Wednesday, May 22, 2024

Heritage Foundation ranks Botswana as one of free economies

A leading American think tank, Heritage Foundation’s index of Economic Freedom, has ranked Botswana as one of mostly free economies in the world. Botswana’s economic freedom score is 70.6, making its economy the 30th freest in the 2013 Index.

The country score increased by 1.0 point better than last year, due primarily to continuing improvements in freedom from corruption and the management of government spending.

The foundation considers 10 freedoms, including property rights, labour, government spending and monetary freedom, among others. The 10 components of economic freedom are weighted equally in determining country scores.

In the Sub Saharan region Botswana is ranked 2nd out of 46 countries in the region, and its overall score is well above the regional and world averages.

“Botswana’s levels of economic freedom are consistently among the region’s highest. Its economy is diversifying, in large part because of foreign investment attracted by low taxes, political stability, and an educated work force,” stated the report.

Botswana has been hailed as it continues to set an example in the management of large endowments of natural resources. The level of corruption has been cited as being the lowest in Africa with an independent judiciary that enforces contracts effectively and protects property rights.

According to heritage site report the country’s competitiveness has been underpinned by a relatively efficient regulatory environment and open trade policies, while diamond exports have ensured adequate flows of foreign exchange.

“The financial sector is fairly well developed, with an independent central bank and little government intervention. Although public debt remains low, the government has undertaken fiscal consolidation to reduce high deficits following the global slowdown,” stated the report.

Botswana trade-weighted tariff rate is standing at 5.2 percent while the import licensing and other non-tariff barriers add to the cost of trade. Foreign investment has played a significant role in the privatization of state-owned enterprises. Most land is not available for purchase by foreign investors.

The index has noted Botswana’s financial sector as one of Africa’s most advanced, and the Botswana Stock Exchange has been growing. There have been no bank failures, and the banking sector continues to expand.

Hong Kong was ranked as the freest economy in the world, followed by Singapore, Australia, New Zealand and Switzerland.

The United States, which has the world’s largest economy, was ranked 10th while mainland China, the world’s second largest economy, was ranked 136th out of 177 economies. “Almost all of the most advanced countries lost ground this year,” Terry Miller, a director at the Heritage Foundation, wrote in the Wall Street Journal.

“Even top-ranked Hong Kong saw its score decline due to increased government spending and higher inflation.

“The US, ranked only 10th most free in the world this year, joins Ireland as the only advanced economies to have lost economic freedom five years in a row.”

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