There are about 200+ countries in the world. Some of them are small with small populations while others are tiny. Their population and economy size are not large enough to get international investors’ attention. In the latest edition of Finance & Development magazine published by the IMF I came across an interesting article on these small states.
The following are some of the notes from that article:
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Source: Finance & Development, September 2013,IMF
- Some microstates such as the island of Seychelles in Asia are rich while others like Samoa, Micronesia are poor.
- The Pacific island of Tuvalu has a land area of just 10 square miles which is about one-seventh the size of Washington, DC.
- Kiribati has a population of just 100,000 spread over an area of about 3.5 million square kilometers of ocean or about the size of the Indian subcontinent.
- The Pacific islands of Samoa and Palau are about as far apart as the east coast of the U.S. and England. This makes communication and trade difficult.
- Most the small states depend on tourism, finance or export industries.
- Nobel-prize winning economist James Meade predicted the island of Mauritius off the coast of Eastern Africa to be a failure in the 1960s due to its dependence on one commodity – sugar, lack of natural resources and high unemployment. The country proved Meade wrong by diversifying into tourism, finance, textiles, and advanced technology—as well as sugar to grow into a high income country. Mauritius has become an offshore tax haven for wealthy investors to channel funds into other Asian countries such as India, Indonesia, etc.