Many of the world’s richest countries are also the world’s smallest: the pandemic barely made a dent on their huge wealth.
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, Switzerland and Singapore—benefit from having sophisticated financial sectors and tax regimes that help attract foreign investments and professional talent. Others like Qatar, Brunei and the United Arab Emirates have large reserves of hydrocarbons or other lucrative natural resources. Shimmering casinos and hordes of tourists are good for business too: despite the pandemic restrictions on international travels, Asia’s gambling haven Macao remains 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.
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 world’s 10 poorest countries, the average per-capita purchasing power is about $1,350 while in the 10 richest is close to $100,000 according to data from the International Monetary Fund (IMF).
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. While a global deal to ensure big companies will pay a minimum tax rate of 15% has been signed last year by more than 130 countries (a deal that now appears in jeopardy due to the opposition of legislators and politicians in many of them), critics have argued that such rate is barely higher than that of nations like Ireland, Qatar and Macao. 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: 74,953 | 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 $30 billion, roughly 50 times that of Britain’s Queen Elizabeth.
Yet, it is not all roses in the sultanate. Despite the monarch’s opulence, and an on-paper per-capita purchasing power of about $75,000, malnutrition in Brunei is commonplace. Although data is scarce, it is believed that over one-third of its 450,000-strong population lives in extreme poverty, with scores of others relying on government welfare to get by.
Luckily, the country was spared the worst of the COVID-19 pandemic. What it was not spared from was the pandemic-related plunge in oil prices: after registering a 13-year high of 3.8% economic growth in 2019, the GDP fell in 2020 to 1.1% and in negative territory, -0.6%, in 2021. Then again: due in large part to the war in Ukraine, oil prices have now largely bounced back, and so have projections for Brunei’s economy, which is now expected to grow by 5.8%.
9. United States
Current International Dollars: 76,027 | 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 in 2020—during the early and worst phase of the pandemic—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. 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, many lost their jobs and businesses, found themselves with astronomical medical bills or other expenses to pay, lined up at food banks. The job market has recovered since then, but inflation at a 40-year high is eating into wages.
Yet another story is how the super-rich fared during these years of economic turmoil. Since March 2020 to May 2022, according to Forbes, the collective wealth of America’s 727 billionaires leapt by $1.7 trillion during the pandemic. They now hold over four times more wealth than the roughly 165 million Americans in society’s bottom half. In 1990, 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.
Current International Dollars: 77,808 | 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 almost 4%, the same rate projected by the IMF for 2022 (that is before oil prices set new highs following Russian aggression of Ukraine).
Furthermore, 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. 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.
7. United Arab Emirates
Current International Dollars: 78,255 | 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 and the concomitant fall of oil prices: the country, in fact, briefly slipped out of the IMF ranking of the richest countries globally for the first time in decades.
However, despite the rumors of their imminent demise, fossil fuels have not gone out of fashion: as soon as their prices recovered, the United Arab Emirates regained their spot on the list of ten richest countries in the world.
Current International Dollars: 84,658 | 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 machinery (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 neighboring Italy, Spain, France and Germany the contraction amounted respectively to 8.8%, 10.8%, 7.9% and 4.5%.
Since then all these nations have mostly returned to pre-pandemic growth rates, but to what do owe Swiss exceptionalism? Indeed, the IMF concluded, growth suffered less due to a swift and sustained policy response through emergency spending and containment measures, but also as a result of the make-up of the Swiss economy itself, with its low dependency on contact-intensive sectors, competitive export industries, and solid public and household finances.
5. Macao SAR
Current International Dollars: 85,611
Just a few years ago, many were betting that the Las Vegas of Asia was on its way to becoming the richest nation in the world. 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 became a money-making machine.
That, at least, until the machine started losing money rather than making it. When Covid struck, global traveling came to a halt, and for a while Macao even slipped out of the 10 richest nations ranking. To this day, Macao is the only country on the list whose per-capita purchasing power is lower than it was before the start of the pandemic—about $125,000 in 2019, down by $40,000 today.
Things are just not what they used to be. While the international clientele has all but disappeared, Macao has relied so far on tourists visiting from mainland China, Hong Kong and Taiwan. Then, this year, just when the summer holiday travel season was about to begin, a new outbreak led to a city-wide shutdown. Amid low foot traffic and closures, it has been estimated that the local casino industry loses about $20 million a day.
Current International Dollars: 112,789 | Click To View GDP & Economic Data
Despite the recent surge, oil prices have in general 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 closer to this level than to its highs.
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, has grown roughly 1.5% in 2021 and is now projected to rebound to 3.4% amid a rise in gas and oil revenues and the boost from hosting the 2022 World Cup, which will add 1.7 billion to the economy and bring 1.2 million visitors to the country.
Current International Dollars: 124,595 | 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%, it expanded by over 4.9%, the fastest-growing country in the bloc. It would only be normal to think that Covid changed that, right? But Ireland defied all expectations once again: its GDP grew by 5.8% in 2020, and by more than twice that—meaning an astounding 13%—in 2021. Forecasts for 2022 are somewhat more conservative, standing at about 5.2%, although most nations can only dream of achieving such a level of growth.
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 slightly lower than the overall 38 member countries’ average. 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.
Current International Dollars: 131,580 | Click To View GDP & Economic Data
With an estimated net worth of $23 billion, restaurateur Zhang Yong is the richest person living in Singapore. In second place with assets of about $20 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. That decline, however, did not last long: in 2021 the GDP bounced back to 7.6%, while this year growth should reach about 4%.
Current International Dollars: 140,694 | 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, Luxembourg has weathered the pandemic better than most of its European neighbors. As a result, in 2021 the grand duchy’s GDP rebounded from -1.7% in 2020 to 6.8%. This year, however, won’t be as rosy (growth is expected to stay at about 1.7%), as the effects of the war in Ukraine, along with higher energy and food prices, are expected to impact business and consumer confidence and consumption. Then again, the country topped the $100,000 mark in per capita GDP in 2014 and has never looked back ever since.
|7||United Arab Emirates||78,255|
|11||Hong Kong SAR||70,448|
|14||Taiwan Province of China||68,730|
|61||Trinidad and Tobago||29,884|
|65||St. Kitts and Nevis||27,608|
|74||Antigua and Barbuda||21,890|
|88||Bosnia and Herzegovina||17,471|
|97||St. Vincent and the Grenadines||15,505|
|140||West Bank and Gaza||6,243|
|149||São Tomé and Príncipe||4,681|
|152||Republic of Congo||4,578|
|155||Papau New Guinea||4,299|
|189||Democratic Republic of the Congo||1,102|
|190||Central African Republic||928|
|—||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.