P. 1
2008 Index of Economic Freedom (the Heritage Foundation)

2008 Index of Economic Freedom (the Heritage Foundation)

5.0

|Views: 2,115|Likes:
Published by AnnieScanlan
Scary. So tired of this free market crap. I work two jobs and this free market we have isn't making me any more free. Economically or otherwise.
Scary. So tired of this free market crap. I work two jobs and this free market we have isn't making me any more free. Economically or otherwise.

More info:

Published by: AnnieScanlan on Oct 30, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/07/2012

pdf

text

original

Population: 5.9 million

GDP (PPP): $77.7 billion

6.3% growth in 2005
4.6% 5-yr. comp. ann. growth
$12,768 per capita

Unemployment: 30.0% (2004 estimate)

Inflation (CPI): 2.0%

FDI (net flow): $123.0 million

Official Development Assistance:

Multilateral: $3.6 million
Bilateral: $20.8 million (0.6% from the
U.S.)

External Debt: $4.5 billion

Exports: $29.4 billion
Primarily crude oil, refined petroleum
products, natural gas, chemicals

Imports: $13.5 billion
Primarily machinery, semi-finished
goods, food, transport equipment, con-
sumer products

The economy is 38.7% free

Rank: 154
Regional Rank: 17 of 17

QUICK FACTS

How Do We Measure Economic Freedom? See Chapter
4 (page 39) for an explanation of the methodology or
visit the Index Web site at heritage.org/index.

253

2005 data unless otherwise noted.

100

80

60

40

20

1995

2008

254

2008 Index of Economic Freedom

Business Freedom
Trade Freedom
Fiscal Freedom
Government Size
Monetary Freedom
Investment Freedom
Financial Freedom
Property Rights
Fdm fm Corruption
Labor Freedom

100 = most free, = world average

0

50

100

LIBYA’S TEN ECONOMIC FREEDOMS






20.0
39.6
81.7
63.5
74.9
30.0
20.0
10.0
27.0
20.0

BUSINESS FREEDOM — 20%

The overall freedom to start, operate, and close a busi-
ness is significantly restricted by Libya’s regulatory envi-
ronment. Despite modest improvements in the business
and investment climate, Libya’s bureaucracy is one of the
region’s most burdensome.

TRADE FREEDOM — 39.6%

Libya’s weighted average tariff rate was 25.2 percent in
2002. Import bans and restrictions, import fees, non-trans-
parent and discretionary regulation, state trade in petro-
leum products, subsidies, and customs corruption add
to the cost of trade. An additional 10 percentage points is
deducted from Libya’s trade freedom score to account for
non-tariff barriers.

FISCAL FREEDOM — 81.7%

The top tax rate on individual income from labor and any
service or function, permanent or temporary, is 15 percent.
A jihad tax is also applied to all taxable income. For incomes
over 200,000 Libyan dinars, other taxes (such as those on
commercial and industrial profits) may raise the top rate
to 90 percent. The top corporate tax rate is 40 percent. Oil
companies are subject to special provisions. Libya has no
value-added tax (VAT) or inheritance tax. In the most recent
year, overall tax revenue as a percentage of GDP was 2.8
percent.

GOVERNMENT SIZE — 63.5%

Total government expenditures, including consumption and
transfer payments, are very high. In the most recent year,
government spending equaled 34.9 percent of GDP. Despite
some steps toward privatization, the economy remains
highly centralized and dominated by the energy sector.

MONETARY FREEDOM — 74.9%

Inflation is low, averaging 2.6 percent between 2004 and
2006. Stable prices explain most of the monetary freedom
score. The government determines most prices through
price controls and state-owned enterprises and utilities. An
additional 15 percentage points is deducted from Libya’s
monetary freedom score to account for policies that distort
domestic prices.

INVESTMENT FREEDOM — 30%

Almost all foreign direct investment is in hydrocarbons.

