Hong Kong once again ranks as the world's freest economy in the annual survey by the conservative Washington-based economic research group, the Cato Institute. The economic freedom index was released Thursday.
The former British colony that is now a special administrative zone within China ranks number one in all of the categories used to prepare the index. These include the smallness of the government sector, respect for property rights and law, access to sound money, free trade, and a small degree of regulation. The report's author, James Gwartney of Florida State University, says Hong Kong has a ranking of 8.7 on a 10-point scale.
"Singapore ranks very closely behind and tied for third place you have Switzerland, New Zealand the United States, followed by the United Kingdom, Canada and Ireland," said James Gwartney.
Mr. Gwartney says the report finds that the freest economies also tend to be the richest, fasting growing, and winners in attracting foreign investment.
"Per capita income [in the top quintile] is in excess of $25,000, whereas in the bottom quintile it is about $2,400. So [it is] about 10 times as high."
In the nearly 20 years that the index has been compiled there have been relatively few shifts in the rankings of the 127 economies surveyed. China, the world's fastest growing big economy, has advanced as its economy has become more open. China is now ranked 86, ahead of Brazil, 88 and Russia, 115.
The survey finds that Nicaragua, Peru, Uganda, Ghana and Zambia have made the biggest advances in recent years. Economics professor Gwartney says Estonia, which wasn't even an independent nation before 1991 now ranks number nine in the index.
"With regard to the former Soviet satellite countries that have made the transition rather successfully, Estonia would certainly head that list. It has moved up more rapidly in terms of economic freedom," said James Gwartney.
The survey says that economic freedom around the world is on the rise as the average index score has advanced from 5.2 in 1985 to 6.4 in 2003.