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South Africa sees slight improvement in economic freedom

28th September 2017

By: Anine Kilian

Contributing Editor Online

     

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South Africa jumped ten spots on the Free Market Foundation’s (FMF’s) economic freedom index, ranking this year at 95 out of 159 countries from its 2016 ranking of 105, when its overall rating out of ten – where zero is unfree and ten is free – was 6.64.

“This year, at 95, our rating is 6.63 owing to the inclusion of the Gender Disparity Index (GDI) as a factor, without which, South Africa would have been ranked at 103, only two places better than last year,” noted software development company NightsBridge director Neil Emerick at the launch of the Economic Freedom of the World: 2017 Annual Report (EFW), which was released on Thursday by the FMF in conjunction with Canada’s Fraser Institute.

Emerick noted that South Africa’s positive rating on the GDI was a direct result of the change made in 1994 to a democratic order and the adoption of a constitution that guarantees gender equality.

Based on data from 2015, the EFW measures economic freedom by analysing the policies and institutions of 159 countries and territories.
 
This year, for the first time, the ranking was adjusted for gender equality. Countries in which women are not legally afforded the same level of economic freedom as men receive a lower score.
 
“The link between economic freedom for all citizens and the prosperity they enjoy is undeniable, while the lowest-ranked countries are usually burdened by oppressive regimes that limit freedom and opportunity,” said Emerick.
 
The 10 lowest-ranked countries on the EFW are Iran, Chad, Myanmar, Syria, Libya, Argentina, Algeria, the Republic of Congo, the Central African Republic and Venezuela.

Some despotic countries, such as North Korea and Cuba, cannot be ranked owing to lack of data.

The report shows that Hong Kong and Singapore have topped the index again, continuing their streak as numbers one and two respectively. New Zealand, Switzerland, Ireland, the UK, Mauritius, Georgia, Australia and Estonia round out the top 10.
 
Other notable rankings include the US and Canada, which are tied at 11, as well as Germany, Japan, France, India, Russia, China and Brazil.

According to research in top peer-reviewed academic journals, people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives.
 
For example, countries in the top quartile of economic freedom had an average per-capita gross domestic product of $42 463 in 2015, compared with $6 036 for bottom-quartile nations.
 
Moreover, the average income in 2015 of the poorest 10% in the most economically free countries was almost twice the overall average per capita income in the least-free countries.

Life expectancy is 80.7 years in the top quartile of countries compared with 64.4 years in the bottom quartile.

“Government should aim to climb back up to our 2000 ranking of 42 in the world, or better. All that needs to be done is to unwind the errors of the past 16 years. The aim, initially, is to be in the top 60 countries, alongside Botswana, France and Hungary, and then to the top 40s alongside countries such as Albania, Bulgaria and Mongolia,” noted Emerick. 

Edited by Samantha Herbst
Creamer Media Deputy Editor

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