What does it mean for a nation to be rich or poor at a time of global pandemic? GDP per capita adjusted for relative purchasing power gives us an idea, albeit an imperfect one.

Author: Luca Ventura
One of the world's poorest countries—Yemen—is being bombed by its far richer neighbor, Saudi Arabia.

Would you rather be rich in a poor country or poor in a rich one? Measuring how rich a country is not that easy (spoiler: it is not just about GDP). Measuring how rich you are depends to a large degree on how rich and poor countries are defined.

If we simply consider a nation's gross domestic product—the sum of all goods and services produced by a country during one year—then we would have to conclude that the richest nations are exactly the ones with the largest GDP: United States, China, Japan, Germany. But how could the economies, for example, of Singapore or Luxembourg ever match that of such powerhouses when they are no more than small dots on the world map?

Another problem with GDP is that it does not measure wealth distribution. That is why a more accurate representation of people’s living conditions begins with dividing a nation's GDP by the number of people that live there: per capita GDP and its growth rate tell us much more about the social wealth potentially available to each person and whether this wealth is either increasing or decreasing over time.

Click here to read more about the world's poorest countries.    Click here to read more details about the world's richest countries.

However, using per capita GDP still poses a problem: the very same income can buy very little in some countries and go much further in others where basic necessities—food, clothing, shelter, or healthcare—cost far less. To gauge how wealthy a country’s citizens are it is necessary to understand how much they can buy. That is why, when comparing per capita GDP across countries, GDP should be adjusted for purchasing power parity, which helps us take into account the inflation rates and the price of goods and services in each given place.

When considering whether it is better to be rich in a poor country or poor in a rich one, the best chance of enjoying a superior standard of living is to reside in a richer nation no matter where a person falls on the income distribution scale. Then again, wealth for some without a good measure of equality for everyone is problematic, to say the least. The coronavirus pandemic proved it most strikingly. Low-income workers, often migrants, living in some very wealthy nations suddenly found themselves unemployed, homeless and stranded without much of a safety net. Many less affluent nations, in the meantime, bent over backwards to take care of all those in need during the crisis.

Because energy and food are essential goods with few substitutes, higher prices are particularly painful for low-income households, the IMF writes in World Economic Outlook July 2022 update: “When the price of other items, such as electronics, furniture, or entertainment, increases, families can simply reduce or even eliminate spending on them. For food, heating, and transportation—often essential to earn a living—this is much harder.” As a result, IMF economists say the current situation poses a threat to both economic and social stability.

This is why, in the long run, it is better not only to be rich but to be egalitarian as well. Too much economic inequality stifles growth for all, political instability is more likely, healthcare care costs and mortality rates are higher, and so are crime and corruption rates. Being rich in a poor country also has costs.


Rank

Country

GDP-PPP ($)

