What comes to mind when people consider the richest nations in the world? And what do people imagine when they consider the world's tiniest countries? Many of the richest countries are also among the smallest, which may surprise some people.
Some highly wealthy and tiny nations, like Luxembourg, Switzerland, and Singapore, profit from having complex financial systems and tax structures that draw in outside capital and skilled labor. Other nations with sizable hydrocarbon reserves or other profitable natural resources include Qatar, Brunei, and the United Arab Emirates. Despite the severe limitations on foreign travel, Asia's gambling paradise Macao continues to be one of the richest nations in the world. Glistening casinos and throngs of tourists are also excellent for business.
But what exactly do we mean when we refer to a nation as "rich," particularly in a time when the gap between the wealthy and everyone else in terms of income is widening? The value of all products and services produced in a country is measured by its gross domestic product (GDP), but it is more accurate to compare the wealth of one country's population to that of another by dividing this production by the number of full-time citizens. The reason why "rich" and "little" are frequently synonymous is then made obvious: the economies of these nations are disproportionately huge in comparison to their small populations.
But we can only get a more accurate picture of a country's average standard of living when we take into account inflation rates and the cost of local goods and services; the resulting number is what is known as purchasing power parity (PPP), which is frequently expressed in international dollars to allow comparisons between different countries.
Should we immediately conclude that the general population is clearly better off than in most other areas in the globe, in countries where this number is very high? Not exactly. We are dealing with averages, and structural inequality may tilt the scales in favor of the already fortunate in any particular nation.
Few might have foreseen how the COVID-19 outbreak would have uncovered these discrepancies. There is little question that the wealthiest countries had the means to provide better treatment for those in need, but not everyone had access to them. These countries were frequently more susceptible to the coronavirus due to their older populations and other risk factors. Additionally, people with low salaries were more severely impacted by the recession than those in professions that paid well. A new sort of inequity also surfaced: although some individuals were able to work from home, others lost their jobs and were left with little safety nets, exposing significant flaws in some of the most lauded welfare systems in the world.
There is one additional reason, though, why such economic prosperity should not be taken at face value. The IMF has consistently cautioned that some data should be viewed with skepticism. For instance, several of the countries in our ranking are tax havens, which implies that money created in other nations ultimately causes their GDP to increase due to clever accounting and legal procedures. Despite the fact that more than 130 countries agreed to a worldwide agreement last year to ensure that large corporations pay a minimum tax rate of 15%, opponents have contended that this rate is marginally greater than that of countries like Ireland, Qatar, and the United Arab Emirates.
The top 10 richest nations in the world, according to GDP per capita at today's values (US dollars; World Bank)
$190,512 for Monaco
$180,366 for Liechtenstein
$115,873 in Luxembourg
$87,097 - Switzerland
$86,117 Macao (China SAR)
$85,267 in Ireland
$67,389 - Norway
American - $63,543
$61,063 for Denmark
$59,797 in Singapore
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