News & Blog

Data visualization explores 2012 global economic freedom and prospects
28 Feb, 2012 - Lachlan James

With recent talks pertaining to another bailout package for Greece, concern across Europe lingering, and many other world economies entering 2012 with varying degrees of trepidation and expectation, global finance continues to make front page news and provide political fodder.

So, amidst all the commotion, where does everybody sit part way through the first quarter of this calendar year? As usual, we’ll turn to data visualization to provide a clearer picture.

Source
Today’s data visualization and data analysis is brought to you by: Yellowfin; now making Business Intelligence even easier.

Data provider
Today’s “Economic Freedom” and ” Macro-Economic” data is brought to you by The Heritage Foundation.

Note: The overall scores that make up The Heritage Foundation’s Index of Economic Freedom comprise a number of categories, including: Business freedom, trade freedom, fiscal freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, labor freedom.

The overall scores that make up The Heritage Foundation’s global Macro-Economic ratings comprise a number of categories, including: Tariff rate, income tax rate, corporate tax rate, population (millions), GDP (billions), GDP per capita, unemployment rate, inflation rate, FDI inflow (millions), tax burden as a percentage of GDP, government expenditure as a percentage of GDP.

For further information regarding the determination and calculations of scores for the 2012 Index of Economic Freedom, and macro-economic performance rankings, please visit The Heritage Foundation.


Overall global economic freedom scores 2012

The Heritage Foundation’s 2012 Index of Economic Freedom suggests that Australia’s (83.1) free-trade economy is one of the most uninhibited and deregulated heading into the New Year – well positioned to stimulate and facilitate new business. But we’re not surprised: Doing business with Yellowfin (headquartered in Melbourne, Australia) is incredibly easy. At this point, it’s also interesting to acknowledge the fact that Australia was the only developed nation to avoid recession during 2008’s GFC – not that we (Yellowfin) are claiming all the credit. An economics stimulus package and booming resources sector played its role too.


Hong Kong, New Zealand, Singapore and Switzerland all scored over 80 on 2012’s Index of Economic Freedom, with liberal fiscal approaches and high government spending.

Other liberal economies (rated 70 – 79.9) include: Canada, United States, Chile, UK, Ireland, Germany, Austria, Cyprus, Estonia, Taiwan, South Korea, Japan, Bahrain, Lithuania, Luxembourg, Macau, Mauritius, Qatar and Saint Lucia.

While many Western European nations are included in this section, it’s interesting to note that almost all Nordic countries have an economic freedom rating well above 70: Denmark, Sweden, Finland, Iceland and the Netherlands. Norway just misses out with 69.


“Freedom from corruption” scores 2012

One of the more intriguing contributing measures to The Heritage Foundation’s economic freedom rankings system is “freedom from corruption”. Whilst it is difficult to label many of the aforementioned categories within the freedom index as ‘good’ or ‘bad’, corruption is a somewhat more definite category.

Notably, all the nations assigned high “freedom from corruption” (80 or above) scores also achieved impressive overall freedom scores, highlighting a clear association between fair and free trade. Again, the domineering presence of Nordic nations suggests a safe region for business: Denmark (93), Finland (92), Sweden (92), the Netherlands (88), Switzerland (87), Norway (86) and Iceland (85).

Other nations with a corruption rating above 80 included: Singapore 93, New Zealand 93, Canada 89, Australia 87, Luxembourg 85, Hong Kong 84 and Ireland 80.


Conversely, according to The Heritage Foundation, investors tempt more than fate in these corruption-riddled capitals: Burma (14), Turkmenistan (16), Uzbekistan (16), Chad (17), Burundi (18), Angola (19), Equatorial Guinea (19).

Reaffirming the connection between free and fair trade, those nations whose economies are susceptible to corrupt activities were also awarded unenviable overall economic freedom scores on the foundation’s 2012 economic freedoms index: Burma (38.7), Equatorial Guinea (42.8), Turkmenistan (43.8), Chad (44.8), Uzbekistan (45.8), Angola (46.7), Burundi (48.1).

