News from Islands
Cape Verde is the third in economic freedom in sub-Saharan Africa
Cape Verde is the third in the ranking of sub-Saharan Africa that assesses economic freedom. The data is the Index of Economic Freedom 2011, published recently by the American Institute Heritage Foundation.
The score of Cape Verde in the ranking of economic freedom is 64.6, ranking the 65th place of the Index. In relation to last year, Cape Verde gained 2.8 more points, the result of improvement in six of the ten assessment criteria that serve to prepare this ranking. The archipelago is the third of 46 countries in sub-Saharan Africa and its overall score is higher than the regional average.
"The solid economic performance reflects the commitment of Cape Verde to reform their accounts. With a growth of over 4%, investments in infrastructure and trade liberalization have improved the business environment," writes the index in the first instance. He adds that "Cape Verde has a relatively good performance in the areas of financial freedom, investment freedom and property rights, which are especially protected by law."
However, the study points out some points that should be improved in order to take "a more vibrant economy," which must go through the restructuring of the "inefficient state enterprises that undermine national productivity and competitiveness in the long term." "The revision of labor laws would serve to make the labor market more flexible, but given the prevalence of the informal sector, its effect is almost nil," he writes.
Ten criteria, six climbs
The Index of Economic Freedom 2011 is done by ten criteria: business freedom, trade freedom, fiscal freedom, government expenditure, monetary freedom, investment freedom, financial freedom, property rights, combat corruption and labor freedom.
In six of ten criteria, Cape Verde has a higher score, which was more pronounced in fiscal freedom (77.3 points, 11.7), it is emphasized that it was eliminating the stamp duty. The index also highlights the good performance of Cape Verde and the expense of the State (71.0 points, 5.7), but criticizes the work "insignificant" in the restructuring of TACV and Electra. Note also positive for the monetary freedom (79.2 points, 4.7), which is, moreover, the best "note" of Cape Verde, where the index points out that "the market determines most prices, but the government controls the prices of electricity and water and regulate others, including petroleum products and staples. " In this section, ten points were deducted from the Cape Verde because the country is dependent on the outside, which distorts prices in the domestic market.
As for free trade (67.6 points, 2.1), the Index indicates that there is no formal barriers to trade, but that restrictions on market access, import taxes, the inefficient regulatory processes, the health standards less than transparent, State intervention in the marketing of certain products and small power of copyright weigh the "cost" of total trade. Here is the criterion of labor laws (50.0 points, 1.9), which still have a "cost of dismissing a worker too high." Cape Verde closes its criteria of freedom increases in business (64.8 points, 1.5). The index says that the business environment is becoming more efficient, thanks to the efforts of improving procedures for opening and licensing companies.
For the other four items, Cape Verde is not no change. The criterion is even the worst of the fight against corruption (51 points), which according to the Index, "is perceived as being very significant." We were 60 points to the freedoms and financial investment, noting the growth of the financial sector, but is still incipient."Foreign investment is officially encouraged and receives the same treatment as domestic investment," says the document. Already on property rights (65 points), writes that "private property is very well protected. The constitutional provision for an independent judiciary is generally respected, but this sector is overloaded, it is insufficient and ineffective."
Above the world average and regional
Cape Verde has 64.6 points, 4.9 points more than the global average (59.7) and 11.1 points more than the regional average (53.5). But is still almost 20 points to reach the threshold of a truly free economy (84.1 points). In the regional rankings, are ahead of Cape Verde, Botswana (2) and Mauritius (1). In fourth place is Namibia, followed by South Africa, Rwanda, Uganda, Madagascar, Burkina Faso and Zambia.
Founded in 1973, the Heritage Foundation is a research and educational institute whose mission is to formulate and promote public policies based on principles of free enterprise, limited government intervention and individual freedom. It also defends the traditional American values ??and a strong national defense. This index is developed in partnership with the well-known economic publication The Wall Street Journal.
