Size doesn’t matter, some people say. Even though many of us hide the sarcasm in that statement, today we will treat this hypothesis seriously.
Many tiny countries don’t have any measurable impact on the world economy. They are too small to have enough income sources, and they depend on the global market a lot. Although their position might look a little shaky from the point of view of bigger, more influential countries contributing hugely to the global GDP, some of the tiny places manage to get richer day by day. We will look at five of them and see what industries feed the smallest countries, help them prosper and prove the idea of size unimportance.
We must note that all the statistical data was taken from the 2020 – 2021 records of the International Monetary Fund, the United Nations (Population Dynamics records), and WageIndicator.org.
It is also advisable to keep in mind the figures (territory in square kilometers, population, Gross Domestic Product per capita (per person)) related to the country with the biggest territory and highest Gross Domestic Product:
- Russia – 17,125,191 square kilometers, 144 million people, $30,800 GDP per capita;
- The USA – 9,525,067 square kilometers, 330 million people, $69,231 GDP per capita.
Having these numbers to compare will help you paint a more vivid picture.
Maldives and Seychelles
- The Republic of Maldives – 298.8 square kilometers, 541,000 people, $26,270 GDP per capita (compare to Russia’s $30,800).
It won’t be a revelation to any of you when we say that this tiny tropical country consisting of 1196 coral islands grouped in 2 chains of 26 atolls makes its living from tourism and service industries.
In 2015, service industries brought 81% of GDP. By the year 2022, the number went down to 70.76%, mostly because of the Covid-19 pandemic. Tourism and resorts provide the country with 28% of GDP, and seafood export occupies second place.
Seychelles has a similar situation: it is an archipelago with more than 100 islands where tourism is the main item on a balance sheet.
- The Republic of Seychelles – 455 square kilometers, 98,000 people, $32,000 GDP per capita (compare to Russia’s $30,800).
Within 46 years of independence from Great Britain, the GDP has increased by 7 times and become the highest in Africa. The income used to come principally from cotton and sugarcane plantations, and now tourism ensures 55% of GDP. The government is working on stimulating fishery and seafood export, producing tinned food and coconut fiber, as well as the agricultural industry so that the country doesn’t depend too much on tourism.
Bahrain
- The Kingdom of Bahrain – 665 square kilometers, 1,7 million people, $53,384 GDP per capita (compare to Russia’s $30,800 and $69,231 of the USA).
A neighbor of Saudi Arabia and Qatar, Bahrain is located in the Persian Gulf. It is an island, but, unlike many sea-locked countries, its income doesn’t rely on tourism. The cornerstone of its economy and commerce has always been the resources.
For a long time, pearl-fishery and selling the pearls abroad were the trades that made money. Then, in 1932 when an oil reserve was discovered, the focus shifted to extracting and exporting the black gold. It happened just in time: in the 1930-s the world developed the technologies for culturing artificial pearls, and their price reduced drastically.
Today, the oil industry brings 70% of the state income and 11% of GDP. Aluminum production and export comes in second.
The third pillar of Bahrain’s income is finance. Thanks to the religious principles of Islam, loans taken from the banks of Bahrain can’t be subject to interest rates, which makes the country perfect for off-shore investments. On top of that, there is also shipbuilding and fertilizer production, contributing to the excellent financial figures.
Monaco
The Principality of Monaco (a city-state and a microstate) – 2.02 square kilometers, 39,000 people, $173,688 GDP per capita (according to the World Bank national accounts and OECD National Accounts). Compare to Russia’s $30,800 and $69,231 of the USA.
Probably, the first thing that comes to mind in association with Monaco is the Monte-Carlo casino and gambling business. The Principality has indeed been attracting gamblers since the middle of the 19th century, thanks to its casinos. The gambling industry was a true breadwinner of the family. With time, the role of casino entertainment has gone down. In 2022, the entire tourism industry is estimated as an 11% part of Monaco’s economy, and casinos – just 4% of all the financial resources. It hasn’t just happened because of the soaring popularity of online casinos and gambling platforms with overwhelming actual cash pokies availability. Financial deals and real property trade have overshadowed the gambling industry. Plus, many people choose Monaco as a tax haven.
Singapore
Last but definitely not least, the legend that rose from one of the most dangerous and poorest places on the planet to a shiny, thriving city of the future in our present – Singapore.
- The Republic of Singapore (a city-state and a sovereign island country) – 778 square kilometers, 5,85 million people, $116,487 GDP per capita (compare to Russia’s $30,800 and $69,231 of the USA).
Just about 50 years ago, Singapore was a small city perishing under the burden of unemployment, low wages, awful infrastructure, and incredible corruption levels. Since then, the GDP has grown by 50 times.
Singapore of today is a futuristic city-state whose financial stability and abundance mostly come from finance and consulting services, insurance companies, producing electronics, and precision engineering. In addition, the Singapore port is the world leader in the tonnage of transported freights.
The secret to Singapore’s success is far from fortunate coincidence or unexpected oil reserves. It is more about leaders with firm fists, strict policies, and the death penalty.
