The Independent Australia Ranking on Economic Management (IAREM) for 2021 reveals Ireland leading the world and Australia still languishing outside the top 20, reports Alan Austin.
LET’S OPEN a fine Redbreast 12-year-old single pot whiskey in celebration. According to the IAREM, Ireland now has the world’s best-performed economy. Singapore, which won top spot in 2014 and 2017, is a close second with Luxembourg, winner in 2008 and 2010, third.
Ireland's economy: Well-structured and maturing nicely
Ireland’s success is due to effectively wrangling both the coronavirus pandemic and challenges associated with Brexit. Its economy, we might say, beat more storied competitors by surprising the judges with its depth and character, smooth complexity and exhilarating spiciness, concluding with a long, sweet finish.
Through the recent COVID-induced global downturn, Ireland was one of only four OECD members to avoid recession. The others were Chile, Iceland and Turkey. Of these, Ireland alone averted deep job losses.
Ireland’s governments delivered budget surpluses in 2018 and 2019 and reduced the nation’s debt from 120% of GDP in 2013 to 59.5% last year.
Ireland reached the pinnacle primarily on economic growth, however, its increase in Gross Domestic Product (GDP) at an annual rate of 21.6% in this year’s second quarter was among global leaders. Since 2012, GDP has grown by a thumping 86.1%. 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%. In Germany, the Netherlands, Denmark and Switzerland growth was below 10%.
Several poorly managed economies actually went backwards over this period, including Australia, whose GDP declined in U.S. dollars by 13.9% from 2012 to 2020.
World’s top ten economies
The best-performed economies in 2021, with scores achieved, were:
- Ireland: 32.94
- Singapore: 31.85
- Luxembourg: 31.26
- Switzerland: 28.33
- Hong Kong: 26.26
- Taiwan: 25.24
- New Zealand: 24.98
- Norway: 24.71
- Denmark: 22.79
- South Korea: 22.67
The top thirty are shown in the table, below, with all IAREM components itemised.
The IAREM score
The Independent Australia ranking on economic management is a composite index that measures all the world’s economies on eight key indicators.
These are the following: 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.
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.
Australia’s dismal demise
Australia’s appalling ranking – at 23rd – confirms the current Coalition Government is the worst at economic management in Australia’s post-war history.
From the world’s top economy in 2009 and from 2011 to 2013, Australia’s ranking fell to third in 2014, ninth in 2015, 13th in 2016, 18th in