SA’s gender laws boost economic freedom rating | Fin24

SA’s gender laws boost economic freedom rating

Sep 28 2017 15:41
Natalie Greve

South Africa’s progressive gender equity legislation, which attributes equal rights to men and women, has bolstered the country’s overall economic freedom ranking, lifting the country from a ranking of 105 in 2016 to 95 in 2017, according to the Economic Freedom of the World Index.

The yearly index, produced by Canada’s The Fraser Institute, measures the degree to which the policies and institutions of 159 countries are supportive of the economic freedom of its citizens.

SA’s 10-point jump is largely attributable to the introduction this year of an adjustment for gender disparity, which measures the degree to which equal economic, civil and legal rights are afforded to both men and women.

Noting that progressive gender rights held a positive correlation with the degree of economic freedom in a country, NightsBridge director Neil Emerick revealed that without the adjustment, SA’s ranking would drop to 103rd.

“Economic rights are fundamental in that without them there can be no political or civil freedom,” he told think tank the Free Market Foundation on 28 September.

“People living in economically free countries are likely to live 20 years longer than if they lived in one of the least economically free countries. Even if you’re poor, it’s better to be poor in an economically free country.”
The degree to which a country’s economic freedom is measured is based on five variables: the size of government; the nature of the legal system and related property rights; the degree to which the currency has remained a store of value; freedom to trade internationally; and the nature and extent or laws and regulation.

Despite this year’s ranking gain, the trend in SA economic freedom since its transition to democracy has been downward, driven largely – according to the report – by broad government policies.

“To the extent that specific economic outcomes and general standard of living are reflected in, and predicted by, a country’s [rating], then South Africa’s potential for economic progress appears to be increasingly limited,” it states.

Factors dragging down the country's level of economic competitiveness include a complicated centralised collective bargaining model, complex hiring and firing regulations, the business costs of crime, its top marginal tax rate, the reliability of police and the compliance costs of trade.

“Macroeconomically, SA is poorly ranked in government consumption, capital controls, and integrity of the legal system,” added Emerick.

In contrast, a strong, privately-owned banking industry, impartial courts, judicial independence and the protection of property rights rally SA against negative economic influences.

Internationally, Hong Kong again took the top spot as the world’s most economically free country, followed by Singapore, New Zealand, Switzerland, Ireland, the UK, Mauritius, Georgia, Australia, and Estonia.

“While Hong Kong is again the most economically free, there is a valid concern that interference from mainland China – which ranks 112th in economic freedom – will ultimately lead to deterioration in Hong Kong’s top position, particularly in rule of law, which helps ensure equal freedom for all,” Fred McMahon, Dr Michael A. Walker Research Chair in Economic Freedom with the Fraser Institute cautioned in a statement.

The 10 lowest-rated countries are Iran, Chad, Myanmar, Syria, Libya, Argentina, Algeria, the Republic of the Congo, the Central African Republic, and, lastly, Venezuela.

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. 

economy  |  economic freedom  |  gender