January 20, 2010

January 20, 2010 | News Releases on Index of Economic Freedom

Lack of Economic Freedom Plagues Sub-Saharan Africa, 2010 Index Finds

WASHINGTON, JAN. 20, 2010 - Sub-Saharan Africa finished last in seven of the 10 components of economic freedom measured in the 2010 "Index of Economic Freedom," published annually by The Wall Street Journal and The Heritage Foundation.

"A majority of nations in the region are ranked either 'mostly unfree' with scores between 50 and 60 or 'repressed' with scores below 50," the editors write. "In Sub-Saharan Africa there are only distinctions among less free economies."

There are positive signs. Mauritius (12th globally) remains among the world's 20 freest economies. It scores above the global average in eight economic freedoms, and implemented major tax reforms in 2010. Botswana is the only other regional economy rated "mostly free."

At the other end of the spectrum, Eritrea recorded the region's biggest overall score reduction. It remains ahead of Zimbabwe, where "all components of economic freedom score below or far below world averages," the editors write.

Eighteen economies in the region are rated as "repressed." Sub-Saharan Africa's "overall level of economic freedom is weaker than that of any other region," the editors write. "Sub-Saharan Africa is ranked last in seven of the 10 components of economic freedom and performs especially poorly in terms of property rights and freedom from corruption."

To compile the Index, the authors measured 183 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 zero to 100. Four countries couldn't be measured because of a lack of reliable data.

The 10 freedoms 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 were averaged to produce the overall Index score.

Worldwide, the average rating for economic freedom dropped slightly this year as many countries scrambled to deal with recession. However, it's important they take the correct steps.

"The 2010 Index provides strong evidence that economic freedom has far-reaching positive impacts on various aspects of human development," the editors write. "Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance, and environmental sustainability."

Of the 179 countries ranked only seven were classified as "free" (a score of 80 or higher). Another 23 were rated "mostly free" (70-79.9). The bulk of countries--113 economies--were found to be either "moderately free" (60-60.9) or "mostly unfree" (50-50.9). The remaining 36 countries have "repressed" economies, with total freedom scores below 50.

The 2010 Index was edited by Ambassador Terry Miller, Director of Heritage's Center for International Trade and Economics, and Dr. Kim Holmes, Heritage's Vice President for foreign affairs. Copies of the 2010 Index (TK pp., US$ TK) can be ordered at heritage.org/index or by calling 1-800-975-8625. Additionally the full text, charts and graphs, is available via the Internet at www.heritage.org/index.

About The Wall Street Journal

Founded in 1889, The Wall Street Journal, the flagship publication of Dow Jones & Company is the world's leading business publication and holds 33 Pulitzer Prizes for outstanding journalism. The Wall Street Journal has a print and online circulation of more than 2 million, reaching the nation's top business and political leaders, as well as investors across the country. The Wall Street Journal boasts the largest individually paid circulation out of the top 25 U.S. newspapers. Other publications that are part of The Wall Street Journal franchise, with a global audience of 3.8 million, include The Wall Street Journal Asia and The Wall Street Journal Europe. The Wall Street Journal Online at WSJ.com is the leading provider of business and financial news and analysis on the Web with more than one million subscribers and 26 million users per month. WSJ.com is the flagship site of The Wall Street Journal Digital Network, which also includes MarketWatch.com, Barrons.com, AllThingsD.com and FINS.com. In 2009, the Journal was ranked No. 1 in BtoB's Media Power 50 for the 10th consecutive year. The Wall Street Journal Radio Network services news and information to more than 350 radio stations in the U.S.

About The Heritage Foundation

The Heritage Foundation is the nation's most broadly supported public policy research institute, with more than 582,000 individual, foundation and corporate donors. Founded in 1973, Heritage now has a staff of 244 and an expense budget of $61 million.

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