February 16 (SeeNews) - Slovenia has descended seven spots to 97th place on the 2017 global economic freedom chart as institutional weaknesses continues to undermine prospects for long-term economic development, U.S.-based think-tank The Heritage Foundation said on Thursday.
Slovenia’s record on structural reform has been uneven, the judicial system remains inefficient, while corruption continues to be perceived as widespread, The Heritage Foundation said in its 2017 Index of Economic Freedom report.
The Alpine country enjoys a comparatively high degree of trade freedom as tariff rates are quite low, the think-tank admitted, but economic gains from trade are undercut by the lack of progress in the financial and investment areas.
The Heritage Foundation's index measures economic freedom in several categories - from property rights to entrepreneurship - in 186 countries worldwide through 12 quantitative and qualitative factors, grouped into four broad categories: Rule of law, Government size, Regulatory efficiency and Open markets. Data from the second half of 2015 and the first half of 2016 was used to compile the 2017 edition of the index.
Overall, Slovenia received a score of 59.2, down from 60.6 in the 2016 edition.
In terms of the rule of law, The Heritage Foundation estimated that the enforcement of private property rights in Slovenia is slow, while the judicial system is inefficient and inadequately resourced.
Corruption, although less prevalent in Slovenia than in neighbouring countries, often takes the form of conflicts of interest involving contracts between government officials and private businesses, the think-tank said.
Government spending is on the rise and has amounted to 48.8% of GDP over the past three years. Tax burdens too are troubling and equal 36.6%of total domestic income.
The Heritage Foundation also noted that although Slovenia has made progress in streamlining the process for launching a business, other time-consuming requirements reduce the regulatory system’s efficiency.
"The labor market remains saddled with rigid labor regulations that hamper dynamic employment growth", it said.
Trade is extremely important to Slovenia’s economy - the value of exports and imports taken together equals 146% of GDP - but trade freedoms have been decreasing, the think-tank estimated.
In general, foreign and domestic investors are treated equally under the law, but the regulatory and judicial systems may impede investment, according to The Heritage Foundation.
The top three countries in the 2017 Index of Economic Freedom are Hong Kong, Singapore and New Zealand.