ITB Group Term Paper

Term-Paper
On “Economic Freedom Index”.
ITB 301 Section: 02

Course Title: International Business.
Submitted To
Dr. Jashim Uddin
Associate Professor
Department of Business Administration
East West University, Bangladesh
Submitted By
Faysal Mahmud Niloy - 2018-1-10-009,
Shahriar Mustafa Chowdhury - 2018-1-10-181,
S.M Taimur Akbar - 2018-1-10-265,
Ishrak Alim - 2018-2-10-063.
Date of Submission
31th December, 2020
Letter of Transmittal
Date: December 31, 2020.

Dr. Jashim Uddin
Associate Professor,
Department of Business Administration,
East West University,
A/2, Jahurul Islam Avenue,
Jahurul Islam City, Aftabnagar,
Dhaka-1212, Bangladesh.
Subject: Term Paper on “Economic Freedom Index”.
Dear Sir,
It is our pleasure to submit a term paper based on “Economic Freedom Index”, as a requirement
for the course curriculum. The purpose of writing this term paper to find out and analyze the current
situation of Macao, Hong Kong, Laos, Nepal, Bhutan, Mongolia and Kyrgyzstan. We tried our
best to make an enrich term paper and we are glad to submit you for better consideration.
The composition of this term paper was an extraordinary encounter to us. We have invested our
best energy to make this term paper an effective one. It has been happy and edifying experience
for us to work in a group and set up this term paper. Nonetheless, this has been clearly an
extraordinary wellspring of learning for us to lead comparable sorts of studies later on.
Much obliged for your direction and supervision to fulfill this term paper.
Sincerely Yours,
Faysal Mahmud Niloy - 2018-1-10-009,
Shahriar Mustafa Chowdhury - 2018-1-10-181,
S.M Taimur Akbar - 2018-1-10-265,
Ishrak Alim - 2018-2-10-063.
2
ACKNOWLEGDEMENT
At the very beginning, we would like to convey our sincere appreciation to Almighty Allah for
giving us the strength and the ability to finish task within this crisis moment of the world due to
COVID-19.
We thus recognize that all the data on this term paper is valid. We have gathered the information
from different online sources, and we have given the legitimate reference of the sources. We made
an honest effort to keep the information ingenious. We are appreciative for the assistance and help
of them who caused us while working on at this term paper.
In addition, we would like to thank our honorable faculty Dr. Jashim Uddin Sir for his kind
guidance, advice, and encouragement when preparing this paper on “Term Paper on Economic
Freedom Index”. Without his inspiration, this term paper could not be possible to prepare.
At the occasion of the term paper accommodation, we sincerely remember all of them.
December 31, 2020,
East West University,
Dhaka.
3
Table of Contents
...................................................................................................................................................................... 1
EXECUTIVE SUMMARY .................................................................................................................................. 7
INTRODUCTION ............................................................................................................................................. 8
OBJECTIVE OF THE STUDY ............................................................................................................................. 8
ORIGINS OF THE TERM PAPER ...................................................................................................................... 8
METHODOLOGY ............................................................................................................................................ 9
Primary data collection: ............................................................................................................................ 9
Secondary data collection: ........................................................................................................................ 9
CONSTRAINTS OF THE TERM PAPER ............................................................................................................. 9
KAZAKHSTAN............................................................................................................................................... 10
Rule of Law: ............................................................................................................................................ 10
Property Rights: ...................................................................................................................................... 10
Judicial Effectiveness:............................................................................................................................. 11
Government Integrity: ........................................................................................................................... 12
Government Size: ................................................................................................................................... 13
Tax Burden:............................................................................................................................................. 14
Government Spending: .......................................................................................................................... 15
Fiscal Health: .......................................................................................................................................... 16
Regulatory Efficiency:............................................................................................................................. 17
Business Freedom: ................................................................................................................................. 17
Labor Freedom: ...................................................................................................................................... 18
Monetary Freedom: ............................................................................................................................... 19
Open Markets: ........................................................................................................................................ 21
Trade Freedom: ...................................................................................................................................... 21
Investment Freedom: ............................................................................................................................. 22
Financial Freedom: ................................................................................................................................. 23
Hong Kong ................................................................................................................................................... 25
Macau ......................................................................................................................................................... 27
MONGOLIA.................................................................................................................................................. 29
Property Rights ....................................................................................................................................... 29
Judicial Effectiveness .............................................................................................................................. 29
Government Integrity ............................................................................................................................ 30
4
Tax Burden.............................................................................................................................................. 31
Government Spending ........................................................................................................................... 31
Fiscal Health............................................................................................................................................ 32
Business Freedom .................................................................................................................................. 32
Labor Freedom ....................................................................................................................................... 33
Monetary Freedom ................................................................................................................................ 33
Trade Freedom ....................................................................................................................................... 34
Investment freedom .............................................................................................................................. 34
Financial Freedom .................................................................................................................................. 35
LAOS ............................................................................................................................................................ 36
Property Rights ....................................................................................................................................... 36
Judicial Effectiveness .............................................................................................................................. 36
Government Integrity ............................................................................................................................ 37
Tax Burden.............................................................................................................................................. 37
Government Spending ........................................................................................................................... 38
Fiscal health ............................................................................................................................................ 38
Business Freedom .................................................................................................................................. 39
Labor freedom ........................................................................................................................................ 40
Monetary freedom ................................................................................................................................. 40
Trade Freedom ....................................................................................................................................... 41
Investment Freedom .............................................................................................................................. 41
Financial Freedom .................................................................................................................................. 42
Bhutan ......................................................................................................................................................... 43
Bhutan’s Rule of Law:............................................................................................................................. 43
Property Rights: ...................................................................................................................................... 44
Government Size of Bhutan: .................................................................................................................. 44
Tax Burden:............................................................................................................................................. 45
Fiscal health: ........................................................................................................................................... 45
Regulatory Efficiency of Bhutan: ........................................................................................................... 46
5
Labor freedom: ....................................................................................................................................... 47
Open Markets of Bhutan: ...................................................................................................................... 47
Trade Freedom: ...................................................................................................................................... 48
Nepal ........................................................................................................................................................... 49
Nepal’s Rule of Law: ............................................................................................................................... 49
Property rights:....................................................................................................................................... 50
Government Size of Nepal: .................................................................................................................... 50
Tax Burden:............................................................................................................................................. 51
Fiscal Health: .......................................................................................................................................... 51
Regulatory Efficiency of Nepal ............................................................................................................... 52
Labor Freedom: ...................................................................................................................................... 53
Open Markets of Nepal: ......................................................................................................................... 53
Trade Freedom: ...................................................................................................................................... 54
Conclusion: .................................................................................................................................................. 54
6
EXECUTIVE SUMMARY
The term paper contains the Economic Freedom investigation of 7 unique nations. In this term
paper we have chipped away at these 12 areas; Property Rights, Judicial Effectiveness,
Government Integrity, Tax Burden, Government Spending, Fiscal Health, Business Freedom,
Labor Freedom, Monetary Freedom, Trade Freedom, Investment Freedom, Financial Freedom.
The term paper execution comprises the investigation from the year 2010 to 2020. We have
likewise examined about the objective of the study, Origin of the Term paper, Methodology,
constraints of these nations.
In these 10 years we tried to figure out how these countries economy is doing, what are the
improvement and dissatisfaction they have done. All the impacts are briefly discussed throughout
the term paper. This term paper has been a great source of information of above mention countries
economic freedom. From this term paper we can get a proper knowledge about their past. During
this pandemic situation we couldn’t reach any expertise. It could be much better if we could
manage to contact with someone who can brief us more appropriately. The entire term paper has
done on the basis on online valid recourses.
7
INTRODUCTION
We're living in the most prosperous period in human history. Poverty, illness and ignorance are
receding all over the world, owing in large part to the development of economic freedom.
In 2020, the ideals of economic freedom that driven this historic change are again calculated in
the Economic Freedom Index. The Index covers 12 freedoms – from property rights to financial
freedom – in 186 countries.
From the report we found that Hong Kong is free, Macau is mostly free, Bhutan Kyrgyzstan
moderately free country. Moreover, Kazakhstan, Nepal, Bhutan, Laos and Mongolia mostly unfree
country about economic freedom. Hong Kong and Macau has different perspective from other
countries.
Economic freedom is the inherent right of every human being to manage his or her own labor
and land. In an economically free society, individuals are free to work, create, consume, and spend
in whatever way they please. Economic independence would bring greater prosperity. The
Economic Freedom Index demonstrates the positive relationship between economic freedom and
a number of positive social and economic objectives.
OBJECTIVE OF THE STUDY

