High ranking: Bahrain moves up on economic freedom index

MANAMA: Bahrain has been ranked as the 40th freest economy among 184 nations, according to a new index.

Heritage Foundation’s 2021 Index of Economic Freedom has praised Bahrain as ‘one of the region’s most improved countries this year’.

The latest analysis by Washington’s number one think tank assesses countries on economic freedom, with Bahrain’s score 69.9 out of 100.

The world average economic freedom score is 61.6, underscoring Bahrain’s strong ranking, with a jump of 3.6 from 66.3 in 2020.

Effectiveness

Bahrain is ranked third among the GCC countries, with only the UAE (76.9) and Qatar (72) ahead of it, followed by Saudi Arabia (66), Oman (64.6) and Kuwait (64.1).

Bahrain’s overall score has increased primarily due to an improvement in judicial effectiveness, according to the report.

“Bahrain is ranked fourth among 14 countries in the Middle East and North Africa region and its overall score is above the regional (62.6) and world averages.”

The report states that after five years in the moderately free category, Bahrain’s economic freedom score has rebounded.

Indicator

“One of the region’s most improved countries this year is Bahrain, where economic freedom has rebounded,” it states.

“The country is now poised to make it back into the ranks of the ‘mostly free’.

“The index’s fiscal health indicator score for Bahrain is one of the lowest in the world.”

For the second year in a row, Singapore’s economy has been ranked the most free in the world this year by the think tank followed by New Zealand and Australia.

The index assesses countries (from July 1, 2019 through June 30, 2020) on four broad categories: Rule of Law (property rights, government integrity, judicial effectiveness); Government Size (government spending, tax burden, fiscal health); Regulatory Efficiency (business freedom, labour freedom, monetary freedom) and Open Markets (trade freedom, investment freedom, financial freedom).

The report states that property rights are generally respected in Bahrain and expropriation is rare.

The process for dealing with construction permits, obtaining electricity and credit, registering property, enforcing contracts and resolving insolvency have improved in the country.

However, Bahrain was pulled up for its ‘largely ineffective’ labour courts and ‘cumbersome and expensive’ subsidy support system.

In addition, the report highlights that Bahrain has four successful preferential trade agreements in force.

“The overall investment framework is generally positive and remains transparent.

“Foreign and domestic investors have access to a wide range of financial services.

“The banking sector remains well capitalised and over 80 per cent of adult Bahrainis have access to an account with a formal banking institution.”

However the report also warns that the principal obstacle facing Bahrain’s economy is its massive debt.

In addition, due to Covid-19 the economy was forecast to contract by 4.9pc for the year, said the report, adding that the overall global economic outlook remains challenging because of the ongoing pandemic and its lingering impact on many economic sectors.

“The situation remains precarious, particularly in many developing countries and emerging markets,” warns the report.

Source: https://www.gdnonline.com/Details/937944/High-ranking-Bahrain-moves-up-on-economic-freedom-index