Launch of the 2023 freedom and prosperity index. I am the managing editor. Just to give you some brief background on today, the freedom and Prosperity Center here at the Atlantic Council aims to increase the wellbeing of people in developing countries. Through research on the development between prosperity and economic, political, and legal freedom. We seek to answer questions such as to countries need freedom to have prosperity . Does democracy or autocracy serve the aspirations of people around the world . They survey nearly every country in the world. We will talk about that later today. First i want to introduce our panelists. We have the senior director of the freedom and Prosperity Center. He was the state Department Special representative for commercial and Business Affairs from 2019 to 2021. He led the initiative to start a business relations between the u. S. And Foreign Companies around the world. He was on the policy planning between 2018 and 2019 where he was responsible for the economic portfolio. He held leadership positions in wall street firms where he raised over 50 million in financing in the u. S. And abroad. He defected from communist romania, where he had been an official in the ministry of finance, and was involved in negotiating government loans with the world bank and imf. We also have the Deputy Director of the freedom and Prosperity Center. Previously he was a private sector specialist at the world bank where he advised governments on policy reforms that helped entrepreneurship and prosperity primarily in africa and the middle east. He also participated and led the business climate, good regulatory practices, and government transparency. He is the author and coauthor of several publications. Worldwide practices of impact assessments, survival of firms in developing economies and complementary regulations to improve public procurement. Welcome. Before we begin, we have a brief video explaining more on the freedom and prosperity indices. For the world. We want people to not only have food and shelter, but a good standard of living, education, health care, fair society and clean environment. That is what we mean by prosperity. But, what is the surest path to prosperity . Academics, policymakers and citizens have been debating this matter for a long time. Some say that free societies produce the best outcomes by unleashing the creativity and talent of individual citizens. Others say focusing on the individual is too chaotic and ultimately inefficient. A strong Central Authority produces the best results. The freedom and Prosperity Center of the Atlantic Council, a think tank in washington, d. C. , contributes facts and figures to the debate. We built a Freedom Index to measure economic, political and legal freedom in 164 countries. Each score reflects measurements of several indicators. Together, they create a comprehensive and unique measurement of freedom. In the same 164 countries. A Prosperous Society should be judged on more than just income per capita. Our index gives us a holistic view of prosperity. In the Freedom Index, we rank countries into four tiers based on their total scores. Pre, mostly free, mostly unfree and free. In the prosperity index, we rank countries as prosperous, mostly prosperous, mostly on prosperous and on prosperous. We have three Key Takeaways from the resulting data. Our first take away, there is a strong correlation between our freedom and prosperity scores. We show a 0. 8 correlation between a countrys scores in the two indexes. This means high values of freedom are associated with high values for prosperity. Low values for freedom are associated with low values of prosperity. On average, the freer the country, the higher it will score in all six measures of prosperity. The income scores show that free countries are far and away the richest. People born in free countries are also healthier and live substantially longer. Citizens of freer countries have access to better education and spend more time learning. The environment scores indicate that freer countries have cleaner environments. Unfree societies are less equal. Wealth is more unevenly distributed and unsurprisingly, unfree countries are also less tolerant. This leads to our second take away, evidence suggests that freedom contributes to prosperity. We examined for our sample of 100 64 countries the correlation between changes in freedom and changes in prosperity over time. If freedom is really driving prosperity, an improvement in freedom would be strongly associated with an improvement in prosperity. That is exactly what we find. Countries that increased their freedom the most are the ones where prosperity increased the most. Peru and venezuela are prime examples. In 1995, venezuela was a freer country than peru. At the turnofthecentury, peru made a clear turn toward freedom. It is one of the top improvers of our data. In contrast, venezuela shows the largest decrease in freedom of all the countries to cover. Venezuela had a higher prosperity score than peru in 1995. By 2022, the two countries had switched positions. Our third take away is autocracies generally fail to deliver prosperity for their people while free countries succeed. Of the 30 countries ranked at the top of our freedom rankings, 27 are in the top category of our prosperity index. Three are in the next highest. None are in the bottom two categories of prosperity. Of the 30 countries ranked at the bottom of our index, 11 are in the lowest category of our index. 