What is the true measure of a country’s material wealth? Most rankings of the world’s richest nations consider gross domestic product (GDP) — basically the size of a nation’s economy. But the problem with such a basis for a “wealthiest countries” ranking is that GDP doesn’t take into consideration a very important factor: the size of a country’s population. Obviously, the more dependents a nation has, the smaller the piece of the pie that, on average, belongs to each citizen.
China, for example, usually ranks very high in most richest countries lists. However, with its current population of more than 1.3 billion people, the Asian giant isn’t even close to having the most impressive GDP-to-population ratio among countries despite its enormous GDP. Meanwhile, other countries with much smaller GDPs but have much higher GDP-to-population ratios are not recognized often enough.
Fortunately, Global Finance has had the insight and the initiative to create a list of The Richest Countries in the World that uses a purchasing power parity (PPP), thereby taking into account not only each country’s GDP and population (based on 2013 figures), but also each nation’s relative cost of living and inflation rates. Thus, GDP per capita being considered, here are the few countries in the world with the richest average residents:
10. Australia / GDP Per Capita: $44,073.81
Australia’s GDP of $1.44 trillion and population of 28.8 million certainly make for a healthy GDP per capita. However, despite the annual gross income of the average Australian being pegged at a healthy $50,449, the most recent news on Australia’s economy hasn’t been very positive. Because of disappointing economic data for the past few months, the Aussie dollar finds itself at its lowest levels since the March 2009 global financial crisis. Furthermore, international demand for the country’s mining and agricultural products — core building blocks of the Australian economy — has noticeably dropped, largely because of weak demand in China. In fact, financial ratings agency Standard & Poor has stated it may demote the country’s credit score if Australia’s budgetary concerns are not addressed.
9. Switzerland / GDP Per Capita: $46,474.95
Due to pervading uncertainty brought about by Greece’s floundering economy, the Swiss National Bank has recently been busy trying to keep down the value of the Swiss franc. The urgency of the concern is illustrated by The Economist‘s latest publication of the Big Mac index — a guide for the true level of currencies based on the prices of Big Macs across countries. The data indicate that a Big Mac in Switzerland, costing approximately $6.82, is by far the most expensive in the world, the Swiss franc grossly overvalued by 42.4%. Nevertheless, the Central European nation doesn’t seem to have much to worry about as price increases in Switzerland’s most important exports, including its elite watches, grow even more desirable the higher they are priced. And besides, the nation’s average annual gross income is listed at a very healthy $54,236, the third highest in the world.
8. United Arab Emirates / GDP Per Capita: $49,883.58
Most people know that the United Arab Emirates (UAE) economy is heavily reliant on oil revenues, but while that’s true, the nation has also successfully diversified its economy to become the least oil-reliant country in the Gulf Cooperation Council (GCC). In fact, the UAE’s non-oil sector grew 8.1% in 2014 to comprise 68.6% of its constant-price GDP — good news in a global economic climate where oil prices have been in sharp decline. As a result of the positive development, the UAE plans to stick to its strategy of further diversifying its local economy with the target of growing its non-oil sector to 80% of its GDP by 2021. Surprisingly though, despite the UAE’s impressive ranking in this list, its GDP worth $401 billion, is only the 30th largest in the world.
7. United States of America / GDP Per Capita: $51,248.21
The United States is consistently listed as the having the largest economy in the world with its GDP pegged at a staggering $17.4 trillion, roughly 17% of the global GDP. However, with more than 321 million citizens, America also has the world’s third largest population, thus considerably dragging down its ranking on this list. Nevertheless, after years of economic uncertainty, the future is once again looking bright for the United States, the federal reserve reporting that both the economy and the job market are continuing to gain strength. In fact, the unemployment rate, which is currently at 5.3%, is at its lowest in seven years. That’s good news for Americans, who are listed as earning an average of $56,340 annually — the largest wage in the world.
