Property Rights Freedom from
Corruption
Fiscal Freedom Government
Spending
Business Freedom Labor Freedom Monetary Freedom
Trade Freedom Investment Freedom Financial Freedom Business Freedom
Labor Freedom Monetary Freedom
REGULATORY EFFICIENCY
OPENMARKETS Trade Freedom Investment Freedom Financial Freedom
GOVERNMENT
SIZE Fiscal Freedom
Government Spending
RULE OF
LAW Property Rights
Freedom from Corruption
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
Country World Average Rank Change1–Year Score
RULE OF LAW GOVERNMENT
SIZE REGULATORY
EFFICIENCY OPEN MARKETS 0
0
–0.1 –7.1
+3.1 +19.2 +0.5
+44.8 +20.0 +10.0 92nd
148th
157th 45th
155th 130th 66th
118th 132nd 132nd 30.0
26.0
64.5 81.0
49.6 51.0 79.4
72.0 40.0 30.0
0 –2.0
0 +2.2
+2.3 –1.0 +1.5
–1.0 0 0
Long-Term Score Change (since 2009) THE TEN ECONOMIC FREEDOMS
Corruption is reported at all levels of government, including the judiciary, the civil service, and the police and security forces, and is driven in part by internal political disputes and competi- tion over resources by the three island administrations. The judicial system, based on both sharia (Islamic) law and the French legal code, is relatively weak and subject to influence by the executive branch and other elites.
The overall regulatory framework remains poor. Establishing a business costs more than the level of average annual income. Retail services are the largest source of employment, and most employment is informal. The government subsidizes state-owned water, electricity, and oil utilities and controls other prices.
Comoros has an average tariff rate of 6.5 percent. It is a member of the Common Market for Eastern and Southern Africa, dedicated to “trade liberalization and customs co-operation.”
The small, bank-dominated financial sector has recorded modest growth in recent years. With two new banks coming into operation, the banking sector has expanded, but many people and businesses still rely on informal lending.
The top personal income tax rate is 30 percent, and the top corporate tax rate is 50 percent.
Other taxes include a value-added tax and an insurance tax. The overall tax burden equals 12.1 percent of total domestic income. Government spending amounts to 25.2 percent of total domestic output. Government finance has been under pressure due to the growth in public- sector wages and salaries and the cost of legislative elections.
COMOROS
(continued)How Do We Measure Economic Freedom?
See page 467 for an explanation of the methodology
Quick Facts
BACKGROUND: The Democratic Republic of Congo is home to a long-running conflict between government forces histor- ically backed by Angola, Namibia, and Zimbabwe and rebels supported by Uganda and Rwanda. In 2013, rebel activity in the eastern regions prompted the United Nations to form the Force Intervention Brigade, part of its MONUSCO peacekeep- ing mission, to begin offensive operations. In 2006, Joseph Kabila won the first multi-party election in 40 years. He was reelected in December 2011 in a flawed process rife with vio- lence. His apparent determination to seek a third term in 2016 despite a constitutional prohibition has sparked protests that have been met with a harsh crackdown by the government.
Population: 79.3 million GDP (PPP): $55.8 billion 9.1% growth in 2014
5-year compound annual growth 7.7%
$704 per capita Unemployment: 8.0%
Inflation (CPI): 1.0%
FDI Inflow: $2.1 billion Public Debt: 19.7% of GDP
Economic Freedom Score
0 20 40 60 80 100
Country Comparisons Freedom Trend
Country World Average Regional Average EconomiesFree
2012 2013 2014 2015 2016
25 50 75
0 100
Least
free Most
free
36 38 40 42 44 46 48 50
46.4
60.7 55.5
83.9
46.4
T
he Democratic Republic of Congo’s immense natu- ral resources, including copper and diamonds, have fueled conflict rather than lasting economic develop- ment. Despite annual average growth of around 8 percent since 2012, the economy has not achieved meaningful structural transformation. Political unrest has led for- eign businesses to limit their operations, and the weak rule of law remains a powerful disincentive to expanding economic activity in the formal sector.ECONOMIC FREEDOM SNAPSHOT
• 2016 Economic Freedom Score: 46.4 (up 1.4 points)
• Economic Freedom Status: Repressed
• Global Ranking: 163rd
• Regional Ranking: 40th in Sub-Saharan Africa
• Notable Successes: Monetary Freedom
• Concerns: Property Rights, Corruption, and Investment Freedom
• Overall Score Change Since 2012: +5.3
The uncertain regulatory environment and absence of institutional support or facilitation for private-sector development continue to curtail entrepreneurial activi- ty. The government’s failure to provide basic public goods and resistance from vested interests further deprive citi- zens of economic opportunities, leaving most of them to rely on informal employment.
