Business Times - 16 Jan 2007
HK ranked as the world's freest economy
HONG KONG - Hong Kong has been ranked as the world's freest economy ahead of rival Singapore in a report released on Tuesday by a right-wing American think-tank, The Heritage Foundation.
Hong Kong's ranking comes despite criticism that its economy is dominated by a handful of powerful family-controlled monopolies and cartels, which not only control prices of particular goods but also block market access to competitors.
The ranking by the Washington-based organisation puts the former British colony at the top of its Index of Economic Freedom, for a 13th successive year, as it scores top marks in six of the 10 categories on the index.
Saying Hong Kong is 'clearly blazing a trial for others to follow' the foundation and co-sponsors, the Wall Street Journal, awarded the city's economy a score of 89.3 points, 1.6 points lower than last year.
Second-placed Singapore, which was lauded as 'the top country in business freedom and labour freedom,' scored 85.7 points, down 2.8 points from last year.
Hang on. What on earth does "labour freedom" mean? To find out, click here. Never mind, the full report is 425 pages long, so Mr Wang will just summarise the relevant details. In assessing labour freedom, the study considers four factors:
- 1. Minimum Wage (the minimum salary, set by law, that an employer must pay an employee)
2. Rigidity of Hours (whether night shifts are permitted; whether workers can be made to work on weekends; whether the workweek can be extended beyond 50 hours etc).
3. Difficulty of Firing Redundant Employees (whether an employer who dismisses redundant employees will be challenged or scrutinised by 3rd parties such as the government or a trade union)
4. Cost of Firing Redundant Employees (what kind of compensation must be paid, if an employee fires redundant employees)
"The non-salary cost of employing a worker is low, and dismissing a redundant employee is costless. Regulations on increasing or contracting the number of work hours are very flexible."
Singapore is the easiest place in the world to pay a worker peanuts; make him work overtime; and then sack him without compensation.