Liberia Amongst 3 World’s Poorest

Friday, 24 February 2012 12:13

Written by ND Staff

Forbes magazine has come up with the world’s richest countries. But it also lists the world’s poorest—Liberia, DR Congo and Burundi:

If wealth is power, then Qataris have some serious muscle to flex. The Persian Gulf emirate of 1.7 million people ranks as the world’s richest country per capita thanks to a rebound in oil prices and its massive natural gas reserves. Adjusted for purchasing power, Qatar booked an estimated gross domestic product per capita of more than $88,000 for 2010.

Qatar has the third-largest reserves of natural gas in the world, and it has invested heavily in infrastructure to liquefy and export it, as well as to diversify its economy, without overreaching as much as nearby Dubai. Qatar has lured multinational financial firms to the country, as well as satellite campuses of U.S. universities. The government is pouring money into infrastructure, including a deepwater seaport, an airport and a railway network, all with an eye to making the country a better host for businesses and the 2022 World Cup.

In second place on our list is the mighty minnow Luxembourg, with a per capita GDP on a purchasing-power parity basis of just over $81,000. The country of half a million people became a financial hub in the latter half of the 20th century, in part thanks to strict banking secrecy laws that earned it the reputation of a tax haven. It’s followed at No. 3 by the city-state of Singapore, which thrives as a technology, manufacturing and finance hub with a GDP (PPP) per capita of nearly $56,700.

To rank the world’s wealthiest countries, Forbes looked at GDP per capita adjusted for purchasing power for 182 nations. We used International Monetary Fund data from 2010, the most recent available (GDP figures for some countries were projections). The PPP-adjusted GDP—preferred by economists when making international comparisons—takes into account the relative cost of living and inflation rates, rather than just exchange rates, which may distort real differences in worth.

“This is, essentially, the only way we have to compare GDPs across countries,” notes Gian Luca Clementi, an associate professor of economics at New York University’s Leonard N. Stern School of Business. “It’s the most accepted data.” Still, he adds, “The numbers must be taken with a grain of salt.” That’s because there are a host of issues that can make any GDP comparisons misleading, including how the quality of goods varies from country to country, he explains.

“Also, in some countries, the wealth is equally distributed, while in others it’s very unequally distributed,” Clementi says. “In Qatar, for example, the way it’s distributed is very unequal, and much of the population is actually very poor. The GDP is high because of oil revenues. And, if I were to use the GDP as an indicator of how well a country will do in the future, in Qatar what will matter is how well they actually invest it.”

Like Qatar, many of the countries in the top 15 spots on our list rely on natural resources to fill their coffers. In Norway, which ranks fourth, petroleum accounts for nearly half of exports and is the main contributor to its PPP-adjusted GDP per capita of nearly $52,000; the country is also one of the world’s largest gas exporters. Brunei, meanwhile, located on the island of Borneo, reaps the benefits of extensive petroleum and natural gas fields and comes in at No. 5 with a PPP-adjusted per capita GDP of just over $48,000. And the United Arab Emirates looks to its oil and gas for about 25% of its GDP, which is nearly $47,500 per capita (PPP).

Other well-heeled countries benefiting at least in part from natural resources are Australia, ranking at No. 11; Canada, at No. 14; and Kuwait, at No. 15, which relies on its crude oil reserves for at least half of GDP, and almost all of its export revenues and government income.

So which countries are poorest? A trio of politically and economically fragile African nations: Burundi, Liberia and the Democratic Republic of Congo, where GDPs (PPP) per capita are $400, $386 and $312, respectively.