Wednesday, February 03, 2010

US Report: Albania tops economic freedom scale in the Balkans

All Balkan countries except Bulgaria are better off today -- and more economically free -- than they were a year ago, according to the Heritage Foundation and the Wall Street Journal's (WSJ) latest global survey on economic freedom, published last month.

The 16th annual edition of the Index -- which lists Albania as the most economically free nation in the Balkans -- covers 183 countries.

Indicators include business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.

The January 20th report was adamant that all Balkan countries must do a better job of fighting for property rights as well as combating corruption, if overall economic progress is to be made.

While Montenegro made the greatest progress in the world in 2009, it remained well behind Albania, the region's best scoring economy in the Index of Economic Freedom. Notable progress in seven of the ten areas of economic freedom allowed Montenegro to improve its grade by 5.4 points since last year.

Based on a score of 63.6, the Adriatic republic was ranked 68th in the world this year, up from 94th in 2009.

Countries were given scores from 0 to 100 on ten factors of economic openness. With scores from 60 to 69.9 points each, five Balkan nations -- Albania, Bulgaria, Macedonia, Montenegro and Romania -- fell within "moderately free" economies.

Bosnia and Herzegovina (BiH), Croatia and Serbia were among the 55 countries ranked "mostly un-free", with scores between 50 and 59.9.

The report cited "increases in trade freedom, property rights, freedom from corruption and labour freedom" as the main factors for Albania's 2.3-point higher total mark from the one it earned last year. The country's fiscal freedom was rated at 92.6 points, the highest score given to any Balkan nation.

"Despite the global economic slowdown, Albania has been able to maintain relatively sound macro-economic stability" and has taken steps to improve the business and investment climate in the country, the two US-based organisations said in the lengthy study.

Fifteen counties -- including Macedonia, Croatia and BiH -- gained at least 2.5 points in their economic freedom scores.

In spite of the financial difficulties, many countries have not abandoned the principles of economic freedom and have continued to adopt measures to liberalise and deregulate fiscal activity.

"Eighty-one countries -- almost half of all those ranked in the Index -- showed improvements in their overall economic freedom scores this year," the report noted. "The levels of economic freedom in 90 other countries, as measured in the 2010 Index, have declined."

Macedonia improved its overall score by 4.5 points and moved up 22 places to take 56th in this year's index. Croatia's mark for economic freedom increased by 4.1 points to 59.2, while BiH's new score of 56.2 is 3.1 points higher than last year. Both countries jumped up 24 slots on the list. Croatia was ranked 92nd and BiH came in at 110th.

Bulgaria lost 2.3 of its economic freedom score in 2009 due to "losses in investment freedom and freedom from corruption, and growth in government spending", the report noted. With its current mark at 62.3, the country fell 19 positions to the 75th in the 2010 Index.

Based on its overall score of 64.2, which is one point higher than last year's, Romania was ranked the 63rd freest economy this year. Serbia gained 0.3 point and moved up five places to the 104th, with a score of 56.9.

Hong Kong, followed by Singapore, remained the world's freest economies for the 16th year in a row. Of 179 countries ranked this year, only five others were classified as "free", with an overall score of 80 or higher. Another 23 with grades in the range of 70-79.9 points were rated "mostly free".

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