South Africa ranking 105th out of 159 countries and territories included in the 'Economic Freedom of the World: 2016 Annual Report' “is tragic”, the Free Market Foundation (FMF) said on Wednesday.
The index measures the economic freedom – levels of personal choice, ability to enter markets, security of privately owned property and rule of law – by analysing the policies and institutions of 159 countries and territories. The latest available data was from 2014.
South Africa’s scores in key components of economic freedom, from 1 to 10 where a higher value indicates a higher level of economic freedom, were as follows: the size of government changed to 5.54 from 5.55 in the last year’s report; its legal system and property rights fell from 5.81 to 5.79; access to sound money changed from 8.17 to 8.04, while freedom to trade internationally fell substantially from 7.04 to 6.71; and the regulation of credit, labour and business dropped to 7.11 from 7.15.
FMF director Temba Nolutshungu said South Africa had steadily lost ground on the rankings, noting that it had ranked ninety-third last year. It has fallen 63 places from forty-second place in 2000, when it was just outside the top 25% of countries in the world.
“It now ranks in the bottom 35%. It is time for government policy to start taking the country in another direction – towards economic freedom, high growth, a high demand for labour, prosperity and justice for all,” he stated.
Hong Kong again topped the index, released by the FMF in conjunction with Canada’s Fraser Institute, followed by Singapore, New Zealand, Switzerland, Canada, Georgia, Ireland, Mauritius, and the United Arab Emirates. Australia and the United Kingdom were tied in tenth place.
However, Fraser Institute economic freedom research chair Fred McMahon said that while Hong Kong was still number one, its position was in jeopardy as China, which ranked low in economic freedom, was encroaching on Hong Kong. “We can expect Hong Kong’s ranking to fall,” he added.
“Economic freedom leads to prosperity and a higher quality of life, while the lowest-ranked countries are usually burdened by oppressive regimes that limit the freedom and opportunity of their citizens,” McMahon said.
The ten lowest-ranked countries are: Iran, Algeria, Chad, Guinea, Angola, Central African Republic, Argentina, Republic of Congo, Libya and Venezuela.
Some despotic countries such as North Korea and Cuba cannot be ranked due to a lack of data.