Russia stuck between Guinea-Bissau and Vietnam in the ranking of economic freedom
Russia got 51.1 points out of 100 in a scale that measures the level of economic freedom in selected countries, sandwiched between Guinea-Bissau and Vietnam. Asian countries topped the ranking, with Hong Kong, Singapore and Australia taking the top 3 positions in the 2013 Index of Economic Freedom compiled by The Wall Street Journal and The Heritage Foundation think tank.
The grade is assigned according to the state of such economic and social indicators as a rule of law, the amount of the government in the economy, regulatory efficiency and the level of market openness. Burkina Faso, Dominican Republic and Azerbaijan open the section for “mostly unfree” countries, leaving Russia behind with their rankings between 59.7 – 59.9 points.
Another ranking by the World Bank indicating the ease of doing business across 185 countries put Russia 6 places higher in 2012 than the year before – at the number 112 economy. Earlier in the year President Vladimir Putin voiced the ambitious goal to move the country up to 20th place by 2020.However, poor law enforcement, corruption and red tape remain the key stumbling blocks on Russia’s way to a more economically efficient country.
Political realities in Russia also make its economic profile look more dubious, Ms. Bogenrief, from ACM Partners, told Business RT. “It’s no secret the world is, if not outwardly than certainly on the periphery, concerned about Vladimir Putin’s recent re-ascension to the Russian presidency.To many, in 2012, it appeared that the “old Russia” was back, an assumption that demands attention on investment pricing curves.”
On a more positive note,“the World Bank report shows that there has been some improvement in cutting red tape and the recent Transparency International Corruption Perception report also shows a small improvement in Russia’s position,” added Chris Weafer, chief strategist at Sberbank CIB. “Entry into the WTO in August is also a very positive step in this direction. So, a hopeful trend but a lot more needs to be done to attract the greater volume of investors required,” the expert concluded.
According to the Heritage Foundation rating, economic freedom in advanced countries is fading away, which is now a key issue, according to one of the ranking authors Terry Miller, a director of the Center for International Trade and Economics at the Heritage Foundation.
“Particularly concerning are the rise of populist "democratic" movements that use the coercive power of government to redistribute income and control economic activity,” Miller wrote in his comment in the Wall Street Journal.
Among 5 countries classified as “free,” where New Zealand and Switzerland follow the leaders only Singapore managed to improve its performance since the previous ranking. All the rest lost between 0.1 and 0.7 points.
No matter how surprising it may seem, but countries in struggling Europe made the best progress in the ranking, with post – Soviet republics leading the way. Georgia produced the best results, with Estonia and Poland breathing down its neck.
The world economic powerhouse – the US – was just 10th on the list, with Ireland partnering the country as the only advanced economies to have lost economic freedom 5 years in a row. The lack of the US leadership was one of the key reasons for a slowdown in economic liberalization across the globe, as stagnation in the number 1 economy ate into the trade flows.
The study covered the period between the second half of 2011 and the first half of 2012.