6 Things Characterizing Successful Nations

I have often wondered why some countries are more prosperous and successful than others. My definition of a prosperous and successful nation is one where average income per citizen or perhaps GDP per capita, is relatively high and the disparity between the wealthy and the poor is very low. Successful nations are therefore those countries whose GDP per capita ranks among the highest in the world and have a low GINI Coefficient i.e. less than 0.5. With this in mind, I have compiled below, a list of what I believe makes for a successful nation.

1. Successful Nations Place High Value on Scientific Output

The United States of America, the United Kingdom, Germany, Japan and surprisingly China, to name but a few, are some of the countries that deliver a lot of scientific research material as measured by scholarly documents published. It is scientific research which has propelled these nations to be among the most successful in the world. Based on my definition above, of what qualifies a country to be deemed a success, China does not measure up as a successful country, at least not yet. But if China continues to invest heavily in scientific research, the country may well be on the road to success.Visit this international science ranking resource for some interesting insights. Good scientific research always leads to new knowledge and often this new knowledge invariably leads to general growth and advancement. It is a matter of history now, that the idea of Google and Google search was a direct result of insights gained by the two co-founders, +Larry Page and +Sergey Brin, while doing their PhD. 

2. Successful Nations have a Culture of Prolific Invention

Invention stems from innovation and successful nations are characterized by an insatiable desire and drive to innovate, to develop and create new things. One of the more objective ways of measuring the degree of invention and innovation among nations, is to look at the number of patents and trademarks registered by each country. To this end, there can be no better source for such information than the World Intellectual Property Organization (WIPO). According to WIPO's Intellectual Property Indicators report for 2012, the year 2011 saw China overtake the USA with the most number of patent applications submitted, with Japan in third position. In total, around 2,14 million patent applications were submitted worldwide and China accounted for 526,412 applications or 24,6% of total global applications, the USA accounted for 503,582 or 23,6% of total global applications, with Japan accounting for 16% of total global patent applications. The real value for these countries will come from the commercialization of these patents, once issued. The 2012 WIPO report is very illuminating with regards to the shift in the countries which are emerging as players in the patents application game.

3. Successful Nations Value Human Life

Successful nations place a lot of value on human life, especially in terms of nurturing and preserving life. These nations have good quality medical systems with free to little cost for citizens to access the best medical care. This means therefore that per capita expenditure on medical care in these countries is relatively high. According to Business Insider, the USA and Swizerland lead the rest of the world when it comes to per capita spend on medical care. However, per capita spend alone does not necessarily translate into the best healthcare system. In the same Business Insider report, the USA only ranks 37th among the world's best Heathcare systems, and Swizterland ranks 20th. The country with the best Healthcare Systems is...France and France happens to rank fourth in terms of per capita spend on medical care.

4. Successful Nations have a well functioning Financial System

According to the International Monetary Fund (IMF), a country's sound financial systems is based on the presence of, "banks, securities markets, pension funds, insurers, market infrastructures, central bank, and regulatory and supervisory authorities. These institutions and markets provide a framework for carrying out economic transactions and monetary policy, and help to efficiently channel savings into investment, thereby supporting economic growth." Most countries have some of these institutions in place but only countries which are truly successful have all the above elements in place, working in concert. China is now the second biggest economy in the world, after the USA and ahead of Japan. However, China has a vastly different financial system to that of Japan and the USA.

5. Successful Nations Place Value on Good Education

Education is said to be the engine for economic growth, and in my opinion, without an educated citizenry, a nation will struggle to advance and progress, even in this world of digitization and the Internet. It is no accident therefore that successful nations have high literacy rates and have a high proportion of their populations with at least an under graduate university degree. After all, research and innovation, as discussed above, are borne out of education. Following a study carried out by the Organization for Economic Cooperation and Development (OECD), 247WallSt compiled a list of the top 10 most educated countries in the world. The list alone says a lot about the role education can play in the success of a nation.

6. Successful Nations have a Good Sense of Humour

Most successful nations are able to laugh at themselves, they do not take themselves too seriously. Citizens of these countries are able to poke fun at everything in society, from politicians to the wealthy, there are no sacred cows which are protected from ridicule and comedy.

Once you have checked out the video's below, i need say no more:

Poking fun at politicians in the US

Prank call to Frech President, Francois Hollande

Zuma and Zille on ZA News

Successful nations are able to laugh at themselves largely because they are self assured and self-confident.

