- The Washington Times - Saturday, January 8, 2005

The world is a little freer than it used to be, but in some places it’s backsliding. That’s the conclusion of this year’s Heritage Foundation/Wall Street Journal Index of Economic Freedom, which looks at a range of indicators — including tax policy, monetary policy and property rights — to size up who’s getting freer and who’s not. As usual, a striking correlation between freedom and prosperity emerges. The data all point to incompetent or tyrannical government as the source of the world’s economic ills. In our view, it’s no coincidence that the places with the most tyranny and political turmoil are also the most troubled economically.

The industrialized democracies, which saw modest progress this year, are mostly free and mostly prosperous. A handful of countries in the former Communist world improved by leaps and bounds, and saw robust economic growth last year. But things are different in the troubled economies of the Middle East and Africa, where countries already in the economic doldrums slid further toward statism and stagnation. This wasn’t a coincidence.

Overall, 86 countries worldwide are freer than they were last year and 57 are less free. The 10 most-improved countries this year were Madagascar, Ukraine, Poland, Bulgaria, Iceland, Indonesia, Hungary, Malaysia, Mongolia and Uzbekistan. We’re pleased to see so many former Communist countries among their numbers, and wish to point out to naysayers that in these cases freeing up the economy has meant growth: Gross domestic product growth rates in all but one of these liberalizing countries were in the robust range of 3 to 5 percent. (The lone exception was Iceland, the most developed among them.)

That should help put to rest the contention that liberalization means stagnation, as many have claimed about Latin America. In that region, mostly stagnant economic growth has mirrored mostly stagnant liberalization efforts — another non-coincidence, in our view. The country with the most free economy in the region, Chile, enjoyed a high growth rate, while the one that consigned freedom to the gulag, Cuba, and another heading in the wrong direction, Venezuela, both ended up with abysmal growth rates. In that regard, Cuba outdid itself. It was the only country in the world to place simultaneously among the 10 most repressed economies and the top 10 repression-heighteners simultaneously.

The troubling cases of African and Middle Eastern countries only prove the point further by showing how extensively repression and poverty go hand in hand. Six of the 10 most unfree economies and six of the 10 most-worsened countries are located in those regions. Not surprisingly, when plotted along x- and y-axes of increasing per capita GDP and increasing freedom, these countries are mostly clustered together down near the bottom of both scales, with some prominent Middle Eastern oil kingdoms the sole exceptions. Besides those, in these least democratic of regions, tyrannical governments or incompetent ones repress their peoples and economies, and the result is human misery and warfare on epic scales. As one indication, the report’s “least free” list reads like some expanded “Axis of Evil” rundown, containing Iran, Cuba, Zimbabwe, Libya, Burma and North Korea, among others.

We hope readers of the economic freedom index take the latter facts to heart, since it’s clear to us from the numbers that good things like economic and political freedoms go together. Repressive governments worldwide should take note.

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