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January 17, 2007

January 17, 2007 | News Releases on

Study: Sub-Saharan Africa Still Lags in Economic Freedom

WASHINGTON, JAN. 16, 2007-Economic freedom broadly declined last year in Sub-Saharan Africa, an area that remains home to more "repressed" economies than any other region, according to the 2007 "Index of Economic Freedom."

Published annually by The Wall Street Journal and The Heritage Foundation, the new index uses a revised methodology that provides an even more precise snapshot of economic freedom than its predecessors.  The new index incorporates the best and latest economic information, including World Bank Data previously unavailable to outside researchers.  It also uses a new rating system in which economies are ranked on a 100-point scale, with a higher score representing greater freedom.

The report pegs the Sub-Saharan region's overall level of economic freedom at only 54.7. That's well below the 60.6 world average and identifies the Sub-Saharan region the world's least economically free region.

Mauritius leads all nation's in the region with a score of 69.0, good for a 34th place ranking worldwide. This score classifies Mauritius' economy as "moderately free." Its closest regional competitor is Botswana, 38th in the world and also "moderately free."  There are no "free" or "mostly free" economies in the region

The region's lack of economic freedom is a source of poverty, the Index editors note. "Average GDP per capita is only $1,984 -- the lowest of any region and barely one-tenth of the average incomes in Europe and the Americas," write Tim Kane, Kim Holmes and Mary Anastasia O'Grady.

A majority of nations in Sub-Saharan Africa are ranked "mostly unfree," with the balance split evenly between "moderately free" and "repressed." Eight Sub-Saharan economies were classified as "repressed," the Index's lowest category.

Compared to the previous year, scores improved for 15 countries in the region and declined in 25 others. Botswana, Kenya and Cape Verde all dropped a category. The first slipped from "mostly free" to "moderately free," while the others fell from "moderately free" to "mostly unfree." One economy advanced: Nigeriamoved from "repressed" to "mostly unfree."

As in previous years, the Index ratings reflect an analysis of dozens of economic variables, grouped into 10 categories, although this year those categories were revised. The 10 freedoms measured are: business freedom, trade freedom, fiscal freedom, freedom from government, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom. Ratings in each category are averaged to produce the overall Index score.

Worldwide, the average rating for economic freedom held essentially steady, "but there is much room for improvement" the Index editors write. Of the 157 countries ranked, only seven are classified as "free" (a score of 80 or higher). Another 23 are "mostly free" (70-79.9). The bulk of countries-107 economies-are either "moderately free" (60-69.9) or "mostly unfree" (50-59.9). Some 20 countries have "repressed" economies, with total freedom scores below 50 percent.

The Heritage Foundation and The Wall Street Journal have published the Index for 13 consecutive years. It's edited by Tim Kane, director of Heritage's Center for International Trade and Economics, Kim Holmes, Heritage's vice president for foreign affairs, and Mary Anastasia O'Grady, a member of the Journal's editorial board and editor of the "Americas" column.

Print versions of the 2007 Index of Economic Freedom (408 pp., US$24.95) can be ordered by calling 1-800-975-8625. Additionally the full text, along with all charts and graphs, is available free on the Internet at www.heritage.org/index. A Spanish language version of the Index will be available online in March.

About The Wall Street Journal

The Wall Street Journal, the flagship publication of Dow Jones & Company (NYSE: DJ; www.dowjones.com), is the world's leading business publication. Founded in 1889, The Wall Street Journal has a print and online circulation of nearly 2.1 million, reaching the nation's top business and political leaders, as well as investors across the country. Holding 31 Pulitzer Prizes for outstanding journalism, The Wall Street Journal provides readers with trusted information and knowledge to make better decisions.  The Wall Street Journal print franchise has more than 600 journalists world-wide, part of the Dow Jones network of nearly 1,800 business and financial news staff. Other publications that are part of The Wall Street Journal franchise, with total circulation of 2.7 million, include The Wall Street Journal Asia, The Wall Street Journal Europe and The Wall Street Journal Online at WSJ.com, the largest paid subscription news site on the Web. In 2006, the Journal was ranked No. 1 in BtoB's Media Power 50 for the seventh consecutive year.

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