Economic Freedom Report 2020: India drops 26 places to 105th position, China ranks 124th

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India slipped 26 places to 105th position in the 2020 Global Index of Economic Freedom, according to the Fraser Institute’s annual report on economic freedom around the world released on Thursday. This year’s report suggests Hong Kong ranks first again, followed by Singapore, New Zealand, Switzerland, Australia, United States, Mauritius, Georgia, Canada and Ireland. India was ranked 79th in last year’s ranking.

The index measures the degree to which countries’ policies and institutions support economic freedom. People living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil freedoms, and longer lives. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of person and private property.

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The report says prospects for increased economic freedom in India hinge on next-generation reforms in factor markets and greater openness to international trade.

The rankings of the other major countries are as follows: Japan (20), Germany (21), Italy (51), France (58), Mexico (68), Russia (89), China (124) and Brazil (105). The United States ranks 6th in this year’s report, compared to Canada, which ranks 9th.

The report measures economic freedom by analyzing the policies and institutions of 162 countries and territories. Indicators include regulation, freedom to trade internationally, size of government, property rights, government spending and taxation. The 2020 report is based on data from 2018, the latest year of comparable statistics.

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According to the index, India’s score fell slightly on parameters such as size of government (from 8.22 to 7.16), legal system and property rights (from 5.17 to 5, 06), freedom of international trade (6.08 to 5.71) and regulation of credit, labor and business (6.63 to 6.53). A score closer to 10 indicates a higher level of economic freedom.

“While Hong Kong remains the most economically free jurisdiction in the world, China’s interference, including the violent crackdown on pro-democracy protests, seriously undermines Hong Kong’s rule of law, which helps ensure equal freedom for all,” said Fred McMahon, Dr. Michael A Walker Research Chair in Economic Freedom at the Fraser Institute.

The ten countries with the lowest ratings are the Central African Republic, the Democratic Republic of the Congo, Zimbabwe, the Republic of the Congo, Algeria, Iran, Angola, Libya, Sudan and finally Venezuela.

The report was prepared by James Gwartney, Florida State University; Robert A. Lawson and Ryan Murphy of Southern Methodist University; and Joshua Hall, West Virginia University.

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