Many of the world's richest countries are also the world's smallest.

Author: Luca Ventura

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 many of the wealthiest nations are also amongst the tiniest.

Some very small and very rich countries—like Luxembourg, Singapore and Hong Kong—benefit from having sophisticated financial sectors and tax regimes that help attract foreign investments and professional talent. Others like Qatar and Brunei have large reserves of hydrocarbons or other lucrative natural resources.

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 this output by the number of 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 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 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 world? Not quite. We are dealing with averages and in any given country, structural inequality can tip the balance in favor of the already privileged.

The COVID-19 pandemic lifted the veil on these disparities in ways few could have ever predicted. While there is no doubt that the wealthiest nations—often more vulnerable to the coronavirus due to their older population and other risk factors—had the resources to take better care of those in need, not everyone had equal access to them. Not only that, the economic downturn hit low-paid workers harder than those with high-paying occupations. A new kind of inequality emerged too: some people have been able to work from home, some others lost their livelihood and found themselves without much of a safety net—large holes in the most celebrated welfare systems in the world were exposed.

To be sure, when a crisis of such unprecedented magnitude takes place, you'd rather be where welfare and social services can offer a degree of assistance and hospitals have reliable electricity access. In the 10 world's poorest countries, according to data from the International Monetary Fund, the average per-capita purchasing power is less than $1,200, in the 10 richest is close to $80,000.

However, there is one more reason to be wary of accepting such economic prosperity at face value. The IMF has warned repeatedly that certain numbers should be taken with a grain of salt. For example, many nations in our ranking are 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. Add to that the unequal distribution of resources, and it becomes easy to understand why even in very rich countries live very poor people.


THE 10 RICHEST COUNTRIESIN THE WORLD


10. Denmark 

Current International Dollars:  58,932 | Click To View GDP & Economic Data

Jantelovenm, meaning “the law of Jante,” refers to a moral concept popular in Denmark and other Nordic countries. It emphasizes the wellbeing of the society over individuality and personal ambition, making equality a central component of interpersonal relations and policy decisions. That also explains why when we say that the per-capita purchasing of the average Danish is close to $60,000 the statement it truer than in the case of those countries where few have a lot and many have a lot less.

The Kingdom of Denmark has a modern and internationally competitive service-based economy, which also means that during the pandemic both household and public finances were less impacted in comparison to nations relying heavily on manufacturing activities, tourism or petroleum products exports. Its 5.8 million citizens enjoy high employment rates and wages, an efficient social security system, and routinely topping the world’s happiest countries ranking.


9. Hong Kong SAR

Current International Dollars:  59,519 | 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. The economy of Hong Kong is characterized by low taxation and no capital gains or inheritance levies, no tariffs on the import or export of goods and full ownership of their business for foreigners with no citizenship, residency or nationality requirements.

As a result, this tiny island of just 1,104 square kilometers (427 square miles) is extremely rich as a whole. This is not to say that all of its 7.5 million residents are: according to government statistics one in five lives below the poverty line. All the while, Hong Kong contends with New York for the title for the city with the largest number of ultra high-net-worth individuals in the world, about 9,000 people with $30 million or more in net worth.

Remarkably, the widening income inequality has also been a contributing factor to the political unrest that roiled Hong Kong since 2019, disrupting businesses and spooking foreign investors. Thanks to the pandemic, the economy contracted last year by 6.1%, the sharpest decline on record.


8. Brunei Darussalam

Current International Dollars:  62,371 | 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 and gets his habitual $20,000 haircut. His fortune—derived from the immense reserves of oil and natural gas of the country—is estimated at about $28 billion, more than 50 times that of Britain's Queen Elizabeth.

Yet, it is not all roses in the sultanate, and not just because Bolkiah is no longer the wealthiest monarch in the world, a title he held for many years (Thailand’s King Maha Vajiralongkorn is about $15 billion richer). Despite the monarch’s opulence, and an on-paper per-capita purchasing power of over $60,000, malnutrition in Brunei is commonplace. Although data is scarce, it has been estimated that 40% of its 450,000-strong population earn less than $1,000 a year. Luckily, the country was spared the worst of the COVID-19 pandemic with only a few hundred recorded cases. What it was not spared from was the pandemic-related plunge in oil prices: after registering a 13-year high of 3.9% economic growth in 2019, GDP growth fell to 1.2% in 2020.


7. United States

Current International Dollars:  63,415 | Click To View GDP & Economic Data

Did we say that the richest countries are also the smallest? That is not the case, of course, of the United States, which during a very difficult 2020 still managed to climb to the top 10 of the list after teetering on its edges for the best part of the last two decades.

