India has emerged as the highest-ranked nation in South Asia, securing the 84th position in the Economic Freedom of the World 2024 Annual Report. Nepal follows closely at 86th, positioning the two countries as regional leaders in economic autonomy. The report assesses 165 countries, evaluating the degree of economic freedom their citizens experienced as of 2022. Leading the global rankings are Hong Kong, Singapore, and Switzerland, which took the top three spots respectively.
The 2024 report highlights a concerning trend of global decline in economic freedom over the past three years, reversing nearly two decades of consistent progress. Other neighboring countries in the ranking include Bhutan at 98th, China at 104th, Sri Lanka at 123rd, Bangladesh at 127th, and Pakistan at 134th, reflecting varied levels of economic freedom across the region.
The report underscores the critical role of economic freedom in fostering national development and alleviating poverty. It argues that higher levels of economic agency are linked to overall economic growth and improved living standards, making it an important indicator for policy-makers. Over the years, the index has been a significant point of reference in academic research and policy discussions worldwide, emphasizing the benefits of free-market economies.
However, the report’s core premise has not been without criticism. Skeptics argue that the link between economic freedom and growth may be overstated, citing examples of nations with robust welfare systems and high economic growth, despite lower economic freedom rankings. For instance, some northern European countries, known for their social safety nets, continue to see economic success without adhering strictly to the free-market principles emphasized in the index. Additionally, critics note that several rapidly developing economies rank lower on the list, raising questions about the straightforward relationship between economic freedom and prosperity.