Georgia Ranks 32nd in Index of Economic Freedom

FROM THE REDACTION

Georgia’s economy is 69.2% free, ranking 32nd among 162 countries worldwide, according to 2008 assessment of The Heritage Foundation and The Wall Street Journal.

Its overall score is 0.1 percentage point lower than last year. Georgia is ranked 18th out of 41 countries in the European region, and its overall score is equal to the regional average. Georgia scores extraordinarily well in business freedom, fiscal freedom, government size, investment freedom, and labor freedom. ‘Business operations are simple and not hampered by red tape. A very low top income tax rate complements the low corporate tax rate, and tax revenue is fairly low as a percentage of GDP. The strongest national institution is the labor market, which is highly flexible and far freer than those of most advanced economies.’ The assessment ranks Labor Freedom in Georgia at 99.9%, saying that ‘highly flexible employment regulations enhance employment opportunities and productivity growth. The non-salary cost of employing a worker can be moderate, and dismissing a redundant employee is costless. Rules on the number of work hours are very flexible. Georgia leads the world in labor market freedom.’ Meanwhile, it says that Property Rights and Freedom from Corruption are still problems for Georgia. Several important facts from the assessment on Georgia: ‘Starting a business takes an average of 11 days, compared to the world average of 46 days; Georgia has made significant progress toward liberalizing its trade regime, but agriculture subsidies, an inefficient customs process, and other barriers continue to add to the cost of trade; Georgia has low tax rates; In the most recent year, government spending equaled 25 percent of GDP; Foreign firms may participate freely in privatizations, though transparency has been an issue; Judicial corruption is still a problem despite substantial improvement in trying to raise the level of efficiency and fairness in the courts; government still faces a persistent challenge in controlling corruption. It has fired thousands of civil servants and police, and several high-level officials have been prosecuted for corruption-related offenses.’ Hong-Kong, Singapore and Ireland top the rating of The Heritage Foundation and The Wall Street Journal.