111 What does it mean for a nation to be rich or poor at a time of global pandemic, high inflation and geopolitical tensions? GDP per capital adjusted for relative purchasing power gives us an idea, albeit an imperfect one. Ireland is one of the world’s largest corporate tax havens, which benefits multinationals far more than it benefits the average Irish person. 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 gross domestic product, or 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 income inequality, that is, how a country’s riches are distributed among the population. 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. 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. It is easier for families to cut down or eliminate spending on electronics, clothing or entertainment when prices surge, but when it comes to food, heating or transportation—crucial to both live and earn a living—this becomes much more difficult. As a result, an inflationary scenario can often pose a threat to 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/Territory GDP-PPP per capita ($) 1 Ireland 145,196 2 Luxembourg 142,490 3 Singapore 133,895 4 Qatar 124,848 5 Macao SAR 89,558 6 United Arab Emirates 88,221 7 Switzerland 87,963 8 Norway 82,655 9 United States 80,035 10 San Marino 78,926 11 Brunei Darussalam 75,583 12 Hong Kong SAR 74,598 13 Denmark 73,386 14 Taiwan 73,344 15 Netherlands 72,973 16 Iceland 69,779 17 Austria 69,502 18 Andorra 68,998 19 Germany 66,132 20 Sweden 65,842 21 Belgium 65,501 22 Australia 65,366 23 Saudi Arabia 64,836 24 Malta 61,939 25 Finland 60,897 26 Guyana 60,648 27 Bahrain 60,596 28 Canada 60,177 29 France 58,828 30 South Korea 56,706 31 United Kingdom 56,471 32 Israel 54,997 33 Cyprus 54,611 34 Italy 54,216 35 New Zealand 54,046 36 Kuwait 53,037 37 Slovenia 52,641 38 Japan 51,809 39 Czech Republic 50,961 40 Aruba 49,627 41 Spain 49,448 42 Lithuania 49,266 43 Estonia 46,385 44 Poland 45,343 45 Portugal 44,708 46 The Bahamas 43,913 47 Hungary 43,907 48 Puerto Rico 43,845 49 Croatia 42,531 50 Oman 42,188 51 Romania 41,634 52 Slovak Republic 41,515 53 Turkey 41,412 54 Latvia 40,256 55 Panama 40,177 56 Seychelles 39,662 57 Greece 39,478 58 Malaysia 36,847 59 Maldives 36,358 60 Russia 34,837 61 Kazakhstan 32,688 62 Trinidad and Tobago 32,054 63 Bulgaria 32,006 64 St. Kitts and Nevis 29,662 65 Chile 27,608 66 Mauritius 29,164 67 Uruguay 28,470 68 Montenegro 27,761 69 Argentina 27,261 70 Costa Rica 26,422 71 Dominican Republic 25,896 72 Serbia 25,432 73 Libya 24,559 74 Antigua and Barbuda 24,012 75 Mexico 23,820 76 Belarus 23,447 77 China 23,382 78 Thailand 22,675 79 Georgia 21,923 80 North Macedonia 21,111 81 Grenada 20,075 82 Turkmenistan 19,974 83 Bosnia and Herzegovina 19,604 84 Iran 19,548 85 Armenia 19,489 86 Colombia 19,460 87 Botswana 19,398 88 Gabon 19,197 89 Albania 19,029 90 Barbados 18,858 91 Brazil 18,686 92 Azerbaijan 18,669 93 Equatorial Guinea 18,510 94 St. Lucia 18,435 95 Suriname 18,427 96 St. Vincent and the Grenadines 17,793 97 Egypt 16,979 98 Moldova 16,840 99 Palau 16,394 100 Peru 16,132 You Might Be Interested In Omani Research Investigates the Influence of Robot-Aided Learning on Education The Evolving Role of Corporate Treasurers in a Complex Financial Landscape Seeking Low-Risk High-Yield Investments: An Analysis of 3 Stocks Geopolitics And Interest Rates: Q&A with Taleh Kazimov, Central Bank Governor Of Azerbaijan Unveiling the Unseen: The Vital Role of Strategy Consultants in Shaping the Retail and Consumer Products Industry Drivers of innovation in financial services
