There are several ways to measure how rich a country is. GDP per capita. Household income. Household wealth. The percentage of the population that lives above a certain income level. The Economist has come up with its own formula. Using this yardstick, Switzerland is the richest country in the world. Or is it Singapore or Norway?
Key Points
Norway’s A Winner, Maybe
Singapore Is A Winner, Maybe
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The magazine rated 178 countries. Its first metric was GDP per person at market exchange rates. It is widely used by the IMF and The World Bank. It adds market exchange rates so it can be compared to a widely used currency. This is usually the US dollar.
The second yardstick is adjusted income for local prices. Broadly speaking this is GDP as measured by purchasing power, and is often known as PPP.
The third measure is local prices and local hours worked. It is one way to look at productivity.
Based on income measured in dollar terms, Switzerland’s figure is $100,000. It is followed by Singapore at $90,700 and Norway at $86,800. Based on productivity or adjusted hours, it is Norway. Based on adjustments for price differences and hours worked, it is Singapore.
It is deeply satisfying to have a list which does not have just one winner. The Economist wraps it up by saying “Being rich is not just about earning more. Prices differ between countries, and a modest salary can go further where things are cheaper. Working hours vary too: some places manage to generate high incomes with fewer hours of labour, leaving time for leisure.”
Outside The Economist ranking, it is interesting to note that these top nations are unusually homogeneous. Over 90% of the people who live in Switzerland are White. The number is 87% in Norway. Over three quarters of the residents of Singapore are Chinese Singaporeans. Perhaps these figures do not matter much at all. They could be a coincidence, but across the three, they are common.
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