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. Shimmering casinos and hordes of tourists are good for business too: Macao, Asia's gambling haven, is one of the most affluent states in the world.

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.

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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 roughly $1,200, in the 10 richest is over $87,000.

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. 

While a global deal to ensure big companies will pay a minimum tax rate of 15% has been recently signed by 136 countries, critics argue that the rate is barely higher than the rates of nations like Ireland, Qatar or Macao—various exclusions and carveouts apply as well. Currently, 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. Brunei Darussalam

Current International Dollars:  65,675 | 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, the GDP fell in 2020 to 1.2%. Then again: as oil prices started bouncing back in 2021, so did Brunei’s economy.


9. Macao SAR

Current International Dollars:  67,475

Just until a couple of years ago, many were betting that the Las Vegas of Asia was on its way to becoming the richest nation in the world. Instead, Covid struck, global traveling came to a halt and Macao briefly slipped out of the IMF’s top 10 ranking. Not only that, Macao is also the only country in the list whose per-capita purchasing power is lower than it was before the start of the pandemic.

Yet, while things are not what they used to be, with tourists from mainland China, Hong Kong and Taiwan now allowed into the island hotel bookings are on the rise.

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 an 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 remains—almost literally—a money-making machine.


8. United States

Current International Dollars:  69,375 | 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.

Yet another story is how the super-rich fared during the health crisis. Between March 2020 and October 2021, according to the Institute for Policy Studies, the collective wealth of American’s 745 billionaires leaped by $2.1 trillion, or 70%, from $2.95 trillion to over $5 trillion. Their wealth is now two-thirds more than the $3 trillion in wealth held by 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.


7. Norway

Current International Dollars:  69,859 | 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.

Until it didn’t: prices crashed at the beginning of 2020, then the global pandemic ensued—and the krone was sent in freefall. In the second quarter of that year, the Norwegian fell by 6.3 %, the biggest decline in half a century and possibly since World War Two.

Does it mean that Norwegians have become significantly less wealthy than they were before the pandemic? Certainly not. After the initial shock, the economy gradually pared the losses and closed the year at -0.7%. Then, in 2021, it regained much of the ground lost during the previous months, growing overall by about 3%.

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.


6. United Arab Emirates 

Current International Dollars:  74,245 | 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.  This is not to say that the Emirates were not impacted by the pandemic: the country, in fact, briefly slipped out of the IMF ranking of the richest countries globally for the first time in decades. Its comeback is due in large part to recovery in prices of crude oil. Back is also—until March 2022—the biggest event the city has ever hosted, the World Expo, which was postponed in 2020 due to you know what.


5. Switzerland

Current International Dollars:  78,112 | 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 its wealth to 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 latest Global Wealth Report by Credit Suisse, 14.9% of the adult population owns assets worth more than one million U.S. dollars. 

All this money, however, could not shield the Swiss economy from the effects of Covid-19: in 2020 production declined by 2.5%. Yet, things could also have been worse, especially when we consider that in the neighboring Italy, Spain, France and Germany the contraction amounted respectively to 8.8%, 10.8%, 7.9% and 4.5%.

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:  100,037 | 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: despite the recent recovery, oil prices have suffered from a 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 to this day it remains barely above that level.

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, in the initial months of the pandemic 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 shown a certain resilience (it contracted by a relatively modest 3.5% in 2020 and has grown roughly 2% in 2021 and is now projected to rebound amid a rise in gas production and investment in preparation for the 2022 World Cup.


3. Singapore

Current International Dollars:  107,677 | 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.


2. Ireland

Current International Dollars:  111,360 | 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 was humming along. In 2019, when the Eurozone grew only 1.5%, Ireland's economy expanded by over 4.9%, the fastest-growing country on the continent. It would only be normal to think the Covid changed that, right? But Ireland defied all expectations once again: its GDP, according to the IMF, grew by 5.8% in 2020, and by more than twice that—meaning an astounding 13%—in 2021..

A nation of just 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 a decade 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.


1. Luxembourg

Current International Dollars:  126,569 | 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 630,000 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, in 2020 Luxembourg has weathered the pandemic better than most of its European neighbors. As a result, propelled also by the rollout of the vaccine, in 2021 the grand duchy's GDP rebounded by 5.5% 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 Covid could not change that.

Rank

Country

GDP-PPP ($)