Every country needs happy kids

A longitudinal study in the USA reveals that, happy kids grow up to make more money as adults, than adults who were not so happy as kids. Assuming that the results of this study are accurate as this relates to predicting how kids will turn out when they become adults, there is no doubt that we ought to be investing energy and effort into creating an environment where kids can be happy and content.

The study points out that happy kids, tend to have a positive outlook on life. They have drive and they show ingenuity in abundance. What is more interesting however, are the types of environments which are conducive to kids growing up happy. The study shows that it begins with a nurturing and loving family environment. Science seems to now confirm what has become common sense, that a happy home is the bed-rock of a happy childhood.

TO be sure, happy families do not exist in isolation, families in general, exist within the broader context a community or society. What role therefore could society play in ensuring that it has happy families? My guess is that a society whose members live by rules agreed to by all those who live in it, is a good start. In that kind of society, activities such as crime are frowned upon and not tolerated at all.  In my view therefore, happy families exist within a social context where members of society conform to the same norms and standards. However, social conformity does not come easy, to a point where often conformity to the norms and standards has to be enforced by means of laws and regulations. 

This is where government comes into play. Governments and politicians enact laws and regulations. Imagine therefore, a country which had as its central purpose: to have happy citizens. Imagine still that all government strategies,  plans and programs were to be geared towards making this purpose a reality. 

IN my opinion, it is fair to conclude that in order to have happier kids, we need happier families and in order to have happier families, we need a society and a country where everyone conforms to the same rules and norms. If South Africa is to prosper as a nation, we need more kids growing up happy.

Our Politicians must show willingness to create effective government!! 

Gauteng: a miracle province

Everything about the Gauteng province is beyond normal and can only be defined as extra ordinary. In terms of geographic size, the Province is only 1,4% the total size of South Africa yet Gauteng contributes 33% to South Africa’s GDP. Following the results of the 2011 Census, for the first time in the history of South Africa, Gauteng now has a larger population than Kwa-Zulu Natal. This population statistic is really mind-boggling and to put it into perspective, Gauteng’s land area which is a mere 1,4% of South Africa’s land mass, is home to 23% of South Arica’s total population.

Due to Gauteng’s role in South Africa’s economy, the province is a consistent net migration gainer. Everyday, more and more people from other provinces trek to Gauteng in search for a better life. The Province’s population size must surely be putting some strain on the infrastructure of the province.

To further emphasize just how extra ordinary Gauteng’s position really is, in the context of South Africa’s economy. The world’s financial capital New York City is part of New York State and a state is equivalent to a Province in South Africa. New York State, accounts for 4,7% of the USA’s land mass and with a population of 19,5 million New York State accounts for just over 6% of the USA’s total population. New York State contributes 7.7% towards the USA’s national GDP. To have a Province like Gauteng with 23% of the national population, contributing 33% to national GDP is not a bad statistic at all, a scary statistic however is that Gauteng, with a land mass of 1,4% of South Africa's total, housing 23% of the national population. On the face of it, Gauteng’s challenge therefore seems to be its limited geographic size. However, increasing the borders of the Province is not the answer, the real answer lies in the creation of more economic hubs or zones elsewhere in South Africa, outside of Gauteng, in order to diversify South Africa’s “sources” of GDP.

It is a miracle that Gauteng’s infrastructure has not collapsed under the strain of its large population, but perhaps depending on where in Gauteng one lives, there may well be signs of the infrastructure manifesting in certain parts of the Province. Whichever way one looks at things, Gauteng is a "miracle" Province.

Stats SA does a noble job

A few days ago Stats SA released the results of the 2011 census survey and the numbers were not much of a surprise. At 51,7 million people living in South Africa today, this is a 25% increase compared to the previous census of 2001. What is absolutely remarkable however, is that when one looks at the 2011 Mid-Year population estimates by Stats SA, that figure of 50,1 million was just over 3% shy of the 2011 census figure of 51,7 million.

This remarkably small margin of difference between the estimate and the census figures bears testament to the brilliant work that Stats SA is doing, it shows that the methods are used to estimate South Arica’s population between each census, are sound and can be relied upon. Even more remarkable is that Stats SA has the wherewithal to actually track South Africa’s population dynamics, period. South Africa is indeed one of the few countries in the developing world, let alone in Africa, which has access to such rich information about its population. Thanks in large part to the skills of those who run Stats SA.

To be sure, a census is but a scientific estimate of our country’s populations but thank goodness Stats SA exists to do this very valuable and noble task. 

Supplement worker wages with share options!!

The Lonmin massacre will forever live in the memories of most South Africans especially of those families who lost their loved. The question these families will continue to ask is, whether not the shooting could have been avoided? The simple answer is that we will never know, what we know for sure is that mine workers died fighting for a better wage.

