TALLINN - Estonia has jumped up two notches in a major ranking of sovereign economic freedom to assume fourth place, beating many traditionally capitalist countries and leaving its Baltic neighbors in the dust.
The Heritage Foundation/The Wall Street Journal Index of Economic Freedom placed Estonia in fourth place after Hong Kong, Singapore and Luxembourg. The standing is particularly impressive when compared with its Baltic neighbors, as Lithuania dropped one spot to take 23rd place and Latvia went up one to reach 28th.
The 2005 index measures 161 countries against a list of 50 independent variables divided into 10 broad factors of economic freedom, including trade and fiscal policies, government intervention, monetary policy, foreign investment, banking and finance, wages and prices and property rights.
Other top 10 nations were Ireland, New Zealand, Britain, Denmark, Iceland and Australia.
For the first time, the United States failed to make the top 10, placing 12th along with Switzerland. According to The Wall Street Journal editors, the United States has been "treading water" and thus surpassed by countries willing to reform their economies even further.
Sweden placed 14th, Finland 15th, Germany 18th and Russia 124th. Hong Kong has occupied the top position in all the 11 annual scoreboards published by the two organizations.
Europe also has reason to be proud, as it was selected as the world's most economically open region.
Of the 155 countries analyzed, 86 scored better this year than last year and 12 had unchanged scores. The scores of 57 countries were worse than last year. Overall, 17 countries were classified as having "free" economies, 56 as "mostly free," 70 as "mostly unfree" and 12 as "repressed."
The annual report on the openness of economies worldwide, which is now in its 11th edition, demonstrates that countries with the greatest degrees of economic freedom also enjoy the highest living standards.
During the last nine years, those states that have done the most to improve their scores on the Index's 10 measures of economic freedom have, in general, experienced the highest rates of economic growth.