Azlan Othman
Brunei is ranked ninth among 39 countries in the Asia-Pacific region, and its overall score is above the regional and world averages in the annual Index of Economic Freedom 2023 from The Heritage Foundation which showcases the level of economic freedom in every country on a scale of 0-100, looking at factors like property rights, tax burdens and labour freedom.
The Sultanate’s economic freedom score is 65.7, making its economy the 48th freest in the 2023 Index. Its score is 0.9 points better than last year.
The ranking categorises scores of 80+ as free economies, 70-79.9 as mostly free, 60-69.9 as moderately free, 50-59.9 as mostly unfree, and 0-49.9 as repressed. The countries with a score of 80 or above include Ireland, Singapore and Switzerland, categorising them as completely free economically.
Brunei’s economy is characterised by a relatively high level of market openness that facilitates trade and investment, by a legal system that generally secures private property, and by macroeconomic stability, the report said. The investment environment is generally efficient and transparent, but a more streamlined regulatory framework would enhance economic freedom and competitiveness.
In 2023, the principles of economic freedom that fuelled the monumental progress are once again measured in the Index of Economic Freedom, an annual guide published by The Heritage Foundation, Washington’s number one think tank.
It measures economic freedom based on 12 quantitative and qualitative factors in 184 countries, grouped into four broad categories, or pillars, of economic freedom, namely rule of law (property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business freedom, labour freedom, monetary freedom) and open markets (trade freedom, investment freedom and financial freedom).
Brunei showed an improvement in property rights with a score of 69.1, judicial effectiveness (51.9), government integrity (61.9), tax burden (96.3), government spending (70.0), and labour freedom (75.2) but dropped in score in monetary freedom (71.8) and trade freedom (84.4).
Each of the 12 economic freedoms within the categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging the 12 economic freedoms, with equal weight being given to each.
Last year, the Sultanate’s economic freedom score was 64.8, making its economy the 62nd freest in the 2022 Index.
Economic freedom peaked in 2017 and has dropped a full five points since then.
Brunei has fallen into the lower half of the ‘Moderately Free’ category. Tax burden and trade freedom levels are good, unlike fiscal health, last year’s report said.
