Taiwan was one of only four countries that made it into the top “Free” category of Index of Economic Freedom this year, according to the latest report released this week by the conservative U.S. Heritage Foundation.

With a score of 80.7, up 0.6 points from 2022, Taiwan cleared the threshold of 80 and into the “Free” category for the second consecutive year, taking a fourth place ranking.

The other three countries in the “Free” category this year were Singapore, Switzerland and Ireland, in that order, while New Zealand, Luxembourg and Estonia all fell out of the top tier, which had seven places in 2022.

With Taiwan’s overall ranking of fourth in economic freedom among the 176 countries surveyed, it moved up two notches from sixth in the past two years and into second place among the 39 Asia-Pacific economies evaluated.

The index measures economic freedom based on 12 indicators in four broad categories — rule of law, government size, regulatory efficiency and open markets — and it gauges whether individuals can control their own labor and property in a free regulatory environment.

According to the report on the 2023 index, Taiwan scored above 80 in seven of the 12 indicators, including judicial effectiveness, government spending and trade freedom.

Taiwan had relatively poor performances, however, in the “labor freedom” and “financial freedom” indicators, scoring 69.1 and 60 in those categories, respectively, the report said.

“The labor market lacks flexibility, and the minimum wage has been rising since 2017,” the report said, apparently characterizing the latter as a negative trend.

Overall, the report said, Taiwan’s “strong commitment to the rule of law and openness to global commerce” had enabled it to become a global leader in economic freedom.

Taiwan’s economy has “benefited from a well-developed institutional framework, a tradition of private-sector entrepreneurial dynamism, and open-market policies that facilitate the free flow of goods and capital,” the report said.

Elsewhere in Asia, South Korea in 15th place was deemed “mostly free” with a score of 73.7; Japan was ranked 31st, and in the category of “moderately free” (69.3); and China at 154th was categorized as repressed (48.3).

Globally, the average score was 59.3, the lowest in the past two decades, down 0.7 points from 2022 and slightly below the 60-point threshold for the “Mostly Unfree” category, according to the report.

Source: Focus Taiwan News Channel