Freedom Barometer Asia 2011

Freedom Barometer Asia 2011by Mikls Romndy & Corinna Johannsen

Freedom Barometer Asia 2011

by Mikls Romndy & Corinna Johannsen

Forewordby Dr. Rainer Adam, Regional Director Southeast and East Asia, Friedrich Naumann Foundation for Freedom, Bangkok

The Freedom Barometer Asia came into being out of a desire to measure the different degrees of freedom enjoyed in Southeast and East Asian countries. Various think tanks and NGOs have developed ways to assess levels of freedom in a number of countries, and they have done so in various ways., In most cases, however, they have focussed only on one aspect of freedom, be it political, legal or economic. Developing an index that considers all of these aspects of freedom from a distinctly liberal point of view was one of the main reasons for us at the Friedrich-Naumann-Foundation to start our Freedom Barometer project. Since this promised to be a daunting task, we decided not to issue an entirely independent publication, but rather compile the data of existing indices in a new way, emphasising those aspects of freedom we treasure most. In doing so, we aimed not only to provide our readers with a tool with which to compare levels of freedom in selected Southeast and East Asian countries and to track their performance over time. We are e also hoping to bring relevant issues to the attention of a wider audience and to stimulate a debate about the political, legal, and economic foundations of freedom. As I mentioned, this publication is a compilation of data from existing indices, without which this project would not exist in its current form. I would like to acknowledge these publications that provide the data we compile and present according to our liberal understanding of freedom. It is an immense pleasure to see the Freedom Barometer Asia being published for the third consecutive year. And what an exciting year it was! We saw political changes in Myanmar that would have been unthinkable just a few years ago: recently introduced liberties such as the right to form unions, to go on strike, and to stage peaceful political protests have brought a gentle air of freedom to this beautiful country. We dearly hope that these developments are but a herald of more changes. News from Northern Asia was equally encouraging. After a de-facto moratorium on the death penalty had been introduced by President Tsakhiagiin Elbegdorj in 2010, Mongolia took further steps to eliminate capital punishment from its legal system last year. Since we strongly oppose the death penalty in all its forms as a severe violation of human rights, we warmly embrace this decision. Elsewhere, developments were less encouraging. In North Korea, Kim Jong-Un succeeded his father and seems to be consolidating the hereditary dictatorship of the Kim family which, for decades, has deprived North Koreans from any form of freedom. Deficits persist in all aspects. Our Freedom Barometer Asia is constantly growing, both in size and volume. With newly included Hongkong, it now covers 17 countries, almost all of Southeast and East Asia. By publishing our index for the third time we are able to gain good insights into progress and

setbacks to freedom in our region. For the coming year, we plan to launch the website www.freedombarometer.org, which will allow its users to systematically search for data and to be constantly updated on developments in our region. We hope that you will enjoy the website. So, without further ado, we wish you a pleasant and informative journey through our region with our Freedom Barometer Asia 2011.


Table of Contents

I. Introduction to the 2010 edition II. The Concept III. Components and Variables IV. Country ChaptersJapan Hong Kong Taiwan South Korea Singapore Mongolia Indonesia Malaysia The Philippines Thailand Vietnam China Brunei Myanmar Cambodia Laos North Korea

1 2 3 5 6 10 16 20 24 28 32 38 44 50 56 62 68 72 76 80 84

Annex I - Overview Annex II - Methodology and Data Sources Annex III - Press Freedom Index Conversion Table Annex IV - Human Rights Evaluation

88 98 102 103

I. Introduction to the 2011 editionIt is a great pleasure to welcome you to the new edition of the Freedom Barometer Asia! The Freedom Barometer aims at measuring and comparing freedom in various Southeast and East Asian countries, but from a distinctly liberal point of view. For us at the Friedrich Naumann Foundation, freedom comprises political, legal, and economic rights. We found that most other indices, while providing valuable information, only focus on one aspect of freedom. For example, the Press Freedom Index by Reporters Without Borders focusses solely on the freedom of the press and expression, whereas the Fraser Institutes Economic Freedom of the World Report examines the economic aspects of freedom. Thus, the Freedom Barometer project came into being. However, our Barometer is not an entirely independent publication, but rather a compilation of the data provided by existing indices. We present them in a way that reflects our definition of freedom. In our research we relied on and used the data of the institutions mentioned in Annex II. In this regard, we want to emphasise that without those data sources the Freedom Barometer could not exist in its present form. The Barometer now enters the third year of its existence and it has been exciting to see the project grow further. We included yet another country - Hong Kong - as we felt that its special status within the Peoples Republic of China merits an own chapter in our index. Also, we revised the look of our Barometer in order to make it a more reader-friendly publication, while trying to retain its distinct appearance. Furthermore, we are specially pleased to announce the launch of the Freedom Barometer website. We felt that bringing the Barometer online would not only make it easier to compare the various countries and their performance over the years, but would also provide our readers with up-to-date relevant news. We are looking forward to your visit at www.freedombarometer.org. We would like to take this opportunity to express our gratitude to everybody who contributed to this project, and wish you an interesting reading experience with the new Freedom Barometer Asia.

The Authors

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II. The ConceptThe "Freedom Barometer Asia" project of the Friedrich Naumann Foundation Regional Office for Southeast and East Asia in Bangkok has been developed as an attempt to measure freedom, in all its complexity, in selected Asian countries. In contrast to most other indices, this project is not limited to simply one aspect of freedom, be it political or economic. Instead, the Freedom Barometer combines the most significant elements of economic, civil and political freedom with a specifically liberal perspective. For instance, we view the existence of the death penalty as a negative element of a societys existing political and legal order and, therefore, in the Freedom Barometer we "discriminate against countries who practise capital punishment. However, as there is no need to reinvent the wheel, here we are using the data of existing indices and then combining them in a new way. Also, as we did not want to overburden our new Barometer, we have limited ourselves to ten main variables applied to three different categories, covering the following fields: political freedom, rule of law, and economic freedom. The degree of POLITICAL FREEDOM is measured by the level of Free and Fair Elections, the Absence of Unconstitutional Veto Players, and the Freedom of the Press. Free and fair elections are the basis of any democracy, and here it additionally pertains to unconsolidated democracies, (e.g. as in Asia), and also undemocratic veto players, (e.g. the military), as particular factors that can further beleaguer democratic processes. Therefore, we have included these as a variable in the Freedom Barometer in order to ensure that elected officials effectively have the power to govern. Freedom of the press is the third component of political freedom. Article 19 of the 1948 Universal Declaration of Human Rights underlines: Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers. Because freedom of the press is seen as both a prerequisite for free and fair elections, and as being highly political in nature, this variable forms part of our political freedom dimension. In terms of RULE OF LAW, the Freedom Barometer comprises the following variables: Independence of the Judiciary, the level of Corruption, and Human Rights Protection. Independence of the judiciary constitutes an elementary part of the freedom of the individual and, as the Universal Declaration of Human Rights demands: All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination. As independence of the courts and checks and balances are mutually dependent upon each other, both of these aspects are combined in one variable. Without an independent constitutional court or other independent legal institutions, true separation of powers is impossible. Corruption contradicts equal treatment and represents a violation of the rule of law, and high levels of corruption correlate negatively with high levels of judicial integrity; thusly, both factors are interlinked in complexity. Human rights protection, as a fundamental element of freedom, constitutes the third variable of the rule of law dimension. Without rule of law, there cannot be effective human rights. Without the presence of human rights rule of law is unthinkable.

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The relationship between ECONOMIC FREEDOM and a functioning democracy is a widely accepted fact, and is the reason for its inclusion in the Freedom Barometer Asia. However, of the five aggregate variables evaluated in the Economic Freedom of the World Report, we have included only four. This is due mainly to the nature of the access to sound money indicator which, in our sense, seemed to have little bearing on the political economy as a major factor in the determination of a democracys quality and an economys freedom. The four variables included in the Freedom Barometer are: Security of Property Rights, the Size of Government (expenditures, taxes, and enterprises), Regulation of Credit, Labour and Business, and the Freedom to Trade Internationally. These four are major rallying points for liberals around the world.

