Business | Economy

Heritage Foundation of US labels Bahrain as freest Arab economy

Bahrain has the Arab world's freest economy, according to the US-based Heritage Foundation.

  • By Habib Toumi, Bureau Chief
  • Published: 23:12 January 15, 2008
  • Gulf News

Manama: Bahrain has the Arab world's freest economy, according to the US-based Heritage Foundation.

Bahrain's economy, ideal in several respects, such as tax and banking freedom, is 72.2 per cent free, which ranks it top in the Middle East and North Africa region and 19th in the world, according to the 2008 assessment.

Improving climate

Its overall score is one per cent higher than last year, partially because of an improving investment climate.

However, worsened scores in inflation and corruption have caused negative changes, the annual report, released yesterday, said.

"Bahrain's economy is very free for the Middle East, with higher scores than the world average in eight of the 10 factors of economic freedom. Business freedom, fiscal freedom, monetary freedom, and especially financial freedom are high. The only weakness is labour freedom, which is 22 points below the world average, largely due to regulations mandating the hiring of Bahrainis. The absence of income or corporate taxes in all industries except oil gives Bahrain a competitive commercial advantage globally," the report said.

The main area which calls for improvement is labour freedom. The economy also would perform better if state-owned enterprises were not so dominant, generating three-quarters of government revenue.

Indicators: Bahrain scores

  • Business freedom: 80%
  • Trade freedom : 80.8%
  • Fiscal freedom: 99.7%
  • Freedom from government: 80.3%
  • Monetary freedom: 74.3%
  • Investment freedom: 60%
  • Financial freedom: 90%
  • Property rights: 60%
  • Freedom from corruption: 57%
  • Labour freedom: 40%

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