Ireland slumps in ‘freedom’ league

IRELAND has plummeted 14 places in the world economic freedom league, as the size of government’s role in the economy grows following the effective privatisation of much of the banking sector.

The Economic Freedom of the World: 2011 Annual Report ranks Ireland as the 25th most economically free country in the world, down from 11th just 12 months ago. The report was published globally by the Economic Freedom network and its Irish affiliate the Open Republic Institute.

A director of the Open Republic, Paul MacDonnell, said the Irish Government has taken extraordinary measures to intervene in the economy to support the banking system and the Government has dragged its feet over domestic economic reform, particularly reform in the public sector.

“If anything the Government has sought to extend the reach of the state into the private sphere as a strategy for the protection of vested interests. For example, in its approach to ESB privatisation it is performing to the letter of its agreement with the Troika to privatise state assets but only in a way that ensures the state body will continue to benefit at the expense of competition and consumers,” he added.

The levels of economic freedom decreased in the 141 countries examined. This year’s report shows that the average economic freedom score fell to 6.64 in 2009, the lowest in nearly three decades, from 6.67 in 2008. Ireland’s score fell from 7.74 to 7.38, still ahead of France and Italy.

Hong Kong retained the highest rating for economic freedom, 9.01 out of 10. The other nations among the top 10 are: Singapore (8.68); New Zealand (8.20); Switzerland (8.03); Australia (7.98); Canada (7.81); Chile (7.77); Britain (7.71); Mauritius (7.67); and the United States (7.60).

Ireland scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom):

*Size of government: fell to 4.6 from 5.28 in the last year’s report.

*Legal structures and security of property rights: fell to 7.8 from 7.92.

*Access to sound money: fell to 9.2 from 9.48.

*Freedom to trade internationally: increased to 8.3 from 8.22.

*Regulation of credit, labour and business: fell to 7.0 from 7.81.