A high level of health care can be attributed to both access to healthcare as well as healthcare outcomes. Education is measured across the same duel success factors whilst the infrastructure dimension focuses on basics including power and water to information and communications technology.

This is the basis of the investments category and is also the heart of the SEDA ranking. The report states that, ‘A country’s wealth has a pervasive impact on many of the factors that contribute to wellbeing. We focus therefore on the performance of countries in converting the wealth they do have into wellbeing.” 

The sustainability category combines the most criterion and is perhaps what sets the consulting firm’s SEDA report apart from other wealth and prosperity rankings. The analysis is spread across four separate dimensions including equality, civil society, governance and environment. When combined, these dimensions cover some of the basic civil liberties which are constitutionally enshrined in the majority of prosperous nations.

Together these three categories that make up the SEDA show a more comprehensive view of the quality of living, individual freedoms and prosperity that comes with living in a particular country. In Australia for instance, whilst the country’s GNI is less than that of the US, sitting roughly in the mid-$50,000 range, its SEDA score is higher indicating a higher level of wellbeing.

Furthermore, “the US’s SEDA score is 76, while Australia’s is 79. Germany’s GNI per capita is more than 10% below that of both countries, but its SEDA score is on par with Australia’s and better than that of the US,” the report explains. This demonstrates why the SEDA report is relevant when it comes to both wellbeing and economic durability.

The authors of the Boston Consulting Group report state that, “our findings mean that countries that focus on enhancing wellbeing not only raise the standard of living of their citizens but also set their country up for stronger and more resilient economic growth.”

“Countries can – and should – aim to achieve the twin objectives of sustainable economic growth and improved well-being. SEDA can be a valuable tool as governments undertake this journey, shedding light on the impact of past policy decisions and informing strategies for the future,” the report states.

Wellbeing over economic stimulus

When put up against the gross national income, a country’s SEDA score can prove that a lesser economy can provide a better wellbeing for its citizens through infrastructure and sustainable economic investments. This also, in turn, effects a country’s ability to respond to economic crisis and promotes a virtuous cycle of economic growth.

In terms of Australia, this is important because according to the BCG countries that are better at converting wealth into wellbeing will grow faster than those that are less so; “Countries that outperform peers in creating well-being for citizens enjoy more robust economic growth,” the report states. Thus, pursuing both economic growth and citizen wellbeing must be a priority for governments, not a trade-off between one and the other.

“Pursuing the twin objectives of growth and well-being should be the aim of long-term development strategies. This doesn’t happen on its own, though—it is the result of thoughtful policy decisions that strike the right balance. This balanced approach is relevant not just under normal circumstances but also during times of crisis. At such times, countries must resist the temptation to prioritise stimulating economic growth or reducing fiscal deficits at the expense of well-being.”