NZ scores fifth place in world prosperity stakes

Think-tank rates New Zealand top in education, but says Kiwis lack faith in their economic potential. Photo / Supplied

New Zealand has been ranked the world's fifth-most-prosperous country, with the highest level of education and civil liberties, by an international think-tank.

But Kiwis' belief in their economy and society appears to lag well behind.

The Legatum Institute, part of a Dubai investment group, issued its annual prosperity index yesterday.

The group was founded by secretive Kiwi billionaire Christopher Chandler, who has bankrolled unique projects for the developing world, including a business school that nurtures original ideas to alleviate poverty.

Mr Chandler, who grew up in the Waikato, has featured on the Forbes rich list with an anonymous silhouette - no public photo was apparently available.

The ranking of 110 countries combines economic factors and measures of happiness and quality of life, including surveys about personal trust and safety.

Overall, New Zealand came fifth, just after Australia and five places ahead of the United States. Norway took the top spot while Britain was 13th.

In a breakdown of New Zealand's scores, the institute judged the country's education system the best in the world, with particular recognition for gender equality and the number of teachers, which inspired "high levels of public confidence".

The institute also held New Zealand's "highly democratic" government in high esteem, saying it was "extremely effective in implementing policies".

New Zealand's civil liberties were deemed the world's best - although New Zealanders' perception of their liberties was 10 spots lower, at 11th.

New Zealand's tolerance towards immigrants and ethnic minorities was also seen to be among the highest in the world, ranking second and third, respectively.

The institute took a broad view of New Zealand's prosperity, diverging from purely economic indicators, which put the country's per capita GDP at 28th.

But the institute also highlighted what it saw as New Zealand's flaws, notably Kiwis' below-average belief in their economic potential.

New Zealanders' economic expectations were 71st out of 110 countries, while belief in economic mobility - that hard work can get you ahead - barely made it out of the bottom quartile, at 79th.

Concerns about personal safety were also raised: few New Zealanders experienced assault, the institute said, but almost one in five fell victim to theft during a year, and four out of 10 New Zealanders felt unsafe walking home alone at night.

New Zealand's low religious attendance - 81st in the world - suggested low levels of access to religious support networks.

Legatum Institute senior fellow Ashley Lenihan said entrepreneurship and opportunity correlated more closely to overall prosperity than any other factor.

"The recession has had an impact on how well many countries perform on economic measures.

"But the prosperity index finds countries that are able to foster a strong culture of entrepreneurship are best positioned to overcome the current financial difficulties."

Education Minister Anne Tolley said a recognition that New Zealand's education was the best in the world did not rule out reform.

"I've always said that New Zealand has an education system to be proud of," she said.

"[But] up to one in five children are not getting the basic reading, writing and maths skills they need, and we are addressing that with National Standards and raising the bar for all students to ensure their success in the modern world."