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tv   Global Economic Freedom Development  CSPAN  April 17, 2018 4:31am-5:23am EDT

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public service by america's cable television companies. today, we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. next, a look at policy changes advancing economic freedom and prosperity. hosting a study on economic conditions and government policies in 186 countries. terry miller, the director of the heritage foundation center for international trade and economics presented the study. this is 45 minutes. ambassador miller serves the heritage in economic freedom and director of our center for
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international trade and economics. prior to joining us he served for 26 years or more as a public servant, and in the diplomatic corps, among his appointments serving as ambassador to the united nations social council for president george w. bush and secretary of state for economic and global issues as well as holding positions in appointment with the united nations. please join me in welcoming terry miller. terry. >> thank you, john. good afternoon, ladies and gentlemen. welcome to the heritage foundation. i know many of you have come today to hear our keynote speaker, secretary wilbur ross. he will be joining us in a few minutes. in the meantime, it is my honor to present to you the 24th edition of our annual index of economic freedom we are
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officially launching today in this united states. i hope you picked up a copy of your index on your way in. if not, please grab one as you leave the building today. anthony kim, i don't see in the auditorium right now and jim roberts sitting right down here in the front row. the index ranks 112 countries and categories of economic freedom. we put those scores together as an overall economic freedom score that serve business as the basis for the global ranks. topping our ranks 24th year in a row, hong kong, free market for commitment and trading roots seems as strong as ever. a remarkable feet when you take into account the evolution of its political situation with
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mainland, china. in second place every year we produced the index, singapore. hong kong and singapore are the only economies judged economically free that we look at. other economies judged free in this year's ranks were the field, switzerland, australia, and ireland. there were a few other countries that distinguished themselves as leaders in economic freedom within their respective geographic regions. hong kong was the best in the asia-pacific region and switzerland had the highest score in europe. the united arab emirates topped off north africa, mauritius and
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the surrounding islands and switzerland and then canada in the americas. as a citizen of the united states, i have to say that last fact is a great disappointment to me personally. this chart shows the bottom 20 and top 20 overall scores in our index. i put it up mainly because it gives me an opportunity to talk about the united states, which has fallen over the past 10 years from 5th place to 18th place in the ranks. there was a slight uptick in the u.s. score this year, which gives some hope that the decline is coming to an end. but we'll have to see the impact of the new policies like the tax cuts that were adopted earlier this year. on the other side of this chart
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there are many sad stories, but none sadder than venezuela, which ranked 46th in the world when we started this project in 1995, but now has fallen right to the bottom of the ranks, just above north korea. as you can see from this slide, there are only modest differences in economic freedom between the various regions. europe has the highest average economic freedom score and most european countries are found in the top half of the ranks. sub-saharan africa lags behind. differences within regions, however, are much more pronounced than the differences between regions. the asia-pacific region has four economies among the freest in the world. i mentioned them before, hong kong, singapore, new zealand and
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australia. and on the other hand it has three economically repressed countries including last place, north korea. the americas region are equally divided between those moderately or mostly free and mostly unfry or repressed. most countries -- mostly unfree -- are grouped in the middle of the ranks. the vast majority of european countries are moderately free contributing no doubt to high average of income on that continent. north africa is evenly distributed within the middle three categories of ranks. unfortunately, there are also four countries in this region we were unable to rank because of political instability or violence. sub-saharan africa has only one country that can be considered mostly free and eight others moderately free.
