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

Author: Luca Ventura
Project Coordinator: Pham Binh

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, Switzerland 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 International Monetary Fund (IMF).

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.

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 had the resources to help save more lives and jobs, the economic downturn hit low-paid workers harder than those with high-paying occupations. A new kind of inequality also emerged: some people have been able to work from home, some others lost their livelihood and found themselves without a safety net—large holes in the most celebrated welfare systems in the world were exposed. In the meantime, the V-shaped recovery many are still hoping for—a brief sharp economic decline followed by an equally rapid rebound—appears less likely by the day. The IMF, in its World Economic Outlook's June update, anticipates growth in advanced economies at -8.0%, followed by a "sluggish" turnaround in  2021, hardly enough to undo the damage that has been done.

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, the average per-capita purchasing power is less $1,200, in the 10 richest is over $90,000. 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, Macao, Luxembourg, Singapore, Switzerland and Ireland 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. 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. Switzerland

Current International Dollars:  66,196 | Click To View GDP & Economic Data

White chocolate, the bobsleigh and—of course—the Swiss Army knife. But also the computer mouse, 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 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? 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 the money in the world, however, could not have shielded the Swiss economy from the effects of Covid-19: in 2020 production is expected to decline by 7%, pushing the country into what is possibly its worst recession since World War II.


9. Kuwait

Current International Dollars:  66,969 | 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 over 6% of the world’s total reserves. The oil industry accounts today for about 40% of the country’s GDP and over 90% of its exports. With a population of approximately 4.1 million (3 million of which are expats) 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, the historical declines in oil prices recorded 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—a few others followed after that.

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. The story, however, is entirely different when it comes to foreign workers. Faced with the economic uncertainty brought by the pandemic, the National Assembly has recently passed a bill to drastically reduce their number as a consequence of the rising demand for jobs among locals. Hundreds of thousands of livelihoods—along with the crucial remittances contributing to countries such as India, Egypt and the Philippines—are at stake.


8. United Arab Emirates

Current International Dollars:  69,434 | 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, trade and finance, as well as construction and tourism, are major industries. This year,  however, its beaches and hotels will remain empty. The city was supposed to hold the much anticipated Dubai World Expo, the biggest event it has ever hosted with some 25 million overseas expected to visit. For obvious reasons, it had to be postponed to next year.


7. Norway

Current International Dollars:  76,684 | 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: after prices crashed, the global pandemic ensued, sending the krone in freefall. Today, this export-reliant economy faces its first recession since the global financial crisis. Does it mean that it will become significantly less wealthy? Probably not. In June, just weeks after cutting the interest rates to zero, the governor of the country’s central bank said he was surprised by the speed and strength of the rebound in productivity.

On the other hand, when it comes to any economic problem fate might throw at them, Norwegians can always count on their $1.2 trillion sovereign wealth fund, the world's largest. Not only that, they know that with great riches 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.


6. Ireland

Current International Dollars:  83,399 | 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 5.5%, consolidating its role as the fastest-growing country on the continent. A nation of fewer 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 industry, the island nation regained its fiscal health, boosted its 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. And while they are undoubtedly better off than they used to, 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.  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, especially now that the economy is projected to shrink more than 7% by year end.


5. Brunei Darussalam

Current International Dollars:  80,383 | 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 about $28 billion, more than 50 times that of Britain's Queen Elizabeth. Despite Bolkiah's opulence, and an on-paper per-capita purchasing power of over $80,000, malnutrition in Brunei is commonplace. Although the data is scarce, it has been estimated that out of its 450,000 population up to the 40% earns less than $1,000 a year. Luckily, the country was spared the worst of the Coronavirus pandemic: in July, noting that no new cases of infection had been recorded in more than two months, Brunei's Ministry of Finance and Economy stated that in the first quarter of the year—as most other nations were already sliding into a recession—the economy had grown by 2.4%.


