Algeria ranked lowest in MENA for economic freedom

Algeria is one of the worst countries in the world for economic freedom according the latest ranking issued in the Economic Freedom of the World: 2017 Annual Report.

The figures, compiled by Canadian think tank the Fraser Institute, rank countries according to access to a free market, free trade and entrepreneurial freedom. These criteria are grouped into five main groups: size of government (expenditure, size of state controlled enterprises, taxation, etc.), legal system and property rights, inflation, freedom of trade at the international level and regulation of credit, labour and business.

The five criteria have a total of 42 distinct variables, each scored on a scale from 0 to 10 points.

Algeria ranked 156 out of 159 countries in the list and was the lowest ranking country in the Middle East and North Africa. The figures were compiled in 2015.

The data used for the ranking system came from institutions such as the World Bank, International Monetary Fund and the World Economic World based on surveys, expert analysis and case studies.

Read: IMF calls on Algeria to diversify income sources

The United Arab Emirates was the highest scoring Arab country coming in at number 37 with Jordan not far behind at 38. Qatar ranked third in the Middle East and North Africa and 45th globally.

Figures for Iraq, Somalia and Sudan were not available so the countries were not listed in the ranking.

Algeria is currently going through one of the hardest economic crises seen during the presidency of Abdelaziz Bouteflika. The last 15 years have allowed the Algerian government to rely on oil revenues and its natural reserves which have given the country financial ease and allowed the government to maintain social peace.

However since oil prices began to plummet in 2014, unease in the country has begun to grow with it becoming evident that its reliance on hydrocarbons is no longer a viable long-term economic model.

Tighter austerity measures introduced through its new economic plan unveiled by the Prime Minister Ahmed Ouyahia consist mainly of borrowing money directly from the central bank. The new economic model will help keep debt levels manageable but cannot be a long-term solution that will allow the Algerian government to successfully balance its budget by 2022 as it intends.