Richest Country In The World

It's hard to know exactly which is the richest country in the world. Although some would find it convenient to assume the United States, Japan, or the United Kingdom to be the richest nations, they are not actually; they fall behind the shadow of a small sovereign state. Although they are three very wealthy countries, they pale in comparison to the truly richest nation, which sits comfortably within the heart of western Europe: Luxembourg.  

Where is Luxembourg? Luxembourg is a small landlocked country and one of the last remaining Grand Duchys that has a total area of just over 980 square miles. It is nestled in between three of Europe's globally successful nations France, Germany, and Belgium, which gives the nation a blend of Germanic and Romantic culture and heritage. It is has been a member of the European Union since its inception in 1957, and despite its size, has a population of just about half a million people.  

How wealthy is Luxembourg? According to Heritgage.org, Luxembourg's GDP annually (average national finance) is about 45 billion dollars with an average GDP per capita (average household salary) of roughly 80,000 dollars. To put that in perspective, the United States, with about 600 times the amount of people than Luxembourg, has an average GDP per capita of about 47,000 dollars; much more people yet it's half the average salary. While the US does have an average of twelve trillion dollars in spending, much of this GDP is actually money that doesn't exist: debt due to internal and external factors keeps the US from being able to utilize their incredibly large purchasing power.  

Why is Luxembourg so wealthy? Luxembourg is an incredibly productive economic state. With people making on average double the average American salary, this means that education and specialized workers in private sectors are two primary reasons why the little nation became the "little nation that could." The government is, compared to other successful nations, very lax on the private sector. In addition, the government can afford to invest in assets without having to allocate money to federal sectors, which actually allows the government to make money in addition to the private sector.  

How does it earn its wealth? Because of the lack of need for public roadworks and infrastructure (because the country is small), and because there is not much spending done on the military (which consists of roughly 800 soldiers), the government does not have to squander away assets. Instead, the Luxembourg government invests heavily to ensure that taxes are kept relatively low and that the financial environment is favorable to investors. To name a few companies, Ebay and Skype currently have their regional European headquarters in the nation's capital, Luxembourg City. In addition to a favorable economic environment, the people are incredibly educated, which also contributes to the large amount of private industries, mostly in banking, communications, and transportation, and a low unemployment rate of 5.5 percent.   

show comments

What Others Are Reading Right Now.