The Heritage Foundation/Wall Street Journal Index of Economic Freedom, a broad indicator of economic freedom in 161 countries, ranked Lebanon 59th worldwide and 7th among 18 countries in the Middle East and North Africa region.
The index evaluated individual economies on the basis of 50 independent variables that were divided into 10 broad factors of economic freedom. The factors are trade policy, fiscal burden of government, government intervention in the economy, monetary policy, capital flows and foreign investment, banking, wages and prices, property rights, regulations and black market activity.
Lebanon’s score on trade and monetary policies improved, while it worsened on government intervention in the economy. The survey noted that Lebanon’s weighted average annual rate of inflation was 2.39 percent during the 1990-99 period, down from 9.3 percent for the 1989-97 period, leading to a better score on monetary policy. The score on trade policy improved as result of a decrease in the average tariff rate.
Lebanon was placed in the category of “mostly free” economies, and ranked behind Bahrain, the UAE, Kuwait, Morocco, Oman and Israel in the region. Worldwide, Lebanon had the same rank as Cambodia and the Dominican and Slovak republics, and came immediately behind Jamaica, Malta and Samoa.
Among the 18 countries rated in the MENA region, six improved their scores and seven received worse scores. Bahrain is the most economically free country in the MENA region and is tied with Australia and Switzerland as the ninth freest economy in the world.
Lebanon and Tunisia improved enough to move from "mostly unfree” to “mostly free”. Hong Kong was found to be the freest economy in the world. Overall, the survey concluded that countries with the highest level of economic freedom also have higher rates of long-term economic growth and are more prosperous than those with less economic freedom.
The survey also found a strong relationship between economic freedom and per capita income. The annual Index of Economic Freedom is used by policymakers and investors as a tool to assess the institutional setting for economic growth in countries around the world. — (Lebanon Invest)
© 2001 Mena Report (www.menareport.com)
