South Korea’s economic freedom ranked 35th among 127 countries, maintaining the same spot from the previous year, an international survey showed yesterday. The economic freedom global index of Korea came out at 7.1 out of 10 in the ''Economic Freedom of the World: 2005 Annual Report.’’ The report was jointly compiled by 72 economic think tanks around the world, including Korea’s Center for Free Enterprise (CFE), and rankings were based on data in 2004. The country ranked 35th together with Botswana, Israel, Latvia and Malta. Korea received 7 points in 2003. Hong Kong topped the list with the highest score of 8.7 points, followed by Singapore with 8.5. New Zealand, Switzerland and the U.S. were tied for third with 8.2. Japan received 7.5, ranking 19th, up one notch from 20th place the previous year. The report showed that Korea received relatively high marks on access to sound money (9.5), freedom in trade (7.2), the size of government (6.5) and property rights protection (6.3). But the country scored badly on corporate regulations (5.1) and labor market flexibility (4.7). ''Although the country received higher scores on financing, government efficiency and other areas, it has a lot to improve on in the areas of state regulations and labor flexibility. The government should ease a set of corporate regulations to encourage companies to make investments and create jobs,’’ a CFE researcher Choi Sung-no said. He also said the government should pay more attention to making the domestic labor market more flexible to create a business-friendly environment and attract foreign investment. Economic freedom refers to the fairness of corporate and financial regulations and liberality of trade policies, in addition to the freedom to buy and dispose of property. The economic freedom index measures a comparative ranking of economic freedom to different nations, based on various predetermined parameters that fall under five categories: freedom to trade, market regulation, access to sound money, property rights and size of government. The index is important to investors as it reveals the comparative advantages of investing in different destinations and suggests the extent to which one can pursue economic activity without government interference. The index also informs policymakers of why one country is attracting investments while another is not.
