January 15, 2008

January 15, 2008 | News Releases on Democracy and Human Rights

Economic Freedom Remains Stagnant in Sub-Saharan Africa, Index Shows

WASHINGTON, JAN. 15, 2008-Sub-Saharan Africa has made little progress toward economic freedom in recent years, according to the 2008 "Index of Economic Freedom" published annually by The Wall Street Journal and The Heritage Foundation.

The new report pegs the region's overall level of economic freedom at 54.5 (on 100-point scale in which a higher score represents greater freedom). That's significantly below the world average of 60.3 and makes Sub-Saharan Africa the poorest-scoring region for economic freedom in the world.

This matters, because the Index shows a direct correlation between economic freedom and prosperity. Countries with higher levels of freedom tend to have higher GDP per capita.

"Unlike regions that have a diverse range of free-market economies, in Sub-Saharan Africa there are only distinctions among less free economies," write Index editors Edwin Feulner, Kim Holmes and Mary Anastasia O'Grady. Most of the 40 economies in the region are ranked "mostly unfree" in the Index, while "moderately free" economies are outnumbered almost two-to-one by "repressed" ones.

Still, there are positive signs. "Mauritius (18th globally), the second most improved economy in the 2008 Index, is the lone Sub-Saharan Africa representative among the world's freest economies," the editors write. It improved its score this year, as did Botswana and Uganda.

Mauritius scores 10 percentage points or more above the global average in six areas and has blazed a trail for other countries by enacting effective tax reform and eradicating corruption. And there's plenty of room for improvement. Almost half of the planet's 20 "repressed" economies are in Sub-Saharan Africa, including Zimbabwe, Guinea-Bissau and the Republic of Congo. The region ranks last in eight of the 10 categories of economic freedom, and it performs especially poorly when it comes to property rights and freedom from corruption.
Overall, in a region marred by government failure, 15 countries saw their economic freedom scores increase, while 25 lost ground.

To compile the Index, the editors measured 157 countries across 10 specific factors of economic freedom. The higher the score, the lower the level of government interference. All countries were graded on a scale of 0 to 100.

The 10 freedoms measured are: business freedom, trade freedom, fiscal freedom, government size, 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.

This year's Index aims to be the most precise measure of economic freedom ever published. The editors fine-tuned a methodology first employed last year to grade each economy in the world. "The methodology has been vetted with an academic advisory board and should now even better reflect the details of each country's economic policies," they write.

Worldwide, the average rating for economic freedom held essentially steady "while progressing more slowly than one might hope," the 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-103 economies-are either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). Some 24 countries have "repressed" economies, with total freedom scores below 50 percent.

This is the 14th consecutive year The Heritage Foundation and The Wall Street Journal have published the Index. It's edited by Kim Holmes, Heritage's vice president for foreign affairs, Edwin Feulner, Heritage's president, and Mary Anastasia O'Grady, a member of the Journal's editorial board and editor of the "Americas" column.

Copies of the 2008 Index (410 pp., US$24.95) can be ordered at heritage.org/index or by calling 1-800-975-8625 and are available in English or Spanish. Additionally the full text, along with all charts and graphs, will be available via the Internet at www.heritage.org/index.

About The Wall Street Journal
The Wall Street Journal, the flagship publication of Dow Jones & Company 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 33 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 nearly 750 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 2.6 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 2007, the Journal was ranked No. 1 in BtoB's Media Power 50 for the eighth consecutive year. The Wall Street Journal Radio Network services news and information to more than 280 radio stations in the U.S.

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