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Saudi ArabiaEconomic Outlook 2024STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|CONTENTSKey Takeaways 3Summary 4 The Global Outlook 6 MENA Regional Outlook 8 Oil Outlook 9 Saudi Arabia Growth Outlook 10 Saudi Arabia Monetary Policy Outlook 14 Saudi Arabia Fiscal&Public Debt Outlook 16Saudi Arabia External Sector Outlook 18 Saudi Arabia Labour Market Outlook 21 Things to Watch in 2024 26 Macroeconomic Dashboard 28STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|3Key TakeawaysThis report provides an analysis of Saudis macroeconomic performance in the first five months of 2024 and growth prospects for the remainder of the year.It assesses the countrys fiscal policy,external sector,labor market,and business environment based on projections made by the Ministry of Finance ahead of the fiscal year and the International Monetary Fund(IMF)in April 2024.The report concludes with highlights of challenges and sectors to watch in the coming year.Below are our key takeaways.Saudi Arabia is actively diversifying its economy by reducing its reliance on oil and expanding its non-oil sector.After being stagnant in 2023(growth rate of 0.03%),the economy is expected to grow by 2.6%this year according to the IMF,moderately below Saudis 4.4%projection in the 2024 budget.The growth trend of non-oil economic activity reflects a persistent expansion,with ongoing investments in the private sector and non-oil industries.Despite the expected fiscal deficit in 2024 to finance non-oil developmental projects,public debt in Saudi Arabia remains sustainable.With the fiscal balance expected to be in deficit over the medium term until 2026,the Kingdoms public financial management system is healthy,having a strong a credit rating profile,low debt-to-GDP ratio,significant foreign reserves,and momentum to diversify sources of income.Inflation in Saudi Arabia is expected to remain low and be among the lowest globally in 2024,positioning the country favorably for private consumption in the travel,tourism,and hospitality sectors.Private consumption in 2023 reached an all-time high over the past two decades and e-commerce transactions for 2024 are on pace to also register a record-high,as the Saudi Arabian Monetary Authority remains steadfast in maintaining the peg of the Saudi riyal to the US dollar.Saudi Arabia aims to attract and retain foreign direct investment(FDI)amid concerns over a sluggish growth among its key trade and FDI partners.The Public Investment Fund(PIF)and the National Development Fund(NDF)will continue to provide stimulus to the economy to sustain trust and appetite among global investors.The Kingdom is also prioritizing measures that strengthen its position as a global trading hub and mitigate trade disruptions from recent geopolitical tensions.The unemployment rate across genders and nationalities in Saudi Arabia is decreasing and the labor force participation rate for women is on an upward trend,indicating a strong momentum of employment in the country.According to the most recent employment statistics,Saudi is meeting its Vision 2030 targets of cutting the unemployment rate below 7%,reaching 4.4%in Q4 of 2023.New challenges loom for Saudis labor market as it is short on local specialized talent,relies on foreign labor,and faces growing competition between the public and private sectors.Foreign employees constitute most of the workforce,translating to a sizable remittance outflow,and almost two-thirds of Saudi university graduates specialize outside technological fields like engineering and medicine that govern Saudis disruptive sectors.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|4SUMMARYIn the face of a challenging global economic environment,Saudi Arabia is diversifying its economy,reducing its reliance on oil,and focusing on expanding the non-oil sector.Despite experiencing stagnation in 2023,the country looked to scale up investments in the private sector to grow the economy by 4.4%this year compared to 0.03%the year prior.As it stands however,the growth rate for 2024 is projected at a modest 2.6cording to the IMF.The Kingdoms public finances are reassuring.A strong credit rating profile,sustainable public debt,and significant foreign reserves indicate stability and offer a buffer against potential shocks.The government intends to streamline operating expenses and diversify sources of income while running a deficit until 2026 to increase financing of non-oil sector development projects.Despite the deficits,forecasts indicate that public debt will remain below Saudis debt ceiling of 50%.Saudi ArabiaEconomic Outlook 2024STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|5The Public Investment Fund(PIF)and the National Development Fund(NDF)will continue to provide stimulus to the Saudi economy,playing a crucial role in building trust among global investors and attracting foreign direct investment(FDI).However,the recent geopolitical tensions are triggering trade disruptions,like rising shipping costs,which threaten the flow of trade and investment.Despite this,Saudi Arabia remains committed to its economic diversification efforts and continues to strengthen its position as a global trading hub.Inflation in the country is expected to remain low in 2024,hovering 2.2%,positioning the country well for private consumption and tourism.E-commerce transactions are on pace to register a record-high,with the volume in Q1 of 2024 threefold that in 2021,and private consumption in 2023 recorded its highest value over the past two decades.In parallel,unemployment continues to decline,and female labor force participation is increasing,surpassing the 2030 target ahead of schedule.However,meeting the growing demand for specialized talent and managing competition between the private and public sectors remains a perennial challenge,carrying long-term implications such as increasing labor costs and hindered talent retention.The business environment in the Kingdom is developing fast.Saudi is investing in economic cities,like NEOM and Qiddiya,that incentivize investors through lax tax regulations and business processes.More so,the Social Development Bank has increased its financing target for 2024 to support startups in the country.Regulatory reforms to facilitate the ease of doing business and public service delivery,like the digitization of government services,are improving the countrys rankings in global e-government and AI readiness indices,signaling a commitment to technological advancement and public sector excellence.Reaching midway through the decade,Saudi Arabia remains committed to Vision 2030 and carries a strong momentum to drive reforms forward.This year shows promise in the travel,tourism,and hospitality sectors,as well as progress in green initiatives and healthcare.Balancing these priorities with labor market trends will prove pivotal in successfully navigating the next half of this transformative decade.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|6The Global OutlookGlobal Economy is decelerating in 2024,with uneven growth across the regionThe outlook for the global economy in 2024 remains subdued.According to the IMFs World Economic Outlook Update issued in April 2024,global economic growth is projected at 3.2%,maintaining its pace in 2022 and 2023(Figure 1).Emerging&DevelopingAsiaSub-Saharan Africa Middle East and North AfricaLATINAmerica UnitedStatesEuroArea%5.2%3.8%2.5%2%2.7%0.8Figure 1:Global growth in 2024 slightly declines,GDP Growth Rates(Annual%Change)1Real GDP Growth(%)2024f1.IMF World Economic Outlook April 2024Reeling from a series of shocks,namely the Covid-19 pandemic,geopolitical tensions and conflicts,and inflationary pressures on commodities,the global economy showed resilience in staying afloat.However,the growth achieved during the 2020s is poised to be the weakest of any half-decade since the 1990s.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|7The Global OutlookEmerging markets are expected to outperform their developed peers in 2024,registering a growth rate of 4.2%compared to the sluggish 1.7%for advanced economies.Figure 2:Growth in emerging&developing economies is outperforming advanced economies in 2024.Real GDP Growth(%)22.IMF World Economic Outlook April 2024.*Saudi Arabia Ministry of Finance data.According to IMF predictions,the growth in emerging markets and developing economies is driven by large expansions in India followed by China(Figure 2).For advanced economies,growth is sluggish largely due to the faster-than-anticipated disinflation process.And despite the contractionary monetary policy,household consumption was strong and able to cope by drawing on income realized during periods of quantitative easing during the pandemic.The challenge ahead in 2024 and beyond for advanced economies is to navigate fiscal consolidation measures to restore sustainable public debt while maintaining economic growth.Advanced EconomiesEmerging Markets&Developing Economies1086420-2-4-6SpainNigeria202220232024STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|8Figure 3:MENA growth is growing in 2024 which is higher than global average Real GDP Growth(%)Real GDP Growth(%)3MENA Regional OutlookModest growth for the MENA region in 2024 at 2.7%,in line with GCC economies which are poised to rebound to 2.4%.According to the IMF,overall MENA regional growth is forecast at and still below the average of 4.2tween 2000-2019.20242.7 231.9%5.2 22fromaverage0.5 20-2021|In 2024,the growth rate in oil-exporting and importing MENA countries is behind 2022 levels.For oil exporters,growth is projected at 2.9%,up from 2%in 2023,yet almost half the growth achieved in 2022.For oil importers in the MENA region,countries are expected to register a moderate GDP growth of 2.4%in 2024,following a growth of 1.8%in 2023 and 4.5%in 2022.For the GCC,growth is projected at 2.4%in 2024,a significant improvement from the stagnant 0.4%in 2023,yet far behind the 7.0%registered in 2022.Moreover,the forecast for 2024 is still better than the 1.7%contraction between 2018 and 2019,but remains below the average of 4.2tween 2000 and 2019.According to IMF projections,the UAE,Oman,and Saudi Arabia are likely to dominate GCC growth in 2024.3.IMF Regional Economic Outlook April 2024;IMF World Economic Outlook April 2024.20226.54.52.11.82.92.420232024MENA OilExportersMENA OilImportersGlobal:3.5MENA Avg.:5.2GCC Avg.:7.0Global:3.2MENA Avg.:1.9GCC Avg.:0.4Global:3.2MENA Avg.:2.7GCC Avg.:2.4STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|9Figure 4:Still higher than breakeven oil prices provide buffer for GCC countries except for Bahrain,GCC Breakeven Oil Price(USD per Barrel)55.IMF Regional Economic Outlook April 2024.Oil OutlookDespite the decline in oil prices,projections for 2024 are above the breakeven point for most GCC economies.Crude oil prices have declined in 2023 from their nine-year peak in 2022,averaging$83 per barrel so far in 2024.On the supply side,OPEC announced production cuts of 2.2 million barrels a day(mb/d)in April 2023 and in the second quarter of 2024coupled with additional voluntary cuts of 1 mb/d and 0.471 mb/d from Saudi Arabia and Russia respectively.This was only partly offset by growth in oil output by non-OPEC countries,namely the United States,where production is expected to increase by 1.1 mb/d this year.On the demand side,OPEC projects global oil demand to grow by 2.2%,or 2.25 mb/d in 2024,as the world will need 30.2 million bpd in 2024 from its members to balance the market,which is up 0.8 mb/d from 2023.4 Goldman Sachs have projected a bullish$100 per barrel projection for 2024;however,other organizations such as Fitch and the EIA have anticipated oil prices to fall within the range of$75 to$94.91 per barrel for 2024.The oil price ranges predicted by Goldman Sachs,Fitch,and the EIA are still expected to surpass the fiscal breakeven oil prices for most GCC oil exporters,except for Bahrain(with a breakeven oil price higher than$125).160140120100806040200Goldman Sachs,Fitch&EIA Forecast for 2024$75-$100 Range.20232024BahrainOmanQatarSaudi ArabiaUAEKuwait4.OPEC Monthly Oil Report April 2024.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|10Saudi Arabia Growth OutlookEconomic growth in 2024 is making a big stride compared to 2023,driven by expansions in non-oil sectors.GDP GrowthAfter a stagnant 2023,the Saudi economy looks to muster a modest growth rate(2.6%)in 2024,albeit slower than its stellar performance(8.7%)in 2022 and behind its budget projections(4.4%)for the year.This can largely be attributed to the repercussions of geopolitical tensions and conflicts on economic activity,mainly in the trade sector following interruption of shipping routes along the Red Sea.Real GDP growth is estimated atlower thanand compared with growth of20230.03%8.7%3.1%Budget20232022The 2024 budget assumes real GDP growth of but over-optimistic relative to current growth prospects ofin line with estimates of October 2023estimates of April 20244.0%2.6%4.4 232024Oil GDP is forecast by the IMF at The contribution of the oil sector to Saudis economy is on a downward trend in 2023 and 2024,evidenced by a sharp and continued reduction in oil activities since 2022.Yet the decline in oil GDP in 2024 is expected to be less steep than in 2023,with the possibility of non-OPEC supply of oil falling short of expectations,triggering demand for Saudi output.On the other hand,the year-on-year growth of non-oil economic activity reflects a stable and persistent expansion.2024-2.4 23-9 22fromfrom1.2%5.6 20-20212020-2021Non-oil GDP is forecast by the IMF at 20243.9 233.8%5.3 22|STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|11Point-of-sale(POS)and e-commerce transactions,which serve as proxies for private consumption,show a continued appetite among consumers,with both indicators on an upward trend since 2017.This year has the potential of registering the largest e-commerce and POS transactions,with the value of sales in Q1 2024 dwarfing that recorded during the same period in 2021 by 200%.Given the contained inflation rates in 2023 and the projected slow inflation in 2024,it is likely that interest rates will not have a significant impact on credit-based consumer spending in 2024.The easing of inflation and the potential increase in public wages,as the government strives to maintain a high standard of living for Saudi residents,is expected to positively influence consumption patterns.Figure 6:POS transactions growth,Saudi Arabia Point of Sale Transactions Figure 7:E-commerce transactions growth,Saudi Arabia E-commerce Sales(Number of transactions)6(SAR,B)76.SAMA.Monthly statistical bulletin7.SAMA.Monthly statistical bulletin1.05.113.926.236.544.4Q1 2022Q1 2023Q1 2024Q1 2021Q1 2020Q1 2019Saudi Arabia Growth OutlookEconomic growth in 2024 is making a big stride compared to 2023,driven by expansions in non-oil sectors.TransportHealthRestaurants&CafesHotelsF&BClothing&FootwearRecreation&CultureMisc.Goods&ServicesElectronic&Related DevicesFurnitureConstruction&Building MaterialsJewelryTelecomEducationPublic UtilitiesOthers2,5002,0001,5001,0005000Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021Q1 2022Q1 2023Q1 2024STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|12Figure 8:Non-oil private sector expansion continues MENA PMI Index Figure 9:Saudi Arabia Industrial Production Index(Points)8(Points)108.Markit Economics.A reading above 50 indicating an overall increase compared to the previous month,and below 50 an overall decrease.10.GASTAT.Data on Saudi Purchasing Managers Index(PMI)and Industrial Production Index(IPI),two private investment indicators,reflect an optimistic investor sentiment and a reduction in oil production.The Purchasing Managers Index(PMI)in Saudi Arabia continues to remain above the 50-threshold,indicating a positive outlook for the expansion of non-oil private sector activity.Moreover,the PMI in Saudi is significantly higher than in Egypt and slightly higher than in UAE,suggesting an ongoing growth anchored by business-friendly policies outlined in Vision 2030.In March 2024,Saudi Arabias Industrial Production Index(IPI)experienced a year-on-year decline of 8.7%,reaching 104.48 from 114.47 in March 2023,based on the 2021 base year.This decline is largely driven by a reduction in mining and quarrying activity,which represents 61.4%of the indexs weight,following Saudis decision to slow oil production.9 Saudi Arabia Growth OutlookEconomic growth in 2024 is making a big stride compared to 2023,driven by expansions in non-oil sectors.7060504030201009.Arab News.March 2024.“Saudi industrial production rises 0.3%in January driven by mining activity.”20242024JanJanJanJanJanJanJanJanJanJanMarMarMarMarMarMarMarMarMarMarMayMayMayMayMayMayMayMayJulJulJulJulJulJulJulJulSepSepSepSepSepSepSepSepNovNovNovNovNovNovNovNov140120100806040200STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|13Figure 10:Private consumption&Exports of goods&services of GDP expanding,GDP by Expenditure at Constant Prices(SAR,M)1111.GASTAT.Consumption(Government&Private)As a testament to the growth of the private sector,private consumption registered a remarkable 46%year-on-year increase in 2023,reaching a record high over the past two decades.And due to the relatively low inflation level in 2024,private consumption is expected to remain on its upward trend.InvestmentThe PIF,NDF,and other government-led non-oil investments will continue to invest in fixed capital formation to create job opportunities.The launch of five new special economic zones with attractive regulations for investors has resulted in investments exceeding SAR 30 billion,while eight agreements have been signed with relevant government agencies to activate incentives.Moreover,a SAR 16.4 billion investment in the automotive industry system,the activation of the Investment Council,and the launch of the National Initiative for Global Supply Chains aim to strengthen the Kingdoms position as an investment hub and major center in supply chains.Exports&ImportsSaudi Arabia will experience continued export growth,driven by the steady increase in non-oil exports.Investments in infrastructure and diversification initiatives will translate to a demand for capital goods,raw resources,and machinery from other countries,maintaining the need for imports as a result.Saudi Arabia Growth OutlookGDP by Expenditure Component&Outlook86420200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023Govt.Final Consumption ExpenditurePrivate Final Consumption ExpenditureGross Fixed Capital FormationExports of Goods&ServicesImports of Goods&ServicesSTRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|14Saudi Arabia Monetary Policy OutlookInflation contained in the Kingdom According to the 2024 budget statement,the MoF forecasts inflation at202420232.2%2.6%frominFigure 11:Saudi inflation contained by several factors Inflation Rate(YoY%Change)1212.GASTAT.The Consumer Price Index(CPI)in the Kingdom rose by 1.6tween March 2024 and 2023.Housing rents soared by 10.5%,driven by a 9.7%surge in villa rents,vegetable prices increased by almost 7%,and restaurant and hotel prices increased by 2.4%.Meanwhile,CPI for recreation and culture and education remained relatively stable(around 1%increase),while prices for home furnishing equipment and transportation decreased by 3.2%and 1.8%respectively. 24JanJanJanJanJanJanMarMarMarMarMarMarMayMayMayMayMayJulJulJulJulJulSepSepSepSepSepNovNovNovNovNovSTRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|15Saudi Arabia Monetary Policy OutlookSaudi Inflation among lowest globally The Saudi Arabian Monetary Authority(SAMA),the central bank of Saudi Arabia,adjusts its policies in response to inflation fluctuations in coordination with the actions taken by the US Federal Reserve (Figure 12).This is because the Saudi riyal is pegged to the US dollar,and SAMA strives to maintain the exchange rate stability between the two currencies.Figure 12:SAMA still mirrors US Fed rate moves Figure 13:Saudi 2024 inflation among lowest globallySaudi Arabia Reverse Repo Rate&US Federal Funds Rate(%)13Global Inflation Rates,2024(%)1413.SAMA;US Federal Reserve.14.IMF World Economic Outlook April 2024The Kingdoms inflation rate in 2024 looks to remain the lowest among G20 members and among the lowest worldwide,enabling private consumption and tourism growth.JanJanJanJanJanJanMayMayMayMayMaySepSepSepSepSep2024USSaudi ArabiaSTRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|16Figure 14:The Kingdom faced a deficit:Surplus/Deficit Revenue&Expenditure (SAR,B)15 15.Ministry of Finance,Saudi Arabia.Saudi Arabia Fiscal&Public Debt OutlookDeficit in Saudi Arabias 2024 Budget not a concern as public debt remains sustainableThe fiscal deficit is projected at SAR 79 billion(almost 2%of GDP)in 2024,in line with that of 2023(SAR 82 billion;2%of GDP).During 2024 and the medium term,Saudi intends to run a deficit and direct spending to major development programs and non-oil projects that can drive sustainable economic growth.The priority is to improve the quality of public services and develop infrastructure across the Kingdom,as well as empower the private sector,stimulate the investment environment,and enhance social support,which will contribute towards improving the quality of life under Saudi Vision 2030.In 2024,projected public spending(SAR 1.25 trillion)is 25%higher than 2022 estimates and 12%higher than that of 2023.The wage bill makes up the largest expenditure line,in line with previous years,at SAR 544 billion(43%of total budget),followed by use of goods&services at SAR 277 billion(22%)and capital expenditures at SAR 189 billion(15%).A breakdown by sector also reveals an expenditure trend that is consistent with previous years.The military makes up the largest portion of expenditures at SAR 269 billion,followed by general items and health&social development at SAR 216 billion and SAR 214 billion respectively.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|17Saudi Arabia Fiscal&Public Debt OutlookDeficit in Saudi Arabias 2024 budget not a concern as public debt remains sustainableOn the revenue side,Saudi projects generating SAR 1.17 trillion in 2024,which is 4%larger than what it had estimated in the 2023 budget.Since the launch of Vision 2030,the annual contribution of non-oil income to total revenues has been on an upward trend,representing 37%in 2023(Figure 15).And during 2024,Saudi seeks to further accelerate the implementation of structural reforms that diversify income sources beyond oil to realize broader economic and social returns.For a closer budget analysis,Strategic Gears reviewed Saudi Arabias annual budget for 2024 here.Figure 15:Non-oil revenue is still growing in 2023;oil revenue decreasedSaudi Arabia Total Revenue Breakdown(%of Total)1616.Ministry of Finance,Saudi Arabia.Public debt at the end of 2023 stood at almost 25%of GDP and is forecasted at 26%of GDP for 2024,comfortably below the governments debt ceiling of 50%.According to the governments medium-term projections,public debt is also set to rise to 26.2%of GDP in 2025 and 26.9%of GDP in 2026.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|18The current account balance in Saudi Arabia is expected to continue its positive trend from 2023 into 2024,driven by a surplus in the balance of trade.Additionally,foreign direct investment(FDI)and tourism inflows are also expected to contribute to this trend,providing a cushion to the countrys economic stability.According to the IMF,the current account balance in Saudi Arabia rebounded from a deficit of 3.1%of GDP in 2020 to a surplus of 5.1%of GDP in 2021.This recovery followed the dual impact of COVID-19 and lower oil prices that year.The surplus has continued to increase,reaching an estimated 13.6%of GDP in 2022,driven by higher oil exports,and 6%in 2023.For 2024,the IMF forecasts it to reach 5.4%of GDP,a strong position yet lower than the average of 12%seen in the two decades leading up to 2020.Figure 16:Saudi current account balance remains positiveCurrent Account Balance(%of GDP)1717.SAMA;IMF.Saudi Arabia External Sector OutlookCurrent account balance is positive but below historical standards%STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|19Saudi Arabia External Sector OutlookCurrent account balance is positive but below historical standardsLooking at the composition of Saudi exports over the last decade,the countrys exports expanded beyond oil to include a diversified basket of non-oil commodities.The share of non-oil exports has been increasing considerably over the past decade,reflecting ongoing diversification efforts.Total non-oil exports in 2023 were valued at SAR 208 billion(17.4%of total exports)and SAR 266 billion(17.2%of total exports)in 2022,up from SAR 190 billion in 2012(13%of total exports).Figure 17:Saudi exports basket continues to diversifyOil&Non-Oil Share of Saudi Exports(%of Total)1818.GASTATSTRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|20Saudi Arabia External Sector OutlookFDI remains positive,hovering below its average of the past decade.Figure 18:FDI recovering,but still below peak levelsSaudi Arabia FDI Inflows(SAR,B)1919.Invest Saudi.Performance of Saudi Arabia in Key Economic and Investment IndicatorsFDI flows play a crucial role in supporting Saudi Arabias diversification goals and bolstering the countrys balance of payments.According to Invest Saudi,FDI inflows to Saudi Arabia saw a huge,yet short-lived,rebound in the year following the pandemic,reaching SAR 72.3 billion in 2021 from SAR 20.2 billion in 2020,only to decrease again to SAR 30 billion in 2022 and SAR 19 billion in 2023.FDI remains below its peak level of SAR 148.1 billion in 2008 and the average of SAR 43.5 billion over the previous 15 years.However,the number of investment licenses granted by the Ministry of Investment has increased by 96tween 2022 and 2023,reaching 8,540 licenses.The new National Investment Strategy aims to attract SAR 1.8 trillion in FDI inflows between 2021 and 2030,equivalent to SAR 200 billion a year,yet at the present rate this seems too ambitious.The position of Saudis foreign reserves looks reassuring for the dollar peg.The Saudi Central Bank(SAMA)reported that the peg is bolstered by substantial foreign exchange reserves,with the PIF managing assets worth SAR 3 trillion for sovereign wealth funds by the end of 2023.The exchange rate stability will continue to serve as a reliable pulse for prospective foreign investors,who have an important contribution to the Kingdoms financial account as the government attempts to liberalize the economy further.