Press Release

1

Nepal continues as one of the least economically free countries in the world:

Economic Freedom of the World Report, 2014

For Immediate Release

Contacts: Manogya Sharma, 9851010218, manogya@samriddhi.org

Surath Giri, 9851077430, surath@samriddhi.org

Kathmandu, Oct 8, 2014: The annual Economic Freedom of the World report 2014 was released

yesterday in Brussels. Like previous years, Samriddhi Foundation (one of the co-publishers of the report)

has released the report in Nepal this year. The report demonstrates a strong link between economic

freedom and prosperity whereby the most economically free countries have shown to offer the highest

quality of life and personal freedoms. According to the report, Hong Kong, once again, is the most

economically free jurisdiction in the world and Nepal continues to be one of the least economically free

countries ranking 126 out of 152 countries with an overall score of 6.16, which is slightly lower than last

year's overall score.

The report measures the economic freedom (levels of personal choice, ability to enter markets, security

of privately owned property, rule of law, etc.) by analysing the policies and institutions of 152 countries.

Nepal's scores reveal weaknesses in Legal System and Property Rights, Labor Market Regulations and

Regulatory regime for trade and business.

Lower level of economic freedom could be attributed as a reason behind's Nepal's inability to catch up

with other developing nations which are experiencing higher levels of economic growth owing to

reforms that make it easier to trade and do business.

The Fraser Institute, Canada's top ranked think tank, 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 90 nations and territories. Samriddhi, The Prosperity Foundation is one

of the co-publishing institutes and has been a member of the Economic Freedom Network for the last 8

years. The report is the world’s premier measurement of economic freedom, using 42 distinct variables

to create an index, ranking countries based on economic freedom, which is measured 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 peer-reviewed report is released annually and uses the data of 2 years back. Therefore, the 2014

report provides ratings for the year 2012, the most recent year for which comprehensive data is

available. Nepal showed mixed performance in regards to all the five measured areas of economic

freedom in the 2014 report. Though its ranking and scores in some of the areas have improved, Nepal’s

overall performance in terms of economic freedom continues to be low.

Press Release

2

Nepal’s score in 5 key areas of economic freedom (from 1 to 10, where a higher value indicates a higher

level of economic freedom and a higher ranking) are as follows:

• Size of government: score decreased from 7.6 in the previous year to 7.4 this year

• Legal structures and security of property rights: score unchanged at 4.2

• Access to sound money: score increased slightly from 6.3 in the previous year to 6.4 this year

• Freedom to trade internationally: score unchanged at 6.4

• Regulation of credit, labour and business: score slightly decreased from 6.5 in previous year to 6.4

this year

The Economic Freedom of the World Report uses 42 variables to construct a summary index and

measure the degree of economic freedom of countries around the world. The cornerstones of

economic freedom are personal choice, voluntary exchange, freedom to compete, and security of

private property. Economic freedom is measured in five different areas: (1) size of government, (2) legal

structure and security of property rights, (3) access to sound money, (4) freedom to trade

internationally, and (5) regulation of credit, labor, and business.

According to the report, based on 2012 statistics (the most recent year of available data), the top 10

most economically free jurisdictions are Hong Kong (which continues its streak of number one rankings),

Singapore, New Zealand, Switzerland, Mauritius, United Arab Emirates, Canada, Australia, Jordan and

(tied for 10th) Chile and Finland. The United States, once considered a bastion of economic freedom,

now ranks 12th in the world, tied with the United Kingdom. Other notable rankings include Japan (23rd),

Germany (28th), Russia (98th), India (110th) and China (115th).

The 10 lowest-ranked countries are Myanmar, Democratic Republic of Congo, Burundi, Chad, Iran,

Algeria, Argentina, Zimbabwe, Republic of Congo and Venezuela, which retains the title of the world’s

least economically free country. Some despotic countries such as North Korea and Cuba could not be

ranked due to lack of data.

Globally, the average economic freedom score dropped slightly to 6.84 out of 10 from 6.87 last year.

The full report is available at www.freetheworld.com

About, Samriddhi The Prosperity Foundation

Samriddhi, The Prosperity Foundation is a public policy think tank initiated in 2006 in Nepal to promote

sound public policy research for a free and prosperous Nepal. Samriddhi has been a member of the

Economic Freedom Network for the last 7 years and annually releases the Economic Freedom of the

World Report in collaboration with the Fraser Institute, Canada. This year again, Samriddhi has joined

hands with SEJON and FNCCI to release the 2013 Report on Economic Freedom of the world.