Heritage Foundation recently published its 28^th edition of the Index of Economic Freedom, which assesses economic freedom in a total of 184 countries for the year 2021. In detail, the overall index score is calculated based on twelve freedom-related criteria classified under four major categories, and each criterion is graded on a scale of 0 (worst) to 100 (best). The scores of these twelve components of economic freedom, which are calculated based on a number of sub-variables, are equally weighted and averaged to produce an overall economic freedom score for each economy. In this vein, Heritage Foundation commented that the global average economic freedom score regressed to 60.0 down from 61.6 a year earlier, noting that this score constitutes a 2.4 point improvement since the inception of the index in 1995. Concurrently, 7 countries emerged as “free” (scores above 80), 27 countries as “mostly free” (scores between 70 and 80), 54 countries as “moderately free” (scores between 60 and 70), 57 as “mostly unfree” (scores between 50 and 60), and 32 as “repressed” economies (scores below 50).

More particularly, Singapore topped the list of covered countries in the 2022 Index of Economic Freedom (IEF) with an overall score of 84.4, followed by Switzerland (score: 84.2) and Ireland (score: 82.0). On a regional basis, the United Arab Emirates (UAE) led the list of countries in the Middle East and North Africa (MENA) region in the 2022 IEF, scoring 70.2 and ranking 33^rd worldwide. The UAE was followed by Qatar (score: 67.7; global rank: 44) and Bahrain (score: 62.0; global rank: 74), only to name a few.

Locally, Lebanon scored 47.3 in the 2022 IEF, compared to a score of 51.4 recorded in 2021, losing 8 positions to rank as the 162^nd freest economy in the world, yet remaining stable on a regional basis, with Lebanon’s score settling below the global (60.0) and regional (56.9) averages. Lebanon’s economic freedom was categorized as “Repressed”, being demoted from the “Mostly Unfree” category that it held for nine consecutive years. Lebanon was only followed by Algeria (score: 45.8; global rank: 167) and Iran (score: 42.4; global rank: 170) in the MENA region. According to the report, Lebanon saw an improvement in three freedom criteria (namely government spending, business freedom, and labor freedom) which was offset by the weakening scores of six criteria (namely property rights, judicial effectiveness, government integrity, monetary freedom, trade freedom and investment freedom). In the same context, the report unveiled that Lebanon’s economy has deteriorated over the last five years, mirrored by a gradual degradation in terms of economic freedom. As far as the IEF’s major categories are concerned, and under the “rule of law” pillar, the report uncovered that while the law protects real private property, the weak judicial capacity often causes a delay in the handling of cases. The report further underlined the persistent corruption staining government contracts, taxation, and real estate registrations, only to name a few. On the “government size” front, the report estimated the country’s total government spending at 27.4% of GDP and its budget deficit at 10.6% of GDP on average during the past three years, while pinpointing a 154.4% debt-to-GDP ratio. In the area of “regulatory efficiency”, the report noted that businesses are enduring to survive amidst the plethora of crisis ravaging the country. On the “open markets” front, the report estimated the implied tariff rate at 5.4%, and that Lebanon is not a member of the World Trade Organization at the present.