Economic Freedom of the World 2013 & Nepal

-Surath Giri

What is Economic Freedom?
A situation where general people are free to: • Own things privately and securely. ( Private Property Rights) • To trade with others (Free trade) • Compete in markets (Easy entry, competition, easy exit, lack of cartels, syndicates and special privileges) • Buy what they want (Both local and foreign goods) • Earn a living in a job they choose or run business they want • Keep what they earn • To enter into contracts and have them enforced Economic Freedom is the measure of the degree of

free market economy a nation has.

Economic Freedom and Income

Economic Freedom and Growth

Economic Freedom and share of the poorest 10%

Economic Freedom and income of the poorest 10%

Economic Freedom and life expectancy

Economic Freedom of the World Report
• Compiled by three prominent economists James Gwartney, Robert Lawson & Joshua Hall for Fraser Institute, a think tank based in Canada • Uses objective components and secondary data only • Major Components:
• 1 Size of Government; 2 Legal System and Property Rights; 3 Sound Money; 4 Freedom to Trade Internationally; 5 Regulation.

• Data sources:
• International Monetary Fund, World Bank, and World Economic Forum and
Government provided data wherever available

• Prepared annually using data of two years back
• Samriddhi, The Prosperity Foundation is the official partner from Nepal

Economic Freedom of the World 2013
• Nine new countries have been added to the index (Brunei Darusala, Cape Verde, The Gambia, Suriname, Swaziland, Tajikistan, Timor-leste, Lebanon, Yemen, ) • Overall economic freedom of the world has increased (6.87 from 6.83 in 2010)

World’s Freest Economies: 2013
Position 1st 2nd 3rd Country/Economy Hong Kong Singapore New Zealand Score 8.97 8.73 8.49 Remarks ----------------

5th 6th 7th

United Arab Emirates Mauritius Finland

8.07 8.01 7.98

-----Increased Increased Increased

9th 10th

Canada Australia

7.93 7.88

Decreased Decreased

World’s Least Free Economies: 2013
Position 143rd 144th 145th Country/Economy Algeria Congo, Dem. Republic Burundi Score 5.32 5.28 5.26 Remarks Slightly improved Slightly improved Worsened

147th 148th 149th

Central African Republic
Angola Chad Zimbabwe

5.17 4.98 4.59

Slightly improved Worsened Slightly improved

151st 152nd

Congo, Republic
Myanmar Venezuela

4.08 3.93

Worsened Worsened

Nepal’s Economic Freedom
• Unadjusted

– 125th out of 152 countries with a score of 6.19 out of 10
– Was 110th out of 144 countries last year with a score of 6.33 out of 10

• Chain-Linked
– 105th out of 152 countries studied with a score of 5.92 out of 10 – Was 105th out of 144 countries last year with a score of 5.90 out of 10

• Overall score and rank has decreased • Nepal is still among the Least Free Category of Economic
Freedom Index

Nepal’s Economic Freedom
• Size of government:
• Worsened from 8.34 to 7.6 (31st in the world)

• Legal structures and security of property rights:
• Improved from 3.85 to 4.2 (126th in the world)

• Access to sound money:
• Slightly improved from 6.26 to 6.3 (136th in the world)

• Freedom to trade internationally:
• Worsened from 6.74 to 6.4 (118th in the world)

• Regulation of credit, labor and business:
• Slightly improved from 6.47 to 6.5 (109th in the world)

Economic Freedom of South Asia and China
Country Sri Lanka India Pakistan Bangladesh China Nepal Maldives Bhutan Score 6.66 6.34 6.34 6.33 6.22 6.19 N/A N/A Rank 92nd 111th 111th 114th 123rd 125th N/A N/A Remarks Increased Same as before Same as before Decreased Decreased Decreased N/A N/A

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