No economic freedom

economy_realHARARE - Zimbabwe was ranked as one of the countries with the worst Economic Freedom according to a survey done by Washington-based Heritage Foundation and the Wall Street Journal.

Zimbabwe was ranked 178 out of 179 countries assessed in the report which was released on Wednesday last week. In 2008, Zimbabwe was in the same position.

Unstable countries and those at war were not surveyed.

The Index of Economic Freedom ranks countries according to criteria that assess a countrys economic openness, trade and the efficiency of domestic regulators, freedom from corruption, property rights and the rule of law.

Zimbabwes score has decreased by 1,3 points from last year, reflecting notable declines in trade freedom, freedom from corruption and investment freedom. Zimbabwe is ranked 46th out of 46 countries in the sub-Saharan Africa region and is the worlds second least economically-free country, reads part of the report.

Excessive govt involvement

The Zimbabwean economy performs poorly and is characterised by instability and volatility, both hallmarks of excessive government involvement. Economic policy is overly influenced by political considerations and state interference. The countrys previously established economic infrastructure has crumbled under a tyrannical and oppressive regime. Zimbabwes economic climate has become increasingly hostile to foreign investment. The financial system, which suffers from repeated crises is failing.

Making the bottom list with Zimbabwe on the Index of Economic Freedom are Cuba and North Korea ranked 177 and 179 respectively. The index measures economic freedom within 10 specific categories: labour freedom, business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights and freedom from corruption. Scores in these categories are averaged to create an overall score.

Political and economic analysts in Zimbabwe were quick to say that despite the progress by the inclusive government there were many contributory issues which weighed down on the countrys economic freedom rating.

Hong Kong was ranked first in the world and the compilers of the report said it remained the worlds freest place to do business. Singapore was ranked second while Australia and New Zealand were third and fourth. Ireland, Switzerland, Canada, the US, Denmark and Chile complete the lists top 10.

Of the 179 countries graded in this years Index, only seven scored 80 or higher, the rating necessary to qualify as having a free economy. Another 23 earned 70-79,9 points, ratings that characterise them as mostly free.

58 economies are classified as moderately free (with scores between 60 and 69,9), while 55 are classified as mostly unfree (scores from 50 to 59,9). The remaining 36 economies are classified as repressed (scores below 50).

The 2010 Index provides strong evidence that economic freedom has far-reaching positive impacts on various aspects of human development. Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance, and environmental sustainability, the report said.

Economies classified as free or mostly free also do a much better job promoting human development, reducing poverty and protecting the environment. The editors found strong correlations between levels of economic freedom and these economic and social variables.

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