But did Americans truly get richer during the pandemic? It depends on whom you ask. Certainly, not those who lost their jobs and businesses, who found themselves with astronomical medical bills and other expenses to pay, lined up at food banks. However, those in top in quintile of the population and earning over $60,000 a year managed in many cases to keep working from home, saw their stock investments grow in value, and received stimulus checks on top of that.

Yet another story is how the super-rich fared during the health crisis. Between March 2020 and April 2021, according to the Institute for Policy Studies, the collective wealth of American’s 719 billionaires leapt by $1.62 trillion, or 55%, from $2.95 trillion to $4.56 trillion. They now hold over four times more wealth than the roughly 165 million Americans in society’s bottom half. In 1990, the think tank says, the situation was reversed—billionaires were worth $240 billion and the bottom 50% had $380 billion in combined wealth.

In other words, if you are an American and your income is a fraction of the average GDP per capita, it is fair to argue that someone else is probably eating your proverbial lunch.


6. Norway

Current International Dollars:  65,800 | Click To View GDP & Economic Data

Since the discovery of large offshore reserves in the late 1960s, Norway’s economic engine has been fueled by oil. As western Europe’s top petroleum producer, the country has benefitted for decades from rising prices. Not anymore: prices crashed at the beginning of 2020, then the global pandemic ensued—and the krone was sent in freefall. The Norwegian economy contracted by 2.5% last year, the biggest annual decline in half a century and possibly since World War Two.

Does it mean that today Norwegians are significantly less wealthy than they were just a couple of years ago? Probably not and GDP growth is already projected to rebound in 2021 to 3.9%.

Furthermore, when it comes to any economic problem fate might throw at them, Norwegians can always count on their $1.3 trillion sovereign wealth fund, the world's largest. Yet Norwegians know that with great wealth comes great responsibility: unlike many other rich nations, high per capita GDP figures are truly a reflection of people’s financial wellbeing since Norway has amongst the lowest income inequality gaps in the world.


5. Switzerland

Current International Dollars:  72,873 | Click To View GDP & Economic Data

White chocolate, the bobsleigh and—of course—the Swiss Army knife. But also the computer mouse, the immersion blender, velcro and LSD. The list just goes and on: these are only some of the inventions that Switzerland has contributed to the world. Today, however, this country of about 8.6 million owes much his wealth to its banking and insurance services and to tourism, as well as to exports such as pharmaceuticals products, gems and precious metals, precision instruments and machineries (from watches, to medical apparatuses and computers).

Is it really a surprise that Switzerland has the highest density of millionaires in the world? According to the most recent estimates, for every 100,000 residents there are 9,428 of them (billionaires included)—the 11.8% of the total considering just the adult population.

All that money, however, could not shield the Swiss economy from the effects of Covid-19: in 2020 production declined by 2.9%. Yet, things could also have been worse, especially when we consider that in Italy, Spain, France and Germany the contraction has been respectively of 8.8%, 10.9%, 8.2% and 4.9%.

To what do we owe the difference? According to the IMF, to a swift and sustained policy response through emergency spending and containment measures, but also to the make-up of the Swiss economy itself, with its solid public and household finances, competitive export industries, and low dependency on contact-intensive sectors.


4. Qatar

Current International Dollars:  93,508 | Click To View GDP & Economic Data

It’s not only the oversupply and demand crisis of last year and the exacerbating effect of COVID-19: oil prices have been in steady and sometimes dramatic decline since the mid-2010s. The per-capita GDP of a Qatari citizen was over $143,222 in 2014, it was “just” $97,846 a year later, and nowadays it is even lower than that.

Still, the country’s oil, gas and petrochemical reserves are so large, and its population so small—just 2.8 million—that this marvel of ultramodern architecture, luxury shopping malls and fine cuisine has managed to top the list of the world's richest nations for 20 years.

Yet, with only about 12% of the residents being Qatari nationals, the country—similarly to many other Gulf states—saw COVID-19 spreading especially among low-income migrant workers living in crowded quarters at furious speed. Quarantines, curfews and lockdowns have been imposed more than once, yet Qatar suffered one of the highest rates of positive cases in the region.

Even so, the economy has showed a certain resilience (it contracted by a relatively modest 2.6% in 2020) and is now projected to rebound amid a rise in gas production and investment in preparation for the 2022 World Cup.


