Report: Hong Kong Tops 'Economic Freedom' Index Again

By Agence France-Presse Hong Kong remains at the top of the list of the world's freest economies, followed by Singapore and the United States, according to the sixth annual Economic Freedom of the World Report, published by the conservative Cato Institute, Canada's Fraser Institute and institutes from 54 other countries. The project started with the help of Nobel laureate Milton Friedman and uses 37 criteria to produce an economic freedom index of the world. Among the criteria used are the degree to which economics are determined by markets and personal choice rather than by government; property rights; freedom to trade with foreigners; sound money; and regulation of credit, labor and business. Thus, high tax rates and tariffs would reduce a country's ranking, as would price controls and capital controls. The lowest ranked countries in the survey were the Democratic Republic of Congo, which had the worst score, preceded by Myanmar, Guinea-Bissau, Algeria and Ukraine. North Korea and Cuba were not included in the survey because of a lack of data. The report shows a strong correlation between economic freedom and per capita income, economic growth, and life expectancy, the Cato Institute said. "That's because economically free societies are more productive," the authors say. "The report demonstrates that added productivity translates into higher incomes for everyone. Significantly, the distribution of income is no more unequal in countries with market-oriented economies than in those that are economically repressive." "Economic freedom is unambiguously good for the poor," says Ian Vasquez, director of the Cato Institute's Project on Global Economic Liberty. "The recent emphasis on increasing foreign aid is misplaced. In the worst cases, such as sub-Saharan Africa, foreign aid has retarded economic freedom." Among the higher-ranking countries, Britain was fourth, followed by New Zealand, Switzerland and Ireland, with Australia, Canada and the Netherlands tied for eighth place. Among other major economies were Germany (15), Japan (24), Taiwan (30), France (38), Mexico (66), and India (73). Three former communist countries are in the bottom 10: Russia (116), Ukraine (119) and Romania (114) all below China, which was 101st among the 123 countries. Most of the low-ranking nations are in Africa and Latin America. Botswana had the best record for an African nation, tied at 38th with six other nations including France and South Korea. Chile, with the best record in Latin America, was tied with three other nations at 15th. Copyright Agence France-Presse, 2002