Assessing Global Economic Survival: The 2024 Global Potential Index

Introduction

As we have proved, Member One’s Alternative Target Operating Model (A.T.O.M.) is the only viable solution for economies to overcome the intrinsic limitations of tax-based regimes. By supplanting the uncertainty of taxes with a clear and stable membership system, A.T.O.M. empowers governments to plan for the future confidently, allowing businesses to thrive under a transparent and accountable system and individuals to gain control over the public services they receive. Despite its vast advantages, transitioning to such a groundbreaking economic structure is only possible for some, not all, countries. To identify these, Member One launched the Global Potential Index (G.P.I.), a meticulously crafted analytic tool that assesses the socioeconomic performance of 190 countries, determining their readiness and suitability for implementing A.T.O.M. This strategic approach underscores our commitment to a smooth and effective integration of A.T.O.M. across varying economic landscapes.

Composition and Methodology

The Global Potential Index (G.P.I.) employs a robust evaluative framework to assess economies across twelve parameters, which fold into two criteria essential for the transition to A.T.O.M.:

1. Government Transformation Ability refers to the power and legitimacy vested in a governing body or institution to exercise control, make decisions, and enforce laws within a defined jurisdiction. The government can exercise its power and influence over individuals and businesses. Power Concentration and Policy/Governance Effectiveness determine this criterion:

• Power Concentration refers to the accumulation of authority, influence, or decision-making control in a few individuals, organizations, or entities within a social, political, or economic system. Higher power concentration favors the transformation to A.T.O.M. since a limited group of decision-makers can decide the course of action faster.

• Policy/Governance Effectiveness refers to the process of developing and enacting policies, while governance refers to the process of implementing and enforcing those policies. The higher the policy and governance effectiveness, the higher the probability of a successful transformation to A.T.O.M.

2. Government Fiscal Resilience refers to the ability of a government to adjust its spending and revenue policies in response to changing economic conditions or unforeseen circumstances. It involves making timely and effective adjustments to fiscal policies, such as taxation and government spending, to achieve desired economic outcomes or address financial challenges. Tax Burden, Tax Intensity, and Government Debt determine this criterion:

• Tax Burden refers to the overall impact or weight of taxes imposed on individuals and businesses. Lower tax burdens favor the transformation to A.T.O.M. since they support individuals’ and businesses’ ability to meet their obligations, invest, save, and consume. 

• Tax Intensity refers to the ratio of total tax revenues a government collects to the size of its economy or gross domestic product (GDP). It measures the significance of tax revenues to a country or region's overall economic output. Lower tax intensity favors the transformation to A.T.O.M. since governments depend less on individual and corporate taxes.

• Government Debt refers to the total money a government owes to external creditors and domestic lenders. It arises when a government borrows funds to finance its expenditures and investments when its revenues and other sources of income are insufficient to cover its spending obligations. Lower government debt favors the transformation to A.T.O.M. since governments have more flexibility in implementing new policies and can address challenges and seize opportunities more effectively.

Research Highlights and Preliminary Observations

Performance of Gulf Cooperation Council (G.C.C.) Member Countries:

The GCC member countries are remarkably ready to transition their economies by adopting A.T.O.M., demonstrating strong potential for economic transformation. Kuwait leads globally (ranked 1st), followed closely by Qatar (ranked 4th), Bahrain (ranked 6th), United Arab Emirates (ranked 8th), Oman (ranked 14th), and Saudi Arabia (ranked 18th). Their high rankings suggest a robust capability to unify under a standard economic framework, potentially enhancing their substantial influence over global crude oil markets.

OPEC and OPEC+ Nations:

Most of the top 20 nations best suited for implementing A.T.O.M. are OPEC and OPEC+ members, indicating a regional trend toward fiscal transformation readiness. In addition to all Gulf states covered in the section above, we find Congo (ranked 13th), Russia (ranked 16th), and Kazakhstan (ranked 19th). Other OPEC+ nations like Azerbaijan (ranked 21st) and Brunei (ranked 24th) also show promising propositions, with several members including Nigeria (ranked 44th) and Venezuela (ranked 53rd) following closely.

Challenges in G7 and E.U. Member Countries:

Among the G7 nations, rankings are notably low, with the United Kingdom at the bottom of our index (ranked 190th) and others like Italy (ranked 188th), France (181st), and Germany (ranked 180th) reflecting substantial challenges in adapting to A.T.O.M. Notably, the United States shows significant weaknesses, with the second largest economy globally ranked 171st. Similarly, E.U. member countries predominantly occupy lower rankings, with countries like Greece (ranked 189th) and Portugal (ranked 187th) reflecting systemic fiscal governance challenges and decentralized decision-making, complicating transformative legislation enacting.

BRICS and BRICS+ Countries Show Mixed Outcomes:

The core BRICS nations, except China (ranked 65th), display varied results. India (ranked 143rd), Brazil (ranked 153rd), and South Africa (ranked 173rd) face challenges due to the extensive variability in governance and policy implementation across their large populations. New BRICS+ members like Egypt (ranked 28th) and Ethiopia (ranked 51st) show more favorable rankings, suggesting emerging potential for transformation.

Surprising High Performers:

Several less dominant countries have shown high readiness for economic transformation. These include East Timor (ranked 5th), Cambodia (ranked 9th), and Uzbekistan (ranked 10th). While these rankings are promising, political instability and social unrest may impact their potential for adopting A.T.O.M.

Conclusion

Member One’s G.P.I. is a vital tool for assessing the feasibility and timing of implementing A.T.O.M. globally. Given the current predicament of tax-based economies, transformation to a tax-free fiscal regime is increasingly tied to governments' survival. The composite index helps identify the leaders and laggards in economic transformation readiness and highlights the critical factors influencing these outcomes. As nations consider transitioning to A.T.O.M., understanding these dynamics will be crucial in tailoring strategies that accommodate specific regional and national contexts, ensuring successful and sustainable economic transformations. Next, we will dive deeper into the results for specific countries with high potential to transform.

Please contact us directly for more details on G.P.I. methodology and detailed rankings.