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Hong Kong tops economic freedom chart again, US dips
Tue, 13th Jan 2009 06:54
By Susan Fenton
HONG KONG, Jan 13 (Reuters) - Hong Kong was rated the world's
freest economy on Tuesday for a 15th straight year in a ranking
by the U.S.-based Heritage Foundation while the United States
dropped to sixth place and is likely to fall substantially next
year following its bailout of financial and car companies.
The Washington-based Heritage Foundation maintains that
economies with the highest level of economic freedom generate the
highest levels of prosperity and per capita income.
The 2009 Index of Economic Freedom, published by the Heritage
Foundation and the Wall Street Journal, was based on data
collected between July 2007 and June 2008 and so does not reflect
the deepening global financial crisis since the collapse of
Lehman Brothers in September.
'It is highly likely that the U.S., the UK and other
countries with high levels of government intervention (during the
financial crisis) will have substantially lower scores in next
year's economic freedom index and will have a lower level of
prosperity as well. That is something we are quite concerned
about,' Terry Miller of the Heritage Foundation told a news
conference in Hong Kong.
The United States dropped to sixth place in this year's index
from 5th place a year ago while the United Kingdom came 10th out
of 179 economies that were ranked.
The foundation said it opposed Washington's decision to bail
out U.S. financial firms and carmakers hit by the financial
crisis, arguing that bankruptcy offered a better way to
financially reorganise a company without distorting the market.
General Motors would now have some competitive advantage,
thanks to government subsidies, over Ford Motor, which did
not need emergency government funding, said Heritage Foundation
President Ed Feulner.
Feulner said that governments formulating fiscal stimulus
packages to help companies weather the financial crisis should
include exit strategies. He praised Hong Kong for putting a
two-year limit on its decision to guarantee bank deposits in the
territory and for not banning short selling of Hong Kong-listed
stocks during the crisis.
Hong Kong has consistently been ranked the world's most free
economy since the index launch 15 years ago. It is one of the
easiest places to start and liquidate a business, government
intervention and corruption are low, as are trade barriers and
taxes, and social mobility is high, the foundation said.
An autonomous region of mainland China, Hong Kong does not
have democracy but the ranking does not include political
freedom.
Open, trade-dependent economies Hong Kong and Singapore,
which retained
second place in the index, are both in recession
but the Heritage Foundation said they were likely to recover
faster from the global downturn because their openness gave them
flexibility.
Asia's economic powerhouses China and India still have some
way to go and were ranked 132 and 123rd respectively with their
scores little changed from last year. China has cut tariffs but
needs to open up its financial sector and improve property rights
while in India tariffs are too high and foreign investment is
overly regulated.
North Korea was ranked bottom of the index. Zimbabwe saw the
biggest decline in its ranking, putting it in next-to-last place
following new restrictions on business and fiscal freedom and the
world's worst hyper-inflation.
Rank Economy Overall score (out of 100)
1 Hong Kong 90.0
2 Singapore 87.1
3 Australia 82.6
4 Ireland 82.2
5 New Zealand 82.0
6 United States 80.7
7 Canada 80.5
8 Denmark 79.6
9 Switzerland 79.4
10 United Kingdom 79.0
(Editing by Tomasz Janowski)
Keywords: HONGKONG ECONOMY/HERITAGE
(susan.fenton@reuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
HONG KONG, Jan 13 (Reuters) - Hong Kong was rated the world's
freest economy on Tuesday for a 15th straight year in a ranking
by the U.S.-based Heritage Foundation while the United States
dropped to sixth place and is likely to fall substantially next
year following its bailout of financial and car companies.
The Washington-based Heritage Foundation maintains that
economies with the highest level of economic freedom generate the
highest levels of prosperity and per capita income.
The 2009 Index of Economic Freedom, published by the Heritage
Foundation and the Wall Street Journal, was based on data
collected between July 2007 and June 2008 and so does not reflect
the deepening global financial crisis since the collapse of
Lehman Brothers in September.
'It is highly likely that the U.S., the UK and other
countries with high levels of government intervention (during the
financial crisis) will have substantially lower scores in next
year's economic freedom index and will have a lower level of
prosperity as well. That is something we are quite concerned
about,' Terry Miller of the Heritage Foundation told a news
conference in Hong Kong.
The United States dropped to sixth place in this year's index
from 5th place a year ago while the United Kingdom came 10th out
of 179 economies that were ranked.
The foundation said it opposed Washington's decision to bail
out U.S. financial firms and carmakers hit by the financial
crisis, arguing that bankruptcy offered a better way to
financially reorganise a company without distorting the market.
General Motors would now have some competitive advantage,
thanks to government subsidies, over Ford Motor, which did
not need emergency government funding, said Heritage Foundation
President Ed Feulner.
Feulner said that governments formulating fiscal stimulus
packages to help companies weather the financial crisis should
include exit strategies. He praised Hong Kong for putting a
two-year limit on its decision to guarantee bank deposits in the
territory and for not banning short selling of Hong Kong-listed
stocks during the crisis.
Hong Kong has consistently been ranked the world's most free
economy since the index launch 15 years ago. It is one of the
easiest places to start and liquidate a business, government
intervention and corruption are low, as are trade barriers and
taxes, and social mobility is high, the foundation said.
An autonomous region of mainland China, Hong Kong does not
have democracy but the ranking does not include political
freedom.
Open, trade-dependent economies Hong Kong and Singapore,
which retained
but the Heritage Foundation said they were likely to recover
faster from the global downturn because their openness gave them
flexibility.
Asia's economic powerhouses China and India still have some
way to go and were ranked 132 and 123rd respectively with their
scores little changed from last year. China has cut tariffs but
needs to open up its financial sector and improve property rights
while in India tariffs are too high and foreign investment is
overly regulated.
North Korea was ranked bottom of the index. Zimbabwe saw the
biggest decline in its ranking, putting it in next-to-last place
following new restrictions on business and fiscal freedom and the
world's worst hyper-inflation.
Rank Economy Overall score (out of 100)
1 Hong Kong 90.0
2 Singapore 87.1
3 Australia 82.6
4 Ireland 82.2
5 New Zealand 82.0
6 United States 80.7
7 Canada 80.5
8 Denmark 79.6
9 Switzerland 79.4
10 United Kingdom 79.0
(Editing by Tomasz Janowski)
Keywords: HONGKONG ECONOMY/HERITAGE
(susan.fenton@reuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
