According to the newest rankings prepared by the Canadian think tank Fraser Institute, Hong Kong has lost its status because the world’s freest economy after half a century of holding that title. According to a report published on Tuesday (September 20), one in every of the major aspects behind this loss was the decline in judicial independence.
This is a major change as Hong Kong has held the highest spot for the reason that World Economic Freedom Index was launched in 1970, but now has to accept second place as its rating is anticipated to proceed to say no.
Hong Kong’s decline within the report highlights the challenge it faces in maintaining its image as a world financial center, especially after years of isolation attributable to the pandemic and political instability.
Some of the standards used to calculate the Economic Freedom Index include ease of international trade, freedom to enter and compete in markets, and business regulation, amongst others.
The 2023 report relies on data from 2021, the newest 12 months for which comparable statistics can be found for 165 countries. The report assesses the extent of economic freedom of people, i.e. the degree to which they can make independent economic decisions.
Matthew Mitchell, a senior research fellow on the Fraser Institute, revealed that, as stated within the press release, the recent developments in Hong Kong are an example of how economic freedom is closely linked to civil and political liberties.
The report said quite a few aspects contributed to Hong Kong’s downgrade, including recent regulations that created barriers to entry, increased the associated fee of doing business and restricted the hiring of foreign staff. According to Mitchell, the mix of those restrictions, supported by government efforts to manage the private sector, naturally results in a decline in economic freedom, which could negatively impact Hong Kong’s prosperity.
Over the years, one in every of Hong Kong’s long-term attractions for international business has been its popularity for a respected legal system. The city’s legal system is different from China’s, which is usually seen as opaque and effectively controlled by the ruling Communist Party.
However, the independence of Hong Kong’s judiciary has been questioned since President Xi Jinping imposed a national security law on the town in June 2020. The law is seen as a restriction on the town’s autonomy and has been criticized by many.
Under the brand new law, crimes reminiscent of secession and subversion are punishable by as much as life in prison. Concerns increased when Chief Executive John Lee said last month that judges should postpone his decision and even banned controversial protest songs from being distributed online, citing national security risks.
In response to the changes, Singapore climbed to the highest of the report from second place last 12 months, with Switzerland, New Zealand and the United States among the many other five countries in the highest five.
