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It’s official: Australia is the No.1 place to be

For every Australian tired of bad news — disasters, political disputes and public people behaving badly — here is some good news. While nobody was noticing, late last year Australia pipped Norway to achieve the highest standard of living in the world.

Standards of living used to be equated with national wealth divided by the number of people — per capita GDP — and this is still part of the measurement. However, standards of living involve a complex range of factors, including income distribution, longevity, infant and maternal mortality rates, education, crime rates, natural disasters and so on. These are known as Human Development Indicators (HDI).

If there is any negative news in this, it is that at least some of the data the Australian HDI is based on is drawn from 2008, with only some of it reflecting the situation in 2010. Ireland is still ranked fourth in the world, which indicates that the recent dramatic economic events have not been factored into the latest standings.

It also means that Australia may have been at the top of the pile for a couple of years without even knowing it. It also means that things might have slid over that time, although the only real negative since 2008 has been in the shape of natural disasters — some really nasty fires and a couple of very bad floods.

But, in that we have some control over our own affairs, Australia is doing exceptionally well. Australia started to approach Norway around 1995 and the two countries tracked very closely until last year when Australia snuck ahead.

Norway has rated well over the past 30 years primarily due to the smart investment of its oil wealth into a national fund, with the interest from the investment topping up government spending. Norway’s emphasis on social services along with its high per capita GDP have kept it at the top of the rankings over those four decades.

Needless to say, factors such as days of full sunlight as opposed to spending a lot of time shivering in the dark are not included in the statistics, which might well help create a bigger gap between Australia and Norway if they were.

Two of the economic criteria for determining HDIs is how much a currency can buy in the local market (purchasing power parity) — what a dollar will buy in Australia is, for example, much less than it will but in a developing country — while the distribution of income (Gini Coefficient) also says more about how wealth is distributed than just raw average income figures.

Norway scores much more highly in per capita GDP and PPP at over $58,000 per head compared with Australia’s just over $40,000, and slightly better in terms of equality of income distribution. But Australia scores slightly better in other areas, such as equality of access to education. Australia also does slightly better on gender inequality, in terms of workforce participation, empowerment and reproductive health.

While Australia and Norway battle it out for top HDI honors, there are some real horror stories further down the scale. Not surprisingly, countries that are poorest are also often least well administered and often have the worst income distribution.

Sub-Saharan African states fare worst of all, as a group, in part because of their poverty but in part also because that such wealth that they do have, in some cases quite considerable, is very poorly managed or squandered on corruption, expensive militaries and political “trophy” purchases. How this plays out in infant mortality, average life expectancy and so is all but unbelievably bad.

And if anyone has ever wondered about the link between poverty and war, the list of embattled countries also tends to read like the who’s who of poorest countries with the lowest HDIs. The lowest-ranked countries are grouped closely together, with Afghanistan fifth from the bottom.

It could be worse, however. Along with Robert Mugabe’s mental health, Zimbabwe has been declining since 1990. It currently has the lowest HDI in the world.

n.b. Data drawn from the UNDP International Human Development Indicators 1970-2010 Trend Analysis.

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  • 1
    drsmithy
    Posted Friday, 4 March 2011 at 1:49 pm | Permalink

    It also means that things might have slid over that time, although the only real negative since 2008 has been in the shape of natural disasters — some really nasty fires and a couple of very bad floods.

    I’d have to say the massive increase in cost of living over the time period might count as well.

    Visiting home for the first time in three years late in 2010, I was gobsmacked to find even a carton of crap beer like VB was over $40, lunch at somewhere like the Coffee Club was pushing $15-$20 and groceries were horrific.

    Admittedly the effect was exacerbated as I’ve been living in the US for the last year, but those were the kind of prices I was used to from my time living in Zurich, and there’s no way any Australian city has the kind of atmosphere and services that Zurich offers to make up for the expense.

  • 2
    Jim Reiher
    Posted Friday, 4 March 2011 at 3:17 pm | Permalink

    Australia has its problems, but clearly we are still a “lucky country”. Those of us who have lived overseas for a period of time, or even travelled overseas, realise how good we have it here. (I suppose if someone had only ever been out of Australia to Norway… they might not see it as much!)

  • 3
    The Pav
    Posted Friday, 4 March 2011 at 4:23 pm | Permalink

    Personally I find such comparisons tiresome. Who cares if we are the best in the world?

    Surely the measure is are we the best we can be?

  • 4
    Flower
    Posted Friday, 4 March 2011 at 5:47 pm | Permalink

    Ah yes “Australia is a lucky country……….. ” but it appears that pollution per capita and the lack of transparency in the extractive industries is irrelevant?

  • 5
    Posted Friday, 4 March 2011 at 9:23 pm | Permalink

    CAN’T EVEN MAINTAIN POOR LIVING CONDITIONS MISTER SPEAKER

  • 6
    Meski
    Posted Monday, 7 March 2011 at 5:29 pm | Permalink

    @Daniel: Perfect imitation there, I ROFLED.

    @Flower: When the rest of the world finds out, they’ll move here, that’ll lower the pollution per capita. (which is one way of lying with statistics - increase the denominator of what you’re measuring)

  • 7
    Flower
    Posted Monday, 7 March 2011 at 8:51 pm | Permalink

    Indeed Meski and our dear leaders will guarantee it – “populate or perish.”

    In the following Climate Change Performance Index, Australia is coming third last. Second last is Kazakhstan and dead last is Saudi Arabia.

    http://www.germanwatch.org/ccpi Page 6

  • 8
    Meski
    Posted Tuesday, 8 March 2011 at 9:00 am | Permalink

    Australians pretty obviously don’t want to do anything about climate change, if you view the popularity polls of Labor since they introduced their carbon tax. Or maybe they think that the government should be implementing a magic pudding solution that won’t cost them anything. They’re certainly being coached in this belief by Abbott and his lackeys, I mean Alan Jones.

  • 9
    Flower
    Posted Tuesday, 8 March 2011 at 11:12 am | Permalink

    Canada’s Barrick Gold is the JV partner of the Kalgoorlie Super Pit, the largest open pit gold project in Australia and Barrick has several other large projects in the country. From all accounts the gigantic Super Pit quarry in Kalgoorlie will not be backfilled but simply abandoned when the project shuts down in 2017. Rio Tinto has so many mining projects in Australia that they are too numerous to list.

    Isn’t it ironic then that Norway dumped Barrick Gold and Rio Tinto from their fantastic Sovereign Pension Fund for crimes against the environment? Norway’s Pension fund is the second largest in the world (around $512 billion), an ongoing legacy from the taxes and revenues collected from its oil production. Norway’s investments are determined by ethical assessment. Norway will not invest in tobacco companies but Australia’s Liberal Party does.

    In addition, Norway ranked sixth for climate change performance while Australia ranked a dismal 58. Norway’s climate change performance is up from last year, Australia’s performance is down.

    Meanwhile we can bask in the knowledge of having the highest living standards in the world while the diggers and dealers gloat over the tax free booty.

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