Money is not spread equally. Let's try and understand how it is distributed!

All nations are not made equal. Even in 2023, Where you are born plays an important role in how prosperous you can be. Some regions of the world are simply richer than others. While income inequality, cost of living and inflation all play an important role in deciding the wealth of an average citizen, GDP per capita (nominal) is perhaps the easiest and most commonly used yardstick used to measure the prosperity of the inhabitants of the nation. It is a surefire way of giving us a basic insight into the wealth of a nation. GDP per capita is simple in theory. Divide the Gross domestic product (Everything the nation produces in a year) by the total number of citizens, and you have the GDP per capita (Nominal) for a nation. While nominal GDP per capita is widely used, it has many shortcomings. It fails to make up for the disparity in data caused by the uneven distribution of income. Given the fact that it uses mean instead of median can result in severe differences in the incomes of rich and poor being hidden by the GDP per capita figures. Moreover, nominal GDP per capita fails to account for the varying cost of living in each nation.

Still, we can understand a lot about a nation through its GDP per capita figures-

1) We can see how far ahead most of the Western world is compared to developing countries. The US, Canada, Western Europe, Australia and New Zealand are still some of the richest nations on the Earth. 2) The Asian tiger economies and Japan stand out in Eastern Asia. These are the countries that embraced the benefits of free market capitalism and achieved a period of unhindered growth. Countries like Singapore, Taiwan, Japan, South Korea, Hongkong and Malaysia have a high GDP per capita and have been able to provide their citizens with a higher standard of living.

3) Despite having 1.4 Billion people, China has managed to pull itself into the category of middle-income countries, an unparalleled feat in history. Some cities in China have similar income levels as developed Western countries. A breakdown of the Chinese economic miracle is coming soon!

4) Another region that has attained a high GDP per capita is the Gulf. Fuelled by Oil and Gas wealth and low population, the countries of Kuwait, Saudi Arabia, UAE, Bahrain, Oman and Qatar have managed to become some of the most prosperous locations to live in. While their economies are certainly fuelled by the dinosaur juice, their economies are unique in many aspects. More on that in future posts.

5) Unfortunately most of Southeast Asia and Latin America alongside entire Africa and South Asia, have poor GDP per capita figures. The reasons range from lack of natural resources to war to colonialism to corruption.

While this was a brief look into GDP per Capita all over the world, we will look into every economy and every aspect in detail in upcoming blogs. Let's start this wonderful journey into the world of economics, geopolitics and money!