III. Components and VariablesPOLITICAL FREEDOM The indicator Free and Fair Elections is characterised by several essential features: Are there appropriate laws in place? Is the active and passive right to vote guaranteed? This also includes the right to form parties and to campaign and so, furthermore, does the campaign period allow a plurality of opinion? Is the actual voting process free from state interference? Is the counting of the votes uninhibited by state or other actors manipulation? In addition, is a legal change of government possible? The component Absence of Unconstitutional Veto Players is mainly derived from the following questions: Do unelected actors that do not dispose of a constitutional mandate have legal or constitutional privileges to delimit the authority of the designated political leaders? Are those privileges exercised? Do unelected actors have informal veto power? How often do coups occur? Has civilian control been established over the military? The main source for both this variable and for "Free and Fair Elections" is the Freedom House report. In terms of Press Freedom, the following questions are decisive: Are there relevant laws in place and are they respected? Is there freedom of speech as well as plurality of opinion (e.g. through ownership)? In addition, are journalists persecuted because of their work? The main source for this indicator is the Press Freedom Index by Reporters without Borders. RULE OF LAW The Independence of the Judiciary constitutes the major determinant of the rule of law. It is essential that everyone is treated equally before the law; judges must not decide in favour of one particular political actor for either political or financial reasons (bribes). Checks and balances are also a measure of the rule of law. Disputes between governmental institutions must be resolved according to the law. The dominance of one single, overweening institution violates the principle of checks and balances and gives rise to undemocratic or corrupt practices. The main source for this indicator is the Freedom House report.

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The extent of Corruption represents another vital factor in the concept of the rule of law. Corruption violates the law and contradicts equal treatment of citizens. The main source for this variable is the Corruption Perceptions Index by Transparency International. Human Rights constitute the third element of the rule of law in the Freedom Barometer. To measure this variable, the following questions apply: Do respective laws exist? Is anyone persecuted because of his/her race, colour, gender, language, religion, national or social origin, political or other opinion, property, birth, or other status? Are basic human rights observed by the state apparatus? Does forced labour exist? Is the death penalty practised?

ECONOMIC FREEDOM Economic freedom is an important supporting pillar of democracy, as pointed out above. Its variables are taken directly from the Economic Freedom of the World report and have not been altered in any way, except that one indicator has been left out. In the Freedom Barometer we have used the following four variables: Security of Property Rights, Size of Government, Regulation of Credit, Labour and Business, and Freedom to Trade Internationally. Security of Property Rights is one of the key principles of economic freedom. This macro-indicator consists of several variables: judicial independence, impartial courts, protection of property rights, legal enforcement of contracts, and regulatory restrictions of sale of real property. Admittedly, there is a certain overlap with the Independence of the Judiciary indicator. However, we think this is a minor one, resulting from the composite nature of the security of property rights indicator, and which mainly focuses on property rights. The indicator Size of Government consists of expenditures, taxes, and enterprises. This includes the level of general government consumption, the degree of transfers and subsidies of the state, the involvement of the government in enterprises and other investments and the top marginal tax rate. Regulation of Credit, Labour and Business constitutes the third indicator of economic freedom. Credit market regulations influence the degree of ownership of banks, the level of foreign bank competition, and the extent of private sector credit. Labour market regulations comprise the existence of a minimum wage, hiring and firing regulations, centralised collective bargaining, mandated cost of hiring, mandated expenditure of work dismissal and conscription. Furthermore, business regulations consist of price controls, administrative requirements, bureaucracy costs, expenses for starting a business, the extent of corruption, licensing restrictions and cost of tax compliance. The indicator Freedom to Trade Internationally includes the areas of taxes on international trade, regulatory trade barriers, size of the expected trade sector, black-market exchange rates, and international capital market controls.

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IV. Country ChaptersThe Freedom Barometer Asia 2011 covers countries of Southeast and East Asia. In our 2011 index we included the following nations: Brunei, Cambodia, China, Hong Kong, Indonesia, Japan, Laos, Malaysia, Mongolia, Myanmar, North Korea, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

The table below depicts the ranking of the countries on the Freedom Barometers 0-100 scale:

RANK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

COUNTRY Japan Hong Kong Taiwan South Korea Singapore Mongolia Indonesia Malaysia Philippines Thailand Vietnam China Brunei* Myanmar* Cambodia* Laos* North Korea*

2010 SCORE 79,69 76,94 73,00 71,74 71,29 63,38 58,64 54,25 52,70 50,69 39,97 37,53 17,99 15,99 18,07 4,62 0,00

2011 SCORE 79,74 77,36 73,22 71,60 70,77 64,51 57,58 53,86 50,91 49,00 41,62 38,48 19,24 18,25 5,87 0,00

Only incomplete data available for countries below.

(Explanatory Note: For some countries, only incomplete data sets were available to us. We decided to include them in our ranking as well. The fact itself that in some cases reliable information is nearly impossible to obtain may bear witness to the level of freedom enjoyed in the respective countries, and we wanted to provide a frame of reference. Countries with incomplete data sets are marked *.)

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16,57

JapanQuick FactsPopulation: 126.5 million Population growth: -0.28% Labour force: 62.97 million by occupation: agric. 3.9% industry 26.2% services 69.8% GDP: USD 4.31 trillion growth rate: 3.9% per capita: USD 34,000 by sector: agriculture 1.4% industry 24.9% services 73.8% Unemployment rate: 5% Pop. below pov. line: 15.7% HDI: 0.901 HDI rank: 12 (of 187)

Scources: CIA World Factbook 2011; UNDP Human Development Report 2011;

Political FreedomFree and Fair Elections Absence of Unconstitutional Veto Players Press Freedom 0 2,5 5,0 7,5 8,33 9,85 10,0 9,64

Rule of LawIndependence of the Judiciary Corruption Protection of Human Rights 0 2,5 5,0 7,83 7,80 8,85 7,5 10,0

Economic FreedomSecurity of Property Rights Size of Government Regulation of Credit, Labour, and Business Freedom to Trade Internationally 0 2,5 5,77 5,0 7,5 10,0 7,47 6,64 7,74

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A. Political FreedomElections in Japan are generally free and fair. Parliamentary elections are held for each of the Houses of Representatives and of Councillors. Election terms for members of the House of Representatives are four years, whereas for the House of Councillors it is a six-year term. Even though political pluralism and participation are generally unrestricted, the Liberal Democratic Party (LDP) was in power for nearly 55 years until defeated by the Democratic Party of Japan (DPJ) in the 2009 elections. Japan has a very strong civic culture with are numerous civic, human rights, welfare and environmental organisations that may assemble freely and voice their opinions without restriction.

Free and Fair Elections

In the political system of Japan there are no unconstitutional veto players of significance. All potential veto powers such as the military or influential business groups are under civilian control. Therefore, there is no potential threat to the stability and integrity of the government by external forces.

Absence of Unconstitutional Veto Players

B. Rule of LawThe judiciary is independent from external pressure. The judicial structure in Japan consists of several levels, and judges are impartial. Trial by jury is unknown in the Japanese legal system.

Independence of the Judiciary

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The press in Japan is free and unrestricted. Most print media and broadcasting stations are privately owned. The only obstacle to freedom of the press in Japan is the kisha kurabu, or press clubs. To ensure news coverage is homogeneous, these clubs foster relations between politicians, bureaucrats and media representatives. In exchange for direct access to politicians, in political reportage journalists practice selfcensorship. Therefore, the ability of the media to pressure politicians into greater transparency and accountability is somewhat constrained. The use of the internet is free and unrestricted. In their 2010 Index, Reporters Without Borders ranked Japan as position 11 out of 178.