6. Hong Kong / GDP Per Capita: $53,432.23
China, despite its GDP of over $10 trillion, is nowhere close to placing in the upper regions of this list. (China places 90th.) However, its autonomous territory, Hong Kong, with its GDP of $289 billion and population of around 7.2 million, ranks an impressive 6th in the world in terms of GDP per capita. But although the International Labour Organization reports that Hong Kong’s workers earn a healthy average of $1,780 each month, recent developments are threatening to derail efforts to sustain the territory’s economic growth. More specifically, unrest fueled by dissatisfaction with mainland China’s policies, along with China’s overall economic slowdown, has resulted in anemic tourism figures and falling retail sales for Hong Kong. Economist Silvia Liu observes, “Structurally, until the tourism sector consolidates and Hong Kong finds new growth engines, I don’t see the way out yet.”
5. Brunei Darussalam / GDP Per Capita: $55,111.20
Brunei may have a GDP of just $15.1 billion — the 118th largest in the world — but it also has a population of less than half a million, thus allowing its relatively few citizens to thoroughly enjoy the nation’s wealth. In fact, Brunei is one of the few countries where citizens pay no income or sales taxes. However, among the nations in this top 10 list, it is perhaps Brunei that has the most to worry about in terms of sustaining its prosperity. The largely oil-dependent Southeast Asian sovereign state has been rocked by plummeting local oil production and crashing world oil prices. Even worse, according to the BP World Energy Outlook, Brunei has only 22 more years before it runs out of oil to extract. Hopefully, the country’s efforts at diversifying its currently one-dimensional economy, including its plans to introduce a stock exchange to fund small businesses, will bear fruit before the nation’s oil runs out.
4. Norway / GDP Per Capita: $56,663.47
With a GDP of $500 billion and a population of only over 5 million, it’s easy to see why Norway ranks high in terms of GDP per capita. The coastline-rich nation has taken excellent advantage of its abundant natural resources, which include petrol, hydroelectric energy, and fisheries that allow its people to enjoy a comfortable average annual gross income of $49,663. Unfortunately, a recent report by the Organisation for Economic Co-operation and Development (OCDE) revealed that Norwegians, especially the younger ones, are living way beyond their means, resulting in Norway registering the highest levels of personal debt throughout all of Europe. Perhaps, the youth in Norway ought to realize that recent dramatic falls in oil prices could definitely bring about less prosperous times for their generation.
3. Singapore / GDP Per Capita: $61,567.28
Singapore has repeatedly been recognized for owning one of the most market-oriented and most pro-business economies in the world, and the nation has greatly benefited from these strengths with its impressive $308 billion GDP and population of below 5.5 million. In fact, the average monthly income of Singaporeans, fixed at $3,694, is the second highest in all of Asia and the Pacific behind only that of the Australians. Perhaps the only causes for concern in Singapore’s economy are its recent limited growth and slightly increasing unemployment rate. Nevertheless, the trade-dependent nation’s economic outlook continues to be generally positive.
2. Luxembourg / GDP Per Capita: $79,593.91
Luxembourg’s GDP, reported to be worth $62.3 billion, is only the 73rd largest in the world, but because the country’s population is less than 600,000, Luxembourg’s GDP per capita is astoundingly the second highest among all nations. Just how does this tiny country of 998 square miles do it? Indicators show that banking, the largest sector in Luxembourg’s economy, is mostly responsible for the Green Heart of Europe‘s prosperity. More specifically, cross-border banking has been largely responsible for allowing the average Luxembourger to enjoy a gross income of $56,021 annually. Also providing additional fuel to the nation’s economy are highly productive steel and industrial sectors.
1. Qatar / GDP Per Capita: $105,091.42
As if it weren’t already the richest country in the world with its $210 billion GDP and population of only over 2.3 million, Qatar is still doing an outstanding job of diversifying its petroleum and liquefied natural gas-dependent economy. In fact, despite a slowdown in the nation’s hydrocarbon sector, Qatar’s economy still managed to grow 4.1% year on year during the first quarter of 2015. The expansion was mainly due to an impressive 11.4% growth in construction, fueled by massive projects like the Msheireb Downtown Doha development and the Doha Metro, as well as a series of other substantial infrastructure projects. Furthermore, Qatar’s transportation sector registered an impressive 19.21% cumulative net profit from January to June of this year. Simply put, all indicators seem to point to the richest citizens in the world growing even richer in the years to come.