January 27, 2015
WASHINGTON, JAN. 27, 2015—Hong Kong is the world’s freest economy in the 2015 Index of Economic Freedom, though “a higher level of perceived corruption” pulled its score to within two-tenths of a point of runner-up Singapore.
The Index—published annually by The Wall Street Journal and The Heritage Foundation—this year shows significant improvement in the Asia-Pacific region, home to over half the world’s population. For two consecutive years, the region has outperformed the other five regions measured in the Index.
Twenty-seven of its economies charted rising scores, while 13 declined. Seven, including Taiwan, Vietnam and Laos, achieved their highest scores since the Index was launched in 1995 to measure economic freedom in the world.
Yet Asia-Pacific remains a study in contrasts. Many of the region’s countries are “mostly unfree.” It is home to the world’s four freest economies (Hong Kong, Singapore, New Zealand and Australia) and eight of its most repressed, including Timor-Leste, Turkmenistan and North Korea.
The Index evaluates countries in four broad policy areas that affect economic freedom: rule of law; limited government; regulatory efficiency; and open markets. There are 10 specific categories: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score.
Maldives added 2.4 points to its Index score (the biggest gain in the region), building on the momentum that moved it out of the “repressed” category in the 2014 Index. Although it is still “repressed,” Timor-Leste rose by almost as much: 2.3 points. Vanuatu improved by 1.3 points, enough to qualify as “moderately free.” India and China are ranked 128th and 139th, respectively, in the world, and both remain “unfree.”
Hong Kong’s score, meanwhile, slid 0.5 points to the territory’s second-lowest rating since 2007. “Although Hong Kong continues strongly to maintain the features of an economically free society, the city’s waning institutional uniqueness has placed it at a critical crossroads,” the editors warn. “The current failure to deliver promised meaningful electoral reform has galvanized greater pro-democracy sentiments in Hong Kong and undermined trust and confidence in the government.”
The world average score of 60.4 is only one-tenth of a point above the 2014 average, but represents a 2.8-point overall improvement since the inception of the Index in 1995. Thirty-seven countries, including Taiwan, Israel, Poland and Colombia, achieved their highest-ever Index scores. Among the 178 countries ranked, scores improved for 101 countries and declined for 73.
The 2015 Index was edited by Ambassador Terry Miller, director of Heritage’s Center for Trade and Economics and Center for Data Analysis; and Anthony B. Kim, senior policy analyst in the Center for Trade and Economics. Copies of the Index (492 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, also is available online.