Choose A Country Other Than The US Using Economic Freedom In

Choose A Country Other Than The Ususing Economic Freedom Index Efi

Choose A Country Other Than The Ususing Economic Freedom Index Efi

Choose a country other than the United States and analyze its economic freedom using the Economic Freedom Index (EFI). Determine how free the country is—classified as "free," "mostly free," "moderately free," "mostly unfree," or "repressed." Examine the country's overall EFI score and assess whether its level of economic freedom has increased or decreased since the last report by reviewing the change in points. Evaluate the country's specific areas of strength and weakness based on EFI factors, considering how its governmental institutions, rule of law, and economic system influence its ranking. Additionally, analyze the country's imports and exports, identifying its main goods and services traded. Discuss the characteristics that provide the country with a comparative advantage in producing its exports and explain the trading advantages of its trading partners concerning imports. Finally, estimate what percentage of the country's GDP derives from imports and exports, sourcing your data from the Observatory of Economic Complexity and the World Bank, respectively.

Paper For Above instruction

For this analysis, I have selected New Zealand as the focus country, a nation recognized for its stable democratic institutions, open market economy, and significant role within the Asia-Pacific region. Using data from the Economic Freedom Index (EFI) published by the Heritage Foundation, New Zealand consistently ranks among the "free" nations globally. In the latest report, New Zealand's EFI score was 81.5, positioning it among the top percentile of economically free countries. When comparing this score to the previous report, there has been a marginal increase of 0.3 points, indicating an improvement in its economic freedom status. This slight upward trend reflects ongoing reforms aimed at reducing regulatory burdens and fostering a more conducive environment for business growth.

Examining the country-specific EFI factors, New Zealand excels in areas such as property rights, business freedom, and investment freedom. The nation's transparent legal framework, robust rule of law, and stable governance contribute significantly to its high EFI score. These institutional characteristics foster economic activity and encourage both domestic and foreign investment. Conversely, areas such as fiscal health and government integrity could be improved to enhance overall economic freedom further. For instance, addressing public debt levels and government transparency issues could strengthen the country's EFI rank and sustain its economic growth momentum.

New Zealand's political system is characterized by a parliamentary democracy with a focus on protecting individual rights and ensuring the impartial application of laws. The country's economic system is predominantly market-oriented, with minimal state interference, allowing the private sector to follow competitive and innovative growth strategies. These institutional factors are reflected directly in its high EFI ranking, reinforcing the importance of solid legal protections and sound governance for maintaining economic freedom.

Turning to trade analysis, New Zealand is primarily an export-driven economy with key exports including dairy products (notably milk and cheese), meat (lamb and beef), and forestry products. The main imports comprise machinery and equipment, vehicles, petroleum products, and electronic devices. According to data from the Observatory of Economic Complexity, New Zealand's comparative advantage in agricultural exports stems from its fertile land, favorable climate, and advanced farming techniques, which enable efficient production of high-quality dairy and meat products. Conversely, its trading partners, such as China, Australia, and the United States, possess competitive advantages in manufacturing, technology, and energy sectors, leading to their prominence as import sources for New Zealand.

Regarding trade percentages, data from the World Bank indicates that exports account for approximately 30% of New Zealand's GDP, primarily driven by dairy and meat exports. Imports constitute roughly 25% of GDP, mainly in machinery, vehicles, and mineral fuels. The openness of New Zealand's economy, along with its trade agreements like the CPTPP and the bilateralFree Trade Agreement with China, underscores its reliance on international markets for economic vitality. Its geographic isolation has historically shaped a comparative advantage in high-quality agricultural products, while its trade relationships with resource-rich and manufacturing nations expand its access to technology and consumer goods. This trade structure supports economic diversification and resilience in an increasingly globalized economy.

In conclusion, New Zealand exemplifies a highly free economy characterized by strong institutions, rule of law, and a favorable business environment. Its trade profile, focusing on agricultural exports supported by competitive advantages, paired with strategic trade partners, highlights its economic strengths and vulnerabilities. Understanding these factors provides insight into how institutional quality and trade dynamics shape the EFI rank and influence overall economic performance.

References

  • Heritage Foundation. (2023). 2023 Index of Economic Freedom. Retrieved from https://www.heritage.org/index/ranking
  • World Bank. (2023). Country Profile: New Zealand. Retrieved from https://data.worldbank.org/country/new-zealand
  • Observatory of Economic Complexity. (2023). New Zealand Export Data. Retrieved from https://oec.world/en/profile/country/nzl/
  • Ministry of Foreign Affairs and Trade, New Zealand. (2023). Trade agreements and economic outlook. Retrieved from https://www.mfat.govt.nz/en/
  • OECD. (2023). Economic Surveys — New Zealand. Retrieved from https://www.oecd.org/economy/
  • Statistics New Zealand. (2023). Official Trade Data. Retrieved from https://www.stats.govt.nz/
  • International Monetary Fund. (2023). World Economic Outlook. Retrieved from https://www.imf.org/en/Publications/WEO
  • United Nations. (2023). Report on Global Trade and Economic Development. Retrieved from https://unctad.org/
  • Economist Intelligence Unit. (2023). Country Report: New Zealand. Retrieved from https://www.eiu.com/
  • FAO. (2023). Food and Agriculture Data. Retrieved from https://www.fao.org/faostat/en/

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