Vietnam moves up 4 places in Economic Freedom of World index

Vietnam has climbed four places to secure the 106th position out of 165 countries and territories in the Economic Freedom of the World index, according to the Canada-based Fraser Institute.

Manufacturing of mechanical products at Tam Hop Company in Soc Son District, Hanoi. Photo: Viet Linh/The Hanoi Times

The Economic Freedom of the World index evaluates the extent to which policies and institutions support economic freedom. It is published annually by the Fraser Institute in collaboration with the Economic Freedom Network, a coalition of independent research and educational institutions covering nearly 100 countries and territories.

Singapore currently leads the world in economic freedom, followed by Hong Kong (China), Switzerland, New Zealand, the US, and Ireland. Notable rankings include Japan (20th), Germany (23rd), France (47th), Russia (104th), and China (111th).

Vietnam has made notable progress,  moving up to the 106th position, a four-place improvement from last year. According to the Fraser Institute, this is a relatively substantial increase compared to other Southeast Asian countries.

In terms of specific components, Vietnam's scores have improved in four key areas of this index. Notably, the legal system and property rights rose from 4.96 to 5.15. This marks the first year that Vietnam's score in this component index has exceeded 5 points.

The soundness of its currency has also improved, with a score of 7.02, up from 6.96. Nevertheless, this remains the component in which Vietnam ranks lowest, largely due to restrictions on foreign exchange ownership in payment transactions. International trade freedom has increased from 6.4 to 6.52, and regulations concerning credit, labor, and business have risen from 6.08 to 6.1.

Dinh Tuan Minh, the Research Director of Market-based Solutions Center for Social and Economic Issues (MASSEI) which is a part of Fraser's network, noted that Vietnam has maintained a consistent upward trajectory since 2015. This trend reflects the government's efforts to restructure the economy towards full market-oriented development and international integration.

"This can serve as compelling evidence to confirm that Vietnam's economy is essentially functioning according to market mechanisms," Minh noted. However, he also emphasized that compared to many countries in the region, Vietnam still needs to make continuous efforts to achieve a higher ranking in the index.