Plenty of good in imperfect world

A lot of things are going right for the world, including global equity markets shrugging off Brexit. Photo / AP

Media studies suggest "bad news" stories outweigh "good news" stories by as much as 17 to one. This is not just media bias, psychologists and neuroscientists suggest there is a human bias to seek out dramatic, negative events. We had to be attuned to these risks for survival as our brains evolved on the African plains.

The world faces challenges in many areas. France was struck by another horrific terrorist attack last week. Brexit and the US election cycle loom as risks to global economic integration. The pace of climate change is in the upper range of expectations, and much more action is needed to reduce emissions.

New Zealand's house price levels are unsustainable and inequitable.

Advice officials and experts have been giving, over many years, with regards tax settings and council planning processes should have been heeded much sooner by their political masters.

The only direct short-term fix, the elephant in the room, is raising interest rates. The RBNZ is unlikely to entertain this while it assesses offshore risks outweigh domestic strength.

But there also are a lot of things going right in the Bay, in New Zealand, and in the rest of the world.

A snapshot includes:

• In the past 25 years, two billion people have moved out of extreme poverty, according to the latest United Nations Human Development Report.

• For the second year running India has been the world's fastest-growing large economy, and this is expected to continue. No other single country can do more to improve global living standards given India's huge and relatively poor population.

• We are living longer. According to the World Health Organisation in the past 15 years global life expectancy has risen five years, and around 10 years in parts of Africa.

• We are also healthier for longer. Major diseases such as heart disease, colon cancer, and dementia are in decline. Dementia incidence rates in the OECD have fallen around 20 per cent since the 1970s. There are more cases today because people are living longer, but the chances of someone over 60 having dementia is much less.

• Renewable energy sources are expanding dramatically. According to the International Energy Agency, renewable energy accounted for close to half of net new additions to global power generation in 2014. China and India are leaders in this regard.

• Coal-powered generation in the United States has shrunk from about 50 per cent to 30 per cent of total generation since 2000. This is the single biggest source of greenhouse gas emissions.

• Global equity markets have largely shrugged off Brexit. Last week the S&P 500 index, which represents the largest US listed corporates, was trading at its highest level ever.

• The New Zealand economy continues to expand at a brisk pace, and regions are leading the pack. According to an ANZ report released last week, job ads are about 9 per cent higher than a year ago. Double-digit growth is occurring in Auckland, but also in Otago, Manawatu, Waikato, and Hawke's Bay. The few hundred new sections planners have allowed for in the Bay is far from sufficient.

• We live in an era of technological innovation and New Zealand is not just an adopter. The tech sector is now NZ's third largest export earner, according to a recent NZIER report.

• Fundamental discoveries continue to be made. This year astronomers have identified a new planet in our solar system, RR245. Greek and Roman gods are jostling for naming rights.

The developments listed point to world that is, in general, becoming more prosperous.

While there are always risks and things are far from perfect, we should also recognise that major advances continue to be made.

- This article was written by Aaron Drew and Lizzie Hill. Aaron is the chief investment officer of the Stewart Financial Group, with head office is in Hastings. His show Real Wealth can be heard on Radio Kidnappers on Tuesday afternoons and on podcast.