3. Ireland

Current International Dollars:  94,391 | Click To View GDP & Economic Data

Until recently, Ireland seemed unstoppable. While the rest of Europe was facing all sort of uncertainties (Brexit, trade tensions with the U.S., refugee and migrant crises to name a few), the Irish economy just kept humming along: in 2019, while the Eurozone grew only 1.2%, it expanded by over 5.9%, consolidating its role as the fastest-growing country on the continent. That all changed in 2020: economic growth more than halved from the previous levels, although it is expected to rebound nicely this year.

A nation of fewer than 5 million inhabitants, Ireland was one of the hardest hit by the 2008 financial crisis. Following some politically difficult reform measures like deep cuts to public-sector wages and restructuring its banking industry, the island nation regained its fiscal health, boosted its employment rates and saw its per capita GDP almost double in a short amount of time.

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  far less than multinationals do. And while they are undoubtedly better off than they used to be, according to data from the OECD the national household per-capita disposable income is actually lower than the overall member countries’ average, about $25,300 a year versus $33,600. Furthermore, with the planned withdrawal of government pandemic supports leaving around 100,000 more people jobless than before the pandemic, the country’s unemployment rate is expected to climb to 8.1% from its current 5.8%. With a considerable gap between the richest and poorest (the top 20% of the population earns almost five times as much as the bottom 20%) most families would balk at the idea that they are wealthy.


2. Singapore

Current International Dollars:  97,056 | Click To View GDP & Economic Data

With an estimated net-worth of $23 billion, restaurateur Zhang Yong is the richest person living in Singapore; the 93-year-old Goh Cheng Liang, the founder of one the world’s largest paint manufacture, is a close second with his $21.7 billion fortune. In third place with assets of about $15 billion (to some people's surprise) is Eduardo Saverin, the co-founder of Facebook, who in 2011 left the U.S. with 53 million shares of the company and became a permanent resident of the island nation. Saverin did not choose it just for its urban attractions or natural gateways: Singapore is an affluent fiscal haven where capital gains and dividends are tax-free.

But how did Singapore become so prosperous? When the city-state became independent in 1965, one-half of its population was illiterate. With virtually no natural resources, Singapore pulled itself up by its bootstraps 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 (most importantly, 98% of the adult population is now literate). That is not as saying that it has been immune from the effects of the global downturn: in 2020 the economy plummeted a record 5.4%, knocking the country into recession for the first time in more than a decade.


1. Luxembourg

Current International Dollars:  118,001 | 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 625,000 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.

Yet, while both the global financial crisis and the pressure from the EU and OECD to reduce banking secrecy have had little impact on the economy, the coronavirus outbreak forced many businesses to close and workers to lose their jobs.

Still, through effective testing and contact tracing measures, Luxembourg has weathered the pandemic better than most of its European neighbors. As a result, in 2021 the grand duchy's GDP will rebound by 4% from -1.3% in 2020. The country topped the $100,000 mark in per capita GDP in 2014 and has never looked back ever since. Even the pandemic couldn’t change that.


Rank

Country

GDP-PPP ($)

