Khemberly Randing Ladio

The index of Economic Freedom

(https://www.statista.com/statistics/256965/worldwide-index-of-economic-freedom/)

A.

The Index of Economic Freedom measures the degree of economic freedom in a

country on a scale from 0 to 100, different countries are rank from the freest to the most
constrained. The index measures the degree to which people in a nation are free to pursue
their own economic objectives without government taxes and regulations, as well as the extent
to which government protects property rights and provides a sound monetary environment.

Economic freedom is defined by the Heritage Foundation as the fundamental right of

every human to control his or her own labor and property. In an economically free society,
individuals are free to work, produce, consume, and invest in any way they please, with that
freedom both protected by the state and unconstrained by the state. In economically free
societies, governments allow labor, capital and goods to move freely, and refrain from coercion
or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.

In 2020 index of Economic Freedom, Singapore rank first, with an index score of 89.4
out of 100, making it the most freest country in economy in 2020. It is followed by the country
Hong Kong (89.1), New Zealand (84.1), Australia (82.6), and the rank fifth Switzerland with the
index score of 82. Those five countries leads, among other countries to be the freest country in
economy. Year 2020 has been a tough year, with the emergence of the deadly Corona virus, the
economy has been greatly affected. Other countries economic freedom reduce while the other
countries take it's advantages. With the 180 countries in total, our country the Philippines make
it in the 70th place with the index score of 64.5, United states is on the 17th place (76.6), Japan
at the 30th (73.3), India at the 120th place (56.5) and the rank 180th North Korea with the
index score of 4.2 . The 180 countries are rank based on four complex sets of indicators. The
sets of indicators are: Rule of Law (property rights, freedom from corruption); Limited
Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom,
labor freedom, monetary freedom) and Open Markets (trade freedom, investment freedom,
financial freedom).

B. As the years pass by many development in different countries may arise, maybe
most countries in future are freely trading without constraint, and leads to growth, of one
country and whole global economy. I learned that, the index of Economic Freedom shows the
the level of freedom in the economy. Thus, it is beneficial for a citizens and businesses to know
the level of ranking of their country, if it's on the freest country, moderately free or on the tight
priced county.

The Index of Economic Freedom takes a comprehensive view of economic freedom.

Some of the aspects of economic freedom that are evaluated are concerned with a country’s
interactions with the rest of the world for example, the extent of an economy’s openness to
global investment or trade. Most, however, focus on policies within a country, assessing the
liberty of individuals to use their labor or finances without undue restraint and government
interference. Each of the measured aspects of economic freedom plays a vital role in promoting
and sustaining personal and national prosperity. All are complementary in their impact,
however, and progress in one area is often likely to reinforce or even inspire progress in
another. Similarly, repressed economic freedom in one area for example, a lack of respect for
property rights may make it much more difficult to achieve high levels of freedom in other
categories. Nations with higher degrees of economic freedom thrive because they capitalize
more fully on the ability of individuals to innovate and prosper when unfettered by heavy-
handed government regulation and taxation. The free-market system encourages the most
efficient allocation of resources and generates a dynamic environment that maximizes the
choices available for work and consumption. Freedom itself is an important value, and
economic freedom is a vital engine for generating the wealth that makes possible the wide
range of important economic and social achievements by which we measure the advance of
human society.