In a further boost to the post-war rebound and peaceful country profile Sri Lanka has moved up considerably in the 2011 global economic freedom index released yesterday by The World Heritage Foundation and the Wall Street Journal.
Sri Lanka has been ranked as the world’s 107th freest economy in the 2011 index, higher in comparison to the 120th place the country had to be satisfied with in 2010.
However Sri Lanka has a lot to improve since it was placed higher at 92nd place in the 2006 ranking.
Compiled now for over a decade countries ranked on a 1-100 scale according to 10 categories that evaluate economic openness, competitiveness and the rule of law.
The country’s overall economic freedom score was 57.1 which is an improvement of 2.5 from last year’s figure of 54.6, and the compilers said it reflects major gains in trade, monetary, and investment freedom. Sri Lanka is ranked 19th out of 41 countries in the Asia–Pacific region, and its score improvement is one of the 10 largest in the 2011 Index. Last year Sri Lanka ranked 23rd regionally.
The compilers said Sri Lanka’s economy is characterised by poor governance, ongoing political instability that undermines credible reform progress, and heavy reliance on foreign assistance. Overall, weak reform efforts have failed to stimulate broad-based economic growth. The heavy presence of the state in the economy continues to hamper private-sector development.
“Challenges to economic freedom in Sri Lanka are considerable,” they said. The average applied tariff rate has dropped significantly, but the persistence of non-tariff barriers still adds to the costs of trade. A lack of transparency and a burdensome approval process continue to impede the much-needed growth in private investment. Property rights are undermined by an inefficient judicial system, which is also subject to substantial corruption and political influence.
Overall Heritage Foundation and Wall Street Journal said though faced with continuing fiscal challenges, more countries embraced greater economic freedom than shied away from it last year.
The Index registered a widespread rebound for 2010, as the average score increased to 59.7 from the 59.4 registered in 2009. More than half the 183 countries now listed in the Index improved their scores. Scores had declined for the previous two years as countries responded to the global financial crisis with increased spending and regulations.
Hong Kong and Singapore topped the ratings, finishing one and two, respectively, for the 17th straight year. But Singapore cut into Hong Kong’s lead significantly, mainly on the strength of a better score in anti-corruption and a significant gain in financial freedom. The third and fourth place finishers also remained the same: Australia and New Zealand, respectively.
Rwanda, which has enacted reforms aimed at improving its competitiveness and entrepreneurial environment, is the world’s most-improved country overall.
Repressive regimes continued to dominate the bottom of the rankings. North Korea ranked last among all rated countries, with an overall score of just 1.00. Rounding out the bottom five were Zimbabwe at 22.1, Cuba at 27.7, Eritrea at 36.7 and Venezuela at 37.6.
source - www.ft.lk
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