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Sri Lanka’s economic freedom, ruler integrity worsen: Global study reveals
Sri Lanka’s ranking for economic freedom has worsened from last year and the integrity of the Sirisena-Wickremesinghe Government has been rated 141st out of 180 countries.
The island’s malfunctioning judiciary, has been ranked 80th in the world. The efectiveness of Sri Lanka’s judiciary fares worse than the world’s biggest gambling haven Macau, which is rated 44th. The judiciary in nearly-bankrupt Greece, in comparison, is rated 56th. Botswana’s judiciary ranks 61st.
These were among important findings in the 2017 Index of Economic Freedom compiled by the United States-based conservative Heritage Foundation. The report is published jointly with The Wall Street Journal.
The report places Sri Lanka at 112 in the world out of 180 countries for economic freedom with a score of 57.4 points, down by 2.5 points from 2016. Sri Lanka ranks well below countries such as Mali, Uganda, Benin, Swaziland, Nicaragua, and Honduras.
Heavily-indebted Sri Lanka’s economic freedom is rated as “mostly unfree” and the foundation cites the rule of law, fiscal health and investment freedom as concerns.
In Asia Pacific, Sri Lanka is rated 25th out of 43 countries, below countries such Cambodia, Fiji, Samoa, Azerbaijan and even Indonesia.
Corruption worsened in Sri Lanka as well. Just a month ago, Transparency International rated Sri Lanka at 95th place out of 176 countries in its Corruption Perceptions Index. The island scored 36 points, down from 37 points in 2015 and 38 points in 2014. It ranked below countries including Ghana, Mongolia, Panama, and Indonesia. Transparency said lower-ranked countries “are plagued by untrustworthy and badly functioning public institutions like the police and judiciary”.
In the 2017 Index of Economic Freedom, Hong Kong, where business monopolies exist in sectors such as rice imports, supermarkets, retail, and real estate, topped the world as the freest once again for the 23rd time, ahead of Singapore.
The United States ranking slipped again, by 0.3 points to 75.1 points, the country’s lowest score in the history of the index. Although the US remains “mostly free,” it is ranked No 17 globally and is the third-freest economy in the Americas, behind Canada, ranked 7th, and Chile, ranked 10. “Large budget deficits and a high level of public debt have contributed to the continuing decline in America’s economic freedom,” the report’s editors observe.
Sri Lanka’s overall score for economic freedom is below the Asia Pacific average of 60.4 points and the world average of 60.9 points, the foundation’s report on Thursday shows. Since 2013, the score has slipped by 3.3 points.
Assessing the rule of law, the foundation says secured interests in property are generally recognized, and there is a fairly reliable registration system for recording private property, but many investors claim that protection can be flimsy.
Judicial independence has improved. Although corruption remains a concern, steps were taken in 2015 to strengthen enforcement of existing safeguards and uphold the current legal and administrative framework, the report says.
Labour, investment, finance, trade, and monetary freedom in Sri Lanka all fall below the world average. Only business freedom inches above the world average, For business freedom, Sri Lanka ranks 54th in the world and is rated 110th for monetary freedom. The island ranks 111th for trade freedom.
The worst ranking is for fiscal health at 152nd in the world, while the second worst is for investment freedom at 144th globally.
Sri Lanka is less free than it was when the index was first published in 1995, the foundation observes.
The foundation says it works to advance the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.
The annual index evaluates countries in four policy areas that affect economic freedom: rule of law; government size; regulatory efficiency; and open markets. There are 12 specific categories: property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score, the report compilers explain.
Based on an average score, each of the 180 countries in the index is classified as “free” (combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
The 2017 index was edited by ambassador Terry Miller, director of the foundation’s Center for Free Market and Regulatory Reform; and Anthony B. Kim, research manager and senior policy analyst in the Center for Free Market and Regulatory Reform.