World Rank:
163
Regional Rank:40
DEMOCRATIC REPUBLIC OF CONGO
Property Rights Freedom from
Corruption
Fiscal Freedom Government
Spending
Business Freedom Labor Freedom Monetary Freedom
Trade Freedom Investment Freedom Financial Freedom Business Freedom
Labor Freedom Monetary Freedom
REGULATORY EFFICIENCY
OPENMARKETS Trade Freedom Investment Freedom Financial Freedom
GOVERNMENT
SIZE Fiscal Freedom
Government Spending
RULE OF
LAW Property Rights
Freedom from Corruption
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
Country World Average Rank Change1–Year Score
RULE OF LAW GOVERNMENT
SIZE REGULATORY
EFFICIENCY OPEN MARKETS –40.0
+12.0
+22.4 –2.0
–12.2 +6.5 +78.5
+12.0 –10.0 –10.0 164th
162nd
126th 1st
171st 171st 78th
163rd 164th 164th 10.0
22.0
73.3 95.2
42.8 41.0 78.5
61.0 20.0 20.0
0 0
+0.4 +9.5
0 +2.6 +3.4
–2.0 0 0
Long-Term Score Change (since 1995) THE TEN ECONOMIC FREEDOMS
Massive government corruption and weak rule of law remain prevalent. The clandestine trade in minerals and other natural resources in eastern Congo by armed rebel militias and elements of the army helps to finance violence and depletes government revenues. Protection of prop- erty rights is weak and dependent on a dysfunctional public administration and judicial system.
Human rights abuses and banditry deter economic activity.
The regulatory system still discourages private entrepreneurship. Institutional deficiencies such as pervasive corruption and very limited access to credit discourage business start-ups.
Much of the workforce is employed in the agricultural sector, and informal labor activity is widespread. Prices are controlled and regulated by the government, which also heavily subsi- dizes electricity.
The Democratic Republic of Congo’s average tariff rate is 12 percent. Importation of goods is costly and time-consuming. Foreign investment in some economic sectors is restricted. The private sector suffers from inadequate access to credit, particularly long-term loans, and over- all use of financial services is highly constrained. Credit to the private sector amounts to less than 10 percent of GDP.
The top personal income tax rate is 30 percent, and the top corporate tax rate is 40 percent.
Other taxes include a rental tax and a tax on vehicles. The overall tax burden equals 13 per- cent of total domestic income. Tax enforcement is arbitrary. Government spending equals 12.7 percent of domestic output. Much of the public debt was cancelled in 2010 under the Heavily Indebted Poor Countries Initiative.
DEMOCRATIC REPUBLIC OF CONGO
(continued)How Do We Measure Economic Freedom?
See page 467 for an explanation of the methodology
Quick Facts
BACKGROUND: The Republic of Congo became indepen- dent in 1960. Denis Sassou-Nguesso seized power in 1979 and governed the country as a Marxist–Leninist state before moderating economic policy and allowing a multi-party elec- tion in 1992. He lost that election to Pascal Lissouba, seized power again following a 1997 civil war, won a flawed election in 2002, and won a seven-year term in 2009 in another dubi- ous election. Civil war militias remain active in the southern Pool region. Congo is one of Sub-Saharan Africa’s largest oil producers, but lack of infrastructure prevents exploitation of its sizable natural gas reserves and significant hydropower potential. As of December 2014, Congo hosted about 55,000 refugees from Angola, the Central African Republic, Chad, the Democratic Republic of Congo, and Rwanda.
Population: 4.3 million GDP (PPP): $28.0 billion 6.0% growth in 2014
5-year compound annual growth 5.1%
$6,559 per capita Unemployment: 6.5%
Inflation (CPI): 0.9%
FDI Inflow: $5.5 billion Public Debt: 42.3% of GDP
Economic Freedom Score
0 20 40 60 80 100
Country Comparisons Freedom Trend
Country World Average Regional Average EconomiesFree
2012 2013 2014 2015 2016
25 50 75
0 100
Least
free Most
free
41 42 43 44 45
42.8
60.7 55.5
83.9
42.8
T
he Republic of Congo continues to be a poorly diver- sified commodity producer, heavily dependent on oil.Economic growth has been erratic due to changes in the volume of oil production. Extensive state controls persist in major economic sectors, and the government restricts foreign investment to a few handpicked partners.
ECONOMIC FREEDOM SNAPSHOT
• 2016 Economic Freedom Score: 42.8 (up 0.1 point)
• Economic Freedom Status: Repressed
• Global Ranking: 172nd
• Regional Ranking: 44th in Sub-Saharan Africa
• Notable Successes: Monetary Freedom and Trade Freedom
• Concerns: Rule of Law, Business Freedom, and Investment Freedom
• Overall Score Change Since 2012: –1.0
Weak but repressive governance suppresses economic opportunity and traps many in persistent poverty. Poor protection of property rights and widespread corruption discourage entrepreneurial activity, undermining pros- pects for long-term economic expansion. The judicial sys- tem remains subject to substantial political interference.
World Rank: