Economic Freedom

The ban that did more harm than good

Originally appeared on Daily FT

By Aneetha Warusavitarana

In the immediate aftermath of the devastating Easter attacks, one of the first steps taken by the Government was to announce a social media ban. This ban was ostensibly to protect us; the rationale being that this would stop the spread of hate, stop the spread of misinformation and fake news, and prevent the inciting of violence. In the Government’s eyes, this ban was the all-encompassing panacea to these problems.

Was the social media ban effective?
Rumour is a powerful weapon at any given time. In the context of a nation that is wracked with grief and fear it was a veritable weapon of mass destruction. Fear is also one of the most effective drivers of hate. If the objective of a social media ban was to prevent further violence, then in retrospect, the first step the Government should have taken would be to speak to the country addressing the fear that would drive retaliatory violence. Instead, the main method of communication was banned, even before the President or Prime Minister of the country addressed the nation. Effectively, the Government followed the precedent of the CEB, and left the entire country in the dark – with no reassurance that anyone in a decision-making position had a grip on the situation.  

In practicality the social media ban was ineffective, as VPNs were immediately downloaded, and people were active on Facebook and WhatsApp. This meant that fear mongering, fake news and hate was prolific. The irony is that if this ban was not in place, the Government would have been able to better monitor and address the slew of fake news. 

Does the Government have the mandate to ban social media?
The right to freedom of expression can arguably be curtailed in instances of hate speech. However, if one group of students organise a rally in campus grounds, and this rally is used to spread hate and incite violence against a different group of students, the answer is obviously not to ban rallies on campus grounds. Banning rallies on campus grounds would first, punish a majority for a crime they did not commit, unfairly infringing on their freedom of expression. Secondly, it would not address the problem. Rallies that incite violence are not exclusive to campus grounds – it could simply be organised elsewhere.

This analogy stands for the ban on social media. Banning social media at such a crucial point meant that the Government officially shut down communication lines among individuals, and importantly cut people from an important source of information. 

This goes completely against the mandate of the Government. What would have been effective was if the Government maintained clear, open lines of communication with constant, timely updates from verified Government sources. As the ban was ineffective, social media was rife with fake news, and the only effective method to combat it proved to be the counter-sharing of verified news alerts or first-hand reports from credible journalists, which disproved the fake news. 

A small but effective group of individuals took up this task, and spent hours sharing verified information and addressing the fake news which incidentally ranged from ‘there’s a tsunami heading this way’ to ‘my neighbour’s aunt’s brother-in-law said that another bomb has gone off’. The Government failing its mandate, restricting the country’s right to expression, and limiting access to information just exacerbated an already volatile situation. 

Who deals with the consequences?
A dangerous precedent has now been set. Last year, during riots in Digana, the Government imposed a similar ban on social media. The Government’s first reaction to the Easter Sunday attacks was to re-introduce the ban. 

According to the OECD, when the Egyptian Government blocked internet for 5 days in 2011, it cost the national economy $90 million. As the internet was still running in Sri Lanka, we can hope that the economic fallout from this disastrous decision will be less in our case. However, this is important. According to Statista, $88 million was spent on social media advertising in 2018 alone. The social media ban negatively affected the plethora of businesses which use Facebook or Instagram as platforms to run on, of which it is safe to assume that small and medium enterprises would have been hit hard. While Government officials are clamouring to propose plans to revive our tourism, they are silent on this front. 

Moving beyond these immediate, short term losses, the long-term consequences are worrying. This ban sends a negative signal to the international community. The Government mismanaged the crisis, to say the least, and the social media ban was the cherry on the top. It is clear that the Government favours this ban in times of crisis, even after the first ban came under criticism and scrutiny. This disregard of individual rights in the face of crisis, the fact the Government clearly has no qualms in compromising these rights, even when they do not translate to increased security or safety is not a message a country wants to send to investors or donors. 

The attacks were a national tragedy, and as a country we need to grieve and recover from this. However, once we do, and once a semblance of normalcy returns, the impunity with which the Government blocked social media with complete disregard for individual freedoms is not something we can ignore or forget. 

Social media ban

The compelling case for greater economic freedom

Originally appeared on Daily FT

By Alexander C. R. Hammond

The Fraser Institute, a Canadian think tank, published the 22nd edition of its annual Economic Freedom of the World (EFW) report. For a long time, we’ve known that, on average, freer economies are richer, grow faster and have longer life expectancies.

But the 2018 edition of the EFW gives us more insight than ever before into the intrinsic link between economic freedom and other measures of human wellbeing — such as infant mortality, equality, happiness and extreme poverty rates. 

