Investors base decisions on Social Progress Indicators

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The 2015 Social Progress Index (SPI) report ranks 133 countries, covering 94% of the world's population, according to their capacity to meet the basic human needs of their citizens, enhance the quality of their lives and reach their full potential. The aim of SPI is to redefine how government's view success by putting important social indicators alongside economic variables to determine a society's progress.

"Investor decisions have traditionally been influenced by economy-focussed indicators such as global competitiveness and the ease of doing business but social indicators are becoming increasingly important to their decisions on whether or not to invest," says Carlton Jones, leader of Deloitte's Economic Development and Competitiveness practice.

Socio-economic challenges

"While that may pose challenges for countries in Africa, which are confronted by a variety of socio-economic challenges, it also presents a huge opportunity for them to rapidly turn the tide in their favour if they can adequately address the constraints to developing their human capital."

South Africa achieved a score of 65.64 in Deloitte's 2015 SPI report ranking it 63 out of 133 countries and second in Africa after Mauritius, which was ranked 36th globally. The country was also ranked second amongst the so-called BRICS nations (Brazil, Russia, India, China and South Africa) after Brazil, which achieved an SPI score of 70.89 and a world ranking of 42.

Africa's second biggest economy after Nigeria did well in areas such as Personal Freedom and Choice (ranked 35th globally), tolerance of sexual persuasion (32nd) and the Number of Globally Ranked Universities (20th). However the country performed poorly in Personal Safety (129th), Health and Wellness (114th) and Nutrition and Basic Medical Care (89th).

"It's easy to get despondent about the fact that South Africa ranked poorly on certain social indicators such as Personal Safety but that also represents an immense opportunity for the country to make huge strides simply by making better use of the resources it already has available," said Mr Jones. "Improving the effectiveness of the police service and judiciary could result in a massive improvement in this aspect, without additional investment. There is also a lot of scope for improving South Africa's scores for indicators such as Health and Wellness, Nutrition and Basic Medical Care and Shelter, all of which could lift the country's overall SPI ranking."

Countries around the world are paying more attention to social progress indicators by trying to create improved outcomes for their people beyond the scope of gross domestic product (GDP). In December last year Paraguay launched a new National Development Plan to 2030 that explicitly targets not just economic growth but also social wellness indicators such as reducing child malnutrition to 2% or less of the population by 2018.

"Investors want to be assured of the long-term sustainability of the countries they are putting their money into and the there is no better way of analysing a country's future prospects than by examining the social progress of its people," said Mr Jones. "Societies that fail to invest in their human capital and enable their citizens to improve the quality of their lives, protect their environments and provide better opportunities for future generations will simply not be viewed at countries that are likely to succeed.