Argentina was in one of the last places in the ranking of economic freedom measured by the Fraser Institute to evaluate the response of governments to the crisis caused by the global pandemic.
The country was placed in one of the last places on the list: it was 161 out of the 165 registered by the report and was thus only above Syria, Zimbabwe, Sudan, and Venezuela, which was the last one placed in the ranking.
Compared to 2019, Argentina fell seven places from 154th place. In the last 20 years, the country plummeted from that ranking: in 2000, it occupied the 37th step; in 2010, it had already dropped to 132nd; in 2015, to 150th; and in 2019, to 154th.
“Argentina’s indicators have worsened if we compare with those recorded for the previous year. That is mainly explained by the change of government and the assumption of the Fernández-Fernández formula in the presidency.
“We should not be surprised by the loss of economic freedoms since the government has always given a clear message against them.
“In addition to all this, there are the regulations and impositions due to the pandemic that further curtail individual freedoms,” mentioned Santiago Casas, economist of the Fundación Libertad y Progreso, the local institution that participates in this survey on behalf of Argentina.
“We should not be surprised by the loss of economic freedoms since the government always gave a clear message against them,” said Casas.
“Thus, according to this index, Argentina is in the top 5 of the least free countries in the world.
“Without economic freedom and legal stability, there is no investment, and if there is no investment, the process of capital accumulation that increases the gross product and real wages is cut off.
“The short-term horizon for Argentina is quite discouraging and worrisome,” Casas continued.
“When countries increase taxes and regulations, people become less economically free, which translates into lower growth rates and lower investment,” said Fred McMahon of the Fraser Institute.
Personal choice, voluntary exchange, freedom to enter markets and compete, and security of person and private property.
Forty-two items were used to construct a summary index and a gendered legal rights adjustment to measure the extent to which women have the same economic freedom as men.
The degree of economic freedom was measured in five broad areas: the size of government, legal system and property rights, money, freedom of international trade, and regulation.
- Size of government: increased government spending, taxes, and government-controlled enterprises were considered. Individual choice is replaced by government decision-making, and economic freedom is reduced.
- Legal system and property rights: protecting individuals and their legitimately acquired property is a central element of economic freedom and civil society. Indeed, it is the most important function of government.
- Money: inflation erodes the value of legitimately earned wages and savings. Sound money is, therefore, essential to protect property rights. When inflation is not only high but also volatile, it becomes difficult for people to plan for the future and thus use economic freedom effectively.
- Freedom of international trade: freedom of exchange, in its broadest sense, buying, selling, entering into contracts, etc., is essential to economic freedom, which is reduced when freedom of trade does not include businesses and individuals in other nations.
- Regulation: governments use several tools to limit the right to trade internationally and impose onerous restrictions limiting the right to trade, obtain credit, hire or work for whomever you wish, or freely operate your business.
The Fraser Institute produces the annual Economic Freedom in the World report in cooperation with the Economic Freedom Network, a group of independent research and education institutes in nearly 100 countries and territories.
“It is the world’s leading measure of economic freedom, measuring and ranking countries in five areas: the size of government, legal structure and security of property rights, access to a sound currency, freedom to trade internationally, and regulation of credit, labor, and business,” defined Liberty and Progress.
With information from Infobae