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Nepal drops in economic freedom index


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Nepal has slipped eight positions down to 149th with the score 50.1 points in the latest Index of Economic Freedom 2014, published annually by the Heritage Foundation and the Wall Street Journal.

The country’s economic freedom score has dropped by 0.3 point from the last year’s 50.4 points when it was ranked at 141st spot in the index. Nepal is ranked 34th out of 42 nations in the Asia-Pacific region and is scored lowest in the countries evaluated from south Asia.

The report says Nepal made some modest improvements in business freedom, monetary freedom, and the control of government. However, investment freedom and freedom from corruption have been witnessed negative. Nepal’s improvements in freedom from corruption, business freedom, monetary freedom and trade freedom have been more than offset by deterioration in other areas particularly a 25-point decrease in investment freedom. The index also says that a lack of transparency, corruption and a burdensome approval process are reasons to impede much-needed private investment and production.

Though Nepal is considered a “mostly unfree” economy throughout its history in the index, Nepal achieved its highest score in 2007.  Nepal was first graded in the 1996 index and its economic freedom score since then has been largely stagnant, declining overall by less than half a points.

Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of 178 countries graded in the 2014 Index is classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

Hong Kong and Singapore has been ranked first and second respectively in the index for the 20th year in a row.