HONG KONG AP Although Hong Kong and Singapore retain their top places in an annual index ranking levels of economic freedom Asian governments grappling with a protracted financial crisis are imposing tighter economic controls a U.S. think tank said Tuesday. Hong Kong which has held the title of the freest economy in the world for the past three years won this year only on a technicality said the conservative Heritage Foundation. The list was compiled in June before the Hong Kong government's foray into the financial markets in August in an attempt to drive out speculators the foundation said. Since the market intervention Hong Kong has lost the title for the freest economy to Singapore. ``It is my sad duty to report that Hong Kong as of today no longer has the freest economy in the world'' the foundation's president Edwin Feulner said at a press conference. Singapore's deputy prime minister Lee Hsien Loong welcomed the news. ``We are naturally happy that Heritage Foundation has recognized Singapore in its evaluation. We hope this will encourage more investors to look seriously at what Singapore has to offer even during the economic crisis'' he said. Hong Kong is not unique in backing away from economic freedom as financial troubles sweep across the world the group said. The survey showed for the first time since the project started in 1995 more countries curtailed economic freedom during the past year than expanded it. ``Far too many countries have reacted in exactly the wrong manner to the global economic downturn'' said Kim R. Holmes the foundation's vice president. These countries should have been eliminating existing restrictions on trade and investment freeing their banking and currency systems from bureaucratic and political manipulation Holmes said. Malaysia introduced tight currency controls to isolate its battered economy from the regional fallout. The study rates the freedom of 161 countries' economies by trade tax monetary and banking policies. It also considers government intervention in the economy capital flows and foreign investment as well as wage and price controls. Following Singapore and Hong Kong in the rankings was Bahrain. New Zealand came fourth and Switzerland was fifth. The United States was ranked sixth. Ireland Luxembourg Taiwan and Britain were all tied for 10th place. Japan dropped one notch from 11th to 12th. The group said the Japanese government's response to the recession has been lackluster so far. ``If Japan think it can emerge from the economic doldrums with paltry tax cuts and a dose of government spending it is mistaken'' Feulner said. Hong Kong government officials and private economists disputed the city's loss of its ranking as the world's freest economy. Some said Singapore still lags Hong Kong in many measures of economic freedom such as government regulation and intervention in corporate affairs as well as in transparency and freedom of the press. ``We are not a command economy. We are a free economy - by any fair measure the freest in the world'' said financial secretary Donald Tsang. Terence Koo associate director of economics and strategy at Indocam Hong Kong Ltd. said ``it's naive to believe Singapore is an extremely free market.'' Koo cited recent Singapore government efforts to reduce wages as evidence of a lack of economic freedom in the city-state. ``The Hong Kong government definitely does not intervene in day-to-day company operations'' he said. APW19981201.1130.txt.body.html APW19981201.1445.txt.body.html