Argentina was once again in the top 10 of the global economic misery index

With 95 points, Argentina reappeared in the Top 10 of the World Misery Ranking, 2020 edition, led by Venezuela and in which it shares the lot with countries affected by wars and very serious civil conflicts.

A reshuffle introduced in 2019 by the economist Steve hanke, from Johns Hopkins University, and published in the North American magazine The national review, the “misery index” results from the addition of unemployment rates, active interest (loans) and retail inflation and subtracting the change in GDP per capita of each country (which in case of negative variations result in an addition).

Venezuela is at the top of the rankings again, while Argentina, which was second in 2019, moved up to seventh, as the list grew from 95 to 156 countries. Thus, Argentina was “relegated” by Zimbabwe, Sudan, Lebanon, Suriname and Libya, but it remained in the Top 10, ahead of Iran, Angola and Madagascar.

Argentina’s unfortunate position is mainly due to its rate of inflation, which in turn implies a high nominal interest rate, coupled with high unemployment and declining GDP.

Hanke specified Infobae that the data he compiled for Argentina is unemployment of 11.8%, inflation of 44% (annualized rate at the end of 2020), an annual interest rate of 29.4% and a drop in per capita GDP of 9.8%. The resulting value, 95 points, is equal to that which would result from the addition of the unemployment rate of 11%, the inflation of 36% and the annual interest rate of 37%, plus a drop in GDP per capita. by 11%, more in line with data from officials Indec.

Argentina, which occupied second place in 2019, moved up to seventh place, when the list grew from 95 to 156 countries and was moved by Zimbabwe, Sudan, Lebanon, Suriname and Libya. It was ahead of Iran, Angola and Madagascar

At the opposite extreme, as the “Economically less miserable countries” in 2020, appear Guyana (which the discovery of vast oil reserves, in dispute with Venezuela, allowed to grow at an unusual rate of 25.8% of GDP per capita), Taiwan, Qatar, Japan and China. In other words, out of the 5 countries which seem the least miserable, 2 are overabundant in energy resources (Guyana and Qatar) and the others are in Asia.

Bad companies

Among the countries of Latin America and the Caribbean, Argentina occupies third place, behind Venezuela and Suriname and ahead of Brazil (11th in the standings, 53.4 points), Haiti (13th, 48.9), the Peru (18th, 42.2) and Jamaica (29th, 38.6 points). According to Steve Hanke’s indicator, the best-positioned country in the region is Cuba (117 °, 15.8), followed by Ecuador (79 °, 23.8), Chile (75 °, 23.9 ) and Mexico (73 24.6 points).

The results show that the “misery index” works better to describe extreme situations than particularly punishes countries with high inflation. The ranking also makes it clear that it is a short-term and not a structural indicator. Therefore, I take the unemployment rate and not the poverty rate, the variation of the GDP and not the competitiveness or the solidity of an economy, the interest rate and not the degree of banking, and leave aside the health and education indicators which cover, for each case, the UN Human Development Index or World Bank Competitiveness Reports and Davos Forum.

The “misery index” indicates the most recent development of an economy. Guyana, the least “miserable” economy of 2020, is no more developed or has a better quality of life than, for example, the Scandinavian countries, Australia or Canada.

According to Steve Hanke’s indicator, the best-positioned country in the region is Cuba (117 °, 15.8), followed by Ecuador (79 °, 23.8), Chile (75 °, 23.9 ) and Mexico (73 24.6 points)

The “median” of the ranking, that is to say the “poverty index” which leaves half of the countries in front and the other half behind, is 23.4 points, less than a quarter of the ” Argentine misery index ”(the explanation of the difference between“ average ”and“ median ”went viral last Wednesday in media and social networks due to a conceptual error by the governor of Buenos Aires and a doctorate in economy, Axel Kicillof).

With a “misery index” of 3827.6 points, Venezuela leads the 2020 ranking by far, due to an inflation rate of 3713% (in 2019 it was 7374%), a interest rate of 33.1%, unemployment of 50.3% (more than double in 2019) and a drop in per capita GDP of 30.9%.

Last August, Argentina finished second in the “Poverty Index” prepared for 60 countries by Bloomberg, behind Venezuela and ahead of South Africa, Turkey and Colombia.

