South Africa has improved its score on the Heritage Foundation’s 2006 Index of Economic Freedom from 2,83 to 2,74, although globally its position has slipped slightly from 48th in 2005 to 50th.
The latest Index of Economic Freedom conducted by the Heritage Foundation — a Washington-based conservative think tank — and The Wall Street Journal, released earlier this week, shows that for the sub-Saharan African region, Botswana has the freest economy, with a score of 2,29 and an overall global ranking of 30, followed by Cape Verde with 2,69 and position 46 overall, and then South Africa.
Zimbabwe is rated at the bottom of the region, with a score of 4,23 and an overall global ranking of 154.
Countries receive a one-to-five rating — with one being the best — on 10 broad measures of economic freedom: trade policy, fiscal burden of government, government intervention in the economy, monetary policy, capital flows and foreign investment, banking and finance, wages and prices, property rights, regulation and informal (or black) market activity.
South Africa’s fiscal burden of government score is 0,1 points worse than last year, but its monetary policy score is one point better, giving South Africa an overall score that is 0,09 points better for 2006, the foundation said.
According to the index, the world is economically freer today than it was a year ago.
The index findings are straightforward — the countries with the most economic freedom also have higher rates of long-term economic growth and are more prosperous than are those with less economic freedom, the editors say.
Of the 157 countries graded in the 2006 index, 99 improved their overall scores, compared with 51 whose scores worsened and five that remained unchanged. Overall, 20 are classified as “free”, 52 as “mostly free”, 73 as “mostly unfree” and 12 as “repressed”.
Hong Kong and Singapore finished first and second in the overall rankings for the 12th straight year, while Ireland overtook Luxembourg and Estonia and moved up to number three, and Iceland moved up three places to number five, where it is tied with the United Kingdom.
The United States improved enough to re-enter the top 10 after falling out last year for the first time ever. It tied for ninth worldwide with Australia and New Zealand. Denmark also features in the top 10.
Among the least free countries are Turkmenistan (148th), Laos (149th), Cuba (150th), Belarus (151st), Libya (152nd), Venezuela (152nd), Zimbabwe (154th), Burma (155th), Iran (156th) and North Korea (157th).
In its comments on sub-Saharan Africa, the report said the region still lacks a free economy, but Botswana did vault into the world’s top 30.
Regional improvement continued, with economic freedom advancing in 25 countries and declining in just 12. Angola and Burundi were ranked in the index for the first time. Benin was the region’s most improved, while Guinea suffered the biggest decline, the report said. — I-Net Bridge