The World’s Most- and Least-Mis­er­able Coun­tries in 2016

Financial Nigeria Magazine - - Finance -

In what fol­lows, I up­date my an­nual Mis­ery In­dex cal­cu­la­tions. A Mis­ery In­dex was first con­structed by econ­o­mist Art Okun as a way to pro­vide Pres­i­dent Lyn­don John­son with a snap­shot of the econ­omy.

The orig­i­nal Mis­ery In­dex was just a sim­ple sum of a na­tion’s an­nual in­fla­tion rate and its un­em­ploy­ment rate. The Mis­ery In­dex has been mod­i­fied sev­eral times, first by Robert Barro of Har­vard and then by my­self. My mod­i­fied Mis­ery In­dex is the sum of the un­em­ploy­ment, in­fla­tion, and bank lend­ing rates, mi­nus the per­cent­age change in real GDP per capita. A higher Mis­ery In­dex score re­flects higher lev­els of “mis­ery,” and it’s a sim­ple enough met­ric that a busy pres­i­dent with­out time for ex­ten­sive eco­nomic brief­ings can un­der­stand at a glance.

holds down the sec­ond most mis­er­able rank, and the rea­sons aren’t too hard to un­cover. Af­ter the so­cial­ist Kirch­ner years, Ar­gentina is tran­si­tion­ing away from the econ­omy-wrack­ing Kirch­ner poli­cies, but many prob­lem­atic residues can still be found in Ar­gentina’s un­der­ly­ing eco­nomic frame­work.

at num­ber 3, is a hot­bed of cor­rup­tion and in­com­pe­tence, as the re­cent im­peach­ment of Brazil­ian Pres­i­dent Dilma Rouss­eff in­di­cates.

ranked as fourth most mis­er­able in the world in 2016, with a weak cur­rency grow­ing ever weaker. In con­se­quence, in­fla­tion has reared its ugly head. I es­ti­mate that Nige­ria’s cur­rent an­nual in­fla­tion rate is 65.7 per­cent, which is a far cry from the of­fi­cial rate of 18.55 pro­vided by the Nige­rian central bank.

It’s sim­i­lar in at num­ber 5, where cor­rup­tion runs to the very high­est of­fice. Pres­i­dent Zuma of South Africa just re­cently sur­vived im­peach­ment af­ter the Con­sti­tu­tional Court unan­i­mously de­cided that Zuma failed to up­hold the coun­try’s con­sti­tu­tion.

ranked sixth most mis­er­able, is mired in ex­change con­trols, a thriv­ing Egyp­tian pound black mar­ket, and mil­i­tary-so­cial­ist rule. How­ever, Egypt is likely suf­fer­ing even more than this ta­ble in­di­cates, as the EIU’s in­fla­tion es­ti­mate for Egypt (17.8 per­cent) is far off from the Johns Hop­kins-Cato In­sti­tute Trou­bled Cur­ren­cies Pro­ject, which I di­rect, es­ti­mate of 150.7 per­cent.

Next, with a Mis­ery In­dex score of 36.0, is a coun­try still feel­ing the ef­fects of the highly-pub­li­cized civil war that be­gan three years ago. With a civil war and en­demic cor­rup­tion, it comes as a shock to no one that Ukraini­ans are mis­er­able?

is plagued by cor­rup­tion, fraud, and in­com­pe­tence, and cur­rency de­val­u­a­tions are com­mon­place – the manat has been de­val­ued twice since 2015, los­ing 57 per­cent of its value against the dol­lar. This weak­ness in the cur­rency mar­kets makes it dif­fi­cult to do busi­ness, and the Azer­bai­jani econ­omy has fal­tered as a re­sult.

faces a despotic leader in Is­lamist Er­do­gan, who de­votes all of his re­sources to stay­ing in power rather than gov­ern­ing the state, lead­ing to a strongly de­pre­ci­at­ing cur­rency and a pop­u­lous mired in fear. The Turk­ish lira has lost over 24 per­cent of its value against the dol­lar in the last year, and the econ­omy is in the process of spon­ta­neously dol­lar­iz­ing. Not sur­pris­ingly, Turkey is a mem­ber of the Frag­ile Five, which also in­clude Brazil, In­dia, In­done­sia, and South Africa.

The rea­sons for rank on this list are al­most too ob­vi­ous and plen­ti­ful to enu­mer­ate, but it’s safe to say that a com­bi­na­tion of cor­rup­tion, in­com­pe­tence, theo­cratic-au­thor­i­tar­ian rule, and more have led to its state of mis­ery.

On the other end of the ta­ble one finds

with the low score of 0.4. Ja­pan’s low mis­ery is not the re­sult of high GDP per capita growth (Ja­pan’s fig­ure is only 0.7 per­cent), un­like most other coun­tries at the bot­tom. In­stead, it’s Ja­pan’s -3.5 per­cent in­fla­tion rate that drives the score down. is the next best, with the sec­ond-least mis­er­able score of 4.5, al­most en­tirely due to its high (6.3 per­cent) GDP per capita growth rate.

Also of note on this list is the United States. In Pres­i­dent Obama’s fi­nal year in of­fice, the ranked lower than Slo­vakia, Ro­ma­nia, Hun­gary, China, and even Viet­nam. What a le­gacy.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.