Economic freedom rises slightly worldwide

Economic freedom rises slightly worldwide while United States sinks to historic low India Ranked 111 Overall   New Delhi, India— India is ranked 111 out of 144 countries included in the Economic Freedom of the World: 2012 Annual Report, released today by Centre for Civil Society. Last year also, India ranked 103. India’s overall rating is 6.26, behind China, Bangladesh, Tanzania and Nepal. Globally, the average economic freedom score rose slightly to 6.83 in 2010, the most recent year available, after plummeting to its lowest level in nearly three decades with a score of 6.79 in 2009. “Governments around the world embraced heavy-handed regulation and extensive spending in response to the American and European debt crises, reducing economic freedom in the short term and prosperity over the long term,” said Dr Parth Shah. “But the slight increase in this year’s worldwide economic freedom score is encouraging. Impressively, all five continents are represented in the global top 10.” Hong Kong again topped the rankings of 144 countries, followed by Singapore, New Zealand, and Switzerland. Australia and Canada tied for fifth overall. The United States, long considered a champion of economic freedom among large industrial nations, continues its protracted decline in the global rankings. This year, the U.S. plunged to its lowest-ever ranking of 18th, down from 10th in 2008 and second overall in 2002. Much of this decline is a result of higher spending and borrowing on the part of the U.S. government. Venezuela has the lowest level of economic freedom among the 144 jurisdictions measured. Myanmar, Zimbabwe, Republic of Congo, and Angola round out the bottom five nations. Research shows that people living in countries with high levels of economic freedom enjoy greater prosperity, higher levels of political and civil liberties, and longer life expectancies. “Sadly, the bottom-ranked countries offer a significantly lower quality of life, reduced prosperity, and limited opportunities for growth,” said Dr Parth Shah. The annual peer-reviewed Economic Freedom of the World report is produced by the Fraser Institute, Canada’s leading public policy think-tank, in cooperation with independent institutes in 90 nations and territories. The Economic Freedom of the World report is the premier measurement of economic freedom, using 42 distinct variables to create an index ranking countries around the world based on policies that encourage economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labor, and business. The full report is available at www.freetheworld.com. India scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom): Size of government: changed to 6.37 from 6.33 in the last year’s report Legal system and property rights: changed to 6.22 from 6.48 Access to sound money: changed to X from 6.6 Freedom to trade internationally: changed to 6.42 from 6.55 Regulation of credit, labour and business: changed to 6.57 from 6.48 International Rankings Hong Kong offers the highest level of economic freedom worldwide, with a score of 8.90 out of 10, followed by Singapore (8.69), New Zealand (8.36), Switzerland (8.24), Australia and Canada (each 7.97), Bahrain (7.94), Mauritius (7.90), Finland (7.88), and Chile (7.84). The rankings and scores of other large economies include: United States (18th), Japan (20th), Germany (31st), Korea (37th), France (47th), Italy (83rd), Mexico (91st), Russia (95th), Brazil (105th), China (107th), and India (111th). Venezuela has the lowest level of economic freedom among the 144 jurisdictions measured. Myanmar, Zimbabwe, Republic of Congo, and Angola round out the bottom five nations. When the rankings are adjusted to account for changes over the years, it shows that during the past decade, some African and formerly Communist nations have shown the largest increases in economic freedom worldwide: Rwanda (44th this year, compared to 106th in 2000), Malawi (84th, up from 114th), Ghana (53rd, up from 101st), Romania (42nd, up from 110th), Bulgaria (47th, up from 108th), and Albania (32nd, up from 77th). Countries showing the greatest declines since 2000 in the adjusted rankings include Venezuela (123rd this year, down from 94th), Argentina (110th, down from 34th), Iceland (59th, down from 11th), and the United States (19th, down from second overall). The report notes that among the highest-ranked countries, the average income of the poorest 10 per cent of people was $11,382 (in 2010 current international dollars), compared to only $1,209 for those living in the least economically free countries. On average, the poorest 10 per cent of people in the freest nations are nearly twice as rich as the average population of the least free countries. About the Economic Freedom Index Economic Freedom of the World measures the degree to which the policies and institutions of countries support economic freedom. The annual report is published in conjunction with the Economic Freedom Network, a group of independent research and educational institutes in 90 nations and territories worldwide. The 2012 report was prepared by James Gwartney, Florida State University; Robert A. Lawson, Southern Methodist University; and Joshua Hall, Beloit College. This year’s publication ranks 144 nations representing more than 95 per cent of the world’s population for 2010, the most recent year for which data is available. The report also updates data in earlier reports in instances where data have been revised. About Centre for Civil Society Centre for Civil Society is a (globally recognised) public policy think tank advancing personal, social, economic and political freedoms. The Centre challenges conventional wisdom to usher an intellectual revolution that encourages people to look beyond the obvious, think beyond good intentions and act beyond activism. Through research, outreach and advocacy, the team aims to promote choice, competition and community based policy reforms. For more information on the Economic Freedom Network, datasets, and previous Economic Freedom of the World reports, visit www.freetheworld.com. Also ‘Like’ the Economic Freedom Network on Facebook: www.facebook.com/EconomicFreedomNetwork. Contact (Nos): Centre for Civil Society Head Office Phone: 91 11 2653-7456 / 2652-1882 Email: ccs@ccs.in