By doing this term paper we will ready to know the view of 7 distinct nations “Economic Freedom
Index”. Then again, we will attempt to discover the center data from the nation’s economic status
with the goal that we can make the term paper more appropriate. There will be diverse section in
the term paper. This term paper will uncover the novel thoughts and data about the “Economic
Freedom Index”. Individuals will ready to make contrasts between 12 unique viewpoints. Day by
day generation is redesigning and “Economic Freedom Index” will be useful for us to realize the
casing work of this specific area.
ORIGINS OF THE TERM PAPER

The term paper analysis on “Economic Freedom Index” has been prepared on google forms. Real
life does not go all the time like the theories and practical. World is very critical and diverse. To
understand the theoretical aspects of a subject, to understand the practical situation, problems,
policies and implications of the theories, this term paper emphasizes on preparing an economic
8
perception, which is the outcome of an integrated process of making future plan for managing
different economical functions. In order to prepare the individual perception, it was necessary to
work on different countries to know their policy and procedure about freedom index. General
diversity is the main stream of this term paper. We have tried to prepare this term paper in such a
way that it reflects the total procedures and in-depth analysis of their perception.
METHODOLOGY
The type of methods used in this term paper is mainly of an analytical and theoretical nature.
Both primary and secondary data analysis were selected as the basic research method.
Primary data collection:

1. lectures given on the topics in the classroom
2. Discussion with group members about their collected data’s.
3. Research online data.
4. Shared practical knowledge of our faculty.
5. Online conversation with the faculty.
Secondary data collection:

1. Majority of the secondary data was obtained from the websites.
2. Published term papers and various term paper magazines by economic portals.
3. Different publications on different Newspaper.
Related files, books, study materials provided by our honorable faculty.
CONSTRAINTS OF THE TERM PAPER

