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January 12, 2011

January 12, 2011 | News Releases on

Middle East/North Africa Advance Toward Greater Economic Freedom

WASHINGTON, JAN. 12, 2011 – The Middle East/North Africa region made modest gains in economic freedom last year, according to the 2011 Index of Economic Freedom, released today by The Heritage Foundation and The Wall Street Journal.

Jordan and Oman registered the greatest gains in economic freedom. Their ratings improved by 2.8 and 2.1 points respectively. Saudi Arabia scored a full 2 points higher than the previous year, and Syria’s rating rose 1.9 points.

Qatar’s 1.5 point improvement, to 70.5 on the Index scale of 100, moved it from the category of “moderately free” to “mostly free.” Syria’s improvement (to 51.3) lifted its designation from “repressed” economy to “mostly unfree.”

Bahrain retained the top ranking within the region and broke into the worldwide Top 10 ranking with a score of 77.7 (up 1.4 points over the year previous). Only one other country from the region, Qatar, ranks in the top 30, and no other Middle Eastern or North African countries are rated as having “mostly free” economies.

Nearly half the region falls into the “mostly unfree” category and two countries – Libya and Iran – rank among the world’s most repressed economies.

The region’s 17 countries posted an average rating of 60.2 – an increase of 0.2 points over last year and just slightly above the world average of 59.7.

“The ongoing transformation of innovative and reform-oriented states such as Bahrain, Qatar, Kuwait, Oman and Israel may pave the way for more robust and dynamic regional economic growth,” write the Index editors. “But other institutional problems, such as lack of investment and financial freedom and weak systems for protecting property rights and preventing corruption continue to degrade the region’s overall economic freedom and economic potential.”

The Index, compiled as a joint project of The Heritage Foundation and The Wall Street Journal, ranks countries on a 1-100 scale on the basis of 10 measures that evaluate openness, the rule of law and competitiveness. The 10 scores are averaged to produce the overall score.

Countries that score well demonstrate a commitment to individual empowerment, non-discrimination and the promotion of competition. Their economies tend to perform better, and their populations tend to enjoy more prosperity, better health and more positive measures on a variety of quality-of-life indices. A score of 80 or higher merits the designation of “free economy.” Those who score in the 70s are considered “mostly free,” those in the 60s “moderately free,” those in the 50s “mostly unfree” and those that score less than 50 “repressed.”

Unlike most countries in the region, Bahrain relies little on oil income. Instead, it has become the money-handler of sorts for the region. Its structural reforms, openness to global commerce and competitive tax regime facilitate a sophisticated financial sector that promotes the flow of capital and foreign investment throughout the region.

Similarly, Qatar moved forward in the Index rankings due to its efforts to limit corruption, respect property rights and improve monetary freedom. Seven more countries, including Israel and Saudi Arabia, remain in the “moderately free” category but have shown improvement.

The 2011 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. A complete online version of the Index is available free at Hard-copy editions (474 pp., $24.95 each) can be ordered at the same Web address or by calling (800) 975-8625.

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