Humanity’s material progress and cultural development is made possible largely due to the freedom of people to initiate innovations that did not exist before and their freedom to buy and sell extra output and services produced by themselves and other people.
In short, economic freedom and freedom to trade are among
the cornerstones of human progress. Remove this freedom and innovation and
ingenuity will largely be curtailed and human misery and underdevelopment will
result.
These are other related issues were tackled in the
two-day Economic Freedom Network Asia (EFN Asia) Conferences 2015, here at Taj
Tashi hotel in Thimpu, capital city of Bhutan. The event’s theme is “Economic
freedom as a way to happiness” and the main sponsors are EFN Asia, QED Group,
and the Friedrich Naumann Foundation for Freedom (FNF).
QED is a private, independent think tank and consulting
firm based in Thimphu while FNF is a German political foundation tasked to help
conduct economic and political education around the globe about the merits of
classical liberalism, lean state, and increased market competition.
EFN Asia was born in 1998 during a conference in Manila
discussing how more economic freedom and less government interventions could
have anticipated and minimized the financial turmoil that occurred during the
“Asian financial crisis” of 1997-1998. Since then, EFN Asia conferences are
held yearly in different big cities in the region.
How is economic freedom measured and quantified? Which
countries are the most free and least free in economic innovation? What are the
implications of such scoring and ranking in economic freedom of countries and
economies?
These and related questions are answered by the Economic
Freedom of the World (EFW) annual reports, produced by Fraser Institute in
Canada, in partnership with FNF (Germany).
The EFW is measured by getting the scores (0 to 10, zero
is totally unfree and 10 is full economic freedom) of countries covered on five
areas: (1) Size of government, (2) Legal system and property rights, (3) Sound
money, (4) Freedom to trade internationally, and (5) Regulation.
As a result, countries with big governments and high
taxes get low scores in area (1); countries with highly corrupt legal systems
and unstable property rights protection will get low scores in area (2);
countries that have high inflation rates and make it difficult for their
citizens to own and use other currencies will get low scores in area (3);
countries that have low import tariffs, have few non-tariff barriers will get
high scores in area (4); and countries with less restrictions and regulations
in credit, hiring of labor and few business permits and compliance costs will
get high scores in area (5).
The composite score for the five areas covered is
generated and countries are ranked from highest to lowest. For Asia, here are
some results. (See table)
For many years now, Hong Kong and Singapore are
recognized as the two freest economies in the world. They have small and few
taxes, their governments enforce the rule of law, and protect property rights.
Since they have low or zero import tariff, it is easy and less costly for their
exporters and importers to buy and sell goods abroad, and so on. Taiwan, Japan,
and South Korea try to follow these policies set by the two freest economies.
The Philippines has been ranking modestly in the 60th to
70th positions in the three years above. It gets high scores in area (1) as it
does not have too many transfers and subsidies, have few government
enterprises. But the Philippines gets low score in area (2) with scores of only
3 to 4 in sub-areas Judicial independence and impartial courts, other
sub-areas.
That presents a big challenge for the Philippine
government (and other Asian governments too) and civil society organizations --
nongovernment organizations, media, academe, professional organizations, church
groups, and so on: Control or minimize corruption and bribery by having rule of
law: the law applies equally; no one is exempted and no one can grant an
exemption to penalties set by the laws.
Bienvenido S.
Oplas, Jr. is the head of Minimal Government Thinkers, Inc., and a Fellow of
the South East Asia Network for Development (SEANET). Both think tanks are
members of EFN Asia.
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See also:
BWorld 24, Traffic and Newton's 3 laws of motion, November 12, 2015
BWorld 25, Feed in tariff means expensive electricity, November 14, 2015
BWorld 26, IPRI 2015 in APEC economies, November 19, 2015
BWorld 24, Traffic and Newton's 3 laws of motion, November 12, 2015
BWorld 25, Feed in tariff means expensive electricity, November 14, 2015
BWorld 26, IPRI 2015 in APEC economies, November 19, 2015
BWorld 27, The rich getting richer, the poor getting middle class, November 21, 2015
EFN Asia 52, The 5 fishbowls of economic freedom in Asia, November 20, 2015
EFN Asia 53, Successful Conference 2015 has ended, November 25, 2015
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