Monthly Barometer Excerpt
If only one statement could capture the mood at the recent IMF/WB Annual Meeting, it would have to be C. Lagarde’s observation that current economic performance is “just not good enough.” The IMF now estimates that growth in potential output in the rich world will not exceed 1.6 percent per year between now and 2020 (versus 2.25 percent before 2008). In emerging markets (EM), the deceleration will be even sharper: 5.2 percent per year versus 6.5 percent over the past seven years.
As always, it’s important to remember that there is more to life than maximizing GDP growth!
The third edition of the World Happiness Report that just came out makes this point vividly. It offers a wealth of analysis on what economists call (in their jargon) “subjective wellbeing” (a proxy for wellness or happiness). People are happier when they’re richer and healthier but there are other factors contributing to perceptions of wellbeing. Six variables in particular account for three-quarters of the differences in the level of happiness among countries: 1) GDP per capita; 2) social support; 3) healthy life expectancy; 4) freedom to make life choices 5) generosity; and 6) freedom from corruption. The fact that social support and generosity are relatively independent from economics and politics explains why some relatively poor and institutionally weak countries such as Mexico are happier than a strong Western democracy like the U.S.
A chapter in the report emphasizes the importance of “relational goods,” such as reciprocity and simultaneity (people taking part in meaningful activities together), in cementing wellbeing and in building happy nations. People are happier when they’re socially fulfilled as members of a group.
This is the reason why Switzerland and the Scandinavian countries are the world’s happiest countries: they are “participatory” and have “perhaps the highest social capital in the world.” Participation and deliberative democracy contribute to build mutual trust, a critical component of social capital. Social trust implies that citizens are more willing to pay taxes, are less prone to corruption and that expansive social safety nets become the norm. All these greatly contribute to subjective wellbeing…or wellness!
ABOUT THIERRY MALLERET
Thierry Malleret is the co-founder and primary author of the Monthly Barometer, a predictive analysis provided exclusively to private investors and today’s most influential opinion and decision-makers. Previously he was a senior partner at IJ (Informed Judgement) Partners, an investment boutique for ultra-high-net-worth individuals based in Geneva. Thierry also founded and directed the Global Risk Network at the World Economic Forum (WEF), bringing together top policymakers, CEOs and academics to consider how global issues will affect business and society in the short and long term. For a number of years, Thierry conceived and implemented the WEF program at Davos. He holds MAs (in economics and history) and a PhD in Economics. He writes a Wellness Edition of his Monthly Barometer, exclusively for the Global Wellness Institute. For a copy of the full report, join the GWI as a Member or Ambassador.