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|21Saudi Arabia Labour Market OutlookRecord low Saudi male&female unemployment Figure 19:Both Saudi male&female unemployment at a record low Unemployment Rate%(15 years old)2020.GASTATThe governments efforts to grow the non-oil sector and address labor market disparities are evident in the quarterly data,showing improvements in overall unemployment rates and participation of Saudi women in the workforce.Assuming that momentum from 2023 carries over,it is expected that employment growth will persist in 2024,with the private sector playing a significant role in generating job opportunities.Saudi Arabias Vision 2030 aims to cut unemployment from 11.6%in 2015 to 7%by 2030.According to the General Authority for Statistics(GASTAT)estimates,the overall unemployment rate(Saudis and non-Saudis)fell to 4.4%in Q4 2023 compared with 4.8%in the same period of the previous year,which indicates a great momentum of employment in the Kingdom.During this period,the unemployment rate for Saudi nationals fell to 7.7%in Q4 2023 compared with 8%in the same period in 2022,and the lowest rate since GASTAT began reporting quarterly statistics in Q2 2016.This was driven by a decline in both Saudi male and female unemployment rates to 4.6%and 13.7%respectively in Q4 2023 compared with 4.2%and 15.4%in the same period of 2022,and also represent the lowest rates since GASTAT began reporting quarterly statistics in Q2 2016(Figure 19).STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|22Saudi Arabia Labour Market OutlookFemale participation rate in labor market is still exceeding visions 2030 targets.Figure 20:Saudi female labor force participation doubles and exceeds Vision 2030s targetsSaudi Female Labour Market Statistics(%)2121.GASTAT.The implementation of women empowerment and inclusive workforce reforms in Saudi Arabia has had a positive impact on womens employment since 2020.These reforms,including protecting pregnant women from dismissal,combating harassment,and providing financial benefits,created a suitable workforce environment for women to enter.In the fourth quarter of 2022,the employment rate for women reached its highest point at 84.6%,with an average rate of 79.2%from 2020 to the fourth quarter of 2023(Figure 20).According to labor market data,as of Q4 2023,63.5%of employed Saudi women were working in the private sector.Of those,15.2%were employed in the wholesale and retail sector,while 9%were employed in the construction industry,and 10%were employed in the social work sector.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|23Saudi Arabia Labour Market OutlookEmerging labor market challengesThe labor market shows positive signs,and the government remains committed to addressing structural imbalances and emerging challenges.While the employment rates among eligible Saudi workers have increased,the number of foreign employees still exceeds them by approximately 203%in the third quarter of 2023,with non-Saudi employees constituting 75%of the total workforce.The heavy reliance on foreign labor,particularly in the private sector,poses economic threats to the Saudi economy,in terms of skewing demographics and increasing remittance outflow.Foreign workers outnumber Saudi nationals in the workforce22The rise in competition between the private and public sectors presents both opportunities and challenges.On the positive side,this competition can contribute to reducing unemployment rates by broadening the workforce and result in competitive salaries for employees.However,this intensified competition for talent has broader implications in the long run,such as labor costs that the private sector could find difficult to sustain,high turnover rates and challenging ability to retain talent,which can hinder continuity for public administrations.The shortage of specialized talent in Saudi Arabia,particularly in technological sectors,is evident.The distribution of graduates from Saudi universities indicates that 65%of graduates specialize in humanitarian studies,while only 17%pursue degrees in engineering and medical areas.This imbalance contributes to the scarcity of skilled professionals in crucial sectors,threatening development,service delivery,and dependency on foreign labor.25Competition between the Private&Public Sector23Gap in local specialized talent2422.Gastat.23.Ministry of Finance,Saudi Arabia.24.Localized.March 2024.“Retaining Young Saudi Talent in the Private Sector”25.Gastat.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|24Saudi Arabia is developing specialized economic cities,such as NEOM,Qiddiya,and the Red Sea Project,to create thriving business hubs and drive economic growth.These cities offer a range of incentives,including tax exemptions,streamlined regulations,and world-class infrastructure,to attract both local and international businesses.In addition,the recent launch of five new special economic zones with investor-friendly regulations has already resulted in SAR 30 billion worth of investments according to the 2024 budget report.Saudi Arabia has launched initiatives to support startups and foster innovation.The Social Development Banks(SDB),which provides financing for freelancers and family businesses,has reached its financing of SAR 3.7 billion for the financial year 2023.In 2024 and the medium term,the SDB has increased its financing target to SAR 4.4 billion to further facilitate business practices by supporting the culture of entrepreneurship.Development of Economic Cities26Entrepreneurship and Innovation27Saudi Arabia Business Environment The reform momentum is accelerating developmentSaudi Arabia is making big strides in diversifying its economy and fostering a more conducive business climate.Through a series of strategic investments and reforms,the Kingdom is attracting foreign investment,empowering local businesses,and creating a vibrant entrepreneurial ecosystem.These initiatives aim to boost economic growth,reduce dependence on oil,and create new opportunities for investors.26.Ministry of Finance,Saudi Arabia.27.Ministry of Finance,Saudi Arabia.The Kingdom has improved regulations to ease the process of doing business.Achievements like the establishment of commercial courts,digitization of government services,and implementation of bankruptcy law have created a more transparent and conducive business environment.These reforms have not only simplified procedures for local businesses but also instilled confidence in international investors,also with the launch of the visiting investor business visa.Regulatory ReformsSTRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|25Saudi Arabia aims to improve its ranking in the United Nations E-Government Development Index to 26 from its current position of 31st by the end of 2024.28 In parallel,Saudi improved its ranking in the Government AI Readiness scoreboard for 2023,placing it second behind UAE for the most prepared governments in the MENA and 29th worldwide.29On December 5,2023,Saudi Arabias Ministry of Investment,along with the Ministry of Finance and the Zakat,Tax,and Customs Authority,made a significant update to the RHQ Program.The announcement included the introduction of a 30-year tax incentive package for multinational companies engaged in RHQ activities in Saudi Arabia.Better E-Government and AI Readiness RankingSaudi Arabias Regional Headquarters(RHQ)Program30Saudi Arabia Business Environment The reform momentum is accelerating development28.The index measures the state of e-government of UN member states relative to each other across online service delivery,telecommunication connectivity,and human capacity.29.Government AI Readiness Index 2023.30.SPA.”30-Year Tax Relief Added to Incentives for the Saudi Program for Attracting Regional Headquarters of Multinational Companies”STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|26Within the framework of the Saudi Green Initiative,NEOM presents an attractive prospect for companies specializing in solar and wind technology.The city is striving for 100%renewable energy with the NEOM Green Hydrogen Project boasting an impressive total investment value of$8.4 billion.This project aims to lead and expedite the adoption of green hydrogen,aiming to produce 600 tons per day of carbon-free hydrogen by its completion at the end of 2026.31Moreover,the Kingdom has announced ambitious plans to launch renewable energy projects totaling 20 gigawatts by end of 2024,a substantial increase from the production of 2.8 gigawatts in December 2023.This commitment to renewable energy underscores Saudi Arabias dedication to sustainable development,offering opportunities for companies in the renewable energy sector.32Saudi Arabia has set its sights on developing national competencies in the data and Artificial Intelligence field.The expansion in the Communications and Information Technology Market by 6%in 2023 is set to create 25,000 jobs in the digital economy.Moreover,the Saudi Authority for Data and Artificial Intelligence Academy has been established to qualify 10,000 specialists and experts in data science and artificial intelligence by 2025.The hospitality sector in Saudi Arabia presents a promising investment opportunity with the anticipation of hosting Expo 2030 and the FIFA World Cup 2034.As part of Vision 2030,the kingdom has set a SAR 289 billion target for total tourism spending by the end of this decade.Saudi also aims to improve in airport capacity,road infrastructure,and public services to accommodate a growing number of visitors by 2030,which is currently forecasted at 150 million.33Green Economy and renewable energy Information Technology,Data,and Artificial Intelligence34 Tourism&Hospitality Services Things to Watch in 2024In 2024,Saudi Arabia has set a goal to activate 23 logistics centers out of the total 59 logistics centers targeted to be operational by 2030.This initiative aims to facilitate trade and transportation operations,improve logistics infrastructure,and consolidate the countrys position as a trading hub.Transportation and Logistics Services3531.NEOM.May 2023.“NEOM green hydrogen investment”32.Ministry of Finance,Saudi Arabia.33.Arabian Gulf Business Insight.February 2024.“Saudi Arabia hits tourism target seven years early.”34.Ministry of Finance,Saudi Arabia.35.Ministry of Finance,Saudi Arabia.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|27Saudi Arabia is investing in its education sector by integrating digital transformation,with a focus on developing a digital strategy to provide electronic services to students among others.This may involve introducing electronic equivalency of certificates for students studying abroad,making the process more efficient.Saudi also aims to increase the employment rate of technical and vocational education Saudi graduates to 41%in 2024 by aligning the skill gap between the workforce and employers with education outcomes.Saudi Arabia is focusing on enhancing the quality of healthcare coverage.The country is investing in telemedicine and specialized clinics to provide advanced medical care to the population.As a step towards improving accessibility to healthcare services for individuals living in remote or underserved areas,additional hospitals with a total capacity of 1,100 beds will be built by the end of 2024.Education36Healthcare Services37Things to Watch in 202436.Ministry of Finance,Saudi Arabia.37.Ministry of Finance,Saudi Arabia.STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|28Macroeconomic Dashboard 20202021202220232024f(MoF)2024f(IMF)Real GDP Growth(%)-4.1 3.2 8.7 0.034.42.6Oil GDP(%)-6.6 0.2 13.1-5.4-2.4Non-Oil GDP(%)-2.5 4.9 4.2 4.9 3.9 CPI Inflation(%)*3.4 3.1 2.6 2.6 2.22.3 Fiscal Balance(%of GDP)*-11.2-2.3 2.5-2.0-1.9 Current Acc.Balance(%of GDP)-3.2 5.3 13.6 5.9 5.40.5 Total Government Gross Debt(%of GDP)*32.5 30.0 23.8 24.825.927.5 External Debt (%of GDP)32.431.723.924.825.5 Reserves(Months of Next Years Imports)25.621.120.017.816.2 Exchange Rate(SAR/USD)3.75 3.75 3.75 3.75 3.75STRATEGIC GEARS|Saudi Arabia Economic Outlook 2024|
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ANNUAL REPORT James Gwartney,Robert Lawson,and Ryan Murphywith Matanda Abubaker,Andrea Celico,Alexander C.R.Hammond,Fred McMahon,and Martin Rode MOST FREE2ND QUARTILE3RD QUARTILELEAST FREEEconomic Freedom of the World2023Economic Freedom of the World2023 Annual Report James Gwartney Robert Lawson Ryan Murphy Florida State University Southern Methodist University Southern Methodist Universitywith Matanda Abubaker Andrea Celico Alexander C.R.Hammond Uganda Judiciary Universidad de Navarra Initiative for African Trade and Prosperity Islamic University in Uganda Institute of Economic Affairs Fred McMahon Martin Rode Fraser Institute Universidad de Navarra2023Fraser Institute 2023 fraserinstitute.org/economic-freedomCopyright 2023 by the Fraser Institute.All rights reserved.No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.The authors of this book have worked independently and opinions expressed by them are,therefore,their own and do not necessarily reflect the opinions of the supporters,directors,or staff of the Fraser Institute.This publication in no way implies that the Fraser Institute,its directors,or staff are in favor of,or oppose the passage of,any bill;or that they support or oppose any particular political party or candidate.Published in cooperation with the Economic Freedom Network.Cover design:Joel Poirier,Peng Wei,and Heather Jalbout.Printed and bound in Canada.Data available to researchers The full data set,including all of the data published in this report as well as data omitted because of limited space,can be downloaded for free at.The data file available there contains the most up-to-date and accurate data for the Economic Freedom of the World index.Some variable names and data sources have evolved over the years since the first publication in 1996;users should consult earlier editions of Economic Freedom of the World for details about sources and descriptions for those years.All editions of the report are available in PDF and can be down-loaded for free from.However,users are always strongly encouraged to use the data from this most recent data file as updates and corrections,even to earlier years data,do occur.Users doing long-term or longitudinal stud-ies are encouraged to use the EFW Panel Dataset as it is the most consistent through time.Technical help If you have difficulty downloading the data,please contact Matthew Mitchell via e-mail to.If you have technical questions about the data itself,please contact Ryan Murphy or Robert Lawson.Citing the data Please cite the data in your bibliography as:Robert Lawson and Ryan Murphy(2023).Economic Freedom Dataset,published in Economic Freedom of the World:2023 Annual Report.Fraser Institute.Citing this publication James Gwartney,Robert Lawson,and Ryan Murphy(2023).Eco-nomic Freedom of the World:2023 Annual Report.Fraser Institute.Published work using ratings from Economic Freedom of the World A list of published papers that have used the economic-freedom ratings from Economic Freedom of the World is avail-able on line at.In most cases,a brief abstract of the article is provided.If you know of other papers current or forthcoming that should be included on this page,or have further information about any of these papers or authors,please write to.Cataloguing InformationGwartney,James D./Economic freedom of the world annual report/James D.Gwartney.Annual.Description based on:19972023 issue by James Gwartney,Robert Lawson,and Ryan Murphy;with Matanda Abubaker,Andrea Celico,Alexander C.R.Hammond,Fred McMahon,and Martin Rode.Issued also on line.ISSN 1482-471X;ISBN 978-0-88975-743-1(2023 edition);978-0-88975-744-8(2023 US edition).1.Economic history-1990-Periodicals.2.Economic indicators-Periodicals.I.Fraser Institute(Vancouver,B.C.)II.Titlefraserinstitute.org/economic-freedom Fraser Institute 2023 Table of Contents Executive Summary/v Chapter 1 Economic Freedom of the World in 2021/1 Chapter 2 Country Data Tables/23 Chapter 3 Populism,Majority Rule,and Economic Freedom/189Andrea Celico and Martin Rode Chapter 4 The Rule of Law and Economic Freedom:Two Sides of the Same Coin for Purchasing Economic Prosperity /207Matanda Abubaker Chapter 5 Diamonds,Dynasties,or Decent Decisions?The Origin of Botswanas Liberal Policies and their Contemporary Unravelling /221Alexander C.R.Hammond Appendix Explanatory Notes and Data Sources/249About the Authors/263About the Contributors/264Acknowledgments/266The Economic Freedom Network/267Economic Freedom of the World:2023 Annual Report vfraserinstitute.org/economic-freedom Fraser Institute 2023 Executive SummaryThe index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic free-dom.The cornerstones of economic freedom are personal choice,voluntary exchange,freedom to enter markets and compete,and security of the person and privately-owned property.Forty-five data points are used to construct a sum-mary index,along with a Gender Legal Rights Adjustment to measure the extent to which women have the same level of economic freedom as men.The degree of economic freedom is measured in five broad areas.Area 1:Size of GovernmentAs government spending,taxation,and the size of government-controlled enter-prises increase,government decision-making takes the place of individual choice and economic freedom is reduced.Area 2:Legal System and Property RightsProtection of persons and their rightfully acquired property is a central element of both economic freedom and civil society.Indeed,it is the most important func-tion of government.If property is not secure,if individuals are not safe,if the judi-ciary is not impartial,or if the rule of law is undermined,then,again,economic freedom is reduced.Area 3:Sound MoneyInflation erodes the value of rightfully earned income and savings,and changes the terms of agreed-upon contracts.Sound money is thus essential to protect property rights.When inflation is high or volatile,it becomes difficult for indi-viduals to plan for the future and limits their economic freedom.Area 4:Freedom to Trade InternationallyFreedom to exchangein its broadest sense,buying,selling,making contracts,and so onis the essence of economic freedom.And this freedom is reduced when government impediments to trade make it costly or even impossible to exchange with businesses and individuals in other nations.Area 5:RegulationGovernments not only use a number of tools to limit the right to exchange inter-nationally,they may also impose onerous regulations,domestically as well as on international trade,that limit the right to exchange,gain credit,hire or work for whomever one wishes,or freely operate ones business.As these limits multiply,economic freedom decreases.vi Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomGender Legal Rights AdjustmentThe index published in Economic Freedom of the World now includes an adjust-ment for gender disparity to take into account the fact that in many nations women are not legally accorded the same level of economic freedom as men.The Gender Disparity Index and its use in making the adjustment is described in Chapter3:Adjusting for Gender Disparity in Economic Freedom and Why It Matters,pp.189211 in the report of 2017.1JurisdictionsThe total number of jurisdictions in the index is 165.The data are available annu-ally from 2000 to 2021 and for years ending in zero or five back to 1970.This dataset makes it possible for scholars to analyze the impact of both cross-coun-try differences in economic freedom and changes in that freedom across a time frame of several decades.Separate estimates are also provided at five-year inter-vals back to 1950 on the economic freedom website.2Related researchSince our first publication in 1996,over 700 studies have used the data pub-lished in Economic Freedom of the World to examine the impact of economic freedom on human well-being.3 The strong balance of the evidence suggests that those who live in jurisdictions with greater economic freedom experi-ence higher levels of well-being as measured by factors such as greater produc-tivity,more rapid economic growth,higher income levels,less poverty,less corruption,and fewer conflicts.Changes to the Index Two important sources of data for the EFWthe World Banks annual Doing Business report and the World Economic Forums annual Global Competitiveness Reporthave not been published in the last three years.While there is some hope that both sources will return in some capacity,the situation remains uncertain and the timing unknown.So,rather than use increasingly dated data we have begun to incorporate alternative sources of data from the Economist Intelligence Units(EIU)Business Environment Rankings into the EFW.For the most part,we have been able to integrate the new EIU data easily into the existing structure of the EFW index.A few of the EIU indicators,however,do not have natural places within the existing EFW index structure.As a result,we have had to make a few adjustments to the component and subcomponent structure.These changes mean that this edition of the EFW contains 45 distinct components or subcomponents instead of the 42 used earlier.We have also taken this opportunity to revise and shorten several area,com-ponent,and subcomponent labels.All of these changes are documented in the Appendix:Explanatory Notes and Data Sources(pp.249262).1 2 A comprehensive data set is available at.3 For a review of these studies,see the chapter,Economic Freedom in the Literature:What Is It Good(Bad)For?