Legatum Prosperity Index 2016
Colombia
Ranked 72nd of 149 on the 2016 Legatum Prosperity Index™
OVERVIEW
Colombia, Latin America’s 4th largest economy, improves not much else but
the economy.
Despite positives in its economic prosperity, Colombia has seen a marked decrease in many
sub-indices over the last decade, with, as is seemingly the perpetual case globally and not
limited to Latin America, economic growth and improvement bolstered at the expense of
the Natural Environment. Colombia, being the most biodiverse country by square kilometre,
should be extremely cautious of this fate. Additionally, whilst Personal Freedom and Safety
& Security have seen a mild improvement, it appears Colombia’s infamous cartelgovernment wars, despite the recent peace, have translated into real declines into certain
sub-indices of the Prosperity Index.
Legatum Prosperity Index 2016
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Sub-Index Rankings
In the Prosperity Sub-Index rankings, Colombia
performs best on Business
Environment and Personal Freedom and
scores lowest on the Safety & Security subindex.
Visit our Rankings table to see how Colombia
compares to other countries.
PROSPERITY GAP
The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's
expected Prosperity Index ranking.
Colombia continues to carry a small prosperity deficit, and it is one that has grown over the
past decade. Growing surplus in Business Environment and a shrinking deficit in Safety &
Security and Economic Quality have been offset by the eradication of Colombia’s Social
Capital surplus and a widening Governance deficit.
Legatum Prosperity Index 2016
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COMMENTARY
Colombia sits mid-table in the Prosperity Index. As such it is difficult to judge its
performance. Is it the best of the weaker countries in Latin America, or should it be held to
the standards of the more prosperous nations on account of its strong economy, high
population and moderate HDI.
Take the example of Safety & Security, where Colombia has consistently ranked the worst in
Latin America and 142nd globally. This is up five places from 2007, and indeed will likely rise
further if peace can be sustained, but for a relatively democratic nation, being one of the
ten least safe countries in the world is poor. Colombia has had a tumultuous history battling
drug cartels and other non-state actors that look to dismantle the state, but little has been
done to prevent either its origins or alleviate its consequences. For example, unemployment
has only fallen 1% in nearly a decade, confidence in government has fallen 20% in the same
amount of time and Colombia’s score on the Corruption Perception Index has dropped by
one point (lower = worse), whilst most countries have risen in these rankings.
Colombia’s Safety & Security Score as a percentage of Central and Latin America’s average Safety & Security Score.
While Colombia has improved its Safety & Security over the past decade, it remains significantly below the regional
average.
Social Capital too is another aspect that brings cause for concern; slumping to 64th place in
this sub-index from 37th in 2007. With a reduction across almost all variables, including
trust, links to leaders, and altruistic behaviour. All contribute to a society less able to
mitigate the negative prosperity effects of problems elsewhere. Here then, it would seem
that Colombia is best considered among the best of the weaker group of Latin American
countries.
Legatum Prosperity Index 2016
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However, it must be recognised that a lacklustre performance in dealing with certain subindices does not mean that certain aspects of Colombia’s performances in the Prosperity
Index cannot be praised. Whilst Social Capital and Safety & Security have taken a hit,
interestingly Personal Freedoms have improved, with Colombia jumping moderately from
50th to 44th, with an increase in LGBT rights and modest increases in tolerance levels.
Additionally, the economy has improved over the past decade. Rising to 76th in Economic
Quality and 28th in Business Environment, Colombia is proving that it is willing to continue
to compete regionally in an economic sense with its neighbours. Increases in female labour
force participation, significant reductions in the poverty rate, both at the national and
absolute poverty lines, as well as a huge slash in redundancy costs (Colombia was in the
bottom half globally until 2012 when it dramatically edged into the top 20% in one year).
Additional positives such as a vast increase in the ease of attaining credit and starting a
business have somewhat dwarfed the economic negatives of a reduction in the affordability
of financial services. Here then, Colombia seems better compared with the performance of
Latin America’s most prosperous areas.
Whether Colombia proves itself able to compete on prosperity with Latin America’s more
successful nations remains to be seen. Little change in rank over the past decade shows a
country stuck in its mid-table position. If it is to climb higher, then Safety & Security must be
improved, alongside weak governance.
Ways to make a change
Click on the Tweets to help make a change in your nation.
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A chance for prosperity growth: peace is the opportunity Colombia needs
Colombia provides a good business environment: time for a governance system to
match!
How Colombia’s drug war has deeply affected prosperity delivery
Visit Colombia’s country profile on www.prosperity.com.
Legatum Prosperity Index 2016
www.prosperity.com