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the majority of african countries lack almost any significant elements of economic freedom, trapping their people at low levels of development. despite these differences in and among the regions, there is one relationship constant. countries with higher levels of economic freedom have higher, and in most cases much higher per capita incomes than countries that lack freedom. this chart compares incomes in the five freest and five least free countries in each region. in addition to celebrating countries that do well in the ranks, we like to recognize countries no matter their ranking that made significant improvement this year. haiti had the most overall game in economic freedom with a major effort to get its fiscal deficit
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under control and significant improvements in the rule of law. barbados, however, made the biggest jump in the rule of law category with big gains in judicial effectiveness and reducing corruption. slovenia was the most improved in the concept of limited government with a big effort to get its budget deficits under control and control of government debt. tunisia had big gains in both trade freedom and investment freedom and pushed its open market score up by almost 10 points. ukraine made gains in all three of the regulatory categories, business freedom, labor freedom and monetary freedom. that, i think, shows that economic progress need not stop for countries facing internal or
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external political challenges. we measure these categories independently. they do interact with one another. progress in one area can enhance the benefits from policy challenges in another. the importance of a particular category may vary, depending on a country's level of development. there's one category that stands out as especially relevant to countries at all levels of development. that's the freedom to trade. the freedom to trade is highly correlated with overall economic freedom and prosperity, both for the world as a whole and within every region and at all levels of development. i want to move on now to highlight some of the ways economic freedom makes a difference to the people around the world. we can see here economic freedom has been trending upwards over the life of the index.
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over that same periody global gdp has just about doubled. poverty rates dropped by over two-thirds. in an economically free world billions of people have escaped poverty and enjoyed for the first time ever the economic opportunity for economic advancement. the benefits of freedom can be seen by comparing countries at a single point in time. this slide shows the correlation between economic freedom and gross domestic product per capita. those living in economically freer societies enjoy much higher incomes on average than those where freedoms are restricted. benefits for improvements of economic freedom, once you received a basic level, score around 60 or so, these improvements can be quite dramatic. look at the steep slope of that
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curve on the left hand side. on the other hand, one of the most interesting results of the index, for countries of any level of economic freedom there's a correlation between changes in economic freedom, improvements and economic growth rates. no matter how low your current score, you're likely to see improvements in economic growth if you take steps to improve your economic freedom. the positive relationship holds over all five time periods, data for 5, 10, 20 year periods. in all cases the countries that improved the economic freedom the most had the highest growth rates on average. wealth and income are not perhaps the most important factors in a society's all over well-being. in the index we looked at the
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relationship of economic freedom and variety of indicators of social well-being. at the broadest level, there's a strong correlation between levels of economic freedom and performance of two widely used indexes of social well-being. human development index and social progress index. looking at some specific areas we see children in freer economies are able to stay in school six years longer on average than children in repressed mostly unfree societies. this will have a huge impact on those countries future prosperity. economic freedom also promotes better healthcare and longer life. here, we compare longevity with countries with less or more economic freedom. the average life span and countries at the lower end of
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economic freedom scale is about 66 years. in countries with higher levels of economic freedom, average life expectantsy is over 76 years. that's ten more years of life on average than governments who allow them more economic freedom. finally, this age of global warning or climate change, there's a cautionary note from the data. for those who believe it is imperative for government to impose greater emission standards or environmental controls. with other areas of progress, economic freedom, not government regulations, taxes or subsidies led to the most improvement environmental conditions. in closing, i want to highlight what we call four critical countries for improvement. these are countries with large populations that have taken the
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first baby steps towards economic freedom, but are still mostly unfree. china, for example, made major reforms under ping but since has promoted a hybrid system that combines participation in the global trading system with centralized planning and control of investment. as growth rates slow, the contradictions of such a mixed approach are likely to become more and more difficult to manage. india has abandoned the ridged adherence to socialism that characterized the early years of its independence and slowly unwinding its massive economic state. over 24 years, the pace of reform is too slow for a country that aspires to world economic leadership.
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russia, hmm, the communist policies of the soviet union are largely gone but authoritarian control following a wealthy oligarchy and state-owned enterprises. finally, brazil. the economic freedom score of only 51.4, is identical to its score in the first edition of the index in 1995. the country's gotten stuck repeating policy mistakes in what seems to be a never ending cycle of futility. all of these countries are in some respect stuck in need tov broad-based reform to sustain economic growth to the benefit of their large populations.
