RI fares better on economic freedom
RI fares better on economic freedom
Johannes Simbolon, The Jakarta Post, Jakarta
Indonesia has improved its performance in terms of economic
freedom this year, while Hong Kong remains the world's freest
economy for the eighth consecutive time, according to The
Heritage Foundation, a United States-based think tank.
The foundation said in its annual "Index of Economic Freedom",
whose summary is available on its website, that Indonesia was
still categorized as "mostly unfree", but that its economic
freedom ranking among the 155 nations surveyed had improved to
105 from 114 last year.
The foundation conducted the survey together with The Asian
Wall Street Journal.
Indonesia shares 105th position with Moldova and Turkey, while
last year Indonesia was ranked 114th together with the People's
Republic of China, Georgia, Malawi and Papua New Guinea,
according to the foundation.
The foundation said the level of government intervention in
the economy grew worse this year, citing the delay in the
privatization of state-owned companies due to the tumbling value
of the rupiah.
But, the foundation said, Indonesia performed better this year
in terms of monetary policy, citing a declining inflation rate;
in terms of prices and wages policy, citing the easing of the
government's controls over the prices of many commodities; and in
terms of government expenditure, citing the declining ratio of
government expenditure to gross domestic product.
Indonesia had also performed better in curbing the black-
market, the foundation said
The index ratings reflect an analysis of 50 different economic
variables grouped into 10 categories: banking and finance,
capital flows and foreign investment, monetary policy, fiscal
burden of government, trade policy, wages and prices, government
intervention in the economy, property rights, regulation and
black-market activity.
Hong Kong retained its number one ranking, followed by
Singapore -- one of the most politically stable countries in Asia
-- which keeps its number two position.
The foundation said Singapore was aggressively pursuing free-
trade agreements with developed countries throughout the Pacific,
but it could not completely escape southeast Asia's economic
turmoil.
New Zealand's score remained the same, but a slip by Ireland
helped it take over the number three position.
Sharing the number four slot were Luxembourg, the Netherlands,
the United States and Estonia.
The most repressed economies were Laos, Burma, Vietnam,
Turkmenistan, Uzbekistan and North Korea, the report said.
Most of the world's economies remained relatively "unfree."
Overall, 71 economies were rated as "free" or "mostly free" while
85 earned ratings of "mostly unfree" or "repressed."
North America and Europe remain home to a majority of the
freest economies, while most of the world's repressed economies
are in Asia and Africa.
"Once again, we found that economic freedom and prosperity go
hand in hand," Gerald P. O'Driscoll Jr., director of the
Heritage's center for international trade and economics was
quoted by the AFP as saying in Hong Kong on Monday.
He cited World Bank data showing that per capita income for
"mostly unfree" or "repressed" economies averaged about US$3,500
since 1999 -- a figure that jumps to $11,549 for "mostly free"
economies and then doubles to $23,325 for "free" economies.