The Independent Australia Ranking on Economic Management (IAREM) for 2021 reveals Ireland leading the world and the USA still languishing well outside the top twenty.
The global table published today by online journal of political and social analysis Independent Australia shows Ireland is now the world’s best-managed economy. Singapore is a close second with Luxembourg third. The USA ranks 25th.
Ireland’s surprising ascendancy
Ireland’s success is due to effectively wrangling both the coronavirus pandemic and the Brexit challenges. Through the recent Covid-induced global downturn, Ireland was one of only four OECD members to avoid recession. Of these, Ireland alone averted deep job losses.
Ireland principal success, however, has been economic growth. Since 2012, gross domestic product (GDP) has grown by a thumping 86.1 per cent. See chart, above. That is the strongest of all major economies, including China.
Over that period GDP in the USA, New Zealand and South Korea grew by less than 30 per cent. In Germany, the Netherlands, Denmark and Switzerland growth was below 10 per cent.
Several poorly managed economies actually went backwards over this period, including Canada, Australia, France, Japan and Italy.
World’s top ten economies
In order, the best-performed economies in 2021, with scores achieved, were:
1. Ireland: 32.94
2. Singapore: 31.85
3. Luxembourg: 31.26
4. Switzerland: 28.33
5. Hong Kong: 26.26
6. Taiwan: 25.24
7. New Zealand: 24.98
8. Norway: 24.71
9. Denmark: 22.79
10. South Korea: 22.67
The top thirty are shown in a table, published here, with all IAREM components itemised.
The IAREM score
The Independent Australia ranking on economic management is a composite index which measures all the world’s economies on eight key indicators. These are national income per person, GDP growth, median wealth per adult, jobs, inflation, tax levels, government debt and economic freedom. This transparent formula can easily be replicated with basic spreadsheet software:
IAREM = ip + gr + mw + j – in – t – gd + ef
The raw data comes from publicly accessible tables issued by the World Bank, Credit Suisse, Heritage Foundation, the CIA, the International Monetary Fund (IMF) and tradingeconomics.com. This is the world’s only index of overall economic performance based on multiple variables.
The troubled trajectory of the USA
The USA has traditionally ranked between 10th and 20th in the world since the first IAREM table was compiled in 2007. The highest ranking was tenth in 2014 as the recovery from the global financial crisis took effect. Other countries gradually overtook the US through the boom following the GFC, so ranking was a modest 23rd when the Obama period ended in 2016.
It was downhill from there, however, as the disastrous decisions by the Trump administration – on trade, tarrifs, tax revenue, spending and federal debt – took their toll. By 2018, the USA had fallen to 29th, the lowest ranking ever. By 2019, ranking was an appalling 34th – due to poor outcomes on personal income, economic growth, median wealth and federal government debt.
The recovery this year to ranking 25th is therefore noteworthy. This has been achieved principally by growth in GDP and median wealth and a slower rate of federal government borrowing.
Global progress through the Covid recovery
Notable losers in 2021 are Japan, Germany, the United Arab Emirates, Brunei, Vietnam and the Czech Republic.
Economies to have advanced strongly this year include China, New Zealand, Denmark, the Netherlands, the United Kingdom, Israel, Malaysia and France.
Ireland’s steady ascent
This is the first year since the IAREM began that Ireland has led the world. Ireland ranked 32nd in 2013, 24th in 2015, sixth in 2018 and fifth in 2019.
It should be noted that Ireland’s economy is heavily dependent on the activity of many large foreign corporations which are taking advantage of Ireland’s benign tax regime. While this has fueled the recovery from the GFC, it entails certain risks.
So the Irish are not ironing any four-leaf clovers. They don’t want to press their luck.
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The original IAREM article is available here for free:
https://independentaustralia.net/politics/politics-display/australian-economy-languishes-while-ireland-singapore-nz-soar-,15669
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“Alan Austin is a great Australian journalist and,
I think, a pirate. I steal Alan Austin’s findings all the time.”
~ Jordan Shanks
https://www.youtube.com/watch?v=HtV-2X4BjQI