Each year the Heritage Foundation and the Wall Street Journal compile a list of the top 10 countries with the freest economies in the world.
This year over 10 different categories of freedom were measured. Things like trade freedom, business freedom, investment freedom, property rights and so on.
The freer the economy the easier and better it is to do business in the corresponding country. It is no coincidence that the same countries in the top of the freest economies in the world list also serve on the top of charts like richest countries in the world and happiest countries.
To find the freest economy in the world 10 different categories were measured within each country. The maximum score was 100 points, meaning that a country with that score would be absolutely free all aspects. No one got the maximum score, but a few countries came close.
10. Chile – 77.2 points (from 100 maximum)
When hearing the name Chile, most people think it is a poor third world country. Not anymore it is!
Among with the rest of Latin American countries Chile used to be a place of poverty but thanks to the reforms in the last 3 decades it has transformed itself to be the freest economy in South America.
The cornerstone of Chile is its sound financial policy allowing for foreign investments to pour into the country. Chile has been keen to sign free trade agreements with countries all over the world.
In addition to its strong financial sector Chile is also the largest exporter of copper in the world.
9. Denmark – 77.9 points
In addition to being the happiest country in the world Denmark is a country with an extraordinarily strong financial sector. The banking crisis of 2008 and 2009 left the country unharmed, mainly because the government’s oversight of the banking industry is working exceptionally well. If the US had a financial oversight body working half as good, we wouldn’t have had the housing bubble that burst in 2008.
Denmark would be even higher in the list of the world’s freest economies if the government would pull back on its spending. The taxes are exceptionally high – some people have to give away 73% of everything they make! If that ain’t crazy, nothing is!
8. USA – 78,0 points
Compared to the year before, the US has lost quite a bit in the freeness of its economy. Because of the economic crisis that started in 2008 the government has decided to accept a number of financial and monetary regulations that have undermined the countries economic freedom.
The government has helped bail out a number of large banks, car manufacturers and other large companies but is itself allowing its budget to get more and more into deficit.
Some experts seem to agree that the US is heading into bankrupcy.
7. Canada – 80.4 points
Thanks to the declinel of USA, Canada is now the freest North-American economy. Its strengths include lack of corruption, financial freedom and property rights. Unlike the USA, Canada has a budget surplus.
It looks that instead of following the lead of USA, Canada is more closely following its European friends. Just like many countries in Europe, Canada has a great welfare program and many social programs intended to make the lives of their people better.
6. Switzerland – 81.1 points
Switzerland has earned its high place in the freest countries in the world list because of its legendary neutrality. The Swiss never pick sides – this has helped them to stay out of trouble and make the country a fortune.
During the World War 2, Switzerland was the only place where many people could deposit their gold and money. Because of the neutrality they could be sure that the money would be safe and they could withdraw it after the war ends. Capitalizing on the image of neutrality has made Switzerland one of the largest financial centers in the world.
5. Ireland – 81.3 ponts
Throughout the 1990s and the early 2000s Ireland benefited greatly from its flexibility and openness. In recent years one could say that the same openness is also to be partly blamed for the financial crisis currently in Ireland. The government is planning to buy up all the non-performing loans the banks have amassed throughout the last 2 decades.
4. New Zealand – 82.1 points
The successful regulatory environment supports people starting their own companies. The government has even decided to cut the corporate tax rate to help make the companies of New Zealand more profit. Business freedom in the country is the highest in the world – scoring 99.9 points out of 100.
3. Australia – 82.6 points
Canada is another country that ranks high in financial freedom, property rights, and freedom from corruption. The country is facing its 18th year of uninterrupted economic growth. Internationally Australia is a competitive producer of services, technologies, and high-value-added manufactured goods. Its export sector remains heavily focused on mining and agriculture.
Lately there has been some turmoil about Australia’s government using internet filtering to stop people seeing certain website. It is believed that if such actions continue, Australia will most probably fall in the list of the freest economies of the world.
2. Singapore – 86.1 points
This city state is the most advanced country in Asia. As a financial center Singapore was already used to growing its economy 6-8% per year until the financial crisis of 2008 hit the country. The country is so well run that instead of going into recession Singapore still managed to pull out from 2008 with a 1% economic growth.
Some other good things about Singapore is non existent corruption, extremely low taxes and one of the worlds most effective labor markets.
1. Hong Kong – 89.7 points
Hong Kong has held the position of the freest economy in the world for 15 years straight. Just like Singapore, this little island is one of the world’s largest financial centers. For those not knowing, Hong Kong is actually not a separate country but a part of the People’s Republic of China.
The reason Hong Kong can triumph the list of the freest economies in the world is because it is a separate region in China and therefore goes untouched by the Chinese communism. Hong Kong governs its own affairs and even has his own mini constitution.
Other notable countries
- United Kingdom – 11th place
- Luxembourg – 14th place
- Estonia – 16th place
- Japan – 19th
- Germany – 23rd
- France – 64th
- Italy – 74rd
- India – 124th
- Russia – 143rd
For a complete list of the Top 10 freest economies in the world see the world heritage website.
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