Report: Hong Kong and Singapore world's freest economies

Jan 12, 2011, 9:10 GMT

Hong Kong - Hong Kong has held on to its title as the world's freest economy for the 17th year running, according to an annual index published Wednesday.

The city emerged top of the Index of Economic Freedoms released by Washington think tank The Heritage Foundation and The Wall Street Journal with a freedom score of 89.7 - exactly the same as last year.

Second place went to Singapore which has also held on to the runner-up title for 17 consecutive years and this year narrowed the gap between rival Hong Kong by adding 1.1 points to its freedom score which totalled 87.2.

The index measures economic freedom within 10 specific categories of freedoms including labour, business, trade, property rights and freedom from corruption.

Each country is awarded a score, with the maximum of 100 representing the ideal. The higher the score, the lower the level of government interference in the marketplace.

Australia again was ranked third, followed by New Zealand, Switzerland and Canada, all of which were categorised as 'free' in the index.

Bur Ireland, reeling from its financial turmoil, tumbled three places from fourth to seventh place.

The United States and Britain dropped slightly in the list but still qualified for the 'mostly free' category, taking 9th and 16th place respectively, and scoring well above the world average of 59.7.

Of the Asian economies, Macau ranked 19th and Taiwan was 25th, placing them also in the 'mostly free' group, while Malaysia, and Thailand were classed as 'moderately free' ranking 53rd and 62nd respectively.

Mainland China jumped five places to rank 135th compared to 140th in 2010, with a score which put it in the 'mostly unfree' category along with Sri-Lanka, the Philippines and Indonesia.

Vietnam gained 1.8 points to notch up 51.6, a score that took it out of the 'repressed' category it occupied last year and into the 'mostly unfree' group.

Coming bottom with a freedom score of just one was North Korea, one of 32 countries, including Myanmar, ranked as 'repressed.'

In its executive summary the report said economic freedom had regained the momentum lost during the financial crisis with the world average score increasing by 0.3 over the year to 59.7.

'Many countries around the world have rededicated themselves to fiscal soundness, fairness, and reform, and the majority of countries are once more on a positive path to greater freedom,' it said.

A Hong Kong government spokesman welcomed the report and promised to uphold economic freedom.

'The government's strategy is to remove impediments to industries tapping into new markets. We will adhere to the principle of 'big market, small government,' the spokesman added.