Sustainable trade

Connecting trade and life expectancy

Visual Capitalist

Published 14 January 2025

Trade and economic growth have boosted life expectancy by improving access to healthcare and nutrition. Efficient resource allocation through trade improves living standards, and economic growth from trade raises income and tax revenues, enabling more government investment in public health and social programs. Based on the findings of the 2024 Hinrich-IMD Sustainable Trade Index, Visual Capitalist illustrates how major trading economies like Japan, Hong Kong, and Singapore enjoy higher living standards and longer lives.

(Text by Jia Hui Tee)

Nations that trade sustainably reap benefits that extend beyond economic growth, significantly contributing to the overall well-being of their citizens. The Hinrich-IMD Sustainable Trade Index (STI) evaluates the ability of 30 global economies to engage sustainably in trade by using 72 economic, societal, and environmental indicators. The life expectancy rankings in the Index provide insights into the broader socioeconomic health of a nation.

Trade openness significantly enhances life expectancy by boosting economic growth, which, in turn, raises income levels that can be allocated to healthcare, exposes economies to foreign technology and know-how, and broadly improves living conditions. Hence, higher life expectancy often correlates with higher gross domestic product (GDP) per capita, indicating that people in wealthier nations tend to live longer. It also reflects effective healthcare systems, low levels of corruption, and social stability, all of which are crucial for sustained economic prosperity.

As Visual Capitalist illustrates in this third installment of a series showcasing the findings of STI 2024 – Japan, known for its advanced healthcare system and high standard of living, consistently ranks at the top. Open trading economies such as Hong Kong and Singapore, with their robust economies and efficient public services, showcase how trade complements effective institutions to enhance quality of life. On the other hand, countries such as Papua New Guinea and Pakistan, which struggle with limited access to quality healthcare and lower economic development, rank at the bottom.

Evaluating national income and life expectancy

In Japan, people have an average life expectancy of about 85 years at birth, surpassing other high-income economies such as Singapore, the US, and Australia. This impressive figure can be attributed to Japan's advanced healthcare system, which emphasizes preventive care, extensive medical research, and widespread access to high-quality medical services. Costs are kept low through strict government regulation of medical fees and drug prices to enable universal access. Additionally, cultural factors, such as dietary habits, play a significant role in enhancing the longevity of its population.
The US has one of the highest GDP per capita (US$81,632) but a life expectancy of 78.2 years, falling behind other high-income economies. This disparity is often attributed to the high prevalence of chronic diseases such as obesity, diabetes, and heart disease, which are linked to lifestyle factors. Furthermore, the US healthcare system – predominantly driven by capitalism – though technologically advanced, faces challenges related to accessibility and affordability, leading to disparities in health outcomes among different socioeconomic groups. High rates of gun violence and substance abuse also contributed to premature deaths which lowered life expectancy at birth.
Thailand’s life expectancy at birth increased to 79.7 years from 78.7 years in the 2023 ranking. Despite being a middle-income country, trade, which accounts for 129% of Thailand’s GDP, has played a crucial role in its economic development, leading to increased national income and an enhanced ability to invest in public health infrastructure. The country's strategic focus on export-driven sectors, particularly electronics, automotive, and agriculture, has helped generate sizeable revenue. This, in turn, has enabled the government to allocate more funds towards healthcare services, ensuring better access to medical facilities and treatments for its citizens.
Papua New Guinea ranks the lowest life expectancy among STI economies, with an average of 66 years at birth, due to its limited economic development. Despite being a middle-income country, the growth of its economy has been heavily reliant on the extraction of natural resources, such as minerals and timber, restricting its participation in high value-added supply chains. Political instability, corruption, and weak institutions further hinder the effective delivery of public services, including healthcare.

Trade plays a pivotal role in improving living standards and life expectancy. Higher trade volumes enable economies like Japan, Hong Kong, and Singapore to invest more in their healthcare systems. By fostering an environment conducive to international trade, governments can increase access to a diverse range of goods and services, including medical supplies and advanced healthcare technologies, which are crucial for improving health standards.

To fully realize the benefits of trade, strong adjacent policies are essential including in healthcare infrastructure, education systems, and social equity. Addressing challenges such as corruption, political instability, and inequality improve life expectancy too.

Access more insights and data on the Hinrich-IMD Sustainable Trade Index by downloading the STI 2024 report and interactive index.

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).