(Robert Lawson,Economic Freedom of the World:2022 Annual Report:187200;.Economic Freedom of the World:2023 Annual Report viifraserinstitute.org/economic-freedom Fraser Institute 2023Economic freedom around the world in 2021Top-rated countriesThe most recent comprehensive data available are from 2021.For the first time in the history of the index,Hong Kong slipped from its top position.The Chinese government imposed new and significant barriers to entry,limits on the employment of foreign labor,and increases in the costs of doing business,which drove a 0.25-point decline in Hong Kongs Area 5(regulation)compo-nent.Meanwhile,increased military interference in the rule of law and eroding confidence in judicial independence and the impartiality of Hong Kong courts led to a 0.20-point decline in the jurisdictions Area 2(legal system and property rights)component.As Hong Kong declined,Singapores scores improved.Driven by improve-ments in its size of government and regulation components,Singapores overall score rose 0.06 points to take the top ranking.The next highest scoring nations are Switzerland,New Zealand,United States,Ireland,Denmark,Australia,United Kingdom,and Canada.Rankings of other major countries Taiwan(11th),Japan(20th),Germany(23rd),Korea(42nd),France(47th),Italy(53rd),Mexico(68th),India(87th),Russia(104th),Brazil(90th),and China(111th).Ten lowest-rated countriesRepublic of Congo,Algeria,Argentina,Libya,Iran,Yemen,Sudan,Syria,Zimbabwe,and,lastly,Venezuela.Well-being is much greater in economically free jurisdictions Nations in the top quartile of economic freedom had an average per-capita GDP of$48,569 in 2021,compared to$6,324 for nations in the bottom quartile(PPP constant 2017,international$)(exhibit 1.5).In the top quartile,the average income of the poorest 10%was$14,091,compared to$1,740 in the bottom quartile(PPP constant 2017,inter-national$)(exhibit 1.7).Interestingly,the average income of the poorest 10%in the most economically free nations is more than twice the average income of all people in the least free nations(exhibits 1.5 and 1.7).In the top quartile,2.02%of the population experience extreme poverty(US$1.90 a day)compared to 31.45%in the lowest quartile(exhibit 1.10).Life expectancy is 80.8 years in the top quartile compared to 65.0 years in the bottom quartile(exhibit 1.8).In the top quartile,the infant mortality rate is 4.2 per 1,000 live births while in the bottom quartile,it is 39.1 per 1,000 live births(exhibit 1.9).In the top quartile,0.98%of the population experience extreme poverty(US$2.15 a day)compared to 31.86%in the lowest quartile(exhibit 1.10).viii Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomA decade of growth in economic freedom was erased in 2020Exhibit 1.4 shows the global average economic freedom score for all 123 juris-diction with complete data since 2000.Between 2000 and 2019,the average economic freedom rating increased from 6.58 to 6.94 but in 2020 the average rating fell to 6.77,where it remained in 2021.The last time the average economic freedom rating was this low was 2009.Chapters in the reportChapter 1:Economic Freedom of the World in 2021The authors of the report,James Gwartney,Robert Lawson,and Ryan Murphy,provide an overview of the report and discuss why economic freedom is important.Chapter 2:Country Data TablesThe tables in chapter 2 provide detailed historical information for the 165 jurisdic-tions in the index.For each jurisdiction for which data were available,the tables show the overall EFW index rating and the rank of that country for the years 1980,1990,2000,2010,2015,2019,2020,and 2021.Chapter 3:Populism,Majority Rule,and Economic FreedomAndrea Celico and Martin RodeIn this chapter,Andrea Celico and Martin Rode of the Universidad de Navarra investigate the relationship between populism and economic freedom.They also consider the potentially mediating roles of institutional constraints and govern-ment ideology.Controlling for other determinants,they find that populism in 6.56.66.76.86.97.02021202020192018201720162015201420132012201120102009200820072006200520042003200220012000Exhibit 1.4:Average Economic Freedom Rating,200020216.586.596.626.686.666.746.746.766.796.796.826.826.866.876.886.916.776.776.946.916.936.73Average rating on EFW indexEconomic Freedom of the World:2023 Annual Report ixfraserinstitute.org/economic-freedom Fraser Institute 2023government is significantly associated with reductions in economic freedom for a large sample of democratic countries.They also find that in OECD countries,the negative association between populism and economic freedom seems to be mediated to a substantial degree by political constraints and political ideology.It is possible that institutional guardrails,which are often absent in many non-OECD countries,check the power of populist governments.Chapter 4:The Rule of Law and Economic Freedom:Two Sides of the Same Coin for Purchasing Economic ProsperityMatanda AbubakerIn this chapter,the Ugandan judge and law lecturer,Matanda Abubaker,discusses the relationship between economic freedom and the rule of law.He explores what is meant by the rule of law and he concludes that causality runs in both directions:while there cannot be economic freedom without the rule of law,economic free-dom also enhances the rule of law.He also argues that when one of the two is threatened,the other is also threatened.Chapter 5:Diamonds,Dynasties,or Decent Decisions?The Origin of Botswanas Liberal Policies and their Contemporary UnravellingAlexander C.R.HammondIn this chapter,Alexander Hammond of the Institute of Economic Affairs explores Botswanas unique economic history.In a continent dogged by stagnant growth,Botswana prospers.For the last half century,the economy of this sparsely popu-lated nation in southern Africa has grown faster than that of almost any other in the world.While economists generally agree that Botswana owes its relative prosperity to its long-standing commitment to decent levels of economic free-dom,there is less agreement about what has permitted Botswana to maintain this commitment.Here,Hammond attributes the nations freedom to good decision-making,political and socio-economic stability,and certain internal and external constraints on policy makers decisions.Alarmingly,however,he concludes that some of these factors may be waning.Fraser Institute 2023 fraserinstitute.org/economic-freedomfraserinstitute.org/economic-freedom Fraser Institute 2023 Chapter 1 Economic Freedom of the World in 2021Economic Freedom of the World is is an ongoing research project.As Milton Friedman stated in his foreword to the initial report,Economic Freedom of the World:19751995(Gwartney,Lawson,and Block,1996),additional work would be necessary to“bring the indexes of economic freedom up to date and to incor-porate the additional understanding that will be generated”.This has never been more true than this year as we have begun to integrate a number of new indicators to compensate for the cancelation or delay of some of our key data sources.We have also made a few structural changes to the index itself by incorporating new components and subcomponents within the traditional five areas.We urge users of the EFW index to use the data only from the most recent report because of data updates and changes to the reports methodology over time.All the ratings for all countries and years for which we have ratings are avail-able in the datafile corresponding to each new report.What is economic freedom?Economic freedom is based on the concept of self-ownership.Because of this self-ownership,individuals have a right to chooseto decide how to use their time and talents to shape their lives.On the other hand,they do not have a right to the time,talents,and resources of others.Thus,they have no right to take things from others or demand that others provide things for them.The cornerstones of economic freedom are personal choice,voluntary exchange,open markets,and clearly defined and enforced property rights.Individuals are economically free when they are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others.When individuals possess economic freedom they are able to decide what,when,and how goods and services will be produced,exchanged,and consumed.Put another way,economically free individuals are permitted to decide for them-selves rather than having options imposed on them by the political process or by the use of violence,theft,or fraud by others.The EFW index is designed to measure the degree to which the institutions and policies of countries are consistent with economic freedom.In order to achieve a high EFW rating,a countrys government must do some things,but refrain from others.Governments enhance economic freedom when they provide an infrastructure for voluntary exchange,and protect individuals and their prop-erty from aggressors who might use violence,coercion,or fraud to seize things that do not belong to them.To this end,the legal system is particularly impor-tant.A countrys legal institutions must protect the person and property of all 2 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomindividuals from the aggressive acts of others and enforce contracts in an even-handed manner.Governments must also permit access to a sound money that results in macro economic price stability and predictability.Governments must also refrain from actions that restrict personal choice,interfere with voluntary exchange,and limit entry into markets.Economic freedom is reduced when taxes,government expenditures,and regulations override personal choice,voluntary exchange,and market coordination.The EFW measure might be thought of as a measure of the degree to which scarce resources are allocated by personal choices coordinated by markets rather than by centralized planning directed by the political process.It might also be thought of as an effort to identify how closely the institutions and policies of a country correspond with the classical liberal ideal of a limited government,where the government protects property rights and arranges for the provision of a limited set of“public goods”such as national defense and access to money of sound value,but little beyond these core functions.To a large degree,a countrys EFW sum-mary rating is a measure of how closely its institutions and policies compare with the idealized structure implied by standard textbook analysis of microeconomics.The Economic Freedom of the World indexan overview The EFW index provides a comprehensive measure of the degree to which a juris-dictions institutions and policies are consistent with economic freedom.It is an outgrowth of a series of six conferences hosted by Milton and Rose Friedman and Michael Walker from 1986 to 1994,which resulted in three books(Walker,1988;Block,1991;Easton and Walker,1992)documenting the discussion and various prototype indexes that culminated with the initial publication,Economic Freedom of the World:19751995.In addition to the Friedmans,several of the worlds leading economists including Douglass North,Gary Becker,Peter Bauer,William Niskanen,and Gordon Tullock participated in the discussions leading to the EFW index.The index is published by a network of institutes spearheaded by the Fraser Institute in Canada.Members of the network and other interested parties meet annually to review the structure of the index and consider ideas for its improvement.The construction of the EFW index is based on three important methodologi-cal principles.First,objective sources of data are preferred to those that involve surveys or value judgments.With that said,given the multidimensional nature of economic freedom and the importance of legal and regulatory elements,it is sometimes necessary to use data based on surveys,expert panels,and generic case studies.To the fullest extent possible,however,the index uses objective sources of data.Second,the data used to construct the index ratings are from external sources such as the International Monetary Fund,World Bank,and World Economic Forum that provide data for a large number of jurisdictions.Data provided directly from a source within a country are rarely used.Importantly,the value judgments of the authors or others in the Economic Freedom Network are never used to alter the raw data or the rating of any country.Third,we strive for transparency throughout.The report provides information about the data sources,the methodology used to transform raw data into the ratings of the com-ponents and subcomponents and how these ratings are used to construct both the Chapter 1:Economic Freedom of the World in 2021 3fraserinstitute.org/economic-freedom Fraser Institute 2023area and summary ratings.Methodological details can be found in the Appendix:Explanatory Notes and Data Sources of this report(pp.249262).The entire data set used in the construction of the index is freely available to researchers at.The EFW index rates 165 jurisdictions.The data are available annually from 2000 to 2021 and for years ending in zero or five back to 1970.This dataset makes it possible for scholars to analyze the impact of both cross-country differences in economic freedom and changes in that freedom across several decades.The EFW measure is a valuable tool for scholars seeking to examine the contribution of economic institutions more thoroughly and to disentangle their influence from political,climatic,locational,cultural,and historical factors as determinants of growth and development.Structure of the EFW indexExhibit 1.1 indicates the structure of the EFW index.The index measures the degree of economic freedom present in five major areas:1 Size of Government,2 Legal System and Property Rights,3 Sound Money 4 Freedom to Trade Internationally,and 5 Regulation.Within the five major areas,there are a total of 25 components in the index.Many of the components are themselves made up of several subcomponents(which in turn may be based on several more underlying sources of data).In total,the index incorporates 45 distinct components and or subcomponents of data.Each component and subcomponent is placed on a scale from 0 to 10 that reflects the distribution of the underlying data.When subcomponents are present,they are averaged to derive the component rating.The component ratings within each area are then averaged to derive ratings for each of the five areas.In turn,the five area ratings are averaged to derive the summary rating for each country.Area 1.Size of Government focuses on how government expenditures and tax rates affect economic freedom.Taken together,the five components of Area 1 measure the degree to which a country relies on personal choice and markets rather than government budgets and political decision-making.Countries with lower levels of government spending,lower marginal tax rates,less government investment,and state ownership of assets earn the highest ratings in this area.Area 2.Legal System and Property Rights focuses on the importance of the legal sys-tem as a determinant of economic freedom.Protection of persons and their right-fully acquired property is a central element of economic freedom.Many would argue that it is the most important function of government.The key ingredients of a legal system consistent with economic freedom are rule of law,security of property rights,an independent and unbiased judiciary,and impartial and effec-tive enforcement of the law.The eight components of Area 2 are indicators of how effectively the protective functions of government are performed.The rating for Area 2 is adjusted based on a gender-disparity index that reflects cross-country differences in legal rights based on gender.Area 3.Sound Money focuses on the importance of money and general price sta-bility in the exchange process.Sound moneymoney with relatively stable pur-chasing power across timereduces transaction costs and facilitates exchange,4 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.1:Areas,Components,and Subcomponents of the EFW Index 1.Size of Government A.Government consumption B.Transfers and subsidies C.Government investment D.Top marginal tax rate(i)Top marginal income tax rate(ii)Top marginal income and payroll tax rates E.State ownership of assets 2.Legal System and Property Rights A.Judicial independence B.Impartial courts C.Property rights D.Military interference E.Integrity of the legal system F.Contracts G.Real property H.Police and crime Note:Area 2 ratings are calculated with adjustments for inequalities in the legal treatment of women using a Gender Disparity Index produced by Rosemarie Fike.The adjusted Area 2 rating is used to compute the summary rating.3.Sound Money A.Money growth B.Standard deviation of inflation C.Inflation:most recent year D.Foreign currency bank accounts 4.Freedom to Trade Internationally A.Tariffs(i)Trade tax revenue(ii)Mean tariff rate(iii)Standard deviation of tariff rates B.Regulatory trade barriers(i)Non-tariff trade barriers(ii)Costs of importing and exporting C.Black-market exchange rates D.Controls of the movement of capital and people(i)Financial openness(ii)Capital controls(iii)Freedom of foreigners to visit(iv)Protection of foreign assets 5.Regulation A.Credit market regulation(i)Ownership of banks(ii)Private sector credit(iii)Interest rate controls/negative real interest rates B.Labor market regulation(i)Labor regulations and minimum wage(ii)Hiring and firing regulations(iii)Flexible wage determination(iv)Hours regulations(v)Costs of worker dismissal(vi)Conscription(vii)Foreign labor C.Business regulation(i)Regulatory burden(ii)Bureaucracy costs(iii)Impartial public administration(iv)Tax compliance D Freedom to compete(i)Market openness(ii)Business permits(iii)Distortion of business environmentChapter 1:Economic Freedom of the World in 2021 5fraserinstitute.org/economic-freedom Fraser Institute 2023thereby promoting economic freedom.The four components of this area pro-vide a measure of the extent to which people in different countries have access to sound money.In order to earn a high rating in Area 3,a country must follow policies and adopt institutions that lead to low(and stable)rates of inflation and avoid regulations that limit the ability to use alternative currencies.Area 4.Freedom to Trade Internationally focuses on exchange across national bound-aries.In our modern world,freedom to trade with people in other countries is an important ingredient of economic freedom.When governments impose restric-tions that reduce the ability of their residents to engage in voluntary exchange with people in other countries,economic freedom is diminished.The compo-nents in Area 4 are designed to measure a wide variety of trade restrictions:tariffs,quotas,hidden administrative restraints,and controls on exchange rates and the movement of capital.In order to get a high rating in this area,a country must have low tariffs,easy clearance and efficient administration of customs,a freely convertible currency,and few controls on the movement of physical and human capital.Area 5.Regulation measures how regulations that restrict entry into markets and interfere with the freedom to engage in voluntary exchange reduce economic freedom.The components of Area 5 focus on regulatory restraints that limit the freedom of exchange in credit,labor,and product markets.Key changes and issues in the EFW index in the 2023 Annual ReportThe last few years have been a huge challenge for the EFW index as two of our most important data sources became unavailable.The World Banks Doing Business report was abruptly canceled,and data from the World Economic Forums Global Competitiveness Report have not been published in the last three years.These two sources had been used in whole,or in part,in 17 of the 42(40%)components or subcomponents in the EFW index.In the last three reports,we continued to use the latest available data.While there is some hope that both sources will return in some capacity,the situation remains uncertain and the timing unknown.Over the last couple of years as we cast about for solutions to these difficul-ties,we turned to the Economist Intelligence Units(EIU)Business Environment Rankings.We had looked at their numbers previously and generally judged them to be high quality,but their main dataset covered only about 80 countries,far short of the 165 that we require.We contacted them last year to ask if they could rate all 165 jurisdictions.Ultimately,we were able to contract with the EIU to get the numbers we wanted for all of our countries for the years since 2017.For the most part,we have been able to integrate the new EIU data easily into the existing structure of the EFW index.A few of the EIU indicators do not have natural places within the existing EFW index structure,and as a result,we have had to make a few adjustments to the component and subcomponent struc-ture.There are a few components and subcomponents that remain wholly reliant on the Doing Business or Global Competitiveness Report data that have not been updated here.We hope to deal with these in the next year or two.These compo-nents are the following:4Bii(Costs of importing and exporting),5Biii(Flexible wage determination,5Biv(Hours regulations),5Bv(Cost of worker dismissal),and 5Ci(Regulatory burden).6 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomHere is a brief description of the changes to the structure of the index by area related to the EIU data integrationArea 1.Size of Government:This area is unchanged.Area 2.Legal System and Property Rights:The component structure is unchanged,but EIU data were integrated into components 2B,2C,2F,and 2H.Area 3.Sound Money:This area is unchanged.Area 4.Freedom to Trade Internationally:The component structure is unchanged.EIU data were integrated into subcomponents 4Bi,4Di,and 4Div.4Div is a new subcomponent within component 4D related to the protection of foreign assets and investments.Area 5.Regulation:We now have four components in Area 5 instead of the previ-ous three.Components 5A and 5B and 5C have the same titles.Several subcom-ponents in the old 5C have been moved to form part of the new component 5D,which is labelled“Freedom to compete”.The appropriate EIU data were inte-grated into subcomponents 5Bi,5Bii,5Bvii,5Civ,5Di,and 5Diii.5Bvii is a new subcomponent about the ease of hiring foreign labor.Subcomponent 5Diii is new and is labelled“Distortion of the business environment”;it relies on EIU data on“price controls”and“state control”of private businesses.Here is a list of the EFW components and subcomponents into which the new EIU variables are being integrated:EFW EIU variable 2B Transparency and fairness of legal system2C Degree to which private property rights are guaranteed and protected2F Efficiency of legal system2H Impact of crime4Bii Tariff and non-tariff barriers4Di Capital account liberalisation4Div Risk of expropriation of foreign assets5Bi Wage regulation5Bii Restrictiveness of labour laws5Bvii Hiring of foreign nationals5Ci Level of government regulation and impact on private business5Ciii Government favouritism5Civ Tax complexity5Di Freedom of existing businesses to compete5Diii Price controls&State control We understand that big changes to the index structure like this can pose difficulties for our users,but at some point we had to deal with the loss of the data from Doing Business and the Global Competitiveness Report.It is important to note that every effort has been made to make the data consistent on a time-series basis.For example,Chapter 1:Economic Freedom of the World in 2021 7fraserinstitute.org/economic-freedom Fraser Institute 2023when a component or subcomponent is based on several underlying sources of data(for example,both old Global Competitiveness Report data and new EIU data),we are employing our familiar chain-linking method to assure the best possible consis-tency within that component or subcomponent over time.And of course,we will continue to provide the full chain-linked panel data set of area and summary ratings.We have also taken this opportunity to revise and shorten several area,com-ponent,and subcomponent labels.All of these changes are documented in the Appendix:Explanatory Notes and Data Sources(pp.249262).Construction of Area and Summary ratings Theory provides us with some direction about elements that should be included in the five areas and the summary index,but it does not indicate what weights should be attached to the components within the areas or among the areas in the construc-tion of the summary index.It would be convenient if these factors were indepen-dent and a weight could be attached to each of them.In the past,we investigated several methods of weighting the various components,including principal compo-nent analysis and a survey of economists.We have also invited others to use their own weighting structure if they believe that it is preferable.Our experience indi-cates that the summary index is not very sensitive to alternative weighting methods.Furthermore,there is reason to question whether the areas(and components)are independent of one another,or if instead,they work together like the wheels,motor,transmission,drive shaft,and frame of a car.Just as these interconnected parts allow an automobile to move forward,it may be that a combination of inter-related factors allows people to enjoy economic freedom.Which is more important for the mobility of an automobile:the motor,wheels,or transmission?The ques-tion cannot be easily answered because the parts work together.If any of these key parts break down,the car is immobile.Institutional quality may be much the same.If any of the key parts are absent,the overall effectiveness may be undermined.As the result of these two considerations,we organize the elements of the index in a manner that seems sensible,but we make no attempt to weight the compo-nents in any special way when deriving either area or summary ratings.Of course,the component and subcomponent data are available to researchers who would like to consider alternative weighting schemes and we encourage them to do so.Summary Economic Freedom ratings in 2021 Exhibits 1.2a and 1.2b(pp.89)present the summary economic freedom ratings,sorted from highest to lowest,for the 165 jurisdictions of this years report.These ratings are for 2021,the most recent year for which comprehensive data are avail-able.Hong Kong and Singapore,as usual,occupy the top two positionsbut for the first time in the history of the EFW index,Singapore edges out Hong Kong for the#1 ranking.1 The next highest scoring nations are Switzerland,New Zealand,United States,Ireland,Denmark,Australia,United Kingdom,and Canada.1 It is worth noting that this exchange of positions is not an artifact of the integration of the EIU data and/or changes to the EFW index structure in this years report;Hong Kong would have dropped to 2nd position even had we made no changes to the EFW index methodology in this years report.8 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.2a:Summary Economic Freedom Ratings for 2021,First and Second Quartiles0246810spareSlovak Republic 41Guatemala 40Panama 39Spain 37Peru 37Portugal 36Israel 34Cyprus 34Armenia 33Montenegro 32Albania 31Chile 30Norway 29Austria 28Romania 27Latvia 25Georgia 25Malta 23Germany 23Netherlands 21Costa Rica 21Japan 20Sweden 17Finland 17Czechia 17Mauritius 15Luxembourg 15Iceland 14Lithuania 12Estonia 12Taiwan 11Canada 10United Kingdom 9Australia 8Denmark 7Ireland 6United States 5New Zealand 4Switzerland 3Hong Kong SAR,China 2Singapore 18.568.558.478.438.148.118.108.058.017.987.977.957.957.937.917.827.817.817.817.797.767.767.737.737.717.717.707.697.677.667.607.597.587.577.577.547.527.527.517.507.490246810spareBosnia and Herzegovina 82Nigeria 81Rwanda 80Kenya 78Cambodia 78Botswana 77Serbia 76Kyrgyz Republic 75Indonesia 74Greece 72Barbados 72Honduras 71Philippines 70Paraguay 68Mexico 68Mongolia 67Uruguay 65North Macedonia 65Thailand 64Gambia,The 62El Salvador 62Seychelles 59Poland 59Brunei Darussalam 59Kazakhstan 58Moldova 57Malaysia 56Slovenia 55Italy 53Croatia 53Jordan 51Dominican Republic 51United Arab Emirates 50Hungary 49Cabo Verde 48France 47Belgium 46Bahrain 45Jamaica 43Bulgaria 43Korea,Republic 427.477.467.467.447.437.407.387.367.357.307.307.257.257.237.197.187.137.127.127.127.117.117.077.067.067.047.027.027.016.976.946.946.936.886.856.846.826.826.776.676.66Chapter 1:Economic Freedom of the World in 2021 9fraserinstitute.org/economic-freedom Fraser Institute 20230246810sparePakistan 123Azerbaijan 122Tunisia 121Mozambique 120Cte dIvoire 119Papua New Guinea 118Bolivia 117Sri Lanka 116Burkina Faso 115Haiti 114Namibia 113Ukraine 112China 111Senegal 110Belarus 109Togo 107Lao PDR 107Vietnam 106Tanzania 105Russian Federation 104Nepal 103Trkiye 101Fiji 101Tajikistan 100Ghana 98Benin 98Morocco 97Ecuador 96Nicaragua 95South Africa 94Bahamas,The 93Qatar 90Oman 90Brazil 90Colombia 89India 87Bhutan 87Trinidad and Tobago 85Kuwait 85Uganda 83Saudi Arabia 836.646.646.636.636.626.626.606.586.586.586.556.536.526.466.426.416.416.386.326.326.306.286.276.266.246.246.236.206.186.176.166.156.146.136.086.056.046.036.025.995.98Exhibit 1.2b:Summary