How have the richest countries fared in the last 40 years?
40 years is a long time. Empires can rise and fall in this time. The Soviet Union and China are great examples. Some of the richest countries of 1980 have lost their position to newly industrialised countries.
How has the GDP per capita ranking changed over the past 4 decades?
I started by choosing 1980 as the base year, but then I realised it is unfair to oil exporters. The GDP of all oil exporters increased exponentially in 1980 because of the global oil crisis.
The annual average crude oil price in 1980 (in today's dollars) was $123 per barrel, up from $62 in 1978. Just for comparison, the crude oil price in 2019 was $53 per barrel, 15% down from the 1978 price.
Thus, I chose 1978 and 2019 as two years. I calculated the GDP/Capita increase between 1978 and 2019 for the richest countries while ignoring dependencies like French Polynesia and New Caledonia because the World Bank doesn't track them anymore.
Monaco remains the richest country in the world. Its GDP/Capita increased by 5x in this period.
The best-performing countries in GDP/Capita:
Ireland – 14.46x increase
Bermuda – 13.19x
Hong Kong – 12.32x
Liechtenstein – 10.31x (2018 data)
Germany – 9.58x
Bermuda and Liechtenstein, like Monaco, are tax havens. Their increase in GDP/Capita is because some of the richest people from all over the world have moved there for tax reasons.
Singapore deserves a special mention. It was ranked 28th in 1978. Its GDP/Capita has increased by 20.55x in these 40 years. That is some growth. Now it's the 8th richest country in the world.
Which countries have done the worst?
UAE – 1.5x
Saudi Arabia – 2.49x
Brunei – 2.90x
Qatar – 2.94x
We can see a common theme here. All these are all oil-dependent states with authoritarian governments.
So how have the rankings changed for these countries?
UAE – 2nd to 22nd place
Saudi Arabia – 12th to 38th
Kuwait – 5th to 30th
Brunei – 10th to 32nd
Qatar – 3rd to 10th
The inability of these oil-rich states to diversify their economy has hurt them. They are as dependent on oil in 2021 as they were in 1978. As the importance of oil in the global economy continues to lessen, these countries will struggle to maintain their relative prosperity.
All these governments realise this. Hence, they are investing abroad in high-growth opportunities through their Sovereign Wealth Funds. But it would be interesting to see how they diversify their economic base away from oil and develop new industries.