(Heritage Foundation)–The Heritage Foundation/Wall Street Journal 2006 Index of Economic Freedom has ranked Armenia 27th in measuring the economic freedom of 161 countries against a list of 50 independent variables divided into 10 broad factors of economic freedom.
The goal of the index is to develop a systematic–empirical measurement of economic freedom in countries throughout the world–using a set of objective economic criteria to study and grade countries. They include trade policy–fiscal burden of government–government intervention in the economy–monetary policy–capital flows and foreign investment–banking and finance–wages and prices–property rights–regulation–and informal market activity.
Armenia is categorized as economically "mostly free." The producers of the index explain that countries with the most economic freedom also have higher rates of long-term economic growth and are more prosperous than are those with less economic freedom.
North America and Europe continue to be the world’s most economically free region in the 2006 Index–with seven of the world’s 11 freest countries and 15 of the world’s "free" economies. Of the countries in this region–33 exhibited an increase in economic freedom while only 10 experienced a decline in economic freedom.
The most improved country in this region is Romania (mostly unfree–92nd)–followed closely by Armenia (mostly free–27th)–Georgia (mostly free–68th)–and Turkey (mostly unfree–85th). Romania improved by 0.39 point this year–making it the world’s second most improved country. Armenia and Georgia improved by 0.32 point and 0.31 point–respectively. Turkey also improved 0.3 point based on improved scores in trade policy–fiscal burden of government–monetary policy–and banking and finance. All four ranked among the 10 most improved economies in the 2006 Index. While Romania remains "mostly unfree," it is moving strongly toward greater freedom. Improvemen’s in Georgia vaulted that country into the ran’s of the "mostly free" for the first time. Armenia now ran’s among the 30 freest economies.
Ahead of Armenia are Hong Kong 1–Singapore 2–Ireland 3–Luxembourg 4–United Kingdom 5–Iceland 5–Estonia 7–Denmark 8–United States 9–Australia 9–New Zealand 9–Canada 12–Finland 12–Chile 14–Switzerland 15–Cyprus 16–Netherlands 16–Austria 18–Sweden 19–Germany 19–Czech Republic 21–Belgium 22–Lithuania 23–Malta 24–Bahrain 25–Barbados 26
The United States climbed back into the top 10 economies–moving up three spots from its 2005 ranking of 12th into a tie for ninth with Australia and New Zealand.
This year–economic freedom has advanced throughout the world: The scores of 99 countries are better–the scores of 51 are worse–and the scores of five are unchanged. In addition–two countries suspended from grading in the 2005 Index were graded this year. Of the 157 countries numerically graded in the 2006 Index–20 are classified as "free," 52 as "mostly free," 73 as "mostly unfree," and 12 as "repressed." Four countries (the Democratic Republic of Congo–Iraq–Serbia and Montenegro–and Sudan) were suspended from grading because of questions about the accuracy of the data reported by the country or about whether the data truly reflect economic circumstances for most of the country. For two other countries (Angola and Burundi)–the data were deemed reliable enough to make grading possible for the first time since their suspension from grading in the 2001 Index.
Details on the index are available at www.heritage.org/research/features/index/