|Lebanon ranks first in Index of Economic Freedom
|Lebanon has some good news to bring to the table in its talks with the WTO: it ranked first place along with Oman in the second Index of Economic Freedom in the Arab World released by the Vancouver-based Fraser Institute.
Fraser "measures the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions" in each of the 16 countries in the MENA region, by assessing five categories: size of government, legal structure and property rights, access to sound money, the ability to trade internationally, and regulation of credit, labor and business.
But some analysts are skeptical about the results. When contacted by The Daily Star Louis Hobeika, an Economics Professor at NDU, was surprised that Lebanon had edged out the U.A.E. and Oman, two countries that have done "an excellent job removing obstacles to foreign competition."
"This is not glorious information, but it's good news," he said. "One of the reasons we have not gotten into the WTO is because so many trade barriers and red tape still exist here."
Lebanon scored 8.1 and fell in the top half of five of the six categories, indicating a low level of state intervention in the economy. It came in first place in the "size of government" category, due to the county's minimal tax rates in proportion to income, and because subsidies account for a small percentage of GDP. It also ranked third place in "regulation of credit, labor, and business," and sixth in "freedom to trade internationally."
But according to the report, the Lebanese government needs to work on enforcing stricter property rights, ultimately concluding: "Lebanon faces a serious problem. It does quite badly in Area 2, 'Rule of Law.'"
Hobeika said he would have guessed that the most free economy in the region belongs to the U.A.E., but Gilbert Doumit, a board member of the Injaz investment group, disagrees.
"For the past 30 years Lebanon has been the only free economy in the region," he said, "but free trade is limited in the U.A.E. Media City might be a free-trade zone, but if you want to run an outlet outside, it will be regulated by the Emirs completely."
The Daily Star