The Growth and Development Bridge Index

A New Index Is Born!

The GDB team of economists has developed the GDB Index which can be used to benchmark and rate countries according to their economic fundamentals, to assess their strengths, weaknesses, opportunities and threats (SWOT), and to analyse their economic prospects. The GDB Index is derived from a solid model built on the findings of the vast literature on economic growth and development. The model has 38 measurable variables included in four categories of economic fundamentals (or economic pillars): 1) capacity and resources; 2) infrastructure and institutional framework; 3) macroeconomic framework; 4) structural and global integration factors. The GDB divides the world into five groups, based on their per capita GDP and GDP growth rates.

The 2010 GDB Index Rankings

The striking fact from the global rankings of the 2010 GDB Index is the top position of two Asian economies, Hong Kong and Singapore. The ranking of countries which follow these two leading economies is less surprising, as the Netherlands and Switzerland are placed in third and fourth positions, the United States in fifth position, followed by the four Nordic countries: Norway, Denmark, Sweden and Finland.

The strong representation of Asian countries in the ranking is noteworthy, as besides the two Asian leading economies, other Asian economies are also well placed. The Republic of Korea is holding the 10th position and Japan, the 18th. China, ranked in the 25th position, is well ahead of a number of high-income countries, while Malaysia and Thailand are also well placed, holding respectively the 33rd and 42nd position. India somehow is lagging behind, being ranked 54th. The first Latin American countries in the global ranking are Panama, Suriname, Chile and Brazil, occupying respectively the 41st, 46th, 49th and 52nd position. At the bottom of the list, we sadly find most of the African countries. Equatorial Guinea, despite the high level of its per capita GDP (nearly 20000 US$), is in the bottom list, just before four other low-income countries.

Index building has become a very popular tool to benchmark countries on different records. Countries have been ranked according to their competitiveness, or according to their human development indicators, or according to their corruption records, etc. But no index has yet been developed to gauge the quality of countries’ economic fundamentals. The Growth and Development Bridge (GDB) Index has been created to fill this gap.

GDB Index benchmarking is a tool to be used by policy makers for measuring performance and identifying potential for improvement, and by investors for making informed decisions on investment allocations and risk mitigation.