The history of the indicator

The Bloomberg Index responded to original model, proposed in the 1960s by Arthur okun, economic advisor to US Democratic President Lyndon Johnson, to summarize the degree of unease or misery of a country in a single piece of information: the sum of its inflation and unemployment rates.

Robert Barro, teacher at Harvard University refined the original concept, and Seteve Hanke pioneered the 4-variable method (inflation, unemployment, interest rate and change in GDP per capita) in 2019. “The human condition lies on a wide spectrum between being miserable and being happy. In the economic sphere, misery stems from high rates of inflation, the cost of credit and unemployment. The surest way to mitigate it is through economic growth. If everything else stays the same, happiness tends to increase when growth is strong, inflation and the cost of credit are low and employment is plentiful, ”the economist wrote to paint the opposite side of misery.

In the Misery 2020 ranking, the Venezuelan-led podium is completed by Zimbabwe, with 547 points (unemployment 4.9%, inflation 495%, active rate 35% per year and GDP per capita down 12.1%) and Sudan, with 193.9 points (unemployment of 25%, inflation of 141.6, active rate of 16.6% and decline of 10.7% of GDP per capita in 2020).

The misery of dictatorships

Zimbabwe was not included in the 2019 ranking due to lack of data, but he continues to suffer under the reign of Emmerson Mnangagwa, which governs in the same way as Robert mugabe, who went from a hero of his country’s independence (the ex-Rodhesia) to a bloody dictator between 1980 and 2017, when he was overthrown by the army (Mugabe died in 2019 in Singapore, at the age of 95; in 2008 he plunged Zimbabwe into the second worst hyperinflation in history)

Affected by a massive exodus from Ethiopia and recurring episodes of violence in Darfur, where the “warlord” is located Mohamed Hamdan Dagolo, second in the military junta that deposed the longtime dictator Omar al Bashir, Sudan is one of the driest countries in the world, suffers a tension of influence between Arabia and Turkey and is in disagreement with South Sudan, product of its partition.

A chance to “Subpod” composed of Lebanon, Suriname and Libya, all with indices over 100 points, precedes Argentina.

Lebanon, a religious and political battleground, was also the first country in the Middle East to undergo, in 2020, hyperinflation, a monetary and banking crisis in which, if that, the civil war in neighboring Syria and the presence of the Hezbollah group in short, it was followed by a devastating explosion that swept through much of the capital, Beirut, last August.

The law of power

The case of Suriname (former Dutch Guyana), whose president, Desi Bouterse, then on tour in China, was sentenced last December to 20 years in prison by a military court for his role in a massacre of opponents in 1982. With less than 600,000 inhabitants and several territorial conflicts, Suriname is also a religious hotbed (Catholics, Protestants, Hindus and Muslims) and it is the only Latin American and Caribbean state whose official language is Dutch.

In sixth place appears Libya, divided between militia leaders since the fall and the execution, in 2011, in the midst of the so-called “Arab Spring”, of Muammar Gaddafi, who for 42 years was the “leader of the revolution” in this country.

Next come Argentina, followed in the ranking by Iran (which has been going through a serious economic crisis for years, aggravated by international sanctions led by the United States, due to the Iranian nuclear program), Angola and Madagascar. .

Angola is the second largest oil producer in Africa. In 2012, when Argentina’s energy deficit had become open, then President Cristina Kirchner led a trade mission there (prepared by her Secretary of Commerce, Guillermo Moreno) based on the idea of ​​increasing the exchange of food for energy.

Even then, Angola was one of the countries with the lowest life expectancy in the world (39 years), 60% of its population lived in povertyTransparency International had classified it among the 20 most corrupt states in the world and a human rights NGO, Human Rights Watch, had denounced the “disappearance” of $ 32 billion from official coffers via Sonangol, the oil company of State. Although the Argentine delegation brought agricultural machinery and dairy cows, the idea did not work: in the following years, trade between Argentina and Angola fell by 37 percent.

The island of Madagascar, tenth in the Misery ranking, fights with Sudan the condition of the poorest state in Africa, and is the place where since 1968 the Argentinian priest has carried out his pastoral work and fought against poverty. Pedro Opeka, Nobel Peace Prize nominee with Swedish teenager Greta Thurnberg and the Black Lives Matter movement.

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