In 2005 it had a population of some 200,000, most of them concentrated in rural areas. Melanesians account for 98 percent of the population. Some two percent are Europeans and Asians.
Most of its largely Christian inhabitants survive on small-scale agriculture. Economic growth is less than three percent. But it’s one of those few countries where there are no exchange controls, no income tax, no withholding tax, no inheritance tax and no capital gains tax. It doesn’t release information to other governments or law agencies about the companies that have accounts there either. As a result, multinationals leery of government regulation elsewhere incorporate there.
This is Vanuatu, an archipelago in the South Pacific Ocean, and it’s been ranked the happiest place on the planet by the New Economics Foundation (NEF), the British think tank and “radical economics” advocate.
How did NEF arrive at its list of happy countries? It multiplied life satisfaction with life expectancy and divided the result with “environmental blueprint,” or how much land and other resources are required to sustain the population.
Life satisfaction is usually determined by asking people how they would rate their lives. Life expectancy figures (how long people live on the average) are available from a number of organizations including the UN and the governments of individual countries. “Environmental footprint” is a measure of NEF’s own devising, and arriving at the figure per country was a complicated affair.
NEF’s Happy Planet Index (HPI) said that the happiest places on earth after Vanuatu are Colombia, Costa Rica, Dominica, and Panama. Is that the same Colombia of the drug cartels and an ongoing civil war? Is that the same Panama that’s practically a US colony?
These findings defy the conventional thinking that the most developed countries are the happiest—and even suggest that ongoing conflicts and political and social problems don’t really matter in determining levels of happiness, unless they impact on life expectancies as in Africa.
But none of the major industrialized countries made it to the first 50 countries in the NEF HPI. This could suggest that while life expectancies are high in, say, the United States, the United Kingdom, Germany, France, Italy, Japan, Russia and other developed countries, satisfaction with life isn’t too high. Development in these countries has also strained the capacity of their resources as well as those of the rest of the planet to sustain their populations.
In Asia, the countries and territories generally regarded as advanced, such as Hongkong, Malaysia, Japan and Singapore didn’t rank as high as the less advanced, and even economic laggards like the Philippines and Indonesia. Hongkong ranked 88th , Malaysia 44th, Japan 95th, and Singapore, to which most Filipino economists and politicians look as a model, ranked 131st. On the other hand, the Philippines ranked 17th and Indonesia 23rd worldwide.
Some of the results were not surprising, however. Of the 178 countries ranked, seven African countries were among the bottom ten, with Zimbabwe in last place (178th ), and Swaziland, Burundi, and the Democratic Republic of the Congo at 177th together with the Ukraine. It figures. Life expectancy in Zimbabwe is at a low 36.9 years (the Philippine figure is 70) and life satisfaction at 3.3 out of an optimum 8.2 (the Philippines’ was 6.4).
But wait, the fact that some countries ranked higher than others doesn’t mean that things are okay planet-wide and everyone should rest easy. NEF set 83.5 out of a possible 100 as a “reasonable target” for its Happy Planet Index. But, as it pointed out, “the highest HPI is only 68.2, scored by the Pacific archipelago of Vanuatu. The lowest, and perhaps less surprising than some other results, is Zimbabwe’s at 16.6.”
The conclusion is that as far as happiness goes, the planet still has a long way to go. “No country achieves an overall high score and no country does well on all three indicators,” said NEF.
The “happy isles” of Vanuatu, for example, have “only a moderate level of life expectancy at 69 years. The message… is that when we measure the efficiency with which countries enable the fundamental inputs of natural resources to be turned into the ultimate ends of long and happy lives, all can do better.”
How to account for the relatively high HPIs of island nations like Vanuatu and the Philippines? NEF suggests that “perhaps a more acute awareness of environmental limits has sometimes helped their societies to bond better and to adapt to get more from less.” Translation: we’re used to the little we have and don’t expect much.
We can surmise in the Philippine case that the combination of high life expectancies, relative satisfaction with life, and a level of development that has had less environmental impact than that of some of its neighbors combined to give it a high HPI ranking. But one suspects that it could be much, much better, and that the Philippines could beat Vanuatu if only better governance by a better class of people were added to its many advantages. We all know what that means.