19 September 2023
RELEASE IMMEDIATE
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Anneke Burns
press@fmfsa.org
The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for
a non-racial, free and prosperous South Africa.
As a policy organisation it promotes sound economic policies and the principles
of good law. As a think tank it seeks and puts forward solutions to some of the country’s most pressing problems: unemployment, poverty, growth, education, health care, electricity supply, and more. The FMF was instrumental in the post-apartheid negotiations and directly influenced the Constitutional Commission to include the property
rights clause: a critical cornerstone of economic freedom.
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Economic Freedom of the World report reveals another drop in ranking for SA
‘South Africa’s long march away from economic freedom continues in 2023, EFW index reveals.’ – David Ansara, CEO of the Free Market Foundation
Scroll af vir Afrikaanse weergawe
The 2023 Economic Freedom of the World (EFW) annual report reveals that South Africa has dropped to 94th, down one place from its ranking of 93rd last year, out of the 165 countries analysed. The country therefore remains in the third out of four quartiles of economic freedom.
The report is published by the Fraser Institute in Canada each year. The Free Market Foundation (FMF) is the Fraser Institute’s partner in South Africa.
This is a significant drop from South Africa’s highest ranking on the index, which was attained in 2000, when it placed 47th, amidst the largely business- and growth-friendly reforms of the Mandela and Mbeki administrations. Since then, the country has consistently declined on the rankings as government has introduced more and more misguided policies.
These policies invariably seek to regiment economic activity in line with government’s ideological ambitions, rather than with the economic needs and demands of society as manifested in the market.
‘This year’s report shows that South Africa’s latest EFW ranking of 94th is the lowest, and its score of 6.53 (out of 10) is the second lowest since the 1994 transition. This means that South Africans have once again lost economic freedom not only in absolute terms but relative to most other countries,’ wrote Richard Grant, Professor of Finance and Economics at Cumberland University and senior consultant to the FMF, of this year’s report.
‘The consistent decline is a clear consequence of the government’s unabated, stifling desire for economic control,’ said David Ansara, FMF Chief Executive Officer.
There is a two-year lag in the available data, meaning this year’s report utilises data from 2021.
The Fraser Institute defines ‘economic freedom’ as:
‘Individuals are economically free when they are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others. When individuals possess economic freedom they are able to decide what, when, and how goods and services will be produced, exchanged, and consumed. Put another way, economically free individuals are permitted to decide for themselves rather than having options imposed on them by the political process or by the use of violence, theft, or fraud by others.’
There is a clear causal link between human progress and prosperity and economic freedom. The EFW shows that the poorest 10% of the population in countries that rank in the first quartile of earn some US4,204 per annum. In the fourth quartile (the least economically free states, where government interferes in economic matters as a matter of course), the poorest 10% earn a paltry US,736. The third quartile, which South Africa ranks in, is not much better, with the average income earned by the poorest 10% of these states being US,641.
‘In other words, in countries that have adopted free market economies, the income earned by the poorest portion of the population is 8.18 times greater than the incomes of the poorest in countries that have opted for state-regimentation of the economy,’ added Ansara.
The EFW contains a clear roadmap for any country wishing to become economically free and prosperous. Countries that have benefited from following this roadmap include Singapore, Hong Kong, Switzerland, New Zealand, and the United States, which constitute the top-5 jurisdictions in this year’s index.
The countries that make out the bottom-5 jurisdictions are Venezuela, Zimbabwe, Syria, Sudan, and Yemen.
‘Venezuela and Zimbabwe – as opposed to Singapore and Switzerland – are regrettably the states that the present South African government seems most keen to imitate,’ said Martin van Staden, FMF Head of Policy.
