Heritage Foundation recently published its 29^th edition of the Index of Economic Freedom, which assesses economic freedom in a total of 176 countries for the year 2023. 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 59.3 down from 60.0 a year earlier, noting that this score shows a 1.7 points improvement since the inception of the index in 1995. Concurrently, 4 countries emerged as “free” (scores above 80), 23 countries as “mostly free” (scores between 70 and 80), 56 countries as “moderately free” (scores between 60 and 70), 65 as “mostly unfree” (scores between 50 and 60), and 28 as “repressed” economies (scores below 50).

More particularly, Singapore topped the list of covered countries in the 2023 Index of Economic Freedom (IEF) with an overall score of 83.9, followed by Switzerland (score: 83.8) 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 2023 IEF, scoring 70.9 and ranking 24^th in the world. The UAE was followed by Qatar (score: 68.6; global rank: 36) and Bahrain (score: 62.5; global rank: 68), only to name a few.

Locally, Lebanon scored 45.6 in the 2023 IEF, compared to a score of 47.3 in 2022, losing 2 positions to rank as the 164^th freest economy in the world and 12^th in the region. The country’s score settled below the global (59.3) and regional (56.8) averages. Lebanon’s economic freedom was categorized as “Repressed” for the second consecutive year. Lebanon was only followed by Algeria (score: 43.2; global rank: 168) and Iran (score: 42.2; global rank: 169) in the MENA region. According to the report, Lebanon saw improvements in three freedom criteria (namely tax burden, fiscal health, and government spending) which were offset by the weakening scores under nine criteria (namely property rights, judicial effectiveness, government integrity, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom). The report noted that Lebanon, which was once a leading regional finance and trade center, is currently facing a severe economic & financial crisis resulting from decades of mismanagement, widespread corruption and political turmoil. In details, the report revealed that Lebanon’s individual and corporate tax rates stood at 25% and 17% respectively, with the tax burden equaling 10.9% of GDP. In addition, the report noted that the country’s public debt stood at 150.6% of GDP, with the latest available inflation rate standing at 154.8%. Finally, the report commented that Lebanon is in dire need of economic and governance reforms, with the fiscal & financial crisis adding to the country’s grim economic picture.