The government screens investment. Despite partially
liberalized rules in sectors like agriculture, industry, tour-
ism, services, and health, the regulatory and bureaucratic
environment remains complex. Libya’s actions to alleviate
concern over its nuclear program have led to the lower-
ing of many international sanctions; its 2007 release of six
foreigners held on murder charges should reinforce this
momentum. The government privatized 360 state compa-
nies in 2004 in a process favoring Libyans. Residents and
non-residents may hold foreign currency accounts with
prior approval. Repatriation and most capital transactions,
including transactions involving capital, credit operations,
and direct investment, are subject to controls, including
approval requirements. Foreigners may not own land in
most cases.

FINANCIAL FREEDOM — 20%

Libya’s financial system is primitive and highly central-
ized. The government nationalized all banks in 1970 and
maintains tight control. Private ownership of financial
institutions was permitted in 1993, and the government
announced in 2007 that it was seeking bids for a stake in
one of the public banks, Sahara Bank. The 10 primary finan-
cial institutions include a central bank that owns shares in
a Bahrain-based foreign banking company and, through
its own overseas arm, controls all international banking
operations domestically. There is no coherent plan to priva-
tize state banks, although the government has said this is
a goal. Legislation passed in 2005 permits foreign banks
to open branches, and 14 foreign banks had representa-
tive offices as of mid-2007. Regulation is bureaucratic and
antiquated, and central bank transparency is weak. There
is no capital market, although the government adopted a
law to establish a stock market in June 2006.

PROPERTY RIGHTS — 10%

The judiciary is not independent, the private practice of
law is illegal, and all lawyers must be members of the Sec-
retariat of Justice. There is little land ownership, and the
government may renationalize the little private property
that is granted, especially to foreign companies. The gov-
ernment has a history of expropriation. Trademark viola-
tions are widespread.

FREEDOM FROM CORRUPTION — 27%

Corruption is perceived as widespread. Libya ranks 105th
out of 163 countries in Transparency International’s Cor-
ruption Perceptions Index for 2006. Government efficiency
is impeded by favoritism based on personal and family
connections. The Qadhafi clan exercises near total control
of major government decisions.

LABOR FREEDOM — 20%

Highly restrictive employment regulations hinder employ-
ment opportunities and productivity growth. The labor
law specifies minimum wage, working hours, night shift,
and dismissal regulations. Unemployment remains high,
and the growing number of job seekers makes job creation
a major challenge.

QUICK FACTS

How Do We Measure Economic Freedom? See Chapter
4 (page 39) for an explanation of the methodology or
visit the Index Web site at heritage.org/index.

255

2005 data unless otherwise noted.

World Average = 60.3

Europe Average = 66.8

100

80

60

40

20

1995

2008

Lithuania’s economy is 70.8 percent free, according to
our 2008 assessment, which makes it the world’s 26th
freest economy. Its overall score is 0.7 percentage point
lower than last year, reflecting slightly worsened scores in
six of the 10 economic freedoms. Lithuania is ranked 13th
out of 41 countries in the European region, and its overall
score is higher than the regional average.

Lithuania scores above average or average in many areas
of economic freedom. Its strongest scores are in business
freedom, trade freedom, investment freedom, and finan-
cial freedom. Business regulation is simple. Investment is
welcome, and foreign capital is subject to the same rules as
domestic capital. The financial sector is advanced, region-
ally integrated, and subject to few intrusive regulations. In
addition, the top income and corporate tax rates are low,
giving Lithuania a strong fiscal freedom score.

BACKGROUND: Lithuania is the largest of the Baltic states
and has historic ties to Poland. In 1993, Russian troops
withdrew, and the country achieved its independence.
Lithuania is a member of the European Union and NATO.
Despite frequent political change, the country remains
stable. With more than 80 percent of its enterprises now
privatized, Lithuania continues to navigate the transition
from a command economy to a market economy success-
fully. Economic growth, driven by domestic demand,
has averaged 7.5 percent since 2001, making Lithuania’s
economy one of the fastest growing among former Soviet
Union states and in the European Union. The strongest
sectors are construction, financial services, and retail.
Reducing inflation will remain a top priority.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->