News Item, , Berlin: Worldwide economic growth fails to increase prosperity for the majority of the population

Bertelsmann Foundation: Four billion people live in democracies, but many of which are defective

Despite the continuing worldwide economic growth of the past few years, mass poverty remains the central problem in most developing countries, and the majority of people have no lasting share in this prosperity. Although the number of official democracies is growing, many people are still excluded from political decision-making or are even being suppressed. This is the conclusion reached by the third Bertelsmann Transformation Index (BTI), an international comparative study of 125 transformation countries by the German Bertelsmann Foundation, which was published today. Among the transformation countries with the most successful governance in the past few years are Chile, Estonia and Botswana. The countries with the worst governance are Somalia, Myanmar and Zimbabwe.

The latest data of this worldwide index shows that despite the continued favorable global economic climate and years of stable growth rates, the social situation of most people in developing countries has seen little improvement. In Africa and Latin America in particular, little progress has been made and mass poverty remains the central problem in development. Although 85 of the 125 developing and transformation states investigated were able to participate in the uninterrupted global economic growth of the past few years, only few states used their economic leeway to combat poverty, or to invest in education or environmental protection. For about 100 states, economic performance and currency and price stability were evaluated as good or very good, but only 34 had sustainable educational or environmental policies. Further, only 43 states were rated as having a good socioeconomic level of development.

Josef Janning, globalization expert of the Bertelsmann Foundation: “The economic growth of the past few years has led many governments simply to consume the fruits of their success. In many cases, the expansion and further development of the national economy has been neglected, and governments have failed to set the course for the future or for less economically robust times.” Glaring weaknesses were observed especially in the mechanisms for social welfare and in the lack of investment in education and environmental protection. Janning: “From the global perspective, advancing globalization is producing greater overall growth and prosperity, but not in a fair or sustainable way. The positive effects of globalization are not benefiting the majority of people and it is not sustainable for the future. The failure, but also the solution to these problems lies in the reform capability at state and government level.”

Democracy is still gaining ground worldwide, yet at the same time the people’s participation in political decision-making and their social integration still is highly deficient in most countries worldwide. In the past few years alone, the number of countries investigated by the BTI which have held free elections leapt from 58% to 63%. A change-over to democratic systems was observed primarily in Africa. Just under 4 billion people now live in a democracy with only 2.5 billion living under autocratic regimes or dictatorships. However, 52 of the 75 democracies investigated show considerable defects in the rule of law and political integration. In many cases, there is no moderate and stable representative party system, balanced representation of interests or a strong civil society. For example, a functioning separation of powers was only observed in 13 of these countries, and less than a dozen countries showed a functioning system of corruption control or penalties for officeholders who abuse their position. Nonetheless, 23 countries were able to stabilize their democratic form of government. These included 11 European states, four in Latin America, four in Africa and three in Asia. Josef Janning: “We can clearly see that the alleged worldwide trend towards more autocracies, suppression and violation of human rights is not, in fact, taking place. On the contrary, the number of official democracies on the world is continuing to grow. But the quality of these democracies is stagnating. In many cases, democracy is even latently endangered. The standard of living for the people here is still precarious, as state arbitrariness, restrictions in civil rights and corruption are still very much the order of the day. And there is still a block of just over 40 stable and often harsh autocratic regimes.”

In a global comparison, the Eastern and Central EU accession states have once again shown great progress. The Czech Republic, Slovenia and Estonia top the ranking followed by countries such as Taiwan, South Korea, Chile, Croatia and Costa Rica. The index gives Chile the highest score for political transformation management, followed by Estonia, Botswana, the island of Mauritius and Slovakia. The big losers of the last few years include Poland because of the polarizing government of Kaczy?ski and Venezuela under Hugo Chávez. The worst level of development towards democracy and a market economy was judged by the experts of the foundation to exist in North Korea, followed by the People’s Republic of Congo, Sudan, Eritrea, Myanmar and Somalia.

About the Transformation Index:

The Bertelsmann Transformation Index (BTI) is the global ranking of the quality of democracy, the market economy and political leadership in 125 developing and transformation countries. It measures the successes and relapses on the road to democracy under the rule of law and with a socially responsible market economy. Detailed country reports provide the basis for evaluating the level of development as well as the capability of political actors to implement reforms in a consistent and targeted manner. The BTI is the first international comparative index which measures the quality of governance with self-collected data and provides a comprehensive analysis of political and economic transformation.

About the Bertelsmann Foundation:

The German Bertelsmann Stiftung is a non-profit foundation dedicated to serving the common good. It works on issues of international understanding, education, economy, society, health and the peaceful coexistence of cultures. The mission of the foundation is more justice and increased civic participation in a globalized world.

The foundation was set up in 1977 by the German media entrepreneur Reinhard Mohn, the majority shareholder of Bertelsmann AG. The Bertelsmann Stiftung works independently of companies and German government institutions and has no party political affiliations.