We had confronted numerous obstructions while setting up the term paper. Data’s were not
sufficient to give a depth analysis. There was absence of adequate essential and auxiliary
information of all 7 countries. Online resources might vary in this group term paper. As we all
know that none of these countries will reveal their accurate data’s. So, in this case it was quite
difficult for us to prepare a depth analysis of all 7 countries “Economic Freedom Index”. During
this pandemic it was quite impossible to meet an expertise to discuss about this subject.
9
KAZAKHSTAN
Rule of Law:
Despite the fact that the law ensures private property rights, those rights are restricted by and by
administrative obstacles and the excessive impact of politically associated and affluent elites. The
legal executive is compliant to the presidential branch. The president straightforwardly designates
judges, making them vulnerable to political impact. Debasement is an issue all through the legal
framework and is likewise far reaching at all degrees of government.
There are 3 different segments in ‘Rule of Law’. All of them are discussed below briefly:
Property Rights:
Year Kazakhstan
2010 30
2011 35
2012 40
2013 35
2014 30
2015 25
2016 30
2017 56.1
2018 56
2019 59.3
10
KAZAKHSTAN PROPERTY RIGHTS
70
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10
As you can see that from 2010 to 2016 Property Rights of Kazakhstan was below 45 percent. It
starts increasing from 2017 and the number was impressive. In 2017 and 2018 it was around 56
percent. Last year it hits 59.3 percent which is the highest till now.
Judicial Effectiveness:
Year Kazakhstan
2010 0
2011 0
2012 0
2013 0
2014 0
2015 0
2016 0
2017 56.5
2018 58.1
2019 56.1
11
KAZAKHSTAN JUDICIAL
EFFECTIVENESS
70
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10
Here we can see that from 2010 to 2016 their percentage rate is nil. It starts moving from 2017
with 56.5 percent. 2018 was the highest amount of percentage they have till now. 2019 is their
lowest percent.
Government Integrity:
Year Kazakhstan
2010 22
2011 27
2012 29
2013 27
2014 25.7
2015 26
2016 29
2017 38
2018 44.6
2019 40.3
12
KAZAKHSTAN GOVERNMENT
INTEGRITY
50
45
40
35
30
25
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10
From 2010 to 2017 the percentage rate of ‘Government Integrity’ was below 40. The lowest
percentage was recorded in 2010. In 2018 it was the highest percentage, around 44.6 percent but
in the very next year it was again down wards.
Government Size:
The level individual annual tax rate is 10%, and the standard corporate assessment rate is 20%.
The general taxation rate rises to 16.4 percent of absolute homegrown pay. Government spending
has added up to 22 percent of the nation's yield (GDP) in the course of recent years, and spending
shortfalls have arrived at the midpoint of 3.1 percent of GDP. Public obligation is identical to 21.9
percent of GDP.
Here we also have 3 different segments and all of them are discussed below:
13
Tax Burden:
Year Kazakhstan
2010 87.9
2011 87.3
2012 90.4
2013 93.2
2014 92.9
2015 93.2
2016 93
2017 93.3
2018 92.6
2019 93.4
KAZAKHSTAN TAX BURDEN

94
93
92
91
90
89
88
87
86
85
84
1 2 3 4 5 6 7 8 9 10
Tax Burden is one of the most noticeable section in Kazakhstan’s economic index. It was always
up ward sloping. In 2019 they have recorded 93.4 percent tax burden which is the highest one. On
the other hand, 2011 was their lowest one with 87.3 percentage rate. From 2012 it never drops
down to below 90 percent.
14
Government Spending:
Year Kazakhstan
2010 82.1
2011 78.5
2012 83.4
2013 84.5
2014 85
2015 85
2016 87.7
2017 85.7
2018 85.3
2019 83.7
KAZAKHSTAN GOVERNMENT
SPENDING
90
88
86
84
82
80
78
76
74
72
1 2 3 4 5 6 7 8 9 10
Here the percentage rate of Kazakhstan Government Spending year 2010 to 2019 was below 90
percent. The highest number of percentages was recorded in 2016, around 87.7 percent. The
lowest one was recorded in 2011. The percentage rate was 78.5.
15
Fiscal Health:
Year Kazakhstan
2010 0
2011 0
2012 0
2013 0
2014 0
2015 0
2016 0
2017 98.9
2018 87.3
2019 41
KAZAKHSTAN FISCAL HEALTH

