Bulgaria is ranked 60th in the 2011 Index of Economic Freedom compiled by the Washington-based Heritage Foundation and "The Wall Street Journal", according to the local partner for the Index, the Institute for Market Economics (IME).

The Index shows that the level of economic freedom in the world has risen slightly, but is still lower than in the years before the economic crisis. The global average score for the 2011 Index is 59.7 on a grading scale of 0 to 100, where 100 stands for complete economic freedom. This implies a 0.3 point increase from last year.

The 2011 Index of Economic Freedom reports on economic policy developments in 183 economies between the second half of 2009 and the first half of 2010.

Based on 10 measures that evaluate openness, the rule of law, and competitiveness, the Index ranks economies according to their economic freedom. The principles of economic freedom emphasized in the Index are individual empowerment, non-discrimination, and the promotion of competition.

Hong Kong and Singapore top the ranking, followed by Australia. Most economies have improved their scores. Three European countries - Switzerland, Ireland and Denmark - are among the top ten. The US has registered a further decline to 9th place, and the UK's score has worsened again, placing the country in 16th position. There are only six "free" economies in the world (with scores above 80): Hong Kong, Singapore, Australia, New Zealand, Switzerland and Canada.

With a score of 64.9, Bulgaria is ranked 60th, which places it among the moderately free economies. After a fall in the previous Index, the country now regains its position, moving 2.6 points up. This, however, does not take into account developments in the second half of 2010, including the revision of the national budget. Bulgaria is a little ahead of its neighbors Romania and Turkey, but slightly behind another neighbor, Macedonia.

Throughout the last decade, Bulgaria has maintained a score above the global average, but still lags behind other European nations and remains far behind the freest economies, the IME says. The country's score has increased considerably (by more than 15 points) since 2000. Its fall in the 2010 Index has been offset by a rise in the 2011 Index, but over the long term there is no clear trend towards more economic freedom in Bulgaria. Not counting the shock of the crisis, the spread of economic freedom in the country is at a standstill.

The currency board arrangement, low direct taxes and relatively free trade are seen as key factors for Bulgaria's economic freedom. As before, the setbacks include corruption and a lack of clear rules.

Although Bulgaria's accession to the EU in 2007 gave its people the direct freedom of travelling in the bloc without visas, the data show that the opportunities offered by EU membership are still far from being fully used. Most other EU member states are performing better than Bulgaria. The adverse effects of the crisis have not catalyzed reforms in the country, but have rather led to their postponement. The Index shows that the current recovery opens up new opportunities for change which should be utilized.

Although Bulgaria's score is above the world's average, it is below the region's average, placing the country 26th among 43 nations of Europe. Even so, Bulgaria is again in the group of moderately free economies. The country has improved its performance according to most of the measures, above all, government spending, monetary freedom, investment freedom and labourfreedom.

The improvement is largely due to relatively limited growth of the public-financed sector and lower inflation, both of which have been caused by the crisis. A decrease is only registered in business freedom (the analysts note that the conditions of starting a business can be improved further). Again,no improvement is observed in the field of property rights, where the country's score is lowest. Corruption remains a problem as the improvement in this field is unsatisfactory.

The 2011 Index shows very clearly that the economic freedom of Bulgarians is most strongly endangered by unprotected property rights and widespread corruption. These are the only measures according to which Bulgaria's score is below 50 (the threshold for free economies).

Greater economic freedom leads to more wealth and better living conditions. Such freedom is based on establishing and observing clear rules, which is where Bulgaria faces the greatest difficulties. The government should focus on establishing such rules instead of interfering directly in some economic sectors through massive spending or heavy regulation, the IME says.

Source: BTA