Rankings

The Economic Freedom of the World report seeks to measure the consistency of the institutions and policies of various countries with voluntary exchange and the other dimensions of economic freedom. Every year it ranks 143 countries for economic freedom by five major categories. Since its inclusion in the rankings in 2007 Kyrgyzstan performed relatively well.  In the latest 2008 edition Kyrgyzstan progressed from 68th to 60th, that tracks Kyrgyzstan progress up to 2006. The next report is expected in October 2009.

Both Kyrgyzstan and Kazakhstan received high marks for the size of government and access to sound money. Government consumption as a percentage of GDP was 16.33% in the Kyrgyz Rep., while 18.32% in Kazakhstan. The passage of a flat 10% corporate and income tax as well as sector-wide cuts in civil servants in the Kyrgyz Rep. likely caused such progress. The Kyrgyz Rep. improved in Access to Sound Money category for keeping inflation within five percent the last five years, while oil-drive growth in Kazakhstan has initiated inflation. Although, Kyrgyz Rep. received a low mark for capital controls, 5.00, Kazakhstan received 1.54.

The Heritage Foundation’s Index of Economic Freedom that measures economic freedom by slightly different parameters and different terminology. It rated Kyrgyzstan 61.1% free and ranked it 70th freest country in the world, ahead of Kazakhstan and far ahead of Russia. Kyrgyzstan’s strong points are trade freedom, as evidenced by size of Dordoi, the largest market in Central Asia, Freedom from Government, due to the 10% corporate and income tax rate and monetary freedom, due to a long history of ~4% inflation, until the end-2007.

Kyrgyzstan’s ranking by Doing Business.

Note: Doing Business 2008 rankings have been recalculated to reflect changes to the methodology and the addition of three new countries.