Wednesday, January 14, 2009

World's Freest Economies (US Slipped) -- Ireland and New Zealand Holding Strong


This comes up because each year the Cato Institute, a US-based conservative think-tank, and 50 other libertarian organizations rate Hong Kong and Singapore the two freest economies in the world. Like Groundhog Day, this has just recurred. On a 10-point scale, Hong Kong was ranked at 8.6, Singapore at 8.5 and the United States at 8.3. New Zealand and the United Kingdom were at 8.2 (see HK, Singapore, top 'economic freedom' index, July 10).


HONG KONGHong Kong has been named the world's freest economy for the 15th year in a row, according to an annual report released Tuesday by the conservative Heritage Foundation and the Wall Street Journal that warns against government intervention amid the global economic crisis.

The Chinese territory, known for its low taxes and looser regulations, was followed by Singapore, Australia, Ireland and New Zealand, according to this year's Index of Economic Freedom.

European countries again accounted for half of the top 20 economies considered free or mostly free, with Switzerland at No. 9 and the U.K. at No. 10.

However, the U.S. slid one notch to sixth place, dinged for increased government spending and tax revenue as a percentage of gross domestic product, one of the survey's authors said.

Ranking at the bottom was North Korea, followed by next-to-last Zimbabwe, Cuba, Myanmar and Eritrea. The southern African country, whose economy is in meltdown after years of state-endorsed violence and business controls, posted the biggest drop in this year's report.

The survey, which gauges 179 countries on 10 economic factors like trade barriers, property rights, taxes and market regulations, covers the year ending in June 2008, before the global meltdown led governments around the world to bailout financial institutions.

Remember, expect a fall of the U.S. even more in future calculations, because the index is based on data collected from July 2007 to June of last year, so is unaffected by the collapse of Lehman Brothers in September or the increasing in government jobs and loans.