It’s a great big world out there. But when it comes to wealth, tiny countries are dominating in 2016 (Sorry, USA and China).
Global Finance Magazine recently ranked the world’s richest countries using data from the International Monetary Fund and the World Bank. The rankings reflect each country’s gross domestic product (GDP) per capita. The GDP is based on purchasing power parity (PPP) per capita, which takes into account relative inflation rates and cost of living among different nations.
What factors contribute to wealthy, successful economies? The data points to efficient regulations, highly developed banking, low levels of corruption, and openness to trade. Oh, and having a huge oil reserve doesn’t hurt either.
Without any further adieu, let’s get to know the top 5 richest countries.
GDP Per Capita: $71,600
Economy Overview: Kuwait has a well-developed banking system and a small, relatively open economy. The Kuwaiti dinar is the highest-valued currency unit in the world, with one dinar currently buying $3.28 USD. Kuwait has almost 10% of the world’s oil reserves, and petroleum accounts for over half of its GDP. Dropping oil prices are a threat to Kuwait’s economy, which realized a budget deficit in 2015 for the first time in 15 years.
Interesting Fact: Kuwait is ranked in the top 10 countries in the world for prevalence of obesity.
4. Brunei Darussalam
GDP Per Capita: $80,335
Economy Overview: Brunei’s economy is almost completely supported by exports of natural gas and crude oil. Averaging about 180,000 barrels per day, Brunei is the third-largest oil producer in Southeast Asia and the fourth-largest producer of liquefied natural gas worldwide. Brunei’s economy is also boosted by welfare measures and government regulation; food and housing are subsidized and the government provides for all medical services. Brunei’s currency is the Brunei dollar (BND), which has a fixed exchange rate to the Singapore dollar of 1:1.
Interesting Fact: Bruneians consider it impolite to point using their index fingers, so they point using their thumbs instead.
GDP Per Capita: $84,821
Economy Overview: Singapore’s market economy is highly developed and known for its regulatory efficiency and lack of corruption. It is fueled by government-linked companies, exports, and trade, and has been ranked as the most open economy in the world. It is also a major Foreign Direct Investment (FDI) outflow financier. The government encourages investment and high levels of savings through policies such as the Central Provident Fund. Additionally, Singapore has taken measures to promote and encourage innovation and entrepreneurship.
Interesting Fact: Singapore is one of only 3 city-states in the world (Monaco and the Vatican City are the other two).
GDP Per Capita: $94,167
Economy Overview: Luxembourg has a mixed manufacturing and services economy that is largely reliant on its steel, industrial, and banking sectors. Other components of this diverse economy are telecommunications, tourism, and agriculture, which is productive and highly subsidized. Luxembourg’s legal structure is among the best in the world, serving to effectively combat corruption. Entrepreneurial activity is supported by a highly efficient regulatory framework, and businesses enjoy minimal bureaucratic interference. Luxembourg’s minimum wage is among the world’s highest, at €1,922.96 per month ($2,142.90).
Interesting Fact: Luxembourg is the world’s only remaining Grand Duchy.
GDP Per Capita: $146,011
Economy Overview: Qatar’s economy is heavily dependent on its hydrocarbon sector, with liquefied natural gas and petroleum accounting for more than 70% of total government revenue, and upwards of 60% of GDP. Qatar has undertaken many structural reforms intended to diversify the economy by encouraging entrepreneurship and enhancing investment. Building industry is also a key component of the government’s plan to diversify the economy. Qatar’s labor force is primarily comprised of expatriates and a high standard of living is enjoyed by almost all expats and Qataris alike.
Interesting Fact: Qatar is home to the popular and controversial Arabic news network, Al Jazeera.