In its 1999 Index of Economic Freedom, The Heritage Foundation, a leading Washington-based think tank, ranked Malaysia the seventh most free economy in Asia and its world ranking stood at 28.

But the index, produced in cooperation with The Wall Street Journal (WSJ), only took into account data and events for the 12 months preceding June 30, 1998.

Malaysia's capital controls, imposed later than the June deadline, meant it was economically less free than the 1999 ranking indicates, Claudia Rosett, member of the editorial board of the WSJ, said at a news briefing on the index.

Other countries described as less free than their 1999 Index rankings showed were Hong Kong and Russia, which took actions after the cut-off date which lowered their scores significantly.

A joint statement from Heritage and the WSJ said the scores for othercountries would have changed as well "but the index editors focused only on a few high profile examples".

The statement said Hong Kong lost its position as the freest economy in the world after the government intervened in the stock market in August, buying HK$118 billion (US$15.2 billion) worth of shares to drive off speculators.

Singapore, ranked second prior to the Hong Kong intervention, is now the freest economy in the world, said Heritage president Edwin Feulner.

"Singapore has stayed the course. While other Asian governments were reacting to the region's economic crisis by intervening in their economies, Singapore remained on the path of economic freedom," he said.

On the existence of several major Singapore companies with heavy government ownership, Feulner said such companies consume very little of the country's economic output as measured by the gross domestic product figures.

But he said a recent cost-cutting package by the Singapore government, which including cutting the CentralProvident Fund (compulsory pension scheme) rate and recommending wage cuts, would be taken into account when compiling next year's index.

Meanwhile, a report in The Straits Times quoted Singapore deputy prime minister Lee Hsien Loong as saying Singapore's top ranking could "attract investment interest".

"We hope this will encourage more investors to look seriously at what Singapore has to offer, even during the economic crisis.

"We believe that a free market economy is the best mechanism for creating growth and prosperity for all Singaporeans," Lee said.