In a new report, the American Heritage Foundation, a U.S. institution, reported a 4.8-step drop in Iran’s economic freedom index in 2021 compared to the year before.
According to the report, published on Tuesday, February 15, 2022, Iran ranks 170th out of 177 countries on the Economic Freedom Index with a score of 42.4.
The Foundation rates countries between zero (worst) and 100 (best) in terms of an economic freedom index. Iran has the worst state of economic freedom among the 177 countries surveyed, after North Korea, Venezuela, Cuba, Sudan, Zimbabwe, Burundi, and Eritrea. Of course, the situation in other countries such as Afghanistan, Libya, South Sudan, Iraq, and Yemen, is unclear.
The American Heritage Foundation sets 12 criteria to measure countries’ economic freedom, including freedom of investment. In that regard, Iran scores only 5, while the average global score is 57.
Iran’s financial freedom rating is at 10, while the global average is 49.
Among the 12 criteria, Iran’s situation is well below the global average in terms of property rights, judicial effectiveness, government obligations, and honesty.
The report adds that Iranians have the right to own and create private businesses under the law, but powerful institutions such as the Islamic Revolutionary Guard Corps (IRGC) restrict fair competition and entrepreneurial opportunities.
Iran’s judiciary is not independent of the Vali-e Faqih: the quality and access to administrative services is also limited by “mismanagement, widespread corruption and bribery,” and opposition efforts to combat these phenomena are also being suppressed.
The Foundation’s assessment shows that the best countries in terms of economic freedom are Singapore, Switzerland, Ireland, and New Zealand.
It should be noted that the report also indicates that over the past year, the world’s economic freedom index has witnessed the largest drop in more than 25 years. Scores for half of the 12 worldwide economic freedom criteria have dropped.
Among those countries are the United States, which has experienced a significant drop. While the country ranked 4th globally in 1995, it has now fallen to 25th place. In the case of Iran, the Foundation’s assessment indicates that Iran has fallen about 8.1 ratings in terms of the economic freedom index since 2017. It said Iran’s economy was one of the leading economies in the Middle East before the February 1979 revolution, but that it was weakened by “mismanagement, international sanctions and government repression.” The American Heritage Foundation is not the only institution that puts Iran at the bottom of the table in terms of economic freedom.
In its latest annual report, published on January 25, Transparency International also ranked Iran 150th out of 180 countries in terms of the extent of financial corruption.
