Pakistan has been ranked the 131st freest economy by the 2019 Index of Economic Freedom report. The economic freedom score given to Pakistan is of 55.6. It has increased by 0.5 points.
The report states that the overall score of Pakistan has increased by 0.6 points. In judicial effectiveness, and property rights, Pakistan has scored better. It compensated the decline in fiscal health and the monetary freedom.
In the Asia-Pacific region, Pakistan was ranked 32nd freest economy amongst 43 nations. The average score in the world was 60.8 and regionally it was 60.6 respectively. Pakistan’s score ranked below the average score.
Due to internal disputes, political disorder and less foreign investment for decades, growth & development in the country has affected.
State interference in the economy has curbed private businesses to flourish. Also corruption and poor security condition has negatively impacted the judicial system of the country.
The criteria upon which economic freedom score is assessed includes the rule of law, size of the government, regulatory efficiency and the open markets in a country.
The reports states that rule of law in Pakistan, its judiciary is influenced by politicians. Thus it is not free and fair.
The government size of Pakistan is sub-divided in to tax system, fiscal health and government spending. The report stated that even though steps are being taken to reduce taxes, Pakistan’s tax system is still quite complex.
As for the regulatory efficiency of Pakistan, it is subdivided in to business, labor and monetary freedom.
The report stated, “A large portion of the workforce is underemployed in the informal sector. The government’s 2018–2019 budget increased spending on subsidies for the construction sector and for such items as food (especially sugar), power, water, and textiles by 36%.”
The open market score is dependent on trade, investment and financial freedom. The report said that due to limitations on foreign investments, and state interference, the economy of Pakistan has suffered.