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that's the ends of my presentation. all of our index results are available online, along with supporting data and historical analysis. i'd be happy now to take questions while we await the arrival of secretary ross. yes, sir. if you'd wait for a microphone, we'll have a microphone. please identify yourself and i'd be happy to hear your question. >> carl. i see one of your criteria is monetary freedom. could you please explain what your parameters are for monetary freedom? >> yes. it's basically a measure of inflation in economies, over a three year period, we use a rolling average of inflation that counts current levels more
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significantly than formal levels. we also look at price controls in the economy and extent governments are interfering in the market and variety of ways to influence prices. yes, sir. >> my other question, a couple of your slides were of great interest, markets our subscribers and readers are invested-in,most improvedy haiti, indonesia and ukraine. can you give us details? these are what we call early growth markets. >> i think haiti is a classic case there is an extremely low level of economic freedom at this time. they're scrambling to come back after earthquakes and other events that held them back more. long term there is a tremendous
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problem with corruption and lack of rule of law in a country like that. this year, they did make concerted efforts to improve. i should point out in this regard our data covering the period from mid-2016 to mid-2017, we're dealing with a little time delay here. there was more obvious progress in countries like ukraine where we've seen a strong effort to improve economic policies and get economic growth going quickly in sight of political security challenges they're facing from russia right now. tunisia is a case we paid a lot of attention to. obviously, the birthplace of the arab spring that didn't spring as far as we would like to see in many of the countries in the region.
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they seem to have stabilized the situation there and putting in place policies to open the economy and make better use of foreign investment and the trade markets available to them. that's what we saw there. back here. >> where, if anywhere, do you take into account when a country uses its economic freedom to spend money to make countries less free, thinking particularly with qatar, which uses some of its money to sponsor states that try to reduce political freedom in other countries? >> that's obviously a problem. we measure -- what we measure on an evenhanded basis for countries, and we're not looking at political developments or political actions by countries
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and other countries around the world. that's for others i think to use. qatar is not what i call a champion of economic freedom scoring in the upper middle half of the middle east ranks. i guess we just didn't take a look at what they do with their wealth once they have it. that's a question for others. let's go over to this side of the room. back in the back. >> excellent summary of michael nabok. thank you very much. 28 countries in the european union and 19 in the eurozone. did you look to see the impact positive or negative on either of those two institutional regimes? >> the european union, i think you have to look at that in the long run, the european union
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grew out of a desire to eliminate war on the european continent. to those of us who -- i'm not quite old enough to remember world war ii but remember its after math. the effort in europe to overcome international rivalries and establish a peaceful and coordinated regime there, it certainly served that purpose to a pretty large extent. these days they've gone way beyond economic cooperation, to the extent they're trying to form political unity. i guess the index is not the right place to comment on that factor. to the extent they created a free trade zone in the continent
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in the way the united states is a free trade zone and nafta good from an economic point of view. you have to worry about the bureaucratic regulatory process not as democratic it might otherwise be and see if that is in some ways out of control. i know that's not a very straightforward situation but very complicated in europe. but for the european union all hold for eurozone as well, take the control of monetary policy away from individual countries. that can be a problem and i heard them as they try to use monetary policy to adjust other factors and on the other hand it imposes a certain amount of discipline, at least in theory, what to do with deficit spending and debt levels out of control. again, i would say it's a mixed
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picture. yes, barbara. >> i would like to hear a little bit of review what criterion you use evaluating trade freedom. >> for trade freedom, we're using mainly the applied tara phrase, not the published one, but weighted according to what products are coming in. it's a trade weighted average for tariffs and non-tariff barriers we look at all kinds of regulations and the extent corrupt practices may impede trade flows. that's an additional measure. yes, sir. >> probably, one of the greatest achievements in the trump
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administration is to almost stop the regulatory state. are these too much in their infancy to put them in the accounts for the ratings of the united states? >> stop what? >> the regulatory. >> yes. >> based on the things we've seen in 2017, including the federal register, there's been an enormous sea change in regulations. is it just too early? >> that's one of the most positive achievements of the trump administration so far in our view. it's bound to have an important positive impact on trade freedom in the united states. but it is in fact too early for us to have been able to take account of those changes in this year's edition of the index. we will be picking that up strongly next year in the index as well changes from the tax reform, so there is some hope that the u.s. score will improve.