17 are in the next and just two in the mostly prosperous category. None are in the top prosperity category. Our indexes demonstrate there is a strong relationship between freedom and prosperity. We have reason to believe that improvements in freedom will, over time, lead to greater and more durable prosperity. Please visit the website for the Atlantic Councils freedom and prosperity indexes. The interactive capabilities of the website allow you to compare detailed data across time for countries and regions. All of our indexes, information and annual reports can be downloaded for further analysis. Dan, lets start with you, there are lots of indexes out there, including many that measure freedom. What makes this one unique . This is probably the most important question, why is humanity better off with the index them before the index. There is no other Freedom Index like ours. There are excellent economic Freedom Indexes. Heritage has one, frazier has one. Theres a political Freedom Index that we all know and love, the freedom housing index that we refer to. The Justice Project has indexes. We put them all together and have some indexes for each of these dimensions of freedom. Economic, political and legal, for better analysis. Having a comprehensive Freedom Index is unique. The prosperity index is also unique in the sense that other measurements of prosperity like the Human Development index of the world bank, or the United Nations, measure just three dimensions. Gdp, which is material wealth, education and health, but we go beyond that and also measure inequality, the environment and to treatment of minorities, which would measure with religious freedom. Most importantly what is unique about us is the purpose behind creating these indexes. I having them as companion indexes, Freedom Index and prosperity index, we can study the interrelationship between we want to see if we are right the two. In the premise that we want to explore, which is that countries that have more freedom also have more prosperity. This is what sets us apart. Given how comprehensive these indexes are, they require a lot of data. Can you talk about how the data was compiled . You saw in the video, we have 164 countries and 28 years of data from 1995 until 2022. We do not collect the data, we collect data from approved by the international community. That includes the world bank, the u. N. , the world inequality database, among others. We have 10 sources we primarily use. Like dan was saying, we have different indicators. In total, 19 indicators from 10 sources for a total of 100,000 data points. Where are we doing this goes back to what dan was saying, having this data, this coverage and having data for every single country for every single year, allows us to do the research to actually look at how freedom and prosperity interact. Dan, data is a great thing. How can we use this in real life . The important thing to understand is that one of the things we can do is make the case that authoritarian countries are not delivering for their people. It is one of the big debates of our time, given that china and russia claim to have a Development Model that other countries should follow. We did an analysis for that and we can show that countries that were comparable to both china and russia develop faster when they chose freedom, rather than the authoritarian. In general, the way we want to make the case is by engaging with both people in Civil Society, think tanks in developing countries that want to go to their governments and make the case that there countries should have more freedom and order to achieve more prosperity. For that, we teamed up with the Atlas Network to get something we call the roll form grant. We give money to think tanks that go to governments and make the case. We work also with people in government who are interested in understanding the levers they can use to improve and give them benchmarks by using our analysis. 2012 seems to stand out as a pivotal year. What happened in that year . We do all of this work and you might ask, why should we care . Today if you look at our data, freedom is declining. Theres lots of conversations about democratic backsliding. By having this desegregated data, we can pin it down to actually what is happening. From 1995 to 2012, both freedom and prosperity were going up. In 2012, freedom started to decline. Economic freedom is still going up, although covid. But it was Political Freedom and legal freedom, rule of law is declining. If you look at prosperity, you saw the video that freedom and prosperity interact. From 90 from 1995 to 2012, it is most a straight line. It is a growth of about 0. 4 a year. We have a scale from zero to 100. Starting 2012, it flattened. With covid, it starts to decline. There is a sense of urgency that has been going on for 10 years. What i find fascinating in this data, because we have the entire world, we can see that it is not a phenomenon that is specific to a certain region or group of countries, there are countries everywhere were democracy and freedom is collapsing. Venezuela is an easy example, but we have an example in thailand, russia, belarus, hungary. In africa we have mali. It is something that is global, in every region, which makes it hard to pin down the core reason , which makes it more fascinating to me. You talked about china and russia and of course they are preventing alternative models to western democracy. Lets dig deeper, how did they fare in the indexes . We did this analysis and it is fascinating because we found parallels between the two. In the case of russia, we have the benefit of an unusual situation in social sciences where we can do a social experiment. In physics or chemistry, you can have a closed environment and you can analyze something where you isolated. It is rare to have it in social sciences, but in the case of russia and the baltics, they were all part of the soviet union. They were all communist countries. They had no Political Freedom, no Economic Freedom. After the collapse of the soviet union, russia on the one hand and the baltics on the other chose different paths in terms of prosperity. When we looked at where they were on the prosperity spectrum, russia was ahead in 1995. The soviet union fell apart in 1991 and russia was ahead about 10 . Compared to the baltics in 1991. By 2022, they were behind 30 . This is just looking at gdp per capita. Looking at our prosperity index, the same picture. They were ahead, then they fell behind. The question is why . In the prosperity index the baltics were up by 1. 