Zimbabwes economic freedom score is 22.1, making its economy the 178th freest out of 179 countries surveyed worldwide.
Its score has increased by 0.7 point from last year, reflecting gains in four of the 10 economic freedoms.
Zimbabwe is ranked last out of 46 countries in the sub-Saharan Africa region and is the second least free country in the 2011 index.
Heritage Foundation described the Zimbabwean economy as characterized by instability and volatility, both hallmarks of excessive government interference and mismanagement of the economy.
The countrys fragile economic infrastructure has further crumbled under a tyrannical and oppressive regime, the report said.
It said Zimbabwes once-vibrant financial system, which has suffered from repeated crises, was failing as the lingering impacts of years of hyperinflation continue to cripple entrepreneurial activity and severely undermine the countrys economic potential.
A corrupt and inefficient judicial system and general lack of transparency severely exacerbate business costs and entrepreneurial risk, it added.
On average, it is far more time-consuming and burdensome to conduct business in Zimbabwe than elsewhere. According to the report, the overall regulatory environment is opaque and vulnerable to government intervention.
Private entrepreneurial activity is subject to government edicts and rampant corruption, it said.
This was in apparent reference to the controversial indigenisation law whose implementation the Harare authorities have been pushing for since February last year.
The law requires foreign companies to sell a majority stake to black businesspeople mostly linked to President Robert Mugabes Zanu (PF) party.
Zimbabwe also scored poorly in terms of trade freedom amid accusations that import bans and restrictions, services market access restrictions, non-transparent regulations, government controls on exports as well as customs inefficiency and corruption added to the cost of trade.
Zimbabwe was also said to have burdensome tax rates, with the top income tax rate being 35 percent this year.
The top corporate tax rate is presently 25 percent, down from 30 percent last year. The respective rates are raised to 36.05 percent and 25.75 percent when a 3 percent AIDS surcharge is considered.
Other concerns raised in the report included the absence of the rule of law and the lack of sanctity of property rights.
Post published in: Economy