Uzbekistan ranked 114th in the ECONOMIC FREEDOM Index 2020, improving its rating by 26 positions
The Economic Freedom Index has been compiled by the Heritage Foundation Research Center in collaboration with The Wall Street Journal since 1995.
The Economic Freedom Index is a combination of 12 components (property rights, judicial efficiency, government integrity; tax burden, public spending, fiscal health; business freedom, labor freedom, monetary freedom; trade freedom, investment freedom, financial freedom), which are grouped into 4 groups – The Rule of law, the Role of the state in the economy, Regulatory Efficiency and Market Transparency.
In the annual report of the index, 186 countries are evaluated on a 100-point system. The points obtained for each indicator have the same specific weight, the overall score is defined as the arithmetic average of 12 components.
According to the developers, the higher the index value, the more economically free the state is. According to the index, the level of economic freedom of states is divided into 5 categories:
The economy is completely free: 80-100 points;
Economy is mostly free: 70-79. 9 points;
Economy is moderately free: 60-69. 9 points;
The economy is mostly unfree: 50-59. 9 points;
The economy is completely unfree: 0-49. 9 points.
The results of the components are based on open data published by government agencies and ratings of various international organizations (World Economic Forum, World Bank, International Monetary Fund, Credendo Group, Transparency International and others).
The report "Economic Freedom Index 2020" analyzed the database from July 1, 2018 to July 1, 2019.
According to the report for 2020, the top 10 results belong to the following countries:Singapore, Hong Kong, New Zealand, Australia, Switzerland, Ireland, Great Britain, Denmark, Canada, Estonia.
Republic of Uzbekistan
Uzbekistan ranked 114th in the world, improving its ranking by 26 positions.
Uzbekistan scored 57.2 out of 100 points.
Over the past 3 years, the rating has improved by 38 positions (2018-152 positions).
In the Asia-Pacific region, Uzbekistan, with an improvement in the rating value of + 3.9 points, along with Vanuatu (+4.3), Kazakhstan (+4.2), Vietnam (+3.5) and the Maldives (+3.3), entered the Top 5 countries in terms of rating growth.
According to the latest report for 2020, Uzbekistan is among the largest reformers (62 countries) in terms of the Freedom of Trade component.
Among the countries of the Asia-Pacific region, Uzbekistan occupies the 26th position (+10 positions from the previous report) out of 42 countries.
The bottom five countries in the world include the Republic of the Congo, Eritrea, Cuba, Venezuela and North Korea.
Uzbekistan noted positive changes in 11 of the 12 indicators. However, the results in some areas remain low.
Good performance indicators of Uzbekistan:
Fiscal policy (98.9 points, +0.2 growth) - based on the budget deficit over the past three years. Uzbekistan is one of the countries with the highest results.
Tax burden (91.6 points, +0.3 growth) - includes the tax burden on corporate profits, personal income and the total burden (including direct and indirect taxes) as a percentage of GDP. With the last report, there is a decrease of 0.9%. The new version of the Tax Code is aimed at further improving this component.
Government spending (74.7 points, +7.3 growth) - estimated on the basis of budget allocation, there is a decrease in spending by 4.0% of GDP.
Freedom of business (72.6 points,+0.1 growth) - based on the analysis of the processes of starting, licensing, business termination, as well as connection to the power supply system.
Freedom of trade (67.6 points, +5 growth) - estimated by the average tariff and non-tariff barriers that affect the import and export of goods and services.
Priority areas for improvement
Financial freedom (20 points, + 10 growth) - is evaluated by the level of government intervention in the distribution of loans, the level of development of the capital market and freedom of competition.This result indicates the need for reforms in this area.
Freedom of investment (20 points, + 10 growth) - the index evaluates various regulatory restrictions that are usually imposed on investments. The above-mentioned low results show that the reforms should be carried out with a thorough analysis of the sector.
State integration (28.2 points,+3 growth) – the component analyzes the indicators of bribery, transparency of public policy, corruption and transparency of the activities of civil servants. Despite the positive growth, however, the overall result implies the need to take concrete measures to improve the results.
The effectiveness of the judicial process (34.2 points, -0.1 decrease) - is calculated based on the indicators of judicial independence, judicial efficiency, favoritism in decisions of the civil service and public trust in politicians.
Property rights (59.1 points,+9.3 growth) - based on property and intellectual property rights, the strength of investor protection, the risk of property confiscation, and the quality of land management.
Freedom of work (59.9 points,+1.2 growth) - a measure that takes into account aspects of the country's labor market regulatory framework regarding the minimum wage; laws that prevent layoffs; severance pay requirements and measurable regulatory restrictions on hiring and hours worked, as well as the level of labor force participation as an indicative indicator of employment opportunities in the labor market
Monetary freedom (59.9 points,+1 growth) - based on the level of inflation over the past three years and price restrictions.
Results of the Republic of Uzbekistan in the index for 2019 and 2020
Indicator 2019 2020 Indicator 2019 2020
1. Property rights 49.8 59.1 (+9.3) 7. Freedom of enterprise 72.5 72.6 (+0.1)
2. Judicial efficiency 34.3 34.2 (-0.1) 8. Labor freedom 58.7 59.9 (+1.2)
3. Government Integrity 25.2 28.2 (+3.0) 9. Monetary freedom 58.9 59.9 (+1.0)
4. Tax burden 91.3 91.6 (+0.3) 10. Freedom of trade 62.6 67.6 (+5.0)
5. Government spending 67.4 74.7 (+7.3) 11. Investment freedom 10 20 (+10)
6. Fiscal health 98.7 98.9 (+0.2) 12. Financial freedom 10 20 (+10)