Economic Freedom Ratings for 2021,Third and Fourth Quartiles0246810Venezuela,Bolivarian Rep.165Zimbabwe 164Syrian Arab Republic 163Sudan 162Yemen,Republic 161Iran,Islamic Republic 160Libya 160Argentina 158Algeria 157Congo,Republic 156Central African Republic 155Lebanon 154Chad 153Myanmar 150Eswatini 150Congo,Dem.Republic 150Angola 149Burundi 148Gabon 147Guyana 146Ethiopia 145Egypt,Arab Republic 144Iraq 143Suriname 142Guinea-Bissau 141Guinea 140Comoros 139Somalia 138Cameroon 137Mauritania 136Djibouti 135Niger 133Mali 133Bangladesh 132Timor-Leste 130Liberia 130Zambia 129Malawi 128Sierra Leone 126Belize 126Madagascar 125Lesotho 1245.955.925.915.915.875.845.825.825.815.805.805.795.785.725.665.635.625.535.525.495.475.445.435.415.405.385.335.335.335.315.155.014.854.824.774.654.534.183.983.903.813.0110 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomThe rankings of some other major countries are Taiwan(11th),Japan(20th),Germany(23rd),Korea(42nd),France(47th),Italy(53rd),Mexico(68th),India(87th),Brazil(90th),Russia(104th),and China(111th).The 10 lowest-rated coun-tries are:Republic of Congo,Algeria,Argentina,Libya,Iran,Yemen,Sudan,Syria,Zimbabwe,and Venezuela.As noted above,Hong Kong had been at the top of the EFW index for all years for which we had datathat is until this report when Singapore achieved a slightly higher rating by just 0.01 points for 2021.In previous annual reports,we sounded the alarm bell about signs of declining economicand otherfreedoms in Hong Kong.In particular,we highlighted the new security law imposed in 2021 by the Chinese government with potential sentences of life imprisonment and the accompanying arrests in its aftermath.Hong Kongs rating has now fallen 0.64 points since its peak rating of 9.19 in 2010.In just the last two years,Hong Kongs rating has fallen by a whopping 0.40 points.How much of that decline is related to Chinas economic and political crackdown in Hong Kong and how much is related to the coronavirus pandemic is difficult to discern,but we do note that the decline in Hong Kongs rating in recent years has been much larger than the worlds average decline.It seems reasonable to assume that much of this decline is related to Chinas new harsh policies in Hong Kong and is not entirely the fault of pandemic policies.Ratings and rankings in 2021 for the five Areas of the index Exhibit 1.3(pp.1115)presents the ratings(and rankings)for each of the five areas of the index.A number of interesting patterns emerge from an analysis of these data.High-income industrial economies generally rank quite high for Legal System and Property Rights(Area 2),Sound Money(Area 3),and Freedom to Trade Internationally(Area 4).Their ratings were lower,however,for Size of Government(Area 1)and Regulation(Area 5).This was particularly true for the high-income countries of Western Europe.On the other hand,a number of developing nations have a small fiscal size of government but rate low in other areas,and as a result,have a low overall rating.The lesson from this is clear:a small fiscal size of government is insufficient to ensure economic freedom.The institutions of economic freedom,such as the rule of law and property rights,as well as sound money,trade openness,and sensible regulation are also required.As the area ratings show,weakness in the rule of law and property rights is par-ticularly pronounced in Sub-Saharan Africa,among Islamic nations,and for some nations that were formerly part of the Soviet bloc,though several countries in the latter group have made impressive strides toward improvement.Many nations in Latin America and Southeast Asia also score poorly for rule of law and property rights.The nations that rank poorly in this category also tend to score poorly in the trade and regulation areas,even though several have reasonably sized govern-ments and sound money.Chapter 1:Economic Freedom of the World in 2021 11fraserinstitute.org/economic-freedom Fraser Institute 2023Note:ratings are shown rounded to the nearest tenth of a point,but the rankings are based on the unrounded ratings.Exhibit 1.3:Area Economic Freedom Ratings(Rankings)for 2021Area 1Size of GovernmentArea 2 Legal System and Property RightsArea 3 Sound MoneyArea 4 Freedom to trade internationallyArea 5 RegulationRating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Albania7.73(26)5.28(70)9.59(9)8.43(15)6.97(51)Algeria4.45(163)3.82(128)7.08(126)3.92(159)4.84(150)Angola7.71(28)3.18(146)5.79(156)5.52(139)4.73(153)Argentina6.21(103)4.98(83)4.04(161)3.32(163)5.30(143)Armenia7.76(25)5.92(52)9.12(53)8.15(39)6.94(52)Australia5.92(122)8.61(9)9.53(18)8.07(46)8.12(10)Austria4.95(150)8.55(10)9.12(52)8.55(12)7.28(38)Azerbaijan4.60(161)4.81(91)6.92(133)7.18(72)6.44(86)Bahamas,The8.52(8)5.63(63)6.65(144)5.07(151)6.88(54)Bahrain7.08(56)5.18(76)9.39(30)8.19(35)7.38(32)Bangladesh8.32(11)2.70(152)6.92(134)5.45(143)5.67(129)Barbados7.31(46)5.78(58)8.38(88)6.17(115)7.05(47)Belarus6.25(101)4.27(118)8.92(72)6.20(113)5.51(137)Belgium4.51(162)7.69(20)9.10(57)8.16(38)7.70(22)Belize6.20(104)3.89(126)6.85(137)5.94(125)6.69(75)Benin7.99(20)4.43(112)7.15(122)5.71(133)6.79(64)Bhutan5.85(128)6.84(33)6.40(149)6.83(83)7.18(41)Bolivia5.94(120)3.95(125)9.55(14)6.14(118)4.81(151)Bosnia&Herzegovina6.76(72)4.52(106)8.21(92)7.06(74)6.77(68)Botswana6.38(95)5.91(53)9.28(38)6.56(95)6.05(108)Brazil6.55(81)5.19(75)8.87(74)6.73(87)5.59(133)Brunei Darussalam6.67(76)5.13(78)8.82(78)7.31(66)7.66(26)Bulgaria6.79(70)5.81(56)9.40(28)8.30(23)7.02(49)Burkina Faso7.23(50)3.79(129)6.67(142)6.20(112)6.81(62)Burundi6.71(74)3.52(136)8.06(99)3.22(164)5.51(138)Cabo Verde7.16(52)6.39(43)9.64(6)6.96(77)6.74(71)Cambodia8.85(3)3.78(130)9.13(51)6.70(88)5.66(130)Cameroon7.23(51)2.74(151)7.16(120)5.42(144)6.03(110)Canada6.28(99)8.30(13)9.18(47)8.14(40)7.99(11)Central African Rep.6.35(97)2.17(162)6.60(146)5.06(153)4.88(149)Chad7.35(45)2.45(157)6.97(130)5.14(150)4.63(155)Chile7.47(37)6.86(31)9.27(40)7.99(53)6.73(73)China5.08(147)4.77(92)8.49(86)6.96(76)5.62(131)12 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.3(continued):Area Economic Freedom Ratings(Rankings)for 2021Note:ratings are shown rounded to the nearest tenth of a point,but the rankings are based on the unrounded ratings.Area 1Size of GovernmentArea 2 Legal System and Property RightsArea 3 Sound MoneyArea 4 Freedom to trade internationallyArea 5 RegulationRating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Colombia6.93(64)4.91(85)8.14(97)6.50(99)6.54(83)Comoros6.42(91)3.09(148)6.74(138)5.80(128)6.10(104)Congo,Dem.Republic7.57(35)2.51(156)6.03(154)5.51(140)5.02(146)Congo,Republic5.83(129)2.80(150)5.31(157)5.78(129)4.53(158)Costa Rica7.42(40)6.64(40)9.70(5)8.30(24)6.73(72)Cte dIvoire6.61(78)4.59(103)6.94(132)5.64(136)6.41(89)Croatia5.53(133)6.04(50)9.52(19)8.32(22)6.83(58)Cyprus6.68(75)6.73(38)9.00(68)8.17(36)7.29(37)Czech Republic6.19(105)7.34(26)9.42(26)8.73(4)7.37(33)Denmark5.18(143)9.08(2)9.63(7)8.25(31)8.39(4)Djibouti5.51(134)3.59(133)7.26(115)5.76(131)6.83(59)Dominican Republic8.75(5)5.10(80)9.10(56)7.54(60)6.00(113)Ecuador7.00(60)4.66(97)8.56(85)6.11(120)5.96(117)Egypt,Arab Republic5.30(140)3.41(139)8.42(87)5.50(142)4.73(154)El Salvador8.52(7)3.95(124)9.27(39)8.00(50)5.80(124)Estonia6.42(92)7.95(16)8.91(73)8.28(29)8.18(8)Eswatini5.17(145)3.11(147)7.78(108)5.07(152)5.52(136)Ethiopia6.86(67)4.41(113)6.32(151)3.55(160)6.05(109)Fiji6.76(71)4.59(102)7.11(125)5.39(145)7.74(20)Finland4.90(153)8.90(5)9.10(55)7.99(51)8.18(7)France4.88(155)7.48(22)9.11(54)8.26(30)7.28(39)Gabon6.52(84)3.20(145)6.10(153)5.86(127)5.37(140)Gambia,The8.05(18)4.63(100)9.19(46)6.62(91)7.05(46)Georgia7.40(41)6.33(45)8.74(81)8.67(7)7.40(31)Germany5.66(131)8.15(14)9.07(62)8.04(47)7.73(21)Ghana8.29(12)5.21(73)6.29(152)6.16(116)6.11(102)Greece4.79(158)6.13(48)9.06(65)8.38(17)6.32(93)Guatemala9.04(1)4.49(109)9.44(23)7.84(54)6.70(74)Guinea6.16(106)3.31(142)7.00(129)5.76(130)5.89(120)Guinea-Bissau7.45(38)2.66(153)6.87(136)5.69(134)4.96(147)Guyana3.86(164)4.70(95)6.73(139)6.04(123)5.83(122)Haiti8.20(15)2.06(164)7.16(119)7.30(68)6.02(111)Honduras8.87(2)3.86(127)9.26(41)6.55(96)6.31(95)Chapter 1:Economic Freedom of the World in 2021 13fraserinstitute.org/economic-freedom Fraser Institute 2023Exhibit 1.3(continued):Area Economic Freedom Ratings(Rankings)for 2021Note:ratings are shown rounded to the nearest tenth of a point,but the rankings are based on the unrounded ratings.Area 1Size of GovernmentArea 2 Legal System and Property RightsArea 3 Sound MoneyArea 4 Freedom to trade internationallyArea 5 RegulationRating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Hong Kong SAR,China7.92(21)7.58(21)9.57(12)9.04(1)8.64(3)Hungary5.96(118)6.40(42)9.25(43)8.56(11)6.63(78)Iceland5.98(117)8.77(6)9.42(27)8.38(18)7.12(43)India7.64(30)5.29(69)7.99(103)6.19(114)5.98(116)Indonesia8.13(17)4.58(105)9.54(16)6.49(100)5.91(119)Iran,Islamic Republic6.59(79)3.26(144)5.90(155)2.39(165)4.49(159)Iraq4.93(152)2.29(160)7.53(110)6.84(82)5.87(121)Ireland6.40(93)7.88(17)9.22(44)8.86(3)8.20(6)Israel6.05(111)6.21(46)9.58(11)8.67(6)7.33(34)Italy5.43(136)6.52(41)9.09(59)8.29(26)6.89(53)Jamaica7.92(22)5.63(64)9.03(66)7.19(71)7.54(28)Japan5.62(132)7.70(19)9.79(3)8.03(48)7.82(15)Jordan7.44(39)4.36(116)9.83(2)7.31(67)7.55(27)Kazakhstan7.64(31)5.49(65)9.15(49)6.57(94)6.77(66)Kenya7.06(57)4.67(96)9.31(35)6.22(110)6.83(60)Korea,Rep.6.29(98)6.86(32)9.54(15)7.37(63)7.30(36)Kuwait5.92(124)5.12(79)8.20(93)7.38(62)6.54(82)Kyrgyz Republic7.38(42)4.61(101)8.29(91)7.33(65)6.77(69)Lao PDR6.94(62)4.39(114)7.52(111)6.76(84)5.62(132)Latvia6.01(115)7.17(28)8.97(71)8.66(8)7.75(18)Lebanon8.47(9)3.43(138)4.97(158)3.53(161)5.32(142)Lesotho5.21(142)4.63(98)7.84(107)6.25(106)5.83(123)Liberia6.01(114)3.71(131)9.07(61)5.72(132)4.59(156)Libya3.73(165)2.51(155)7.14(124)5.54(138)4.31(160)Lithuania6.94(63)7.40(24)8.97(70)8.64(9)7.80(16)Luxembourg5.39(139)8.64(7)9.07(60)8.29(27)8.14(9)Madagascar7.36(44)2.65(154)7.93(106)6.23(109)5.45(139)Malawi6.51(86)4.63(99)7.38(112)4.91(155)5.92(118)Malaysia7.27(47)5.70(61)8.16(96)7.26(69)7.54(29)Mali6.47(87)3.40(140)6.92(135)6.21(111)6.00(114)Malta6.46(88)6.78(36)9.30(36)8.34(19)7.78(17)Mauritania5.42(138)3.27(143)7.96(105)6.16(117)6.09(106)Mauritius7.71(27)7.06(29)9.35(34)8.13(41)6.84(57)14 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.3(continued):Area Economic Freedom Ratings(Rankings)for 2021Note:ratings are shown rounded to the nearest tenth of a point,but the rankings are based on the unrounded ratings.Area 1Size of GovernmentArea 2 Legal System and Property RightsArea 3 Sound MoneyArea 4 Freedom to trade internationallyArea 5 RegulationRating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Mexico8.15(16)4.46(111)8.04(100)8.13(42)6.33(92)Moldova7.84(24)5.96(51)8.03(101)7.63(57)6.42(88)Mongolia6.55(82)6.05(49)8.74(80)7.09(73)6.76(70)Montenegro6.44(89)5.64(62)9.61(8)8.32(20)7.93(13)Morocco6.56(80)5.25(71)7.21(118)6.58(93)6.51(85)Mozambique6.89(66)4.49(107)6.50(148)6.46(102)5.79(125)Myanmar6.43(90)3.02(149)6.66(143)5.34(148)5.19(144)Namibia7.13(53)5.73(60)6.70(141)5.68(135)5.54(135)Nepal7.63(32)4.90(86)6.63(145)5.37(147)6.97(50)Netherlands4.90(154)8.64(8)9.10(58)8.48(14)7.67(25)New Zealand6.15(108)9.09(1)9.42(25)8.53(13)8.95(1)Nicaragua6.15(107)3.49(137)9.59(10)7.35(64)6.02(112)Niger6.52(85)3.56(134)7.16(121)5.62(137)6.14(101)Nigeria8.72(6)3.55(135)8.81(79)5.51(141)6.77(67)North Macedonia6.93(65)4.74(94)8.19(94)7.72(56)7.69(24)Norway4.97(149)9.00(3)8.83(77)8.24(33)7.32(35)Oman5.01(148)5.36(68)8.69(82)7.55(59)6.27(97)Pakistan8.24(14)3.63(132)6.37(150)5.91(126)5.76(127)Panama7.61(33)5.79(57)9.36(33)8.24(32)6.55(81)Papua New Guinea6.04(112)4.36(115)6.71(140)6.74(86)6.40(90)Paraguay8.00(19)4.35(117)9.25(42)6.94(79)6.57(80)Peru7.61(34)5.23(72)9.44(24)8.17(37)7.15(42)Philippines7.91(23)4.49(108)9.51(20)6.53(97)6.62(79)Poland5.76(130)6.38(44)8.09(98)8.30(25)7.09(44)Portugal6.04(113)7.38(25)9.17(48)8.23(34)6.87(55)Qatar5.94(121)5.39(67)8.32(90)6.99(75)6.27(98)Romania6.95(61)6.78(35)9.30(37)8.43(16)7.03(48)Russian Federation5.92(123)4.91(84)8.66(83)6.33(105)5.58(134)Rwanda4.93(151)5.88(54)9.21(45)6.95(78)6.85(56)Saudi Arabia4.81(157)6.70(39)8.86(76)6.64(90)6.21(99)Senegal7.05(58)4.16(121)7.14(123)6.60(92)6.05(107)Serbia5.87(126)5.44(66)8.02(102)8.10(43)6.83(61)Seychelles6.38(96)6.14(47)8.56(84)7.74(55)6.78(65)Chapter 1:Economic Freedom of the World in 2021 15fraserinstitute.org/economic-freedom Fraser Institute 2023Exhibit 1.3(continued):Area Economic Freedom Ratings(Rankings)for 2021Note:ratings are shown rounded to the nearest tenth of a point,but the rankings are based on the unrounded ratings.Area 1Size of GovernmentArea 2 Legal System and Property RightsArea 3 Sound MoneyArea 4 Freedom to trade internationallyArea 5 RegulationRating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Sierra Leone7.10(55)4.48(110)7.21(117)6.00(124)4.76(152)Singapore7.26(49)8.43(11)9.45(22)8.94(2)8.74(2)Slovak Republic6.22(102)6.74(37)9.14(50)8.29(28)7.09(45)Slovenia4.81(156)6.84(34)9.38(32)8.32(21)6.81(63)Somalia8.84(4)1.88(165)7.29(114)6.12(119)4.20(161)South Africa5.95(119)5.76(59)8.16(95)6.43(103)6.35(91)Spain5.88(125)7.42(23)9.06(63)7.99(52)7.27(40)Sri Lanka8.28(13)4.84(87)6.57(147)4.88(156)6.09(105)Sudan7.37(43)2.06(163)1.25(163)5.20(149)4.02(162)Suriname6.27(100)4.27(119)4.29(160)6.48(101)6.28(96)Sweden4.73(159)8.34(12)9.54(17)8.59(10)7.83(14)Switzerland7.51(36)8.96(4)9.85(1)8.09(44)7.97(12)Syrian Arab Republic5.48(135)2.30(159)4.81(159)3.45(162)3.47(163)Taiwan7.69(29)7.30(27)9.56(13)7.62(58)7.69(23)Tajikistan5.86(127)4.01(123)9.06(64)6.76(85)6.21(100)Tanzania5.98(116)5.07(81)8.38(89)5.39(146)6.53(84)Thailand6.86(68)5.20(74)9.76(4)6.90(80)6.63(77)Timor-Leste5.43(137)4.07(122)7.22(116)7.23(70)5.15(145)Togo6.76(73)4.83(88)7.07(127)6.10(121)6.43(87)Trinidad and Tobago6.83(69)5.05(82)9.01(67)6.25(107)6.00(115)Tunisia5.17(144)4.82(90)7.99(104)6.34(104)5.77(126)Trkiye6.65(77)4.83(89)7.54(109)6.87(81)5.71(128)Uganda7.02(59)4.25(120)9.40(29)6.23(108)6.32(94)Ukraine7.26(48)4.58(104)6.96(131)6.67(89)5.36(141)United Arab Emirates5.28(141)7.03(30)8.99(69)8.01(49)7.47(30)United Kingdom6.10(110)7.99(15)9.49(21)8.71(5)7.75(19)United States7.13(54)7.86(18)9.38(31)8.07(45)8.29(5)Uruguay6.39(94)5.87(55)8.86(75)7.50(61)6.66(76)Venezuela,RB4.65(160)2.29(161)0.94(165)4.99(154)2.17(165)Vietnam6.53(83)5.15(77)7.02(128)6.52(98)6.10(103)Yemen,Republic8.35(10)2.36(158)2.48(162)4.65(158)3.08(164)Zambia6.13(109)4.77(93)7.33(113)6.07(122)4.89(148)Zimbabwe5.08(146)3.40(141)1.25(163)4.81(157)4.54(157)16 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomThe EFW Panel Dataset Over the years,the EFW index has become more comprehensive and the available data more complete.As a result,the number and composition of the components and subcomponents for many countries vary across time.This makes it difficult to directly compare index values from earlier periods with those of later periods.To assist researchers who are interested in a consistent time-series for a particu-lar country and/or longitudinal data for a panel of countries,we have developed the EFW Panel Dataset.The EFW Panel Dataset is a chain-linked version of the index.It uses the most recent year as the base year,and changes in a countrys scores backward in time are based only on changes in components that were present in adjoining years.The table below demonstrates the procedure using some illustrative numbers.In the years from 2018 to 2021,Variables 1 and 2 are simply averaged to create a rating.The problem comes in the period from 2012 to 2017 when Variable 2 is not available.If we took only the usual raw average of Variable 1(since there is no Variable 2),the average would artificially fall by 0.5 points.The chain-linked ver-sion,though,would base the rating only on the changes in Variable 1,and since there was no change to Variable 1 in 2017 compared with 2018,the chain-linked rating would not change from 2018 to 2017.This process is then continued to get chain-linked ratings backward in time.It should be noted that the EFW Panel Dataset contains area and summary ratings only for those years in which the country received a regular EFW index rating.Because some data for earlier years may have been updated or corrected,researchers are always encouraged to use the data from the most recent annual report to ensure the most reliable figures.Exhibit 1.4 presents the global average for all nations with complete data since 2000 using the EFW Panel Dataset.Overall,the index shows increases in eco-nomic freedom since 2000,but the last few years have been rocky.Thanks no doubt to the coronavirus pandemic,the world average has fallen to 6.77 from 6.94 since 2019a 0.17 point decline.This erases a decades worth of improvement in the global average and is 2.5 times larger than the global decline witnessed in the 2008/09 financial crisis.YearVariable 1Variable 2Raw AverageChain-Linked20216.08.07.07.020206.08.07.07.020195.07.06.06.020185.06.05.55.520175.05.05.520165.05.05.520154.04.04.420144.04.04.420133.03.03.320123.03.03.3Chapter 1:Economic Freedom of the World in 2021 17fraserinstitute.org/economic-freedom Fraser Institute 2023We take no position on the efficacy of the various public-health policies designed to deal with the coronavirus pandemic;they very well may have saved millions of lives,or they may have been completely ineffectual.That is a ques-tion for epidemiologists and health economists to work out.Our concern is eco-nomic freedom,and on that margin,there is no question that government policies responding to the coronavirus pandemic have reduced economic freedom.Economic freedom and human progressAs is customary,this chapter concludes with some simple graphs illustrating relationships between economic freedom and various other indicators of human progress(Exhibits 1.51.12).The graphs use the average of the EFW panel dataset for the period from 2000 to 2021,breaking the data into four quartiles ordered from least free to most free.Because persistence is important and the impact of economic freedom will be felt over a lengthy period of time,it is better to use the average rating over a fairly long time period rather than the current rating to observe the impact of economic freedom on performance.The graphs begin with the data on the relationship between economic freedom and the level of GDP per capita and then go on to examine the correlation with other economic and social outcomes.Many of the relationships illustrated in the graphs below reflect the impact of economic freedom as it works through increas-ing per capita income.We are not necessarily arguing that there is a direct causal relation between economic freedom and the variables considered below.These graphics nonetheless provide some insights into the contrast between market-oriented economies and those dominated by government regulation and planning.At the very least,these graphs suggest fruitful areas for future research.6.56.66.76.86.97.02021202020192018201720162015201420132012201120102009200820072006200520042003200220012000Exhibit 1.4:Average Economic Freedom Rating,200020216.586.596.626.686.666.746.746.766.796.796.826.826.866.876.886.916.776.776.946.916.936.73Average rating on EFW index18 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.5:Economic Freedom and Income per Capita012,00024,00036,00048,000Most FreeSecondThirdLeast FreeCountries with greater economic freedom have substantially higher per-capita incomes.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.$6,324$12,080$25,901GDP per capita(constant 2017 PPP$)Economic Freedom Quartile$48,569Exhibit 1.6:Economic Freedom and the Income Share of the Poorest 10%0.00.51.01.52.02.53.0Most FreeSecondThirdLeast FreeThe share of income earned by the poorest 10%of the population is unrelated to economic freedom.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.2.74%2.12%2.34%Income share of the poorest 10onomic Freedom Quartile2.84%Chapter 1:Economic Freedom of the World in 2021 19fraserinstitute.org/economic-freedom Fraser Institute 2023Exhibit 1.7:Economic Freedom and the Income Earned by the Poorest 10,0006,0009,00012,00015,000Most FreeSecondThirdLeast FreeThe amount of income,as opposed to the share,earned by the poorest 10%of the population is much higher in countries with higher economic freedom.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.$1,736$2,641$5,654Annual income per capita of poorest 10%(constant 2017 PPP$)Economic Freedom Quartile$14,204Exhibit 1.8:Economic Freedom and Life Expectancy0102030405060708090Most FreeSecondThirdLeast FreeLife expectancy is almost 16 years longer in countries with the most economic freedom than it is in countries with the least.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.65.070.076.4Life expectancy at birth,total(years)Economic Freedom Quartile80.820 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomExhibit 1.9:Economic Freedom and Infant Mortality Rate0816243240Most FreeSecondThirdLeast FreeThe infant mortality rate is almost ten times higher in nations in the lowest quartile of economic freedom than it is in nations in the highest quartile.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.39.121.28.7Mortality rate,infants(per 1,000 live birthsEconomic Freedom Quartile4.2Exhibit 1.10:The Efect of Economic Freedom on Poverty Rates 020406080100Most FreeSecondThirdLeast FreePoverty rates are lower in countries with more economic freedom.Note:The columns show,for each quartile,the percentage of a countrys population that lives on$2.15 per day,$3.65 per day,or$6.85 per day,in 2017 constant PPP-adjusted dollars.Sources:Economic Freedom of the World:2023 Annual Report;World Bank,2023,World Development Indicators on-line database.Poverty rate(%of population)Economic Freedom Quartile31.86Q.86s.59!.73.30b.66%3.08%8.11 .58%0.98%2.13%5.53%$2.15$3.65$6.85$2.15$3.65$6.85$2.15$3.65$6.85$2.15$3.65$6.85Chapter 1:Economic Freedom of the World in 2021 21fraserinstitute.org/economic-freedom Fraser Institute 2023Exhibit 1.12:Economic Freedom and the UN World Happiness Index0246810Most FreeSecondThirdLeast FreePeople report that they are happier in countries with greater economic freedom.Sources:Economic Freedom of the World:2023 Annual Report;United Nations,World Happiness Report 2023.4.614.526.09UN World Happiness IndexEconomic Freedom Quartile6.76Exhibit 1.11:Economic Freedom and Social Progress020406080100Most FreeSecondThirdLeast FreeEconomic freedom corresponds with higher social progress,as measured by the Social Progress Index.Sources:Economic Freedom of the World:2023 Annual Report;Social Progress Imperative,2022,2022 Social Progress Index.54.164.675.0Rating on Social Progress IndexEconomic Freedom Quartile85.622 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomReferencesBlock,Walter E.,ed.(1991).Economic Freedom:Toward a Theory of Measurement.Proceedings of an International Symposium(Volume 2).Fraser Institute.,as of July 6,2022.Easton,Stephen T.,and Michael A.Walker,eds.(1992).Rating Global Economic Freedom.Fraser Institute.,as of July 6,2022.Gwartney,James,Robert Lawson,and Walter Block(1996).Economic Freedom of the World:19751995.Fraser Institute.,as of July 6,2021.Walker,Michael A.,ed.