Vietnam lags behind ASEAN peers on economic freedom index

By Nguyen Quy   March 10, 2019 | 05:28 pm PT
Vietnam lags behind ASEAN peers on economic freedom index
Women sell vegetables at a Hanoi market in January, 2018. Photo by Reuters/Kham
Vietnam moves up 13 places on Economic Freedom Index, but remains in the ‘mostly unfree’ class.

In a compilation by the Heritage Foundation, an American conservative public policy thinktank based in Washington, D.C.,Vietnam is ranked 128th out of 180 countries and territories on the 2019 Economic Freedom Index, up 13 places from last year.  

On this index, it fares unfavorably against Southeast Asian peers like Singapore (2nd), Thailand (43rd), Indonesia (56th) and the Philippines (70th).

Its overall score increased by 2.2 points from last year to 55.3 thanks to improvements in fiscal health, investment freedom and judicial effectiveness, according the report. 

However, tax burden, monetary freedom and financial freedom are still inhibited.

Vietnam finished 30th out of 43 countries in the Asia Pacific region, below China and its smaller neighbors Cambodia and Laos.

The U.S. foundation said that Vietnam could improve its economic environment by continuing to reform state-owned enterprises, reducing red tape, increasing transparency in the business and financial sectors, reducing bad debt in the banking sector and increasing recognition of private property rights.

The ranking is based on 12 quantitative and qualitative factors grouped into four broad categories, including rule of law, government size, regulatory efficiency and open markets to measure economic freedom in 180 countries and territories across the world.

The world average score is 60.8, classifying the global economy as "moderately free".

Only six economies are classed as "free" by earning scores of 80 or above. Hong Kong and Singapore finished first and second in the rankings for the 25th consecutive year, followed by New Zealand, Switzerland, Australia and Ireland.

The world’s biggest economy, the U.S. ranked 12th globally, jumping six places from the last year’s ranking while China is far behind in 100th place.

This year, the number of economies ranked as ‘mostly unfree’ stands at 64, while 21 are considered "repressed".

Vietnam’s economy expanded 7.08 percent last year, which helped the country retain its status as one of the best performing economies in the world.

It was the highest growth the country has experienced since 2008 and compared with the median estimate of 6.9 percent in a Bloomberg survey of 12 economists.

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