South Africa dropped to 37th in global property rights rankings, according to the International Property Rights Index, released on Wednesday.
Property Rights Alliance, in co-operation with 113 think tanks across the world and in partnership with the Free Market Foundation (FMF) in SA said this was the largest drop in property rights protections after President Cyril Ramaphosa, called for land expropriation without compensation.
The index measures the strength of physical property rights, intellectual property rights, and the legal and political environments that contain them.
The report found that worldwide, 6 billion people suffered from inadequate protection of their property rights. Only 758 million people, 13 percent of the world, enjoy adequate protections for their artistic works, inventions, and private property. Three countries, Finland, New Zealand, and Switzerland (a quarter of 1 percent of the world) have achieved the highest property rights protections.
Alarmingly, for the first time the US fell from being first in the world for intellectual property protections to second, yielding to Finland, which also passed New Zealand to become first in the index overall. The Index is also the first publication to use the recently updated Patent Rights Index developed by Professor Walter Park at American University.
Property rights are a key indicator of economic success and political stability.
Renowned economist Hernando De Soto said: “Weak property rights systems not only blind economies from realising the immense hidden capital of their entrepreneurs, but they withhold them from other benefits as evidenced through the powerful correlations in this year’s index: human freedom, economic liberty, perception of corruption, civic activism, and even the ability to be connected to the internet, to name a few.”
Property rights are an essential component of prosperous and free societies. This year the report includes correlations with no less than 23 economic and social indicators, including nine specific to e-commerce which displayed some of the strongest relationships the Index has ever discovered – suggesting rights play an important role in addressing internet access issues.
Property rights are restricted by gender. Poor property rights protections are bad enough; however, the gender equality component of the index reveals that several countries in the Middle East, North Africa and sub-Saharan Africa regions continue to limit property ownership based solely on gender.
Lorenzo Montanari, the executive director of Property Rights Alliance, called property rights: “The most consequential disparity affecting the world today. Property rights determine what you can do with your assets. Inadequate protections limit what people do with their mind, with their hands, and how they relate to one another.”
- BUSINESS REPORT ONLINE
