What do people think when they think about the richest countries in the world? And what comes to mind when they think about the smallest nations in the world? Some would be surprised to find out that the wealthiest nations are also amongst the tiniest.
Some very small and very rich countries—like Luxembourg, Singapore, San Marino and Ireland—benefit from having sophisticated financial sectors and tax regimes that help attract foreign investments and professional talent. Others like Qatar, Brunei and Kuwait have large reserves of hydrocarbons or other lucrative natural resources.
Shimmering casinos and hordes of tourists are good for business too: Macao, Asia’s gambling haven, is the second-most affluent state in the world. Bigger countries with a relatively small population like Norway and the United Arab Emirates, two other oil and gas-rich powerhouses, round up the list of the top 10 richest nations according to the figures released by the International Monetary Fund (IMF) in April 2019.
But what do we mean when we say a country is “rich,” especially in an era of growing income inequality between the rich and everyone else? While gross domestic product (GDP) measures the value of all goods and services produced in a nation, dividing a country’s GDP by the number of the full-time residents is a better way of determining how rich or poor one country’s population is relative to another’s. The reason why “rich” often equals “small” then becomes clear: these countries’ economies are disproportionately large compared to their comparatively small populations.
However, only when taking into account inflation rates and the cost of local goods and services can we get a more accurate picture of a nation’s average standard of living: the resulting figure is what is called purchasing power parity (PPP), which is often expressed international dollars in order to allow comparisons between different countries.
Should we automatically assume that in nations where this figure is particularly high the overall population is visibly better off than in most other places in the word? Not quite. We are dealing with averages and in any given country, structural inequality can tip the balance in favor of the already privileged.
Another question: Should we take economic prosperity at face value? The IMF has warned repeatedly that certain numbers should be taken with a grain of salt. For example, Macao, Luxembourg, Singapore, Switzerland, Ireland, and the Netherlands are all tax havens which means wealth originally generated in other countries ends up inflating their GDP because of sophisticated accounting and legal practices. More broadly, it is estimated that over 15% of global jurisdictions are tax havens and that about 40% of global foreign direct investment flows are so-called “phantom” transactions, financial investments passing through empty corporate shells with no real influence on a country’s economy and people’s financial wellbeing.
Values are expressed in current international dollars, reflecting a single year’s (the current year) currency exchange rates and PPP adjustments. Data source: International Monetary Fund, World Economic Outlook Database, April 2019.
THE 10 RICHEST COUNTRIESIN THE WORLD
10. Hong Kong
Current International Dollars: 66,517 | Click To View GDP & Economic Data
A former British colony, this special administrative region of China is a gateway to the mainland and Asia’s top financial center. Ranked 4 among 190 economies in the World Bank’s Ease of Doing Business index thanks to its good infrastructure and many tax incentives, Hong Kong is an incredibly popular destination to launch a start-up, with foreigners allowed to own 100% of their businesses without any citizenship, residency or nationality requirements. As a result, the island as a whole is extremely rich although according to government statistics one in five residents lives below the poverty line. Even so, Hong Kong is the city with the largest number of ultra high-net-worth individuals in the world (over 10,000 people with a net worth of at least $30 million).
Current International Dollars: 67,969 | Click To View GDP & Economic Data
The flat Arabian Desert covers most of Kuwait’s territory. It was only in 1938 that oil was discovered under its sands. A lot of oil: Kuwait makes up about 8% of the world’s total reserves. The oil industry accounts today for nearly one-half of the country’s GDP and over 90% of its exports. With a population of approximately 4 million almost entirely concentrated in urban areas, this small state on the northern edge of the Persian Gulf is one of the Middle East’s most advanced and democratic. However, dips in oil prices in recent years have begun to worry the very rich Kuwaitis: in 2015, the government announced the first budget deficit in more than a decade. The country has since then taken steps to diversify its economy by allowing 100% foreign ownership in a number of sectors and offering various tax breaks to investors. Nevertheless, such changes take time to bear fruit. In the meantime, Kuwait’s parliament passed yet another budget projecting a revenue shortfall for the current fiscal year: the fifth in a row.
8. United Arab Emirates
Current International Dollars: 70,474 | Click To View GDP & Economic Data
Agriculture, fishing and trading pearls: these used to be the economic mainstays of this Persian Gulf nation. Then oil was discovered in the 1950s and everything changed. Today, its highly cosmopolitan population enjoy considerable wealth, traditional Islamic architecture mixes with glitzy shopping centers, and workers come from all over the world lured by tax-free salaries and year-round sunshine (to the extent that only about 20% of the people living in the country are actually locally-born). The United Arab Emirates’ economy is also becoming increasingly diversified. Outside the traditionally dominant hydrocarbon sector, tourism and construction, as well as trade and finance, are major industries. Much anticipated is also the Dubai World Expo 2020, the biggest event the city has ever hosted which is expected to attract some 25 million overseas visitors.
Current International Dollars: 76,738 | Click To View GDP & Economic Data
Norway’s economic engine is fueled by oil. As western Europe’s top petroleum producer, the country has benefitted from rising prices after years of decline. With massive revenues pumping stimulus into the economy, the central bank governor recently decided to do the unthinkable: hike interest rates to their highest level since 2015. While the rest of Europe flirts with sub-zero rates in order to encourage investment and growth, Scandinavia’s richest nation seems to have the opposite problem: an uptick in inflation, the most glaring signal that the economy is getting stronger. On a side note, it is also important to point out that Norwegian policymakers know that with great GDP growth comes great responsibility: contrary to many other rich nations, high per capita GDP figures are truly a reflection of people’s financial wellbeing. Norway has one of the lowest income inequality gaps in the world.
