23 October, 2020

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Sri Lanka Ranks 83 Among 162 Jurisdictions On Economic Freedom Of World Index

Sri Lanka ranks 83 out of 162 countries and territories included in the Economic Freedom of the World: 2020 Annual Report, released by Canada’s Fraser Institute in association with the Advocata Institute Sri Lanka.

Hong Kong and Singapore top the index, continuing their streak as 1st and 2nd respectively. New Zealand, Switzerland, the United States, Australia, Mauritius, Georgia, Canada, and Ireland round out the top 10.

Research shows that people living in countries with high levels of economic freedom enjoy greater prosperity, more political and civil liberties, and longer lives. For example, countries in the top quartile of economic freedom had an average per-capita GDP of $44,198 in 2018 compared to $5,754 for countries in the bottom quartile.

Moreover, in the top quartile, the average income of the poorest 10 percent was $12,293 compared to $1,558 in the bottom quartile. Interestingly, the average income of the poorest 10 percent in the most economically free countries is more than twice the average per-capita income in the least free countries.

Sri Lanka’s ranking for Economic Freedom

According to the Fraser Institute Report on Economic Freedom, Sri Lanka gained 15 places to be ranked 83 compared to the previous year where the country was ranked 98. Sri Lanka’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):

“It is noteworthy that this 2020 annual report is based on the data for 2018. If it were based on the data for 2018, 2019, and 2020, for Sri Lanka, there could have been a different score, most likely a lower rank and a smaller score compared to 83 and 6.88 for 2018,” commented Dr Sarath Rajapatirana, Chair of the Academic Programme at the Advocata Institute. “This is based on the categories: 1. Size of Government, 2: Legal System and Property Rights, 3: Sound Money, 4: Freedom to Trade Internationally, 5: Regulation. During this period the size of Government increased, freedom to trade did not improve with para-tariffs still in place while regulations were not clearly defined. With COVID 19 pandemic coming into Sri Lanka in March 2019, economic freedom had to be curtailed with a complete lockdown of activities. But this was a precautionary strategy. Without a lockdown, it could have been worse. Sri Lanka did better than most countries. The danger is that the measures adopted could be retained which would restrain economic freedom beyond what was necessary to restrain the virus. “ he went on to say.

Sri Lanka is particularly weak in the category related to “Legal System and Property rights” in the index with little improvement from last year’s report. According to Professor Sirimal Abeyratne Professor in Economics at the University of Colombo and advisor to Advocata Institute, “Economic freedom requires discipline and discipline is constituted by the rule of law. Proponents of economic freedom lose ground when they forget this. Opponents of economic freedom look smart when they ignore this. Economic freedom ensures the prosperity of a nation, only when it is founded on the rule of law.”

About the Economic Freedom Index

The Fraser Institute produces the annual Economic Freedom of the World report in cooperation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories. It’s the world’s premier measurement of economic freedom, measuring and ranking countries in five areas—size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally and regulation of credit, labour and business.

This year’s publication ranks 162 countries and territories. The report also updates data in earlier reports where data has been revised. (By Advocata Institute)

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Latest comments

  • 4
    1

    Ranking as the 93rd is not correct as this sad sorry shitty island has got everything going against them.
    I attribute the following as the reasons as to why I dispute the findings of Dr Sarath whose sister is married to a cousin of mine and I thumbed a lift in his car many a moon ago after attending the sisters wedding reception.
    =
    Sad sorry Lanka is a very low-income country where 99.3% of the poverty-stricken population are starving and just do not know where their next meal is coming from.?
    =
    Whilst studying Economics at the Aquinas University College the lecturer told me that the figures along with the statistics can be twisted and turned around to create pictures of prosperity or doom.
    =
    Unemployment is very high, now with the present Rajapuka government and the doings of the COVID-19 virus the employment market has taken a twist for the worse.
    =
    The inward dollar remittances, especially from the middle-east, has also received a mighty blow and there’s been more than a 55% decline in these incoming TT’s or drafts.

  • 1
    0

    2018 is the time when UNP was in power, so why Mahinda and Gota’s picture in this article? Does it mean Colombo Telegraph is trying to hoodwink the readers? Shameful act.

  • 0
    2

    rj
    Your motherland is famous for open defecation and therefore known as “happy shity” country.
    How is the economic freedom there?

    Soma

  • 0
    0

    This cant be true because we just changed our name to “vistas of splendor and prosperity “. Lets wait for post 2020 reports . Talking about, the size of government heard coconut minister was found at the top, broken legal system (listen to PCol statements) , access to not sound but black money, freedom to not just trade internationally but internally (Evil Eye was euphoric that Muslims will loose their meat business ) and regulation of credit under Cabraaaal.

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