Singapore has overthrown Hong Kong to claim the title of having the world’s freest economy.
For the first time since the Economic Freedom of the World Index began in 1970, Hong Kong dropped from first to second, and its ranking is poised to decline even worse.
Some of the tenets used to gauge the economic freedom index are measured based on ease of international trade, freedom to enter and compete in markets, as well as business regulations, amongst other yardsticks.
The findings in the 2023 report are based on data from 2021, the most recent year with available comparable statistics across the 165 jurisdictions. It measures the economic freedom of individuals — or their ability to make economic decisions on their own.
According to a senior fellow at the Fraser Institute Matthew Mitchell, “Hong Kong’s recent turn is an example of how economic freedom is intimately connected with civil and political freedom.”
According to the research, Hong Kong’s rating suffered as a result of new legislative barriers to entry, rising company costs, and restrictions on hiring foreign labor.
According to a senior fellow at the Fraser Institute Matthew Mitchell, “Hong Kong’s recent turn is an example of how economic freedom is intimately connected with civil and political freedom.”
According to the research, Hong Kong’s rating suffered as a result of new legislative barriers to entry, rising company costs, and restrictions on hiring foreign labor.
“These restrictions, along with government initiatives to manage the private sector, inexorably resulted in a decline in economic freedom. The prosperity of Hong Kong would probably suffer as a result,” Mitchell warned.
In 2020, China imposed a national security law in Hong Kong which critics slammed as a curtailment of the city’s autonomy. Under the new legislation, crimes of secession and sedition are punishable by up to life in prison.
Singapore climbed to the top spot from second place the previous year.
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“Driven by improvements in its size of government and regulation components, Singapore’s overall score rose 0.06 points to take the top ranking,” the report stated.
The U.S., Switzerland, and New Zealand are in third, fourth, and fifth place, respectively.
Other noteworthy mentions include Germany coming in at number 23, Japan at number 20, and the United Kingdom at number 9.