4. Singapore

Current International Dollars:  103,181 | Click To View GDP & Economic Data

With an estimated net-worth of $16 billion, restaurateur Zhang Yong is the richest person living in Singapore. Close-second with assets of about $14 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 (even most importantly 97% 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 the second quarter of the year the economy plummeted a record 41%, knocking the country into recession for the first time in a decade.


3. Luxembourg

Current International Dollars:  108,950 | 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. 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. Statec, the national government statistics service, has already stated that it expects the recession to be as short as it has been sharp, and that in 2021 the grand duchy's GDP will rebound by 7% from -6% this year. The country topped the $100,000 mark in per capita GDP in 2015 and never looked back ever since. Even the pandemic is unlikely to change that.


2. Macao 

Current International Dollars:  114,362

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 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 is—almost literally—a money-making machine.

But how can you gamble and social distance at the same time? While Macao has certainly recorded a severe slowdown in activity (which resulted in the firing of scores of migrant workers), it also has managed the health emergency successfully, with less than 50 overall initial cases, no new infections since and no fatalities. In July, the city has re-opened to travelers from the mainland without requiring them to undergo 14-days of mandatory quarantine. Macao, it turns out, can do very fairly well also without foreign tourists: in 2019, out of almost 40 million visitors, nearly 71% of them were from continental China.


1. Qatar

Current International Dollars:  132,886 | Click To View GDP & Economic Data

About $15,000 is, on average, how much each Qatari citizen has lost every year since the hydrocarbon prices started dropping in 2014. 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 world's richest nations for 20 years.

Will it retain this record? With only about 12% of the residents being Qatari nationals, the country—similarly to many other Gulf states—saw Covid-19 spreading among low-income migrant workers living in crowded quarters at furious speed: by mid-July, tallying one of the world's highest per capita rates of infection, the number of confirmed cases was exceeding 100,000. Yet, surprisingly, the economy is projected to keep growing over the medium term amid a rise in gas production and investment in preparation of the 2022 World Cup. By then, hopefully, social distancing on the stands will not be required.


Rank

Country

GDP-PPP ($)

