Latvia slips in economic freedom, says report

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.

2 thoughts on “Latvia slips in economic freedom, says report

  1. According to yet another world ranking, this time International Living’s “Quality of Life Index,” France rates as the best country in the world to live in with a score of 88, followed by Switzerland, Australia, Denmark, New Zealand, Austria, USA, Sweden, Finland and Italy in the top 10. Latvia scored 65, behind such countries as Uruguay, Bolivia and Paraguay but ahead of Albania, Brazil and Colombia. The other Baltic countries scored 66 Estonia and 68 Lithuania. The lowest scoring country was Iraq at only 31.

  2. The Wall Street Journal, January 4, 2006, issue lists Latvia as number 39 in world rankings in the “Index of Economic Freedom”. 39 is in the top half of countries identified as “mostly free”. Unfortunately Latvia is below Estonia, which is no. 7 on the list of the 19 countries identified as “Free” and Lithuania is No. 23 on the list and No. 3 in the category as “mostly free”. I can understand why Estonia is in this category because it’s ethnic Russian population is much smaller as a percentage and they have taken freedom both ecnmic and political much closer to heart.

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