(1988).Freedom,Democracy,and Economic Welfare.Proceedings of an International Symposium(Volume 1).Fraser Institute.,as of July 6,2022.fraserinstitute.org/economic-freedom Fraser Institute 2023 Chapter 2 Country Data TablesThis chapter presents detailed data on the compo nents used in constructing the EFW index for the 165 jurisdictions included in this edition of the report.For each jurisdiction for which data were available,we present the overall EFW index rat-ing and the rank of that country for the years 1980,1990,2000,2010,2015,2019,2020,and 2021.Like all the ratings in the index,these are values out of 10;10 is the highest possible rating and zero(0)is the lowest.A higher rating indicates a greater degree of economic freedom.Ratings are available for many jurisdic-tions for 1970,1975,1985,1995,and 2000 to 2018,but these data are not shown in the tables because of limited space.See for full data.Reading the tablesThe top row shows the countrys summary rating for each year and,in parentheses,its overall rank.In the rows below,titles on the left in bold face indicate the five areas of economic freedom that are combined to generate an overall score.The cells to their right give the rating for that area for each year.Underneath each area title are the titles of the components and sub-components that are combined to generate that areas score.In these rows,the scores for each year are presented,where data are available.Shown in italic beside some scores are the actual data used to derive that particular component rating.For some countries,data for other components for certain years may be reported even though there were insufficient data to compute area or summary ratings.A more complete description of each component,including the methodology used to calculate the ratings,can be found in the Appendix:Explanatory Notes and Data Sources(pp.249262).Gender Disparity IndexThe row in the tables titled“Gender Legal Rights Adjustment”is a composite index that employs 17 variables to measure legal discrimination against women and is used to adjust the ratings of Area 2.For researchersEFW Panel DatasetThe EFW Panel Dataset is not reported in the following tables but is available at.See page 17(in chapter 1)for an explanation of the EFW Panel Dataset.24 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomAlbania19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)4.68(87)6.48(71)7.30(48)7.67(38)7.71(35)7.59(32)7.60(31)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government3.944.848.198.077.817.917.837.73A.Government consumption7.70(13.81)4.87(23.44)9.10(9.07)8.09(12.5)8.19(12.17)8.16(12.26)8.03(12.71)7.76(13.62)B.Transfers and subsidies3.51(24.3)7.80(8.57)7.39(10.09)7.01(11.49)7.33(10.29)7.05(11.34)7.13(11.02)C.Government investment10.00(3.92)8.02(21.93)8.25(21.11)8.11(21.6)7.55(23.59)7.55(23.59)7.55(23.59)D.Top marginal tax rate8.508.008.008.008.00(i)Top marginal income tax rate10.00(10)9.00(23)9.00(23)9.00(23)9.00(23)(ii)Top marginal income and payroll tax rate7.00(32)7.00(34)7.00(34)7.00(34)7.00(34)E.State ownership of assets0.180.967.828.147.778.548.548.232.Legal System and Property Rights6.236.314.855.505.305.235.245.28A.Judicial independence3.083.144.594.684.654.134.194.48B.Impartial courts7.546.973.774.564.284.444.304.22C.Property rights4.394.524.614.424.424.42D.Military interference8.337.785.978.338.338.338.338.33E.Integrity of the legal system5.955.633.834.544.855.275.405.35F.Contracts4.143.843.443.213.213.42G.Real property8.027.938.096.396.726.726.72H.Police and crime4.215.435.865.305.305.30Gender Legal Rights Adjustment1.001.001.001.001.001.001.001.003.Sound Money6.546.919.599.749.809.809.59A.Money growth7.62(11.88)9.30(3.48)9.93(-0.37)9.84(-0.78)9.78(1.08)9.78(1.08)B.Standard deviation of inflation9.62(0.95)5.03(12.43)9.75(0.62)9.43(1.43)9.75(0.63)9.69(0.77)9.00(2.5)C.Inflation10.00(0)9.99(0.05)9.29(3.55)9.62(1.89)9.59(2.03)9.72(1.41)9.59(2.04)D.Foreign currency bank accounts0.000.005.0010.0010.0010.0010.0010.004.Freedom to Trade Internationally6.757.568.238.538.448.43A.Tariffs6.118.458.869.018.989.01(i)Trade tax revenue5.14(7.29)8.57(2.14)9.31(1.03)9.66(0.51)9.57(0.64)9.65(0.53)(ii)Mean tariff rate6.60(17)9.00(5)9.24(3.8)9.28(3.6)9.28(3.6)9.28(3.6)(iii)Standard deviation of tariff rates6.60(8.5)7.78(5.55)8.02(4.94)8.10(4.75)8.08(4.79)8.10(4.75)B.Regulatory trade barriers6.897.738.178.908.908.90(i)Non-tariff trade barriers6.898.016.948.408.408.40(ii)Costs of importing and exporting7.459.419.419.419.41C.Black-market exchange rates0.000.0010.0010.0010.0010.0010.0010.00D.Controls of the movement of capital and people0.000.004.014.055.896.185.875.80(i)Financial openness4.584.584.584.583.322.93(ii)Capital controls0.000.001.544.624.624.624.624.62(iii)Freedom of foreigners to visit0.008.308.638.638.74(iv)Protection of foreign assets5.927.026.086.906.906.905.Regulation1.055.695.767.247.106.646.97A.Credit market regulation0.005.827.049.219.537.929.23(i)Ownership of banks0.002.005.0010.0010.0010.0010.00(ii)Private sector credit6.456.127.638.603.777.70(iii)Interest rate controls/negative real interest rates0.009.0010.0010.0010.0010.0010.00B.Labor market regulation6.897.127.197.127.127.12(i)Labor regulations and minimum wage6.576.536.536.536.536.53(ii)Hiring and firing regulations3.684.315.655.655.655.65(iii)Flexible wage determination6.866.095.585.585.58(iv)Hours regulations8.008.008.008.008.008.00(v)Costs of worker dismissal5.646.306.306.306.306.30(vi)Conscription0.000.0010.0010.0010.0010.0010.0010.00(vii)Foreign labor7.467.837.737.767.767.76C.Business regulation1.752.104.295.495.505.545.315.31(i)Regulatory burden5.686.085.655.655.65(ii)Bureaucracy costs6.526.006.676.006.22(iii)Impartial public administration1.752.104.936.126.376.246.005.79(iv)Tax compliance3.653.633.543.593.593.59D.Freedom to compete5.763.387.076.236.236.23(i)Market openness5.766.766.816.816.816.81(ii)Business permits0.007.325.625.625.62(iii)Distortion of business environment6.256.256.25Chapter 2:Country Data Tables 25fraserinstitute.org/economic-freedom Fraser Institute 2023Algeria19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)3.22(104)3.22(109)4.69(119)5.03(146)4.70(157)4.64(162)4.94(157)4.82(157)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government3.754.134.513.773.704.394.367.73A.Government consumption4.65(24.19)5.19(22.35)4.53(24.6)1.94(33.4)1.61(34.52)3.02(29.73)2.87(30.23)3.47(28.21)B.Transfers and subsidies8.41(6.32)8.19(7.14)7.82(8.51)7.82(8.51)7.82(8.51)7.82(8.51)C.Government investment5.00(32.51)5.59(30.42)3.50(37.76)2.41(41.55)1.99(43.04)4.00(36.01)4.00(36.01)4.00(36.01)D.Top marginal tax rate4.504.504.504.50(i)Top marginal income tax rate7.00(35)7.00(35)7.00(35)7.00(35)(ii)Top marginal income and payroll tax rate2.00(53)2.00(53)2.00(53)2.00(53)E.State ownership of assets1.591.591.592.522.592.632.632.472.Legal System and Property Rights2.643.373.083.763.873.843.843.82A.Judicial independence3.453.163.733.674.154.164.094.04B.Impartial courts3.183.182.933.023.203.373.033.03C.Property rights4.254.234.695.065.065.06D.Military interference3.335.002.155.004.173.333.333.33E.Integrity of the legal system3.864.123.524.354.414.374.794.72F.Contracts4.083.443.503.453.453.12G.Real property6.576.066.786.636.636.636.63H.Police and crime5.494.785.545.675.675.90Gender Legal Rights Adjustment0.530.530.530.710.710.710.710.713.Sound Money5.184.356.967.216.897.177.657.08A.Money growth8.15(9.23)8.77(6.16)7.77(11.13)8.48(7.59)7.18(-14.1)6.61(-16.94)8.01(9.96)8.01(9.96)B.Standard deviation of inflation7.70(5.75)5.53(11.17)5.14(12.16)6.13(9.67)6.34(9.14)7.93(5.19)8.00(5.01)6.75(8.14)C.Inflation4.87(25.66)3.12(34.4)9.93(0.34)9.22(3.91)9.04(4.78)9.15(4.27)9.61(1.95)8.55(7.23)D.Foreign currency bank accounts0.000.005.005.005.005.005.005.004.Freedom to Trade Internationally2.552.045.285.743.962.673.763.92A.Tariffs7.665.084.956.916.846.876.876.86(i)Trade tax revenue6.36(5.46)8.61(2.08)8.48(2.28)8.48(2.28)8.48(2.28)8.48(2.28)(ii)Mean tariff rate7.66(11.7)5.08(24.6)5.08(24.6)6.28(18.6)6.24(18.8)6.22(18.9)6.22(18.9)6.20(19)(iii)Standard deviation of tariff rates3.40(16.5)5.83(10.42)5.79(10.53)5.92(10.21)5.92(10.21)5.90(10.26)B.Regulatory trade barriers5.245.351.662.002.001.55(i)Non-tariff trade barriers3.483.653.313.533.532.62(ii)Costs of importing and exporting7.007.050.000.480.480.48C.Black-market exchange rates0.000.007.788.575.560.004.365.62D.Controls of the movement of capital and people0.001.043.152.141.791.791.791.66(i)Financial openness0.002.082.082.082.082.072.071.53(ii)Capital controls0.000.001.670.000.000.000.770.77(iii)Freedom of foreigners to visit1.111.110.770.000.00(iv)Protection of foreign assets5.715.383.984.334.334.335.Regulation1.952.213.644.695.065.125.074.84A.Credit market regulation0.000.872.265.675.196.196.005.00(i)Ownership of banks0.000.000.000.000.000.000.000.00(ii)Private sector credit1.741.7810.005.578.578.018.01(iii)Interest rate controls/negative real interest rates5.007.0010.0010.0010.007.00B.Labor market regulation5.094.825.105.275.275.17(i)Labor regulations and minimum wage4.064.034.034.034.034.03(ii)Hiring and firing regulations6.946.936.386.386.385.63(iii)Flexible wage determination5.174.915.556.526.526.52(iv)Hours regulations6.006.006.006.006.006.00(v)Costs of worker dismissal8.427.767.767.767.767.76(vi)Conscription5.001.001.001.003.003.003.003.00(vii)Foreign labor4.053.103.003.233.233.23C.Business regulation3.913.553.283.103.453.443.443.74(i)Regulatory burden2.103.754.224.224.22(ii)Bureaucracy costs3.331.562.222.223.33(iii)Impartial public administration3.913.553.623.623.722.582.582.63(iv)Tax compliance2.953.354.764.764.764.76D.Freedom to compete3.945.186.485.575.575.44(i)Market openness3.944.064.174.204.204.41(ii)Business permits6.298.808.778.778.77(iii)Distortion of business environment3.753.753.1326 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomAngola19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)5.06(145)5.45(144)5.21(154)5.53(146)5.38(149)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government6.576.317.538.087.587.73A.Government consumption3.91(26.7)4.78(23.74)7.44(14.69)7.58(14.23)7.18(15.59)B.Transfers and subsidies7.96(7.98)8.89(4.59)9.70(1.59)9.70(1.59)9.70(1.59)C.Government investment8.05(21.81)5.68(30.13)10.00(14.46)9.27(17.55)6.63(26.78)8.90(18.85)D.Top marginal tax rate9.509.509.509.508.00(i)Top marginal income tax rate10.00(17)10.00(17)10.00(17)10.00(17)9.00(25)(ii)Top marginal income and payroll tax rate9.00(25)9.00(25)9.00(25)9.00(25)7.00(33)E.State ownership of assets2.352.735.084.494.494.494.494.752.Legal System and Property Rights2.733.042.242.652.813.133.173.18A.Judicial independence3.693.953.793.973.774.084.063.65B.Impartial courts3.273.272.032.382.502.702.542.82C.Property rights2.082.682.513.123.123.33D.Military interference5.003.331.673.333.334.174.174.17E.Integrity of the legal system2.882.394.004.113.653.954.504.27F.Contracts2.161.151.151.151.151.15G.Real property1.352.785.425.525.525.52H.Police and crime1.922.111.511.901.902.09Gender Legal Rights Adjustment0.470.880.880.880.880.880.880.883.Sound Money5.746.994.516.355.79A.Money growth7.32(13.38)5.80(20.98)9.48(2.6)7.64(11.82)7.03(14.83)7.03(14.83)B.Standard deviation of inflation5.06(12.36)5.55(11.14)4.44(13.89)6.78(8.06)6.29(9.27)C.Inflation7.11(14.47)7.94(10.28)5.96(20.19)6.58(17.08)4.85(25.75)D.Foreign currency bank accounts5.005.000.005.005.004.Freedom to Trade Internationally5.874.915.525.515.52A.Tariffs8.246.997.127.127.01(i)Trade tax revenue8.89(1.67)8.99(1.51)9.39(0.91)9.39(0.91)9.39(0.91)(ii)Mean tariff rate8.54(7.3)7.72(11.4)7.96(10.2)7.96(10.2)7.82(10.9)(iii)Standard deviation of tariff rates7.28(6.79)4.25(14.36)4.00(14.99)4.00(14.99)3.81(15.48)B.Regulatory trade barriers5.023.441.183.063.063.06(i)Non-tariff trade barriers5.023.552.363.603.603.60(ii)Costs of importing and exporting3.330.002.512.512.51C.Black-market exchange rates10.0010.009.7310.0010.00D.Controls of the movement of capital and people2.811.801.482.191.882.00(i)Financial openness1.660.000.002.502.502.50(ii)Capital controls2.313.082.312.312.31(iii)Freedom of foreigners to visit0.000.111.220.000.00(iv)Protection of foreign assets3.964.882.722.722.723.185.Regulation4.134.745.004.815.014.73A.Credit market regulation10.008.677.737.007.655.98(i)Ownership of banks8.005.005.005.005.00(ii)Private sector credit10.0010.009.1910.008.948.94(iii)Interest rate controls/negative real interest rates8.009.006.009.004.00B.Labor market regulation3.623.384.154.574.574.57(i)Labor regulations and minimum wage2.062.065.566.256.256.25(ii)Hiring and firing regulations2.943.184.574.574.574.57(iii)Flexible wage determination6.285.176.976.976.97(iv)Hours regulations4.004.004.004.004.00(v)Costs of worker dismissal6.266.636.636.636.63(vi)Conscription0.000.000.000.000.00(vii)Foreign labor5.861.853.123.563.563.56C.Business regulation1.772.532.363.252.923.683.854.29(i)Regulatory burden1.762.762.942.942.94(ii)Bureaucracy costs3.481.562.443.114.67(iii)Impartial public administration1.772.532.903.012.734.704.704.90(iv)Tax compliance1.814.764.644.644.644.64D.Freedom to compete0.563.675.183.993.994.09(i)Market openness0.561.982.752.812.813.10(ii)Business permits5.367.617.927.927.92(iii)Distortion of business environment1.251.251.25Chapter 2:Country Data Tables 27fraserinstitute.org/economic-freedom Fraser Institute 2023Argentina19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)4.13(91)4.50(91)7.13(40)5.86(123)5.30(146)5.45(151)4.72(159)4.77(158)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government6.667.017.986.596.056.476.097.73A.Government consumption6.91(16.5)8.53(11)6.88(16.62)6.14(19.14)5.43(21.54)5.91(19.91)5.61(20.94)5.69(20.65)B.Transfers and subsidies7.49(9.7)8.17(7.2)7.74(8.8)6.12(14.74)6.05(15)6.49(13.37)4.89(19.27)5.54(16.88)C.Government investment10.00(10.23)8.04(21.85)7.61(23.37)8.70(19.54)8.70(19.54)8.70(19.54)D.Top marginal tax rate6.004.007.005.004.004.004.004.00(i)Top marginal income tax rate6.00(45)7.00(35)8.00(35)7.00(35)7.00(35)7.00(35)7.00(35)7.00(35)(ii)Top marginal income and payroll tax rate1.00(57)6.00(36-43)3.00(49)1.00(58)1.00(57)1.00(57)1.00(57)E.State ownership of assets6.267.348.317.637.187.247.247.102.Legal System and Property Rights3.164.034.554.824.814.974.984.98A.Judicial independence3.753.464.184.764.815.074.734.81B.Impartial courts6.304.054.054.304.294.464.274.27C.Property rights3.273.964.334.794.794.79D.Military interference3.335.006.677.507.507.507.507.50E.Integrity of the legal system3.984.706.674.564.144.264.844.77F.Contracts5.034.384.383.843.543.383.383.38G.Real property6.746.446.726.866.866.866.86H.Police and crime5.575.335.395.965.965.96Gender Legal Rights Adjustment0.410.710.760.880.880.880.880.883.Sound Money2.502.509.606.656.604.664.124.04A.Money growth0.00(115.53)0.00(427.46)9.07(4.64)7.77(11.15)5.74(21.29)5.08(24.58)5.08(24.58)5.08(24.58)B.Standard deviation of inflation0.00(119.77)0.00(1198.84)9.52(1.2)9.14(2.16)5.92(10.2)5.43(11.42)6.38(9.05)5.50(11.25)C.Inflation0.00(92.02)0.00(2064.19)9.81(-0.94)4.68(26.6)4.72(26.38)3.14(34.3)0.00(53.55)0.58(47.1)D.Foreign currency bank accounts10.0010.0010.005.0010.005.005.005.004.Freedom to Trade Internationally5.314.677.536.063.505.593.053.32A.Tariffs4.053.197.475.596.016.046.175.85(i)Trade tax revenue3.67(9.5)3.40(9.9)7.92(3.12)3.51(9.73)4.71(7.93)4.93(7.61)5.32(7.02)4.42(8.36)(ii)Mean tariff rate4.44(27.8)5.90(20.5)7.48(12.6)7.48(12.6)7.28(13.6)7.30(13.5)7.32(13.4)7.32(13.4)(iii)Standard deviation of tariff rates0.28(24.3)7.00(7.5)5.77(10.58)6.03(9.93)5.90(10.26)5.87(10.32)5.82(10.45)B.Regulatory trade barriers6.495.354.644.724.725.04(i)Non-tariff trade barriers6.322.634.133.793.794.42(ii)Costs of importing and exporting6.678.085.165.655.655.65C.Black-market exchange rates9.8010.0010.0010.000.006.480.000.96D.Controls of the movement of capital and people2.080.836.183.303.345.121.311.42(i)Financial openness4.161.667.602.510.002.672.672.67(ii)Capital controls0.000.003.850.770.776.150.000.00(iii)Freedom of foreigners to visit4.657.979.070.000.00(iv)Protection of foreign assets7.095.284.622.592.593.035.Regulation3.024.285.985.215.545.545.345.30A.Credit market regulation4.453.707.325.246.766.725.795.60(i)Ownership of banks5.005.005.005.005.005.005.005.00(ii)Private sector credit8.346.096.955.725.297.175.386.80(iii)Interest rate controls/negative real interest rates0.000.0010.005.0010.008.007.005.00B.Labor market regulation3.733.465.375.895.515.785.785.80(i)Labor regulations and minimum wage7.867.862.343.883.883.88(ii)Hiring and firing regulations3.001.291.783.763.763.763.94(iii)Flexible wage determination5.185.184.832.913.353.193.193.19(iv)Hours regulations5.014.666.0110.0010.0010.0010.0010.00(v)Costs of worker dismissal0.002.522.522.522.522.52(vi)Conscription1.001.0010.0010.0010.0010.0010.0010.00(vii)Foreign labor7.596.166.637.097.097.09C.Business regulation0.885.695.604.404.314.885.014.86(i)Regulatory burden6.782.432.052.712.712.71(ii)Bureaucracy costs7.505.304.445.785.565.11(iii)Impartial public administration0.885.695.696.476.606.537.277.12(iv)Tax compliance2.423.414.144.504.504.50D.Freedom to compete5.655.295.594.794.794.93(i)Market openness5.655.785.836.146.146.14(ii)Business permits4.815.355.735.735.73(iii)Distortion of business environment2.502.502.9228 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomArmenia19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)7.47(39)7.54(44)7.69(37)7.62(29)7.58(33)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government8.128.597.877.778.037.73A.Government consumption7.72(13.75)7.54(14.38)7.94(13)6.89(16.58)6.47(17.99)B.Transfers and subsidies8.05(7.67)7.75(8.76)7.86(8.35)7.22(10.69)7.32(10.35)C.Government investment8.32(20.89)9.37(17.22)10.00(14.13)8.98(18.58)8.98(18.58)8.98(18.58)D.Top marginal tax rate9.005.005.008.008.00(i)Top marginal income tax rate10.00(20)5.00(36)5.00(36)9.00(23)9.00(22)(ii)Top marginal income and payroll tax rate8.00(26)5.00(36)5.00(36)7.00(33)7.00(32)E.State ownership of assets3.637.928.849.079.079.078.042.Legal System and Property Rights4.085.065.405.455.935.925.92A.Judicial independence3.743.643.634.014.324.994.694.90B.Impartial courts5.013.393.663.744.944.784.71C.Property rights5.114.865.155.565.565.56D.Military interference6.675.835.835.835.835.00E.Integrity of the legal system4.764.554.364.335.375.776.25F.Contracts5.244.833.853.853.854.06G.Real property9.729.839.809.829.829.82H.Police and crime6.085.806.597.087.087.08Gender Legal Rights Adjustment0.820.820.821.001.001.001.001.003.Sound Money9.009.219.479.549.12A.Money growth6.92(15.38)8.93(5.33)8.46(7.69)8.70(6.51)8.78(6.12)8.78(6.12)B.Standard deviation of inflation8.72(3.21)9.13(2.16)9.67(0.83)9.68(0.81)9.13(2.18)C.Inflation8.36(8.18)9.25(3.73)9.50(2.52)9.71(1.44)8.56(7.18)D.Foreign currency bank accounts10.0010.0010.0010.0010.004.Freedom to Trade Internationally7.708.178.107.488.15A.Tariffs8.908.688.438.438.62(i)Trade tax revenue9.15(1.28)8.87(1.7)8.99(1.51)8.94(1.59)8.98(1.53)(ii)Mean tariff rate9.44(2.8)8.78(6.1)8.74(6.3)8.76(6.2)8.74(6.3)(iii)Standard deviation of tariff rates8.11(4.73)8.39(4.03)7.56(6.11)7.59(6.01)8.14(4.66)B.Regulatory trade barriers3.555.896.476.716.716.71(i)Non-tariff trade barriers3.553.834.484.094.094.09(ii)Costs of importing and exporting7.958.479.329.329.32C.Black-market exchange rates10.0010.0010.0010.0010.00D.Controls of the movement of capital and people8.086.037.547.284.797.29(i)Financial openness9.499.499.497.937.937.93(ii)Capital controls8.335.386.156.156.15(iii)Freedom of foreigners to visit1.1110.0010.000.0010.00(iv)Protection of foreign assets6.685.195.285.055.055.055.Regulation4.506.636.997.187.116.94A.Credit market regulation8.839.009.689.689.07(i)Ownership of banks10.0010.0010.0010.0010.00(ii)Private sector credit7.506.999.059.057.21(iii)Interest rate controls/negative real interest rates9.0010.0010.0010.0010.00B.Labor market regulation6.546.466.276.506.506.50(i)Labor regulations and minimum wage5.865.864.875.835.835.83(ii)Hiring and firing regulations6.526.776.937.137.137.13(iii)Flexible wage determination7.367.377.257.257.25(iv)Hours regulations10.0010.0010.0010.0010.00(v)Costs of worker dismissal8.998.999.259.259.25(vi)Conscription0.000.000.000.000.00(vii)Foreign labor7.256.215.746.026.026.02C.Business regulation5.791.803.795.145.935.645.56(i)Regulatory burden4.124.575.175.175.17(ii)Bureaucracy costs6.365.785.565.114.67(iii)Impartial public administration5.793.604.674.686.966.266.37(iv)Tax compliance0.000.005.546.026.026.02D.Freedom to compete5.177.457.576.636.636.63(i)Market openness5.175.385.595.595.595.59(ii)Business permits9.539.559.309.309.30(iii)Distortion of business environment5.005.005.00Chapter 2:Country Data Tables 29fraserinstitute.org/economic-freedom Fraser Institute 2023Australia19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)7.87(7)8.37(5)8.37(8)8.25(5)8.27(8)8.20(8)8.05(7)8.05(8)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government6.346.716.646.956.696.446.037.73A.Government consumption4.93(23.23)5.20(22.33)4.79(23.7)4.32(25.3)4.30(25.39)3.74(27.3)3.12(29.39)2.77(30.57)B.Transfers and subsidies7.38(10.1)7.22(10.7)7.09(11.17)6.80(12.23)6.66(12.74)6.96(11.64)5.77(16.03)5.16(18.27)C.Government investment10.00(13.53)10.00(11.76)10.00(11.6)9.81(15.65)10.00(12.02)9.50(16.76)9.25(17.64)9.31(17.42)D.Top marginal tax rate2.003.003.005.505.004.504.504.50(i)Top marginal income tax rate2.00(62)3.00(49)3.00(47)6.00(45)5.00(47)5.00(45)5.00(45)5.00(45)(ii)Top marginal income and payroll tax rate3.00(49)3.00(49)5.00(47)5.00(49)4.00(47)4.00(47)4.00(47)E.State ownership of assets7.388.138.308.307.517.497.497.872.Legal System and Property Rights8.608.978.748.568.598.548.598.61A.Judicial independence8.778.788.768.518.518.448.448.46B.Impartial courts9.029.029.028.558.418.268.188.15C.Property rights9.328.799.059.229.229.22D.Military interference10.0010.0010.0010.0010.0010.0010.0010.00E.Integrity of the legal system8.898.908.908.468.508.508.929.08F.Contracts9.008.728.727.997.897.847.847.84G.Real property8.397.578.298.218.148.148.14H.Police and crime7.647.878.137.967.967.96Gender Legal Rights Adjustment0.881.001.001.001.001.001.001.003.Sound Money9.099.029.479.349.509.549.529.53A.Money growth8.91(5.44)7.53(12.34)9.47(2.63)8.59(7.03)9.38(3.08)9.36(3.18)9.05(4.73)9.05(4.73)B.Standard deviation of inflation9.40(1.51)9.19(2.02)9.31(1.72)9.33(1.67)8.92(2.7)9.18(2.05)9.35(1.64)9.65(0.86)C.Inflation8.03(9.84)9.35(3.26)9.10(4.48)9.43(2.85)9.70(1.51)9.62(1.91)9.68(1.61)9.43(2.86)D.Foreign currency bank accounts10.0010.0010.0010.0010.0010.0010.0010.004.Freedom to Trade Internationally6.748.498.427.918.068.208.038.07A.Tariffs7.356.468.438.838.979.139.039.06(i)Trade tax revenue7.60(3.6)7.93(3.1)9.06(1.41)9.25(1.13)8.90(1.65)8.81(1.79)8.51(2.24)8.61(2.08)(ii)Mean tariff rate7.10(14.5)7.16(14.2)8.84(5.8)9.44(2.8)9.50(2.5)9.52(2.4)9.52(2.4)9.52(2.4)(iii)Standard deviation of tariff rates4.28(14.3)7.40(6.5)7.80(5.49)8.50(3.75)9.05(2.38)9.05(2.38)9.04(2.4)B.Regulatory trade barriers8.878.447.607.877.878.09(i)Non-tariff trade barriers8.417.976.787.317.317.75(ii)Costs of importing and exporting9.338.918.428.438.438.43C.Black-market exchange rates9.8010.0010.0010.0010.0010.0010.0010.00D.Controls of the movement of capital and people3.089.006.364.355.695.795.235.12(i)Financial openness4.1610.006.996.999.4010.0010.0010.00(ii)Capital controls2.008.003.081.544.624.624.624.62(iii)Freedom of foreigners to visit0.110.110.110.000.00(iv)Protection of foreign assets9.028.768.648.436.325.855.Regulation8.588.678.578.528.538.308.088.12A.Credit market regulation8.389.6810.009.409.589.438.809.15(i)Ownership of banks8.0010.0010.0010.0010.0010.0010.0010.00(ii)Private sector credit7.149.0310.008.218.758.306.397.45(iii)Interest rate controls/negative real interest rates10.0010.0010.0010.0010.0010.0010.0010.00B.Labor market regulation7.596.567.238.037.417.557.497.43(i)Labor regulations and minimum wage7.817.816.956.956.956.95(ii)Hiring and firing regulations4.507.857.856.466.469.708.97(iii)Flexible wage determination5.185.185.525.445.566.086.086.08(iv)Hours regulations4.6810.0010.0010.0010.0010.00(v)Costs of worker dismissal9.637.937.937.937.937.93(vi)Conscription10.0010.0010.0010.0010.0010.0010.0010.00(vii)Foreign labor5.147.214.975.391.802.10C.Business regulation9.769.767.717.717.897.617.447.24(i)Regulatory burden6.733.643.983.983.983.98(ii)Bureaucracy costs6.209.3910.008.678.007.11(iii)Impartial public administration9.769.769.769.669.439.649.649.69(iv)Tax compliance8.148.148.168.168.168.16D.Freedom to compete9.358.949.228.608.608.68(i)Market openness9.359.379.359.369.369.36(ii)Business permits8.509.098.958.958.95(iii)Distortion of business environment7.507.507.7330 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomAustria19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)7.15(14)7.56(18)8.02(18)7.90(18)7.96(23)7.89(26)7.63(28)7.69(28)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government4.785.255.375.475.615.434.937.73A.Government consumption4.46(24.82)4.40(25.03)4.16(25.86)4.07(26.16)3.69(27.44)3.72(27.34)3.02(29.72)2.85(30.31)B.Transfers and subsidies4.11(22.1)4.03(22.4)2.93(26.44)2.02(29.78)3.10(25.82)3.51(24.32)1.72(30.88)1.98(29.92)C.Government investment8.56(20.04)9.90(15.35)10.00(10.37)9.98(15.07)10.00(13.14)10.00(12.28)10.00(13.21)10.00(13.2)D.Top marginal tax rate2.002.002.003.503.503.503.503.50(i)Top marginal income tax rate2.00(62)4.00(50)4.00(50)4.00(50)4.00(50)4.00(55)4.00(55)4.00(55)(ii)Top marginal income and payroll tax rate0.00(62)0.00(66)3.00(54)3.00(54)3.00(59)3.00(59)3.00(59)E.State ownership of assets4.785.947.787.787.786.406.406.422.Legal System and Property Rights7.987.898.128.498.478.518.588.55A.Judicial independence7.827.968.027.807.677.787.827.76B.Impartial courts8.218.218.217.847.787.787.717.71C.Property rights9.469.129.109.319.319.31D.Military interference10.009.8610.0010.0010.0010.0010.0010.00E.Integrity of the legal system8.758.758.758.758.718.689.219.03F.Contracts7.607.607.607.387.077.167.167.16G.Real property7.927.927.928.108.108.108.10H.Police and crime9.069.109.329.309.309.30Gender Legal Rights Adjustment0.880.880.881.001.001.001.001.003.Sound Money8.409.639.639.649.629.409.179.12A.Money growth9.97(-0.17)9.46(2.69)9.18(4.1)9.19(4.06)8.76(6.2)8.14(9.3)7.20(14.02)7.20(14.02)B.Standard deviation of inflation9.64(0.9)9.75(0.63)9.80(0.5)9.74(0.64)9.89(0.28)9.86(0.35)9.81(0.49)9.85(0.39)C.Inflation9.00(5)9.31(3.45)9.53(2.35)9.64(1.81)9.82(0.9)9.60(2)9.69(1.53)9.45(2.77)D.Foreign currency bank accounts5.0010.0010.0010.0010.0010.0010.0010.004.Freedom to Trade Internationally7.707.979.368.388.548.578.308.55A.Tariffs8.617.929.188.348.368.208.038.06(i)Trade tax revenue9.53(0.7)9.53(0.7)9.78(0.33)9.63(0.55)9.10(1.35)9.13(1.3)8.60(2.1)8.60(2.1)(ii)Mean tariff rate7.68(11.6)8.26(8.7)9.52(2.4)8.98(5.1)8.98(5.1)8.98(5.1)8.98(5.1)8.98(5.1)(iii)Standard deviation of tariff rates5.96(10.1)8.24(4.4)6.41(8.98)7.00(7.5)6.49(8.77)6.51(8.72)6.61(8.48)B.Regulatory trade barriers9.498.198.438.538.538.53(i)Non-tariff trade barriers9.487.306.907.087.087.08(ii)Costs of importing and exporting9.509.089.969.989.989.98C.Black-market exchange rates10.0010.0010.0010.0010.0010.0010.0010.00D.Controls of the movement of capital and people4.506.008.777.007.357.576.637.59(i)Financial openness6.996.9910.0010.0010.0010.0010.0010.00(ii)Capital controls2.005.006.923.083.083.083.083.08(iii)Freedom of foreigners to visit6.427.748.745.008.85(iv)Protection of foreign assets9.398.498.598.458.458.455.Regulation6.887.057.627.547.557.547.167.28A.Credit market regulation6.967.469.758.929.139.338.278.63(i)Ownership of banks5.005.0010.008.008.008.008.008.00(ii)Private sector credit7.887.399.248.779.3810.006.827.89(iii)Interest rate controls/negative real interest rates8.0010.0010.0010.0010.0010.0010.0010.00B.Labor market regulation4.634.635.786.576.146.176.176.17(i)Labor regulations and minimum wage9.219.218.208.208.208.20(ii)Hiring and firing regulations4.824.318.598.758.758.758.75(iii)Flexible wage determination4.494.493.502.712.082.492.492.49(iv)Hours regulations4.404.225.188.006.006.006.006.00(v)Costs of worker dismissal9.8110.0010.0010.0010.0010.00(vi)Conscription5.005.003.003.003.003.003.003.00(vii)Foreign labor5.414.454.964.754.754.75C.Business regulation9.069.067.387.047.297.066.636.83(i)Regulatory burden7.534.214.454.474.474.47(ii)Bureaucracy costs7.438.488.898.676.007.33(iii)Impartial public administration9.069.069.069.069.068.359.288.74(iv)Tax compliance5.516.416.776.776.776.77D.Freedom to compete7.577.647.637.587.587.48(i)Market openness7.577.637.977.947.947.94(ii)Business