120
100
80
60
40
20
0
1 2 3 4 5 6 7 8 9 10
From 2010 to 2016 the percentage rate was nil. But in 2017 it almost touches the 100 percent. In
2017 Fiscal Heath rate was 98.9 percent. But from 2018 it starts to fall. 2019 was the lowest,
percentage rate was 41.
16
Regulatory Efficiency:
Kazakhstan has made it simpler to begin a business. Exchange across fringes has been encouraged,
and a traditions regulatory charge has been cut. Requirement of agreements has gotten more
straightforward. Endeavors to eliminate regulatory boundaries have been respectably effective. In
2019, the public authority expanded subsidies for farming and energy and kept a wide scope of
different appropriations even with more fragile monetary execution.
3 different segments of regulatory efficiency are given below,
Business Freedom:
Year Kazakhstan
2010 73.5
2011 74.3
2012 72.9
2013 71.8
2014 74.4
2015 73.7
2016 72.3
2017 74.5
2018 74.3
2019 73.9
17
KAZAKHSTAN BUSINESS FREEDOM
75
74.5
74
73.5
73
72.5
72
71.5
71
70.5
70
1 2 3 4 5 6 7 8 9 10
In business freedom there was no consistency in Kazakhstan. In 2013 they had the lowest
percentage rate which was around 71.8. In 2017 they had the highest percentage rate. Around 74.5
percent was recorded in 2017.
Labor Freedom:
Year Kazakhstan
2010 83.1
2011 88.4
2012 88.7
2013 88.4
2014 86.7
2015 87
2016 82.7
2017 82.5
2018 86.8
2019 86.2
18
KAZAKHSTAN LABOR FREEDOM
90
89
88
87
86
85
84
83
82
81
80
79
1 2 3 4 5 6 7 8 9 10
Labor freedom was above 80 percent from 2010. In 2012 labor freedom percentage was around
88.7 percent. 2017 was the lowest year. Last year they had 86.2 percent in labor freedom.
Monetary Freedom:
Year Kazakhstan
2010 65.6
2011 69.9
2012 71.8
2013 72.2
2014 74.4
2015 74.6
2016 74
2017 73.9
2018 68.2
2019 70.9
19
KAZAKHSTAN MONETARY FREEDOM
76
74
72
70
68
66
64
62
60
1 2 3 4 5 6 7 8 9 10
In 2016 Kazakhstan had their highest monetary freedom. It was around 74 percent. On the other
hand, in 2010 they had their lowest percentage which was around 65.6 percent.
20
Open Markets:
The total value of exports and imports of goods and services equals 60.6 percent of GDP. The
average applied tariff rate is 2.4 percent, and 35 nontariff measures are in force. Foreign investment
is officially welcome, but unclear legal codes and inconsistent application of regulations are
deterrents. Troubled banks have been recapitalized, and the financial sector is stable. Capital
markets remain underdeveloped.
There are also 3 different parts available.
Trade Freedom:
Year Kazakhstan
2010 85.9
2011 80.9
2012 79.6
2013 78.2
2014 78.2
2015 79
2016 77.4
2017 78.5
2018 75.6
2019 80
21
KAZAKHSTAN TRADE FREEDOM
88
86
84
82
80
78
76
74
72
70
1 2 3 4 5 6 7 8 9 10
In 2010 Trade Freedom percentage was recorded the highest rate. It was around 85.9 percent. In
2018 trade freedom percentage was 75.6 percent which was the lowest one.
Investment Freedom:
Year Kazakhstan
2010 30
2011 30
2012 30
2013 30
2014 40
2015 40
2016 40
2017 40
2018 50
2019 50
22
KAZAKHSTAN INVESTMENT
FREEDOM
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10
Kazakhstan Investment Freedom had a very identical consistency. From 2010 to 2013 it was 30
percent, 2014 to 2017 around 40 percent. In 2018 and 2019 it was 50 percent. It increases over the
years.
Financial Freedom:
Year Kazakhstan
2010 50
2011 50
2012 50
2013 50
2014 50
2015 50
2016 50
2017 50
2018 50
2019 50
23
KAZAKHSTAN FINANCIAL FREEDOM
60
50
40
30
20
10
0
1 2 3 4 5 6 7 8 9 10
From 2010 to 2019 Financial Freedom remain same.
24
Hong Kong
Yea Ove Prope Judicial Govt Tax Govt. Fisc Busi Labo Mone Trad Invest Finan
r rall rty Effectiv . Bur Spend al ness r tary e ment cial
Scor Right eness Integ den ing Hea Free Free Freed Free Freedo Freed
e s rity (%) lth dom dom om dom m om
201 89.7 90.0 - 78 13.8 93.7 - 98.7 87.4 83.1 90.0 90.0 90.0
0
201 89.7 90.0 - 79.5 14.2 89.6 - 98.7 86.2 87.1 90.0 90.0 90.0
1
201 89.9 90.0 - 82.8 14.4 91.0 - 98.9 86.5 85.8 90.0 90.0 90.0
2
201 89.3 90.0 - 81.2 14.5 88.9 - 98.9 86.2 82.1 90.0 90.0 90.0
3
201 90.1 90.0 - 79.6 14.2 89.7 - 98.9 95.5 82.0 90.0 90.0 90.0
4
201 89.6 90.0 - 79.9 13.7 89.7 - 100 95.9 81.8 90.0 90.0 90.0
5
201 88.6 90.0 - 80.1 15.7 90.7 - 97.4 89.0 81.8 90.0 90.0 90.0
6
201 89.8 93.7 84 80.3 14.4 90.0 100 94.6 89.1 83.2 90.0 90.0 90.0
7
201 90.2 92.5 84.3 82.8 13.9 90.2 100 96.3 89.4 84.3 90.0 90.0 90.0
8
201 90.2 93.3 75.3 83.8 14 90.3 100 96.4 89.2 86.4 95.0 90.0 90.0
9
202 89.1 93.6 76.8 84.7 14.1 90.3 99.9 96.2 89.1 80.7 95.0 80.0 90.0
0
Here, we can see the changes in the economic freedom index of Hong Kong from 2010 to 2020.
If we compare the overall score, 2018-19 was the highest achieving score and 2016 was the lowest
25
achieving score for them. In the earlier, property rights were almost same in every year, but in the
last few years we can see some differences. The highest Judicial Effectiveness that Hong Kong
ever faced was in 2018, and the lowest in 2016. Government Integrity wasn’t constant, mostly in
current year. The percentage of Tax Burden is quite good and the highest was in 2016. Government
Spending was more in 2010, and differences between other years isn’t that much. Fiscal Health
was also quite good and it changed nearly, and it faced best time from 2017-19. Business Freedom
of Hong Kong is so good, and past records also indicate the same. As same as Business Freedom,
Labor Freedom is also good in Hong Kong. Monetary Freedom was also well, but Trade,
Investment and Financial Freedom were same in the earlier years. In the last few years, it has
changed for the few.
26
Macau
Yea Ove Prope Judicial Govt Tax Govt. Fisc Busi Labo Mone Trad Invest Finan
r rall rty Effectiv . Bur Spend al ness r tary e ment cial
Scor Right eness Integ den ing Hea Free Free Freed Free Freedo Freed
e s rity (%) lth dom dom om dom m om
201 72.5 60.0 - 39.3 32.1 95.2 - 60.0 60.0 77.5 90.0 80.0 70.0
0
201 73.1 60.0 - 39.0 31.7 93.3 - 60.0 60.0 83.4 90.0 85.0 70.0
1
201 71.8 60.0 - 38.7 32.5 88.1 - 60.0 55.0 84.2 90.0 85.0 70.0
2
201 71.7 60.0 - 38.4 31.4 91.5 - 60.0 55.0 81.3 90.0 85.0 70.0
3
201 71.3 60.0 - 38.2 34.5 91.7 - 60.0 55.0 79.8 90.0 85.0 70.0
4
201 70.3 60.0 - 37.6 34.0 91.8 - 60.0 50.0 74.9 90.0 85.0 70.0
5
201 70.1 60.0 - 37.3 32.0 93.9 - 60.0 50.0 69.6 90.0 85.0 70.0
6
201 70.7 60.0 60.0 37.1 33.2 92.8 100 60.0 50.0 70.8 90.0 85.0 70.0
7
201 70.9 60.0 60.0 36.4 28.3 91.0 100 60.0 50.0 73.6 90.0 85.0 70.0
8
201 71.0 60.0 60.0 33.2 25.0 90.4 100 60.0 50.0 76.5 90.0 85.0 70.0
9
202 70.3 60.0 60.0 33.5 28.9 89.8 99.9 60.0 50.0 70.0 90.0 85.0 70.0
0
Here, we can see the changes in the economic index of Macau from 2010 to 2020. In this period,
the highest overall score of Macau was in 2011, it was 73.1. There is no change in Property rights,
27
which constantly 60. Judicial effectiveness changed rationally in earlier years, but in recent years,
it remains constant. There have no major differences in Government Integrity, and the highest
score is 39.3, which was scored in 2010. The highest percentage of the Tax burden was in 2014,
which was 34.5%. Government spending also went ups and down rationally, and the most spending
was in 2010, and the lowest was in 2012. The highest number of Fiscal health spent in 2017, 2018,
and 2019, those were 100. In 10 years, Business freedom remains the same in Macau, it is 60.
Labor freedom faced three changes in those years, in the first two years, it was 60. For the next
three years, it was 55. And for the last six years, it is 50. Monetary freedom changed differently,
the highest score was in 2012 and the lowest was in 2016. But, Trade freedom, Investment
freedom, and financial freedom remain the same in those 10 years, and the numbers are 90, 85,
and 70.
28
MONGOLIA
Property Rights
Property Rights
60
50 51.3 51 50.3
48.2
40
30 30 30 30 30 30 30 30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
The Mongolian Constitution and subsequent land laws recognize Mongolian citizens’ rights to
private land ownership. Their property rights were constant for first six years which was 30%,
after that in 2017 it starts increasing sharply to 51.3%. from then there is ups and down in their
property rights. Next year its decreased .3% then 2.8% after that in 2020 it increases 2.1%. Overall,
they are in very good condition.
Judicial Effectiveness
35
30
30.9
25 28.4
20 23.8 23
15
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
29
Effective judicial systems protect the rights of all citizens against infringement of the law by
others. Here we have info from 2017 to 2020. Their judicial effectiveness is very poor. And it is
slowly going downwards. In 2018 it was getting better but after that it get down and down.
Government Integrity
45
40 39
38 36.8 36.9
35 34.8
30 30 29.8
27 27 27 28.2
25
20
15
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Government integrity refers that the government must fulfill its commitment to the public, and
keep its word as an agent in the political principal-agent relationship. We can see from the chart
that Mongolia Government integrity is almost same for last 10 years. There is little bit ups and
down but mostly remain almost constant. In 2015 and 2016 they get maximum 38% and 39% but
then again decreased to its previous.
So, we can say that Mongolia has a poor Government integrity.
30
Tax Burden
Tax Burden
90
88
88.5 88.4 88.5
86 87.1 87.4
84
84.4
83.9
82 83.3
82.5
81.9 81.8
80
78
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
We can see Mongolia has a very mixed up tax burden. In 2012 they have huge tax burden but thy
manage put it little bit back but for last few years it still very high. However, in 2020 in get down
2%. Overall Mongolia has a huge tax burden.
Government Spending
Government Spendings
70
66.6
62.8 62.6 63.1
60
56.7 57.6 57.1
50 49.6 51.5
40 39.1
35.6
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
How much the government spends for the country. If we see the graph, we can see from 2010 to
2015 there was many ups and down about this spending.it increase in 2012 and 2013 then decrease
in 2014 and 2015. But after that it start increasing. The govt spend improve each year. Moreover
in 2020 the govt spending reach its maximum 66.6%.
31
Fiscal Health
Fiscal Health
10
9
8
7
6
5
4
3
2
1
0
2008 2010 2012 2014 2016 2018 2020 2022
Mongolia is doing great with their fiscal health, if we see the graph, we can understand that. In
2017 they have only 0.1 fiscal health. Which increase sharply to 3.8% in 2018 after that in 2019
it become 6.2%. Finally, in 2020 the fiscal health move to 9.2% which is till now their best.
Business Freedom
Business Freedom
74
71.8
72
70.4
70 69
68.2
67.7 67.7 67.7
68 67.2 67
66
66
63.6
64
62
60
58
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mongolia has a good business freedom in past but now it getting down every year. If we see the
graph, we can see it increasing from 2010 to 2014. Moreover in 2014 it has the highest 71.8% but
32
after that it start declining. In 2015 it sharply declines to 68.2% after that each year it decline some
amount. Now in 2020 it has 63.6% business freedom.
Labor Freedom
Labor Freedom
84
82.7
82
81.1
80
79.2
78 77.9
76.6
76 75.9 75.6 75.7
74.5 75
74 74.1
72
70
68
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Labor freedom is very important for a country like Mongolia. But their labor freedom is not that
good condition. From 2012 to 2015 it was increasing quite gradually but after that it start declining.
In 2015 their labor freedom was 82.7% but in 2020 it comes down to 75.7%.
Monetary Freedom
Monetary Freedom
82
80
78 79.1
76 77.8
74 75.6
74.3 74.2
72 73.6
72.4 72.3
70
68 69.2
66 68
66.5
64
62
60
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
33
Mongolia monetary freedom has many ups and down in this last 10 years. They have 66.55 in
2010 after that it increase sharply to 73.6% in 2011. Then in 2012 it increases gradually 74.5%
and in 2013 74.3%. But after 2013 with 75.6% it starts declining gradually till 2016. After 2017
again it rising gradually but at the end in 2020 now it is 74.2%.
Trade Freedom
Trade Freedom
82
80 79.8 79.8 79.8 79.8
78
76 75.9 75.8
74.7 74.8 74.9
74 74
72
70 70
68
66
64
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
If a country doesn’t have trade freedom it is impossible to do international business there.

