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10 Countries with Most Economic Freedom
By siliconindia
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Thursday, 03 November 2011, 00:38 IST
Bangalore: Economic freedom is a very important term for any country to grow its economy and economic polices. Economic freedom of country emphasizes on free markets and easier trade policies to follow. It also means distributive justice and basic freedom to all individuals. Two thirds of the world's population's economic freedom is inhibited by bureaucracy, limited credit, and corruption.
In the case of India, economic reforms were made in the early 1990s which led to India's current economic growth.
There are several indices of economic freedom that attempt to measure free market economic freedom. Some empirical studies based on these rankings have found higher living standards, economic growth, income equality, less corruption and less political violence to be correlated with free markets. However, these results and their interpretation remain controversial.
Further, an open market attracts more investment. All these factors add up to long-term economic growth. Protectionism in economic policies holds off development, while economic freedom leads to prosperity.
Here is the list of the countries which enjoy the most economic freedom:
1. Hong Kong:
Hong Kong has remained as the world's freest economy, according to Index of Economic Freedom since the inception of the index in 1995. As one of the world's leading international financial centers, Hong Kong has a major capitalist service economy characterized by low taxation and free trade, and the currency, Hong Kong dollar, is the ninth most traded currency in the world. Hong Kong's economic strengths, including a sound banking system, virtually no public debt, a strong legal system, ample foreign exchange reserves, rigorous anti-corruption measures and close ties with the mainland China, enable it to quickly respond to changing circumstances. Its economy size is slightly bigger than Israel and Czech Republic and its GDP per capita at purchasing power parity is the 7th highest globally, more than Switzerland and Netherlands and slightly lower than the United States. Hong Kong has also had an abundant supply of labor from the region nearby. A skilled labor force coupled with the adoption of modern British/Western business methods and technology ensured that opportunities for external trade, investment, and recruitment were maximized.