To determine a country’s rank on the index, the Fraser Institute looks at five ‘Areas’:
- Size of government (South Africa ranks an eye-watering 119th)
- Legal system and property rights (South Africa ranks a commendable 59th)
- Sound money (South Africa ranks 95th)
- Freedom to trade internationally (South Africa ranks 103rd)
- Regulation (South Africa ranks 91st)
With ‘size of government’ being South Africa’s most poorly-performing metric, the FMF recently proposed to finance minister Enoch Godongwana – who had mooted the necessity of significant spending cuts – that South Africa’s Cabinet be slashed from some 30 ministers down to only 10 state departments in the central sphere.
South Africa is among the top-10 economically free states in sub-Saharan Africa, squeezing in in 10th place. It was beaten by Mauritius (the freest jurisdiction on the continent and the only to rank in the first quartile), Cabo Verde, Seychelles, The Gambia, Botswana, Kenya, Rwanda, Nigeria, and Uganda.
‘There still remain lessons that other African states can teach South Africa,’ added Van Staden.
The 2023 Economic Freedom of the World annual report will be made available here: https://www.fraserinstitute.org/studies/economic-freedom
Click here for soundbite by Martin van Staden.
Ends.
Media enquiries
Anneke Burns
FMF Publicist
071 423 0079 | press@fmfsa.org
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Economic Freedom of the World-verslag dui op nog ‘n daling in ranglys vir SA
‘Suid-Afrika se lang mars weg van ekonomiese vryheid duur voort in 2023, lui EFW-indeks.’ – David Ansara, Hoof Uitvoerende Beampte van die Vryemarkstigting
Scroll up for English version.
Die 2023 Economic Freedom of the World (EFW) jaarlikse verslag dui aan dat Suid-Afrika na 94ste, een plek laer as 93ste verlede jaar, op die ranglys uit ‘n totaal van 165 lande gedaal het. Die land bly dus in die derde uit vier kwartiele van ekonomiese vryheid.
Die verslag word elke jaar deur die Fraser-instituut in Kanada gepubliseer. Die Vryemarkstigting (FMF) is die Fraser-instituut se vennoot in Suid-Afrika.
Dit is ‘n beduidende daling van Suid-Afrika se hoogste rang op die indeks, wat in 2000 bereik is, toe dit 47ste geplaas het, te midde van die hoofsaaklik sake- en groei-vriendelike hervormings van die Mandela- en Mbeki-regerings. Sedertdien het die land voortdurend gedaal op die ranglys omdat die regering meer en meer ondeurdagte beleide in werking gestel het.
Hierdie beleide poog, amper sonder uitsondering, om ekonomiese aktiwiteite in lyn met die regering se ideologiese ambisies te regimenteer, eerder as met die ekonomiese behoeftes en eise van die samelewing, soos dit in die mark gemanifesteer word.
‘Hierdie jaar se verslag toon aan dat Suid-Afrika se jongste plasing op die EFW-ranglys van 94ste die laagste is, en sy telling van 6.53 (uit 10) is die tweede laagste sedert die oorgang van 1994. Dit beteken dat Suid-Afrikaners weereens ekonomiese vryheid verloor het, nie net in absolute terme nie, maar in verhouding tot die meeste ander lande,’ het Richard Grant, Professor in Finansies en Ekonomie aan Cumberland Universiteit en senior konsultant vir die FMF, in die jaarlikse verslag geskryf.
‘Die konstante daling is ‘n duidelike resultaat van die regering se ongebreidelde, versmorende begeerte vir ekonomiese beheer,’ sê David Ansara, FMF Hoof Uitvoerende Beampte.
Daar is ‘n tweejaar vertraging in die beskikbare data, wat beteken dat hierdie jaar se verslag data van 2021 gebruik.
Die Fraser-instituut definieer ‘ekonomiese vryheid’ as:
‘Individue is ekonomies vry as hulle toegelaat word om vir hulself te kies en om vrywillige transaksies aan te gaan, solank hulle nie die persoon of eiendom van ander benadeel nie. Wanneer individue ekonomiese vryheid het, kan hulle self besluit wat, wanneer, en hoe goedere en dienste geproduseer, geruil, en verbruik sal word. Met ander woorde, ekonomies-vrye individue word toegelaat om vir hulself te besluit eerder as dat opsies aan hulle opgelê word deur die politieke proses, of deur die gebruik van geweld, diefstal, of bedrog deur ander.’