Mongolia is type of country where high trade freedom is necessary. We can guess it by seeing the
chart. Their trade freedom is 79.8% in 2010n and it was constant till 2013. After that there is a
sharp decreased till 2016 with 70%. In 2020 now the trade freedom is 74%.
Investment freedom
Investment freedom
51
50
49 50 50 50 50 50 50 50 50
48
47
46
45
44 45 45 45
43
42
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
34
Investment freedom is very important for un-development countries. Mongolia has quite good
investment but we can they have same for a long time. Except 2016,2017 and 2018 Mongolia has
always same investment freedom 50%. In 2016 to 2018 there was a decline to 45%. After three
years it increases to 50% again.
Financial Freedom
Financial freedom
70
60
60 60 60 60 60 60 60 60 60 60 60
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
If a country doesn’t have the financial freedom citizen can spend or invest anywhere. Mongolia
has same financial freedom for last 10 years. We can see in the graph that from 2010 to 2020 they
have 60% financial freedom, neither they made any improvement or any decline in this sector for
past ten years.
35
LAOS
Property Rights
Property Rights
45
42.5
40 38.8
35 35.3 34.1
30
25
20 20
15 15 15 15 15 15 15
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
The Constitution grants that land belongs to the Lao people as “national heritage,” and devolves
the role to the state of deciding how it is used, transferred and inherited. From the graph we can
see Laos is doing good in property right. From 2016 to 2017 there is huge improvement in
theoretical and legal ownership of resources. Before that for last 5years they were very constant.
In 2018 there was a little bit downward but we can see the upward in each year. Which is good for
Laos.
44
42
42.5
41.4
40
38
37.3
36
35.9
34
32
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
36
We know the higher effectiveness is good. Here we have info from 2017 to 2020. At 2017 it was
very low but after that it increasing. In 2018 judicial effectiveness increase to 41.4 and in 2019 it
moves to 42.5. but in 2020 it again falls back and become 37.3%. So, its visible that their judicial
effectiveness is not that good.
40
35
32.6 33.1 33.5
32
30
25 26 25
21 22
20 20 20
18.6
15
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
We know government integrity define the fulfil of its commitment, so the higher the value is means
the govt fulfil the commitment. Here we can see from 2010 to 2013 it was very much constant.
And from 2016 Laos improve a lot about their commitment. They are slowly improving although
there is little bit decrease in 2020.
Tax Burden
Tax Burden
88
86 86.6 86.7 86.9 87

