A new report finds that North Korea has the lowest level of economic freedom in the world.

In their 2008 Index of Economic Freedom Report, the Wall Street Journal and the U.S.-based Heritage Foundation ranked North Korea last out of 157 countries surveyed.

The report said that while foreign investment now flows into the communist state with the launch of the Gaesong Industrial Complex, all business activities are dominated and tightly restricted by the government.

According to the report, North Korea lost a key financial supporter when the former Soviet Union collapsed. It suffered further financial trouble due to flooding and drought in the 1990s.

The report said the reclusive state earns foreign currency through illegal activities, including counterfeiting and weapon sales.

The Index of Economic Freedom comprises ten categories, including labor, business, trade and fiscal freedoms. It also covers government size, property rights and freedom from corruption. Scores in these categories are averaged to create an overall score on a scale of one to 100.

Hong Kong had the top score this year at 90-point-three. South Korea ranked 41st with a score of 67-point-nine. North Korea's score was three percent.