Economic freedom on the decline in South Africa

South Africa is ranked 75 out of 178 countries in the 2014 Index of Economic Freedom, published by the Heritage Foundation and the Wall Street Journal recently.

Hong Kong has the most free economy in the world
Hong Kong has the most free economy in the world

South Africa’s overall economic freedom score is 62.5.

The Index tracks economic freedom globally and covers 186 countries that account for 99 % of the world’s population.

The Index ranks countries with scores above 80 as ‘free’, those with scores between 70-80 as ‘mostly free’, those with scores between 60-70 as ‘moderately free’, and those with scores below 60 as ‘mostly unfree’ or ‘repressed’.

South Africa was therefore ranked as a moderately free economy.

The overall score is composed of ten sub-categories which include property rights; freedom from corruption; fiscal freedom; government spending; business freedom; labour freedom; monetary freedom; trade freedom; investment freedom and financial freedom.

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The Index notes that economic freedom in South Africa has declined over the past decade.

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Hong Kong maintained its status as the world’s freest economy, a remarkable distinction that it has achieved for 20 consecutive years. Singapore the second-freest economy, has closed the gap between itself and Hong Kong to the second narrowest difference in their competition over the past two decades.

According to the Index, economic freedom – and thus development – is dependent on a strong and competitive private sector for which the “strengthening of institutional, physical, and human capital prerequisites” is necessary.