Latvia ranks 39th out of 161 countries in terms of its economic freedom, according to a study by the Washington, D.C.-based conservative think tank Heritage Foundation and The Wall Street Journal newspaper.
Seen as “mostly free,” Latvia lost ground in the 2006 Index of Economic Freedom because the cost of government became more expensive and because of its monetary policy, according to the report released Jan. 4. Latvia’s overall score on the index, which looks at 50 different variables, dropped to 2.43, down from 2.31 in the 2005 index.
Estonia, with an index of 1.75, ranked seventh in the world, while Lithuania, with an index of 2.14, ranked 23rd. Hong Kong, Singapore and Ireland took the first three spots in the index.
The 2006 index, the Heritage Foundation said in a press release, measured 161 countries. The 50 variables were divided among 10 broad categories, including trade policy, the fiscal burden of government, government intervention in the economy, monetary policy, capital flows and foreign investment, banking and finance, wages and prices, property rights, regulation, and Informal market activity.
The higher the score in the index, the greater the level of government interference, according to the Heritage Foundation.
Andris Straumanis is a special correspondent for and a co-founder of Latvians Online. From 2000–2012 he was editor of the website.