What does it mean for a nation to be rich? GDP per capita adjusted for relative purchasing power provides a clue into that.

Rich and poor in Mumbai, India

WHAT DOES IT MEAN FOR A NATION TO BE RICH?

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 the 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 (GDP)—the sum total 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 San Marino or Luxembourg ever match that of such powerhouses when they are no more than tiny dots on the world map?

Another problem with GDP is that it does not measure wealth distribution. 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 tells 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 capital GDP 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 a country’s citizens are wealthy it is necessary to understand how much they are able to 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 inflation rates and price of goods and services in each given place.

In conclusion, then, when considering whether it is better to be rich in a poor country or poor in a rich one, the best chance of enjoying an excellent living standard is to reside in a richer nation no matter where a person falls on the income distribution scale. Averages, however, never tell the whole story. The coronavirus pandemic proved it most strikingly. Low-income workers, often migrants, living in very wealthy nations suddenly found themselves unemployed, homeless and stranded. By contrast, some poor and developing nations were spared, or cleverly prevented, the worst health and socio-economic effects of the outbreak, allowing their citizens to continue their lives in a mostly unchanged way. Whether you are rich or you are poor, these—indeed—are very strange and frightening times.

Rank Country GDP-PPP ($) 1 Qatar 132,886 2 Macao SAR 114,363 3 Luxembourg 108,951 4 Singapore 103,181 5 Ireland 83,399 6 Brunei Darussalam 80,384 7 Norway 76,684 8 United Arab Emirates 69,435 9 Kuwait 66,387 10 Switzerland 66,196 11 United States 65,112 12 Hong Kong SAR 64,928 13 San Marino 61,575 14 Netherlands 58,341 15 Iceland 56,066 16 Saudi Arabia 55,704 17 Taiwan Province of China 55,078 18 Sweden 54,628 19 Denmark 53,882 20 Germany 53,558 21 Austria 50,931 22 Australia 50,725 23 Bahrain 49,529 24 Canada 48,246 25 Belgium 49,529 26 Finland 47,975 27 Malta 47,405 28 Oman 47,366 29 France 47,223 30 United Kingdom 46,828 31 Japan 45,546 32 South Korea 44,704 33 Spain 41,592 34 Cyprus 41,407 35 New Zealand 40,943 36 Italy 40,470 37 Aruba 39,121 38 Puerto Rico 40,067 39 Israel 39,121 40 Czech Republic 38,834 41 Slovenia 38,462 42 Lithuania 36,701 43 Slovak Republic 36,640 44 Estonia 35,852 45 Hungary 34,046 46 Poland 33,665 47 Portugal 33,665 48 The Bahamas 33,665 49 Malaysia 33,333 50 Trinidad and Tobago 32,881 51 Seychelles 31,693 52 Latvia 31,402 53 St. Kitts and Nevis 30,578 54 Greece 30,252 55 Russia 29,642 56 Antigua and Barbuda 29,346 57 Kazakhstan 28,849 58 Turkey 28,264 59 Romania 27,887 60 Croatia 27,729 61 Panama 26,822 62 Chile 26,317 63 Mauritius 24,996 64 Bulgaria 24,595 65 Uruguay 23,581 66 Maldives 23,312 67 Equatorial Guinea 21,300 68 Mexico 20,868 69 Belarus 20,644 70 Turkmenistan 20,411 71 Thailand 20,365 72 Montenegro 20,084 73 Argentina 20,055 74 China 19,504 75 Dominican Republic 19,411 76 Gabon 19,057 77 Barbados 18,921 78 Barbados 18,921 79 Azerbaijan 18,616 80 Serbia 18,564 81 Botswana 18,558 82 Costa Rica 18,037 83 Iraq 18,025 84 Iran 17,662 85 Grenada 16,717 86 North Macedonia 16,486 87 Brazil 16,462 88 Palau 16,234 89 Algeria 15,696 90 Colombia 15,541 91 Suriname 15,532 92 Lebanon 15,049 93 Peru 14,719 94 St. Lucia 14,492 95 Mongolia 14,309 96 Bosnia and Herzegovina 14,220 97 Egypt 14,023 98 Indonesia 13,998 99 Albania 13,991 100 Sri Lanka 13,897 101 South Africa 13,754 102 Paraguay 13,584 103 Tunisia 12,661 104 St. Vincent and the Grenadines 12,454 105 Kosovo 12,322 106 Georgia 12,227 107 Fiji 12,147 108 Dominica 12,008 109 Ecuador 11,742 110 Namibia 11,266 111 Eswatini 11,160 112 Armenia 10,866 113 Bhutan 9,876 114 Ukraine 9,774 115 Jamaica 9,692 116 Jordan 9,649 117 Philippines 9,471 118 Libya 9,358 119 Morocco 9,235 120 Guyana 9,094 121 Uzbekistan 9,000 122 Nauru 8,999 123 Guatemala 8,705 124 Belize 8,664 125 India 8,378 126 El Salvador 8,313 127 Bolivia 8,172 128 Lao P.D.R. 8,110 129 Vietnam 8,066 130 Cabo Verde 7,729 131 Moldova 7,703 132 Republic of Congo 7,174 133 Ghana 6,956 134 Angola 6,752 135 Myanmar 6,707 136 Tonga 6,486 137 Samoa 6,152 138 Nigeria 6,054 139 Pakistan 5,872 140 Djibouti 5,568 141 Honduras 5,395 142 Nicaragua 5,290 143 Timor-Leste 5,254 144 Bangladesh 5028 145 Mauritania 4,881 146 Cambodia 4,664 147 Còte d'Ivoire 4,457 148 Tuvalu 4,277 149 Zambia 4,148 150 Sudan 4,072 151 Kyrgyz Republic 4,056 152 Papua New Guinea 3,983 153 Cameroon 3,955 154 Kenya 3,875 155 Marshall Islands 3,868 156 Senegal 3,853 157 Lesotho 3,614 158 Tajikistan 3,589 159 Micronesia 3,562 160 Benin 3,446 161 Tanzania 3,402 162 Sao Tomè and Prìncipe 3,387 163 Nepal 3,318 164 Vanuata 2,957 165 Comoros 2,799 166 The Gambia 2,746 167 Zimbabwe 2,702 168 Uganda 2,631 169 Ethiopia 2,511 170 Chad 2,480 171 Mali 2,471 172 Rwanda 2,452 173 Guinea 2,441 174 Solomon Islands 2,303 175 Yemen 2,280 176 Kiribati 2,138 177 Afghanistan 2,095 178 Burkina Faso 2,077 179 Guinea-Bissau 2,019 180 Haiti 1,878 181 Togo 1,826 182 Madagascar 1,699 183 Sierra Leon 1,690 184 South Sudan 1,602 185 Liberia 1,414 186 Mozambique 1,303 187 Malawi 1,240 188 Niger 1,106 189 Eritrea 1,060 190 Democratic Republic of the Congo 849 191 Central African Republic 823 192 Burundi 727

Source: International Monetary Fund, World Economic Outlook October 2019. Values are expressed in current international dollars, reflecting the corresponding exchange rates and PPP adjustments.