Sri Lanka suffers its worst slip in Global Economic Freedom rankings
Thursday, 29 January 2015 01:13
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Sri Lanka has suffered its worst performance by slipping further in the Global Economic Freedom rankings and remain categorised among “mostly unfree” countries along with several in the region.
As per the index, published annually by The Wall Street Journal and The Heritage Foundation, Sri Lanka was ranked at 101st freest with a score of 58.6, down from 90th place in 2014 and by 1.4 points. In 2013 Sri Lanka ranked best at 81 up from 97th place in 2012.
In Asia Pacific Sri Lanka’s rank was 21st out of 42 countries. The world average is 60.4 whilst the Asia Pacific regional average is 58.8.
The average of free economies is 84.6.The index assesses four broader parameters – Rule of Law, Limited Government, Regulatory Efficiency and Open Markets and 10 factors within those.
Modest gains in freedom from corruption and the management of Government spending in Sri Lanka were outweighed by declines in half of the 10 economic freedoms, including investment freedom, property rights, and trade freedom.
The return to relative political stability has precipitated a rise in Sri Lanka’s economic freedom. Over the past five years, economic freedom on the island has advanced by 1.5 points, with improvements in half of the 10 factors led by double-digit gains in fiscal freedom.
Overall, however, the foundations of economic freedom remain weak. Property rights are hard to enforce because of fraud, and a weak Judiciary fails to mediate disputes effectively. Government industrial policies distort trade and shelter domestic industry from competition. The Central Bank is not fully independent, raising the fear of inflation and monetised Government deficits.
Hong Kong remained the world’s most economic free economy, though “a higher level of perceived corruption” pulled its score to within two-tenths of a point of runner-up Singapore. Publishers of the Index said this year shows significant improvement in the Asia-Pacific region, home to over half the world’s population. For two consecutive years, the region has outperformed the other five regions measured in the Index.
Sri Lanka was ranked ahead of countries such as Indonesia, Cambodia, Pakistan, India, Bangladesh, Maldives, China and Vietnam in Asia Pacific. Ranked above Sri Lanka were Thailand and the Philippines as well as countries such as Fiji and Mongolia.
