What comes to mind when people think of the world’s wealthiest countries? And what comes to mind when people think of the world’s tiniest countries? Several people are surprised to hear that many of the world’s wealthiest countries are also among the tiniest.
Luxembourg, Singapore, and Hong Kong, for example, benefit from sophisticated financial sectors and tax regimes that attract global investment and professional talent. Others, such as Qatar and Brunei, have significant hydrocarbon reserves or other lucrative natural resources. Shimmering casinos and crowds of visitors help business as well: Macao, Asia’s gambling center, has one of the wealthiest governments in the world.
What, though, does it mean for a country to be “rich,” especially in an era of growing wealth inequality between the affluent and the rest? While GDP quantifies the entire value of goods and services produced in a nation, dividing it by the number of full-time residents offers a more realistic picture of how affluent or impoverished one country’s people is in relation to another. The reason why “rich” commonly correlates to “tiny” becomes clear: these nations’ economies are abnormally large in relation to their small populations.
However, only when inflation rates and the cost of local goods and services are taken into account do we get a more accurate picture of a country’s average standard of living: the resulting figure is known as purchasing power parity (PPP), and it is frequently expressed in international dollars to facilitate cross-country comparisons.
Should we automatically conclude that countries with very high figures have a demonstrably better-off population than the bulk of the rest of the world? No, not exactly. We’re talking about averages here, and structural inequality may tip the scales in favor of the already well-off in any given country.
10. Brunei Darussalam
Dollars International Current Exchange Rate: 65,675
The house of Brunei’s Sultan, Hassanal Bolkiah, has 1,788 rooms, including 257 bathrooms, a dining hall for up to 5,000 visitors, a mosque for 1,500 people, an air-conditioned stable for 200 polo horses, five pools, and 18 elevators. His fortune, derived from the country’s massive oil and natural gas reserves, is estimated to be more than $28 billion, more than 50 times the amount of Queen Elizabeth II of the United Kingdom.
9. Macao
Dollars International Current Exchange Rate: 67,475
Until recently, many people felt that Asia’s Las Vegas was on its path to become the world’s richest country. Rather, Covid struck, halting worldwide travel and momentarily knocked Macao out of the IMF’s top 10. Furthermore, Macao is the only nation on the list whose purchasing power per capita is lower than it was before the epidemic.
While things aren’t as they used to be, with mainland Chinese, Hong Kong, and Taiwanese tourists now permitted on the island, hotel bookings are up.
8. The United States
Dollars International Current Exchange Rate: 69,37
Did we mention that the most prosperous countries are also the smallest? That is not the case, of course, for the United States, which got to the top ten despite being on the verge of bankruptcy for the greater part of the previous two decades.
But, did the epidemic actually make Americans richer? It all depends on who you talk to. Certainly not those who have lost their jobs and businesses and are now facing massive medical bills and other responsibilities. People in the top quintile of the population earning more than $60,000 per year, on the other hand, were allowed to continue working from home in many instances, their stock holdings increased in value, and they got stimulus payments on top of that.
7. Norway
Dollars International Current Exchange Rate: 69,859
Since the late 1960s, when massive offshore quantities were found, oil has been driving Norway’s economic engine. As Western Europe’s top petroleum producer, the country has reaped the benefits of rising prices for decades.
6. Emirates of Arabia
Dollars International Current Exchange Rate: 74,245
Agriculture, fishing, and pearl trade were historically the Persian Gulf nation’s economic backbones. When oil was found in the 1950s, everything changed. Today, its highly cosmopolitan population enjoys enormous wealth, historic Islamic architecture coexists with opulent shopping malls, and employees migrate from all over the world to take advantage of tax-free earnings and year-round sunshine (to the extent that only about 20 percent of the people living in the country are actually locally-born).
5. Switzerland
Dollars International Current Exchange Rate: 78,112
Today, this 8.6 million-person country owes a considerable percentage of its wealth to banking and insurance services, as well as tourism and exports like as pharmaceuticals, gems and precious metals, precision instruments and machineries (from watches, to medical apparatuses and computers).
4. Qatar
100,037 US Dollars in Today’s Exchange Rate
It is not only the oversupply and demand problem of last year, nor the aggravating effect of COVID-19: despite the recent rebound, oil prices have been steadily declining since the mid-2010s. Qatari citizens’ per-capita GDP was above $143,222 in 2014, dropped to “only” $97,846 a year later, and stands barely over that level to this day.
