WASHINGTON, Jan 18: Pakistan is ranked ahead of many regional economics in terms of economic freedom, according to the latest worldwide index of economic freedom. The 2007 Index of Economic Freedom, jointly conducted by The Heritage Foundation and Wall Street Journal, has put Pakistan at the 89th place.

Pakistan has also earned a better ranking compared with most of developing countries on the index, which rates economic freedom of countries taking into account some key factors including ease of doing business, regulations, investment freedom, financial freedom, fiscal freedom, property rights, trade freedom etc.

India is 104 on the index which measured economic freedom of 161 countries.

The assessment notes that Pakistan scores well in fiscal freedom, business freedom, freedom from government, and labour freedom. It also acknowledges that the government’s efforts to liberalise the business climate are producing results.

In the background, experts observe that Pakistan is a vital crossroads between Central and South Asia and also add that wide-ranging macroeconomic reforms have spurred economic growth.

China, a major regional economy, has been ranked 119th on the index.

The executive summary of the 2007 Index notes that modern scholars of political economy are rediscovering the centrality of “free institutions” as fundamental ingredients for rapid long-term growth.

Economic freedom is strongly related to good economic performance, the summary stresses.

The Index reflects that the top 20 countries have held relatively steady. Even though the methodology used for rating economic freedom has been revised with this edition of the Index, the composition and order of the top 20 economies have hardly changed at all.

Japan and Belgium moved into the top group (compared to the old methodology, not compared to 2006 scores using the new methodology), whereas Austria and Sweden fell to lower positions.

Hong Kong has the highest level of economic freedom for the 13th straight year. Singapore remains close, ranked second in the world, and Australia is ranked third freest economy in the world, which means that the Asia-Pacific region is home to the top three economies.

Twelve of the top 20 freest economies are European. A majority of the freest economies are in Europe, led by the United Kingdom, Ireland, Luxembourg, and Switzerland. Only five are in the Asia-Pacific region. The remaining three are from the Americas: the United States, Canada, and Chile.

A new labour freedom factor has been added, and entrepreneurship is being emphasised in the business freedom factor.

Both of these new categories are based on data that became available from the World Bank only recently.—APP