“Mostly Free”: Georgia improves rank in economic freedom survey

Georgia has 0.4 more points this year and is number 11th among 43 European countries. Photo by N. Alavidze/agenda.ge.
Agenda.ge, 16 Feb 2017 - 03:51, Tbilisi,Georgia

Georgia is steadily improving its standing in economic freedom ratings and has been included in the top five list of "mostly free” countries in the world, shows the latest survey by the Heritage Foundation.

Furthermore, the 2017 Index of Economic Freedom survey ranked Georgia 13th amongst 186 countries after it moved up 10 places by gaining 76 points.

In the whole report, Hong Kong placed number one on the 2017 list.

In the category of "mostly free” countries Georgia took fifth place after Switzerland, Estonia, Ireland and the United Kingdom.

As for Georgia’s neighboring countries, Armenia got 70.3 points and took 33th place, while Azerbaijan was rated at 63.6 points taking 68th place and Turkey with 65.2 points came in 60th place.

Among 186 countries Russia came in at 114th place with 57.1 points listed in the category of "mostly unfree”.

 

Read more about Georgia Economy. See more from the 2017 Index.

Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law, regulatory efficiency, limited government and open markets. Based on an aggregate score, countries are graded and classified as "free (combined scores of 80 or higher); "mostly free (70-79.9); "moderately free (60-69.9); "mostly unfree (50-59.9); or "repressed” (under 50).

While discussing the rule of law, the report said the protection of property rights has improved in Georgia and the government has made the enforcement of contracts easier.

As for government size, the report said: "The flat individual income tax rate is 20 percent, and the flat corporate tax rate is 15 percent. Other taxes include a value-added tax and a tax on dividends. The overall tax burden equals 25.3 percent of total domestic income. Government spending has amounted to 29.2 percent of total output (GDP) over the past three years, and budget deficits have averaged 1.4 percent of GDP. Public debt is equivalent to 41.2 percent of GDP”.

According to the report the regulatory environment is efficient in Georgia.

It takes only three procedures and three days to start a business, and no minimum capital is required”, said the report.

Finally, the report highlights the importance of the open market in Georgia’s economy.

The value of exports and imports taken together equals 110 percent of GDP. The average applied tariff rate is 0.7 percent. There are some restrictions on foreign ownership of agricultural land. With the banking sector growing and modernized, access to financing has improved. Capital markets continue to evolve, but the stock exchange remains small and underdeveloped”, said the report.

The Heritage Foundation is a research and educational institution whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom and a strong national defence.