1 Luxembourg 126,569
2 Ireland 111,360
3 Singapore 107,677
4 Qatar 100,037
5 Switzerland 78,112
6 United Arab Emirates 74,245
7 Norway 69,859
8 United Staes 69,375
9 Macao SAR 67,475
10 Brunei Darussalam 65,675
11 San Marino 65,446
12 Hong Kong SAR 65,403
13 Denmark 63,405
14 Netherlands 61,816
15 Taiwan Province of China 61,371
16 Austria 59,406
17 Iceland 59,268
18 Germany 58,150
19 Sweden 57,425
20 Belgium 55,919
21 Andorra 55,764
22 Australia 55,492
23 Bahrain 53,128
24 Canada 53,089
25 Finland 53,084
26 France 50,876
27 Saudi Arabia 48,908
28 United Kingdom 48,693
29 South Korea 48,309
30 Malta 47,152
31 New Zealand 45,880
32 Italy 45,267
33 Israel 44,966
34 Japan 44,935
35 Kuwait 44,609
36 Czech Republic 43,714
37 Slovenia 43,206
38 Cyprus 42,832
39 Lithuania 42,091
40 Spain 42,074
41 Estonia 41,892
42 Poland 37,323
43 Puerto Rico 37,170
44 Hungary 36,849
45 Portugal 36,543
46 Slovak Republic 35,547
47 Aruba 34,902
48 The Bahamas 34,732
49 Latvia 34,169
50 Turkey 33,963
51 Romania 33,833
52 Oman 32,327
53 Greece 31,821
54 Croatia 31,112
55 Panama 30,889
56 Russia 30,431
57 Malaysia 29,048
58 Seychelles 28,060
59 Kazakhstan 28,043
60 Chile 26,513
61 Bulgaria 25,847
62 Trinidad and Tobago 25,526
63 Guyana 24,494
64 St. Kitts and Nevis 24,236
65 Uruguay 23,869
66 Maldives 23,838
67 Argentina 22,892
68 Mauritius 22,311
69 Costa Rica 21,592
70 Belarus 21,467
71 Montenegro 21,387
72 Serbia 21,243
73 Dominican Republic 20,944
74 Mexico 20,820
75 China 19,090
76 Thailand 19,028
77 Antigua and Barbuda 18,801
78 Equatorial Guinea 18,698
79 North Macedonia 18,069
80 Botswana 17,163
81 Suriname 16,793
82 Georgia 16,590
83 Gabon 16,559
84 Bosnia and Herzegovina 16,302
85 Grenada 16,288
86 Brazil 16,169
87 Colombia 15,922
88 Albania 15,487
89 Turkmenistan 15,347
90 Azerbaijan 15,299
91 Armenia 14,701
92 Moldova 14,258
93 South Africa 14,239
94 Barbados 14,224
95 Ukraine 14,146
96 Sri Lanka 14,123
97 Iran 13,993
98 St. Lucia 13,739
99 Paraguay 13,724
100 Libya 13,489
101 Egypt 13,422
102 Peru 13,410
103 Indonesia 12,967
104 Dominica 12,792
105 Mongolia 12,671
106 Kosovo 12,546
107 St. Vincent and the Grenadines 12,395
108 Palau 12,228
109 Bhutan 12,135
110 Fiji 11,902
111 Algeria 11,829
112 Vietnam 11,608
113 Equador 11,529
114 Jordan 10,821
115 Jamaica 10,815
116 Tunisia 10,720
117 Iraq 10,415
118 Nauru 10,167
119 Namibia 9,616
120 El Salvador 9,551
121 Eswatini 9,409
122 Bolivia 8,901
123 Philippines 8,900
124 Guatemala 8,895
125 Uzbekistan 8,452
126 Lao P.D.R. 8,444
127 Morocco 8,338
128 India 7,314
129 Angola 6,820
130 Cabo Verde 6,779
131 Belize 6,738
132 Tonga 6,361
133 Mauritania 6,293
134 Djibouti 6,255
135 Ghana 6,190
136 Nicaragua 6,133
137 Honduras 5,767
138 Bangladesh 5,733
139 Côte d'Ivoire 5,724
140 West Bank and Gaza 5,662
141 Samoa 5,541
142 Pakistan 5,447
143 Kenya 5,407
144 Nigeria 5,377
145 Tuvalu 5,289
146 Kyrgyz Republic 5,187
147 Venezuela 5,163
148 Cambodia 4,930
149 Myanmar 4,426
150 São Tomé and Príncipe 4,402
151 Republic of Congo 4,288
152 Nepal 4,215
153 Sudan 4,173
154 Papua New Guinea 3,936
155 Tajikistan 3,923
156 Marshall Islands 3,877
157 Cameroon 3,860
158 Benin 3,720
159 Senegal 3,699
160 Micronesia 3,441
161 Zambia 3,410
162 Comoros 3,120
163 Timor-Leste 3,106
164 Tanzania 3,062
165 Haiti 3,049
166 Ethiopia 3,024
167 Guinea 2,818
168 Lesotho 2,761
169 Uganda 2,729
170 Vanuatu 2,725
171 Mali 2,522
172 Guinea-Biissau 2,483
173 Burkina Faso 2,444
174 Solomon Islands 2,410
175 Rwanda 2,410
176 Zimbabwe 2,408
177 The Gambia 2,399
178 Togo 2,353
179 Kribati 2,281
180 Eritrea 1,911
181 Yemen 1,827
182 Sierra Leone 1,809
183 Chad 1,637
184 Madagascar 1,630
185 Liberia 1,623
186 Malawi 1,503
187 Niger 1,355
188 Mozambique 1,338
189 Democratic Republic of the Congo 1,203
190 Central African Republic 996
191 Somalia 953
192 Burundi 779

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