Economic Freedom Index Rates Pakistan Economy as ‘Mostly Unfree’

Economy in most parts of the world is harsh as it is. Stringent regulations and restrictions only contribute to the pressure. If the 2015 Index of Economic Freedom compiled by the Heritage Foundation and in association with The Wall Street Journal is to be believed, Pakistan rests at number 121 out of 178 countries in regards to economic freedom. Thus, its economy is considered to be mostly unfree since people do not enjoy the power to freely invest and trade.

This index analyses the economy of a country using a total of 10 defined indicators: government spending, property rights, freedom from corruption, monetary freedom, investment freedom, business freedom, fiscal freedom, trade freedom, labour freedom and financial freedom. Pakistan shows improvements with four indicators, weaknesses with four whereas two show neither progress nor detrioration. Improvements in freedom from corruption and investment freedom boost last year’s score by 0.4 points.

The researchers acknowledge that some government-operated industries have transitioned as a result of being privatized. However, the lapses in security and increasing regulations leave hardly any incentive for foreign investment. In case you were wondering, other countries that accompany Pakistan in the category of mostly unfree economies include: Nigeria (at 120), Kenya (at 122), India (at 128) and Bangladesh (at 131).

Experts are divided over their opinion on this disappointing position that Pakistan achieves in the study. One group of economic experts is extremely critical of the harsh regulations imposed by the government whereas the other encourages the idea of having such checks and balances in place. Dr Ikram ul Haq belongs to the former; he firmly believes that loopholes in the regulatory framework are costing the average citizen by depriving him/her of the much deserved economic liberty.

Contrary to the rightists’ views, Kaiser Bengali’s (Head of Balochistan Chief Minister’s Policy Reform Unit) belief in strong regulations over the economy remains unwavered. Infact, he is glad that the study doesn’t consider Pakistan’s economy among those that are economically free. Former Sindh government advisor sees liberty of multinationals as the freedom to loot.