Reality about Legatum Prosperity Index: Prime Minister provides incomplete and inaccurate data

On November 27, Prime Minister Nikol Pashinyan claimed in a Facebook post that Armenia ranks 61st in the Legatum Prosperity Index 2019, improving its position by 27 points compared to last year.

Nikol Pashinyan also wrote that in the British Legatum Prosperity Index, Armenia was ahead of all post-Soviet states except for the Baltic States and Georgia.

“Armenia ranks 61st, having improved its position by 27 points compared to last year. Of the countries in the region, Georgia is in the 53rd place, Russia – 74, Turkey – 91, Azerbaijan – 92, Iran – 119. The authors compare the countries based on nine criteria: economic development, business environment, efficiency of public administration, education, health, security and personal freedom, as well as social capital and environmental development standards” the Prime Minister wrote.

Later the same day, Deputy Chairman of the Republican Party of Armenia Armen Ashotyan addressed the issue. He said that the data presented by the Prime Minister are not true.

“I don’t know what Nikol relies on when he writes another lie, but I am going to upset him. There are still people in Armenia who read such reports in original and in full. So, in fact, our country’s positions have really improved, but not by 27 points, as Pashinyan wrote, but by 7 points. In a similar study last year, Armenia ranked 68th. I leave aside the other mistakes in his post, such as “authors of the rating compare countries by nine criteria”. In fact, the rating is based on 12 criteria”, Ashotyan wrote.

The Fact Investigation Platform has checked whether Nikol Pashinyan’s and Armen Ashotyan’s statements correspond to the reality.

It should be noted that Legatum Institute is a think-tank with a global vision based in Great Britain. The goal of the institute is to promote public education.

Each year the institute publishes a prosperity index that measures well-being among 167 countries by material wealth and other factors that make life enjoyable.

On November 25, the Institute released its 2019 report.

Reports are posted on the official website of the Legatum Institute by year. Thus, according to the 2018 report, Armenia ranked 88th. The 2019 report states that Armenia ranks 61st.

However, if we compare the criteria for 2018 and 2019, we will notice that there has been a change in methodology as of the last report. In 2019, 12 indicators (pillars) were considered compared to 9 in previous years. This is stated in the methodology section of the 2019 report.

In addition, the Institute has published the results of previous years (since 2009) for 167 countries in a separate document, using a new methodology. According to the recalculation, Armenia ranked 68th in 2018 and 61st in 2019.

As for the criteria, not only their number has changed since 2019. For example, in 2018 one of the 9 pillars was the “business environment”, and this year it is missing. New standards include living conditions, investment environment, enterprise conditions, market access and infrastructure.

Thus, Nikol Pashinyan’s Facebook post on November 27, that according to a report by the Legatum Institute, Armenia improved its position by 27 points compared to last year, is not completely true since the methodology has changed, and Pashinyan is comparing the index obtained by using the new methodology with the index obtained by using the old one.

The Prime Minister’s assertion that the authors compare the rankings of the countries based on nine criteria is also incorrect, as since 2019 the Legatum Institute has been considering 12 criteria when preparing the prosperity index chart.

Lusine Voskanyan