SA economic freedom in jeopardy
Cape Town - It has taken less than a decade for South Africa to slide 40 places in the Economic Freedom of the World Annual Report rankings, the Free Market Foundation (FMF) said on Monday.
South Africa is ranked 82nd in the Economic Freedom of the World: 2010 Annual Report released by the FMF on Monday.
Last year, South Africa ranked 70th, and in 2002, 42nd.
"It has taken less than a decade to slide 40 places down the rankings. This is a matter of grave concern," the FMF said.
This year's report showed that economic freedom experienced its first global downturn in a quarter century, with the average score falling to 6.67 in 2008 (the most recent year for which data is available) from 6.74 in 2007.
Of the 123 countries with economic freedom rankings dating back to 1980, 88 (71.5%) saw their rankings decrease while only 35 (28.5%) recorded increases.
"In response to the economic decline of 2008, many countries opted for perverse credit expansion and regulatory policies, damaging economic freedom and hindering future growth," FMF executive director Leon Louw said.
"Even in the wake of recession, the quality of life in nations with free and open markets is vastly superior to that of countries with government-managed economies."
The report ranked Hong Kong number one, followed by Singapore and New Zealand.
Zimbabwe once again had the lowest level of economic freedom among the 141 jurisdictions included in the study, followed by Myanmar, Angola, and Venezuela.
The annual peer-reviewed Economic Freedom of the World report is produced by the Fraser Institute, a Canadian public policy
think-tank, in co-operation with independent institutes in 80 nations and territories.
The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.
Economic freedom is measured in five different areas - size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour, and business.
Research showed that individuals living in countries with high levels of economic freedom enjoyed higher levels of prosperity,
greater individual freedoms, and longer life spans.
"Commitment to economic freedom is a common theme among the world's most prosperous nations," Cape-based FMF director Temba Nolutshungu said.
"While residents of these countries enjoy the highest standards of living and greatest personal freedoms, people in countries at the bottom of the rankings are typically impoverished and subject to oppressive governments that recognise few - if any - individual rights or freedoms," he said.
Louw said world experience showed that the direction of change was more important than the economic system.
"After 1994, the ANC steered SA in the right direction, and we were rewarded with steady growth after a generation of stagnation.
"The 2010 report shows that there has been deterioration in every component, which is potentially catastrophic.
"Unless we return to increasing freedom, we can expect a decline and another round of stagnation," Louw said.
CRY THY BELOVED COUNTRY !!!!!!
Fraud and corruption (malmanaged and mis-appropriated....???)
Will Vavi and Co still not see what they are doing to the country? Creating unemployment and zero investment. Just when the motor manufacturers thought things were settling down and increased investment in SA, cosatu has screwed it up for any future plans. Wake up cosatu and anc must get a back bone.
Hope somebody tell this to Nando Malema and his virile president.
I've never studied economics but in the South African context, does this report not hint that exchange controls should be removed as a way to decrease unemployment? From the report, "Using data on 45 industrial and developing countries, he finds a more liberal regime for international exchange in 1980/1985 to be associated with a decline in both the
total and the youth unemployment rate over the period to 2000–2003 (Feldmann, 2007). Additionally, a more comprehensive
liberalization of international trade and capital
movements from 1980/1985 to 2000–2003 is associated
with a fall in youth unemployment over the same period."
Your new editor
Zimbabwe once again had the *lowest* level of economic freedom [...] *followed by* Myanmar, Angola, and Venezuela.
I would like to know where S.A was ranked before 1994? As it is important to remember that even though S.A. was virtually strangled by sanctions before 1994, S.A. had almost no international debt as it was repaid by the apartheid government and more people had work then.
I agree, Thulani, Cry the beloved Country!
Don't winge. You were warned that this will happen but you chose to be politically correct.
It's a capitalist agenda with no place in Southern Africa, the inequalities are too great. Basically any country with socialist tendencies gets penalised. Let's move forward to a more equal, socialist structure in SA.
Hong Kong is not a nation. It is a city. For all practical purposes, so is Singapore. I would go on to say that New Zealand is a sheepfarm, but that would be mischievous. So where is the first real, non-trivial, national economy on this report?
The government's job is to regulate the process of private business, not rnt businesses. It's to make sure that the playing field for business is adequate... LOL! ANC will ruine South Africa.
The ruling party, ANC's corruption, unwillingness to get rid of their 'communist' alliances, and crime to blame for this, while they are in government we will 'free fall' to the bottom, joining our neighbours. Wrong attitudes, greed for money and power rules South Africa at the moment. Please learn from New Zealand, Singapore and Hong Kong which are by the way only islands with almost not any minerals, oil and excess land, sure they must do a few things right, surely their attitude and mindset is positive and strong.
And our friend Julius travelled to Zimbabwe and Venezuela to "learn" about nationalisation.....when will they ever learn? Typical of Africa, the answer is blowin' in the wind.....and SA will slide even more. Soon we will be down there with Mugabe and Chavez. That's what they want: short-term enrichment. Stuff the future!
Forcing companies to pay for everithing double (eg: roads, insurances), BEE, minimal wages (way to high for unskilled workers),compulsory increases above inflation rate (that is killing the small buisnesses), what alse is ANC going to sacrifise to stay in power (eg: Mogabe).
Yes, and which way is the exchange rate going to go with this latest report, as well as the attempt to muffle the media pending? Just when the world thought that there was at last 1 country in Africa maintaining a viable economy after the change to democracy, this is our little ray of hope disappearing in a pipe-dream.
Economic freedom in SA is diffrent to what the world report states. We want to redistrubite wealth. That is the answer from the ANC. If we redistribute 5M tax payers money and wealth to 50M people we now have economic freedom. Short and simple. Stupid as well!. When will the ANC stop using we will take from the rich and give the poor and state we will create wealth for the poor narrowing the gap to the rich.