The Economics of Developing and Emerging Markets

Chapter 1 already demonstrated that there are big differences between countries in terms of income per capita. Figure 7.1 provides an indication of how big those differences really are using a logarithmic scale for 191 countries, together accounting for more than 97 percent of the world population. The population-weighted average income level is $16,672. This ranges from a low of $754 for Burundi to a high of $120,376 for Macao. The average income level in Qatar is thus 160 times higher than in Burundi. Macao has a small population (about 0.6 million people) and is the casino capital of China. There are also large differences, however, for countries with large populations that do not depend on a single economic activity for generating their income. The USA is the richest sizeable country in terms of population (about 328 million people). It has a per capita income level of $62,513; this is 83 times as much as Burundi (12 million people), 28 times as much as Ethiopia (112 million people), 13 times as much as Nigeria (201 million people), nine times as much as India (1,366 million people), and more than four times as much as China (1,397 million people). This chapter explains to some extent the main causes of these big differences.