January 12, 2012
Bahrain, Saudi Arabia lose ground; UAE, five others post modest gains
WASHINGTON, JAN. 12, 2012—So far, at least, economic freedom has not flourished in the Arab Spring. Economic freedom declined significantly during 2011 in the Middle East/North Africa region, according to the 2012 Index of Economic Freedom, published annually by The Wall Street Journal and The Heritage Foundation.
The region lost seven-tenths of a point on its overall score to fall to 59.9, just above the world average of 59.5 for economic freedom. Scores on property rights, monetary freedom, investment freedom and financial freedom in the Middle East/North Africa region rank below world averages.
Bahrain, the region’s top performer in the Index – and, at No.12, its only country in the Top 20 –lost a whopping 2.5 points. Saudi Arabia lost 3.7 points, leaving it tied for the third-largest decline in the world with Argentina. Both Bahrain and Saudi Arabia increased government spending, in part to head off unrest among citizens.
“The [region’s] problems will not be solved simply by holding elections with more political parties or allowing freedom of expression,” the Index editors wrote. “Hard institutional reforms that reduce the state’s role in the economy and in peoples’ lives are required.”
Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of 179 countries in the 18th annual edition was classified as “free” (i.e. combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
Of the 17 ranked countries in the Middle East/North Africa region, only six scores improved and those were the countries least affected by the turmoil. The United Arab Emirates (1.5), Jordan (1.0) and Qatar (0.8) all posted modest gains. Morocco improved its score for the fourth straight year to rejoin the ranks of “moderately free” economies.
Iran and Libya are the only two countries in the region that remain in the “repressed” category. But 15 of the 17 are rated only “moderately free” or worse.
The world average dipped to 59.5, a drop of two-tenths of a point and the second-lowest score of the last 10 years. Scores improved for 75 of the 179 countries, declined for 90 and stayed the same for the rest. Overall, only five countries were classified as “free.” A total of 23 were rated “mostly free,” 62 “moderately free” and 89 “mostly unfree” or “repressed.”
Index results continued to demonstrate that when countries adopt policies leading to high scores, they also enjoy prosperity and economic security. The freest countries in each region had per-capita incomes averaging three to 12 times higher than the least free. In the United Nations’ assessment of what it calls poverty intensity, “mostly free” and “moderately free” countries perform three times better than “mostly unfree” and “repressed countries.”
The top one-fifth of countries on the Index grew at an average rate of 3.7 percent. The bottom fifth grew 2.1 percent.
The 2012 Index was edited by Ambassador Terry Miller, director of Heritage’s Center for International Trade and Economics; Kim Holmes, Ph.D., Heritage’s vice president for foreign policy studies and director of the Davis Institute for International Studies; and Edwin J. Feulner, Ph.D., Heritage’s president. Copies of the Index (484 pages, $24.95) may be ordered online at www.heritage.org/index or by calling 1-800-975-8625. The full text, including charts and graphs, is available online.
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About The Heritage Foundation
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