Freest economies

Asia again topped a survey which ranks the world’s freest economies in 2007, with Hong Kong in first place and Singapore in second position.

Australia clinched the third spot in the latest Index of Economic Freedom survey for 2007 conducted by the Wall Street Journal and The Heritage Foundation.

Hong Kong topped the rankings for the 13th consecutive year with an 89.3 score out of 100 given its low taxes and flexible labor market. Singapore came second with a score of 85.7, while Australia jumped from ninth to third in a new ranking methodology which included labor freedoms for the first time.

Europe had four countries in the top 10 including UK, Ireland, Luxembourg and Switzerland. US came fourth. The 2007 index showed that for the 157 countries rated, overall global economic freedom “stalled” slightly this year, after a sustained uptrend, with a 0.3% dip from last year’s average.

The worst ranked country was North Korea with three points. The rankings employed criteria such as business freedom, tax rates, inflation, property rights and freedom from corruption.

For Hong Kong, the recent scrapping of a proposed goods and services tax was seen as positive, but a possible move to enact minimum wage laws could hurt the city’s economic freedom by creating more unemployment, the report’s editors said.
A debate spurred by Hong Kong CEO Donald Tsang’s apparent dropping of the city’s long-standing “laissez-faire” policy of positive non-interventionism was not considered as negative.

Editor of the Wall street journal in Asia said that they look at what’s actually done, rather than what the CEO says.

China was ranked a lowly 119, behind countries like Lesotho and Cameroon, given its lack of property rights and financial and investment freedom. Because it is well known that the court system, the judicial system in China is not up to world standards. The same was the opinion of Edwin Feulner, president, Heritage Foundation.