In the Economic Freedom of the World (EFW) 2019 Report, South Africa ranks 101 out of 162 countries – this is a fall of two places from last year but is a massive fall of 54 places since 2000 when the country achieved a ranking of 47 and was in the top 30% of economically free countries.
With such an upward trend South Africa was on track to be one of the world’s most prosperous countries. Instead, in 2019, South Africans have less economic freedom than do residents in 60% of the democratic world.
This was the message given by Neil Emerick, an associate of the Free Market Foundation (FMF) and the developer of the software tool used to interrogate the EFW data, unpacking the report.
The EFW index measures the degree to which a country’s policies and institutions support economic freedom and is the premier measurement of economic systems. There are five main components: size of government; legal structure and security of property rights; access to sound money; freedom to trade internationally; and regulation of credit, labour and business.
In the past five years, South Africa’s largest falls are Compliance cost of importing and exporting, down from 7.5 to 4.7; Extra payments/Bribes from 7.5.5 to 2.8, and Protection of Property Rights from 7.7 to 5.4.
Countries that score highest on the EFW index are among the most prosperous, healthiest, cleanest, and safest places to live, according to peer review research. A lack of economic freedom condemns countries to lower incomes, greater poverty, more inequality, reduced life expectancy, fewer political rights and liberties, and bleak prospects for the quality of life.
Hong Kong and Singapore continue to take the top two positions, followed by New Zealand, Switzerland, the US, Ireland, the UK, Canada, Australia, and Mauritius in the top 10. Other notable countries include Japan (17), Germany (20), France (50), Russia (85) and China (113).
The 10 lowest-rated countries are Iraq, Republic of Congo, Egypt, Syria, Democratic Republic of Congo, Angola, Algeria, Sudan, Libya, and, lastly, Venezuela. Some countries such as North Korea and Cuba cannot be ranked due to lack of data.
Nations that are economically free out-perform non-free nations in all recognised indicators of well-being. The 2019 report based on the latest figures available (2017), nations in the top quartile of economic freedom enjoyed:
* An average per-capita GDP of $40 000, compared with less than $6 000 for bottom quartile nations.
* Average income of the poorest 10% was $10 646, compared with $1 503 in the bottom quartile
* Average income of the poorest 10% is two-thirds higher than the average per-capita income in the least-free nations.
* Only 1,8% of the population experience extreme poverty ($1.90 a day) compared with 27,2% in the bottom quartile.
* Infant mortality is 6,7 per 1 000 live births compared with 40,5 in the bottom quartile.
* Life expectancy is 79,4 years in the top compared with 65,2 years in the bottom quartile.
Other positive outcomes include:
* Political and civil liberties are higher.
* Gender equality and happiness levels are better in economically free nations.