FOR IMMEDIATE RELEASE
15 September 2015
Press Release: Malaysia ranks 58 among 157 countries in Economic Freedom
15 September 2015, Kuala Lumpur – Malaysia ranks 58 out of 157 countries and territories included in the Economic Freedom of the World: 2015 Annual Report, released today by The Institute for Democracy and Economic Affairs in conjunction with Canada’s Fraser Institute. Malaysia ranked 74 in the 2014 Index.
The report, which is based on data from 2013 (the most recent year available), measures a country’s economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analysing the policies and institutions of 157 countries and territories.
Malaysia’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom) are as follow:
- Size of government: changed to 6.51 from 5.96 in the last year’s report
- Legal system and property rights: changed to 6.93 from 6.79
- Access to sound money: changed to 6.60 from 6.50
- Freedom to trade internationally: changed to 7.74 from 7.60
- Regulation of credit, labour and business: changed to 8.30 from 8.16
Commenting on the results, Wan Saiful Wan Jan, Chief Executive of IDEAS, said: “I am most pleased that Malaysia has improved tremendously in this EFW report. Leaping from the 74th place to 58th this year is a big success. This is a snapshot from 2013 and therefore a recognition of the efforts by the government to make the private sector the engine of growth. Initiatives in the Economic Transformation Programme such as divestment of Government Linked Companies (GLCs) and liberalisation of service sectors may contribute to improving our score in this Index.”
“While our score in most of the indicators have improved, he added, “our score in five sub indicators declined. Among them, the legal enforcement of contracts has plunged. The legal enforcement of contracts indicator measures the efficiency of the judicial system in resolving commercial dispute. The decline shows that the time, cost and the number of procedures of the settlement process is getting less efficient and costly.”
Wan Saiful suggested, “If we want to keep this success, we must push ahead with liberalisation and not give in to the temptation of increasing government’s role in the economy because the more government is involved in the economy, the smaller the space and incentive for the private sector to grow and excel.”
Hong Kong has the highest level of economic freedom worldwide, with a score of 8.97 out of 10, followed by Singapore (8.52), New Zealand (8.19), Switzerland (8.16), United Arab Emirates (8.15), Mauritius (8.08), Jordan (7.93), Ireland (7.90), Canada (7.89), and the United Kingdom (7.87).
Other notable countries include the United States (7.73), Japan (7.52), Germany (7.50), Russia (6.69), China (6.44) and India (6.43).
“Hong Kong’s still number one, but because democracy is the best safeguard of freedom, if China, which ranks low in economic freedom, encroaches on Hong Kong, we can expect Hong Kong’s ranking to fall,” said Fred McMahon, Dr. Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute.
The 10 lowest-ranked countries are Angola, Central African Republic, Zimbabwe, Algeria, Argentina, Syria, Chad, Libya, Republic of Congo, and Venezuela. Some despotic countries such as North Korea and Cuba can’t be ranked due to lack of data.
Globally, the average economic freedom score rose slightly to 6.86 out of 10 from 6.84 last year.
According to research in top peer-reviewed 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 GDP of US$38,601 in 2013, compared to US$6,986 for bottom quartile nations.
Moreover, the average income in 2013 of the poorest 10 per cent in the most economically free countries (US$9,881) dwarfed the overall average income in the least free countries (US$1,629). And life expectancy is 80.1 years in the top quartile of countries compared to 63.1 years in the bottom quartile.
About the Economic Freedom Index
Economic Freedom of the World measures the degree to which the policies and institutions of countries support economic freedom. It’s the world’s premier measurement of economic freedom, ranking countries based on economic freedom, which is measured in five areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour and business.
The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in 90 nations and territories.
The 2015 report was prepared by James Gwartney, Florida State University; Robert A. Lawson, Southern Methodist University; and Joshua Hall, West Virginia University.
This year’s publication ranks 157 countries and territories. The report also updates data in earlier reports in instances where data has been revised.
For more information on the Economic Freedom Network, datasets, and previous Economic Freedom of the World reports, visit www.freetheworld.com. Also ‘Like’ the Economic Freedom Network on Facebook: www.facebook.com/EconomicFreedomNetwork.
Check out the Economic Freedom of the World video here.
IDEAS is Malaysia’s first think-tank dedicated to promoting market-based solutions to public policy challenges. We are an independent not-for-profit organisation. As a cross-partisan think tank, we work across the political spectrum. Our purpose is to advance market-based principles, and we are not bound by party politics, race or religion.
Our mission is to improve the level of understanding and acceptance of public policies based on the principles of rule of law, limited government, free markets and free individuals. For more information, please visit http://ideas.org.my/
IDEAS (+60-3) 6201 8896/ 8897
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