South Africa economically freer
31 January 2006
South Africa improved its score on the 2006 Index of Economic Freedom conducted by the Heritage Foundation, a Washington-based conservative think tank, and The Wall Street Journal.
South Africa's overall score on the index was 2.74, 0.09 points better than in 2005 - although the country's global ranking slipped slightly from 48 in 2005 to 50 in 2006.
According to the index, released on 4 January, Botswana has the freest economy in sub-Saharan Africa, with a score of 2.29 and an overall global ranking of 30, followed by Cape Verde (2.69 and 46) and then South Africa.
Countries receive a 1-5 rating in the index - with 1 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 was 0.1 point worse in 2006 than in 2005, but its monetary policy score was 1 point better, making the country's overall score 0.09 points better this year, the Heritage Foundation said on its website.
According to the foundation, the world is "economically freer today than it was a year ago", with 99 of the 157 countries graded in the 2006 index improving their overall scores, compared to 51 whose scores worsened and five that remained unchanged.
Overall, 20 countries were classified as "free", 52 (South Africa among them) as "mostly free", 73 as "mostly unfree" and 12 as "repressed".
Regional improvement continued in sub-Saharan Africa, the foundation said, with economic freedom advancing in 25 countries in the region and declining in just 12. While Botswana jumped into the world's top 30, Benin was the region's most improved.
Hong Kong and Singapore finished first and second in the rankings for the 12th straight year, while Ireland moved up to third spot, followed by Luxembourg in fourth and Iceland and the United Kingdom tied for fifth place.
The implications of the index are straightforward, according to its editors: "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."
SouthAfrica.info reporter
