Thursday’s release of the Economic Freedom of the World Index from the Fraser Institute sees SA fall another two places to 101st out of 160 countries.
Economic freedom has been shown to be correlated with economic growth, incomes and prosperity generally, so it is disturbing to see SA continue its slide in this international ranking.
Notable drops in the index’s subcategories included a sharp decline in the score relating to bribery and corruption — no surprise there. Business costs of crime, regulation of private sector credit, and the integrity of the legal system all saw negative movements.
SA now ranks alongside countries such as Greece (102nd) and Ghana (103rd). Nigeria has moved up to 81st, with Uganda and Botswana at a respectable 48th and 49th.
If SA is to arrest its economic decline it needs to take heed of the signals showing in these international reports. State-owned enterprises must be dealt with. The government must free up labour markets, which necessarily means taking on the unions. More generally, the government should attempt to do less and do it better.
Until this happens, we will continue to see low growth, high unemployment and growing political unrest.
Free Market Foundation
This article was first published on Businesslive on 11 September 2019