Ranked 35th in the world, the Global Finance magazine placed Kuwait fifth as the richest Arab country for the year 2021, at a time when the gross domestic product, according to purchasing power parity in Kuwait was $44,609.
The Al-Rai daily quoting the magazine said the classification is based on a measure of per capita GDP, adjusted according to purchasing power.
On the Arab level, Qatar came on top and took the fourth rank globally, followed by the UAE sixth globally, Bahrain 23 globally, followed by Saudi Arabia fourth in the Arab world and 27 globally.
At the beginning of the report, the question asked was: Would you rather be rich in a poor country or poor in a rich country? And the answered that measured the extent of a country’s wealth was not so easy. It is not only about measuring the wealth of a country based on the GDP, as measuring the extent of an individual’s wealth based on a large extent on how rich and poor countries are defined.
In this sense, the sources said, “If we simply look at the GDP of a country, we have to conclude that the richest countries are precisely the countries with the largest GDP, namely the United States, China, Japan and Germany. But how can nations like Singapore or Luxembourg can be compared with powerful countries when they are nothing more than small countries on the world map?”
The sources pointed out that another problem is that GDP does not measure the distribution of wealth. That is why a more accurate representation of people’s living conditions begins with dividing the country’s GDP by the number of people living in that country.
The per capita GDP and its growth rate often show the social wealth that is likely to be available to each person and whether this wealth is increasing or decreasing over time.
However, Global Finance said that using per capita GDP remains a problem, as income itself can buy very little in some countries. Thus, to gauge the wealth of a country’s citizens, it is necessary to understand how much they can buy.
For this reason, when comparing per capita GDP in the countries of the world, the GDP should be calculated based on purchasing power parity, which helps to take into account inflation rates and the prices of goods and services in a country.
At the level of the world’s richest countries, Luxembourg ranked first, followed by Ireland, Singapore, Qatar, Switzerland, the UAE, Norway, the United States of America, Macau, and Brunei.
The GDP is the sum of all goods and services produced by a country during one year, while purchasing power parity shows the ability of individuals to bear the costs of goods and services at a value of one unit of currency at a specific time, which changes from time to time according to several economic factors such as the high level of inflation.