Iran’s economic freedom score is 41.8, making its economy the 171st freest in the 2015 Index.
According to the 2015 Index of Economic Freedom, published earlier this week by The Wall Street Journal and The Heritage Foundation, Washington’s No. 1 think tank, Iran’s score has increased by 1.5 points since last year, with improvements in five of the 10 economic freedoms, including labor freedom, the control of government spending, and monetary freedom, outweighing a decline in business freedom.
The annual guide covers 10 freedoms – from property rights to entrepreneurship – in 186 countries. Iran is ranked last out of 15 countries in the Middle East/North Africa region, and its overall score is well below the world and regional averages.
The report – launched in 1995 and published annually – uses 10 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic to rank countries – rule of law, limited government, regulatory efficiency, and open markets.
Each of the 10 economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these ten economic freedoms, with equal weight being given to each. Based on an average score, each of 178 countries graded in the 2015 Index is classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
The report blames the undermined economic freedom in Iran on international sanctions and a faltering domestic economy.
Over the past five years, its score has declined by 0.3 point, with losses concentrated in three of the 10 economic freedoms, the report says.
In particular, rising business regulations have made it harder for entrepreneurs to do business. Capital flight and increased inflation due to currency devaluation also have affected the petroleum dependent economy.
Leading the chart this year are Hong Kong, Singapore, and New Zealand.