Press Freedom

Corruption

The iron triangle of LDP, bureaucrats, and big business was the root of Japan's huge post-war economic success, but also has been frequently criticised as a breeding ground for corruption. Former Prime Minister Junichiro Koizumi undertook huge efforts, to only limited success, to breach the strong ties between politics and big business in order to break up this vicious circle. Japan is also party to the UN Convention against Corruption, but has not yet ratified it into national law. Transparency International ranked Japan in its 2010 Corruption Perceptions Index as position 17 out of 178. Human rights are protected. Japan is party to all major UN conventions relating to this subject. From our liberal perspective however, one major desideratum still persists Japan has not yet abolished the death penalty. Actually, Japan voted against the UN resolution proposing a worldwide moratorium of the death penalty. According to Amnesty International, prison conditions do not comply with international standards. Inmates have only limited access to medical care. Pre-trial detention conditions are subject to criticism as suspects have only limited access to lawyers, leading to a higher chance of abusive interrogation methods and coerced confessions. Aside from this, the overall situation of human rights in Japan is quite good, as is reflected in our score.

Human Rights

C. Economic FreedomSecurity of Property RightsProperty - both real and intellectual - is well protected. The only drawback is it can be tedious and expensive to get patents and copyrights. Contracts are in general highly respected. Government spending (which includes consumption and transfer payments) is high, equalling about 37 percent of the GDP. There is a further upward trend, since Japan has to pay for a rising social welfare cost for an ageing population. Overall tax revenue - 28.3 percent of the GDP - consists of a rather high income tax rate (50 percent), an average corporate tax rate (41 percent), VAT, and taxes on interest and real estate.

Size of Government

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Starting, running, and closing a business is well regulated. It takes 23 days to start a business; to get a business license takes 15 procedures and 187 days. Bankruptcy proceedings are uncomplicated. Labour regulations are comparably flexible. The non-salary cost of an employee is moderate, firing procedures are uncomplicated. However, regulations regarding work hours are fairly rigid. Japans weighted average tariff rate was 1.2 percent in 2009. Potential obstacles to international trade include import/ export bans and restrictions, opaque regulations, state trade in some goods, and an inefficient customs administration.

Regulation of Credit, Labour, and Business

Freedom to Trade Internationally

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Hong KongQuick FactsPopulation: 7.12 million Population growth: 0.448% Labour force: 3.676 million by occupation: agric. n.a. industry 6.9% services 77% GDP: USD 325.8 billion growth rate: 6.8% per capita: USD 45,900 by sector: agriculture 0% industry 7.4% services 92.5% Unemployment rate: 4.3% Pop. below pov. line: n.a. HDI: 0.898 HDI rank: 13 (of 187)





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A. Political FreedomThe freedom to peacefully change the government is limited by the Basic Law, which is the basis of Hong Kongs legal framework. The Basic Law provides for the election of the head of government (the Chief Executive), and the Legislative Council. However, the Chief Executive is not elected directly by the population, but by the Election Committee, an electoral college of 800 Hong Kong residents from different constituency groups. Of the 60-seat Legislative Council, only half are elected directly. The other 30 members are elected by functional constituencies, which represent key economic and social sectors. The 2008 elections to the Legislative Council were regarded as free and fair in terms of the procedure nevertheless, elections in Hong Kong cannot generally be regarded as meaningful elections, due to the semi-democratic structure of the legislative.


Assessing the presence (or absence) of veto players in Hong Kong politics is somewhat tricky. In theory, veto players not vested with a constitutional mandate are virtually absent. Powerful economic and social actors find their interests efficiently represented through their presence in both the Election Committee and the Legislative Council. Regardless, mainland China certainly qualifies as a major veto player in Hong Kong politics. The People's Republic has repeatedly asserted that, ultimately, Hong Kong politics are decided in Beijing, and clout has been used to thwart political developments deemed unfavourable.


The freedom of the press is efficiently protected by Hong Kong laws. Reporters Without Borders ranks Hong Kong as position 34 out of 178 countries, making it the second most free country in Asia, after Japan. Concerns that media in Hong Kong would lose their independence after 1997 did not come true. Sensitive issues - such as, democracy or human rights in China - are openly discussed, be it in newspapers or on television.

Press Freedom

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B. Rule of LawIndependence of the JudiciaryAlong with the continuation of English common law, the independence of the judiciary is enshrined in Hong Kongs constitutional document, the Basic Law. By and large, the courts in Hong Kong are free from improper influence, be it either from other branches of government, or private interests. However, the possibility of Chinese influence on court decisions has raised fears. During a conference on the Hong Kong Basic Law in Beijing in 2007, the chairman of the Chinese National People's Congress allegedly warned it would not be appropriate for Hong Kong to copy the Western democratic notion of separation of powers, and urged the Chief Executive should play a more dominant role in Hong Kongs government.

Corruption

Hong Kong is regarded as one of the least corrupt places in the world. In the vanguard of anti-corruption measures is the Independent Commission Against Corruption (ICAC), whose activities focus on three areas: investigation, prevention, and education. The ICAC can receive complaints and has broad authorities to investigate. For example, it can examine bank accounts and business documents, and ask suspects to disclose their assets. Despite all those efforts, business interests do still have substantial influence on the Legislative Council. Also, there have been some violations of the Code on Access to Information requiring the government to release information to the public. In some cases, reasonable requests for information where rejected, which resulted in a growing number of complaints. Nonetheless, corruption is perceived as very low in Hong Kong. In their 2010 Corruption Perceptions Index, Transparency International ranked Hong Kong as position 13 out of 178 countries.

Human Rights

Generally speaking, citizens of Hong Kong enjoy a high level of civil and political liberties. The protection of human rights is enshrined in Hong Kong's constitutional document, the Basic Law, as well as in the Bill of Rights Ordinance, which brings into effect the United Nations Covenant on Civil and Political

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Rights. Legislation that contradicts the provisions set in the Basic Law can be declared unconstitutional by the courts. However, there are some concerns: The freedom of assembly can be restricted, and in some cases the police - who have extensive powers - were accused of using unnecessary force when shutting down political protests. Furthermore, as mentioned above, the freedom to change the government is constrained by the Basic Law, which does not provide for meaningful direct elections.

C. Economic FreedomPrivate property and the freedom of exchange are generally well protected by Hong Kongs Basic Law. All land is controlled by the government which, through public auctions, issues renewable leases until 2047. However, the enforcement of intellectual property protection is rather deficient. Pirated media and other counterfeit products are readily available and sold, more or less openly.

Security of Property Rights

Hong Kongs tax rates are low. The income tax rate is set at between 2 and 17 percent, (adjusted by deductions and allowances), or at a flat 15 percent of the gross income whichever is lower. The top corporate tax rate is 16.5 percent. Overall tax revenue is about 13 percent of the GDP.

Hong Kongs regulations and laws provide for a transparent financial sector, which not only withstood the challenges of past financial crises, but also cemented Hong Kongs status as a leading international financial hub. Banks are under the supervision of the Hong Kong Monetary Authority; regulations apply equally to domestic and foreign banks. Credit is given at market terms.


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Government spending, (which includes consumption and transfer payments), is low, equalling 18.6 percent of the GDP. Government policies aim at maintaining a balanced budget.

Size of Government

The freedom to start, run, and close a business is subject to efficient regulations. It takes not more than six days and three procedures to start a business, and obtaining a license can be done in 67 days and seven procedures. Labour regulations are flexible. The non-salary cost of an employee is low, dismissal procedures are uncomplicated.


International trade is subject to only few obstacles, such as pharmaceutical, food and energy labelling regulations. Hong Kong's weighted average tariff rate is 0 percent.

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TaiwanQuick FactsPopulation: 23.07 million Population growth: 0.193% Labour force: 11.07 million by occupation: agric. 5.2% industry 35.9% services 58.8% GDP: USD 821.8 billion growth rate: 10.8% per capita: USD 35,700 by sector: agriculture 1.4% industry 31.1% services 67.5% Unemployment rate: 5.2% Pop. below pov. line: 1.16% HDI: n.a. HDI rank: n.a.





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A. Political FreedomElections in Taiwan are usually free and fair. The last parliamentary and presidential elections were held in 2008. As in 2004, tempers were running high and some large protests took place, but there was no violence. Evidence suggests that there were some cases of vote-buying, albeit on a limited scale. Political participation and pluralism are equally unrestricted in Taiwan; opposition parties can operate freely and without restrictions. The civil society is meaningfully included in the political process.