Of course how “free” an economy is isn’t necessarily a sign of stability and performance – think Ireland. So let’s look at The Heritage Foundation’s 2012 Macro-Economic Index to establish this year’s most potentially prosperous and debt-ridden nations – irrespective of economic style and accountability.


Overall economic performance (macro-economic scores) 2012

The top economic performers – prevalent amongst the world’s freest and least corrupt economies – are increasingly familiar names, with Hong Kong (89.9), Singapore (87.5), Australia (83.1), New Zealand (82.1) and Switzerland (81.1) achieving overall macro-economic scores above 80.

Reminder: The overall scores that make up The Heritage Foundation’s global Macro-Economic ratings comprise a number of categories, including: Tariff rate, income tax rate, corporate tax rate, population (millions), GDP (billions), GDP per capita, unemployment rate, inflation rate, FDI inflow (millions), tax burden as a percentage of GDP, government expenditure as a percentage of GDP.


Other nations with good economic outlooks for 2012, according to The Heritage Foundation, include: Austria (70.3), Bahrain (75.2), Canada (79.9), Chile (78.3), Cyprus (71.8), Denmark (76.2), Estonia (73.2), Finland (72.3), Germany (71), Iceland (70.9), Ireland (76.9), Japan (71.6), Lithuania (71.5), Luxembourg (74.5), Macau (71.8), Mauritius (77), Qatar (71.3), Saint Lucia (71.3), Sweden (71.1), Taiwan (71.9), Netherland (73.3), United Kingdom (74.1) and the United States (76.3).

Based on the measures that make-up the foundation’s 2012 Macro-Economic Index, the immediate economic situation looks particularly bleak for Iraq (N/A), Afghanistan (N/A), Somalia (N/A), Sudan (N/A), North Korea (1 – no, this is not a typo) and Zimbabwe (26.3). In instances where there is insufficient data to accumulate a response, we have assumed that 2012’s fiscal position is dire.


2012 GDP per capita

Gross Domestic Product (GDP) per capita is often a good indication of a nation’s economic prosperity. The ten countries with the highest GDP per capita are: Qatar (88,559), Luxembourg (81,383), Singapore (56,522), Norway (52,013), Macau (48,865), United Arab Emirates (48,821), United States (47,284), Hong Kong (45,736), Switzerland (41,663) and the Netherlands (40,765).


On the other hand, the ten countries with the lowest GDP per capita represent some of the poorest and volatile in the world: Democratic Republic of Congo (328), Liberia (392), Burundi (411), Zimbabwe (434), Eritrea (681), Central African Republic (745), Niger (755), Sierra Leone (807), Malawi (827) and Togo (858). Insufficient data was available for North Korea (N/A) and Somalia (N/A).

However, GDP per capita can be distorted amongst small populations, or in some instances, fail to represent a large divide between the mega wealthy and working poor.


2012 unemployment

Unemployment rates are often referred to as a measuring stick for economic performance. Can they be used as a more realistic determinant of the economic well-being of the general populace? Unfortunately, this data set for unemployment is not ideal. Insufficient data was available from a large number of countries (39).


Of the nations with adequate employment records, those with the lowest unemployment rates are listed as: Qatar (0.5), Azerbaijan (0.9), Belarus (1), Uzbekistan (1.1), Thailand (1.2), Papua New Guinea (1.8), Seychelles (2), Singapore (2.1), Kuwait (2.2) and Tajikistan (2.2).

The nations with the highest recorded unemployment rates are listed as: Liberia (85), Liberia (85), Burkina Faso (77), Turkmenistan (60), Djibouti (59), Senegal (48), Nepal (46), Lesotho (45), Bosnia and Herzegovina (43.1), Haiti (40.6) and Swaziland (40).

Due to the inadequacy of this particular data set – and the discrepancies between best and worst performers listed here and those identified within the overall macro-economic performance index – it is both uncertain and unlikely whether a country’s unemployment rates are representative of the economic circumstance of its general populace.


Conclusion

Like to sure-up your job prospects in 2012? If you don’t already reside in one of the following places, it’s time to relocate to: Singapore, Hong Kong, Switzerland, Norway, the Netherlands or Australia.

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