Index of Economic Freedom Significance, Methodology and Rank of India

Why In News

·         Index of Economic Freedom: The Index of Economic Freedom is an annual report that measures level of economic freedom in countries. Let us know about its Significance, Methodology and Rank of India.

Key Points

·         The Index of Economic Freedom is an annual report that measures the level of economic freedom in countries around the world. The index is published by The Heritage Foundation, a conservative think tank based in Washington D.C., in partnership with The Wall Street Journal. The index uses a combination of qualitative and quantitative data to rank countries on a scale of 0 to 100, with 100 representing the highest level of economic freedom.

Index of Economic Freedom: Overview

·         Name of the Index      -  Index of Economic Freedom

·         Published by   The Heritage Foundation

·         Headquarters of Publisher      Washington D.C

·         Partners in Publishing Wall Street Journal

·         Rating Scale    0 to 100

Index of Economic Freedom: Methodology

·         The index is based on four main pillars of economic freedom: rule of law, government size, regulatory efficiency, and open markets. Within these pillars, the index measures factors such as property rights, government spending, business freedom, labor freedom, and trade freedom. Each of these factors is given a score, and the scores are combined to create an overall score for each country.

·         The Index of Economic Freedom follows a methodology that is categorized into four groups, each consisting of 12 aspects. These are:

Rule of Law

·         Property Rights: This evaluates a country’s capacity to legally safeguard the property rights of its citizens.

·         Judicial Effectiveness: This measures the effectiveness and impartiality of the judiciary in relation to property laws.

·         Government Integrity: This assesses the strength of the government and the occurrence of corrupt practices such as bribery, nepotism, patronage, embezzlement, cronyism, and graft.

Government Size

·         Tax Burden: This examines the percentage of personal and corporate income that is subject to marginal tax rates and overall taxation levels, including indirect and direct taxes, as a proportion of the GDP.

·         Government Spending: This analyzes the quantity of government spending and its related burden, including state consumption and transfer payments for various entitlement programs.

·         Fiscal Health: This assesses a country’s ability to manage its budgets by measuring growing debt and deficit.

Efficiency of Regulation

·         Business Freedom: Assesses the cost, time, and degree of freedom associated with starting, operating, and shutting down a business, considering factors like electricity costs.

·         Labor Freedom: Measures the level of interference in labor rights, including minimum wage laws, restrictions on layoffs, severance pay requirements, and regulatory constraints on hiring and working hours, as well as the labor force participation rate.

·         Monetary Freedom: Examines the stability of prices and the extent to which the microeconomy is regulated.

Openness of Markets

·         Trade Freedom: Measures the impact of tariff and non-tariff barriers on the import and export of goods and services in and out of the country.

·         Investment Freedom: Evaluates the degree of freedom or restrictions on the movement of investment capital for individuals and firms.

·         Financial Freedom: Indicates the efficiency of the banking system and the level of independence of the government from the financial sector.

Index of Economic Freedom: Key Features

·         The index is widely used by governments, businesses, and investors to assess the economic climate in different countries.

·         A higher score on the index is seen as an indicator of a more attractive investment climate, while a lower score can be a warning sign of potential economic problems.

·         According to the 2021 Index of Economic Freedom, Hong Kong topped the rankings for the 27th consecutive year, followed by Singapore, New Zealand, Australia, and Switzerland.

·         The United States ranked 20th, while China ranked 107th out of 180 countries.

·         The index also highlighted the impact of the COVID-19 pandemic on global economic freedom, with many countries experiencing declines in economic freedom due to increased government intervention in response to the pandemic.

·         Critics of the index argue that it reflects a conservative bias, as it tends to favor countries with low taxes and minimal government intervention in the economy.

·         They also note that the index does not take into account social or environmental factors, and may therefore provide an incomplete picture of a country’s overall economic health.

·         Despite these criticisms, the Index of Economic Freedom remains a widely used tool for assessing economic conditions around the world. Its focus on key economic indicators and its comprehensive coverage of a wide range of countries make it a valuable resource for investors, policymakers, and business leaders. As the global economy continues to evolve, the index will likely continue to play an important role in shaping economic policy and investment decisions.

Index of Economic Freedom: Rank of India

·         Currently, India is categorized as “Mostly Unfree” in terms of the economic freedom its inhabitants enjoy. The 2023 Index of Economic Freedom gave India a total score of 59.8 out of 100, which translates to a 59.8% performance on the index. India’s total score on the 2023 Index is its lowest in six years.

·         In the Index, India is placed at the 121st spot out of 184 nations. India still struggles in areas such as government honesty, freedom for labor, and financial stability, which are significant factors that impact its total score and position on the Index.

Belgium firm to launch biodiesel project in Ayodhya soon

Why In News

·         The city of Ayodhya has been chosen for a two-year pilot project aimed at producing biodiesel from waste. Belgium-based company Vito is expected to launch the project in Ayodhya soon.

Key Points

·         The city of Ayodhya has been chosen for a two-year pilot project aimed at producing biodiesel from waste. Belgium-based company Vito is expected to launch the project in Ayodhya soon. The company, which focuses on clean technology and sustainable development, has already started working on the project, according to officials.

·         Belgium-based company Vito is set to launch a two-year pilot project aimed at producing biodiesel from waste in Ayodhya, India.

