S’pore is 2nd freest economy: US think-tank

Source : Business Times - 13 Jan 2009

Hong Kong was on Tuesday named the world’s freest economy for the 15th year in a row by American think-tank The Heritage Foundation, with North Korea and Zimbabwe at the bottom of the rankings.

The Wall Street Journal and The Heritage Foundation have been measuring countries’ commitment to free-market capitalism in the ‘Index of Economic Freedom’ for the past 15 years

Hong Kong’s Asian rival Singapore was again ranked second, followed by Australia, Ireland and New Zealand, according to the pro-free market group.

The annual index, which measures a jurisdiction’s commitment to free market capitalism, placed the southern Chinese city atop a list of 179 economies.

The United States dropped one place to sixth, because of increases in both tax revenue and government spending as a percentage of GDP, one of the report’s authors, Terry Miller, said in an article in the Wall Street Journal.

Mr Miller, director of the foundation’s Centre for International Trade and Economics, said capitalism has taken a beating in recent months, as financial institutions begged for government intervention to help them through a global crisis.

But capitalism remained the best system to battle the downturn, he said.

‘Despite recent setbacks, (left-wing critics) would be hard pressed to deny that capitalism steps out more nimbly than its rivals, and keeps up with the music far more surely,’ he wrote.

Hong Kong is often criticised for allowing its economy to be dominated by a select group of family-controlled monopolies and cartels which control prices and block market access to competitors.

The Heritage Foundation said North Korea was the world’s most restricted economy, followed by Zimbabwe, Cuba, Myanmar and Eritrea.

Zimbabwe lost the most points on the 0-100 scale in the past year, followed by Venezuela, as a result of price controls, currency devaluations and nationalisations, Mr Miller said.