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i would caveat that only with the issue of trade policy, which seems to be going in the opposite direction at this time. it would be very hard for me to predict exactly what will happen to the u.s. score in the year ahead. yes, sir. >> thanks. >> thanks. i just had a follow-up question on the trade freedom question, to what extent do the u.s. policies contribute to the store, withdrawal from the tpp. renegotiating of nafta. and can you could comment on the floebl trade freedom. >> none of those actions have had an impact yet on the score because they come after the cutoff date for the data for
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inclusion into the process. but any new tariffs could have some impact on the score. that depend on the extent of those tariffs, of course. right now that's an open question. we had a lot of announcements of proposed action by the trump administration and by other countries, sometimes in response, and sometimes on their own. inwe need to wait and see what actually happens in terms of the imp sigs of tariffs and what impact that has on trade flows around the world and we will be able to judge better what's actually going on. well, i see our distinguished guests have arrived. so i think that better the last question. i would be happy to answer questions individually after the program is over. it's my honor now at this point to introduce the distinguished president of the heritage foundation, kay coals-james. mrs. james has an he can tensive background in crafting public
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policy and leading in nearly every sector of american economy and she brings a wealth of experience to this position. having served on the heritage board from 2005 to 2018 and in the conservative movement for more than 30 years. during that time, she's made conservative solution as reality at all levels of government, including during her service as director of the u.s. office of personnel management from 2001 to 2005. most recently, mrs. james was the founder and president of the gloucester insz institute, an organization dedicated to training and nurturing leaders in the african-american community. she's a graduate of hampton university, the recipient of numerous honorary degrees, and a best-selling author. most important, her words, those, she's married to charles james senior and is the proud mother of three and grandmother of five. please join me in welcoming kay
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coles-james. [ applause ] >> thank you so much. thank you all for being here this afternoon. it is absolutely my pleasure to welcome you to the special event and to introduce our esteemed guests. for 45 years, the heritage foundation has been dedicated to building an america where freedom, opportunity, prosperity, and civil society flourish. this is not a throw-away line to anyone who works in this building. no, it's our battle cry against the tide of human history. you see, for literally thousands of years, the vast majority of people lacked economic freedom and opportunity. and as a result they were condemned to demeaning demumizing lives of poverty,
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sickness, and sometimes early death amount few people controlled most of the power and most of the wealth, and everyone else suffered for it. thankfully, those days are over for more people today than at any previous time in history. but we still see instances such as in north korea that serve as a stark reminder of where we have come from and where we could return. if we don't remain dedicated to building a better future. that's what the heritage foundation is all about, and it's why our index of economic freedom is so vitally important. the index chronicles the advance of economic freedom and its defeat of poverty and privation. with detailed analysis presented in a user friendly format, the index has served as the go-to resource for policy makers,
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researchers, and students for more than 20 years. it covers 12 freedoms in 186 countries, revealing the essential link between free markets and prosperity. and as a result, the index has inspired positive policy change around the globe, improving the lives of millions of people. you see, economic freedom leads to better health, longer lives, improved education, and cleaner environments. it expands markets and improves standards of living. and it brings societies closer together in peaceful cooperation that tran sends race, religion, and culture. in sum, the index reveals a powerful truth. governments that respect and promote openness and free markets make their citizens' lives, and the world, better. and it's for that reason that we are deeply honored that commerce
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secretary wilbur ross is with us today. secretary ross is not only an extraordinarily accomplished businessman with degrees from yale and harvard and a record of generating jobs and prosperity at more than 100 companies. he's not just a universally acclaimed expert, having been named by blockberg markets as one of the 50 most influential people in global finance. yes, he's even far more than that. and he not only serves as the trump administration's principal voice for job growth and economic opportunity, he is a staunch, life-long believer in the undeniable truth that inspires our work here at the heritage foundation every day. that is, with freedom and opportunity, people everywhere can rise up from poverty and be
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empowered to live healthy, productive, and fulfilling lives. i can therefore think of no better guest to speak at this special occasion than our dear friend at the heritage foundation, secretary ross. thank you for joining us today. [ applause ] thank you, kay, for that very kind introduction. it reminds me a little bit about henry kissinger one time was delivering a speech. and before it, he got a very, very elaborate introduction. following which he immediately said, given that introduction, i can't wait the hear what i'm about to say. [ laughter ] for some 45 years, heritage foundation has been a leading advocate for the values we in
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this room hold firmly -- free enterprise, limited government, a strong defense, and a prosperous and secure america. it's a pleasure to be here for the washington launch of the latest index of economic freedom. i'm here today because i believe that next year and at least for the next seven-odd years, our possession united states in the index will hopefully continue to improve. as of the june, 2017, cutoff date for policy changes to be taken into account, we didn't yet have very many of the deregulatory actions that we now have taken. we didn't have many epa reforms. and we certainly didn't have the largest tax cut and tax reform in history.