·         The project will initially use one tonne of plastic waste to generate biodiesel.

·         Vito officials have held meetings with Ayodhya administration officials and organised a workshop for the Ayodhya Municipal Corporation officials.

·         The company will use the corporation’s material recovery facility for waste segregation before setting up its own facility.

·         Ayodhya was selected for the pilot project due to the expected increase in waste generated by the surge in devotees’ footfall after the opening of the Ram temple in January 2022.

·         The Sri Ram Janmabhoomi Tirath Kshetra Trust has estimated a turnout of several lakhs of devotees every month, which will generate more waste and create a major garbage disposal issue for the corporation.

Japan’s health ministry approves first abortion pill in its history

Why In News

·         A panel in Japan’s health ministry has approved the country’s first abortion pill, in a major step for reproductive rights decades after other countries made abortion medication widely available.

Key Points

·         A panel in Japan’s health ministry has approved the country’s first abortion pill, in a major step for reproductive rights decades after other countries made abortion medication widely available.

·         The ministry’s pharmaceutical board granted approval to the MeFeego Pack, an abortion pill manufactured by British pharmaceutical Linepharma, according to a spokesperson from the Ministry of Health, Labor and Welfare.

Overview of the news

·         The medication consists of two types of pill, and can be used within nine weeks of pregnancy, according to Japanese public broadcaster NHK. In a clinical trial in Japan, 93% of participants had a complete abortion within 24 hours.

·         The medication combines mifepristone and misoprostol, which the World Health Organization has included in its Essential Medicines List, described as safe and effective for pregnant people.

·         It would provide an alternative to a surgical procedure amid calls for progress in women’s reproductive rights and gender equality. In Japan, abortions have been usually performed with metal instruments. As this procedure is invasive, medical experts and others are calling for introduction of abortion pills in Japan.

·         Under Japan’s existing laws, women can only receive an abortion if a pregnancy “may significantly damage the person’s physical health due to bodily or economic reasons” or if they became pregnant due to rape.

World Intellectual Property Day 2023 observed on 26 April

Why In News

·         World Intellectual Property Day is marked on April 26th with the objective of raising awareness about the impact that patents, copyrights, trademarks, and designs have on our daily lives.

Key Points

·         World Intellectual Property Day is marked on April 26th with the objective of raising awareness about the impact that patents, copyrights, trademarks, and designs have on our daily lives.

·         The purpose of intellectual property (IP) rights is to encourage innovation and creativity worldwide, with a particular focus on the younger generation’s potential to create sustainable solutions for the IP refers to intangible assets generated by the mind, including inventions, literary and artistic works, designs, symbols, names, and images used in commerce.

·         These non-physical assets can be owned by individuals or companies, and intellectual property rights give them control over their creations.

World Intellectual Property Day 2023: Theme

·         The 2023 World Intellectual Property Day theme is focused on Women and IP: Accelerating Innovation and Creativity. With nearly half of the global population being female (49.58%), women represent a vast pool of untapped talent and play a significant role in shaping the world through their creativity, hard work, and resourcefulness.

·         The theme for 2023 aims to highlight the importance of empowering women to overcome these challenges and unlock their full potential in the field of intellectual property, driving innovation and creativity forward.

World Intellectual Property Day 2023: History

·         WIPO, a self-funded specialized agency of the United Nations, plays a crucial role in establishing a fair and accessible global intellectual property system. In the year 2000, the member states of WIPO agreed to observe World Intellectual Property Day on April 26th every year to celebrate the establishment of the WIPO Convention in 1970.

·         The Convention aims to bridge the gap between intellectual property as a legal or business concept and its impact on people’s lives. By observing this day, WIPO hopes to increase awareness of the importance of intellectual property rights and encourage innovation and creativity across the globe.

Zimbabwe to introduce gold-backed digital currency

Why In News

·         To combat the falling value of the Zimbabwean currency, the Reserve Bank of Zimbabwe (RBZ) has announced plans to introduce a gold-backed digital currency.

Key Points

·         To combat the falling value of the Zimbabwean currency, the Reserve Bank of Zimbabwe (RBZ) has announced plans to introduce a gold-backed digital currency. The digital gold tokens will be a form of electronic money, backed by gold held at the RBZ.

·         This will enable holders of small amounts of Zimbabwean dollars to exchange their money for tokens and protect themselves against exchange rate fluctuations.

Zimbabwe’s dual currency structure:

·         The Zimbabwean economy operates on a dual currency structure, with the Zimbabwean dollar and the U.S. dollar in use. The U.S. dollar currently dominates and accounts for about 70% of domestic transactions, according to the RBZ.

·         In an effort to halt the collapse of the Zimbabwean dollar and reduce the demand for the U.S. dollar, the RBZ introduced gold coins in July 2022.

·         The RBZ had re-introduced the Zimbabwean dollar in 2019, replacing the previous multiple currency system that had been in place since 2009, when the country abandoned its old local dollar due to years of hyperinflation.

·         Due to the outbreak of the COVID-19 pandemic in 2020, the Zimbabwean government permitted individuals with free funds to use their foreign currency to make domestic payments for goods and services.

·         This policy led to the current dual currency system, where the Zimbabwean dollar and the U.S. dollar are both in use for domestic transactions.