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The Warsaw Voice » Business » January 30, 2014
Business & Economy
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Economic Freedom Improves in Poland: Report
January 30, 2014   
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Poland has achieved its highest score ever in the 2014 Index of Economic Freedom, which ranks the country 50th worldwide, up seven notches from last year.

The index is drawn up by the Heritage Foundation and The Wall Street Journal and covers what it describes as 10 freedoms—from property rights to entrepreneurship—in 186 countries. The latest index was released Jan. 14. It says that economic freedom is advancing worldwide, despite challenging economic and political environments. The global average economic freedom score has reached 60.3, the highest ever recorded in the 20-year history of the index.

Poland’s total score of 67 points is 1.0 point better than in 2013.

World economic freedom has improved by 0.7 points from last year and 2.7 points from 1995. Much of the momentum toward greater freedom that had been lost during the past five years has been regained, the report says.

Of the 178 economies numerically graded in the 2014 Index, six have earned the designation of “free” with scores above 80. The next 28 countries, with scores between 70 and 80, are considered “mostly free.” These 34 economies sustain and provide institutional environments in which individuals and private enterprises enjoy a substantial degree of economic freedom in the pursuit of greater opportunity and prosperity, according to the report.

The largest portion of the countries graded—117 economies—have freedom scores between 50 and 70. Of those, 56 economies are considered “moderately free” (scores of 60-70), and 61 are “mostly unfree” (scores of 50-60). Twenty-seven countries have “repressed” economies with scores below 50.

Despite the global progress over the past two decades, which occurred most dramatically in the 10 years from 1998 to 2007, the number of people living in economically “unfree” countries remains very high: 4.5 billion, or about 65 percent of the world’s population. More than half of these people live in just two countries, China and India, where advancement toward greater economic freedom has been patchy at best, according to The Heritage Foundation.

In Poland, a significant improvement was noted in the ease of doing business thanks to the deregulation of professions. Poland also improved in terms of investment barriers, after a simplification of procedures for issuing construction permits. In terms of the freedom of trade, Poland ranks a high 11th worldwide. In terms of property rights and the level of corruption, Poland ranks 41st.

“Being number 50 is better than being ranked 57th,” said Mariusz Pawlak, chief economist for Poland’s Association of Entrepreneurs and Employers. “However, I think we should aspire to join the elite group of economically free countries. In Europe, only Switzerland is classified among such countries. Moreover, 22 European countries are ahead of us. I would also like to point out that [economic] freedom exclusively depends on political will. It does not require investment. It’s enough to create the right legal and institutional conditions for doing business.”

Among European countries, Poland is 23rd among the 43 economies graded. In Central and Eastern Europe, Estonia has the highest rating (4th in Europe), followed by Germany (8th), Lithuania (11th) and the Czech Republic (15th). Poland is ahead of Hungary (51st), Slovakia (57th) and Ukraine (155th). Ukraine is classed among “repressed” economies.

Globally, only six countries—Canada, Hong Kong, Singapore, Australia, New Zealand and Switzerland—are economically free, according to The Heritage Foundation.

Tomasz Wróblewski, media relations director at the Warsaw Enterprise Institute, which is run by the Association of Entrepreneurs and Employers, said, “It is worth noting the close correlation between the level of economic freedom and the level of GDP per capita. In [economically] free countries, per capita GDP is much higher than elsewhere, and there is a chasm between economically free countries and those that lack such freedom. In Europe, in the five most [economically] free countries, the average GDP per capita is $36,730, while in the five least free countries it is a mere $13,727. This proves that [economic] freedom brings prosperity and is worth fighting for.”

Top 12 countries: Score
1. Hong Kong (90.1)
2. Singapore (89.4)
3. Australia (82.0)
4. Switzerland (81.6)
5. New Zealand (81.2)
6. Canada (80.2)
7. Chile (78.7)
8. Mauritius (76.5)
9. Ireland (76.2)
10. Denmark (76.1)
11. Estonia (75.9)
12. United States (75.5)
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