Sunday, November 14, 2010

A Few Interesting GDP Comparisons

If you go to different national and international statistics bureaus and check GDP for different countries at current exchange rates, you will find some interesting facts. To take just a few examples:

Israel with 7.6 million people has roughly the same GDP as neighboring Egypt with 79 million people. It also has a larger GDP than that of Pakistan, with 171 million people.

Singapore with 5.1 million people has roughly the same GDP as Malaysia with 28.3 million people. And it also has a bigger GDP than the Philippines, with 92 million people.

Sweden with 9.4 million people has a GDP that is nearly 4 times bigger than that of the other European country with a blue and yellow flag, Ukraine, who has 45.9 million people.

Australia with 22.5 million people has a GDP that is nearly as big as that of India, with 1.19 billion people.

Norway with 4.9 million people has a GDP that is roughly 2.5 times bigger than that of another oil rich country, Nigeria who has 158 million people.

Japan with 127 million people has a GDP that is nearly as big as that of China, with 1.34 billion people.

---- Many people would perhaps object to these comparisons as the general price level is a lot lower in the poor countries due to the Penn effect. And they've got a point in the sense that the difference in living standards isn't as big as these numbers suggests.

However, the numbers are still striking. And when it comes to economic influence, GDP at current exchange rates is what matters. Why these differences exists is a complex story usually involving differences in culture and current and/or past economic system that varies between the different cases. Only in the cases of Norway and Australia is it related to natural resources-but as Nigeria and India also has that, this only explains a small part of it. And in the cases of Singapore vs. Malaysia and to a lesser extent Israel vs. Egypt amd Japan vs. China, the richer country actually has less natural resources.

In the case of Singapore vs. Malaysia, former Malaysian leader Mahathir Mohamad gave this explanation:
""""""Singapore will overtake Malaysia because its focus is just on economic growth. There is no social restructuring goal such as fair distribution of wealth between races as we have in Malaysia.