Significant disparities in Asean countries' Economic Freedom rankings

 

 

Singapore once again leads Asean in economic freedom by scoring top marks in areas such legal systems and property rights, freedom to trade internationally and in devising useful regulation. The Singaporean government effectively protects both physical and intellectual property rights and exacts low marginal tax rates and tariffs on imports, which encourages entrepreneurs to set up businesses and promotes economic growth and prosperity.

 

 

Singapore is a good example of how a government can play a crucial role in establishing institutions that facilitate the unleashing of powerful market forces, which promotes human freedom and dignity.

 

Among Asean’s greater challenges are the transitional economies of its member countries. Singapore is the only Asean member that sits in the first quartile of the report with Malaysia (58), Indonesia (76), Brunei (62), Philippines (67) and Cambodia (52) far behind in the second quartile. Vietnam (109) and Thailand (103) are placed in the third quartile while the worst performing country in Asean, Myanmar declined 3 spots from last year to 146 this year.

 

Thailand received low marks because of its weak legal system and protection of property rights. Cambodia on the other hand, had low scores because it placed strict controls on the movement of capital and people. This restricts the flow of resources to its most valued uses, which in turn results in lower rates of economic growth. Malaysia did well as it rose 16 spots, from number 74 in 2012 to 58 in 2013. This improvement was due to a reduction in trade barriers, improved credit and labor market regulations and improvements in property rights protection.

 

“Economic freedom breeds prosperity, and the most economically free countries offer the highest quality of life while the lowest-ranked countries are usually burdened by oppressive regimes that limit the freedom and opportunity of their citizens,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute. 

 

SEANET Director, Wan Saiful Wan Jan said “The results of this global report for Asean is encouraging, but there are still significant disparities within the ranking between Asean countries. In light of the Asean Economic Community, which aims to foster greater economic integration within the region, certain aspects of the Singaporean experience can and should be emulated by other Asean countries that lag behind. It is possible to mirror the economic success that Singapore has achieved for the region's prosperity.”

 

While Hong Kong is the top of the international rankings, other notable countries include the United States with the score of 7.73, Japan (7.52), Germany (7.50), Russia (6.69), China (6.44) and India (6.43).

 

The 10 lowest-ranked countries are Angola, Central African Republic, Zimbabwe, Algeria, Argentina, Syria, Chad, Libya, Republic of Congo, and Venezuela. Some despotic countries such as North Korea and Cuba can’t be ranked due to lack of data.

 

Globally, the average economic freedom score rose slightly to 6.86 out of 10 from 6.84 last year.

 

According to research in top peer-reviewed journals, people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.

 

For example, countries in the top quartile of economic freedom had an average per-capita GDP of US$38,601 in 2013, compared to US$6,986 for bottom quartile nations.

 

Moreover, the average income in 2013 of the poorest 10 per cent in the most economically free countries (US$9,881) dwarfed the overall average income in the least free countries (US$1,629). And life expectancy is 80.1 years in the top quartile of countries compared to 63.1 years in the bottom quartile.

 

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 90 nations and territories. It’s the world’s premier measurement of economic freedom, ranking countries based on economic freedom, which is measured in five areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour and business. See the full report at www.freetheworld.com.

 

 

Top 10

1 Hong Kong 

2 Singapore 

3 New Zealand 

4 Switzerland (8.16)

5 United Arab Emirates 

6 Mauritius 

7 Jordan 

8 Ireland 

9 Canada 

10 United Kingdom

Source: Economic Freedom Index