Ranks 23rd in the World
The Heritage Foundation and The Wall Street Journal’s annual “Index of Economic Freedom” for 2001, ranks Cyprus (not counting the occupied areas) as 23rd in the world. Hong Kong was first, and the U.S. tied for 5th, among the 155 nations rated; Cyprus is also one of the five nations that accomplished the most improvement in 2000.
Based on some 50 economic variables, the ratings (1 for best, 5 for worst), gave Cyprus high marks in a number of areas, noting that the EU accession process has “served as an impetus,” for the pace of Cyprus’s increasing economic liberalization. The highlights:
The survey notes a “very low level of protectionism, in Cyprus, with tariffs down from 5.3 percent to 4 percent, and quotas and non-tariff barriers being reduced and gives it the highest rating of 1.
With, “a very low level of inflation” of just 2.09 percent, the survey gave Cyprus another top mark of 1.
With a “very high level of protection,” and independent judiciary, a “fair legal system,” and the “right to due process,” Cyprus gets another 1 and a “better” for improving a full point in a year.
The report says that a “low level” of regulation, applied “evenly in most cases,” makes “establishing a business relatively easy,” in Cyprus and gives it the second best score of 2.
Banking & Finance:
Cyprus’s banking system “adheres to standards similar to those in the U.S. and Europe,” the report says, and “provides a full range of services, with solid international ratings.” The report again sets its score at 2.
Wages & Prices.
With a “low level of intervention,” and prices “set by the market,” Cyrus’s rating improved by one point to 2. Government Intervention. The government plays a large role in the economy and in many firms, and consumes 19.3 percent of GDP; the survey calls that (3) “moderate.”
Capital Flows & Investment:
The survey says Cyprus, “has focused on lowering barriers to foreign direct investment controls,” and “grants investment permits in a timely and non-discriminatory fashion,” (3). Fiscal Burden. While government expenditure still accounts for 37 percent of GDP, the average taxpayer in Cyprus pays only 20 percent in marginal taxes and the top corporate rate is 25 percent, for a 3.5 but “stable” rating.
“Modern copyright and patent laws” passed in Cyprus, have now “improved” intellectual property-right protection, the report says, with “moderate” activity (3).