Singapore now ranks as the world’s most economically free nation, and a new Fraser Institute report explains this change.
Previously, Hong Kong led the pack for over two decades. However, a decline in judicial fairness and legal stability caused its fall.
The recent data from 2021 highlights this shift.
Hong Kong’s government often boasted about its top rank. The new report might be a blow to its pride.
Matthew Mitchell, a Fraser Institute researcher, connected this decline to civil liberties. “Political restrictions usually hurt economic freedom,” he stated.
Singapore, on the other hand, is benefiting. More foreign businesses and expatriates are moving there from Hong Kong.
After Hong Kong, Switzerland, New Zealand, and the United States follow in the rankings. China stayed at its 111th position.
Fraser Institute expects Hong Kong’s rating to continue declining. This is due to ongoing restrictions on personal freedoms.
Previous high scores didn’t factor in new laws that limit civil rights. Last year, the institute warned about mainland China’s increasing influence.
Hong Kong’s government disputed the findings. “Claims about new mainland barriers are false,” a spokesperson noted.
Hong Kong’s standing as a financial hub has also felt the strain. Its relationship with Western nations contributes to this tension.
The National Security Law introduced in 2020 caused further decline. This has led to both reduced business confidence and an outflow of companies and residents.
Moreover, it hurt Hong Kong’s global image. A drop in other global rankings evidences this. In 2021, the Heritage Foundation also removed Hong Kong from its economic freedom list.
Background
In summary, this shift in rankings holds significance for both Singapore and Hong Kong. For Singapore, the top spot in economic freedom can attract more international business.
This comes as a win for the nation, known for its stable governance. On the other hand, Hong Kong’s decline raises concerns.
The city has been a global financial hub for years. However, its political landscape is causing a ripple effect on its economic status.