Somerset Area High School

Somerset, Pennsylvania

Teacher: William M. Simmons

Why Nations Are Free

By Lance Barron

12^th Grade 

The countries that I have chosen to compare are Canada from the free category, Italy from the mostly free category, and Fiji from the mostly unfree category, and Cuba from the repressed category.  Each of these countries has several reasons as to why they are in these categories that they are in.  Some of the reasons are positive and some are negative, but each has an impact on the category in which the country is placed. 

Canada is an economically free country.  It has two great things going for it.  Not only does it have bounteous natural resources, but it is also a high tech industrialized country with a very skilled labor force.  A country that can have not only the resources to make products but also the capability of producing the products themselves is in very good shape.  Canada has high standards of living as well as a relatively small unemployment rate.  Canada is also the largest trading partner of the United States.

Canada is a member of the North American Free Trade Agreement (NAFTA).  The NAFTA is an agreement between the three North American countries, USA, Mexico, and Canada, which was formed to reduce trade barriers and making some agreed upon trade rules.  After signing this agreement, Canada’s trade has increased 50%.

Italy is a mostly economic free country.  Italy’s economy has changed drastically from the pre World War II days.  Before WWII, Italy was a mostly agricultural society.  Today Italy is mostly an industrialized nation.  In fact, Italy is ranked as the world’s fifth largest industrial economy.

Italy has few natural resources.  That is one of their major problems.  However, they are in a slow economic recovery.  Italy’s inflation rates, which at one point were so high that they could be considered almost out of control, are now more in check and well within normal rates.

Another major problem with Italy is the trade deficit.  Annually their imports exceed their exports.  However this difference is getting somewhat smaller.  Recently, economic policy in Italy has focused on reducing trade deficits and the national debt.  Those policies seem to be working.  The national debt is slowly declining.  New measures have cutback spending and increased revenue.

Italy is a member of the European Union.  As a result, this has helped their trading.  Their closest trading partners are the members of the European Union.  These countries make up over 55% of their trading.  The country that they trade with the most is Germany.  France and the Netherlands are also big trading partners with Italy.  This seems to have helped Italy’s economy.

Fiji is a mostly economically unfree country.  Fiji is different from Italy because its economy is based mainly on agriculture.  They have plenty of natural resources.  Tourism has also become a major influence in Fiji’s economy.

Despite being one of the most developed of the Pacific island economies, Fiji does have its problems.  Fiji is still a developing country and has a lot of subsistence agriculture; [crops are consumed only by] the people who [produced them and they are] not sold in the market[place].  [Fiji] has a very large trade deficit.  [It] also had two military coups since 1987, which destroyed Fiji’s economy.  Fiji has also had a lot of emigration.  Most of the emigration, unfortunately, has been from the professional class of people.  After each coup, more and more skilled workers [left] Fiji. … Without these workers, the economy can only go down.

Cuba is an economically repressed country.  Because Cuba is a dictatorship under Fidel Castro, automatically many freedoms are taken away.  Almost all of the factories in Cuba are owned and operated by the Cuban government.  75% of the work force in Cuba is employed by the state.

A major decline in the Cuban economy between 1989 and 1983, almost 35%, has put Cuba in an economic hole that it is still trying to climb out of.  To try and get out of the hard ships in the economy, the government implemented a couple of new things.  Those included things like legalizing the U.S. dollar, allowing tourism, and taking in foreign investments.  This, however, has not resulted in a major economic growth, but instead a very small one.  Because of liberalized agriculture markets, there are now unrestricted prices on agricultural items.  This just hurts the consumer, and in the long run, the economy as a whole.

As can be seen, each of these countries has its advantages and disadvantages in their economic system.  The number of each, advantages and disadvantages, is what helps determine economic freedom, along with several other factors.  But this is what makes every country unique.

Answers To Questions Triggered by the Required Reading

Question 1: Be the Devil’s Advocate and counter Benjamin Franklin’s statement that “No nation was ever ruined by trade.”
There are several reasons for restricting free trade.  Restrictions protect the industries that are vital to a nation’s defense.  If a country relies on another country for guns, weapons, or materials used to produce weapons, such as steel, and the two countries go to war, the country trading for weapons is in big trouble.  Restrictions also keep jobs in the economy.  Instead of sending factories and jobs overseas, where cheaper labor is available, restrictions on free trade keep jobs in the country.

Question 2: Name five countries whose ranking surprised you.

Germany, Vietnam, South Korea, Singapore, Kuwait

Question 3: Write one sentence each to explain why you chose the countries you did in Q2.

I thought Germany would be mostly unfree.  I thought Vietnam would be mostly free.  I thought South Korea would be mostly unfree.  I thought Singapore would be mostly free.  I thought Kuwait would be mostly unfree.

Question 4: 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 outranked the USA in the eight Annual Reports.

Hong Kong, Singapore, Luxembourg, Estonia, Ireland, New Zealand, United Kingdom, Denmark, Iceland, Australia, Chile, Switzerland

Question 5: 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.

I read over all required readings and looked all over the website and could not find the listing of the variables.  My classmates and instructor had the same problem.  Therefore, I do not have an answer to this question.

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