The Malawi economy has been rated “mostly unfree” in the 2014 index of Economic Freedom, an annual guide published by The Wall Street Journal and The Heritage Foundation.
Malawi’s economic freedom score is at 55.4 percent, making its economy the 124th freest in the 2014 index, according to the rankings released on Tuesday.
Economic freedom is defined in the report as the fundamental right of every human to control his or her own labour and property.
The index covers 10 freedoms from property rights to entrepreneurship in 186 countries.
The score has not changed from that of last year, but Malawi has made improvements in property rights, labour freedom and the control of government spending undermined by a significant loss of monetary stability.
The country is ranked 22 out of 46 countries in the sub-Saharan Africa region and its overall score is below the world average.
“Malawi’s economy continues to be rated ‘mostly unfree.’ It lags in competitiveness and the promotion of the broad-based economic growth so essential to the reduction of poverty,” reads the commentary on Malawi.
It says over the 20-year history of the index, Malawi’s economic freedom has been largely stagnant.
The two institutions say in the report that poor quality of much of the basic infrastructure and the government’s inefficiency in delivering public goods have been serious impediments to vibrant economic development.
“Despite notable score improvements in trade freedom, monetary freedom and fiscal freedom, its overall gain has been largely offset by a notable decline in business freedom and a smaller decline in property rights,” reads the report.
On rule of law, the report says although the Constitution provides for the separation of powers among the judicial, executive and legislative branches of government, the effectiveness of checks and balances has varied.
It says President Joyce Banda’s administration has been praised for efforts to reduce waste and fight corruption and that a law that limited the power of the courts to issue injunctions was repealed and that the head of the national police was replaced.
Commenting on regulatory efficiency, it says commercial regulations have not been implemented or enforced effectively and that economic diversification has lagged and much private-sector activity takes place outside of the formal economy.
Based on the rankings, Hong Kong’s economic freedom score is 90.1 percent, making it the top-rated economy in the index for the 20th consecutive year.