It’s difficult to quantify the disparity between developed and underdeveloped countries. While gross domestic product (GDP) is a well-known economic indicator, there are other indicators that may be used to assess a country’s success. While some are more accurate than others, none of them are inherently incorrect. To make matters worse, the majority of countries are massive, complex entities that defy classification. As a result, a number of countries fall into a variety of categories.
Even experts are unable to agree on a definition. How does the United Nations classify countries? It doesn’t say. Instead, it says they “reflect key economic national characteristics.”
The World Bank categorizes countries based on their GDP per capita into four groups: high-income, upper-middle-income, lower-middle-income, and low-income.
But of what use is the wealth of a country if the lives of its ordinary citizens are not so good? This is why, for this article, we are going to focus and rank our best countries based on the Human Development Index (HDI).
HDI
The HDI measures long-term growth in three essential aspects of human development: lifespan, access to information, and a satisfactory standard of living. The length of a healthy life is measured by life expectancy. This is a metric for gaining access to learning and knowledge.
The HDI uses data from the United Nations Population Division (life expectancy), the United Nations Educational, Scientific, and Cultural Organization Institute for Statistics (mean years of schooling and projected years of schooling), and the World Bank (life expectancy) to ensure cross-country comparability (the GNI per capita data).
This metric can be used to evaluate the effectiveness of national policies. Variations in HDI ratings between countries are likely due to policies that affect life expectancy, educational achievement, or other non-economic factors.
The following ranking of the top countries employ the latest HDI figures by the United Nations for the year 2020.
1. Norway (HDI of 0.957)
Norway has the highest human development index. Since the industrial revolution, Norway’s economy has been more diverse and is growing. Natural resources, especially oil and gas, as well as exports, are key contributors to the country’s economy. The gross domestic product (GDP) is $277.1 billion, or $55,009 per person. Norway is distinguished by its long life expectancy of 80.57 years and superior living circumstances compared to other European countries. It ranks first among the world’s ten most developed countries.
2. Ireland (HDI of 0.955)
Ireland’s constitution permits the state to provide vital services and fund development initiatives in the absence of private initiative. As a result, semi-state organizations are in charge of the country’s rail and road networks, as well as select television and radio stations, electricity generation and distribution, and the peat industry.
Air transport and health insurance are two industries where state-owned corporations operate. Many of these companies privatized and became more competitive as a result of the united European market in the 1990s. Ireland’s high-tech industry encouraged economic development and helped reduce unemployment in the 1990s thanks to a low corporate tax rate of 12.5%.
The nickname “Celtic Tiger” was given to the country because of its economic growth, which was double that of most other EU countries. However, by 2001, the benefits of new jobs created by overseas corporations had diminished.
Ireland’s political and banking leaders turned to the mortgage and construction industries to continue fast development. By 2008, it was clear that most of the banking and construction booms were unsustainable.
Ireland went into a protracted recession after the crash.
The bailouts of the Irish banking industry by the European Union and the International Monetary Fund in 2010 were followed by severe austerity measures that harmed the Irish economy.
During the 1990s and early 2000s, Ireland had low taxes and responsive social services. After the 2008 financial crisis, these factors led to big problems with the budget.
3. Switzerland (HDI of 0.955)
Switzerland, one of the world’s wealthiest countries, has a very stable economy and a long-term monetary security policy, making it a popular investment destination. Its GDP of $363.4 billion and per capita income of $45,418 are the result of significant labor specialization, trade, and industry.
With a life expectancy of 81.38, the country enjoys a pretty good standard of living. Switzerland is the third most developed country on our list.
4. Hong Kong (HDI of 0.949)
Its economy is heavily based on international trade and finance. As a result, it’s regarded as one of the best places to start a company. As of 2018, Hong Kong had over 2800 registered companies, with eCommerce (22%) accounting for the majority of them, followed by Fintech (12%), Software (12%), and Advertising (12%).
Hong Kong was placed first in the Economic Freedom of the World Index in 2015, with a score of 8.97.
