Ghana places 76 in Economic Freedom Survey

Ghana is placed 76 in a survey of 109 world nations in an index of countries with the highest forms of economic freedoms.

The index measures the degree to which the policies and institutions of countries are supportive of economic freedom and how it affects their people in their daily routines.

Dubbed Economic Freedom of the World 2005 Report, the publication which is written by James Gwartney, Robert Lawson with Erik Gartzke and made available to the Ghana News Agency by the CATO Institute of America, listed the cornerstones of economic freedom as personal choice, voluntary exchange, freedom to compete, and security of privately owned property.

The 2005 Report named Ghana, Bolivia, Brazil, El Salvador, Iceland, Jamaica, Nicaragua, Peru, Tanzania and Uganda as among the countries that had made substantial gains in economic freedom since 1995. The others are Poland and Zambia. It noted that some of the countries began at very low levels or had experienced ups and downs in their economic decisions over the period.

Among nations that have registered significant losses in economic freedom over the same period are Venezuela, Myanmar and Zimbabwe.

On the size of government, the rating had moved from a 4.7 rating in 1980 to 6.1 in 2000 to 5.6 in 2003 on a scale of one to 10 where 01 marks the lowest and 10 the highest.

On the legal structure and security of property rights the rating moved from 2.8 in 1980 to a current of 5.0 in 2003 while access to sound money as a measure of economic freedom (this includes growth of money supply, inflation variability, annual inflation and freedom town foreign currency) moved from 1.1 in 1980 to 5.8 in 2000 and is currently fixed at 6.8.

Other index areas are Freedom to Exchange with Foreigners and Regulation of Credit, Labour and Business.

The Report noted the average economic freedom score rose from 5.17 (out of 10) in 1985 to 6.4 in the most recent year for which data are available while of the 109 nations, 96 recorded improvement in their economic freedom score, seven saw decline, six registered changes of under 0.1 points.

In the 2005 index, Hong Kong retained the highest rating of economic freedom of 8.7 of 10,closely followed by Singapore at 8.5, New Zealand, Switzerland and the United States tied for third with ratings of 8.2.

The U.K., Canada and Ireland ranked 6th, 7th and 8th in that order, while Estonia, Luxemburg and the United Arab Emirates tied for 9th.

The rankings of other large economies are Germany 19th; Japan 30th; France 38th; Italy 54th; Mexico 59th; India 66th; China 86th, Brazil 88th and Russia 115th.

Botswana ranked highest (30th) among Continental Sub-Saharan African nations while most of the lowest ranking nations were those in Africa, Latin America or former communist states.

Chile and Costa Rica, which tied at 20th, have the best record in Latin America with bottom nations as Burundi, Guinea-Bissau, the Democratic Republic Congo, Venezuela, Zimbabwe and Myanmar.

There was no data for North Korea and Cuba.

The 2005 Economic Freedom Report said nations that were economically free out-performed non-free nations in indicators of well-being, stressing that nations on top in economic freedom had an average per capita GDP of 25,062 dollars, compared to 2,409 dollars for those nations in the bottom.

"The top group has an average per capita growth rate of 2.5 per cent compared to 0.6 per cent for the bottom group, while unemployment in the top averages 5.2 per cent compared to 13.0 per cent in the bottom," the Report said.

It put life expectancy at 77.7 years in the top groups while the figure dropped to 52.5 years in the bottom rungs.

"In nations of the top quintile, the average income of the poorest 10 per cent of the population is 6,451 dollars as against the 1,185 for those in the bottom quintile."

The countries with highest economic freedoms have 0.1 per cent of children in the labour force while 22.6 per cent in the least economically free countries are in the labour force.

Political rights ranked 1.7 on a scale of 1-7, where 1 marks the highest level of freedom and seven the lowest. The bottom group has an average score of 5.0.

The Report indicated that economic freedom is 50 times more effective than democracy in diminishing violent conflict while the impact of economic freedom on whether States fought or had military dispute was highly significant at 1 per cent, while democracy was not a statistically significant predictor of conflict.

Nations with low score are 14 times prone to conflict than States with under 8.0 score, the Report noted, but said the overall pattern of results did not shift when additional variables such as membership of EU; ECOWAS and other Unions, nuclear capability and regional factors were added.

The Report also said that wealth created by markets through efficient production, unlike wealth derived from land or resources, was difficult for nations to 'steal" by violent action since efficient production required property rights and free decisions by market participants that were difficult or impossible to coordinate to the victor's advantage.