There are no veto players without a constitutional mandate. During Taiwans transformation to a democracy, all potential veto powers were dispersed. Even though political actors sometimes strongly disagree on policy matters, there is a broad consensus among them concerning Taiwans political system as a market-based democracy, and so there are no noteworthy anti-democratic powers that could act as an unconstitutional veto player.


B. Rule of LawIn general, judicial independence is well developed in Taiwan. Trials are fair and usually free from external influence by politicians or business. Nevertheless, some doubts have been expressed regarding the political independence of the Supreme Court judges; their nomination process, judicial proceedings and decisions have raised eyebrows.17



Press and media operate relatively free and unrestricted in Taiwan: a diversity of opinions and views are voiced, criticism towards government policies is tolerated, internet is free, and foreign journalists can travel and report without restrictions. Consequently, the governments influence on the press is minimal. Lately, there have been some efforts by the government to restrict critical press voices. Ever closer commercial ties between Taiwan and China have pushed media owners and journalists to self-censorship, albeit on a limited scale.

Press Freedom

Corruption

Corruption in Taiwan is still on a moderate level, but things are getting better. In 2009, several measures were taken by the government to enforce anti-corruption laws, resulting in the removal of high-ranking officials and members of parliament who were involved in vote-buying. The media reports frequently and extensively on corruption cases, contributing to the raising of public awareness of this subject. Transparency International ranked Taiwan as position 33 out of 178 surveyed countries in its 2010 index. Human Rights are generally protected and respected in Taiwan. Since Taiwan is not recognised as an independent country and, therefore, not a member of the United Nations, the country is not party to any UN Conventions regarding the protection of human rights. Nevertheless, human rights violations are uncommon. In its 2009 report, Amnesty International criticised insufficient protection of women and girls from domestic violence. During the visit of a semi-official delegation from China, the freedom of assembly and expression was restricted. Taiwan officially has not abolished the death penalty, yet. Executions were resumed in 2010, after having been suspended for almost four years between 2005 and 2009.

Human Rights

C. Economic FreedomSecurity of Property RightsProperty rights are adequately protected under Taiwanese law. The courts honour and enforce contracts, but the judicial process can be slow at times. Several laws have been passed to enforce the protection of intellectual property rights, yet pirated CDs and DVDs, counterfeit pharmaceuticals, and fake luxury goods still are readily available. Government spending has risen from 17.8 percent to 18.5 percent of the GDP. Recent privatisation and deregulation measures led to the state playing a smaller role in Taiwans economy. Taiwan has a comparatively high income tax rate of 40 percent. The corporate tax rate has been reduced from 25 percent to 20 percent. Additionally, there is ten percent surtax on undistributed profits. Other taxes comprise a VAT and a

Size of Government

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property tax. Overall tax revenue is about 13.7 percent of the GDP. Taiwans financial sector is modern and competitive. Foreign investors operate freely. The government, through its own institutions accounting for roughly half of the country's financial assets, dominates banking. Foreign banks have a limited role. Taiwanese regulations well protect the freedom to start, run, and close a business. It takes 15 days to start a business, and getting a license takes 28 procedures and 142 days. Closing a business is an uncomplicated procedure. Labour regulations are fairly inflexible. The non-salary cost of a worker is low; firing procedures can be expensive and complicated. Regulations on work hours are not flexible. Taiwans weighted average tariff rate is about two percent. With trade with China being the only exception, the state does not interfere significantly with foreign trade. In the case of China, regulations try to control Taiwan's trade and investment dependency on the mainland. Among the obstacles to foreign trade are import and export bans and restrictions, state trade in some goods, and weak enforcement of intellectual property rights.



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South KoreaQuick FactsPopulation: 48.75 million Population growth: 0.23% Labour force: 24.75 million by occupation: agric. 7.3% industry 24.3% services 68.4% GDP: USD 1.459 trillion growth rate: 6.1% per capita: USD 30,000 by sector: agriculture 2.6% industry 39.3% services 58.2% Unemployment rate: 3.7% Pop. below pov. line: 15% HDI: 0.897 HDI rank: 15 (of 187)





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A. Political FreedomElections in South Korea are generally free and fair. The electoral process has constantly improved since 2002 and, even though contesting in an election is rather expensive, the influence of money-politics has declined in the last years. The president, who can only serve one term, is elected every five years. The members of the national assembly are elected for four year terms. Political pluralism and participation are strong in South Korea; several political parties contest in elections and there are also a great variety of active NGOs.


There are no veto players who lack constitutional mandate in the South Korean political system - civilian control over the army has been successfully established. Other influential groups do not carry much weight in politics in politics. However, government transparency remains comparatively low which, in part, may be contributed to widespread corruption.


B. Rule of LawEven though the judiciary operates fairly unrestricted, there have been reports during the past few years which question the extent of judicial independence in South Korea. State prosecutors are occasionally urged to start investigations, e.g. on tax matters, in order to intimidate political opponents. In one case, Korean Supreme Court Justice Shin Young-Chul tried to influence lower courts during trials of protesters who, in 2008, had demonstrated against the import of US beef.21



The media is mostly free and unrestricted in South Korea. There are several privately owned newspapers that operate freely. However, the National Security Law punishes all actions that are perceived as favouring the North and, therefore, questioning the legitimacy of the South Korean state. This leads to a certain degree of self-censorship in order to avoid prosecution. Nevertheless, the press in South Korea is significantly freer than in other countries in this region. In their 2010 index, Reporters Without Borders ranked South Korea at position 42 out of 178 - a great improvement in comparison to last year's result.

Press Freedom

On other occasions the South Korean judiciary has underlined its independence through remarkable rulings against the government, most notably in the case against a blogger who was accused by the government of "electronically spreading false rumours that damage the public good" and destabilising the currency market.

Corruption

The South Korean government enacted an anti-corruption law in 2001, followed by a general code of conduct for public officials in 2003 and the establishment of the Independent Commission against Corruption. Still, extortion and bribes, of or by public officials, remain a widespread problem. A spectacular corruption case saw former-President Roh Moohyun being prosecuted for his involvement in dubious business deals. Despite the efforts undertaken by the government, corruption is still a serious issue in South Korea.

Human Rights

The overall human rights situation in South Korea is satisfactory. Still, there have been reports of inhuman, degrading, and unlawful detentions, even though these incidents seem to have happened only on a limited scale. The death penalty, although not yet officially abolished, is no longer executed.

C. Economic FreedomSecurity of Property RightsPrivate property is well protected under South Korean law and expropriation is unlikely to happen. The courts can be slow in deciding on contractual matters, though. The protection of intellectual property rights, on the other hand, is deficient. Piracy of copyrighted material is not uncommon.

Size of Government

Government spending increased to 30 percent of the GDP. This can be attributed, in part, to fiscal packages that include targeted transfers to social support schemes, public investment in infrastructure, and credit guarantees for SMEs. South Korea has a relatively high top income tax rate of 38.5 percent, and a top corporate tax rate of 22 percent. Other taxes include VAT and property tax. Overall tax revenue is about 26.6 percent of the GDP.22

South Koreas financial sector is in the process of undergoing reforms which are aimed at improving transparency, efficiency and ending state-directed lending. As a result, the financial sector is becoming more competitive. The restructuring of banking during the past decade has resulted in weak institutions being merged or shut. Foreign banks own majority stakes in some large commercial banks, but there are restrictions regarding foreign ownership. The government has to some extent retreated from private banks, but still keeps some ownership positions. South Korean laws regulate the possibility to start, run, and close a business fairly well. It takes 14 days to start a business; getting a license can be done in 13 procedures and 34 days. Closing a business is an easy procedure. However, labour regulations are inflexible. The non-salary cost of a worker is moderate, but firing procedures are complicated. Work hour regulations are inflexible.


On the path to further trade liberalisation, South Korea has negotiated FTAs with Chile, Singapore, ASEAN, and EFTA during the past couple of years. Furthermore, the government is pursuing agreements with the EU, the USA, and Peru. Obstacles to foreign trade are prohibitive tariffs, import and export restrictions, complicated regulations, and adjustment tariffs and taxes.


