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Venezuela tops list (again) of most miserable countries: Cato Institute

People line up to pay inside a Makro supermarket in Caracas, Venezuela, Jan. 9, 2015.
Jorge Silva | Reuters
People line up to pay inside a Makro supermarket in Caracas, Venezuela, Jan. 9, 2015.

Last year ended an "annus horribilis" for many countries, according to a new economic ranking, with Venezuela once again topping the list as the most miserable place on Earth.

War, social upheaval and poor economic conditions are the most common characteristics of the countries listed at the top of the Cato Institute's Misery Index. Compiled by Johns Hopkins University economist Steve Hanke, the list functions as a travel guide through some of the most dysfunctional places in the global economy.

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The index bases its findings on four key data points: Unemployment levels, interest rates, consumer prices and economic growth.

"You have three things that make you miserable and subtract something that makes you less miserable," which is economic growth, Hanke explained to CNBC.

Venezuela a leader—but not in a good way

Based on those points, topping the index for a second consecutive year was Venezuela. Since the demise of leader Hugo Chavez, the oil-producing country has been on the fast track toward decline, morphing into a hotbed of hyperinflation, food shortages and civil strife.

As conditions have worsened, the precipitous drop in oil—revenue from which Venezuela once used to fund a generous public safety nethas been an accelerant for opposition to the government of Nicolas Maduro.

Many names on the list aren't surprising given the state of their societies. Rounding out the top five are Argentina—reeling from plunging foreign exchange reserves and a protracted standoff with bondholders; Ukraine, Syria and Iran. Hanke noted a curious common denominator between those in the top five.

"The interesting thing is every one of those countries…with the exception of Argentina are suffering the fallout of sanctions," he said. Although much of the market's attention has been focused on Russia's economic turmoil and a falling currency, "the Ukrainian currency has taken a much bigger hit that the rouble," Hanke said.

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Because of the former Soviet satellite's proximity and economic links to Moscow, "Russian sanctions are what's really killing Ukraine," He added.

So which country is the least miserable on the planet? Tiny Brunei. Its oil-and-gas-powered economy is among the most fully employed and fastest growing in the world. And it also has low inflation and interest rates.

Switzerland is right behind the oil rich sultanate, followed by China, Taiwan and Japan.