Daar is ‘n duidelike verband tussen menslike vooruitgang en welvaart en ekonomiese vryheid. Die EFW toon aan dat die armste 10% van die bevolking in lande wat in die eerste kwartiel van die ranglys rangskik, ‘n inkomste van ongeveer US4,204 per jaar verdien. In die vierde kwartiel (die minste ekonomies-vrye state waar die regering gereeld in ekonomiese aangeleenthede inmeng), verdien die armste 10% ‘n skamele US,736. Die derde kwartiel, waarin Suid-Afrika rangskik, is nie veel beter nie, waar US,641 die gemiddelde inkomste is wat deur die armste 10% van hierdie state verdien word.
‘Dit beteken in wese dat in lande wat vrye mark-ekonomieë aangeneem het, die inkomste wat deur die armste deel van die bevolking verdien word, 8.18 keer groter is as die inkomstes van die armstes in lande wat staatsregimentering van die ekonomie verkies,’ het Ansara bygevoeg.
Die EFW bevat ‘n duidelike padkaart vir enige land wat ekonomies vry en welvarend wil word. Lande wat voordeel getrek het uit die volg van hierdie padkaart, sluit in Singapoer, Hongkong, Switserland, Nieu-Seeland, en die Verenigde State, wat die top-5 jurisdiksies in hierdie jaar se indeks uitmaak.
Die lande wat die onderste 5 jurisdiksies uitmaak, is Venezuela, Zimbabwe, Sirië, Soedan, en Jemen.
‘Venezuela en Zimbabwe – eerder as Singapoer of Switserland – is ongelukkig die state wat die huidige Suid-Afrikaanse regering die graagste wil navolg,’ sê Martin van Staden, FMF Hoof van Beleid.
Om ‘n land se rang op die indeks te bepaal, kyk die Fraser-instituut na vyf ‘Areas’:
- Grootte van die regering (Suid-Afrika rangskik ‘n verstommende 119ste)
- Regstelsel en eiendomsregte (Suid-Afrika rangskik ‘n lofwaardige 59ste)
- Gesonde geldsake (Suid-Afrika rangskik 95ste)
- Vryheid om internasionaal handel te dryf (Suid-Afrika rangskik 103ste)
- Regulering (Suid-Afrika rangskik 91ste)
Aangesien ‘grootte van die regering’ Suid-Afrika se swakste prestasie lewer, het die FMF onlangs aan minister van finansies Enoch Godongwana voorgestel – wat die noodsaaklikheid van aansienlike begrotings-besnoeiings voorgestel het – dat Suid-Afrika se kabinet verminder word van sowat 30 ministers na slegs 10 staatsdepartemente in die sentrale sfeer.
Suid-Afrika is een van die top-10 ekonomies vrye state in Sub-Sahara-Afrika – dit het die tiende plek behaal. Dit is geklop deur Mauritius (die vryste jurisdiksie op die vasteland en die enigste een wat in die eerste kwartiel rangskik), Cabo Verde, Seychelle, die Gambia, Botswana, Kenia, Rwanda, Nigerië, en Uganda.
‘Daar bly steeds lesse wat ander Afrika-lande aan Suid-Afrika kan leer,’ het Van Staden bygevoeg.
Die 2023 Economic Freedom of the World-verslag sal hier beskikbaar wees: https://www.fraserinstitute.org/studies/economic-freedom
Kliek hier vir 'n klankgreep deur Martin van Staden.
Einde.
Media-navrae
Anneke Burns
FMF Publisiteitsbeampte
071 423 0079 | press@fmfsa.org
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