2 times. The question is why . When you look at our freedom next, russia, the baltics are ahead of russia by two times. The score in 2022 baltics was about 80 and the score for russia was about 40. Russia, their Freedom Scored a client between 1995 and 2022 by 30 . It is interesting to look at china because you see something similar. Their Freedom Score also is about half of the score for the countries we picked for a comparison which is south korea and taiwan. The prosperity score is also ahead for south korea and taiwan. We see in both of these cases, countries that started from a similar point. In the case of south korea and taiwan and the peoples republic of china, in the Second World War they were comparably poor. They were all dictatorships. South korea and taiwan were military dictatorships, but they had Economic Freedom. John china had neither. Then they developed differently. South korea and taiwan have a gni per capita which is twice that of china. South korea and taiwan escaped the middle income trap, meaning they moved from middle income to high income countries, while china did not. In looking at these two countries, russia and the peoples republic of china, who claimed they have a model for development, i am inspired. I am remembering the ad we had in the 1990s where the lady asked, wheres the beef . They said, why should we be like you . You are not come for you are not performing compared to other countries. By desegregating Economic Freedom and Political Freedom, we can see how the three interact and see how they lead to prosperity. The recipe that works the best is the three of them together. In the case of taiwan and south korea, they had legal freedom, rule, economica Economic Freedom, then they implemented democracy which led them to where they are today. To add what china has been achieving, which is taking people out of poverty more than any other country, but the switch. We do not see the switch in the data. When xi jinping took office, Political Freedom is declining as he is taking a grip on the country. Which we think is unfortunate because maybe there was a missed opportunity here. Staying with you, beyond china and russia, 100 62 other countries, which countries made big moves up and down over the last 28 years and what were the consequences . I like to compare things to make them interesting. The biggest freedom decline or is venezuela. We saw in the video that in 1995, venezuela was far more free and far more prosperous than peru. Peru has its struggles now, but in the late 1990s and early 2000s, they implemented prodemocracy reforms that actually led them to cross with venezuela. Just by being a country with far less natural resources, they switched position and peru is more prosperous than what venezuela is today. What i found fascinating in the data, the good news is that it is easier to increase prosperity than it is to decline prosperity. Only a few countries had a negative change from 1995 to 2022. The biggest negative change was and the second was venezuela. Syria had a civil war. The impact of declining freedom over time can be not as bad. It can be similar to that of the civil war. Covering Global Development issues including Civil Society and democracy promotion, can these indexes be used for americas democracy promotion efforts abroad . Excellent question. The answer is yes, with several caveats. Number one, we are not working with the u. S. Government to promote an american agenda in any way. We dont take money from the u. S. Government. We would like to work more with agencies. We recently had a meeting with a u. S. Agency devoted to National Development but we have not designed them to promote anything in the agenda of the u. S. Government. Having said that, we are at an extraordinary moment in time and i think our indexes and reports chosen tonight can be an excellent tool to make the case not just for the United States, but for the free world in general, towards a Better Future for humanity. Let me elaborate. What became clear after the invasion of ukraine by russia is that groups of countries have emerged that are clearly defined. You had a group of authoritarian countries, russia, china and iran, north korea, venezuela, cuba where the chinese are putting spy stations against United States. That is one group of countries. But then, following the ukraine war, the free world and by the way, the terminology of the previous cold war is coming back in fashion. The free world also very democracies in europe, japan, south korea, australia, new zealand and so on. But then there is an entire other group of countries, referred to variously as the global south, which i dont like the term because geography has nothing to do with it. I prefer the term and i also heard the term swing countries. Those are important countries like india, south africa, brazil and mexico, that are not as strongly opposed to the extraordinary violation of the United Nations principles by russia as the free world countries. They are taking a position that they want to be nonaligned. In many respects. The indexes work can help the government and the people of the United States as well as the govern