Burlington High School
Burlington, Kansas
Teacher: Devra Parker
What Price Economic Freedom?
By: Amanda Dawn Troyer
12th grade
I was born in the United States of America. Business opportunities are abundant for private citizens are large corporations. The Untied States has trade agreements with many foreign countries Therefore it will be interesting to compare the strengths and weaknesses of the economic freedoms of Tajikistan, Costa Rica, Dominican Republic and Singapore.
The Dominican Republic is a middle-income developing country on agriculture, trade, and services, especially tourism. Agriculture mains the most important sector in terms of goods used in trade and in terms of export earnings. Tourism accounts for more than one billion in annual earnings. Free Trade Zone earnings and tourism are the fastest growing export sectors. Construction, tourism and telecommunications are leading the advance. In order to boost economy, they have devalued the peso, increased sale tax and gas prices, reduced import tariffs and initiated income tax. Among their weakness would be increasing trade deficit, the collapse of the second commercial bank, fiscal imbalances and poor tax collection rates. However, the current situation places them in the mostly unfree category for economic freedom.
Costa Rica is located in Central America. Tourism, agriculture and electronics are the foundation for their basically stable economy. Some of their economic strengths are their economic structure, which has bounced back forms a -0.9% deficit in 1996 to a 7% in 1999. They have worked to expand economic and trade ties. They joined other Central American countries to institute a Trade Investment Council with the United States and have made apparent their desire to join the North American Free Trade Agreement. Since coming out of a recession in 1997, they have shown much growth, mostly from exports of their free trade zones and tourism. A good deal of this growth can be credited to the production of Intel Corporation’s microprocessor assembly and testing plant. One of their greatest strengths is their fertile land and abundant rainfall. Among their weaknesses is the struggle to control the budget deficit. Thirty percent of their total revenue is lost on interest payments, limiting the financial availability for investments. In addition, their roads are in poor condition due to lack of funds for repairs. Their ports are also in disrepair and unable to keep up with growing trade and their railroad is mostly dysfunctional. There has been political opposition to privatization. Consequently, all the above factors place Costa Rica in the mostly free category of economic freedom.
Tajikistan is located between the borders of China and Afghanistan. Although it belongs to the following trade organizations CIS (Capital Investment Services), EURASEC (Eurasian Economic Community), SCO (Santa Cruz Operation) and WTO (World Trade Organization),it is one of the poorest countries in the world. They depend upon exports of cotton and aluminum, but the income from this is dangerously weak. They have managed to privatize small enterprises and are working privatization of a medium and large size enterprises. They have a extremely low fiscal deficit of 0.3%. Also among items for improvement are land reform, banking reform and restructuring. An inventory of their weaknesses includes mineral resources which aren’t very abundant, very little industry and their economy has been damaged because of six years of civil conflict. They depend on aid from other countries for a lot of their basic needs. Taking all these things into consideration on the economic freedom scale, Tajikistan falls under the category of repressed.
Of the four countries I researched, Singapore was the most economically free. It has a most favorable location on major sea lands. In listing strength, one would have to include an open and corruption free business environment, free market economy and stable prices. Because of theses they have attracted investments from many foreign countries of many countries. They have a port whose location makes them very competitive for both importing and exporting. Another reason they are so successful is large portions of their budget are marked for education and technology. The basis of their economy is manufacturing electronics and financial business services. They have had very low unemployment for years at a time. Rising wages and high cost operating environment are some Singapore weaknesses. They are working to decrease labor shortages in services and low-skilled jobs on construction and electronics.
Finally, Dominican Republic and Costa Rica rely greatly on tourism and agriculture while Singapore has a very successful free market economy based largely on electronics. Tajikistan, on the other hand is very poor economically relies heavily on cotton. They all have some weaknesses with Tajikistan having the greatest amount of work ahead of them in the struggle for economic freedom.
Therefore it has been interesting to compare the strengths and weaknesses of Tajikistan, Costa Rica, Dominican Republic and Singapore as they strive toward economic freedom. Trade agreements or not I’m glad I was born in the United States.
Answers To Questions Prompted By The Required Reading
Q1- Be the Devil's Advocate and counter Benjamin Franklin's statement that "No nation was ever ruined by trade."
If any country gets all there supplies from another nation and that nation decides to increase the price they charge you or decide to drop the trade agreement with you then that is going to ruin your country because you rely on those products.
Q2- Name five countries whose ranking surprised you. Bahamas, Hong Kong, Italy, Jamaica and Haiti
Q3- Write one sentence each to explain why you chose the countries you did in Q2. I thought that the Bahamas would be more free then they are because lots people like to go on vacations and be able to do whatever they want on vacation. Hong Kong-I thought that they would be freer also because they make a lot of stuff so I thought that that would give them more freedom. Italy- I thought that they would be mostly unfree because of where they are located. They are located by France and Switzerland. Jamaica- I would think that they would be more free because they have a lot of tourist. Haiti- They are an island and I thought that they would have a lot more tourist and therefore have more economic freedom.
Q4- The USA was not ranked first in any of the years exhibited online in the Annual Report nor in the 2005 Index. List the twelve countries that ranked higher on the Index and the countries that out ranked the USA in the eight Annual Reports.
1. Hong Kong
2. Singapore
3. Luxembourg
4. Estonia
5. Ireland
6. New Zealand
7. United Kingdom
8. Denmark
9. Iceland
10. Australia
11. Chile
12. Switzerland
Q5- the Index uses 50 variables in 10 categories. The Report shows 21 variables in 5 categories and lists 24 sub-variables in its online charts.
Take the 10 categories of the Index and place all 45 variables found in the Annual Report charts under one of the Index categories. The Trade Policy category is already done as an example. Many variables might well go under more than one category. Do the best you can using each variable only once until all are categorized. We will be able to tell if thought is put into this exercise.
We talked about this in our class room and no one has been able to access the site for this information. The 10 categories were listed but we couldn’t find the variables in order to answer the question.