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

South America Ahead of World Average in Economic Freedom, Index Finds

WASHINGTON, JAN. 20, 2010--The 29 economies in the South and Central America/Caribbean region performed better than the world average in four 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.

Still, there are some danger signs in the region. "Despite strong economic progress in many countries as the result of policy liberalization, governments and even electorates in some countries have been turning away from free market policies and embracing a new populism that looks very much like the old corrupt cronyism that characterized the region before the outbreak of democracy in the 1980s and 1990s," the editors warn.

Only one economy in the region, Chile, made the worldwide top 20 (10th).

At the other end of the scale, five economies were ranked "repressed": Guyana, Venezuela and Cubawere joined this year by Ecuador and Bolivia. Venezuela remains a problem, as its authoritarian government is working to undermine democracy throughout the region.

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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