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SingaporeQuick FactsPopulation: 4.74 million Population growth: 0.817% Labour force: 3.16 million by occupation: agric. 0.1% industry 30.2% services 69.7% GDP: USD 291.9 billion growth rate: 14.5% per capita: USD 62,100 by sector: agriculture 0% industry 28.3% services 71.7% Unemployment rate: 2.2% Pop. below pov. line: n.a. HDI: 0.866 HDI rank: 26 (of 187)





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A. Political FreedomElections are held every five years in Singapore and voting is mandatory. People that fail to cast a ballot are excluded from the electoral register and then banned from participating in future elections, unless they had an acceptable reason for not voting and also pay a fee. The last elections in 2011 resulted in the ruling Peoples Action Party winning 81 out of 87 seats. There is no independent authority to monitor the electoral process. Political pluralism is practically non-existent despite officially being encouraged by the government. The opposition is often intimidated and space for political participation is heavily restricted. Reformers that could challenge the government's power are denounced as dissidents, and can be silenced by the government at any time. Thus, oppositional political parties have virtually no space to operate.


There are no unconstitutional veto players in the political system of Singapore. The government entirely controls the countrys politics. Oppositional groupings that could be a potential threat to the countrys ruling elite usually are broken up immediately.


B. Rule of LawJudges are appointed by the president on the advice of the prime minister, a fact making it hard to imagine judges truly are free from political influence. Indeed, several opposition25



All national press in Singapore is controlled by the Singapore Press Holdings, which effectively practices self-censorship. On several occasions, foreign newspapers not only have been subject to lawsuits and forced to pay high fines, but also have had their circulations restricted. One can say that in Singapore, rather than freedom of the press, there is freedom from the press. Moreover, political films or documentaries are entirely banned. The internet, however, has resisted governmental censorship. The index published in 2010 by Reporters without Borders ranked Singapore as position 136 out of 178.

Press Freedom

politicians have been involved in cases which have driven them into bankruptcy. Many judges are connected to the PAP. In terms of their oft PAP-friendly judgments, however, it is not entirely clear if judges act out of their own belief, or if they are pressured by members of the party.

Corruption

The Singaporean government adheres to a strict no-tolerance policy regarding corruption. This is essential to the economic success of Singapore - if investors felt that their funds were not safe, the image of Singapore as one of the regions biggest financial hubs would be severely damaged. Anti-corruption efforts are, by and large, successful. Singapore leads Transparency International's 2010 Corruptions Perceptions index of 178 surveyed countries.

Human Rights

The protection of human rights is deficient. Singapore is not party to any of the UNs major conventions on the protection of human rights. Freedom of expression is restricted; defamation charges are pressed against anyone who criticises the government. Moreover, the death penalty is in force Singapore rejected a UN motion calling on a worldwide moratorium on the use of the death penalty. From our liberal point of view, this is more than regrettable. Religious freedom is only respected as long as it is not considered as endangering the integrity of the state. In 2009, 23 suspected Islamists were detained without trial, and concerns about inhuman treatment or torture have been voiced in this respect.

C. Economic FreedomSecurity of Property RightsBoth private property rights and intellectual property rights are well protected under Singaporean law. Contracts are secure, and if urban needs make the acquisition of real estate necessary then compensation is provided. Singapore has one of the region's most sophisticated intellectual property rights regimes. The Intellectual Property Office of Singapore is the country's leading agency serving as government advisor on intellectual property rights and promoting intellectual property awareness.

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Government spending is still relatively low, but has reached 17 percent of the GDP (compared to about 12.5 percent in 2010). The state is involved to a considerable extent in Singapore's economy through government-linked companies. Taxes are comparably low. The top income tax rate equals 20 percent, whereas the top corporate tax rate was recently reduced to 17 percent. Other taxes include VAT and property tax. Overall tax revenue is about 14.3 percent of the GDP.

Size of Government

The financial sector of Singapore is highly competitive. Banking is dominated by three groups, the largest being the government owned Development Bank of Singapore. Additionally, 113 foreign banks operate more or less freely. To start, run, and close a business is easy under Singapore's regulations. Starting a business takes a mere three days, and a business license can be obtained in 11 procedures and 25 days. Closing a business is uncomplicated. Singaporean labour regulations are flexible. The non-salary cost of an employee is low; dismissing him is easy. Work hour regulations are flexible.


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A founding member of the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation, Singapore promotes the reduction of trade barriers between member states. Singapore's foreign trade, by and large, is liberalised; its weighted average tariff rate is 0 percent. However, some import and export restrictions, service market barriers, and licensing requirements are obstacles to foreign trade.


MongoliaQuick FactsPopulation: 3.13 million Population growth: 1.489% Labour force: 1.068 million by occupation: agric. 34% industry 5% services 61% GDP: USD 11.02 billion growth rate: 6.1% per capita: USD 3,600 by sector: agriculture 19.7% industry 35.1% services 45.2% Unemployment rate: 11.5% Pop. below pov. line: 36.1% HDI: 0.653 HDI rank: 110 (of 187)





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A. Political FreedomElections are generally free and fair. The last presidential elections in 2009 were considered to comply with democratic standards by independent international observers. A point of criticism are the frequent changes made to voting procedures in parliamentary elections; in the last few years, the subdivision of electoral districts has been varying between multi-member and single-member districts. Critics are concerned this could lead to instability. Political participation and pluralism are constitutionally granted, and are also protected in practice. Civil society groups can usually operate without governmental restrictions. Trade unions operate legally and are protected by the government.


There are no unconstitutional veto players in the political system of Mongolia. Civil control over the military has been established. Business interests or other pressure groups remain subordinate when it comes to policy-making. That the government does not always operate entirely transparently has been the cause of some concern. Nevertheless, the integrity of the government is by no means threatened by extra-legal powers.


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The freedom of the press is generally respected by the government. Some journalists practice self-censorship for fear of being prosecuted under the controversial State Secrets Law. Sometimes, in the past, this law has been used to quell criticism towards the government. However, media restrictions imposed during the state of emergency in 2008 have been lifted. A new law on press freedom - aimed at improving the legal environment of the media sector - was discussed by government officials, media organisations, and civil society representatives in May 2011. Reporters Without Borders ranked Mongolia as position 76 of 178 in its 2010 index. This is a major improvement compared to the previous years ranking where Mongolia held position 91 of 175.

Press Freedom

B. Rule of LawIndependence of the JudiciaryThe independence of the courts is constitutionally granted. In practice, corruption plays a major part in judicial decisionmaking. Moreover, the enforcement of rules regarding the judiciary's independence is insufficient. All this is reflected in the low score that Mongolia achieves in this section, despite its better performance in terms of political freedom.

Corruption

Corruption is a part of daily business. A report by the Asia Foundation found, in 2009, that one out of five households had used bribes when dealing with official bodies. An anticorruption agency, the Independent Authority Against Corruption, was created as late as 2007 to deal with the problem - so far with limited success. The 2010 Corruption Perceptions Index issued by Transparency International ranked Mongolia as position 116 out of 178 countries.

Human Rights

Mongolia's human rights record which, to date, has been mediocre, is witnessing positive developments. After announcing a moratorium on executions in January 2010, Mongolian president Tsakhiagiin Elbegdorj successfully pushed for outright abolition of the death penalty. The Mongolian parliament is expected to approve a bill which will be the basis for the complete elimination of the death penalty from Mongolian laws.

C. Economic FreedomSecurity of Property RightsThe enforcement of laws protecting private property is weak. Judges tend either not to respect contracts at all, or simply to ignore their contents. The same applies to the protection of intellectual property. Enforcement is lax, pirated products are readily available.

Size of Government

Government spending (including consumption and transfer payments) is relatively high, equalling about 35 percent of the GDP. Mongolia has a low top income tax rate of 10 percent and a moderate corporate tax rate of 25 percent. Other taxes30

comprise VAT, an excise tax on alcohol and vehicles, and a dividend tax. Overall tax revenue reaches about 33 percent of the GDP.