86.2 86.1 86.1
84
82
80
80.1 79.8 79.7
78 79.2
76
74
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
37
Tax burden is responsibility for paying a greater portion of taxes. Laos tax burden is getting
high every year. From 2010 to 2013 the burden was comparatively low then 2014 to 2020. It
increasing every year.
Government Spending
Government Spendings
100
90 90.3 90.1
86.6 85.8 86.7 86.8 85.3 86.6
80 79.3
73.8 76.6
70
60
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
For Laos the government spending is very much constant. There was a downward in 2016 to 2019
but overall it almost remains same for last 10 years. It was 90% in 2010 and getting downward
every year and get lowest in 2016 after that it start getting up from that. Lastly in 2020 the
government spending become 86.6%.
Fiscal health
Fiscal Health
70
60
50
40
30
20
10
0
2008 2010 2012 2014 2016 2018 2020 2022
38
Here we have info from 2017 to 2020 about Laos Fiscal Health. In 2017 it was 61.2% after that it
decrease to 60.2% in 2018. Then again it increases to 66.5% in 2019 but in 2020 it gets its lowest
53.3%.
Business Freedom
Business Freedom
70 66.3 65.4
61.6 62.1 60.7
59.4 58.8 59.5 60.1
60 55.9 54.3
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Business freedom is very important for a country. Here we can Laos is pretty much same for last
10 years. In 2010 their business freedom was 59.4% which decrease in 2011 and after that increase
slowly 2012 to 2013 .in 2017 it has the highest freedom abut after this it starts declining and now
in 2020 it is 54.3%.
39
Labor freedom
Labor Freedom
70
60 58.9 60.1 58.6

55.7 57.1 57.6
54.7 54.9 54.4 55
50 49.9
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Labor freedom refers to the freedom of labor of works in work around the world. Laos is constantly
good in labor freedom. They have almost same percentage from 2010 to 2020. If we see the graph,
we can realize there is a little up and down but overall the its very much constant.
Monetary freedom
Monetary Freedom
82
80
80.4
78
78.5
76 76.9 76.8
74 75.5 76
74.5
72 73.5 73
70 71.3
68 70.2
66
64
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Monetary freedom is very important for business. Laos has a good monetary freedom. But they
should be much better. In 2011 they have highest freedom 80.4 but after that it start declining and
2017 it reaches its lowest. After that it gradually it starts increasing but in 2020 it declines.
now their monetary freedom is 76.8%.
40
Trade Freedom
Trade Freedom
90
80 81.8 82
74.6
70 68.4 68.4
60 58.7 58.7 58.6 58.6 58.6 56.6
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Laos need good trade freedom to expand their business. Here we can see at the beginning of 2010
they have very constant trade freedom. From 2012 to 2016 it was from 58.7% to 58.6%. after that
in 2017 there is a sharp increase to 74.6% then again sharp decline to 56.6%. Again in 2019 there
is a sharp increase to 81.8%. Now in 2020 they have 82% trade freedom.
Investment Freedom
Investment freedom
40
35
30 35 35 35 35 35 35
25 30 30
20 25 25 25
15
10
5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
More investment freedom makes more company more development. From the graph we can see
Laos have low investment freedom. In 2010 it was 25% we stay same till 2012. Then there was an
ups and downs till 2015. After that till 2020 it remains 35% constant. They are having same
investment freedom for last five years.
41
Financial Freedom
Financial Freedom
25
20 20 20 20 20 20 20 20 20 20 20 20
15
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Laos is maintaining same financial freedom for past ten years. We can see the graph that in 2010
their financial freedom was 20% and it remain constant till 2020. Now in 2020 still they have 20%
financial freedom. Although they have a poor financial freedom but they make it to stay same not
declining.
42
Bhutan
Bhutan’s Rule of Law:
Year Property Rights Judicial Government

