Bahrain is the most economically free nation in the Mena region, and the seventh freest economy in the world, according to an annual report on global economic freedom by the Fraser Institute, a leading international think tank.

The Kingdom achieved an overall score of 7.94 out of 10, marking it ahead of the US and Japan, said Fraser in its "Economic Freedom of the World: 2012 Annual Report" published this week.

The other top 10 nations are: Hong Kong (8.9); Singapore (8.69); New Zealand (8.36); Switzerland (8.24); Australia (7.97); Canada (7.97); Mauritius (7.90); Finland (7.88) and Chile (7.84), said the Fraser index which measures the degree to which the policies and institutions of countries are supportive of economic freedom.

Bahrain topped the rankings in the GCC region followed by the UAE (7.83); Qatar (7.70); Kuwait (7.66); Oman (7.64) and Saudi Arabia (7.06),

The Fraser Institute’s report is the premier measurement of economic freedom, using 42 distinct variables to create an index ranking of countries around the world based on policies that encourage economic freedom.

The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of private property.

Economic freedom is measured in five different areas: (1) size of government,(2) legal structure and security of property rights, (3) access to sound money, (4) freedom to trade internationally, and (5) regulation of credit, labour, and business.

On the top ranking, Kamal bin Ahmed, the minister of transportation and acting chief executive of the Bahrain Economic Development Board (EDB), said: "Bahrain’s consistent ranking in first place among other Gulf countries reflects the success of a the Kingdom’s decade of economic reforms to improve prosperity and job creation."

The Bahrain EDB is a dynamic public agency with an overall responsibility for attracting inward investment into Bahrain, and is focusing on target economic sectors in which the Kingdom offers significant strengths.

Key areas of focus include manufacturing, ICT, and logistics and transport services as well as other sub-sectors.

The financial services sector in Bahrain is particularly strong and the EDB supports in the continuing growth of the banking industry and key sub-sectors, including Islamic Finance, Asset Management, Insurance and Re-Insurance.

"The fact this progress has also been translated into economic growth, shows our tried and tested regulatory environment and commitment to international standards offer an attractive business environment, particularly for companies looking to access the growing GCC market, which is worth well over a trillion dollars," he added.

Other recent reports have also highlighted Bahrain’s economic strengths. Earlier this year Bahrain won first place in the Middle East and 12th place worldwide in the 2012 Wall Street Journal / Heritage Foundation Economic Freedom Index.