|
Tuesday, January 11 6:46 PM SGT
Hong Kong and Singapore are world's freest economies: reportHONG KONG, Jan 11 (AFP) -Hong Kong and Singapore have the world's most unrestricted economies, according to a report published Tuesday. The report, published by Canada's Fraser Institute, the Hong Kong Centre for Economic Research and the United States-based Cato Institution, was immediately welcomed by Hong Kong's government. It vowed to maintain the territory as "the world's freest economy and a leading international financial centre." Hong Kong only shared the title of the world's least restricted economy with Singapore because of a "lagged effect of concern about contract repudiation" from when Hong Kong returned to China in 1997, the report said. Michael Walker, executive director of the Fraser Institute, wrote: "It is our expectation that Hong Kong will resume sole possession" of the title. The report continued: "Since contracts entered into by the Hong Kong government did not have the complete involvement of the People's Republic of China, there was initial concern that some contracts, including the one for Hong Kong's airport, would not be honoured. "That uncertainty is now past and future ratings for Hong Kong should see the SAR (special administrative region) achieving a high score in the index's viability of contracts rating." Hong Kong's Financial Secretary Donald Tsang said: "I am happy the report recognises the fact that Hong Kong has fully respected and preserved its economic freedom after the reversion of sovereignty." Referring to the autonomy deal under which Britain returned Hong Kong to China, he said: "It is another welcome acknowledgement of the continuity of Hong Kong's free and open market economy functioning robustly under 'one country two systems'." Tsang also noted that the assessment was shared by the US think tank Heritage Foundation, which rated Hong Kong similarly in a report released early last month. Since 1970, Hong Kong has consistently, except for a short period in 1985, enjoyed top ranking in the report's index. The report noted that the resumption of sovereignty by China on July 1, 1997, has "not materially hurt the economic freedom long enjoyed by the people of Hong Kong" and that the territory had been given "considerable autonomy" by Beijing in conducting its affairs. It also acknowledged efforts by the government to diversify the economy, making it less dependent on property and finance by introducing a cyberport, centred on multimedia and Internet services, a Disneyland themepark and a Chinese medicine centre. The report also said the government's controversial market intervention in August 1998 to purchase more than 100 billion Hong Kong dollars (12.98 billion of blue-chip stocks to avoid a collapse in the property market had public support. "The Hong Kong government has indeed taken a more active role in the economy," the report said. "The widened scope of policy initiatives may only be a cyclical phenomenon. When the economy starts to grow again, the government can then afford to have more faith in the market mechanism and to revert to its 'positive non-intervention' principle. "This will bode well for the long term continuation of Hong Kong's economic freedom." Following Hong Kong and Singapore, the report listed New Zealand, the United States and Britain as the next most unrestricted economies. After them came Ireland in sixth place, then Canada, Australia, the Netherlands, Luxembourg, and Switzerland. China, despite some positive press about economic reform, still ranks only 75th in the world as it "continues a slow march toward economic liberalism." "Most of the positive changes have taken place in the area of economic structure and use of markets, one of China's weakest areas," the report said. The least free economies included Myanmar, last out of 123 countries, followed by the African nations of the Democratic Republic of Congo, Sierra Leone, Rwanda, Madagascar and Guinea-Bissau at 118. |