3. Singapore
107,677 US Dollars in Today’s Exchange Rate
With an estimated net worth of $23 billion, restaurateur Zhang Yong is the wealthiest person in Singapore; Goh Cheng Liang, 93, the founder of one of the world’s largest paint manufacturers, is a close second with a fortune of $21.7 billion. Third place goes to Eduardo Saverin, the co-founder of Facebook, who departed the United States in 2011 with 53 million shares of the firm and became a permanent resident of the island country. Saverin did not chose Singapore alone for its metropolitan charms or natural gateways: it is also an opulent fiscal refuge, with tax-free capital gains and dividends.
2. Ireland
Dollars International Current Value: 111,360
Ireland appeared invincible until lately. While the rest of Europe was beset by uncertainty (Brexit, trade disputes with the United States, and refugee and migration problems, to mention a few), the Irish economy was humming away. In 2019, although the Eurozone grew by just 1.5 percent, Ireland’s GDP surged by more than 4.9 percent, making it the continent’s fastest-growing country. It’s natural to believe the Covid altered that, isn’t it? However, Ireland surpassed expectations once again: the IMF estimates that its GDP would grow by 5.8 percent in 2020 and by more than double that amount – an incredible 13 percent — in 2021.
1. Luxembourg
Dollars International Current Value: 126,569
Luxembourg may be visited for its castles and picturesque scenery, cultural festivals, and gastronomic delicacies. Or, as many do, you might just open an offshore account with one of its banks and never return, as many do. That would be a shame, as this nation of around 630,000 people is located in the center of Europe and has plenty to offer both tourists and locals. Luxembourg invests a significant portion of its riches in improving housing, healthcare, and education for its citizens, who enjoy by far the greatest quality of life in the Eurozone.
While the global financial crisis and EU and OECD demands to decrease banking secrecy had minimal effect on the economy, the coronavirus pandemic prompted numerous firms to close and thousands of people to lose their employment.
Nonetheless, Luxembourg has survived the epidemic better than the majority of its European neighbors in 2020, owing to robust testing and contact tracking methods. As a consequence, and aided by the vaccination deployment, the grand duchy’s GDP rebounded to 5.5 percent in 2021, up from -1.3 percent in 2020. The country’s per capita GDP surpassed $100,000 in 2014 and has not looked back since. Even Covid was powerless to change that.
The epidemic of COVID-19 exposed these discrepancies in ways that few could have expected. While there is little question that the wealthiest nations — which are frequently more susceptible to the coronavirus due to their older populations and other risk factors — have the resources necessary to provide better treatment to those in need, not everyone had equal access to them. Not only that, the economic crisis disproportionately impacted low-wage employees compared to high-wage ones. Additionally, a new type of inequality emerged: although some people were able to work from home, others lost their jobs and found themselves without much of a safety net—large gaps in the world’s most recognized welfare systems were exposed.
To be sure, when a crisis of this size occurs, you’d like to live in an area where welfare and social services are available and hospitals have reliable energy. According to IMF data, the average buying power per capita in the world’s ten poorest nations is around $1,200, while it exceeds $87,000 in the world’s ten richest.
There is, however, one further reason to be skeptical of such economic growth on its face. The IMF has consistently cautioned that some figures should be interpreted with caution. For instance, several of the countries on our index are tax havens, which implies that income created in other countries ends up boosting their GDP through complex accounting and legal methods. More broadly, it is estimated that over 15% of global jurisdictions are tax havens, and approximately 40% of global foreign direct investment flows are so-called “phantom” transactions, which involve financial investments passing through empty corporate shells with no discernible impact on a country’s economy or people’s financial well-being. Add to that the unequal distribution of resources, and it’s simple to see why extremely impoverished individuals exist in even the wealthiest countries.
While a worldwide agreement requiring large corporations to pay a minimum tax rate of 15% was recently ratified by 136 countries, opponents claim that the rate is slightly higher than that in Ireland, Qatar, or Macao—as well as several exemptions and carveouts. At the moment, it is estimated that over 15% of global jurisdictions are tax havens and approximately 40% of global foreign direct investment flows are so-called “phantom” transactions, in which financial investments pass through empty corporate shells with no discernible impact on a country’s economy or people’s financial well-being. Add to that the unequal distribution of resources, and it’s simple to see why extremely impoverished individuals exist in even the wealthiest countries.