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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.
— Read on www.gfmag.com/global-data/economic-data/richest-countries-in-the-world
Small but rich countries
Best multilingual news from the world
Eco. Lassi Pensikkala
Creator of AmerExperience
Studied Economics, Psychology and Sociology. Speaks five languages.
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