HK ranked “World’s Freest” for 16th time
The Heritage Foundation ranked HK as the world's freest economy for the 16th consecutive year in its 2010 Index of Economic Freedom published last week. Singapore remains in second place, followed by Australia, New Zealand and Ireland.
According to the US public policy research institute's study, HK scores 89.7 this year, well above the world average of 59.4.
Cyprus ranked 24th with a score of 70.9, a marginal increase of 0.1 points, having been overtaken by Sweden and Germany that ranked 21st and 23rd, respectively, rising from the joint score of 70.5 last year to 72.4 and 71.1, respectively.
In the distribution of global economic freedom, this ranks Cyprus as barely within the category of “mostly free” economies.
Its overall score is almost unchanged from last year, with significant declines in property rights and labour freedom balanced by improvements in business freedom and freedom from corruption, according to the Heritage Foundation. Cyprus is ranked 13th out of 43 countries in the Europe region, and its overall score is higher than the regional and global averages.
Cyprus performs well in many of the ten economic freedoms. Business growth is facilitated by a relatively transparent and efficient regulatory framework. The financial sector has also become more open and efficient with strict but sensible supervision, and the government has taken measures to improve its public finance.
A high level of government spending is the primary weakness that holds down Cyprus’s overall economic freedom. There is also room for improvement in trade freedom. While tariff barriers are low, there are significant non-tariff barriers. Monetary stability has deteriorated somewhat due to rising inflation and government price-fixing practices.
The Heritage Foundation recognised that HK's competitive tax regime, respect for property rights and flexible labour market, coupled with an educated and highly motivated workforce, have stimulated an innovative and prosperous economy.
The Heritage Foundation further complimented HK as one of the world's leading financial and business centres. The legal and regulatory framework for the financial sector is transparent and efficient. Business regulation is straightforward. Moreover, HK has maintained its status as Asia's second-largest destination for foreign direct investment.
The study measured the degree of economic freedom of 179 economies worldwide by assessing ten factors: business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.
