Ireland is world's seventh freest economy - report

Ireland's economy has been ranked seventh in a survey of the world's freest economies.

The finding came in the latest Index of Economic Freedom survey for 2007, conducted by the Wall Street Journal  and The Heritage Foundation.

Using new methodological detail, Ireland is ranked 2nd out of 41 countries in the European region, behind only the United Kingdom, with a score of 81.3 per cent - much higher than the regional average.

The authors identify labour freedom as Ireland's weakest area. "As in many other European nations, generous labour laws mean that employment is not as flexible as it should be for maximum job creation and sectoral dynamics.

"Government spending as a proportion of GDP is also a disincentive. Even though tariffs are low, non-trade barriers reduce Ireland's trade freedom score."

Ireland scores highly when it comes to business freedom, investment freedom, financial freedom, monetary freedom, property rights, and freedom from corruption.

Entrepreneurship is made easy in Ireland because Government has a "light regulatory hand". It also notes that "distortionary EU agricultural subsidies" are undermining the country's monetary score, however.

Asia again topped a survey which ranks the world's freest economies in 2007, with Hong Kong in first place and Singapore in second position.

Hong Kong topped the rankings for the 13th consecutive year with an 89.3 score out of 100 given its low taxes and highly flexible labour market. Singapore came second with a score of 85.7, while Australia jumped from ninth to third in a new ranking methodology which included labour freedoms for the first time.

Europe had four countries in the top 10 - the United Kingdom, Ireland, Luxembourg and Switzerland. The United States came fourth.

The 2007 index showed that for the 157 countries rated, overall global economic freedom "stalled" slightly this year, after a sustained uptrend, with a 0.3 per cent dip from the previous year's average.

The worst ranked country was North Korea with three points.

The rankings employed criteria such as business freedom, tax rates, inflation, property rights and freedom from corruption.

Of the 157 countries ranked, only seven were classified as "free" with a score of 80 or higher.

Twenty countries -

including many in Asia such as Vietnam, Laos and Myanmar -

had "repressed" economies with scores of less than 50.

Despite this, the authors said global poverty was found to be retreating as a result of international economic growth.

Rank

Country

Percentage Freedom

Hong Kong

89.3

2

Singapore

85.7

3

Australia

82.7

4

United States

82.0

5

New Zealand

81.6

United Kingdom

81.6

7

Ireland

81.3

8

Luxembourg

79.3

9

Switzerland

79.1

Canada

78.7

Additional reporting agencies