Pakistan improves 10 notches in economic freedom

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ISLAMABAD: Pakistan’s ranking in terms of Economic Freedom of the World 2017 report has improved by 10 notches and it stood at 127th position out of total 159 countries.

The annual report of the Economic Freedom of the World 2017 released on Monday by Policy Research Institute of Market Economy (PRIME) Pakistan in conjunction with Canada’s Fraser Institute stated that Pakistan’s ranking stood at 137th position last year 2016.

The report states that Pakistan has improved its global ranking on economic freedom, climbing up 10 places since the last year. However, Pakistan continues to be placed among the least economically free countries in the world.

“Although it is encouraging to see that Pakistan’s ranking in the Economic Freedom of the World Index 2017 has improved overall, there is great room for improvement as we continue to be placed amongst the least free countries in the World and in Asia. Without effective tax reform, Fiscal discipline, improvement in the Contract Enforcement Regime, and Trade Liberalisation, we cannot expect to be placed alongside the most developed countries of the world”, Chief Operating Officer PRIME Ms Ayesha Bilal said.

Pakistan scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom) as in terms of size of government, the score went down to 7.86 from 7.88 in the last year’s report, legal system and property rights, the score decreased to 3.30 from 3.37, access to sound money, it increased to 6.38 from 6.21, freedom to trade internationally declined to 5.77 from 5.82 and regulation of credit, labour, and business improved to 6.31 from 6.19.

Hong Kong and Singapore again top the index, continuing their streak as 1st and 2nd respectively and New Zealand, Switzerland, Ireland, United Kingdom, Mauritius, Georgia, Australia and Estonia round out the top 10.

“Where people are free to pursue their own opportunities and make their own choices, they lead more prosperous, happier and healthier lives,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.

The 2017 report was prepared by James Gwartney, Florida State University; Robert A. Lawson, Southern Methodist University; and Joshua Hall, West Virginia University. It’s based on data from 2015 (the most recent year of available comparable data) and measures the economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analysing the policies and institutions of 159 countries and territories.

This year, for the first time, the ranking is adjusted for gender equality. In countries where women are not legally accorded the same level of economic freedom as men, that country receives a lower score.

“The link between economic freedom for all citizens and the prosperity they enjoy is undeniable, while the lowest-ranked countries are usually burdened by oppressive regimes that limit freedom and opportunity,” McMahon said.

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

Other notable rankings include the United States and Canada, which tied at 11th, Germany (23), Japan (39), France (52), India (95), Russia (100), China (112) and Brazil (137).

According to research in top peer-reviewed academic 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 $42,463 in 2015 compared to US $6,036 for bottom quartile nations.

Moreover, the average income in 2015 of the poorest 10 percent in the most economically free countries (US $11,998) was almost twice the overall average per capita income in the least free countries. And life expectancy is 80.7 years in the top quartile of countries compared to 64.4 years in the bottom quartile.

 

 

 

 

 

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