The last years saw a restructuring of the banking sector, meaning private access to credit is now easier. By and large, the government stays out of the financial sector, and foreign investors enjoy a mostly unconstrained access to the domestic capital market. Ten of the 16 private banks currently operating in the country are foreign-owned. The number of state-owned banks has been reduced. Additionally, there are 72 smaller, mostly unregulated lending institutions. To start, run, and close a business is protected by the country's regulatory environment. Starting a business takes a mere 13 days, but declaring bankruptcy can be a lengthy and burdensome process. Labour regulations are comparatively flexible. The non-salary cost of a worker is average, whereas firing an employee is a straightforward and costless procedure. Regulations on work hours, however, are not flexible.


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Mongolia's weighted average tariff rate is about 5 percent. International trade is relatively free and liberalisation is progressing. Still, import and export restrictions and taxes, weak enforcement of intellectual property rights, and inefficient and corrupt customs implementation pose an obstacle to international trade.


IndonesiaQuick FactsPopulation: 245.6 million Population growth: 1.069% Labour force: 116.5 million by occupation: agric. 38.3% industry 12.8% services 48.9% GDP: USD 1.03 trillion growth rate: 6.1% per capita: USD 4,200 by sector: agriculture 15.3% industry 47% services 37.6% Unemployment rate: 7.1% Pop. below pov. line: 13.33% HDI: 0.617 HDI rank: 124 (of 187)





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A. Political FreedomPresident and Vice-President, the House of Representatives, the Regional Representative Council, and the local Houses of Representatives are directly elected every five years. Candidates running for president and vice-president need an absolute majority of votes to be appointed. The last general elections in 2004 and 2009 complied, by and large, with democratic standards. However, irregularities with voter lists have occurred, and the Supreme Court has ordered a partial recounting of votes. Political pluralism and participation is generally free and unrestricted in Indonesia; a great variety of NGOs and local interest groups are involved in communal politics, and the rights of assembly and association are generally respected.


The freedom of the press, a cornerstone of Indonesian democracy, has taken hits lately. Two journalists were killed and others have received death threats due to their reports about environmental issues. In a similar case, an army officer had allegedly assaulted a reporter for investigating rumours about the army's involvement in illegal logging activities. Regrettably, law enforcement agencies showed little enthusiasm to look into the matter. At present, the government seems to consider the protection of freedom of the press as a matter of secondary importance; it has failed in keeping promises to change provisions of the Information and Electronic Transaction Law allowing criminal33

Press Freedom


Compared with other countries in the region, Indonesia achieves an average score. Although the authority of the Indonesian government is not directly challenged, there are some unconstitutional veto players who, to a certain degree, can influence political processes. Since 1999 the army has gradually retreated from politics, and may interfere only if national unity is threatened. Nevertheless, some high-ranking officers have done well in provincial elections which grants the army some sway over Indonesian politics. Radical Islamic forces are also another potential veto player. In the past, these groups have successfully pressured the government to pass legislation in their favour.


defamation charges to be pressed against journalists who distribute information over the internet. This step is regrettable, since access to the internet is generally unrestricted, and social media outlets can operate freely.

B. Rule of LawIndependence of the JudiciaryThe judiciary in Indonesia is not fully independent. The regime change of 1998 left the judiciary somewhat untouched, with the army and big business still remaining influential in this branch of government. Bribes are a common instrument to influence court decisions, with the rather low salaries of judges, attorneys and lawyers merely adding to the attractiveness of bribes. However, the newly established constitutional court seems to take its task seriously and, so far, has proved to be a valuable contributor to the process of democratisation. Nevertheless, the quality of the judiciary in Indonesia remains a little lower than average.

Corruption

Corruption is widespread in Indonesia. President Susilo Bambang Yudhoyono made the fight against corruption a central element of his election campaign in 2004 and, once in office, established an anti-corruption commission, namely the Commission for the Elimination of Corruption (KPK) In theory, with the existence of the KPK, Indonesia disposes of an effective mechanism to fight corruption. Many high-ranking government officials have been arrested on allegations of misconduct. However, as the KPK is somewhat overburdened, the problem still persists. Considering these circumstances, it comes as no surprise that Transparency International ranked Indonesia as only 110 out of the 178 countries in its 2010 Corruption Perceptions Index. This result, in turn, is also reflected in our relatively low score.

Human Rights

There have been significant improvements in terms of human rights protection under the Yudhoyono administration, but some severe problems still exist. For one, Indonesia still adheres to the death penalty. Moreover, Amnesty International published reports that accuse security forces of torture and murder and religious minorities continue to experience discrimination, intimidation and violence. All in all, the

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situation of human rights in Indonesia is not as bad as in other countries in the region, but there is still room for improvement.

C. Economic FreedomA deficient legal framework, ineffective administration and patronage networks affect the security of property rights. In many cases, court rulings are arbitrary and judges tend to rule against foreigners in business disputes. The otherwise welcome decentralisation of mining rights, which now can be decided on regional and local levels, has often produced contradictory and confusing contracts which may lead to social conflict. The often unclear ownership of land rights also poses a problem, most notably for the rural population. The enforcement of intellectual property is weak.


Government spending (including consumption and transfer payments) is low, equal to about 19.2 percent of the GDP. Indonesias fiscal deficit reaches 2.6 percent, whereas the country's public dept is rather low at 30 percent of the GDP. The low degree of public debt was one of the main reasons for rating agencies to give Indonesia investment grade for the first time in 14 years. A fiscal reform brought taxes to average levels resulting in a top income tax rate of 30 percent and a corporate tax rate of 25 percent. Other taxes include a VAT and a property tax. Overall tax revenue equals 13.3 percent of the GDP.

Size of Government

Indonesias financial system has been gradually restructured since the late 1990s, resulting in a reduction to about 130 banking institutions. Subsequently, the efficiency of the banking system has increased. Various regulations negatively affect the freedom to start, run, and close a business. Starting a business takes 47 days, getting a business license requires a total of 14 procedures, and closing a business is both complicated and costly.


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While restrictive labour regulations keep the non-salary cost of an employee at an average level, they also make his dismissal costly.


Indonesias weighted average tariff rate is 3.1 percent. To meet requirements of WTO, AFTA, and APEC, Indonesia will have to continually reduce tariffs until 2020. At present, international trade suffers from a complicated system of licensing requirements, lacklustre implementation of trade policies, a deficient enforceability of contracts and property rights, and a corrupt customs department.

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MalaysiaQuick FactsPopulation: 28.73 million Population growth: 1.576% Labour force: 11.63 million by occupation: agric. 13% industry 36% services 51% GDP: USD 414.4 billion growth rate: 7.2% per capita: USD 14,700 by sector: agriculture 10.5% industry 41.4% services 48.2% Unemployment rate: 3.4% Pop. below pov. line: 3.6% HDI: 0.761 HDI rank: 61 (of 187)





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A. Political FreedomUniversal suffrage has been established and elections are held on a regular basis. The last general elections took place in March 2008, and opposition parties succeeded in breaking the two-thirds majority of the ruling coalition for the first time in almost forty years. The Barisan National (BN), which previously had won 198 of 219 seats in the 2004 elections, only managed to secure 140 seats in 2008. However, the elections cannot be regarded as entirely free and fair; the BN has been accused of tampering with voter registration lists and repressive laws limited the chances of the opposition. That opposition parties, nevertheless, managed to win a considerable number of votes suggests that the BNs dominance is diminishing. In terms of political pluralism and participation, the government allows societal groups as long as they dont interfere with government policies. Certain civic activities are constrained by laws; for example, the right to freely associate and assemble. The influence of non-gover nmental organisations is, therefore, insufficient.


The freedom of the press in Malaysia is guaranteed by the constitution. But in practice, the freedom of press, expression and speech are restricted. Political discussion in the media did become more frequent after the 2008 elections, but many private television stations are closely tied to the BN and practice self-censorship. The Printing Presses and Publications Act requires publishers to annually renew their license; this procedure can be used to revoke a license with no judicial process if published content is deemed "likely to be prejudicial" to public order, morality, security, or national interest, thus providing strong incentive for self-censorship and limited investigative journalism. Lately, the internet has emerged as an outlet for dissenting views and opinions. However, the

Press Freedom

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The effective power to govern indeed lies in the hands of the government. Veto players such as the military remain under civil control. However, Malay organisations have gained influence and put pressure on the government to keep policies in place which favour the ethnic majority group.


government has been quick to react to this new trend by pressing charges, on grounds of defamation, against bloggers.