Since the first ever mine shafts were blasted out of the ground in the late 19^th century in search for mineral resources, be it gold or platinum, workers have always earned a fraction of the money earned by those who owned and managed the mines. The role of Trade Unions have always been to fight for the mine workers, with the objective of closing this wage gap, but if anything, the gap has increased over the decades.

What has changed however since the gold rush of the late 19^th century is that most mines are now publicly traded companies. There in lies the opportunity.

Yes workers, like mine managers and mining executives should earn wages but like mine managers and mining executives, mine workers should also have the opportunity to participate in share option schemes. Workers should continue to earning a wage but they should accept an annual inflation-related wage increase in return for taking a bet that the company share price will outperform inflation over time. I’m no financial expert and therefore I don’t know the complexity involved in structuring a share option scheme which would have to cater for potentially tens of thousands of mine employees, depending on the size of the mining company involved. But surely workers should be given the opportunity to partake directly in the fortunes of the company. This participation does indeed come with a risk, a risk that the share price could in fact decline over time. Take Lonmin, the mining company whose workers were involve in the Marikana massacre. In October 2011, the Lonmin share price was just below R140 per share and as at 28 Sep 2012 that share price was at R74,70, which is a decline of more than 45% year-on-year. This decline in the share price is also reflected in the company’s financial performance. For the financial year to March 2012, Lonmin’s revenues declined by 20% year-on-year in dollar terms. Given this kind of financial performance, the Lonmin executives were always going to find it had to give the mine workers any wage increase, let alone the double-digit increase the workers were asking for. Having said that, when the share price is bullish, the workers, if they were to participate in a share-option scheme, would potentially make a decent surplus.

I say, yes give workers a living wage, but also give them share options and let them participate fully in the financial performance of the companies they work for. 

Should SA proceed with fracking???

The Cabinet lekgotla, which is an equivalent of a strategic planning session for President Zuma with all his Ministers, always yields interesting announcements about decisions reached at that forum. One of the more obscure announcements coming out the lekgotla, was the decision that the ANC-led government will lift a moratorium on applications for exploration or frack for shale gas in the Karoo region of South Africa.

Many have raised concerns regarding the possible negative impact of fracking on the environment and I share this concern whole-heartedly. However, such concerns should not paralyse us as a country from finding ways to carry-out fracking, using environmentally friendly methods. Some would argue that fracking and environmentally friendly are mutually exclusive concepts, that there's simply no safe method of extracting shale out of the earth without causing some harm to the environment. See my earlier blog about how companies like ExxonMobil do it.

South Africa is a country with high unemployment levels and very a big divide between the rich and the poor. The creation of jobs is but one one of the best ways to improve the economic status of those who are currently unemployed. In my view, there ought to be a trade off between the need to protect the environment and the need to address the wealth gap in South Africa. Government must certainly explore the fracking opportunity to its fullest but only if it is driven by the philosophy of, "with minimal harm to the environment."

Our Politicians must show willingness to create effective government!! 

Silent killer among us!

In recent times, most newspapers, magazines, radio and television headlines have been dominated by political and to a lesser extent, economic topics. South Africa continues to be ravaged by the HIV/AIDS scourge which is intent on destroying our society. During the early 1990’s stories about HIV and AIDS and campaigns aimed at arresting the spread of the disease, were all over the news, yet today the media is silent on this disease. If there is any reporting on the disease, it certainly does not make headline news and consequently, HIV/AIDS, like TB before it, is fast becoming a silent killer in our society.

According to Avert, the HIV/AIDS prevalence among antenatal clinic attendees in South Africa has grown from 24.8% in 2001 to 30.2% in 2010. This means that the number of pregnant mothers who have HIV/AIDS has increased during this timeframe. What is alarming about this statistic is that for some of the mothers, the disease will be passed on to their newborn babies through breast-feeding either due to ignorance or simply because of lack of financial resources to access breast milk substitute products.

Interestingly, while the Western Cape has the second lowest prevalence of HIV/AIDS among antenatal clinic attendees, the province has seen the sharpest rise of prevalence figures among this group, from 8.6% in 2001 to 18.5% in 2010. Kwa-Zulu Natal has the highest HIV/AIDS prevalence among this same group, at 39.5%.  The HIV/AIDS figures in themselves are very concerning however, in my opinion, these figures are a symptom of a much more concerning social milieu, one of a nation still riddled with poverty.

To solve the HIV/AIDS problem, our government must do much more to improve the economic fortunes of the citizens.