IT’S HARD TO get by when you don’t have a job and the cost of living keeps rising.
This is the maxim behind economist Arthur Okun’s Misery Index, which adds together a country’s unemployment and inflation rates. The higher the number, the more ‘miserable’ the country is.
There has been some criticism of the index. Extensive studies have shown that unemployment influences happiness (or, rather, unhappiness) significantly more than inflation.
Still, few would argue that both unemployment and inflation are bad when they are very high.
In light of that, Business Insider compiled a list of the 18 most miserable countries based on 2014 data available at the CIA World Factbook. Some countries struggle with both high unemployment and inflation, while others have one rate asymmetrically higher than the other.
Some countries are absent from the list because data was either unavailable or outdated.
Misery-index score: 20.1
CPI inflation: 4.9%
Unemployment: 15.2%
Tunisia was once called a “success story in Africa and the Middle East, but today it faces an array of challenges following the 2011 revolution,” according to the CIA Factbook. The government’s biggest challenges include reassuring businesses and investors and bringing budget and current account deficits under control.
Source: CIA Factbook
Misery-index score: 20.7%
CPI inflation: 7.1%
Unemployment: 13.6%
Jamaica’s economy relies heavily on the services sector, including tourism. Unfortunately, the country suffers from high crime and corruption and high unemployment — which leads to more crime.
The government is battling a two-headed hydra: On the one hand, it needs to achieve fiscal discipline to maintain debt payments, but on the other hand it wants to confront the serious crime problem.
Source: CIA Factbook
Misery-index score: 20.8%
CPI inflation: -0.2%
Unemployment: 21%
Croatia is one of the better-off former Yugoslav republics, but the country was hammered by sudden slowdown in 2008 with the financial crisis and never fully recovered. Major long-term problems include uneven regional development, a challenging investment climate, and a “stubbornly” high unemployment rate.
Source: CIA Factbook
Misery-index score: 20.9%
CPI inflation: 12.1%
Unemployment: 8.8%
Ukraine’s economy was hit hard during the financial crisis, finally rebounding in 2010, and then imploding after Russia annexed Crimea. (GDP fell by 6.8% in 2014.)
Political corruption and inefficient reforms continue to hold back the country.
Source: CIA Factbook
Misery-index score: 21.7%
CPI inflation: 12.9%
Unemployment: 8.8%
“Mongolia’s economy faces near-term economic risks from the government’s loose fiscal and monetary policies, which are contributing to high inflation, and from uncertainties in foreign demand for Mongolian exports,” according to the CIA Factbook.
Source: CIA Factbook
Misery-index score: 23.5%
CPI inflation: 10.1%
Unemployment: 13.4%
Egypt’s economy has slowed since 2011 following political and security uncertainty. The country’s tourism and manufacturing sectors were particularly bruised. Additionally, limited foreign-exchange earnings and weak growth have made public finances unsustainable.
Recently, a huge gas field was discovered off Egypt’s coast.
Source: CIA Factbook
Misery-index score: 24.1
CPI inflation: -0.2%
Unemployment: 24.3%
Spain looked deflated during the financial crisis, but thing are looking up. The country saw its first full year of positive economic growth in 2014, its unemployment rate is falling at the fastest rate ever recorded, its borrowing costs are “dramatically” lower than their peak in 2012, and inflation is falling.
Source: CIA Factbook
Misery-index score: 25.5
CPI inflation: -1.3%
Unemployment: 26.8%
Greece was the big story out of Europe this summer as the Syriza government battled against its European creditors over a bailout deal.
Unfortunately, on top of Greece’s numerous economic problems, “uncertainty regarding Greece’s future in the eurozone has dampened investor confidence,” according to the CIA Factbook.
Source: CIA Factbook
Misery-index score: 26.1
CPI inflation: 15.8%
Unemployment: 10.3%
Iran is the wild card on the world stage right now. The potential sanctions relief could lead to an economic window of opportunity, especially considering that the country has a young, relatively well-educated population and a large market size. Plus, Iranian oil stands to return to the market.
Source: CIA Factbook, World Economic Forum
Misery-index score: 27.8
CPI inflation: 1.7%
Unemployment: 26.1%
Serbia faces numerous long-term economic challenges, including the need for job creation, high government expenditures (on salaries, pensions, and healthcare), rising public and private foreign debt, and attracting foreign direct investment.
The country also struggles with high levels of corruption and an aging population.
Source: CIA Factbook
Misery-index score: 27.9
CPI inflation: -0.1%
Unemployment: 28%
Macedonia has taken huge steps forward since gaining independence, but the country has failed to attract the same foreign investment as its Balkan neighbors. Additionally, corruption and weak rule are long-term problems suffocating the economy.
Source: CIA Factbook
Misery-index score: 31.1
CPI inflation: 6.1%
Unemployment: 25%
South Africa’s is one of the biggest names in emerging markets, making up the final letter in the BRICS acronym. But economic growth has decelerated in recent years, and unemployment, poverty and inequality remain major long-term problems.
Source: CIA Factbook
Misery-index score: 32
CPI inflation: 3.9%
Unemployment: 28.1%
Lesotho’s government is the country’s largest employer, but the economy also relies on textile manufacturing, agriculture and remittances. Notably, diamond mining has grown in recent years, which analysts believe could contribute as much as 8.5% to GDP by the end of 2015.
Source: CIA Factbook
Misery-index score: 35.2
CPI inflation: 8.2%
Unemployment: 27%
“Yemen is a low-income country that is highly dependent on declining oil resources for revenue,” according to the CIA Factbook.
Further, the country struggles with long-term problems, including declining water resources, high unemployment and “severe” food scarcity. And, on top of all of that, the country is in the midst of a civil war.
Source: CIA Factbook
Misery-index score: 44.1
CPI inflation: 36.4%
Unemployment: 7.7%
Argentina’s economy struggles with an unsustainable and growing fiscal deficit, a stagnating economy, extremely high inflation and increased drug-related violence. And election season is coming.
Source: CIA Factbook, The Washington Post
Misery-index score: 62.9
CPI inflation: 2.9%
Unemployment: 60%
Djibouti relies heavily on foreign assistance to help support its balance of payments, and struggles with a 60% unemployment rate.
Inflation is “not a concern”, but only because the Djiboutian franc is tied to the US dollar. Unfortunately, the artificially high value of the Djiboutian franc hurts the country’s balance of payments.
Source: CIA Factbook
Misery-index score: 67.8
CPI inflation: 34.8%
Unemployment: 33%
Syria’s economy continues to decay. It got significantly worse in 2014 following international sanctions, widespread infrastructure damage, and decreased consumption and production. And on top of that, thousands of Syrian refugees are fleeing the country every day.
Source: CIA Factbook
Misery-index score: 70
CPI inflation: 62.2%
Unemployment: 7.8%
“Venezuela seems to be going from worse to worse,” RBC Capital Markets’ Helima Croft previously wrote.
The plunging oil prices in late 2014, combined with a recession, crushed the Venezuelan economy. Inflation is out of control to the point that an iPhone 6 costs nearly $47,700 (€42,000) right now. The country is looking for allies outside of OPEC in hopes of stabilising its oil prices.
Source: CIA Factbook, Bloomberg News
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