An Air New Zealand Plane Flies Over Mount Victoria
IN PHOTO: An Air New Zealand plane flies over houses in Mount Victoria as it approaches Wellington airport, October 7, 2011. Reuters/Marcos Brindicci

New Zealand has been named the third most prosperous country in the world in the 2014 list of Legatum Prosperity Index. According to the Legatum Institute, New Zealand has attained its highest level of prosperity ever recorded in the index in the last six years since it began. The country climbed two places since it was ranked fifth overall in 2013.

Norway emerged as the most prosperous country, while Switzerland ranked second. Denmark is behind New Zealand in fourth place while Canada ranked fifth. The Central African Republic is at the bottom of the list. The Prosperity Index showed New Zealand is included among the top 20 countries in eight categories. The country was among the top 10 countries based on personal freedom, governance, social capital, education, and safety and security.

The Legatum Prosperity Index recognised New Zealand as the most prosperous nation in the Asia-Pacific region ahead of Australia that ranked 7th overall. Canada was ranked fifth, the United States 10th and the UK at 13th place. In the press release by the Legatum Institute, New Zealand has been described the freest country in the world for being ranked number one in the Personal Freedom category. It also emerged as the most tolerant country with 92 percent of immigrants and 93 percent of ethnic minorities reporting New Zealand as a good place to live.

Legatum Institute Senior Adviser James Barty said in the press release that the New Zealand government should be inspired by the country's "impressive" rankings in the index. Despite facing the challenges of location, small domestic market and productivity, New Zealand continues to improve as a result of the government's commitment to sound financial management. Barty explained that while having a solid economy is important, what sets New Zealand apart from other countries is its good governance and high levels of freedom.

New Zealand's families are also considered among the strongest in the world with 96 percent of respondents relying on families and friends in times of crisis. In the economy category, New Zealand has risen 12 places since the 2012 index. The improvement in the country's rankings was not attributed to the rebuilding of Christchurch but mainly on low inflation, high confidence in the job market and longer term improvement in standards of living.