B. Rule of LawIndependence of the JudiciaryThe independence of the courts is heavily compromised by the influence of the executive branch of government. Politically motivated verdicts are not uncommon, as the case of Anwar Ibrahim, an opposition leader, shows. Recently, the government has tried to restore the image of the judiciary by issuing a bill which grants the judiciary more independence. This endeavour has been widely perceived as a public relations exercise in order to gain voter support for the upcoming elections in 2012 . The prime minister remains highly influential in terms of judicial verdicts.

Corruption

Corruption remains a serious problem among the political and business elite of the country. Even though the government tries to keep up its public image of sincerely fighting corruption, there is little political will to effectively tackle this problem. Transparency International ranked Malaysia on position 56 out of 178 in its 2010 Corruption Perceptions Index.

Human Rights

There are severe flaws in terms of human rights protection. For one, the death penalty is still in force; in 2009, 22 people were sentenced to death, and the current number of executions is unknown. From our liberal perspective this is unacceptable. Moreover, as the case of Anwar Ibrahim shows, people can be convicted for their (alleged) sexual orientation another fact we cannot approve. Amnesty International has reported degrading and inhumane treatment of suspects, as well as cases of arbitrary detention. Furthermore Malaysia is not party to any of the relevant UN Conventions, such as the Convention Relating to the Status of Refugees, the Covenant on Civil and Political or the Covenant on Economic, Social and Cultural Rights.

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C. Economic FreedomThe acquisition, use, and sale of private property is largely protected by respective Malaysian laws. The caveat being 'largely' - there are notable exceptions: Borneo's indigenous population is subject to forced relocations which pave the way for large infrastructure projects, and also civil unrest. The judiciary (as mentioned above) is under influence of the ruling BN. Corporate lawsuits take over a year to file and are often decided according to political motivations. Intellectual property rights are a problematic matter. Enforcement is insufficient and, most notably, producers of pharmaceuticals and consumer products suffer serious losses.


Government spending (which includes consumption and transfer payments) is comparatively low, amounting to about 26 percent of the GDP. Taxes in Malaysia are on average levels. The top individual income tax rate is at 26 percent, whereas the top corporate tax rate was recently reduced from 26 percent to 25 percent. A goods and services tax is being discussed but, as of yet, has not been implemented. Overall tax revenue accounts for about 15.3 percent of the GDP.

Size of Government

To start, run, and close a business is constrained by regulations. Although starting a business takes a mere 17 days, getting a license is a rather tedious undertaking which requires 25 procedures and 261 days. Labour regulations are flexible. Although dismissing an employee may be complicated and costly, his non-salary cost is low. A minimum wage is unknown and working hours are regulated flexibly.

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The Malaysian banking sector keeps growing, with more than 30 commercial banks operating under the central banks oversight. Efficient supervision and mergers have made banks more competitive. Foreign involvement is subject to restrictions: Equity participation is limited to 30 percent for commercial banks and 70 percent for Islamic and investment banks, and insurance companies.



Foreign trade is, in principle, liberalised - but protectionism regarding key enterprises proves to be a barrier for foreign investors. The governments New Economic Policy makes Malaysia a somewhat difficult place for foreign direct investment. Malaysia is the only ASEAN country with an FDI outflow bigger than its inflow, which could indicate investors' loss of confidence. However, Malaysia profits greatly from the ASEAN-Australia-New Zealand Free Trade Agreement, which was implemented in 2008.

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PhilippinesQuick FactsPopulation: 101.83 million Population growth: 1.903% Labour force: 38.9 million by occupation: agric. 33% industry 15% services 52% GDP: USD 351.4 billion growth rate: 7.3% per capita: USD 3,500 by sector: agriculture 12.3% industry 32.6% services 55.1% Unemployment rate: 7.3% Pop. below pov. line: 32.9% HDI: 0.644 HDI rank: 112 (of 187)





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A. Political FreedomNational elections for the presidency and both houses of congress took place in May 2010. The Liberal Party candidate Benigno "Noynoy" Aquino, son of the late former president Corazon Aquino, was elected president with 42 percent of total votes. The elections were widely regarded as free and fair. Preelectoral violence was low compared to previous elections. Corruption and electoral fraud allegations against President Aquino could not be verified. Political participation is comparatively unrestricted, with the government having restricted the rights of assembly only during a brief period between 2005 and 2006. These restrictions were lifted afterward as a result of public pressure. In general, the Philippines have a tradition of freedom and civil liberties.


The constitution of the Philippines protects freedom of the press. In reality, though, the Philippines are among those countries of highest risk for journalists, with numerous deaths occurring within the profession every year. Reporters Without Borders ranked the country as position 156 out of 178 surveyed countries in their 2010 index with this rating due mainly to the killing of 29 journalists in Maguindanao province. However, compared to the previous year's result, this was still a significant improvement.

Press Freedom

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Unconstitutional veto players are not completely absent in the political system of the Philippines. In 2006, there was an alleged coup attempt. Moreover, over the last few years violent insurgent groups have been threatening the countrys security, mostly in the southern part of the island of Mindanao. All efforts to stop the violence completely have proven, so far, to be unsuccessful. Nevertheless, the overall situation can be judged as relatively stable, hence positioning the Philippines as midrange within this section.


B. Rule of LawThe Philippines had a change of government in 2010. As the Aquino administration was still relatively young in 2011 - the year covered by this report - only modest improvements could be expected.


The independence of the courts is rather weak; judges are poorly paid (the judiciary gets only one percent of the national budget), and often have to look for additional sources of income to make ends meet. This, in turn, affects impartiality and often leads to compromised judgments. That Supreme Court judges are government appointed does not foster their independence, as well.

Corruption

Corruption is rampant. Former President Gloria MacapagalArroyo herself was involved in several corruption cases, which eventually led to an (unsuccessful) impeachment motion in parliament. Naturally, corruption is not limited to the highest state levels; rather, it is a widespread element of Philippine society. In 2008, for example, a considerable number of banks were closed due to mismanagement and internal corruption. In Transparency Internationals ranking of 2010, the Philippines were position 134 out of 178 surveyed countries.

Human Rights

The Philippines abolished the death penalty and are party to all major UN conventions relating to human rights. In spite of this, the situation remains problematic. A number of reports reveal cruel, inhuman, and degrading conditions in jails. In 2008, a new outbreak of violence in Mindanao province led to the displacement of about 600,000 people. The Moro Islamic Liberation Front, a Muslim insurgent group, reportedly trains children as young as 13 as soldiers. Extra-judicial killings, arbitrary detention, and abuse by security forces happen on a frequent basis.

C. Economic FreedomThe policies of the outgoing Arroyo administration weigh heavily on the figures for the Philippines, demonstrating a decline in economic freedom during its final full year in office.

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Some progress regarding the effective enforcement of property rights has been made, but the situation is still somewhat problematic. In theory, property rights and laws to protect them are firmly entrenched in the Philippine legal system and this, in turn, draws investment into the economy. Concerns are raised by slow courts and, in some cases, alleged disregard for contracts. A constitutional amendment regarding full ownership of land and businesses aims to lift restrictions for foreigners. Intellectual property rights enforcement remains troublesome.


Government expenditures, (which include consumption and transfer payments), are comparatively low, equalling 17.3 percent of the GDP. Taxes are rather high. The top income tax rate is 32 percent, whereas the top corporate tax rate is set at 30 percent. Additionally, Philippine citizens have to pay VAT, real estate tax and an inheritance tax. Overall tax revenue is about 14 percent of the GDP.

Size of Government

To start, run, and close a business is constrained by a multitude of regulations. Starting a business takes about 38 days and 15 procedures. To close a business can be a complicated and lengthy procedure. Non-salary costs of an employee are low, but inflexible labour regulations make firing an employee a complicated procedure.

