Economy 'less free' as government meddles

15 September 2015 - 02:24 By Shenaaz Jamal

The government is strangling economic freedom by interfering in the economy. Evidence of this, it is said, is that the Economic Freedom of the World report has demoted South Africa 54 places in the past 15 years.The report, compiled by the Free Market Foundation in conjunction with Canada's Fraser Institute, placed South Africa 96th among 157 countries reviewed."The decline in economic freedom is the result of the government's insistence on dominating the economy and crowding out the private sector, which has a negative impact on growth, employment, poverty reduction and individual liberty," said foundation director Temba Nolutshungu.South Africa was ranked 89th last year.Globally, the average economic freedom score rose slightly to 6.86 out of 10 from 6.84 last year.Economist Chris Hart said South Africa was slipping in the rankings because of the increase in regulation, taxes and labour instability, which were all throttling the economy."We are uncompetitive and from the investment point of view are becoming less attractive. Increasing regulation is also affecting tourism," said Hart."Visa regulations have pushed tourism here into recession. You would have thought that tourism would be used to counterbalance other struggling sectors, such as mining, but it is not."Countries leading the freedom index are Hong Kong, Singapore and New Zealand."If China, which ranks low in economic freedom, encroaches on Hong Kong we can expect Hong Kong's ranking to fall," said the Fraser Institute's Fred McMahon.Of the lowest-ranking countries, eight are in Africa. They include Angola, the Democratic Republic of the Congo and Zimbabwe.Hart said that South Africa's self-inflicted economic problems could be alleviated by allowing businesses to invest more in the economy instead of having to spend money on regulatory compliance...

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