Asian nations, although diverse and unique, share some characteristics. The more developed economies (Hong Kong, Japan, Singapore, South Korea, and Taiwan) rank among the top 30 countries in the 2011 Prosperity Index. The emerging Asian economies (China and most of Southeast Asia) are placed squarely in the middle of the Index, although many are on the rise. In stark contrast, South Asian countries placed in the bottom 20 in the Index, having yet to see the same dramatic societal and economic transformation as their neighbours to the east.
Beyond the wide dispersion of rankings, there are five distinct stories that emerge from Asia in the 2011 Index:
1. Amid Asia's economic rise, wellbeing exceeds income
Within the region, countries tend to perform better in wellbeing variables (which encompass things such as satisfaction of education systems or confidence in financial institutions) than in income variables (including traditional objective variables such as pupil to teach ratio or percentage of non-performing loans).
2. Asian countries experience differing trajectories
The diversity of countries found in the Asian region shows a varied portrait of prosperity. The countries in the region (primarily east and southeast) which have increased overall prosperity in the last three years have done so by increasing both the income and wellbeing dimensions of prosperity, while countries that have failed to do so (mainly in South Asia) have seen declines in both dimensions.
3. Avoiding the "middle income trap": Problems and solutions
The economic rise of Asia comes with the threat that some emerging economies in the region are approaching the “middle income trap”—economic stagnation. The Index suggests that part of the solution might be found in human capital investment and increased R&D spending.
4. Corruption still a problem despite improvements in entrepreneurship
Almost all countries in the region have increased their Entrepreneurship & Opportunity scores as a result of the development of an improved communications infrastructure. However, in South Asia corruption and high start-up costs still stand as major barriers to entrepreneurs.
5. Safety and security is declining in Asia
Since 2009, all countries in the region have experienced a fall in the Safety & Security sub-index. This should be a focus of Asian countries if overall prosperity is to rise.
Download the full Examining the State of Prosperity in Asia report.