Stressing the importance of trade liberalisation, consecutive Philippine governments have taken measures to facilitate this. Several regional and bilateral FTAs led to an ever increasing exchange between the Philippines and other countries in the region.47



With 38 commercial banks operating in the Philippines, banking dominates the financial sector. Five big commercial banks - two of them state-owned - control a sizeable share of the total assets. The government runs a small Islamic bank, which caters mostly to Muslim citizens in the South. Although credit is generally allocated at market terms, banks have to lend part of their money to preferred sectors.


Among the barriers to international trade are high tariffs, import and export restrictions, access barriers to the Philippine service market, opaque customs valuations, corruption and, (as mentioned above), a weak intellectual property rights regime.

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ThailandQuick FactsPopulation: 66.72 million Population growth: 0.566% Labour force: 38.64 million by occupation: agric. 42.4% industry 19.7% services 37.9% GDP: USD 586.9 billion growth rate: 7.8% per capita: USD 8,700 by sector: agriculture 12.3% industry 44.7% services 43% Unemployment rate: 1% Pop. below pov. line: 9.6% HDI: 0.682 HDI rank: 103 (of 187)





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A. Political FreedomGeneral elections took place in July 2011 and swept the populist Puea Thai Party to a majority of 265 seats in the 500 member parliament. Yingluck Shinawatra, Puea Thais leader and sister of controversial Ex-Prime Minister Thaksin Shinawatra, became Thailands first female Prime Minister. By and large, the last elections can be classified as free and fair. In theory, the Thai constitution provides for universal suffrage. In practice, there are exceptions; Buddhist monks do not have the right to vote. Members of some ethnic minorities, (such as the hill-tribes in northern Thailand), as they are not acknowledged as Thai citizens, also are deprived of their right to vote. Similar restrictions apply to the right to stand for office: Government officials, for example, are generally excluded. Furthermore, only citizens with a Bachelors degree or higher may stand for election. This effectively excludes about 95 percent of Thailands population. In addition, the constitution of 2007 introduced the undemocratic provision of an only half-elected Senate the other half of Senate members are appointed by a special committee. Political pluralism and participation are largely unrestricted - a host of NGOs address the interests of farmers, women, students, and workers. However, reports suggest that NGOs working on sensitive political subjects face harassment.


The army - though not vested with any constitutional or electoral mandate - is still of great political importance, and certainly qualifies as an unconstitutional veto player. The clout of the army was made obvious on several occasions during the last few years. In late 2008, the military leadership refused to disperse protesters of the Peoples Alliance for Democracy (PAD), a royalist political group, who had hi-jacked Bangkoks two airports and the Government House in order to oust thenPM Samak Sundaravej. By contrast, in 2010, during the antigovernment protests of the United Front for Democracy against Dictatorship (UDD), Thailands rowdy Thaksin supporters, the army intervened on request of the then Prime Minister Abhisit Vejjajiva. This shows not every Thai government can rely on the armed forces to follow their orders.51



The army may interfere if they think its necessary, regardless of their constitutional mandate (or lack thereof).

Press Freedom

A great diversity of media, including radio, television, newspapers, and internet forums, makes up one of the most developed media structures throughout Asia. Yet, the freedom of the press is restricted. In their most recent report, Reporters Without Borders ranks Thailand number 153 out of 178 surveyed countries - this is a considerable diminution of press freedom compared to last years ranking The strict lse-majest law forbids any criticism or sign of disrespect towards the royal family. Unfortunately, these laws are misused frequently to target scholars, activists, and journalists who report critically on sensitive issues. In some cases, the law is simply used to rid political competition.

B. Rule of LawIndependence of the JudiciaryThe 2007 constitution restored judicial independence and an independent Constitutional Court. The latter, however, delivered some controversial judgments in 2008, when they ruled two Prime Ministers, Samak Sundaravej and Somchai Wongsawat, out of office and dissolved the then governing Peoples Power Party on charges of electoral fraud. After forming a government in late 2008, the Democrat Party, in turn, was accused of financial irregularities, but the case was dropped in December 2010 due to procedural mistakes. Apart from political cases, the judiciary seems to be sufficiently independent and well-balanced, though bribery remains a problem.

Corruption

Corruption permeates all levels of Thai society. The most common forms of corruption include bribery, nepotism and conflicts of interest. There are several state agencies dedicated to fight all types of corruption. The National Corruption Commission, for example, initially established under the 1997 constitution was given the power to investigate independently and to prosecute. The commission was re-established again under the 2007 constitution, and in those cases involving52

politicians or state officials its powers even have been broadened. Nevertheless, these efforts have proven to be largely ineffective. The latest Corruption Perception Index ranks Thailand 78 of 178 countries, a rating that shows corruption continues to remain at rather high levels.

Regarding the legal framework, nearly all conditions are met: Thailand is party to the International Covenant on Civil and Political Right, the International Covenant on Economic, Social and Cultural Rights and it accepts the Universal Declaration of Human Rights as international customary law. However, Thailand is not party to the Convention relating to the Status of Refugees. Regardless of this framework, arbitrary arrests and detentions are not unheard of occurrences. Undue delays between arrest and trial of suspects do happen. The presumption of innocence until proven guilty does not always apply. The death penalty exists, which is unacceptable from our liberal point of view. Ethnic minorities are not sufficiently protected. People in border areas, especially ethnic Cambodians, Burmese, Lao and Malay, often face discrimination. Members of the hill-tribes in the northern regions are denied Thai citizenship and a proper education. The Thai government has repatriated refugees from Myanmar and Laos, despite their status, and occasionally has prevented the UNHCR from processing fugitives.

Human Rights

C. Economic FreedomPrivate property is generally adequately protected but the legal process can be lengthy, and judgements are often influenced by illegal means. The protection of intellectual property is deficient; product piracy is vibrant, despite the efforts of the Central Intellectual Property and International Trade Court. Another concern is the possibility of government disclosure of trade secrets to protect any public interest that has no commercial objective. It is questionable to what extent the related data is protected against unfair use.


Government spending, which includes consumption and transfer payments, is low, equal to about 17.7 percent of the53

Size of Government


GDP. Interventions by the government have brought setbacks to privatisation. At 37 percent, Thailand has a relatively high top income tax rate. The corporate tax rate of 30 percent is at a comparatively average level. Other taxes include VAT and property tax. Overall tax revenue is about 16 percent of the GDP.


14 commercial banks, of which two are owned by the government, were operating in Thailand as of 2009. Capital markets are well developed; the stock exchange is vibrant and open to foreign investors. Credit is usually given on market terms. The freedom to start, run, and close a business is well protected. Starting a business takes 32 days, and getting a business license takes less than the world average of 11 procedures and 156 days. Declaring bankruptcy is an uncomplicated process. Labour regulations are flexible. The non-salary cost of a worker is low; firing an employee is easy. Regulations on working hours are business-friendly.


Thailands weighted average tariff rate is about 4.6 percent. As one of the founding members of the ASEAN Free Trade Area, Thailand has negotiated FTAs with Australia, China, India, Japan, and New Zealand. Yet since the 2006 coup, the dismantling of certain trade barriers has come to a stop. As of now, prohibitive tariffs, import bans and restrictions, opaque customs valuations and weak enforcement of intellectual property rights pose obstacles to international trade.

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VietnamQuick FactsPopulation: 90.55 million Population growth: 1.077% Labour force: 47.37 million by occupation: agric. 53.9% industry 20.3% services 25.8% GDP: USD 276.6 billion growth rate: 6.8% per capita: USD 3,100 by sector: agriculture 20.6% industry 41.1% services 38.3% Unemployment rate: 4.4% Pop. below pov. line: 10.6% HDI: 0.593 HDI rank: 128 (of 187)


Political FreedomFree and Fair Elections 0,36 Absence of Unconstitutional Veto Players 0,38 Press Freedom 0 2,50 2,5 5,0 7,5 10,0


Economic FreedomSecurity of Property Rights Size of Government Regulation of Credit, Labour, an

Documents

Freedom Barometer Asia 2011