Chile the 7th freest economy in the world

The country is a global leader in economic freedom, and ranks higher than any other Latin American nation in the 2013 Index of Economic Freedom.

Chile has maintained its position in the top ten freest economies in the world in this year’s Index of Economic Freedom.

Published as a joint project between the U.S. think tank The Heritage Foundation and the Wall Street Journal, the index has measured the economic environment in all countries of the world since 1995, assessing the ease with which individuals, companies and societies can prosper.

Chile’s economic freedom score is 79 out of 100 making it the freest economy in Latin America and the 7th freest economy in the world, behind: Canada, Switzerland, New Zealand, Australia, Singapore and Hong Kong. Chile is up 0.7 points from last year, mainly due to improved scores in investment and business freedoms.

“Chile continues to be a global leader in economic freedom,” the index report reads. “With the rule of law strongly maintained by an independent and efficient judicial system, prudent public finance management has kept public debt and recent budget deficits under control.”

The report also puts Chile’s success down to sound economic actions and its dynamic “countercyclical fiscal policy” that accumulates surpluses when copper prices are high and operates in deficit only when prices and economic activity are low.

“Flexibility and openness have equipped Chile’s small economy with an impressive capacity to adjust to external shocks, and its active participation in the Trans-Pacific Partnership negotiations reflects its strong commitment to trade liberalization,” the report continues. “Facilitating entrepreneurial activity, sound policy choices grounded in a strong commitment to economic freedom have ensured economic dynamism. The investment code is conducive to long-term growth, and the financial sector remains competitive.”

Breaking the report down, in terms of government, Chile scores 83.7  in government spending and 77.6 in fiscal freedom. The country scores 90 points in property rights, and scores in the 80s in terms of both investment freedom and trade freedom. Chile has more free trade agreements than any other country.

Chile’s economic freedom has been noted by other indexes, including last year’s Economic Freedom of the World Report compiled by the Fraser Institute, in which Chile ranked 10th in the world and top in Latin America.