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Home  The Gulf in The Press Bahrain's economy 'one of the freest'
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Bahrain's economy 'one of the freest' |
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Wednesday, 16 January 2008 |
Gulf Daily News - BAHRAIN may have the 19th freest economy in the world, but it falls well below the global average for labour freedom, according to a report released yesterday.
The 14th annual Index of Economic Freedom says the country is the most fiscally liberal in the Middle East and North Africa (MENA) region.
It was placed 19th in a list of 157 countries around the world evaluated on their economic freedom and included in the "mostly free" category.
That is a vast improvement on its ranking of 39th last year and is based on its rating of 72.2 per cent on a 100-point scale.
Bahrain received high scores in business, trade, fiscal, monetary, investment, and financial freedom as well as for freedom from government.
The index, compiled by the Washington-based Heritage Foundation and the Wall Street Journal, measured 157 countries against a list of independent variables - including government intervention in the economy, trade policy, wages and prices, property rights, regulation, foreign investment and the black market.
Six countries, including Iraq and Sudan, were not ranked.
The report stated Bahrain's ranking changed from last year because of an improving investment climate and a methodological refinement in its research procedures that provides a better assessment of non-tariff barriers.
"Bahrain's economy is very free for the Middle East, with higher scores than the world average in eight of the 10 factors of economic freedom," it said.
"Business freedom, fiscal freedom, monetary freedom and especially financial freedom are high.
"The only weakness is labour freedom, which is 22 points below the world average, largely due to regulations mandating the hiring of Bahrainis.
"The absence of income or corporate taxes in all industries, except oil, gives Bahrain a competitive commercial advantage globally."
The index aims at creating a factual measurement of economic freedom in countries throughout the world.
Policy researchers believe countries with the most economic freedom have higher rates of long-term growth and are more prosperous.
Countries are separated into five categories: "free", "mostly free", "moderately free", "mostly unfree" and "repressed".
Kuwait was second highest ranked Arab nation at 39th position, followed by Oman (42), Jordan (58), Saudi Arabia (60), the UAE (63), Qatar (66), Lebanon (73) and Turkey (74); putting them all in the "moderately free" category.
Tunisia was 84th, Egypt 85th, Morocco 98th, Algeria 102nd and Yemen 125th - rating their economies as "mostly unfree".
The lowest ranked Arab country was Syria at 144th, putting it in the "repressed" economy category.
The freest economy in the world was said to be Hong Kong, followed by Singapore and Ireland, who retained their positions for the third year running.
The US was fifth and the UK 10th, while Pakistan ranked 93rd, India 115th and China 126th.
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