January 15, 2008 | News Releases on Asia
HONG KONG, JAN. 15, 2008--Hong Kong continues to be the world's freest economy, according to the 2008 "Index of Economic Freedom," published annually by The Wall Street Journal and The Heritage Foundation.
It's the 14th straight year that Hong Kong has earned the number-one ranking. Three other economies in the Asia-Pacific region also made the Index's top 10. Singapore (2nd), Australia (4th) and New Zealand (6th) joined Hong Kong in that elite group.
The Index reflects data compiled in 10 key categories of economic freedom. "With the top scores in four of the ten factors, Hong Kong is once again the poster economy for economic freedom," note Index editors Kim Holmes, Edwin Feulner and Mary Anastasia O'Grady.
Yet the Asia-Pacific region remains a study in contrasts. The good news is that 18 economies there improved economic freedom while 10 lost ground. That's better than any other region did.
Still, most countries in the region are ranked "mostly unfree." The region is also home to several "repressed" economies, including North Korea, which scores poorly in every factor. "It has nowhere to go but up--if its political leadership ever decides to try," the editors write.
Hong Kong's score did drop a bit this year. Its measure of economic freedom is 90.3, down 0.3 points from last year. But it maintains a lead over second place Singapore, which improved 0.2 to earn a score of 87.4. The editors laud Singapore as "the top country in business freedom and labor freedom."
By implementing trade liberalization and fiscal reforms that include a flat tax, Mongolia showed the most improvement in the region. With a score of 62.8, Mongolia moved up to "moderately free" from "mostly unfree" in the 2007 Index.
Asia's overall level of economic freedom (58.7) lags a bit below the world average (60.3). But the editors predict this could change if two economic giants press on with economic reform. India and China are ranked 21st and 23rd in the region, the Index notes, making them "mostly unfree."
But economic freedom has been improving in those countries, and that trend should help speed Asian development in the years ahead. "When China and India further open their economies to globalization so that internal economic freedoms are strengthened," the editors write, "the rise in global prosperity will be spectacular."
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.
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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 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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