Current International Dollars: 82,439 | Click To View GDP & Economic Data
European Union economies are going through a rough period. Amid uncertainties tied to Brexit and trade tensions, rising oil prices and Italy’s economic woes, Eurozone officials were forced to slash their growth forecast for the 19 member countries to 1.1%. The Irish economy, however, just keeps growing: in 2019, it will expand by over 4%, consolidating its role as the fastest-growing economy of the bloc following the 2008 financial crisis. A nation of less than 5 million inhabitants, Ireland was one of the hardest hit by the global downturn. Following some politically difficult reform measures, including sharp cuts in public-sector wages and restructuring its banking sector, the island nation regained its fiscal health, boosted it employment rates and saw its per capita GDP almost double to its current levels. Do citizens feel twice as rich as 10 years ago? Probably not: Ireland is one of the world’s largest corporate tax havens, with ordinary people benefitting infinitely far less than companies do. Are they better off nonetheless? Undoubtedly.
5. Brunei Darussalam
Current International Dollars: 83,777 | Click To View GDP & Economic Data
1,788 rooms, including 257 bathrooms, a banquet hall that can accommodate up to 5,000 guests, a mosque for 1,500 people, an air-conditioned stable for 200 polo ponies, 5 pools and 18 elevators: this is where Hassanal Bolkiah, the Sultan of Brunei, lives. His fortune—derived from the immense reserves of oil and natural gas of the country—is estimated at over $20 billion, 40 times that of Britain’s Queen Elizabeth. Despite Bolkiah’s opulence, and a per-person GDP of over $86,000, malnutrition in Brunei is commonplace. Something like 440,000 people—40% of the population—earn less than $1,000 a year. As if things were not bad enough, the sultan—whose fortune is said to increase by $147 every second—decided in April 2019 to enact death penalty by flogging and stoning for those who commit adultery and sodomy. Being one of the world’s richest countries clearly does not mean being one of the most just.
Current International Dollars: 103,717 | Click To View GDP & Economic Data
Singapore’s economy expanded by 3.2% in 2018, a sharp slowdown compared to 2017, when it grew 3.9%. Global trade tensions can have such effects. Yet one would be hard-pressed to find any clue of this deceleration by looking at the country’s GDP per capita figures. According to the IMF, GDP per capita grew in 2017 grew to over $86,000 from the previous year, reached $89,000 in 2018, and is projected to follow this upward trend in 2019 and until at least 2024, when it is expected to jump to $99,000. How did Singapore become so rich? When Singapore became independent in 1965, one-half of its population was illiterate. With virtually no natural resources, Singapore pulled itself up by its boostraps through hard work and smart policy, becoming one of the most business-friendly places in the world. Today, Singapore is a thriving trade, manufacturing and financial hub and 97% of the adult population is adult literate.
Current International Dollars: 108,813 | Click To View GDP & Economic Data
You can visit Luxembourg for its castles and beautiful countryside, its cultural festivals or gastronomic specialties. Or you could just set up an offshore account through one of its banks and never set foot again, as many do. It would a pity though: situated at the very heart of Europe, this nation of about 600,000 has plenty to offer, both to its tourists and its citizens. Luxembourg uses a large share of its wealth to deliver better housing, healthcare and education to its people, who by far enjoy the highest standard of living in the Eurozone. Extraordinarily, it is worth mentioning that both the global financial crisis and the pressure from the EU and OECD to reduce banking secrecy have had little impact on the economy. In 2015, the country topped the $100,000 mark in per capita GDP and never looked back ever since.
Current International Dollars: 122,201
In Asia’s gambling capital many are betting that Macao will climb to the first spot of the richest nation’s ranking very soon. Formerly a colony of the Portuguese Empire, since the gaming industry was liberalized in 2001 this special administrative region of the People’s Republic of China has seen its wealth growing at astounding pace. With a population just over 600,000, and more than 40 casinos spread over a territory of about 30 square kilometers, this narrow peninsula just south of Hong Kong is—almost literally—a money-making machine.
Current International Dollars: 134,623 | Click To View GDP & Economic Data
About $15,000 is, on average, how much each Qatari citizen has lost each year since the hydrocarbon prices started dropping in 2014. Still, the country’s total GDP per person in 2019 is still projected to remain above $134,000, slightly up from last year. Qatar’s oil, gas and petrochemical reserves are so large, and its population so small—just a little over 2.6 million—that it has topped the list of world’s richest nations for 20 years. This feat is even more remarkable given that Saudi Arabia and its allies imposed a blockade on Qatar in 2017.
Gross domestic product (GDP) based on purchasing-power-parity (PPP) per capita.
Values are expressed in current international dollars, to the nearest whole dollar, reflecting a single year’s (2018) currency exchange rates and PPP adjustments.
|8||United Arab Emirates||70,474|
|10||Hong Kong SAR||66,517|
|17||Taiwan Province of China||55,244|
|49||Trinidad and Tobago||32,684|
|53||St. Kitts and Nevis||31,095|
|56||Antigua and Barbuda||29,298|
|81||Islamic Republic of Iran||18,505|
|95||Bosnia and Herzegovina||14,164|
|104||St. Vincent and the Grenadines||12,431|
|131||Republic of Congo||7,119|
|154||Papua New Guinea||3,789|
|160||Sao Tomè and Prìncipe||3,441|
|189||Democratic Republic of the Congo||791|
|190||Central African Republic||746|
Source: International Monetary Fund, World Economic Outlook April 2019.