Uruguay fell four places in the global ranking of economic freedom

The Fraser Institute Economic Freedom Report 2022 —co-published by the Center for Development Studies (CED)— presents evidence regarding the economic and social benefits that economic freedom represents for countries.

The publication contemplates data from the year 2020. The higher the score in this index, the higher the income per inhabitant, the lower percentages of poverty and indigence, the more respect for the environment, the higher education, the higher life expectancy, among others, according to the executive summary.

Read also: Check out our coverage on Uruguay

Uruguay obtained a score of 7.06 in the 2022 Index of Economic Freedom, its performance worsened compared to the previous year (7.36 points), and it lost four places in the international ranking.

“Despite the drop experienced, we must highlight that Uruguay presents a very stable behavior with a score that oscillates between 7 and 7.5 in the last 20 years,” the report states.

With this value, it ranks 68th among 165 countries in the world ranking, led by Hong Kong (1), Singapore (2) and Switzerland (3).

Venezuela is at the bottom of the table (165), while Argentina is very close (161).

“The decline in the table is due both to the effect of the pandemic and to stagnation in Uruguay’s score and at the same time that others advanced remarkably. Peru and Paraguay are an example of positive evolution in recent years,” states the report.

Globally, Uruguay is in the second quartile of economic freedom.

Chile (7.56) and Peru (7.5) were surpassed in the region, respectively ranking 33rd and 37th worldwide.

Compared to the previous year, Uruguay worsened in all categories except in “Legal System and Property Rights”, which has had a very marginal improvement.

However, despite the drop in the other items, the latter continues to be the category in which the country obtains the worst score.

On the other hand, Uruguay obtains good results in the areas of “Monetary stability” and “Freedom for international trade”. The items in which the country obtained the highest score in these categories are, among others, the following: money growth, standard deviation of inflation, freedom to open foreign currency accounts, (foreign trade) tariffs, (lack of) foreign currency black market, and financial openness.

The Fraser Institute’s Index of Economic Freedom 2022 (IEF 2022) measures the degree to which a country’s policies and institutions support economic freedom. It is very important to note that although it is published this year, the results are those of the year 2020. The cornerstones of economic freedom are individual freedom, voluntary exchange, the freedom to enter and leave markets and compete, and personal security and private property. This index is a multidimensional indicator that is composed of 42 indicators that are grouped into 5 large areas: Size of government, Legal system and Property Law, Monetary stability, Freedom of international trade and Regulation.

With information from El Observador