1 Luxembourg 140,694
2 Singapore 131,580
3 Ireland 124,596
4 Qatar 112,789
5 Macao SAR 85,611
6 Switzerland 84,658
7 United Arab Emirates  78,255
8 Norway 77,808
9 United States 76,027
10 Brunei Darussalam 74,953
11 Hong Kong SAR 70,448
12 San Marino 70,139
13 Denmark 69,273
14 Taiwan Province of China 68,730
15 Netherlands 68,572
16 Austria 64,571
17 Iceland 64,621
18 Andorra 63,600
19 Germany 63,271
20 Sweden 62926
21 Australia 61,941
22 Belgium 61,587
23 Finland 58,010
24 Canada 57,812
25 Bahrain 57,424
26 France 56,036
27 Saudi Arabia 55,368
28 United Kingdom 55,301
29 Malta 54,647
30 South Korea 53,051
31 Kuwait 50,919
32 New Zealand 50,411
33 Italy 50,216
34 Israel 50,204
35 Japan 48,814
36 Slovenia 48,534
37 Cyprus 48,443
38 Czech Republic 47527
39 Lithuania 46,479
40 Spain 46,413
41 Estonia 44,778
42 Puerto Rico 42,759
43 Poland 41,685
44 Hungary 40,944
45 Portugal 40,805
46 The Bahamas 40,274
47 Aruba 39,508
48 Slovak Republic 38,620
49 Guyana 38,258
50 Turkey 37,488
51 Latvia 37,330
52 Romania 36,622
53 Croatia 36,201
54 Panama 36,085
55 Greece 35,596
56 Oman 35,286
57 Seychelles 35,272
58 Malaysia 32,901
59 Kazakhstan 30,502
60 Russia 30,013
61 Trinidad and Tobago 29,884
62 Maldives 29,133
63 Bulgaria 29,593
64 Chile 28,526
65 St. Kitts and Nevis 27,608
66 Uruguay 26,663
67 Argentina 25,882
68 Mauritius 25,043
69 Montenegro 24,878
70 Costa Rica 24,490
71 Dominican Republic 23,983
72 Serbia 23,904
73 Mexico 22,216
74 Antigua and Barbuda 21,890
75 Belarus 21,686
76 China 21,364
77 Thailand 21,057
78 North Macedonia 19,726
79 Botswana 19,287
80 Equatorial Guinea 19,036
81 Turkmenistan 18,857
82 Georgia 18,594
83 Libya 18,345
84 Iran 18,332
85 Grenada 18,293
86 Colombia 18,225
87 Gabon 17,848
88 Bosnia and Herzegovina 17,471
89 Barbados 17,408
90 Albania 17,383
91 Suriname 17,300
92 Brazil 17,208
93 Azerbaijan 17,153
94 Moldova 16,719
95 St. Lucia 16,509
96 Armenia 15,818
97 St. Vincent and the Grenadines 15,505
98 Sri Lanka 15,387
99 South Africa 15,361
100 Peru 15,035
101 Egypt 14,928
102 Indonesia 14,535
103 Dominica 14,491
104 Paraguay 14,430
105 Kosovo 13,964
106 Palau 13,652
107 Fiji 13,598
108 Mongolia 13,350
109 Algeria 13,002
110 Bhutan 12,967
111 Vietnam 12,881
112 Ecuador 12,664
113 Tunisia 12,300
114 Iraq 12,141
115 Jordan 11,861
116 Jamaica 11,802
117 Nauru 10,750
118 El Salvador 10,581
119 Namibia 10,448
120 Eswatini 10,411
121 Philippines 10,237
122 Guatemala 9,911
123 Bolivia 9,856
124 Uzbekstian 9,243
125 Lao P.D.R. 9,184
126 Morocco 9,041
127 India 8,358
128 Cabo Verde 7,740
129 Angola 7,360
130 Belize 7,147
131 Nicaragua 7,071
132 Mauritania 6,920
133 Tonga 6,783
134 Ghana 6,754
135 Honduras 6,740
136 Djibouti 6,667
137 Bangladesh 6,633
138 Pakistan 6,470
139 Côte d'Ivoire 6,345
140 West Bank and Gaza 6,243
141 Kenya 6,061
142 Venezuela 5,949
143 Samoa 5,935
144 Nigeria 5,853
145 Tuvalu 5,798
146 Kyrgyz Republic 5,562
147 Cambodia 5,493
148 Myanmar 4,776
149 São Tomé and Príncipe 4,681
150 Tajikistan 4,630
151 Nepal 4,578
152 Republic of Congo 4,578
153 Sudan 4,442
154 Cameroon 4,398
155 Papau New Guinea 4,299
156 Marshall Islands 4,192
157 Benin 4,137
158 Senegal 4,093
159 Zambia 3,776
160 Micronesia 3,650
161 Ethiopia 3,407
162 Tanzania 3,358
163 Comoros 3,555
164 Timor-Leste 3,339
165 Haiti 3,189
166 Lesotho 3,034
167 Guinea 3,029
168 Uganada 2,961
169 Vanuatu 2,851
170 Rwanda 2,808
171 Guinea-Bissau 2,784
172 Burkina Faso 2,663
173 The Gambia 2,646
174 Togo 2,599
175 Mali 2,575
176 Zimbabwe 2,523
177 Solomon Islands 2,385
178 Kiribati 2,148
179 Eritrea 2,101
180 Yemen 2,078
181 Sierra Leone 1,958
182 Liberia 1,779
183 Madagascar 1,778
184 Chad 1,705
185 Malawi 1,603
186 Mozambique 1,439
187 Niger 1,435
188 Somalia 1,322
189 Democratic Republic of the Congo 1,316
190 Central African Republic 1,102
191 South Sudan 928
192 Burundi 856
Afghanistan, Lebanon, Syria, Ukraine N.A.

Source: International Monetary Fund, World Economic Outlook April 2022. Values are expressed in current international dollars, reflecting the corresponding exchange rates and PPP adjustments.