Nepal drops two notches in economic freedom

KATHMANDU, Sept 15: Nepal has ranked 108 out of 159 countries and territories included in the Economic Freedom of the World: 2016 Annual Report, released on Thursday by Samriddhi Foundation in conjunction with Canada's Fraser Institute.

Samriddhi Foundation is releasing the report in Nepal for the ninth consecutive year.

Last year, Nepal was at the 106th position with a score of 6.56.

With an overall score of 6.54 -- in a scale of 1 to 10 where a higher value indicates a higher level of economic freedom -- Nepal ranked 108th out of 159 jurisdictions in this year's index.

With this, Nepal has dropped two places down in the global ranking.

Nepal's score dropped to 7.89 from 8.72 under Size of Government component, whereas its score climbed to 4.79 from 4.33 under Legal System and Property Rights. But Nepal has the worst score and ranking in Legal System and Property Rights.

Likewise, Nepal's score in Access to Sound Money climbed to 6.43 from 6.42. Nepal also improved its score to 6.72 from 6.47 under Freedom to Trade Internationally.

Under Regulation of Credit, Labor and Business Component also, Nepal's score climbed to 6.87 from 6.85. However, overall score dropped to 6.54 this year from last year's 6.56, according to the report.

"Economic freedom leads to prosperity and a higher quality of life, while the lowest-ranked countries are usually burdened by oppressive regimes that limit the freedom and opportunity of their citizens,” said Fred McMahon, Dr Michael A Walker Research Chair in Economic Freedom with the Fraser Institute.

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 GDP of US$ 41,228 in 2014, compared to $5,471 for bottom quartile nations. Moreover, the average income in 2014 of the poorest 10 percent in the most economically free countries (US$ 11,283) dwarfed the overall average income in the least free countries (US$ 5,471).

And life expectancy is 80.4 years in the top quartile countries compared to 64 years in the bottom quartile.

Globally, Hong Kong (9.03) again tops the index, continuing its streak of number one ranking, followed by Singapore (8.71), New Zealand (8.35), Switzerland (8.25), Canada (7.98), Georgia (7.98), Ireland (7.98), Mauritius (7.98), and United Arab Emirates (7.98). Australia and the United Kingdom tied for 10th with a score of 7.93, according to the report.

The 10 lowest-ranked countries in this year's report are Iran, Algeria, Chad, Guinea, Angola, Central African Republic, Argentina, Republic of Congo, Libya and Venezuela.

Some despotic countries such as North Korea and Cuba couldn't be ranked due to lack of data, the report states. The report further reads that Germany (7.55), Japan (7.42), France (7.30), Russia (6.66), India (6.50), China (6.45) and Brazil (6.27) are some of the countries that have improved their ranking.

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 nearly 100 nations and territories.

The Economic Freedom of the World Report is world's premier measurement of economic freedom, measuring and ranking countries 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, labor and business.

This year's publication ranks 159 countries and territories.