New Zealand remains among the most economically free countries in the world, according to an annual ranking by conservative United States think tank the Heritage Foundation and The Wall Street Journal.This country came in at fourth place out of 183 countr
New Zealand remains among the most economically free countries in the world, according to an annual ranking by conservative United States think tank the Heritage Foundation and The Wall Street Journal.
This country came in at fourth place out of 183 countries in the 2010 Index of Economic Freedom, moving up from fifth last year by switching places with Ireland.
Hong Kong is on top, where it has been for all of the 16 years the index has been published, followed by Singapore and Australia.
A cause for alarm at the Heritage Foundation is that the United States has slipped to eighth place from sixth last year, and its index score fell from 80.7 to 78 on a scale from 0 to 100.
New Zealand's score edged up 0.1 points from its 2009 total to 82.1. According to the index that reflected modest improvements in trade freedom and fiscal freedom.
"The economy has an impressive record of market reforms and benefits from its openness to global trade and investment," the index said.
"The banking sector is characterised by sound regulations and prudent lending practices, and well-implemented structural reforms have allowed the New Zealand economy to weather the recent global financial and economic crisis relatively unscathed."
According to the index this country has an efficient legal and regulatory environment which strongly supports entrepreneurial activity.
Foreign and domestically owned businesses enjoy considerable flexibility in business formation and employment practices, with restrictions on foreign investment applying in only a few sectors.
The index breaks down economic freedoms into 10 categories, with New Zealand getting a score of 99.9 for business freedom, with the index noting that starting a business in this country is "very easy and straightforward", taking only one day compared to the world average 35 days.
This country's lowest score, of 51.3, was for government spending. The index said total government expenditures, including consumption and transfer payments, were relatively high. In the most recent year, government spending equalled 40.3 percent of GDP.
Lamenting the decline of the US on the index, Terry Miller, director of the Centre for International Trade and Economics at the Heritage Foundation, said that for the first time the US had fallen out of the elite group identified as "economically free" by the objective measures of the index.
Study after study showed a strong correlation between economic freedom and prosperity, Mr Miller said in a Wall Street Journal article.
Citizens of economically freer countries enjoyed much higher per capita incomes on average than those who lived in less free economies, and index data indicated that freer economies did a much better job at reducing poverty than more highly regulated economies.
