The Russian economy is catching up to 1980

The Russian economy is catching up to 1980

The Canadian Fraser Institute has released its annual ranking of countries in the world by level of economic freedom. The permanent leader of the ranking, Hong Kong, lost 1st place to Singapore this year. The USA was in 5th place, the UK - in 9th, Germany - in 23rd, India - in 87th, China - in 111th. Russia has lost several positions, falling to 104th place and as close as possible to its position in 1980, when the Fraser Institute ranked the Soviet Union in 107th place.

Researchers at Canada's Fraser Institute have released their annual rating countries of the world according to the level of economic freedom. This year, the ranking included 165 states and jurisdictions. Data for 2021 was used to compile the ranking.

The rating assesses the economic freedom of countries' residents and companies in making economic decisions - based on an analysis of the regulatory policies of states, the level of freedom in international trade and business, the size of the government apparatus, an assessment of the legal system, the level of transparency and stability of monetary policy, etc.

Overall, the authors note that after a period of continuous growth (2000-2019), the average index of economic freedom in the world has been declining. In 2020–2021, the global index was 6.77 points, a record low since 2009. Although back in 2019 the index was at its highest level of 6.94 points.

An important feature of the current rating is the change of leader (.pdf). Fraser Institute researchers have consistently ranked Hong Kong top, but this year it came in second place, behind Singapore.

The authors believe that the growing influence of the Chinese Communist Party in Hong Kong is significantly reducing the level of economic freedom in this territory. “New regulatory barriers, restrictions on hiring foreign labor, and rising business administrative costs all have a negative impact on economic freedom,” the authors note.

Switzerland occupies third place in the ranking after Singapore and Hong Kong, followed by New Zealand, and the United States rounds out the top five. Also in the top 10 are countries such as Ireland (6th place), Denmark (7th), Australia (8th), Great Britain (9th), Canada (10th). Japan this year was in 20th place, Germany - in 23rd, France - in 47th, India - in 87th, Brazil - in 90th, China - in 111th place.

The last five are countries such as Yemen (161st place), Sudan (162), Syria (163), Zimbabwe (164) and Venezuela (165). Fraser Institute does not include Cuba and North Korea in its rankings due to insufficient data on them.

Russia was ranked 104th in the ranking, between Nepal and Tanzania. This is not the worst, but also not the best result for the Russian Federation during the ranking.

In 2000, the country ranked 115th, then slightly improved its position, but again found itself in 115th place in 2005. dividing him with Rwanda and Togo. In the 2010s, Russia’s position in the ranking began to improve, in 2015 it was in 109th place, in 2019 it was in 94th place. But already in 2020 there was a downward movement again - 97th place. In the entire history of the Fraser Institute ranking, Russia's current place in it is closer to 1980, when the Soviet Union was in 107th place.

In this year's ranking, Russian positions were noticeably weakened by such indicators as the size of the state apparatus (123rd place) and regulation (134th place). Significantly higher indicators include the legal system and property rights (84th place), as well as the strength of the financial system (85th place).

Evgeny Khvostik

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