Lebanon ranks second in Arab world in economic freedom

Country ranks first in access to sound money category in region

The Fraser Institute’s annual Index of Economic Freedom in the Arab World ranked Lebanon in second place in 2009 among 15 Arab countries included in the survey, up from fifth place in 2008 and fourth place in 2007, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group. The index measures the degree of economic freedom in each country on the basis of 18 variables divided into five broad factors of economic freedom.

The factors measure the size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and the regulation of credit, labor and business. Lebanon received a score of 7.8 points on a scale of 1 to 10, up from 7.6 in 2008 and 7.7 in 2007 and 2006, and higher than the Arab average of 7.1 points. Lebanon was followed by Kuwait, Oman, Jordan, Qatar, Saudi Arabia, the UAE, Yemen, Egypt, Morocco, Mauritania, Tunisia, Syria and Algeria, while Bahrain had the highest level of economic freedom in the Arab world.

Lebanon ranked first on the Size of Government category, the fourth year in a row that Lebanon tops the region in terms of the small size of the government relative to its economy.

Also, Lebanon ranked in first place on the Access to Sound Money category, which measures the extent that a nation’s currency is sound and holds its value over time. It ranked second in the region on the Access to Sound Money in 2008 and first in the category in 2007 and 2006.

In parallel, Lebanon tied with Djibouti and Egypt, came behind Comoros and ahead of Libya on the Legal Structure & Security of Property Rights category.

This area examines whether laws, primarily dealing with economic matters, are fairly and transparently applied in a timely manner, and whether property rights and contracting are protected by the rule of law.

Also, Lebanon ranked behind Saudi Arabia and ahead of Sudan on the Freedom to Trade Internationally category, which measures the extent to which businesses and individuals can freely trade with their counterparts in other nations. It came in 11th place in each of 2009 and 2008 and in 10th place in 2007.

Further, Lebanon tied with Oman and Saudi Arabia, came behind Bahrain and ahead of Kuwait in terms of Regulation of Credit, Labor and Business.

This category measures the extent to which the regulatory burden hinders the formation or advancement of businesses, the free movement of labor, and ability to obtain or advance credit. It came in eighth place in each of the preceding two years. The Fraser Institute is a Canada-based independent research organization whose mission is to study and measure the impact of competitive markets and government intervention on the welfare of individuals.

– Reuters