Vietnam's economy classed as 'mostly unfree' by global survey
The country has been advised to continue reforms, reduce red tape and increase transparency.
Vietnam's economic freedom currently stands well below global and regional averages, according to a new survey.
The country has been ranked 141st on the 2018 Economic Freedom Index compiled by the Heritage Foundation, an American conservative public policy think tank based in Washington, D.C.
Its overall score of 53.1 is up 0.7 point from last year, thanks to improvements in fiscal health, government integrity and judicial effectiveness. But trade freedom, property rights and labor freedom are still inhibited, according to the survey.
Vietnam finished 35th out of 43 countries in Asia Pacific, below China and its smaller neighbors Cambodia and Laos.
The U.S. foundation said that Vietnam could improve its economic environment by continuing to reform state-owned enterprises, reducing red tape, increasing transparency in the business and financial sectors, reducing bad debt in the banking sector and increasing recognition of private property rights.
“Corruption and nepotism are rife,” it said, emphasizing that the problems are more common in public firms subsidized by the government.
Vietnam seems to be on the right track after pushing ahead with various IPOs of state-owned firms in recent years. The country has also imprisoned scores of corrupt members of the public oil giant PetroVietnam, including once powerful officials.
Vietnam’s economy expanded 6.81 percent last year, its fastest growth in a decade and among the fastest in the world.
Although its score has been interpreted as “mostly unfree”, the economy is among 102 that improved this year. Another 75 declined and three remained unchanged.
The world average score of 61.1, the highest recorded in the 24-year history of the index, classes the global economy as “moderately free”.
Only six economies are classed as “free” by earning scores of 80 or above. Hong Kong and Singapore finished first and second in the rankings for the 24th consecutive year, followed by New Zealand, Switzerland, Australia and Ireland.
The number of economically “unfree” economies stands at 63, while 21 are considered “repressed”.
The world’s biggest economy, the United States, ranks 18th globally, while China is far behind in 110th.