Vietnam advances in economic freedom index, behind Cambodia

Vietnam has moved up four notches to the 106th position, but still far below Cambodia’s ranking at 78th, in the Economic Freedom of the World index, which is annually released by the Canada-based Fraser Institute.

Vietnam’s overall score came in at 6.26, up from 6.19 in the previous edition, positioning the country in the third quartile. The average economic freedom rating was 6.77 across 165 economies rated.

Vietnam recorded improvements in four out of five main areas, including Legal system & property rights, Sound money, Freedom to trade internationally, and Regulation. Its Size of government rating slid to 6.53 from 6.56.

The country’s solid improvement in the economic freedom rating since 2015 to now has reflected the government’s efforts to reshuffle the economy in a fully market-oriented manner, said Dinh Tuan Minh, director of Market Solutions Research Center for Economic and Social Issues (MASSEI), which collaborates with the Fraser Institute on assessing Vietnam’s market economy.

“This is good evidence to assert that Vietnam’s economy is basically operating in line with the market mechanism,” Minh told the government's news portal.

In Southeast Asia, Vietnam trails Singapore (first position), Malaysia (56th), Thailand (64th), the Philippines (70th), Indonesia (74th), Cambodia (78th), and stays just above Laos (107th).

Meanwhile, Vietnam ranks 72th worldwide in the 2023 Index of Economic Freedom, an annual guide published by The Heritage Foundation, Washington's No. 1 think tank. Its score increased 1.2 points from last year to 61.8. Vietnam is ranked 14th out of 39 countries in the Asia–Pacific region, and its overall score is above the world and regional averages.

“Capitalizing on its gradual integration into the global trade and investment system, the economy is becoming more market-oriented. Reforms have included partial privatization of state-owned enterprises, liberalization of the trade regime, and increasing recognition of private property rights,” The Heritage Foundation said.

Vietnam is seeking the recognition of its market economy status from the U.S., European Union, Brazil and other countries.

The Economic Freedom of the World index measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately-owned property.

Forty-five data points are used to construct a summary index, along with a Gender Legal Rights Adjustment to measure the extent to which women have the same level of economic freedom as men.

The top-rated economies in 2021, the year with the most recent comprehensive data available, are Singapore, Hong Kong, Switzerland, New Zealand, the U.S., Ireland, Denmark, Australia, the UK, and Canada.