Economically, Hong Kong has a lot going for it. It has almost no public debt, a strong legal system, a lot of money in foreign currencies, and close ties to mainland China.
Furthermore, international and domestic Chinese companies want to list on the HKEX due to Hong Kong’s increasingly internationalised and modernised financial industry. The size, laws, and financial instruments of the city’s capital market in Asia are comparable to those of London and New York City.
5. Iceland (HDI of 0.949)
Their economy is made up of services (57 percent of GDP in 2009), manufacturing (23 percent), construction and utilities (23 percent), and fishing (23 percent). As a result of privatization, public ownership has decreased over time, and the public sector increasingly concentrates on energy, health, education, and social welfare.
Small and medium-sized businesses (SMBs) make up the bulk of the export base, which is mostly made up of natural resources. These businesses include fisheries, energy-intensive industries, and tourism.
Foreign investment is concentrated on export-oriented industries with prospects in fields such as information technology, renewable energy, agriculture, water-based companies, and tourism, which has grown in popularity in recent years. Since 1995, Icelandic industrial investment has risen dramatically, and this trend is projected to continue. The labor force is younger than in most neighboring countries, with 67 percent of the population aged 15 to 64.
6. Germany (HDI of 0.947)
Germany’s economy, which is powered by highly skilled people, is the world’s fourth biggest.
The country is known for its high-quality machinery, automobiles, electronics, and pharmaceuticals. Germany has the second-greatest surplus economy in the world in 2019, with exports surpassing imports. In 2019, Germany had an 81-year life expectancy and a neonatal mortality rate of three per 1,000 people.
Germans have access to universal healthcare. Every German citizen is required to join a non-profit health insurance plan that covers the majority of medical costs. Only 0.3 percent of Germans had unmet medical needs in 2017.
7. Sweden (HDI of 0.945)
Sweden is home to one of the most evolved post-industrial civilizations on the planet. Sweden’s life expectancy increased by eight years between 1980 and 2019, while infant mortality fell from seven to two deaths per 1,000 live births.
Despite having the highest income tax rate in the world, Sweden has a high quality of life and a low unemployment rate of 9% in 2021.
Furthermore, Swedish citizens have free access to healthcare and higher education.
Swedes have had around 20 years of education. Sweden as a society places high importance on environmental stewardship.
8. Australia (HDI of 0.944)
For the most part, Australia has a diverse economy and enough healthcare.
People in Australia also have a better quality of life than people in other countries, according to a poll from the Organization for Economic Cooperation and Development (OECD). 7.3 out of 10 people in Australia were happy with their lives, compared to 6.5 people in other countries, the poll found.
Australia’s GDP has expanded by more than 20% in over two decades.
The fact that Australia has an average life expectancy of 85 years is due in part to its excellent healthcare system. With three newborn deaths per 1,000 live births in 2019, it has one of the lowest infant mortality rates in the world.
9. Netherlands (HDI of 0.944)
For the most part, this country has a solid economy and a high standard of living for its residents.
In 2017, the Netherlands ranked sixth in the EU for the lowest likelihood of poverty or social exclusion. In 2019, the Netherlands had an 82-year life expectancy and a neonatal mortality rate of four per 1,000 people.
According to the OECD, the Netherlands provides its citizens with the tools they need to build a good quality of life. Despite the country’s poor environmental situation, people’s health and life expectancy are comparable to those of other rich countries.
In contrast to the global average of 11%, the Netherlands has a good work-life balance, with less than 0.4 percent of people working long hours.
10. Denmark (HDI of 0.940)
Denmark is the last country on this top 10 list. The country’s economy is reliant on services and human resources in the absence of natural resources other than oil and gas.
Denmark has a long life expectancy of 80 years and a high standard of living. Denmark is the world’s tenth (tenth) most developed country, with a GDP of $355 billion and a per capita income of $61,000.
Author
Abbey Johnson has a Masters degree as an engineer and has over 3 years of teaching and research experience. He is happiest when on a bike and is also interested in electric energy and computer Science.