 Mongolia’s economic progress
received strong praise from the Economic Freedom Index published by
the Heritage Foundation, which raised Mongolia’s world economic standing
by 16 places over last year.
Using a wide variety of measurements,
countries’ economies are rated according to how freely they allow
business to be transacted. Mongolia has increased its standing from
being a "mostly unfree" economy to " moderately free,"
as a result of increased trade liberalization and fiscal reforms, including
a flat tax.
Mongolia's economy was ranked
62.8 percent free in the Heritage Foundation’s 2008 assessment, which
makes it the world's 62nd freest economy. Its overall score is 3 percentage
points higher than 2007, mainly reflecting improved scores in four of
the 10 economic freedoms.
Mongolia is ranked 10th out
of 30 countries in the Asia–Pacific region, and its overall score
is slightly higher than the regional average.
Mongolia enjoys high levels
of fiscal freedom, financial freedom, business freedom, investment freedom,
and trade freedom. The top income and corporate tax rates are moderate.
The average tariff rate is also moderate, although non-tariff barriers
(such as customs corruption) have undermined the government's policy
of liberalization.
Although commercial registration
and licensing are considered efficient, the report noted that closing
a business takes longer than in many countries. Inflation is fairly
high, but the government has eliminated almost all of its price supports
and market distortions.
While overall praising Mongolia’s
reforms, the Heritage Foundation also took note of what it called Mongolia’s
very weak property rights and freedom from corruption. The judicial
protection of property rights is still weak, and judges often do not
validate previously agreed contracts, according to the report.
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