permits7.657.307.307.307.30(iii)Distortion of business environment7.507.507.22Chapter 2:Country Data Tables 31fraserinstitute.org/economic-freedom Fraser Institute 2023Azerbaijan19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)5.60(131)6.09(120)6.14(126)5.94(128)5.99(122)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government7.404.445.345.014.557.73A.Government consumption4.12(26)6.48(17.96)7.05(16.03)5.64(20.83)5.77(20.38)B.Transfers and subsidies7.09(11.19)8.26(6.88)7.37(10.16)7.71(8.9)7.71(8.9)7.71(8.9)C.Government investment10.00(13.06)0.00(67.39)1.53(44.65)0.00(57.6)0.00(57.6)0.00(57.6)D.Top marginal tax rate5.006.506.506.506.50(i)Top marginal income tax rate7.00(35)9.00(25)9.00(25)9.00(25)9.00(25)(ii)Top marginal income and payroll tax rate3.00(49)4.00(41)4.00(41)4.00(44)4.00(44)E.State ownership of assets3.645.124.804.803.782.903.042.Legal System and Property Rights4.664.664.724.714.754.764.81A.Judicial independence4.263.873.143.413.443.894.024.05B.Impartial courts4.742.152.472.742.862.692.97C.Property rights3.743.623.954.654.654.65D.Military interference6.675.835.005.005.005.00E.Integrity of the legal system6.724.494.053.794.014.134.21F.Contracts6.126.286.136.136.136.13G.Real property8.729.739.777.617.617.61H.Police and crime5.896.076.487.557.557.55Gender Legal Rights Adjustment0.820.820.820.820.820.820.820.823.Sound Money6.447.247.337.286.92A.Money growth6.32(18.38)7.75(11.26)9.41(2.93)9.00(5)8.76(6.21)8.76(6.21)B.Standard deviation of inflation4.14(14.66)5.36(11.59)5.69(10.78)5.87(10.33)5.26(11.85)C.Inflation8.87(5.67)9.17(4.17)9.62(1.92)9.48(2.61)8.67(6.65)D.Foreign currency bank accounts5.005.005.005.005.004.Freedom to Trade Internationally6.377.017.176.987.18A.Tariffs8.137.947.527.487.58(i)Trade tax revenue9.39(0.92)9.03(1.45)8.73(1.91)8.52(2.22)8.73(1.91)(ii)Mean tariff rate8.22(8.9)8.18(9.1)8.26(8.7)8.26(8.7)8.30(8.5)(iii)Standard deviation of tariff rates6.80(8.01)6.61(8.46)5.58(11.05)5.65(10.88)5.72(10.71)B.Regulatory trade barriers3.684.296.397.017.017.01(i)Non-tariff trade barriers3.684.225.145.825.825.82(ii)Costs of importing and exporting4.367.648.208.208.20C.Black-market exchange rates10.0010.0010.0010.0010.00D.Controls of the movement of capital and people3.073.083.714.143.454.14(i)Financial openness1.723.594.834.824.824.82(ii)Capital controls4.624.624.624.624.62(iii)Freedom of foreigners to visit0.001.442.770.002.77(iv)Protection of foreign assets4.424.113.964.364.364.365.Regulation4.526.046.176.456.156.44A.Credit market regulation6.528.007.578.337.118.00(i)Ownership of banks5.005.005.005.005.00(ii)Private sector credit6.5210.008.7210.007.3210.00(iii)Interest rate controls/negative real interest rates9.009.0010.009.009.00B.Labor market regulation6.526.296.186.376.376.37(i)Labor regulations and minimum wage8.008.006.676.676.676.67(ii)Hiring and firing regulations4.826.326.166.756.756.75(iii)Flexible wage determination7.827.458.188.188.18(iv)Hours regulations8.008.006.006.006.00(v)Costs of worker dismissal7.767.768.508.508.50(vi)Conscription1.001.001.001.001.00(vii)Foreign labor6.755.136.207.507.507.50C.Business regulation4.292.184.334.965.395.405.60(i)Regulatory burden4.485.527.217.217.21(ii)Bureaucracy costs6.526.446.226.226.67(iii)Impartial public administration4.292.842.542.792.782.822.28(iv)Tax compliance1.533.775.105.365.366.26D.Freedom to compete2.875.555.985.715.715.77(i)Market openness2.874.244.354.344.344.53(ii)Business permits6.857.609.029.029.02(iii)Distortion of business environment3.753.753.7532 Economic Freedom of the World:2023 Annual ReportFraser Institute 2023 fraserinstitute.org/economic-freedomBahamas,The19801990200020102015201920202021Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Rating(Rank)Summary Ratings(Rank)6.44(25)6.66(32)6.89(51)7.25(50)7.23(59)7.11(70)6.61(89)6.55(93)xxxxxxxxxxxxxxxxxRating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)Rating(Data)1.Size of Government8.949.018.548.949.048.848.607.73A.Government consumption6.81(16.85)7.18(15.6)5.18(22.4)6.80(16.87)7.11(15.82)6.39(18.28)5.77(20.39)6.11(19.21)B.Transfers and subsidies10.00(0.5)9.86(1)8.97(4.29)8.97(4.28)9.04(4.02)8.96(4.32)8.62(5.55)7.97(7.96)C.Government investment10.00(3.9)10.00(6.74)10.00(8.29)10.00(6.12)10.00(6.12)10.00(6.12)D.Top marginal tax rate10.0010.0010.0010.0010.0010.0010.0010.00(i)Top marginal income tax rate10.00(0)10.00(0)10.00(0)10.00(0)10.00(0)10.00(0)10.00(0)10.00(0)(ii)Top marginal income and payroll tax rate10.00(5-9)10.00(10)10.00(9)10.00(9)10.00(9)10.00(9)E.State ownership of assets2.Legal System and Property Rights6.656.635.796.046.125.665.625.63A.Judicial independence6.196.147.217.187.157.157.157.15B.Impartial courts7.707.177.066.606.316.35C.Property rights5.005.005.005.005.005.00D.Military interference8.338.3310.0010.0010.0010.0010.0010.00E.Integrity of the legal system6.676.676.677.507.506.676.676.67F.Contracts4.004.003.603.553.553.55G.Real property4.986.153.823.823.82H.Police and crime2.502.502.502.502.502.50Gender Legal Rights Adjustment0.880.880.881.001.001.001.001.003.Sound Money6.336.906.907.167.118.276.686.65A.Money growth8.72(6.41)8.90(5.51)8.18(9.1)9.37(3.17)9.99(0.06)9.63(1.85)9.63(1.85)9.63(1.85)B.Standard deviation of inflation8.58(3.54)9.32(1.7)9.64(0.9)9.53(1.18)8.81(2.99)8.89(2.77)7.59(6.01)7.54(6.15)C.Inflation8.00(10.01)9.37(3.16)9.79(1.04)9.73(1.34)9.63(1.87)9.55(2.27)9.50(2.49)9.42(2.9)D.Foreign currency bank accounts0.000.000.000.000.005.000.000.004.Freedom to Trade Internationally3.864.084.705.996.265.654.835.07A.Tariffs4.323.603.333.273.333.963.194.16(i)Trade tax revenue4.60(8.1)3.60(9.6)3.67(9.5)4.04(8.94)4.50(8.25)6.84(4.74)4.53(8.2)7.42(3.86)(ii)Mean tariff rate4.04(29.8)3.00(35)2.82(35.9)3.22(33.9)3.50(32.5)3.50(32.5)3.50(32.5)(iii)Standard deviation of tariff rates2.96(17.59)2.27(19.32)1.55(21.13)1.55(21.13)1.55(21.13)B.Regulatory trade barriers7.768.114.054.054.05(i)Non-tariff trade barriers0.000.000.00(ii)Costs of importing and exporting7.768.118.118.118.11C.Black-market exchange rates6.007.4010.0010.0010.0010.0010.0010.00D.Controls of the movement of capital and people1.251.250.772.913.594.572.072.07(i)Financial openness2.512.510.000.000.002.502.502.50(ii)Capital controls0.000.001.540.770.770.770.770.77(iii)Freedom of foreigners to visit7.9710.0010.000.000.00(iv)Protection of foreign assets5.005.005.005.Regulation8.508.117.617.157.336.88A.Credit market regulation8.629.8410.009.219.079.818.456.67(i)Ownership of banks10.0010.0010.0010.0010.0010.0010.0010.00(ii)Private sector credit7.869.5310.007.628.229.445.350.00(iii)Interest rate controls/negative real interest rates8.0010.0010.0010.009.0010.0010.0010.00B.Labor market regulation8.648.497.707.25
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May|2023Yen ChenJulia BushTina NguyenTyler HarpNarges LahijiEconomic Contribution Study of Hyundai Motor Americas U.S.Operations CENTER FOR AUTOMOTIVE RESEARCH 2 The Center for Automotive Research(CAR)is an independent nonprofit that produces industry-driven research and fosters dialogue on critical issues facing the automotive industry and its impact on the US economy and society.CAR researchers closely track current and future global automotive industry and technology trends and assess their impacts.CAR researchers also study international collaborations and stay abreast of changes in international trade and regulatory environments,the development of technology standards,and the deployment of new vehicle technologies.For citations and reference to this publication,please use the following:Chen,Y.,Bush,J.,Nguyen,T.,Harp,T.,Lahiji,N.(2023).Economic Contribution Study of Hyundai Motor Americas U.S.Operations.Center for Automotive Research,Ann Arbor,MI.CARs mission is to produce independent research,convene stakeholders,and analyze critical issues facing the mobility industry and its impact on the economy and society CENTER FOR AUTOMOTIVE RESEARCH 3 Acknowledgments This study was made possible through support from Hyundai Motor America(HMA).The Center for Automotive Research(CAR)thanks the company for their support.The authors would like to thank Patrick Manzi,the Chief Economist of the National Automobile Dealers Association(NADA),for his invaluable input.Additional assistance was provided by Alex Kulicki;Jane Michalek for the coordination of the project;and Carolyn Mozheev for the production of this document.CENTER FOR AUTOMOTIVE RESEARCH 4 Executive Summary The purpose of this study is to estimate Hyundai Motor Americas(HMAs)and its independent dealer networks employment and economic contribution to the United States and the economies of the seven states in which HMA and HMA dealer networks have significant automotive footprints.This study also estimates the economic contribution of Hyundais new electric vehicle and battery manufacturing investment to the United States economy.In 2021,Hyundai Motor America(HMA)and Hyundai America Technical Center,Inc.(HATCI)hired 7,050 workers in Alabama,California,Texas,Georgia,Michigan,and other states in the U.S.In addition,HMAs independent dealer network employed 54,100 workers across all fifty states.CAR estimates HMA,HATCI,and HMAs independent dealers in 2021 contributed 190,950 jobs in the U.S.economy.Of these,HMA and HATCIs U.S.automotive operations support 58,250 jobs,and 132,700 jobs are associated with HMAs 835 dealers in fifty states.HMA and its dealerships added USD 20.1 billion in private earnings to the U.S.economy,including USD 3.0 billion in social welfare contribution and USD 2.8 billion in federal and state income tax revenue.HMAs employment multiplier is 8.3implying 7.3 additional jobs for every employee in HMAs U.S.automotive operations.HMAs independent dealers have an employment multiplier of 2.5,indicating 1.5 other jobs created for every HMA dealership worker.In 2022,Hyundai Motor Group(HMG),a multinational conglomerate that owns Hyundai Motor Company(HMC),the parent company of HMA,announced that HMG,Hyundai Mobis,and SK On will invest an additional USD 10.6 billion into new electric vehicle facilities in Georgia and Alabama,which is expected to hire 13,500 jobs in those states.CAR estimates these jobs CENTER FOR AUTOMOTIVE RESEARCH 5 will create or retain a total of 62,800 jobs in the United States by 2025.These jobs will generate USD 8.3 billion in private earnings,including USD 1.3 billion in government social welfare funds and USD 1.2 billion in federal and state personal income tax.TABLE OF CONTENTS234689101112121313131317202022252829About the AuthorsAcknowledgmentsExecutive SummaryTable of ContentsList of TablesList of FiguresA Brief History of Hyundai in the United StatesHyundai Motor America&Genesis Motor America Social Impact HMA Corporate Social Responsibility Hyundai Hope On Wheels GMA Corporate Social Responsibility Genesis Inspiration FoundationHyundai U.S.Automotive Manufacturing Facilities and Research Centers HMAs Current Manufacturing Operations and Production Volumes Hyundai U.S.Research,Development,and Technical CentersHMAs U.S.Dealers Network Sales by Region,HMAHMAs New Investment in the United StatesHMAs Environmental SustainabilityHMAs Economic Impact Analysis in the United States Hyundai Motor America(HMA),Hyundai Motor Company(HMC),and Hyundai Motor Group(HMG)CENTER FOR AUTOMOTIVE RESEARCH6TABLE OF CONTENTS30 313335383941434547495052545656575859596062 Methodology-Macroeconomic Modeling HMAs Current Economic Contribution to the U.S.Economy HMAs Dealer Network Contribution to the U.S.Economy HMAs Investment and Future Contribution to the U.S.Economy HMAs Economic Contribution to Key Operating States Alabama Arizona California Florida Georgia Michigan New York Rest of the U.S.Summary and ConclusionAppendix A:A History of Hyundai in the United States Hyundai Motor America Genesis Motor A Brief History of Hyundai in the United StatesAppendix B:HMA U.S.Sales Hyundai U.S.Sales Genesis U.S.SalesReferences CENTER FOR AUTOMOTIVE RESEARCH7LIST OF TABLES151923263132333437384041434547495052Table 1:Hyundai Motor Company(HMC)Manufacturing Plants in the United States,2022Table 2:HMAs U.S.Research,Development,and Technical CentersTable 3:Hyundais New Manufacturing Investments in the United StatesTable 4:HMAs Environmental ObjectivesTable 5:HMAs Employment ContributionTable 6:HMAs Income ContributionTable 7:HMAs Dealer Network Employment ContributionTable 8:HMAs Dealer Network Income ContributionTable 9:Hyundais EV Investment Employment ContributionTable 10:Hyundais EV Investment Income ContributionTable 11:HMAs State Economic Contribution AlabamaTable 12:HMAs State Economic Contribution ArizonaTable 13:HMAs State Economic Contribution CaliforniaTable 14:HMAs State Economic Contribution FloridaTable 15:HMAs State Economic Contribution GeorgiaTable 16:HMAs State Economic Contribution MichiganTable 17:HMAs State Economic Contribution New YorkTable 18:HMAs State Economic Contribution Rest of U.S.CENTER FOR AUTOMOTIVE RESEARCH8LIST OF FIGURES111114161718212225596061Figure 1:A Timeline of Hyundai Operations in the United States,1986-2025Figure 2:A Timeline of Genesis Operations in the United States,2003-2022Figure 3:Hyundai U.S.Vehicle Production,2005-2022Figure 4:Hyundai U.S.Engine Production,2017-2022Figure 5:Hyundai U.S.Transmission Production,2017-2022Figure 6:HMAs U.S.Research,Development,and Technical CentersFigure 7:Map of HMA Dealership Franchise Sales by Region,2021Figure 8:HMC EV Sales in Top Ten Countries,2022Figure 9:Number of Suppliers by StateFigure 10:Hyundai Vehicle Sales in the United States,2009-2022Figure 11:Vehicle Market Share by Brand Origins in the United States,2000-March 2023Figure 12:Genesis Vehicle Sales in the United States,2016-2022 CENTER FOR AUTOMOTIVE RESEARCH9 CENTER FOR AUTOMOTIVE RESEARCH 10 A Brief History of Hyundai in the United States Hyundais presence in the United States began in 1986 when Hyundai Motor America(HMA)established its headquarters in Fountain Valley,California.In February 1986,Hyundai launched its subcompact Excel model in the U.S.market,and in just seven months,Hyundai sold 100,000 Excels.Total sales in 1986 for Excel reached 168,882,setting an industry record for a first-year import vehicle distributor.In 2022,HMAs U.S.sales totaled 781,000 vehicles for the year,supported by their domestic production facility in Montgomery,Alabama.HMA currently relies on 61,150 employees to support Hyundais U.S.research,production,and sales operations.In 2022,Hyundai announced it would build two new Georgia facilities dedicated to electric vehicle(EV)and battery manufacturing.Hyundai plans to invest USD 5.5 billion in a facility in Savannah,Georgia to produce EVs and EV batteries.Production is expected to start in 2025 with a future capacity to build 300,000 EVs annually and create 8,100 jobs.The other new EV battery manufacturing facility will be located in Atlanta,Georgia,in a Joint-Venture partnership with SK On.The USD 5 billion facilities will begin production in 2025 and are expected to create 3,500 jobs for the communities.Figure 1 shows a timeline of Hyundai Operations in the U.S.,and Figure 2 shows the history of Genesis Motors in the U.S.For a more detailed history,please refer to Appendix A:A History of Hyundai in the United States.CENTER FOR AUTOMOTIVE RESEARCH 11 Figure 1 A Timeline of Hyundai Operations in the United States,1986-2025 Figure 2 A Timeline of Genesis Operations in the United States,2003-2022 Hyundai Motor America&Genesis Motor America Social Impact Hyundai Motor America(HMA)and Genesis Motor America(GMA)have several corporate social responsibility programs and initiatives to further their CENTER FOR AUTOMOTIVE RESEARCH 12 stated commitment of fostering progress for humanity.Each company says they seek to enrich the lives of all people,increase the wellbeing of society,and improve the planet through sustainable action.To further these goals,they devote their time,expertise,and other resources to related causes,including community development,early education,environmental efforts,and cultural enrichment.HMA Corporate Social Responsibility In 2022,HMA launched Hyundai Hope,a corporate initiative focused on providing time and resources to nonprofit organizations that support the health and safety of individuals and foster positive growth in communities.Hyundai Hope focuses on the pillars of health,communal safety,and food security,and has donated over$1 million towards these causes since its inception.HMA also supports a range of programs aimed at recognizing the positive impact and achievements of diverse artists,entertainers,and actors.HMA has donated$648,000 to support organizations that provide communities an enriching cultural experience.Hyundai Hope On Wheels Hyundai Hope On Wheels(HHOW)was founded in 1998 as a 501(c)(3)non-profit organization to fund research and create awareness for childhood cancer.HMA and its more than 830 dealers and customers support the cause with a donation from every new vehicle sold.In 2022,HHOW surpassed$200 million in life-time donations to pediatric cancer research in the United States.In 2023,HHOW awarded$25 million to such research to commemorate the non-profits 25th anniversary.To date,HHOW has CENTER FOR AUTOMOTIVE RESEARCH 13 supported the advancement of 1,300 research studies at over 175 medical institutions.GMA Corporate Social Responsibility Genesis Gives is a corporate social responsibility initiative launched in 2022 that supports non-profit organizations focused on improving access to,and performance in,youth sports as well as technology,engineering,art,and mathematics education in under-resourced communities.The program has donated$1.5 million to date.Genesis Inspiration Foundation Founded in 2018,the Genesis Inspiration Foundation(GIF)is a 501(c)(3)non-profit organization that seeks to improve educational outcomes by providing access to arts programs that engage children in under-resourced communities.GIF has donated nearly$8 million through over 100 grants to nearly 80 organizations since its inception through the support of Genesis as well as its dealer network and customers.Hyundai U.S.Automotive Manufacturing Facilities and Research Centers HMAs Current Manufacturing Operations and Production Volumes HMA has operated one assembly plantHyundai Motor Manufacturing Alabama(HMMA)in the United States since 2005.HMMA is in Montgomery,Alabama,about 150 miles southwest of Atlanta.Sonata was the first model HMA built in the United States,followed a year later by the Santa Fe.From CENTER FOR AUTOMOTIVE RESEARCH 14 2010 to 2018,Santa Fe was also assembled at Kia Motors Manufacturing Georgia(KMMG),the only Kia Motors America(KMA)U.S.assembly plant in West Point,Georgia.HMA and KMA are both owned by Hyundai Motor Group(HMG).The engines that go into Hyundai Sonata and Santa Fe are made at HMMA,and the transmissions are produced at KMMG.In 2022,HMMA produced 332,832 motor vehicles in its U.S.light-vehicle assembly plant,which includes the Hyundai Elantra,Sonata,Santa Cruz,Tucson,and Santa Fe.HMAs U.S.annual production volume is shown in Figure 3.Figure 3 Hyundai U.S.Vehicle Production,2005-2022 Sources:Wards Auto and IHS Markit Figure 3 above depicts HMAs total vehicle production in the U.S.between 2005 and 2022.The decline in vehicle production which begins in 2016 coincides with transition of Santa Fe Sport production from the West Point Plant in Georgia to the Montgomery Plant in Alabama.Furthermore,the Montgomery Plant underwent line improvements,tooling installation,and CENTER FOR AUTOMOTIVE RESEARCH 15 employee training to accommodate production of the redesigned Santa Fe,Sonata,and Elantra.In addition to HMMA,Hyundai Motor Company(HMC),the parent company of HMA,owns and operates Hyundai Transys,HMCs automotive parts and powertrain producer.Hyundai Transys operates five manufacturing facilities in the United States.Table 1 lists the manufacturing facilities HMC owns and operates in the United States.In 2022,HMA vehicles assembled in the U.S.comprised roughly 43%of HMAs total U.S.sales.This is projected to grow to 49%in 20301 due to the investments detailed in Table 3 and future production of battery electric vehicles.Please refer to Appendix B for more detail on HMA U.S.sales.Table 1 Hyundai Motor Company(HMC)Manufacturing Plants in the United States,2022 Facility Operations City State Hyundai Motor Manufacturing Alabama(HMMA)Manufacturing Montgomery AL Hyundai Motor America(HMA)Headquarters Fountain Valley CA Hyundai Transys Georgia Seating System Manufacturing West Point GA Hyundai Transys Georgia Powertrain Manufacturing West Point GA CENTER FOR AUTOMOTIVE RESEARCH 16 Hyundai Transys Georgia Seating System,LLC(Alabama)Manufacturing Prattville AL Hyundai Transys Illinois Seat Plant Manufacturing Champaign IL Hyundai Transys Arizona Seating System Manufacturing Mesa AZ Figure 4 provides a history of Hyundai U.S.engine production from 2017 through 2022 in HMMA.HMMA is HMAs sole U.S.engine facility,and the plant has produced engines at an annual volume exceeding 400,000 units in the last two years.Figure 4 Hyundai U.S.Engine Production,2017-2022 Sources:LMC Automotive CENTER FOR AUTOMOTIVE RESEARCH 17 Figure 5 provides a history of Hyundai U.S.transmission production from 2017 through 2022.Hyundai Transys Georgia Powertrain is an HMC subsidiary in West Point,Georgia.The facility is HMCs sole U.S.transmission facility.The plant has produced transmissions at an annual output exceeding 350,000 units in the last two years and supplied transmissions for both HMA and KMA assembly plants in Alabama and Georgia.Figure 5 Hyundai U.S.Transmission Production,2017-2022 Sources:LMC Automotive Hyundai U.S.Research,Development,and Technical Centers Hyundai Motor Group(HMG)has seven global centers focused on research and development(R&D).In the United States,Hyundais R&D facilities consist of Hyundai America Technical Center,Inc.(HATCI),established in 1986 in Ann Arbor,Michigan;Hyundai Design and Technical Center in Irvine,California,and HATCIs 17.52 million square meter proving grounds in the Mojave Desert,CENTER FOR AUTOMOTIVE RESEARCH 18 where USD 60 million was invested for a total of 116 km road length for a top speed of 250 km/h.HATCI has grown to include a robust network of engineering disciplines and increased business-focused activities to support Hyundais North American operations.In 2022,Hyundai announced it broke ground on a new Safety Test and Investigation Laboratory(STIL)at its HATCI facility-a USD 51.6 million investment which is expected to create more than 150 jobs in the Ann Arbor area.The new facility will feature a field crash investigation lab,high voltage battery lab,forensics lab,500m track and a Vehicle Dynamics Area pad where high-speed maneuvers,low-speed maneuvers,steering failures,brake failures,system failures,and electrical issues can be observed2.In May 2022,Hyundai announced it will locate its New Horizons Studio(NHS)headquarters in Bozeman,MT.This facility will be located on Montana State Universitys campus and will focus on the development of Ultimate Mobility Vehicles(UMVs).Figure 6 shows Hyundais research,development,and technical centers in the U.S.Figure 6 HMAs U.S.Research,Development,and Technical Centers CENTER FOR AUTOMOTIVE RESEARCH 19 Sources:Book of Deals,Center for Automotive Research Table 2 lists Hyundais research and development facility locations in the United States and their primary automotive research focuses.Table 2 HMAs U.S.Research,Development,and Technical Centers Facility Name Focus Location Hyundai America Technical Center,Inc.Center dedicated to the design,plan and development of Hyundai vehicles intended for the North American market Ann Arbor,MI Safety Test and Investigation Laboratory-HATCI Field crash investigation lab Ann Arbor,MI Hyundai America Technical Center,Inc.Center focuses on the development of alternative fuel vehicles Chino,CA Hyundai-Kia Motors Design&Research Center Vehicle design center Irvine,CA HATCI Proving Grounds Vehicle test track California City,CA CENTER FOR AUTOMOTIVE RESEARCH 20 New Horizons Studio Development of Ultimate Mobility Vehicles Bozeman,MT HMAs U.S.Dealers Network Hyundai has over 830 dealerships located throughout the United States.CAR researchers estimate that these dealers have more than 54,000 employees.More than half,or 29,000,are sales representatives and supervisors.A quarter,or 14,000,are automotive mechanics and technicians.Most Hyundai vehicles sold in the U.S.are built at U.S.manufacturing facilities,including Hyundai Motor Manufacturing Alabama.Sales by Region,HMA Hyundai sold a total of 693,560 vehicles at 835 franchise locations in the U.S.in 2021.Figure 7 depicts Hyundai sales across seven regions in the U.S.and the number of franchise locations by region.The region that saw the most sales in 2021 with 151,480 units sold includes the states Connecticut,Delaware,Maine,Massachusetts,New Hampshire,New Jersey,New York,Pennsylvania,Rhode Island,and Vermont.CENTER FOR AUTOMOTIVE RESEARCH 21 Figure 7 Map of HMA Dealership Franchise Sales by Region,2021 Sources:Hyundai Motor America The EV market experienced substantial growth in 2022 as the global market share of EVs ticked up to 12.3%of the light vehicle market,3 demonstrating a clear acceleration of EV adoption.In 2022,Hyundai Motor Company sold 238,000 Battery Electric Vehicles(BEVs)and Plug-In Hybrid Vehicles(PHEVs)globally,up 72 percent year-over-year and representing a 6.0 percent share of HMCs vehicles sold in 2022.These sales include 223,000 BEVs and 15,000 PHEVs.The top ten countries HMCs EVs were sold are South Korea,Germany,U.S.A.,U.K.,France,Norway,Spain,Canada,Netherlands,and Italy,as shown in Figure 8.Except for South Korea,most of HMC EV sales were in European CENTER FOR AUTOMOTIVE RESEARCH 22 countries and North America.In fact,European countries account for 48 