Trinidad ranks well in measures of economic freedom
The 2013 Economic Freedom of the World (EFW) report has been released, and once again, Trinidad and Tobago has been ranked among the best places in Latin America for the economic freedom it offers to foreign direct investors. Worldwide, Trinidad ranks 79th out of the 152 countries and territories that were ranked for economic freedom. It scored 6.95 out of a possible 10 points — above the worldwide average of 6.83 — across five identified key measures that comprise economic freedom.
The components included how well a country protects the rights of private property ownership, whether it exercises fair and consistent enforcement of contracts, the stability of its monetary environment, rate of taxation, barriers to domestic and international trade and degree of reliance on government sp
Among South American countries, only Chile, Peru and Uruguay ranked ahead of T&T in overall economic freedom. In the whole of Latin America, Brazil and Mexico, together comprising almost two-thirds of South America’s GDP, placed low on the overall EFW index at 102 and 94, respectively. Argentina, with the second-largest GDP in South America, was ranked only 137th out of 152 countries and territories. And Venezuela placed last among the countries that were ranked.ending and regulation rather than on free markets. A total of 42 distinct variables were included in the measurements.
The EFW report has been compiled annually for 25 years by a top-rated Canadian think-tank, the Fraser Institute. The Institute's goal has been to identify the countries where, across the board, it's easiest to do business with the fewest restrictions.
The Institute's tracking over decades has shown that a country's degree of economic freedom exerts a profound impact on its economic prosperity across several categories. Political and civil liberties are considerably higher in economically free nations, an indicator that affects the stability of foreign direct investment (FDI). Of perhaps greatest significance for FDI is that countries with more economic freedom have notably higher per-capita incomes. In the case of Trinidad, it ranked third highest of 13 Caribbean countries in 2012 GDP per capita, at US$18,010.
Two other areas surveyed in the EFW Report will interest foreign direct investors seeking access to new markets in Latin America or the Caribbean. Trinidad placed a strong fifth in its regulatory environment ranked against the other 20 Caribbean and Latin American countries examined. The ranking considered the labour market, credit market and business regulation. And in freedom of international trade, T&T was ranked eighth in the Latin American and Caribbean region.
The EFW report also indicates that foreign direct investors in Trinidad can be confident of protection and fairness, thanks to both Trinidad's legal system and its consistent recognition of property rights. T&T ranked higher than more than half of the 21 Latin American and Caribbean countries surveyed in this regard.
Trinidad also performed well among countries worldwide. It placed in the top 40 percent for the degree to which free markets (rather than government controls) guide access to its resources. Components examined within the category included government consumption as a share of total consumption, taxation rates, and the extent to which private investment and enterprise were used (rather than government investment) to direct resources.
When added to Trinidad and Tobago's acknowledged strong economic, legal and political institutions, the country’s global scores for free markets demonstrate the republic’s promising opportunity for the foreign direct investor.