1 Qatar 132,886
2 Macao SAR 114,363
3 Luxembourg 108,951
4 Singapore 103,181
5 Ireland 83,399
6 Brunei Darussalam 80,384
7 Norway 76,684
8 United Arab Emirates 69,435
9 Kuwait 66,387
10 Switzerland 66,196
11 United States 65,112
12 Hong Kong SAR 64,928
13 San Marino 61,575
14 Netherlands 58,341
15 Iceland 56,066
16 Saudi Arabia 55,704
17 Taiwan Province of China 55,078
18 Sweden 54,628
19 Denmark 53,882
20 Germany 53,558
21 Austria 50,931
22 Australia 50,725
23 Bahrain 49,529
24 Canada 48,246
25 Belgium 49,529
26 Finland 47,975
27 Malta 47,405
28 Oman 47,366
29 France 47,223
30 United Kingdom 46,828
31 Japan 45,546
32 South Korea 44,704
33 Spain 41,592
34 Cyprus 41,407
35 New Zealand 40,943
36 Italy 40,470
37 Aruba 39,121
38 Puerto Rico 40,067
39 Israel 39,121
40 Czech Republic 38,834
41 Slovenia 38,462
42 Lithuania 36,701
43 Slovak Republic 36,640
44 Estonia 35,852
45 Hungary 34,046
46 Poland 33,665
47 Portugal 33,665
48 The Bahamas 33,665
49 Malaysia 33,333
50 Trinidad and Tobago 32,881
51 Seychelles 31,693
52 Latvia 31,402
53 St. Kitts and Nevis 30,578
54 Greece 30,252
55 Russia 29,642
56 Antigua and Barbuda 29,346
57 Kazakhstan 28,849
58 Turkey 28,264
59 Romania 27,887
60 Croatia 27,729
61 Panama 26,822
62 Chile 26,317
63 Mauritius 24,996
64 Bulgaria 24,595
65 Uruguay 23,581
66 Maldives 23,312
67 Equatorial Guinea 21,300
68 Mexico 20,868
69 Belarus 20,644
70 Turkmenistan 20,411
71 Thailand 20,365
72 Montenegro 20,084
73 Argentina 20,055
74 China 19,504
75 Dominican Republic 19,411
76 Gabon 19,057
77 Barbados 18,921
78 Barbados 18,921
79 Azerbaijan 18,616
80 Serbia 18,564
81 Botswana 18,558
82 Costa Rica 18,037
83 Iraq 18,025
84 Iran 17,662
85 Grenada 16,717
86 North Macedonia 16,486
87 Brazil 16,462
88 Palau 16,234
89 Algeria 15,696
90 Colombia 15,541
91 Suriname 15,532
92 Lebanon 15,049
93 Peru 14,719
94 St. Lucia 14,492
95 Mongolia 14,309
96 Bosnia and Herzegovina 14,220
97 Egypt 14,023
98 Indonesia 13,998
99 Albania 13,991
100 Sri Lanka 13,897
101 South Africa 13,754
102 Paraguay 13,584
103 Tunisia 12,661
104 St. Vincent and the Grenadines 12,454
105 Kosovo 12,322
106 Georgia 12,227
107 Fiji 12,147
108 Dominica 12,008
109 Ecuador 11,742
110 Namibia 11,266
111 Eswatini 11,160
112 Armenia 10,866
113 Bhutan 9,876
114 Ukraine 9,774
115 Jamaica 9,692
116 Jordan 9,649
117 Philippines 9,471
118 Libya 9,358
119 Morocco 9,235
120 Guyana 9,094
121 Uzbekistan 9,000
122 Nauru 8,999
123 Guatemala 8,705
124 Belize 8,664
125 India 8,378
126 El Salvador 8,313
127 Bolivia 8,172
128 Lao P.D.R. 8,110
129 Vietnam 8,066
130 Cabo Verde 7,729
131 Moldova 7,703
132 Republic of Congo 7,174
133 Ghana 6,956
134 Angola 6,752
135 Myanmar 6,707
136 Tonga 6,486
137 Samoa 6,152
138 Nigeria 6,054
139 Pakistan 5,872
140 Djibouti 5,568
141 Honduras 5,395
142 Nicaragua 5,290
143 Timor-Leste 5,254
144 Bangladesh 5028
145 Mauritania 4,881
146 Cambodia 4,664
147 Còte d'Ivoire 4,457
148 Tuvalu 4,277
149 Zambia 4,148
150 Sudan 4,072
151 Kyrgyz Republic 4,056
152 Papua New Guinea 3,983
153 Cameroon 3,955
154 Kenya 3,875
155 Marshall Islands 3,868
156 Senegal 3,853
157 Lesotho 3,614
158 Tajikistan 3,589
159 Micronesia 3,562
160 Benin 3,446
161 Tanzania 3,402
162 Sao Tomè and Prìncipe 3,387
163 Nepal 3,318
164 Vanuata 2,957
165 Comoros 2,799
166 The Gambia 2,746
167 Zimbabwe 2,702
168 Uganda 2,631
169 Ethiopia 2,511
170 Chad 2,480
171 Mali 2,471
172 Rwanda 2,452
173 Guinea 2,441
174 Solomon Islands 2,303
175 Yemen 2,280
176 Kiribati 2,138
177 Afghanistan 2,095
178 Burkina Faso 2,077
179 Guinea-Bissau 2,019
180 Haiti 1,878
181 Togo 1,826
182 Madagascar 1,699
183 Sierra Leon 1,690
184 South Sudan 1,602
185 Liberia 1,414
186 Mozambique 1,303
187 Malawi 1,240
188 Niger 1,106
189 Eritrea 1,060
190 Democratic Republic of the Congo 849
191 Central African Republic  823
192 Burundi 727

Source: International Monetary Fund, World Economic Outlook October 2019. Values are expressed in current international dollars, reflecting the corresponding exchange rates and PPP adjustments.