percent of HMC EV sales,South Korea accounts for 33 percent,and North America accounts for 17 percent.Figure 8 HMC EV Sales in Top Ten Countries,2022 Sources:Marklines 2022 Global Sales of Major Automakers and Groups Hyundais New Investment in the United States U.S.automakers announced to invest USD 122.4 billion in electric vehicles from 2010 through 2022,with a total of USD 50.9 billion worth of investment announcements in 2022 alone4.In 2022,HMG and Hyundai Mobis announced they would invest USD 10.6 billion into new electric vehicle facilities.Two investments are in Bryan County,Georgia,one in Bartow County,Georgia,and the last in Montgomery,Alabama.Table 3 details the 2022 investment announcement on the production of battery electric vehicles and battery manufacturing facilities.CENTER FOR AUTOMOTIVE RESEARCH 23 Table 3 Hyundais New Manufacturing Investments in the United States Company Focus Location Investment Amount Expected Completion Hyundai Motor Group Metaplant America(HMGMA)EV and battery manufacturing Bryan County,GA$5 Billion5 2025 Hyundai Motor Group(HMG)and SK On EV battery manufacturing Bartow County,GA$4-5 Billion6 2025 Hyundai Mobis EV Power electric system plant Bryan County,GA$926 Million7 2024 Hyundai Mobis EV battery modules Montgomery,AL$205 Million8 2024 By 2025,HMG will invest over USD 10 billion in new electric vehicle and battery manufacturing in the U.S.At the Megasite located in Bryan County,Hyundai announced a USD 5 billion investment in opening its first state-of-the-art U.S.smart factory,Hyundai Motor Group Metaplant America CENTER FOR AUTOMOTIVE RESEARCH 24(HMGMA).Located close to ports,rails,and workforce,the 2,967-acre Megasite is adjacent to Interstate 16 with direct access to 250 major metro areas,including Atlanta,Birmingham,Charlotte,Memphis,and Orlando.Located 28 miles from the site,the Port of Savannah is the nations largest and fastest-growing container terminal.The site was purchased in 2021 through a partnership between the State of Georgia and the Savannah Harbor-Interstate 16 Corridor Joint Development Authority,which includes the counties of Bryan,Bulloch,Chatham,and Effingham.This facility will help HMG lead the U.S.auto industrys EV transition and strive toward its goal of becoming one of the top EV providers in the U.S.by 2026.HMG and SK On,a lithium-ion battery subsidiary of S.K.Innovation,have selected Bartow County,Georgia,to build a new EV battery manufacturing facility.HMG will use the new facility to supply its U.S.factories.It is one of the largest economic development projects in the states history.Operations are expected to begin in 2025.Hyundai Mobis,HMGs largest automotive parts supplier,is investing USD 926 million in a Bryan County plant to produce electric vehicle power systems.The EV Power Electric system plant will expand Hyundai Mobis current footprint in Georgia.Hyundai Mobis operates a manufacturing facility with almost 1,200 employees in West Point as Kia Georgias largest Tier 1 supplier since 2009.The plant supplies chassis modules,cockpit modules,and bumper assemblies to automotive manufacturers.At full production,the 1,200,000-square-foot facility will supply more than 900,000 electric vehicle power units and 450,000 integrated charging control units annually to Hyundai Motor Group Metaplant America(HMGMA)in Bryan County,Hyundai Motor Manufacturing Alabama(HMMA)in Montgomery,and Kia Georgia.Hyundai Mobis also plans to invest USD 205 million in constructing a new EV battery module plant in Montgomery,Alabama.When the 450,000-square-foot CENTER FOR AUTOMOTIVE RESEARCH 25 facility reaches full production capabilities,it will supply over 200,000 EV batteries annually to the Kia Georgia plant and the Hyundai Motor Manufacturing Alabama(HMMA)factory in Montgomery.The new facility will be built on the HMAA campus off Interstate 65 in Montgomery.Hyundai Mobis will expand its existing presence in Montgomery by establishing the EV battery module plant.Please refer to Figure 9 for the number of suppliers per state supporting HMA.Figure 9 Number of Suppliers by State9 Sources:Marklines Supplier Database HMAs Environmental Sustainability As a company,Hyundai is dedicated to minimizing the negative environmental impact of their operations throughout the entire value chain.The company plans to reduce the carbon footprint of their vehicles and CENTER FOR AUTOMOTIVE RESEARCH 26 operations while also reducing waste through recycling and upcycling,including more recycled and eco-friendly materials in their products,executing a robust EV strategy,reducing air and water pollutants,and utilizing raw materials more efficiently.Hyundai released an environmental report in 2021 that details its environmental sustainability goals,summarized in Table 4.Table 4 HMAs Environmental Objectives Objective Carbon Hyundai plans to increase electric vehicle sales to reduce the average carbon emissions of all its vehicles,with the goal to achieve zero carbon emissions for product usage over the long term.Sold 140K EVs in 2021,a year-on-year increase of 44%in the proportion of EVs against total vehicle sales.Set target to be carbon neutral by 2045 Received RE100 designation from The Climate Group for efforts to transition to 100%renewable energy by 2045.Set target to achieve 100%electrification in major markets by 2040.Materials Hyundai recycles plastic materials to make wheel guards,undercover parts,battery trays,and parts for fan shrouds.Biomaterials are utilized to produce interior materials in the newly launched G80 and IONIQ 5.The IONIQ 5s production incorporates vegetable oil and eco-friendly paints in the pre-treatment process of leather seats.CENTER FOR AUTOMOTIVE RESEARCH 27 Hyundais vehicles are 85%recyclable and reusable.Biodiversity Hyundai assesses and protects biodiversity related to business activities,with a focus on ecosystem restoration,resource circulation,climate change response,and biodiversity conservation.Waste Hyundai recycles most of the metals it uses,such as iron and aluminum,and recycles waste paint,waste thinner,packaging materials and sludge.In 2021,Hyundai recycled 91.5%of all waste materials generated at business sites,as well as responsibly treated difficult-to-recycle waste.In addition to Hyundais plan for reduced emissions throughout its business sites,the company is also committed to accelerating its technology development for eco-friendly vehicles and increasing sales of its EVs and Fuel-Cell Electric Vehicles(FCEVs)in line with the expansion of EV markets.Hyundai sold 140K EVs in 2021,a year-on-year increase of 44%in the proportion of EVs against total vehicle sales.The company has set its EV sales target to 840,000 units by 2026(17%of total vehicle sales).By 2030,Hyundai aims to sell 1.87 million EV units worldwide(36%of total vehicle sales),with 530,000 units sold in the U.S.alone(58%of total U.S.vehicle sales).To expand its global EV sales and market share,Hyundai plans to launch 17 EV lineups including 11 Hyundai brands and 6 Genesis brands by 2030.The company released the IONIQ 6 in 2022 and will release the IONIQ 7 in 2024,while launching EV lineups for six types of SUVs,three passenger vehicles,one small commercial vehicle,and another new vehicle by 2030.All new models of the Genesis brand will be launched as EVs starting from 2025.Aside from battery electric vehicles,Hyundai is reaching many milestones in other CENTER FOR AUTOMOTIVE RESEARCH 28 vehicle technologies such as the worlds first mass production of FCEVs,including sales of 20,000 NEXOs.HMAs Economic Impact Analysis in the United States CAR researchers estimated HMAs economic contribution by using proprietary employment data provided by the company,and a commercially available and peer-reviewed,dynamic input-output general equilibrium model of the U.S.economy produced by Regional Economic Models,Inc.(REMI).CARs analysis focuses on several aspects of HMAs United States operations:manufacturing and related supporting operations,research and development,future EV and battery investment,and dealership network.CAR also provides details of the companys economic contribution in seven states in which HMA has significant footprints in motor vehicle manufacturing,motor vehicle design and technology centers,regional sales offices,regional headquarters,and dealer network operations.The REMI model produces estimates based on model inputs of HMAs direct employment,income,and compensation data.Direct employment represents all HMAs U.S.hourly and salaried workers who directly work in the companys manufacturing facilities,research and technology centers,regional offices,and headquarters.The model estimates intermediate employment,or the number of supplier jobs related to HMA across all sectors of the U.S.economyin other words,there are indirect jobs supported by HMA operations in the United States.The model also estimates spin-off or expenditure-induced employmentthe jobs supported by the HMA employees and suppliers workers who spend their earnings in the economy.Additionally,the model generates estimates of the amount of U.S.personal CENTER FOR AUTOMOTIVE RESEARCH 29 income and tax revenues generated by HMAs total economic contribution in the United States.Hyundai Motor America(HMA),Hyundai Motor Company(HMC),and Hyundai Motor Group(HMG)Hyundai Motor Group(HMG)is a multinational conglomerate,also known as chaebol,with a series of affiliated companies cross-holding each others ownership with complex shareholding arrangements.HMG was formed in 1998 by Hyundai Motor Company(HMC)acquiring a majority share of Kia Motor Corporation.Today,HMGs business value chains include motor vehicle manufacturing,steelmaking,construction,finance,logistics,information technology,and services.In addition to HMC and Kia,HMGs automotive affiliates include Hyundai Mobis,Hyundai IHL,and Hyundai WIA.Hyundai Motor America(HMA)is one of HMCs fully-owned subsidiaries in the United States.HMC directly owns the following companies in the United States:Hyundai Motor America(HMA),HMCs U.S.sales and manufacturing operations,Hyundai Translead,HMCs logistics and parts distribution operations,Hyundai Transys,HMCs auto parts system manufacturer,Hyundai America Technical Center,Inc.(HATCI),a R&D center for HMG,Hyundai Rotem USA(through Hyundai Rotem),a heavy industry equipment manufacturing company,MoceanLab,and Hyundai Motor Investment Through HMAs ownership,HMC indirectly owns the following companies in the U.S.:Hyundai Capital America the financial arm in the United States for HMC,CENTER FOR AUTOMOTIVE RESEARCH 30 Hyundai Motor Manufacturing Alabama automotive manufacturing,Stamped Metal American Research Technology metalworking manufacturing,and Genesis Motor America the U.S.sales operations for Genesis Motor,a division of HMC Beginning in 2021,HMGs Hyundai,Kia,and Genesis global sales rank third place in the world,only behind Toyota and Volkswagen.In North America,HMG is in fifth place,following General Motors,Toyota,Ford,and Stellantis10.This economic contribution study focuses on HMAs current U.S.automotive operations(including HMAs wholly-owned U.S.subsidiaries11),Hyundais automotive technical and research center HATCI,Hyundais new electric vehicle and battery investment in Georgia and Alabama,and HMAs independent dealer network operations.Except for Hyundais new EV and battery investment,this economic contribution study does not include the other wholly owned subsidiaries that HMC,HMAs parent company,owns or operates in the United States.Methodology-Macroeconomic Modeling CAR researchers produced the estimates presented in this study using a specially constructed inter-industry and inter-region dynamic economic model developed by Regional Economic Models,Inc.(REMI).The REMI model is designed to simulate dynamic year-over-year regional economic effects of policies or actions,including investment,employment,and wage rates.Government agencies,consulting firms,and universities have long relied on the highly regarded REMI model for analyzing economic policy impacts and industry contributions.CAR has used REMI for multiple economic impact studies in the past12.CENTER FOR AUTOMOTIVE RESEARCH 31 CAR researchers used a 7-region,160-sector REMI model to estimate the economic contribution of HMAs operations in the United Statesincluding manufacturing and related supporting operations,research and development,future EV and battery investment,and dealership network.The approach permitted simulation of the interactions among the economies of the seven selected states and the rest of the United States.The simulation inputs include,but are not limited to,the proprietary hourly and salaried worker headcounts,and U.S.payroll statistics.HMAs Current Economic Contribution to the U.S.Economy In 2021,HMA directly hired 7,050 hourly and salaried workers in the United States.HMAs U.S.automotive operations generated 21,200 indirect(supplier)jobs and supported an additional 30,000 spin-off(expenditure-induced)jobs in the United States.The total U.S.employment contribution for HMAs U.S.operations was 58,250 or,0.03%of total U.S.private non-farm employment.These jobs generated USD 5.2 billion in disposable personal income and USD 2.2 billion in social welfare and income tax contribution(Table 5 and Table 6).Table 5 HMAs Employment Contribution Employment Direct Employment(Hourly and Salaried)7,050 Intermediate Employment 21,200 Spin-Off Employment(Expenditure-Induced)30,000 CENTER FOR AUTOMOTIVE RESEARCH 32 Total Employment(Direct Intermediate Spin-Off)58,250 Multiplier:(Total Employment/Direct Employment)8.3 The ratio of total employment to direct employment produces an overall job multiplier 8.3meaning there were 7.3 additional jobs in the U.S.economy for every direct job at HMA.The total earning by place of work in the private sector for all 58,250 jobs was USD 7.3 billion,which represents 0.04 percent of the private non-farm sector compensation in the U.S.economy.Based on this compensation,CAR estimates that USD 1.0 billion was paid for personal income taxes,USD 0.8 billion was paid for contributions to the government,and personal current transfer receipts(social welfare payments)were reduced by USD 0.3 billion.Table 6 HMAs Income Contribution Income($Billion)Total Earnings by Place of Work,Private Non-Farm$7.3B Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts$1.1B Less:Personal Income Taxes$1.0B Equals:Private Disposable Personal Income$5.2B Contribution as Percent of U.S.Economy CENTER FOR AUTOMOTIVE RESEARCH 33 Employment 0.03%Compensation 0.04%HMAs Dealer Network Contribution to the U.S.Economy HMAs dealer network has more than 830 new vehicle dealerships across all fifty states,and these independent businesses and entrepreneurs directly employ 54,100 workers in their new and used car sales and service operations.In 2022,about 43 percent of motor vehicles HMA sold in the United States were assembled in HMAs U.S.manufacturing plant.Of these 54,100 workers HMA dealers hire,CAR estimates that about 29,000 employees are new and used car sales personnel and supervisors;13,500 are mechanics and technicians;and the remaining workers support business operations.HMAs U.S.dealer network is estimated to generate 32,000 indirect(intermediate)jobs.The direct and indirect employees then generate an additional 46,600 jobs in the U.S.economy through their personal consumption expenditure.Combined,a total of 132,700 jobs are supported by HMAs dealer network in the United States.The ratio of total jobs per direct hire(job multiplier)is 2.5.In other words,for every job HMA dealers hire,about 1.5 more jobs were added to the U.S.economy(Table 7).Table 7 HMAs Dealer Network Employment Contribution Employment CENTER FOR AUTOMOTIVE RESEARCH 34 Direct Employment(Hourly and Salaried)54,100 Intermediate Employment 32,000 Spin-Off Employment(Expenditure-Induced)46,600 Total Employment(Direct Intermediate Spin-Off)132,700 Multiplier:(Total Employment/Direct Employment)2.5 HMAs independent dealership businesses contribute a total of 132,700 jobs to the U.S.economy and generate a total of USD 12.8 billion in private non-farm earnings,of which USD 1.9 billion is contributed to the governments social welfare funds and the reduction of social welfare expenditure.A total of USD 1.8 billion in income tax revenue can be traced to the economic contribution of HMAs dealer network operations(Table 8).Table 8 HMAs Dealer Network Income Contribution Income($Billion)Total Earnings by Place of Work,Private Non-Farm$12.8B Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts$1.9B Less:Personal Income Taxes$1.8B CENTER FOR AUTOMOTIVE RESEARCH 35 Equals:Private Disposable Personal Income$9.1B Contribution as Percent of U.S.Economy Employment 0.07%Compensation 0.08%HMAs Investment and Future Contribution to the U.S.Economy Hyundai has announced nearly USD 19 billion in investment towards electrification since 2010.In 2022,HMG and Hyundai Mobis announced they will invest USD 10.6 billion in new electric vehicle and battery manufacturing facilities in the next three years.In Bryan County,Georgia,Hyundai announced a USD 5 billion investment in Hyundai Motor Group Metaplant America(HMGMA).This facility is expected to hire up to 8,100 workers in vehicle manufacturing and battery manufacturing facilities.HMG and SK On have selected Bartow County,Georgia,to build a new EV battery cell manufacturing facility by investing up to USD 5 billion.Operations are expected to hire 3,500 workers beginning in 2025.Hyundai Mobis,HMGs largest automotive parts supplier,is investing USD 926 million in a Bryan County plant to produce electric vehicle power systems.The plant is expected to hire as many as 1,500 workers.Hyundai Mobis also plans to invest USD 205 million in constructing a new EV battery module plant in CENTER FOR AUTOMOTIVE RESEARCH 36 Montgomery,Alabama.This battery module plant is expected to hire 400 workers by as early as 2024.Together,Hyundais new USD 10.6 billion investment in Georgia and Alabama will directly hire 13,500 workers.CAR estimates that about 8,000 workers would be directly hired to work in battery manufacturing facilities;up to 4,000 workers in electric vehicle manufacturing assembly,and 1,500 workers in electrical equipment manufacturing facilities.They will support nearly 21,100 supplier jobs in the United States;and generate additional 28,200 jobs in other industries.The overall employment contribution by Hyundais new EV and battery investment will be 62,800 jobs,as shown in Table 9.The Job Multiplier is 4.7,which indicates that for every Hyundai direct hire,there are 3.7 additional jobs created in the U.S.economy.The multiplier is lower than that of HMAs current automotive operations because the investment focuses on EV and battery manufacturing,and battery and electric equipment manufacturing sectors have lower job multipliers than that of the motor vehicle manufacturing sector.Near 90 percent of Hyundais new hires(13,100 of 13,500)for the EV investment would be in Georgia.These jobs in Georgia would generate 24,800 other jobs in Georgia,and the job multiplier in Georgia is 2.9.According to Hyundais announcement,there would be 400 new hires in Alabama.Because inter-state commerce also contributes to job creation in Alabama,Alabama would see a higher job multiplier than Georgia.Overall,Alabama would see a total of 2,900 jobs added to the state economy due to Hyundais EV investment in Georgia and Alabama.CENTER FOR AUTOMOTIVE RESEARCH 37 Table 9 Hyundais EV Investment Employment Contribution Employment US Total GA AL Direct Employment(Hourly and Salaried)13,500 13,100 400 Intermediate Employment 21,100 11,100 900 Spin-Off Employment(Expenditure-Induced)28,200 13,700 1,600 Total Employment(Direct Intermediate Spin-Off)62,800 37,900 2,900 Multiplier:(Total Employment/Direct Employment)4.7 2.9 N/A Hyundais EV and battery investment will bring the U.S.economy USD 8.3 billion in personal earnings per annum,of which USD 5.8 billion in personal disposable income and USD 2.5 billion in social welfare and tax contribution,as shown in Table 10.Georgia and Alabama would see a USD$4.6 billion and USD$0.3 billion increase in personal earnings,and$USD 3.5 billion and$USD 0.2 billion in personal disposable income,respectively.Georgia would see USD$1.3 billion of social welfare and tax revenue increase;and Alabama would have USD$0.09 billion increase in the same categories.CENTER FOR AUTOMOTIVE RESEARCH 38 Table 10 Hyundais EV Investment Income Contribution Income($Billion)US Total GA AL Total Earnings by Place of Work,Private Non-Farm$8.3B$4.6B$0.3B Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts$1.3B$0.4B$0.04B Less:Personal Income Taxes$1.2B$0.7B$0.05B Equals:Private Disposable Personal Income$5.8B$3.5B$0.2B Contribution as Percent of U.S.Economy Employment 0.03%N/A N/A Compensation 0.04%N/A N/A HMAs Economic Contribution to Key Operating States In 2021,HMAs new capital investment in the United States exceeded USD 3.2 billion.Alabama,California,and Georgia received the majority of HMA capital investment,accounting for more than 97 percent of the total investment of that year.HMAs directly hired 6,500 workers in the United States,and 94 percent of them live in Alabama,California,Georgia,and Texas.HATCI,a wholly-owned subsidiary of HMC,employs about 550 researchers,engineers,and other white-collar staff in the United States.The majority of them work from the states of California and Michigan.CENTER FOR AUTOMOTIVE RESEARCH 39 HMA dealer network has 835 independent dealers across all fifty states.The top ten states with the highest number of HMA new vehicle retail stores are California,Texas,Florida,New York,Pennsylvania,Illinois,Ohio,North Carolina,Georgia,and Virginia.These ten state account for more than half of all HMA dealers in the United States.CAR estimated about 55 percent of HMA dealer network employment reside in these ten states.Alabama Alabama is home to HMAs sole motor vehicle assembly plant in the United States,Hyundai Motor Manufacturing Alabama(HMMA).It opened in 2005 and now employs about 3,500 hourly and salaried workers.Since 2005,HMMA has been home to U.S.