Venezuela shows the biggest global drop in the 2014 Prosperity Index

Prosperity is more than just material wealth. It is also the joy of everyday life and the prospect of being able to build an even better one in...

Prosperity is more than just material wealth. It is also the joy of everyday life and the prospect of being able to build an even better one in the future. Under this premise, The Legatum Institute –a London based public policy think-tank- created the Prosperity Index six years ago.

The Prosperity Index benchmarks countries using 89 variables spread across eight distinct categories of wealth and well-being: Economy, Entrepreneurship & Opportunity, Governance, Education, Health, Personal Freedom, Social Capital and Safety & Security.

In the 2014 Prosperity Index rank of 142 countries, Venezuela came in 100th place, a whopping 22 place drop in only a year –by far the biggest yearly fall for any country in the region and the world-. When compared with the 22 Latin American and Caribbean countries included in the rank, Venezuela has the 3rd worst spot, only ahead of Honduras (105th place) and Haiti (135th place).

ProsperityIndex_Vzla_2013-2014Venezuela gets its best score in the “Education” category, coming in the 52nd place in the global ranking and 2nd best in the region, after Argentina (44th place).

Of the Venezuelans surveyed, 74% say that children get the opportunity to learn and grow in the country, which is consistent with the country’s high enrollment rates: 92.2% in primary education (regional average is 90.5%), 85.4% in secondary education (regional average is 79.9%) and 78.1% in tertiary education (regional average is 39.9%). Enrollment rates in tertiary education are pretty high due to the creation of new universities (like Universidad Bolivariana) and certain social programs (such as the Misión Sucre). Though these initiatives increased access to the system, there is reasonable doubt about the quality of the education and its results in terms of the employability of the graduates. With enrollment rates that surpass the regional average, the years of secondary and tertiary education completed by the Venezuelan labor force are still lower than the regional average. But perhaps the strongest evidence comes from students themselves.

In the “Health” category, Venezuela comes in 74th place in the global rank and in 11th place in the regional rank.

The Legatum Institute data shows that Venezuelans have a health-adjusted life expectancy of 66 years -1.4 years over the regional average-; that only 19% of the population think they have health problems that prevent them from doing things people their age normally can do; and 34% experience worrying during a lot of the day yesterday. However, Venezuela has health indicators comparable to those of 20 or 30 years ago, or of countries with a much lower per capita income. While the shortage of medicines and medical supplies has been a conjunctural problem of the past two years, the deterioration in public health has been brewing for several years. The current model has been inefficient and inequitable, with a real impact on the most vulnerable populations. In other words, the country’s health system is in the midst of a crisis. Venezuela will probably drop some more places in the 2015 health rank.

Venezuela gets the 7th worst spot in the region in terms of “Entrepreneurship & Opportunity” (87th place) and 4th worst place in the “Economy” category (104th place – a 44 place drop in only one year).

Compared to the regional average, Venezuela underperforms in items like inflation (it’s currently 6 times higher than the regional average), size and volatility of foreign investment (which fell 54% in the first semester of 2014), and hi-tech exports as percentage of manufactured exports. And while 80% of people in Colombia, Panama and Paraguay answer “yes” when asked “are you satisfied with your standard of living, all the things you can buy and do?”, only 56% of Venezuelans say “yes”, which leaves the country in the bottom three for this particular item, only after Jamaica (44%) and Haiti (21%). And even though 86.9% of Venezuelans think they can get ahead by working hard, Venezuela is ranked by the World Bank as having the worst regulatory environment to start a business in the region and the 8th worst in the world.

Venezuela gets the 3rd worst spot in the region in both “Safety & Security” (116th place) and “Personal Freedom” (108th place – a 24 place drop in only one year).

Only 19.2% of Venezuelans surveyed claimed that they feel safe walking alone at nights in the areas where they live, 22.5% said they had property stolen over the past year and 19.3% said they had been assaulted or mugged during the same period. But lack of safety is not just a matter of perception: according to the last available homicide rate of 219 countries included in the 2014 UNODC study, Venezuela has a rate of 53.7 per 100,000 habitants. Only 12 countries (7.5%) have a rate over 30.

Of the Venezuelans surveyed, 64.3% are satisfied with the freedom to choose what to do with their lives. However, when considering civil liberties –like freedom of expression and belief, associational and organizational rights, rule of law, and personal autonomy– Venezuela gets the 2nd lowest score (0.17/1) in the region, only before Haiti (0.16/1). It should also be said that, after Brazil and Mexico, Colombia and Venezuela have the highest levels of state-sponsored political violence and repression. This seemed pretty evident during the months of protests and guarimbas in the first semester of 2014, specially after more than 3,000 cases of arbitrary arrests and 153 cases of tortures –all of which the NGO Foro Penal will present before the United Nations-.

Venezuela gets its worst score in the “Governance” category (134th place), getting the 9th worst spot in the global rank and 2nd worst one in the regional rank.

Venezuela underperforms the regional average in almost all of the studied variables, including government effectiveness and separation of powers. Also, only 36.1% of Venezuelans have confidence in the military, 33.7% in the Judicial System and 40.2% in the “honesty of elections”.

Venezuela is ranked as the most autocratic –or least democratic- country in Latin America and the Caribbean and gets the worst score in terms of rule of law, regulation quality and the ability to participate in political processes. There is one element in which Venezuela does better than every other country in the region: 61.4% of people say they are satisfied with efforts done to deal with the poor in the country. The regional average for this survey question is 38.2%. However, Venezuela’s economy is ailing and this is showing up in the poverty statistics.

Last but not least: The Legatum Institute considers a “Social Capital” category that measures social cohesion and engagement, and community and family networks. Venezuela comes in 94th place in the global rank (a 26 place drop in only one year) and has the 6th worst regional rank. Apparently, 44% of Venezuelans can rely on friends and family, but only 10% donate money to charities, only 8% do voluntary work and only 3% help strangers in need. This shows really low social cohesion. But in Venezuela’s case we might have to look at this from a different perspective. After 19 elections in just 15 years, the Venezuelan social cohesion is really an electoral one.