The Heritage Foundation, a US Conservative think-tank, recently launched the “Economic Freedom Index”. The index was prepared by covering 184 countries this time for the period of July 2019 to June 2020. This is the first time the index has been published since the COVID-19 pandemic overturned lives as well as global economies and the scoring reflects a small extent how governments have responded to the health crisis.
In the index, Singapore has topped the global ranking for the second consecutive year. In the 2021 Index, India came in around the middle of the pack among Asia-Pacific countries ranking 26th out of 40 countries, scoring 56.5 points. Globally, the Foundation rates India’s economy as the 121st freest. Although its overall score is unchanged, improvements were made in business freedom. This was offset by declines in judicial effectiveness and other scores.
- Rank 1: Singapore
- Rank 2: New Zealand
- Rank 3: Australia
- Rank 4: Switzerland
- Rank 5: Ireland
Important Fact of the Index:
- The biggest news generated from the “2021 Index of Economic Freedom” was however not the rankings or how COVID-19 impacted the scores but that The Heritage Foundation decided to exclude Hong Kong from its rankings for the first time ever.
- The Heritage Foundation said that the reason for leaving Hong Kong out is that the Special Administrative Region and its economic policies have now come under the direct control of Beijing.
What is Economic Freedom Index?
- The Heritage Foundation’s Index of Economic Freedom is an annual guide published to measure the progress made in advancing economic freedom which it claims brings greater prosperity.
- The Foundation also believes that “the ideals of economic freedom are strongly associated with healthier societies, cleaner environments, greater per capita wealth, human development, democracy, and poverty elimination.”
- The index ranks 12 indicators from property rights to financial freedom under four categories: rule of law, size of government, regulatory efficiency and open markets.
- The small island nation of Singapore made improvements or maintained its score for all 12 indicators except monetary freedom and judicial effectiveness which declined marginally, but its scores in these two indicators are still exceptionally high when compared with most other countries.
Important takeaways for all competitive exams:
- Heritage Foundation Headquarters: Washington, D.C., US.
- Heritage Foundation Founded: 16 February 1973.
- Heritage Foundation Chairperson: Thomas A. Saunders III.