Tuesday, February 10, 2009

There's A New Number 1 In The World: Liechtenstein Passes Luxembourg In Per Capita GDP

To see the complete ranking, go the CIA World Factbook. Here is the top 10:

1 Liechtenstein $118,000
2 Qatar $101,000
3 Luxembourg $85,100
4 Bermuda $69,900
5 Kuwait $60,800
6 Norway $57,500
7 Jersey $57,000
8 Brunei $54,100
9 Singapore $52,900
10 United States $48,000

Here is something the CIA reports about Liechtenstein (which is small with a population 35,000 and is only 160 square kilometers in area):

"Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and the highest per capita income in the world. The Liechtenstein economy is widely diversified with a large number of small businesses. Low business taxes - the maximum tax rate is 20% - and easy incorporation rules have induced many holding companies to establish nominal offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. In 2008 Liechtenstein came under renewed international pressure - particularly from Germany - to improve transparency in its banking and tax systems."

In last place was Zimbabwe at $200. With 118,000/200 = 590, it means that the standard of living is 590 times higher in Liechtenstein than in Zimbabwe.

The country of Guinea-Bissau has a population of 1.5 million. But their GDP was only about $900 million. That is less money than the movie "The Darknight" has made, even if you take into account its production costs. Click here for details.


Anonymous said...

due to Zimbabwe's lack of productivity, they are practically starving. Would you suggest the people become more educated, or should businesses migrate to this sector to take advantage of what could be cheap labor. ceteris paribus. Could their situation happen to be bad because of policies they have set in place?

Cyril Morong said...

Thanks for dropping by and commenting.

I don't know what should be done first in Zimbabwe. Things might be starting to change and I was planning to post something about this tomorrow.

I think the answer to your last question is definitely yes. President Mugabe has confiscated property, inflated the currency, controlled exchange rates and destroyed any incentives to produce. He is a dictator who has silenced almost all opposition.
They have a long rebuilding process ahead of them.

Patrick said...

I think the The Economics of Public Policy hits the nail right on the head in chapetr four. Private property rights and effective law enforcement/judicial branch is the foundation of a prosperous nation. Then obviously less regulation and government intervention by a leader that has an obvious lack of good intention for his own people. I just dont know how he stays in power? How does a nation of people just accept this for so long? Lack of education?

Cyril Morong said...


Thanks for dropping by and commenting. You raise some great questions. I don't think I really know but part of it is that he has the military on his side and he pays his friends enough so they support him. He has outlawed or put out of business any political opposition, unions, freedom of the press. etc. Dictators often rule through terror, secret police, etc. Not sure if that is the case here.