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so we hope that those very specific developments will help propel us up in next year's and in succeeding year's. since the index was created by heritage foundation and the "wall street journal" in 1995, it's become an indispensable tool in promoting the benefits of economic freedom. it is used by governments, individuals, investors, businesses, ngos, and the media in capitals and c suites throughout the world. it is a recurring reminder of how important freedom is to individual and collective prosperity. and it provides governments, including our own, with an objective critique of the economic conditions in each
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country. it is these conditions upon which governments are held accountable by increasingly discerning and educated citizens. in short, the index is an essential service provided by heritage. i congratulate the six economies that earned the index's top designation of free with scores of 80 or better. hong kong, singapore, new deland, switzerland, australia, and ireland. it is, to say the least, disconcerting that the united states is not yet part of this elite group although globally economic freedom has hit an all-time high. it's imperative that we acknowledge and address the reasons for which our country lags behind the seven nations that are ranked above us.
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the good news is that thanks to president trump, we believe our downward slide in the index over the past decade not only has come to a halt, but should be reversing. -- scores improve in this latest report, but the latest u.s. score of 75.7, about .6 of a point before the previous report, is the right direction. but it's come from a base that was the lowest in the index's history due to no fault of the present administration. it is an indication that after a decade of economic stag nation and decades of overregulation, we have hit an historical inflection point. 15 months ago, trump took office
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with a specific agenda to unleash our economy and improve job opportunities for millions of americans. a key element of that agenda was lifting the heavy yoke of government from the backs of american businesses and workers. as i speak, the administration is continuing to review and eliminate outdated ineffective rules and regulations whose costs in time and money vastly exceed their benefits. the president has mandated that for every new federal rule created, at least two of equal value must be repealed. in fact, we have done better than that by a very wide margin. in the last year, the president
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repealed a whopping 22 regulations for every new one issued. just today, i and 14 other cabinet members sign an mou among us implementing the one federal decision framework for environmental review and authorization process for major infrastructure projects. that's one of the areas that is the most fiendishly regulated in the country. you may have seen a chart that i have in my office. it's a little taller than i am. and what it contains is the 120 different steps that someone must go through to get a permit for a major infrastructure project. with that many steps, it's a wonder anything ever gets built in this country.
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it takes years and years to get the permits. one private sector company, rio tinto is a horrible example. it's a good company. but the thing that they have gone through is horrible. they have spent several hundred million dollars in ten years working to get permit to open what will probably be the world's largest open pit copper mine ever. they still don't have the permission to do it. now, they are a big company. they can afford the hundreds of millions of dollars. they can afford the ten years. but think how much better off that and everybody would be if they could put that extra few hundred million into projects rather than into paperwork? because that's what it's been, paperwork and litigation have been the horrible things.
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in addition to deregulation, the tax burden that has stifled growth has also been lifted. as you know last december, president trump sign the tax cuts and jobs act of 2017. president trump has reduced taxes by 5.5 trillion dollar over the next decade. the biggest tax cuts and reforms in american history. and for the first time in more than 30 years u.s. companies have a competitive tax rate that will bring prosperity to millions of americans. we know that it is the private sector that drives the prosperity, not the federal government. since the reduction of the corporate tax rate on american businesses from 35% to 21%, more than 440 large companies have
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announced new investments, raises, and bonuses that are directly benefiting more than 4.5 million american workers. and all working families get a well-deserved raise now that they are keeping more of their hard-earned money. the new tax law changes our present or former worldwide system to a territorial system, there are ending the penalty on companies headquartered in the united states, and it's making their domestic operations more globally competitive. in addition to tax cuts and deregulation, we are taking a new look at our trade relationships. with the intent of reinvigorating u.s. manufacturing production and output. we are working to enyears of
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one-sided and unbalanced trade deals that disadvantage u.s. businesses and workers. -- to enyears of one-sided and unbalanced trade deals. other countries simply have refused to play by the rules. their continuous dumping of government subsidized products has decimated essential american industries. it threatens our national security. and it saddles our nation with global trade deficits that exceed half a trillion dollars annually. these deficits are draining wealth from our nation. i'm proud of the fact that president trump has forcefully stood up for the interests of american industries that are essential to our national security. we believe that trade should be fair, free, reciprocal, and free, free, free.
