SL moves three spots up to 112th position in world Economic Freedom Index

• This is despite economy being rated mostly ‘unfree’
• Country’s overall score increases by 1 point due to higher fiscal health score
• Ranked 24th among 42 countries in Asia–Pacific region
• Nine of SL’s 12 Index indicators below global average levels

Sri Lanka moved up in Heritage Foundation’s world Economic Freedom Index 2020 by three spots to 112th position, although, the country’s economy remains rated mostly unfree for the sixth year in a row. In the 2020 index, Sri Lanka’s overall score has increased by 1 point due to a higher fiscal health score. 

The country is ranked 24th among 42 countries in the Asia–Pacific region, with an overall score of 57.4 out of 100, which is well below the regional and world averages.

“Nine of Sri Lanka’s 12 Index indicators are below global average levels. For economic freedom to expand, the government will need to prioritize anticorruption efforts, reduce debt, and reform the judiciary to improve its independence and integrity,” the United States based conservative think tank said.

In particular the 2020 index showed indicators such as judicial effectiveness, labour freedom, tax burden and trade freedom falling compared to the 2019 index. 

Although, Sri Lanka made a slight gain in the rights indicator, Heritage Foundation pointed out that fraud and forged documents in the private property registration system remains a concern.

“Secured interests in property are generally acknowledged, but enforcement can be difficult. A reliable private property registration system is undermined by fraud and forged documents,” it added. 

Further, it noted that corruption also remains a challenge in the judiciary, public procurement, and customs.

In terms of the country’s labour market, the report highlighted that the bloated civil service contributes to a lack of efficiency in the labour market.

However, Sri Lanka made has improved its scores in several indicators including government integrity, business freedom and monetary freedom compared to 2019 index.  

Meanwhile, Singapore  became the world’s freest economy in the 2020 index ending the 25-year reign of Hong Kong as the world’s freest economy. 

In the new rankings, Hong Kong’s overall score declined by 1.1 points to 89.1, while Singapore’s remained unchanged at 89.4.

New Zealand retained third spot while Australia overtook Switzerland to capture the 4th spot.  The Index of Economic Freedom analyzes 12 factors under four pillars underpinning economic freedom in countries throughout the world annually since 1995. 

The 2020 edition included 186 countries, of which are fully scored and ranked.