Effectiveness Integrity
2010 60 - 52
2011 60 - 50
2012 60 - 57
2013 60 - 57
2014 60 - 58.8
2015 60 - 63
2016 60 - 65
2017 60.1 50.7 44.7
2018 60.9 51.6 50.9
2019 62.5 55.4 54.5
2020 69.9 46.4 51.2
80
70 69.9
65
63 62.5
60 60 60 60 60 60 60 60 60.1 60.9
57 57 58.8
55.4
54.5
50 52 50.7 51.6
50.9 51.2
50
44.7 46.4
40
30
20
10
0 0 0 0 0 0 0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Property Rights Judicial Effectiveness Government Integrity
Figure 1: Rule of law of Bhutan
43
Property Rights: From the graph, we can see that it always been in a constant rate, after 2017
it started to increase.
Judicial Effectiveness: Bhutan’s judicial effectiveness started to increase since 2017.

However, 2020 it has decreased and went to 46.4.
From the graph, we can see that from 2012 it has started rapidly. However, in 2017 it has fallen
to the lowest in the decade though it has risen again but in 2020 it started to decrease again.
Government Size of Bhutan:

Year Tax Burden Government Fiscal Health
Spending
2010 84.1 58.3 -
2011 83.9 64.1 -
2012 83.8 55.3 -
2013 82.7 38.8 -
2014 82.9 57.2 -
2015 82.6 60.1 -
2016 83.1 67.5 -
2017 83.1 73.6 61.7
2018 83 72.2 80.0
2019 83 71.6 77.6
2020 82.9 71.1 74.8
44
Tax Burden Government Spending Fiscal Health
90
84.1 83.9 83.8 82.7 82.9 82.6 83.1 83.1 83 83 82.9
80 80
77.6
73.6 74.8
70 72.2 71.6 71.1
67.5
64.1
60 60.1 61.7
58.3 57.2
55.3
50
40 38.8
30
20
10
0 0 0 0 0 0 0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 2: Government Size of Bhutan
Tax Burden:
From the graph, we can see that tax burden rate is always been in quite constant rate, but
gradually decrease a little percentage.
Graph shows that, in 2013 it has fallen to the lowest in the decade though it has risen again and
ended up having the highest percentage so far in Bhutan.
Fiscal health:
From the graph, 2010 to 2016 was constant in terms of fiscal health index in Bhutan but it get
boosted in 2017 and ended up in good percentage in 2020.
45
Regulatory Efficiency of Bhutan:
Year Business Freedom Labor Freedom Monetary Freedom
2010 60.5 85.1 73.4
2011 59.8 84.7 71.8
2012 59.7 78.6 72.6
2013 60.5 84.4 67.3
2014 59.4 83.6 65.8
2015 61.9 81.1 66.0
2016 65.2 77.6 66.9
2017 72.6 77.6 67.1
2018 72.5 75.7 70.5
2019 68.7 79.5 72.6
2020 68.2 79.4 71.6
Business Freedom Labor Freedom Monetary Freedom
90
85.1 84.7 84.4 83.6
80 81.1 79.5 79.4
78.6 77.6 77.6 75.7
73.4 71.8 72.6 72.6 72.5 72.6 71.6
70 70.5 68.7
67.3 66.9 67.1 68.2
65.8 66 65.2
60 60.5 59.8 60.5 61.9
59.7 59.4
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 3: Regulatory Efficiency of Bhutan
46
Business Freedom:
Numbers are quite constant till 2015, after that it was improved a bit and rises gradually till
2020.
Labor freedom:
Graph shows that, it decreases gradually a little portion of it within the time frame of 2010 to
2020.
Monetary Freedom:
It was in a decent position in 2010 in the middle of 2010-2020-time frame it got declined a bit.
Open Markets of Bhutan:
Year Trade Freedom Investment Freedom Financial Freedom

2010 52 15 30
2011 52 20 30
2012 49.5 20 30
2013 49.5 20 30
2014 49.4 20 30
2015 49.4 20 30
2016 60 20 30
2017 60 20 30
2018 74.4 20 30
2019 79.4 20 30
2020 79.4 20 30
47
Trade Freedom Investment Freedom Financial Freedom
90
80 79.4 79.4
74.4
70
60 60 60
50 52 52
49.5 49.5 49.4 49.4
40
30 30 30 30 30 30 30 30 30 30 30 30
20 20 20 20 20 20 20 20 20 20 20
15
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 4: Open Markets of Bhutan

Trade Freedom:
Above graph clearly shows that, trade freedom of Bhutan was in a moderate
position in 2010 but it has risen after 2015 and ended up in a decent percentage.
Investment Freedom:
It is always in lower margin for Bhutan. Started with 15 in 2010 and ended up with
20 in a consistent manner till 2020.
Financial Freedom:
From the graph, we can see that it always been in a constant rate from 2010 to 2020
48
Nepal
Nepal’s Rule of Law:
Year Property Rights Judicial Effectiveness Government
Integrity
2010 35 - 27
2011 30 - 23
2012 30 - 22
2013 30 - 22
2014 30 - 21.3
2015 30 - 31
2016 30 - 29
2017 37.3 32 26.7
2018 37.5 36.2 24.6
2019 39.2 34.7 26.2
2020 40.7 32 31.5
Property Rights Judicial Effectiveness Government Integrity
45
40 40.7
39.2
37.3 37.5
35 36.2
35 34.7
31 32 32
31.5
30 30 30 30 30 30 30
29
27 26.7 26.2
25 24.6
23 22 22 21.3
20
15
10
0 0 0 0 0 0 0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 1: Rule of law of Nepal
49
Property rights: From 2011 to 2017 it remains containing 2017 it has started to increase.
Judicial Effectiveness:
The judicial effectiveness has always been volatile and in 2017 it has increased. However, from
2018, it has started to fall.
From 2011 it started to decrease until 2016.Again, from 2017 it has fallen and again from 2019 it
is increasing.
Government Size of Nepal:

Year Tax Burden Government Fiscal Health
Spending
2010 86.6 92.3 -
2011 86.4 88.4 -
2012 86.0 88.1 -
2013 85.8 89.2 -
2014 85.9 89.6 -
2015 85.6 88.9 -
2016 85.1 91.1 -
2017 84.9 89.5 98.4
2018 84.2 87.6 98.5
2019 84.0 83.7 98.5
2020 83.4 77.9 98.1
50
Tax Burden Government Spending Fiscal Health
120
100 98.4 98.5 98.5 98.1

92.3 89.6 91.1 89.5
86.6 88.4
86.4 88.1 89.2 88.9 87.6
86 85.8 85.9 85.6 85.1 84.9 84.2 84
83.7 83.4
80 77.9
60
40
20
0 0 0 0 0 0 0 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 2: Government Size of Nepal
Tax Burden:
Graph shows that it was in pretty much close rate in this index from 2010-2020.
In 2010, numbers were good enough but later on, it got declined a lot till 2020.
Fiscal Health:
There is a boom in year 2016 in the index of fiscal health for Nepal and after that it was constant.
51
Regulatory Efficiency of Nepal:
Business Freedom Labor Freedom Monetary Freedom
90
80
77.8 76.3
73.8 74.9 75.1
70 70.5 70.8 72.2 71.2
69.4
65.7 64.9 64.6 65.8
64.6
60 61.8 61.6
59.4 59.2 58.5
57.2
53.6 53.7
50
47.3 47.6 47.9
44.7 44.3 45.4 44.3 43.8 44.3 43.5
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Year Business Freedom Labor Freedom Monetary Freedom

2010 59.4 44.7 77.8
2011 59.2 44.3 73.8
2012 53.6 45.4 74.9
2013 57.2 44.3 75.1
2014 58.5 43.8 76.3
2015 65.7 44.3 70.5
2016 64.9 47.3 70.8
2017 64.6 47.6 72.2
2018 64.6 43.5 65.8
2019 61.8 47.9 69.4
2020 61.6 53.7 71.2
Figure 3: Regulatory Efficiency of Nepal
52
Business Freedom:
It was in a mid-range index from 2010 but upgraded slowly till 2020.
Labor Freedom:
Graph shows that, it is in constant rate till 2018 and after that it has risen quite comprehensively.
Monetary Freedom:
This graph of Regulatory Efficiency of Nepal indicates that, Nepal loses a small portion of its
monetary freedom from 2010 to 2020
Open Markets of Nepal:

Year Trade Freedom Investment Freedom Financial Freedom
2010 58.8 15 30
2011 61.4 5 30
2012 61.5 10 30
2013 60.8 10 30
2014 61 5 30
2015 61.8 5 30
2016 55.6 5 30
2017 68.1 10 30
2018 66.6 10 30
2019 60.4 10 30
2020 60.4 10 30
53
Trade Freedom Investment Freedom Financial Freedom
80
70
68.1 66.6
60 61.4 61.5 60.8 61 61.8 60.4 60.4
58.8
55.6
50
40
30 30 30 30 30 30 30 30 30 30 30 30
20
15
10 10 10 10 10 10 10
5 5 5 5
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 4: Open Markets of Nepal

Trade Freedom:
This graph shows that Nepal got a good number of trade freedom in 2017 but got
declined till 2020.
Investment Freedom:
Investment freedom is quite low and got declined even more in 2011 and then ended up
in lower range of this index.
Financial Freedom:
This graph of Open Markets of Nepal clearly indicating that, the financial freedom is in
constant rate from 2010 to 2020.
Conclusion:
From above analysis we can assume that how the world economy is changing. It seems like that
the rich countries are getting more rich and poor countries are struggling a lot to discharge their
burdens. But some of the countries have done some great job in their GDP which is a significant
move by them. Those countries are now the biggest controversial countries. Other rich has so many
interests on those developing countries. Surely, they will invest on there. In the mean time poor
or, under development countries will also get priority eventually.
54

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Term-Paper

On “Economic Freedom Index”.

ITB 301 Section: 02

Date: December 31, 2020.

December 31, 2020,

East West University,

OBJECTIVE OF THE STUDY

ORIGINS OF THE TERM PAPER

Primary data collection:

Secondary data collection:

CONSTRAINTS OF THE TERM PAPER

KAZAKHSTAN TAX BURDEN

KAZAKHSTAN FISCAL HEALTH

3 different segments of regulatory efficiency are given below,

There are also 3 different parts available.

From 2010 to 2019 Financial Freedom remain same.

So, we can say that Mongolia has a poor Government integrity.

If a country doesn’t have trade freedom it is impossible to do international business there.

86 86.6 86.7 86.9 87

60 58.9 60.1 58.6

Year Property Rights Judicial Government

Property Rights Judicial Effectiveness Government Integrity

Figure 1: Rule of law of Bhutan

Judicial Effectiveness: Bhutan’s judicial effectiveness started to increase since 2017.

Government Size of Bhutan:

Figure 2: Government Size of Bhutan

Business Freedom Labor Freedom Monetary Freedom

Figure 3: Regulatory Efficiency of Bhutan

Open Markets of Bhutan:

Year Trade Freedom Investment Freedom Financial Freedom

Figure 4: Open Markets of Bhutan

Property Rights Judicial Effectiveness Government Integrity

Figure 1: Rule of law of Nepal

Government Size of Nepal:

100 98.4 98.5 98.5 98.1

Figure 2: Government Size of Nepal

Business Freedom Labor Freedom Monetary Freedom

Year Business Freedom Labor Freedom Monetary Freedom

Open Markets of Nepal:

Figure 4: Open Markets of Nepal

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