1 Luxembourg 118,001
2 Singapore 97,057
3 Ireland 94,392
4 Qatar 93,508
5 Switzerland 72,874
6 Norway 65,800
7 United States 63,416
8 Brunei Darussalam 62,371
9 Hong Kong SAR 59,520
10 Denmark 58,932
11 United Arab Emirates 58,753
12 San Marino 58,427
13 Netherlands 57,534
14 Macao SAR 56,078
15 Iceland 55,596
16 Taiwan Province of China 55,724
17 Austria 55,218
18 Sweden 54,146
19 Germany 54,076
20 Australia 51,680
21 Belgium 51,096
22 Finland 49,853
23 Bahrain 48,766
24 Canada 48,720
25 Saudi Arabia 46,811
26 France 46,062
27 Korea 44,621
28 United Kingdom 44,117
29 Malta 42,856
30 Japan 42,248
31 New Zealand 42,018
32 Kuwait 41,627
33 Italy 40,861
34 Czech Republic 40,618
35 Israel 40,547
36 Cyprus 40,107
37 Lithuania 38,824
38 Slovenia 40,067
39 Spain 39,121
40 Estonia 38,834
41 Poland 34,103
42 Portugal 34,043
43 Puerto Rico 34,025
44 The Bahamas 34,148
45 Hungary 33,030
46 Slovak Republic 32,709
47 Latvia 31,509
48 Romania 30,526
49 Turkey 30,253
50 Oman 30,178
51 Aruba 29,090
52 Greece 28,748
53 Russia 27,903
54 Croatia 27,717
55 Malaysia 27,402
56 Panama 27,003
57 Kazakhstan 26,565
58 Seychelles 25,414
59 Trinidad and Tobago 25,031
60 Bulgaria 23,817
61 Chile 23,366
62 Uruguay 22,459
63 St. Kitts and Nevis 20,987
64 Argentina 20,751
65 Mauritius 20,292
66 Belarus 20,187
67 Costa Rica 19,990
68 Guyana 19,684
69 Maldives 19,609
70 Montengegro 19,252
71 Serbia 19,146
72 Mexico 19,130
73 Antigua and Barbuda 18,618
74 Dominican Republic 18,608
75 Thailand 18,236
76 Equatorial Guinea 17,788
77 China 17,192
78 Botswana 16,893
79 North Macedonia 16,712
80 Turkmenistan 16,520
81 Gabon 15,970
82 Grenada 15,431
83 Bosnia and Herzegovina 15,047
84 Georgia 14,918
85 Brazil 14,916
86 Suriname 14,513
87 Azerbaijan 14,431
88 Colombia 14,324
89 Palau 14,309
90 Albania 14,218
91 Barbados 13,553
92 St. Lucia 13,359
93 Armenia 13,261
94 Sri Lanka 13,214
95 Ukraine 13,110
96 Iran 13,073
97 Paraguay 12,881
98 Moldova 12,811
99 Egypt 12,790
100 St. Vincent and the Grenadines 12,606
101 Indonesia 12,222
102 Bhutan 12,060
103 South Africa 12,032
104 Peru 11,871
105 Mongolia 11,825
106 Fiji 11,567
107 Lebanon 11,564
108 Kosovo 11,274
109 Algeria 11,112
110 Dominica 11,072
111 Ecuador 11,009
112 Vietnam 10,869
113 Jordan 10,306
114 Tunisia 10,120
115 Iraq 10,003
116 Jamaica 9,975
117 Nauru 9,856
118 Namibia 9,396
119 Eswatini 8,957
120 Philippines 8,452
121 El Salvador 8,422
122 Bolivia 8,344
123 Guatemala 8,293
124 Lao P.D.R.  8,111
125 Morocco 7,620
126 Uzbekistan 7,449
127 Angola 6,932
128 India 6,461
129 Cabo Verde 6,424
130 Tonga 6,191
131 Belize 6,046
132 Libya 5,893
133 Mauritania 5,834
134 Ghana 5,693
135 Samoa 5,653
136 Nicaragua 5,575
137 Honduras 5,450
138 West Bank and Gaza 5,388
139 Côte d'Ivoire 5,365
140 Bangladesh 5,307
141 Myanmar 5,242
142 Nigeria 5,187
143 Venezuela 5,178
144 Pakistan 5,150
145 Djibouti 5,096
146 Kyrgyz Republic 5,036
147 Kenya 4,926
148 Cambodia 4,695
149 Tuvalu 4,497
150 Republic of Congo 4,188
151 Sudan 4,098
152 Nepal 4,061
153 Papau new Guinea 3,833
154 São Tomé and Príncipe 3,829
155 Marshall Islands 3,786
156 Tajikistan 3,676
157 Cameroon 3,646
158 Senegal 3,478
159 Micronesia 3,446
160 Benin 3,437
161 Timor-Leste 3,382
162 Zambia 3,342
163 Comoros 3,048
164 Haiti 2,916
165 Ethiopia 2,908
166 Tanzania 2,821
167 Lesotho 2,718
168 Zimbabwe 2,622
169 Guinea 2,604
170 Vanuatu 2,586
171 Uganda 2,574
172 Solomon Islands 2,455
173 Mali 2,401
174 Afghanistan 2,390
175 Guinea-Bissau 2,348
176 Rwanda 2,337
177 The Gambia 2,276
178 Burkina Faso 2,262
179 Kiribati 2,200
180 Togo 2,199
181 Yemen 1,927
182 Eritrea 1,821
183 Sierra Leone 1,725
184 Chad 1,611
185 Madagascar 1,599
186 Liberia 1,557
187 Mozambique 1,277
188 Niger 1,259
189 Democratic Republic of Congo 1,106
190 Malawi 993
191 Central African Republic 979
192 Somalia 925
193 South Sudan 791
194 Burundi 760

Source: International Monetary Fund, World Economic Outlook April 2021. Values are expressed in current international dollars, reflecting the corresponding exchange rates and PPP adjustments.