ECONOMIC OPENNESS REACHES HIGHEST LEVEL GLOBALLY, SPREADING GLOBAL TRADE, INNOVATION AND PROSPERITY YET MANY WESTERN COUNTRIES’ INSTINCT TO PROTECT AND TURN INWARDS, COMBINED WITH A WIDER STAGNATION IN THE QUALITY OF GOVERNANCE GLOBALLY IS ACTING AS A BRAKE ON ECONOMIC OPENNESS AND POSES A RISK TO SOLVING SOCIAL CHALLENGES.
The inaugural Global Index of Economic Openness  (GIEO) launches today to rank 157 countries’ openness to commerce, with analysis of what enables or hinders each country’s ability to trade domestically and internationally.
1. ECONOMIC OPENNESS IS AT ITS HIGHEST EVER LEVEL GLOBALLY, WITH SOME OF EVEN THE LOWEST-RANKED COUNTRIES IMPROVING, AND LIFTING MILLIONS OF PEOPLE OUT OF POVERTY
2. COUNTRIES WITH GREATER LEVELS OF ECONOMIC OPENNESS ARE MOREPRODUCTIVE
3. ECONOMIC OPENNESS, AND THEREFORE ECONOMIC GROWTH, CAN BE IMPROVED BY POLICY CHOICES
4. GOVERNANCE IS KEY, YET THE QUALITY OF GOVERNANCE IS STAGNATING, ACTING AS A BRAKE ON ECONOMIC OPENNESS
5. HONG KONG IS THE WORLD’S MOST OPEN ECONOMY, FOLLOWED BY SINGAPORE (2ND) AND THE NETHERLANDS (3RD) WITH THE UNITED KINGDOM 7TH AND THE UNITED STATES 9TH. THE MOST OPEN ECONOMY IN SOUTH AMERICA IS CHILE (31ST) AND IN AFRICA, SOUTH AFRICA (58TH).
6. THE COUNTRIES SHOWING MOST IMPROVEMENT IN ECONOMIC OPENNESS INCLUDE INDIA, CHINA AND RWANDA.
* INDIA HAS REDUCED THE BURDEN OF BUSINESS REGULATION AND MADE STARTING A BUSINESS EASIER AS PART OF WIDER LIBERALISING REFORMS UNDER PRIME MINISTER MODI THAT HAS IMPROVED ENTERPRISE CONDITIONS BY 20 PLACES SINCE 2009.
* CHINA RANKS 51ST, IMPROVING BY 13 PLACES SINCE 2009, STRENGTHENING ENTERPRISE CONDITIONS AND THE ENVIRONMENT FOR BUSINESS CREATION, USING THE WIDE AVAILABILITY OF SKILLED LABOUR. THE CHINESE GOVERNMENT IS ALSO PRIORITISING THE DEVELOPMENT OF CITY CLUSTERS, NOTABLY IN THE PEARL RIVER DELTA, YANGTZE RIVER DELTA, AND THE BEIJING-TIANJIN-HEBEI ECONOMIC ZONE.
* RWANDA RANKS 78TH AND IS THE SUB-SAHARAN AFRICAN COUNTRY THAT HAS IMPROVED THE MOST SINCE 2008, WITH ITS INVESTMENT ENVIRONMENT NOW RANKED 51ST AFTER REMOVING RESTRICTIONS ON FOREIGN INVESTMENT AND MAKING KEY IMPROVEMENTS IN ENTERPRISE CONDITIONS BY REDUCING BURDENS SUCH AS LENGTHY TAX FILING AND MAKING IT EASIER TO START A BUSINESS.
* THE UNITED ARAB EMIRATES IS THE BEST-KNOWN EXAMPLE OF BUSINESS-FRIENDLY REFORM IN THE MENA REGION, RISING 21 PLACES IN ITS
ENTERPRISE CONDITIONS PILLAR TO 26TH AND 3RD FOR ITS LOW BURDEN OF REGULATION.
Our ambition is that the Index becomes a valuable tool to make the case for economic growth and development.
We are also launching our analysis of the openness of two leading economies: the United States and the United Kingdom. Rising concerns in communities across many developed nations about low wages, the security of homes, and pressures on health and education systems are increasing demands on politicians for protection from change, most visible in the rise of populist and nationalist movements in the UK, US and France. All the evidence shows that solving these social problems requires us to not lose sight of what we know drives economic growth. We must resist the temptation to turn inwards because Economic Openness is a critical path to real prosperity – economic and social wellbeing.
Baroness Philippa Stroud, CEO at The Legatum Institute, said:
"Our research shows that open, competitive and connected economies not only increase prosperity for people living in those nations, they also prevent crony capitalism and corruption. At a time when many nations around the world are at a crossroad, we need to restate the case for entrepreneurialism and free markets with a pro-business agenda that is open to trade, skills and investment. Economic Openness has delivered decades of economic and social wellbeing, turning inwards, putting up barriers and closing our economies to the world poses risks to future prosperity. I believe that the onus is on all of us to create and encourage a new wave of Economic Openness. We are now living through a new global digital revolution, and this presents huge opportunities to deliver economic and social prosperity for a new generation."
Dr Stephen Brien, Director of Policy at The Legatum Institute said:
“The benefits of economic competition are widely understood and the language of openness easy to use, so with this Index we are seeking to define and measure openness in a way that can help political leaders and policy makers to effect change by enhancing Economic Openness. Open economies improve domestic and international welfare, and there are many levers for leaders to deploy that can enhance competitiveness and openness, but it requires domestic political will.”