Government should reduce red tape to promote economic freedom

0
288

The decline in South Africa's ranking and rating from 42nd in 2000 to 96th in 2013 in measure of its economic freedom, is the result of government's insistence on dominating the economy and crowding out the private sector.

This control in turn has a negative impact on growth, employment, poverty reduction and individual liberty.

According to the Free Market Foundation’s Eustace Bavie, economic freedom in this research was identified in five different areas which include government involvement and regulation.

"Economic freedom in this study is measured in five areas. Firstly the size of government – the bigger the government the lower the score. The lower government interference is the higher the score. Sound money, where you don't have fluctuating and high inflation. Freedom to trade internationally. Then there is regulation – the less red tape there is the better," he says.

Economic freedom is explained as the key to greater opportunity and an improved quality of life.

Furthermore it is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.

It is perceived to be important because living in a society with high levels of economic freedom leads to higher incomes, lower poverty, less unemployment and longer life expectancies, among a host of other benefits.  

Reports also reveal that globally the average economic freedom score rose slightly to 6.86 out of 10 from 6.84 last year.

THANDI XABA