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04 Sep 2007 19:01
South Africa has been placed 60th in the latest international economic-freedom rankings, down six places on last year and 24 since 2004, the Free Market Foundation of Southern Africa said on Tuesday.
“After impressive gains from greater political and economic freedom achieved in and after 1994, South Africa’s overall economic freedom score has stagnated during recent years, although there have been significant changes in individual components in the index,” executive director Leon Louw said in a statement.
South Africa had been overtaken by other countries, and new countries with more economic freedom had been included, he said, but added that the country’s overall rating had improved from 6,7 to 6,8 out of 10.
Zimbabwe had the least free economy of the 141 countries ranked in the study, contained in the Economic Freedom of the World: 2007 Annual Report, released by the Free Market Foundation on Tuesday.
The rankings were topped by Hong Kong, with Singapore second and New Zealand third.
The rankings are based on 42 factors measured in 2005, including personal choice, voluntary exchange, freedom to compete, integrity of the legal system, security of private property, prosperity, security, freedom and life expectancy.
“These measures are part of a fundamental base needed to build a free and prosperous nation,” said the Foundation’s Cape Town director, Temba Nolutshungu.
“A quick glance at the countries scoring lowest on the index shows that without economic freedom, especially protection of property rights and the rule of law, there is little individual freedom and little in the way of prosperity,” he said.
South Africa’s score on legal structures and security of property rights improved from 6,6 to 7 and regulation of credit, labour and business went up from 6,4 to 6,8, but that for access to sound money decreased from 8,2 to 8 and for freedom to trade internationally from 6,9 to 6,6.
The report noted that most of the lowest ranked countries were African, including eight of the bottom 11—Niger, Togo and Chad, all at 5,1, Burundi at 5, Central African Republic at 4,6, Congo at 4,3, Angola at 4,2, the Democratic Republic of the Congo at 4 and Zimbabwe at 2,9.
Botswana, placed 38th with a score of 7,2, was the highest ranked sub-Saharan country, while Mauritius was the highest ranked in the African region at 22nd, with a score of 7,5.
“Weakness in the rule of law and property rights is particularly pronounced in sub-Saharan Africa, in many parts of the Middle East, and for several countries that were part of the former Soviet bloc, although some of these countries have shown improvement,” said lead author of the report, James Gwartney, a professor of economics at the Florida State University.
The report found that broad regional changes in freedom could and did have significant impact on surrounding countries, and that by liberalising trade with foreign countries, economically free countries could exert a positive, if modest, impact on economic freedom in less free countries.
It further found that free-trade agreements allowing a number of countries to simultaneously coordinate trade liberalisation could have a sizeable influence on spreading economic freedom to economically repressed regions of the world.—Sapa
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