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HONG KONG STILL THE WORLD’S FREEST, BUT SINGAPORE NARROWS THE GAP, 2014 INDEX OF ECONOMIC FREEDOM SHOWS
HONG KONG,JAN. 14, 2014—Hong Kong successfully defended its status as the world’s freest economy for the 20th consecutive year in the 2014 Index of Economic Freedom, thwarting a challenge by perennial runner-up Singapore, which came within seven-tenths of a point of the top spot.
The Index—published annually by The Wall Street Journal and The Heritage Foundation—shows this year that the Asia-Pacific region remains a study in contrasts. It is home to four of the world’s freest economies (Hong Kong, Singapore, Australia, New Zealand) and three of the most repressed (Timor-Leste, Turkmenistan, North Korea).
Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of 178 countries graded in the 2014 Index is classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
Asia-Pacific, home to over half the world’s population, is the most improved region in the 2014 Index. Twenty-eight of its economies saw their scores rise, while 14 saw them decline. Yet, the editors note, many of the region’s countries remain “mostly unfree.”
Maldives added two points to its Index score, moving it to “mostly unfree.” Samoa rose by twice that amount, bumping it to “moderately free.” Vanuatu improved by almost three points but narrowly failed to qualify as “moderately free.” Malaysia’s 3.5-point gain left it flirting with “mostly free” status.
The editors attribute Singapore’s surge to the emergence of a more dynamic and competitive financial sector, boosting its productivity through an openness to global trade and investment. Australia and New Zealand, meanwhile, “continue to set the standard for clean, corruption-free government and benefit significantly from their transparent and efficient business environments and open-market policies,” they write.
India and China are ranked 120th and 137th, respectively, in the world, and both remain unfree. “The foundations for long-term economic development continue to be fragile in the absence of effectively functioning legal frameworks,” the editors write. “Progress with market-oriented reforms has been uneven and has often backtracked at the urging of those with a political interest in maintaining the status quo.”
The world average score of 60.3—seven-tenths of a point above the 2013 average—is the highest average in the two-decade history of the Index, the editors note. Forty-three countries, including Singapore and Sweden, achieved their highest scores yet in the 2014 Index. Among the 178 countries ranked, scores improved for 114 countries and declined for 59. Four recorded no score change.
The 2014 Index was edited by Ambassador Terry Miller, director of Heritage’s Center for International Trade and Economics; Anthony B. Kim, senior policy analyst in the Center for International Trade and Economics; and Kim Holmes, Ph.D., Heritage’s Distinguished Fellow. Copies of the Index (490 pages, $24.95) may be ordered online at www.heritage.org/index or by calling 1-800-975-8625. The full text, including charts and graphs, also is available online.
About The Wall Street Journal
The Wall Street Journal is America’s largest newspaper by paid circulation with more than 2.2 million customers. In recent years, the Journal has expanded its core content offering to include coverage of the arts, culture, lifestyle, sports, and personal health, building on its heritage as the leading source of business and financial news. Published by Dow Jones, one of the world’s largest news gathering operations with nearly 2,000 journalists in more than 80 bureaus, The Wall Street Journal now spans 12 editions in nine languages, engaging readers across newspapers, websites, magazines, social media, and video. The Journal holds 35 Pulitzer Prizes for outstanding journalism.
About The Heritage Foundation
The Heritage Foundation is the nation’s most broadly supported public policy research institute, with more than 710,000 individual, foundation and corporate donors. Founded in 1973, Heritage develops public policy solutions that advance free enterprise, limited government, individual freedom, traditional values and a strong national defense.