To rank the level of freedom for 162 economies, the EFW analyses 42 indices across five major areas (size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation), using figures from 2016 — the most recent data available.

Yet again, Hong Kong takes the top spot in the EFW rankings — a position it has held since 1980. Singapore remains second, as it has since 2005. The remaining top 10 most free nations are: New Zealand, Switzerland, Ireland, the United States, Georgia, Mauritius, the United Kingdom, Australia, and Canada, the latter two being tied for 10th spot. The three least free countries are Argentina, Libya, and Venezuela. Out of the 162 countries the EFW report measures, Sri Lanka ranks in 106th place. Sri Lanka’s position in the report is a staggering 10 places lower than it was in 2017. Of all the areas the report analyses, Sri Lanka experienced the steepest decline in ‘Legal Systems and Property Rights’ – a drop from 5.28 to 4.93. Sri Lanka specifically lags behind in judicial integrity, openness to trade, and access to sound money. 

The positions of the economies in the EFW matter because there is a significant correlation between economic freedom and human wellbeing. To analyse this, the Fraser Institute splits the 161 measured countries into quartiles (i.e. each quartile represents a quarter of the economies) based on their level of economic freedom.

The average income in the freest quartile of nations is a staggering 7.1 times higher than the average income in the least free quartile ($40,376 and $5,649 respectively). The bottom 10% of income earners in the freest countries make, on average, 7.9 times more than the poorest 10% in the least free quartile. 

Comparatively, extreme poverty (as defined by the World Bank as an income of than $1.90 per day) is almost non-existent in the freest countries. By comparison, almost a third of all people in the bottom quartile of economies live in extreme poverty. It is clear, then, that for the absolute poorest in any given society, it is unimaginably better to live in a freer economy.

Of the four quartiles, Sri Lanka belongs to the third quartile, which is suitably titled “Non-Economically Free Countries”. With an average GDP per capita of $3,842, Sri Lanka’s average income is an incredible 2.9 times lower than the average income in this quartile ($11,465). As the freest nations have an average income of $40,376 it undeniable that on average, freedom and prosperity are heavily correlated.

But economic freedom isn’t just about money. Take life expectancy for example. In the freest countries, people live on average 15 years longer than those in the most restrictive systems. For many people, that amounts to a difference between knowing one’s grandchildren—or dying before their birth.

Infant mortality is another measure that highlights the immeasurable human cost of isolationist economic policies. Measured in the number of deaths per 1000 births, the devastating death rate in the least economically free nations is 6.8 times higher than the rate in the freest —42.2 and 6.2, respectively.

Problems of misogyny also creep in. When looking to the United Nations (UN) Gender Inequality Index, where zero represents complete gender equality and one represents complete inequality, the least free countries have an average score of just 0.46–compared to 0.18 for the freest quartile.

Free people are also happier people. The UN World Happiness Index asked respondents to rank their lives on a scale of zero to 10, with 10 representing the best possible life and zero representing the worst imaginable. The most economically liberal countries once more win out: the EFW shows that the freest quartile has an average score two points higher than the least free – 6.5 compared to 4.48.

There is more good news. Despite our tendency toward pessimism about the current state of the world, the EFW shows that economic freedom has increased substantially over the last 25 years and that the largest gains have been made in developing nations.

In 1990, the average economic freedom score for a “high-income industrial” country was 7.18 out of 10, compared to just 5.28 for the average “developing” country—a gap of 1.90. By 2016, that gap had narrowed by 46%: developing economies were a mere 1.06 points behind the industrial nations. The rapid increase in the EFW score by many developing economies was primarily driven by gains in the area of trade liberalisation and sound money (meaning the stabilisation of purchasing power by combating inflation.)

The result of these advances is that, when weighted for population, the average person now lives in a far freer economy. Consider this: if the world of 1980 were a country today, its economic freedom score would place it at 160 out of 163 nations — ranking two places below war-torn Syria. But if a 2016 world was a nation in 1980, it would be the 12th freest, with a score of 6.62 — slightly above 1980 Australia.

The latest EFW once again shows the deep and continued link between economic freedom and important indicators of human wellbeing, including; wealth, poverty alleviation, life expectancy, inequality, infant mortality and happiness.

It is clear that despite the many challenges that remain, the poorest in society continue to benefit the most from secure property rights, loosened regulatory barriers, and greater trade liberalisation. Long may policymakers remember this so that the march toward greater economic freedom continues.


(The writer is the Research Assistant for HumanProgress.org. He writes about economic freedom, globalisation, and human wellbeing. Hammond is a graduate of History and Politics, from the University of Exeter in Great Britain).