-made Elantra(Avante),Sonata,and Santa Fe.The production of Santa Cruz and Tucson began in 2021 and gradually replaced the compact and mid-size passenger cars production in HMMA.Besides motor vehicles,HMMA also produces over half a million engines that go to HMMA and KMMG,Kias sole assembly plant in West Point,Georgia.In 2021,Alabama received USD 2.3 billion in new capital investment to support HMAs continuous operations in Alabama.In 2023,HMMA begins the production of Genesis GV70 EV to qualify for the IRA 30D Clean Vehicle Credit;the new Federal income tax credit for electric vehicles made in North America.HMA employs 3,600 in the state of Alabama.In addition,HMAs Alabama dealer network operates 16 stores and directly hires 900 local employees.The total employment contribution from HMA auto operation and dealers in the state of Alabama is 22,200.The ratio of total employment to direct employment produces an employment multiplier of 4.9meaning there are 3.9 additional jobs in Alabama for every worker hired by HMA and HMA dealer network in Alabama.The total earning by place of work in the Alabama CENTER FOR AUTOMOTIVE RESEARCH 40 private sector increased by USD 3.1 billion,which represents USD 2.4 billion of private disposable income and USD 654 million of government social welfare funds and income tax.Table 11 HMAs State Economic Contribution Alabama HMAs State Economic Contribution Alabama Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)3,600 900 4,500 Intermediate Employment 6,950 300 7,250 Spin-Off Employment(Expenditure-Induced)9,750 700 10,450 Total Employment(Direct Intermediate Spin-Off)20,300 1,900 22,200 Multiplier:(Total Employment/Direct Employment)5.6 2.1 4.9 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$2,906$151$3,057 CENTER FOR AUTOMOTIVE RESEARCH 41 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$241$31$272 Less:Personal Income Taxes($Million)$363$19$382 Equals:Private Disposable Personal Income($Million)$2,301$101$2,402 Arizona HMA does not have an automotive presence in the state of Arizona.However,HMA has 16 independent dealers and directly employs 1,800 employees.HMAs retail business in Arizona contributes a total of 4,400 workers and USD 397 million in total earnings.The employment multiplier is 2.4meaning there are 1.4 additional jobs in Arizona for every job at HMAs Arizona dealer network.These jobs add USD 59 million to government social welfare funds and USD 50 million to federal and local income tax.Table 12 HMAs State Economic Contribution Arizona HMAs State Economic Contribution Arizona Employment Auto Operations Dealer Network Total CENTER FOR AUTOMOTIVE RESEARCH 42 Direct Employment(Hourly and Salaried)-1,800 1,800 Intermediate Employment 20 950 970 Spin-Off Employment(Expenditure-Induced)30 1,600 1,630 Total Employment(Direct Intermediate Spin-Off)50 4,350 4,400 Multiplier:(Total Employment/Direct Employment)N/A*2.4 2.4 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$15$382$397 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$12$47$59 Less:Personal Income Taxes($Million)$1$49$50 Equals:Private Disposable Personal Income($Million)$3$286$289 CENTER FOR AUTOMOTIVE RESEARCH 43*Employment contribution was largely derived from other states.California California is home to HMAs headquarters,Hyundai America Technical Center,Hyundai-Kia Design and Research Center,and HATCI proving ground.These facilities employ 1,850 researchers,engineers,and other non-manufacturing staff.In 2021,California received USD 700 million in new capital investment to support HMAs automotive operations.It was HMAs second-highest state investment,compared to Alabama.In addition,HMAs dealer network in California operates the largest dealer count of any state,70 new vehicle dealerships,and directly employs 5,700 salespersons,technicians,and business-supporting staff.HMAs total direct employment in California,including dealers,was 7,550.The total employment contribution to the state was 19,200.The job multiplier is 2.5meaning in California,there are 1.5 additional jobs for every HMA worker.The total earnings by place of work are estimated to be USD 2.4 billion,including USD 371 million of government social welfare contribution and USD 397 million of state and federal income tax.Table 13 HMAs State Economic Contribution California HMAs State Economic Contribution California Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)1,850 5,700 7,550 CENTER FOR AUTOMOTIVE RESEARCH 44 Intermediate Employment 1,950 3,100 5,050 Spin-Off Employment(Expenditure-Induced)2,300 4,300 6,600 Total Employment(Direct Intermediate Spin-Off)6,100 13,100 19,200 Multiplier:(Total Employment/Direct Employment)3.3 2.3 2.5 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$864$1,495$2,359 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$132$239$371 Less:Personal Income Taxes($Million)$145$252$397 Equals:Private Disposable Personal Income($Million)$587$1,003$1,590 CENTER FOR AUTOMOTIVE RESEARCH 45 Florida Florida received USD 17 million in capital investment from HMA in 2021 to support its automotive operations.HMA has a limited number of employees in the state but has a large footprint in the HMA dealer network.Florida has 51 HMA independent dealerships,which directly employ 4,600 workers.It is HMAs third largest state in terms of dealer network,next to California and Texas.The total employment contribution in the state is 12,400,and the job multiplier is 2.7meaning there are 1.7 additional jobs for every direct job at HMA Florida.HMAs income contribution will add USD 1.1 billion to the total earnings,including USD 195 million in government social welfare funds and USD 135 million in personal income tax.Table 14 HMAs State Economic Contribution Florida HMAs State Economic Contribution Florida Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)-4,600 4,600 Intermediate Employment 600 2,300 2,900 Spin-Off Employment(Expenditure-Induced)1,500 3,400 4,900 Total Employment(Direct Intermediate Spin-Off)2,100 10,300 12,400 CENTER FOR AUTOMOTIVE RESEARCH 46 Multiplier:(Total Employment/Direct Employment)N/A*2.2 2.7 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$203$848$1,051 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$52$143$195 Less:Personal Income Taxes($Million)$25$110$135 Equals:Private Disposable Personal Income($Million)$126$595$721*Employment contribution was largely derived from other states.Georgia Hyundais automotive operations in Georgia include a powertrain plant,a seating plant,and a part distribution center.HMA does not own these plants.Instead,they are wholly or partially owned by HMC,the parent company of HMA.HMA has 450 direct employees across these locations and invested USD 42 million in 2021.On top of it,HMA dealer network hires 1,900 workers in 27 new vehicle dealers stores.Together,HMA is responsible for hiring 2,350 workers in Georgia,contributing a total employment of 9,600,a job multiplier CENTER FOR AUTOMOTIVE RESEARCH 47 of 4.1meaning there are 3.1 additional jobs for every one job at HMA.The total earnings by place of work in the private sector are USD 868 million,including USD 121 million in government social welfare funds and USD 115 million in personal income tax.Table 15 HMAs State Economic Contribution Georgia HMAs State Economic Contribution Georgia Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)450 1,900 2,350 Intermediate Employment 1,600 1,050 2,650 Spin-Off Employment(Expenditure-Induced)2,800 1,800 4,600 Total Employment(Direct Intermediate Spin-Off)4,850 4,750 9,600 Multiplier:(Total Employment/Direct Employment)10.8 2.5 4.1 Income Auto Operations Dealer Network Total CENTER FOR AUTOMOTIVE RESEARCH 48 Total Earnings by Place of Work,Private Non-Farm($Million)$453$415$868 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$56$65$121 Less:Personal Income Taxes($Million)$62$53$115 Equals:Private Disposable Personal Income($Million)$335$294$629 Michigan Michigan is home to Hyundais technical and research center HATCI.HATCI mainly operates in two statesMichigan and California.About half of the direct employees locate in Michigan.HATCI-Michigan received USD 11 million in capital investment in 2021.In addition,HMAs independent dealers operate 17 new vehicle dealerships across the state and employ around 950 workers.The total direct employment associated with HMA in Michigan is 1,250.The economic contribution is 3,990 jobsa job multiplier of 3.1meaning there are 2.1 additional Michigan jobs for every job at HMA.The total earnings by place of work in the private sector are USD 385 million,including USD 80 million in government social welfare funds and USD 52 million in personal income tax.CENTER FOR AUTOMOTIVE RESEARCH 49 Table 16 HMAs State Economic Contribution Michigan HMAs State Economic Contribution Michigan Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)300 950 1,250 Intermediate Employment 500 600 1,100 Spin-Off Employment(Expenditure-Induced)600 950 1,550 Total Employment(Direct Intermediate Spin-Off)1,400 2,500 3,900 Multiplier:(Total Employment/Direct Employment)4.7 2.6 3.1 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$154$231$385 Less:Contributions for Government Social Insurance and$29$51$80 CENTER FOR AUTOMOTIVE RESEARCH 50 Personal Current Transfer Receipts($Million)Less:Personal Income Taxes($Million)$21$31$52 Equals:Private Disposable Personal Income($Million)$103$148$251 New York HMA dealer network operates 44 new vehicle dealerships and employs 2,500 workers in the state of New York.There is no HMA automotive facility in New York.However,New York state is HMAs fourth-largest state by dealer count.Total employment is estimated to be 2,500,and the economic contribution to jobs is 7,300a job multiplier of 2.9meaning there are 1.9 additional jobs for every HMA job in New York.The total earnings by place of work in the private sector are USD 930 million,including USD 186 million in government social welfare funds and USD 171 million in personal income tax.Table 17 HMAs State Economic Contribution New York HMAs State Economic Contribution New York Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)-2,500 2,500 CENTER FOR AUTOMOTIVE RESEARCH 51 Intermediate Employment 300 1,300 1,600 Spin-Off Employment(Expenditure-Induced)800 2,400 3,200 Total Employment(Direct Intermediate Spin-Off)1,100 6,200 7,300 Multiplier:(Total Employment/Direct Employment)N/A*2.5 2.9 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$180$750$930 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$52$134$186 Less:Personal Income Taxes($Million)$31$140$171 Equals:Private Disposable Personal Income($Million)$97$476$573*Employment contribution was largely derived from other states.CENTER FOR AUTOMOTIVE RESEARCH 52 Rest of the U.S.Many other automotive operations in the rest of the U.S.are associated with Hyundai,but they are not part of HMA.Instead,most of those operations are HMCs subsidiaries.For example,Hyundai Translead and Hyundai Transys,having significant automotive footprints in the United States and being essential elements in the Hyundai familys United States operations,are excluded from this study.In spite of the fact that there are omissions,HMA still directly employs about 900 in the rest of the U.S.Most of them are non-manufacturing,business-supporting staff and researchers.HMA dealer network operates 591 new vehicle dealerships in the rest of the U.S.and employs 35,800 workers.Total employment is estimated to be 36,700,and the economic contribution to jobs is 112,200a job multiplier of 3.1meaning there are 2.1 additional jobs for every HMA job in the rest of the U.S.The total earnings by place of work in the private sector are USD 11.0 billion,including USD 1.7 billion in government social welfare funds and USD 1.5 billion in personal income tax.Table 18 HMAs State Economic Contribution Rest of U.S.HMAs State Economic Contribution Rest of U.S.Employment Auto Operations Dealer Network Total Direct Employment(Hourly and Salaried)900 35,800 36,700 Intermediate Employment 9,300 22,500 31,800 CENTER FOR AUTOMOTIVE RESEARCH 53 Spin-Off Employment(Expenditure-Induced)12,300 31,400 43,700 Total Employment(Direct Intermediate Spin-Off)22,500 89,700 112,200 Multiplier:(Total Employment/Direct Employment)N/A*2.5 3.1 Income Auto Operations Dealer Network Total Total Earnings by Place of Work,Private Non-Farm($Million)$2,508$8,516$11,024 Less:Contributions for Government Social Insurance and Personal Current Transfer Receipts($Million)$497$1,182$1,679 Less:Personal Income Taxes($Million)$326$1,171$1,497 Equals:Private Disposable Personal Income($Million)$1,685$6,163$7,848*Employment contribution was largely derived from other states.CENTER FOR AUTOMOTIVE RESEARCH 54 Summary and Conclusion Hyundai Motor America has been in the U.S.market for 37 years.The sales volume grew from 168,000 units in 1986 to near 800,000 units in 2016.HMAs Alabama plant has been producing U.S.-made vehicles since 2005.The annual production volume increased from 91,000 units in 2005 to shy of 400,000 units in 2013 and 2014.HMAs U.S.-based assembly plant produced about 45 percent of HMAs vehicles sold in the U.S.market.HMA is considered a mid-size automaker by sales volume in the United States.Globally,Hyundai Motor Group ranks third,with more than 6.8 million units sold in 2022.Hyundai Motor Company contributed nearly 4.0 million units of vehicles sold worldwide.HMA and HATCI hired 7,050 workers in Alabama,California,Texas,Georgia,Michigan,and other states in the U.S.About 15 percent are engineers and researchers.Manufacturing employees account for half of total employment in the U.S.In addition,HMAs dealer network employed a total of 54,100 workers across all fifty states.More than half of these employees are sales personnel and supervisors;about one-quarter of employees are mechanics and technicians;and the rest are business-supporting staff.Combined,HMA U.S.operations and its dealer network employed a total of 61,150 workers in the United States.CAR estimates HMA and HMAs independent dealers in 2021 contributed a total of 190,950 jobs in the U.S.economy.Of these,58,250 are supported by HMAs U.S.automotive operations,and 132,700 are associated with HMAs 835 dealers in fifty states.HMA and its dealerships added USD 20.1 billion in private earnings to the U.S.economy,including USD 3.0 billion in social CENTER FOR AUTOMOTIVE RESEARCH 55 welfare contribution and USD 2.8 billion in federal and state income tax revenue.HMAs employment multiplier is 8.3implying 7.3 additional jobs for every employee in HMAs U.S.automotive operations.HMAs independent dealers have an employment multiplier of 2.5,indicating 1.5 other jobs created for every HMA dealership worker.From 2010 to 2022,Hyundai Motor Group(HMG)and its subsidiaries had already invested USD 8.3 billion towards electrification in the United States.By 2025,HMG,Hyundai Mobis,and SK On will invest an additional USD 10.6 billion into new electric vehicle facilities in Georgia and Alabama,which is expected to hire 13,500 jobs in those states.These jobs will generate an additional 49,300 jobs in the U.S.economy,a 4.7 employment multiplier,and create or retain a total of 62,800 jobs in the United States by 2025.These jobs will generate USD 8.3 billion in private earnings,including USD 1.3 billion in government social welfare funds and USD 1.2 billion in federal and state personal income tax.CENTER FOR AUTOMOTIVE RESEARCH 56 Appendix A:A History of Hyundai in the United States Hyundai Motor America Hyundais presence in the United States began in 1986 when Hyundai Motor America(HMA)established its headquarters in Fountain Valley,California.In February 1986,Hyundai launched its subcompact Excel model in the U.S.market,and in just seven months,Hyundai sold 100,000 Excels.Total sales in 1986 for Excel reached 168,882,setting an industry record for a first-year import vehicle distributor.In 1987,Hyundai expanded its operations into the central United States,opening a regional office near Chicago.The following year,HMA opened a USD 21 million 300,000-square-foot parts distribution center in Ontario,California,to deliver parts to Hyundais dealerships.In 1989,HMA opened a USD 16.6 million 342,000-square-foot office complex and parts distribution center in Aurora,Illinois.Hyundai established an additional parts distribution center in Lawrenceville,Georgia,and a Warranty Technical Center in Fountain Valley.In 1990,Hyundai opened its Hyundai Design Center in Fountain Valley.In 2003,it moved into a new USD 30 million facility in Irvine,California,and was renamed the Hyundai-Kia Motors Design and Research Center.Along with the design studio,the Design and Technical Center also contained Hyundai America Technical Center,Inc.(HATCI),which was originally established in 1986 in Ann Arbor,Michigan.In 2002,Hyundai broke ground in Montgomery,Alabama for its first U.S.motor vehicle assembly plant,Hyundai Motor Manufacturing Alabama(HMMA),a USD 1.4 billion investment that opened in 2005 and now employs about 3,500 workers.In 2004,Hyundai America Technical Center completed the construction of its Hyundai/Kia proving ground in California City,CENTER FOR AUTOMOTIVE RESEARCH 57 California.In 2009,Hyundai opened its USD 300 million engine plant at HMMA,which was expanded in 2011 to begin production of the 1.8-liter Nu engine.In 2022,Hyundai announced it would build two new Georgia facilities dedicated to electric vehicle(EV)and battery manufacturing.Hyundai plans to invest USD 5.5 billion in a facility in Savannah,Georgia to produce EVs and EV batteries.Production is expected to start in 2025 with a future capacity to build 300,000 EVs annually and create 8,100 jobs.The other new EV battery manufacturing facility will be located in Atlanta,Georgia,in a Joint-Venture partnership with SK On.The USD 5 billion facilities will begin production in 2025 and are expected to create 3,500 jobs for the communities.Genesis Motor Hyundai conceived the concept of Genesis in 2003 and introduced its first model in 2007.Genesis first global debut was under the Hyundai brand at the 2008 North American International Auto Show.In late 2016,Genesis launched in the U.S.as a stand-alone brand with two models:the G80 and G90.In September of 2016 a third model,the Genesis G70,was unveiled in South Korea and later introduced to the U.S.market during the 2018 New York Auto Show.Genesis vehicles are sold through a subset of existing Hyundai dealers,with designated space for Genesis within the dealerships showrooms.In 2022,Genesis opened its first U.S.stand-alone dealer in Lafayette,Louisiana13.J.D.Power named Genesis the most dependable automotive brand in 2020 and the following year,the most technologically innovative in North America14.CENTER FOR AUTOMOTIVE RESEARCH 58 A Brief History of Hyundai in the United States Hyundai opened a regional office near Chicago in 1987 to begin a lengthy history of investment in the United States.The following year,HMA opened a USD 21 million 300,000-square-foot parts distribution center in Ontario,California,to deliver parts to Hyundais dealerships.In 1989,HMA opened a USD 16.6 million 342,000-square-foot office complex and parts distribution center in Aurora,Illinois.Hyundai established an additional parts distribution center in Lawrenceville,Georgia,and a Warranty Technical Center in Fountain Valley.In 1990,Hyundai opened its Hyundai Design Center in Fountain Valley.In 2003,it moved into a new USD 30 million facility in Irvine,California,and was renamed the Hyundai-Kia Motors Design and Research Center.Along with the design studio,the Design and Technical Center also contained Hyundai America Technical Center,Inc.(HATCI),which was originally established in 1986 in Ann Arbor,Michigan.In 2002,Hyundai broke ground in Montgomery,Alabama for its first U.S.motor vehicle assembly plant,Hyundai Motor Manufacturing Alabama(HMMA),a USD 1.4 billion investment that opened in 2005 and now employs about 3,500 workers.In 2004,Hyundai America Technical Center completed the construction of its Hyundai/Kia proving ground in California City,California.In 2009,Hyundai opened its USD 300 million engine plant at HMMA,which was expanded in 2011 to begin production of the 1.8-liter Nu engine.CENTER FOR AUTOMOTIVE RESEARCH 59 Appendix B:HMA U.S.Sales Hyundai U.S.Sales Hyundai began selling vehicles in North America in 1986,with the launch of its Excel model.In its first year of operation in the U.S.,Hyundai sold 168,882 units of the Excel.Hyundai has experienced substantial growth in the U.S.market since 1986.By the end of 2022,the total unit sales of Hyundai vehicles were 724,265 which is 5.3%of the total U.S.light vehicle sales.Figure 10 shows the growth of Hyundais market vehicle sales from 2009 through 2022.Figure 10 Hyundai Vehicle Sales in the United States,2009-2022 Source:Wards Auto Data;CAR Research In 2016,HMA sales volume reached 774,900,the highest level HMA ever achieved in the U.S.market.From 2017 to 2019,the number of sales remained steady at 700 thousand.Hyundai-Kia was the fifth best-selling automaker group in the United States in 2022 with 10.7 percent of the market share,CENTER FOR AUTOMOTIVE RESEARCH 60 surpassing all European brands combined,and only behind Detroit-Three(Ford,General Motors,and Stellantis)and Japanese brands as shown in Figure 11.Figure 11 Vehicle Market Share by Brand Origins in the United States,2000 March 2023 Source:Wards Auto Data;CAR Research Genesis U.S.Sales In late 2016,Genesis became a standalone brand and in that same year sold 6,948 units or 0.04 percent of market share in the United States.In 2022,Genesis sales grew eight-fold to 56,410 units and accounted for 0.41 percent of the U.S.market share15.Among motor vehicle luxury brands in North America,Genesis ranks ninth place in 202216.CENTER FOR AUTOMOTIVE RESEARCH 61 Figure 12 Genesis Vehicle Sales in the United States,2016-2022 Source:Wards Auto Data;CAR Research CENTER FOR AUTOMOTIVE RESEARCH 62 References 1 Light Vehicle Sales Import,IHS Markit and CAR analysis 2 https:/ 3 Marklines 2022 Global Sales of Major Automakers and Groups 4 CARs Book of Deals,Center for Automotive Research 5 Hyundai Motor Group Metaplant America(HMGMA).AJC.27MAY2022.Documents reveal new details about future Hyundai EV plant in Georgia.https:/ Hyundai Motor Group(HMG)and SK On.Georgia USA.8DEC2022.Hyundai Motor Group and SK On To Build EV Battery Facility in Bartow County.https:/www.georgia.org/press-release/hyundai-motor-group-and-sk-build-ev-battery-facility-bartow-county 7 Hyundai Mobis($926 million).Georgia USA.23NOV2022.Second Global Automotive Supplier for Hyundai Metaplant To Create 1,500 Jobs.https:/www.georgia.org/press-release/second-global-automotive-supplier-hyundai-metaplant-create-1500-jobs 8 Hyundai Mobis($205 million).Area Development.28OCT2022.South Korea-Based Hyundai Mobis Plans Montgomery,Alabama,EV Battery Plant.https:/ 9 Marklines Supplier Database 10 Marklines 2022 Global Sales of Major Automakers and Groups 11 The following HMA subsidiaries are not included in this study:Hyundai Capital America(HCA),Stamped Metal American Research Technology,Inc.(SMARTI),and SMART Alabama,LLC(SMART),owned by SMARTI.12 Dziczek,K.,Schultz,M.,and Chen,Y.(2019).Contribution of General Motors to the Economies of Nine States and the United States in 2019.Center for Automotive Research,Ann Arbor,MI;Contribution of Toyota Motor North America to the Economies of Nineteen State and the United States in 2016.Kristin Dziczek,Yen Chen,Bernard Swiecki,Michael Schultz,Deb Maranger Menk,and Juliana Peterson,Center for Automotive Research,Ann CENTER FOR AUTOMOTIVE RESEARCH 63 Arbor,MI Septemer 2016;Contribution of General Motors Manufacturing Plants to the Economies of Ten States and the United States in 2013 and 2014.Kristin Dziczek,Debbie Maranger Menk and Yen Chen,Center for Automotive Research,Ann Arbor,MI,April 2015;Economic Contribution of the Ford Motor Company Michigan Assembly Plant to the Michigan Economy.Kim Hill,Bernard Swiecki,Debbie Maranger Menk,Joshua Cregger,Michael Schultz,Center for Automotive Research,Ann Arbor,MI,March 2013.Economic Impact of Hyundai in the United States.Kim Hill,Debbie Maranger Menk and Joshua Cregger,Center for Automotive Research,Ann Arbor,MI,November 2011.;Contribution of Toyota Motor North America to the Economies of Sixteen States and the United States in 2010.Kim Hill and Debbie Maranger Menk,Center for Automotive Research,Ann Arbor,MI,March 2011.;CAR Research Memorandum:The Impact on the U.S.Economy of the Successful Automaker Bankruptcies.Sean McAlinden,Kristin Dziczek,Debbie Maranger Menk,and Joshua Cregger,Center for Automotive Research,November 2010.;Contribution of the Automotive Industry to the Economies of All Fifty States and the United States.Kim Hill,Adam Cooper and Debbie Maranger Menk.Center for Automotive Research.Prepared for The Alliance of Automobile Manufacturers,The Association of International Automobile Manufacturers,The Motor Equipment Manufacturers Association,The National Automobile Dealers Association and The American International Automobile Dealers Association.April 2010.;CAR Research Memorandum:The Economic and Fiscal Contributions of the“Cash for Clunkers”Program National and State Effects.Sean P.McAlinden,Yen Chen and Adam Cooper,Center for Automotive Research,Ann Arbor,MI,January 2010.;The Economic and Environmental Impacts of a Corporate Fleet Vehicle Purchase Program.Kim Hill and Debbie Maranger Menk,Center for Automotive Research.Prepared for AT&T,October 2009.;CAR Research Memorandum:The Impact on the U.S.Economy of Successful versus Unsuccessful Automakers Bankruptcies.Sean P.McAlinden,Adam Cooper and Debbie Maranger Menk,Center for Automotive Research,Ann Arbor,MI,May 2009.;Contribution of Honda to the Economies of Seven States and the United States.Sean P.McAlinden,Kim Hill,David Cole and Debbie Maranger Menk,Center for Automotive Research.Prepared for American Honda Motor Co.,Inc.,January 2009;CAR Research Memorandum:The Impact on the U.S.Economy of a Major Contraction of the Detroit Three Automakers.Sean P.McAlinden,Kristin Dziczek and Debbie Maranger Menk,Center for Automotive Research,Ann Arbor,MI,November 2008.;Contribution of a Vehicle Infrastructure System to the Economy of Michigan:Economic and Industrial Impacts Update and Benefit-Cost Analysis-Kim Hill and Debbie Maranger Menk,Center for Automotive Research.Prepared for Michigan Department of Transportation,June 2008;Contribution of Toyota Motor North America to the Economies of Sixteen States and the United States,2006.Kim Hill and Debbie Maranger Menk,Center for Automotive Research.Prepared for Toyota Motor North America,October 2007.;Evaluation of Economic Impacts of the State of Michigans Vehicle Infrastructure Integration Program-Kim Hill,Center for Automotive Research.Prepared for Michigan Department of Transportation,September 2007.;Contribution of the Motor Vehicle Supplier Sector to the Economies of the United States and Its 50 States Kim Hill and Debbie Maranger Menk,Center for Automotive Research.Prepared for the Motor and Equipment Manufacturers Association,January 2007;Contribution of Toyota to the Economics of Fourteen States and the United States in 2003.Kim Hill,Center for Automotive Research,June 2005.;The Contribution of the International Auto Sector to the U.S.Economy:An Update.Sean P.McAlinden and Bernard Swiecki,Center for Automotive Research,March 2005.Prepared for the Association of International Automobile Manufacturers,Inc.;Contribution of the U.S.Motor Vehicle Industry to the Economies of the United States,California,New York,and New Jersey in 2003 Institute of Labor and Industrial Relations,University of Michigan and the CENTER FOR AUTOMOTIVE RESEARCH 64 Center for Automotive Research.Prepared for the Alliance of Automobile Manufacturers,Inc.,May 2004;Economic Contribution of the Automotive Industry to the U.S.Economy An Update Sean P.McAlinden et al.,Center for Automotive Research.Prepared for the Alliance of Automobile Manufacturers,Fall 2003;Contribution of the Automotive Industry to the U.S.Economy in 1998:The Nation and Its Fifty States Sean McAlinden,Center for Automotive Research.George A.Fulton,Donald R.Grimes and Lucie G.Schmidt,Institute of Labor and Industrial Relations,University of Michigan.Barbara C.Richardson,Transportation Research Institute,University of Michigan.Prepared for the Alliance of Automobile Manufacturers,Inc.and the Association of International Automobile Manufacturers,Inc.,Winter 2001;The Contribution of the International Auto Sector to the U.S.Economy.David E.Cole,Sean P.McAlinden and Brett C.Smith,Center for Automotive Research.George A.Fulton,Donald R.Grimes and Lucie G.Schmidt,Institute of Labor and Industrial Relations,University of Michigan.Prepared for the Association of International Automobile Manufacturers,Inc.,Ann Arbor,March 1998;Note:The research staff of the Center for Automotive Research performed a number of these studies while located at the University of Michigans Office for the Study of Automotive Transportation 13 Automotive News,April 4,2022.https:/ 14 Gastelu,Gary(12 February 2020).J.D.Power names Genesis most dependable automotive brand.FoxN.Fox News.Archived from the original on 2 March 2021.15 Wards Auto U.S.Monthly Sales,December 2022.16 Ibid.
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