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but free trade is almost like the unicorn in the garden. people talk about it but it's very, very hard to find it nowada nowadays. our tariffs are among the lowest of any major country in the world. and we have the least in the way of non-tariff trade barriers. yet american exporters are plagued by every type of tariff and non-tariff barrier thrown against them, even by our most trusted allies. in davos recently, i was on a panel with the director of the wto, the world trade organization, and to start things off i asked him the question, i said, if the united states is not the least protectionist big country, please tell me who is. he had no answer.
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so we are using all of our available tools to ensure a level playing field for our country's companies, workers, farmers, and ranchers. and we are already getting results. our new deal with the republic of korea is lowering barriers to automakers and other key american industries a major win for the cause of economic freedom. maybe it will inadvertently push republic of korea up in your freedom index for next year. and we can also see the impact of our economic policies on the whole world. after a decade of stag nation, we are finally flowing at about 3% again, something the nay sayers said could never happen.
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the number of americans collecting unemployment benefits is at a 45-year low. consumer confidence is at a 14-year high. 2 million americans have moved off food stamps and onto work roles. and since election day, american companies have created nearly 3 million new jobs. manufacturing sectors, particularly showing renewed strength. in the last year, more than a quarter of a million new manufacturing jobs were created in the united states compared to 100,000 manufacturing jobs lost in the final year of the obama administration. new factories are opening throughout the country. during the first nine months of
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2017, the united states experienced a net addition of more than 4,000 new manufacturing plants. after decades of industrial decline, we have finally turned the corner. none of these positive things were happening before the election of president trump. so judge him by the results. judge him by the results, not by mannerisms, not by catch phrases, not by 160-character tweets. judge the administration by its results. president trump is unleashing american ingenuity. now, of course there is more to do, a lot more to do. this administration is next going to be focused on reducing government spending, something
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that will require more money-needed reforms. the last spending bill was quite unfortunate. the democrats used the nation's need for the military to have increased funding as an opportunity to load up the bill with their own wasteful spending. but as the president said, he will never sign such a bill again. never. we will always continue our march to cut unneeded regulations. we look forward to working with heritage to get the united states to where it belongs, at the top of the economic freedom index. again, thank you for inviting me. it's a pleasure to be here. and i gather now we are going to have a little fireside chat. [ applause ]
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the senate armed services committee hold a confirmation hearing for the president's nominees to be the leaders of the u.s. pacific command, the u.s. northern command, and the north american aerospace defense command. that's tuesday morning at 9:30 eastern, live here on c-span3. this weekend, live coverage on book tv of the 22nd annual l.a. times festival of books. starting saturday at 1:00 p.m. eastern, with journalist jorge ramos and his book, stranger, the challenge of a latino immigrant in the trump era. political reporter sarah kenzior, with her book, the view from flyover country. dispatches from the forgotten america. on sunday our live coverage continues at 1:30 p.m. eastern with journalist david corn and his book russian roulette, the inside story of putin's rule over america. black lives matter cofounder
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patrice coniers with her book, they call you a terrorist, a black live's matter memoir. watch our weekend-long coverage of the 22nd annual l.a. times festival of books, live, on c-span2's book tv. connected with c-span to personalize the information you get from us. just go to and sign up for the e-mail. the program guide is a daily e-mail with the most updated program schedule. word for word gives you the most interesting daily video highlights in their own words with no commentary. the book tv newsletter sent weekly is an insiders look at upcoming authors and book festivals. and the american history tv weekly newsletter gives you


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