More work needed to improve economic freedom score — experts

AMMAN —  Jordan ranked 66th globally on the 2020 Index of Economic Freedom” released by the Heritage Foundation in the US, taking the 3rd place among Arab countries.

Jordan scored 66 out of 100 in the annual ranking of 186 countries.

The index considers four categories and 12 sub-categories: Rule of law (property rights, judicial effectiveness, and government integrity), government size (tax burden, government spending, and fiscal health), regulatory efficiency (business freedom, labour freedom, and monetary freedom), and market openness (trade freedom, investment freedom and financial freedom).

Singapore, Hong Kong, New Zealand, Australia and Switzerland were the top five countries on the index, with the UAE on top of Arab countries, with a score of 76.2/100.

The Jordan Strategy Forum (JSF) issued a “in a nutshell” paper, in which it highlighted the weakest areas in the Kingdom’s score.

“To improve ‘economic freedom’, relevant stakeholders should look at indicators in which Jordan’s scores are low,” the JSF said, noting that the categories of “government integrity” and “labour freedom” scores were the lowest.

“Government integrity includes irregular payments and bribes, transparency and government policymaking, absence of corruption, perceptions of corruption, and governmental and civil service transparency,” the forum said in its paper.

As for labour freedom, the JSF said it includes “ratio of minimum wage to average value added per worker, hindrance to hiring additional workers,” in addition to rigidity of working hours, difficulty of laying off employees, the legally mandated notice period, severance pay and labour force participation rates.

Economists said that while the ranking, on the regional and global levels, is good, there needs to be more work done to improve the Kingdom’s rating to attract more support and investments.

“In regard to transparency and bribes, there is surely regression, whether in small or big bribes,” economist Wajdi Makhamreh told The Jordan Times over the phone on Monday.

Makhamreh said that many government decisions were “one-sided and taken without apparent research” .

“The ranking is surely good, we surpass many Arab countries. We need to compare ourselves with those performing better than us,” he said.

Economist Husam Ayesh reiterated the importance of improving indicators in comparison with countries performing better than Jordan so as to learn from their experiences.

“It is important in this index and in others, to craft a roadmap through their results to see what should be done. These indexes impact the perception of the Kingdom,” Ayesh said.

In regard to labour, Ayesh said that there is more unemployment and less vacancies due to the coronavirus crisis, noting that as the number of infections are increasing, the impact will increase. This will affect workers’ salaries and their way of work, which will negatively reflect on the labour freedom index, he added.

“Many organisations are coping by laying off employees, decreasing salaries, increasing working hours or through decreasing spending on employees in other ways, all of which impact their productivity and performance, and the opportunities available to them within the job itself,” the economist said, noting that this impacts other related indicators.

There needs to be a comprehensive plan, instilling entities within each ministry, which objectively monitor performance and problems to craft solutions, creating a local index that tracks improvement or regression, he said.

“Many issues and problems require a simple change in procedures and upgrading them,” Ayesh said.