Armenia has moved two notches up in The Heritage Foundation’s 2021 Economic Freedom Index.
Armenia’s economic freedom score is 71.9, making its economy the 32nd freest in the 2021 Index. Its overall score has increased by 1.3 points, primarily because of an improvement in fiscal health. Armenia is ranked 18th among 45 countries in the Europe region, and its overall score is above the regional and world averages.
Economic freedom in Armenia has hovered between moderately free and mostly free for many years. GDP growth during the reporting period has continued to be strong. To institutionalize higher levels of economic freedom more firmly, the government needs to maintain its focus on improving judicial effectiveness and government integrity. Stronger rule of law would also have a positive impact on investment freedom. In the previous index Armenia was 34th. In 2018 and 2019, it was 44th and 47th, respectively.
The Washington-based Heritage Foundation, one of the most influential structures in US public policy, assesses the countries’ scores by several criteria, including how open the markets are considered in each territory, how efficient regulators are in encouraging business and labor freedom, and how stringent the rule of law is in protecting property rights.
In the South Caucasus, Georgia boasts the highest index of economic freedom, occupying the 12th place with 77.2 points. Azerbaijan is 38th.
Although the report does not focus on individual countries, it suggests that due to the new situation that has resulted after the six-week Armenian-Azerbaijani war, both Armenia and Azerbaijan will have the opportunity to improve their economic freedoms.
In the Eurasian Economic Union (EEU), only Kazakhstan is among the countries with “mostly free” economies along with Armenia, with a total score of 71.1 points, occupying the 34th place. The other member states of the EEU are significantly lower, classified as “moderately free.” Russia ranks 92nd, Belarus 95th and Kyrgyzstan 78th.
In “free” and “mostly free” countries, according to the report, citizens receive almost twice as much income as the world average, about 6 times higher than in “oppressed” economies. Citizens of countries with free economies also have greater access to quality education, health care, and a clean environment.
Of the 178 countries included in the index, however, only five were considered “free,” 92 countries were classified as economies with varying degrees of freedom.
Meanwhile, more than 8 dozen countries have less than 61.6 points on average and are mainly classified as “not free” and “oppressed” economies.
Singapore remains the top-rated economy on the list this year, followed by New Zealand, Australia, Switzerland and Ireland.
The top five countries “earned very high economic freedom scores of 80 or more. Cuba, Venezuela and North Korea are at the bottom of the ranking.