In this piece, we will take a look at the 25 smallest countries in the world that matter the most.
In modern day geopolitics where everything boils down to resources, economic and military power, geographic size usually does not matter when it comes to international politics and influence. Take for instance the example of Africa. Africa is the world’s second largest continent in terms of both its population and its area. However, Africa’s gross domestic product (GDP) is a mere $2.96 trillion in nominal terms. Compare this GDP with that of New York City – the world’s largest city in terms of economic output. New York’s GMP (gross metropolitan product) sits at $2.01 trillion – more than two thirds of the entire African economy. In fact, New York’s most prosperous district, Manhattan, had a GDP of $651 billion in 2020 – greater than the $376 billion GDP of Pakistan, the world’s fifth most populous country according to data from the United Nations.
So, as is clear from New York’s example, size really doesn’t matter in a lot of cases. Another example of this phenomenon comes from the corporate world. In terms of employees, one of the world’s largest companies is Walmart Inc. (NYSE:WMT). Walmart has a whopping 2.1 million employees working for it, and it earned $11.6 billion in profits during its fiscal year that ended in June 2023. However, one of the world’s most valuable companies in terms of market capitalization, Apple Inc. (NASDAQ:AAPL), has a mere 164,000 employees working for it – less than one tenth of Walmart’s workforce. Yet, despite this, Apple’s profit during its fiscal year ending in September 2022 was $99 billion – almost nine times that of Walmart’s. Of course, the different nature of the duo’s business model requires Walmart to have more employees. It is after all primarily a retailer which needs more employees to run its stores. Yet, as is evident, a higher number of employees does not translate into higher profit gains for shareholders as these depend more on the product category and technology involved.
On the flip side, being larger comes to Walmart’s benefit when we consider its total revenues. The firm earned $611 billion in revenue during its latest fiscal year, more than $200 billion higher than Apple’s latest fiscal year revenue of $394 billion.
In the financial world too, size is a key factor. For instance, one of the largest investment holding companies in the world is Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B). Berkshire does not operate in a way that a hedge fund does, i.e. the firm does not seek to rapidly trade shares to make a profit. Instead, it takes up stakes in firms that it believes will do well in the future and makes money from investments in sectors such as manufacturing and energy as well as through dividends. The firm had a whopping $948 billion in assets as of 2022 end, and its size ensures that when it buys shares, the entire market moves.
As an example, Berkshire disclosed in mid November 2022 that it had bought a $4.1 billion stake in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) – the world’s largest contract chip manufacturer. Prior to the announcement, TSMC’s shares had taken a beating on the stock market, and the American Depository Receipts (ADRs) had dropped to $60 at the start of November. However, as soon as word broke of Berkshire’s investment, the ADRs jumped from $74 on November 11 to $80.5 the day after the investment firm’s SEC filings revealed the purchase. Currently, they are trading at $84.30, still higher than the November low and despite the fact that Mr. Buffett has since sold the shares as he is worried about the geopolitical risk in Taiwan and TSMC’s inability to control it.
Finally, while heft might sound comforting in times of trouble, it still ends up constraining one’s ability to be agile. The clearest example of this phenomenon in the business world is the rise of Tesla, Inc. (NASDAQ:TSLA). Tesla is the world’s largest electric vehicle manufacturer and leads the market due to new manufacturing processes that it has developed on its own. However, despite their best efforts, America’s largest conventional car manufacturers, namely General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), have yet to match Tesla’s success in the market despite bringing in as much as three times in revenue as the firm.
With these details in mind, let’s take a look at some smallest countries in the world that matter the most.
Our Methodology
To compile our list of the smallest countries that matter the most, we first listed down all countries except the top fifty in terms of landmass. Then, this list was filtered only to include those with a GDP higher than $100 billion, narrowing our search. Finally, the countries were further sorted by including only those whose population is less than 50 million. This left us with a total of 29 countries, out of which the top 25 are presented as the countries that matter the most ranked by their GDP.
Smallest Countries In the World That Matter the Most
25. Republic of Ecuador
Latest GDP Estimate: $121 billion
The Republic of Ecuador is a South American country. It has a $121 billion GDP and a population of 18 million people.
24. Slovak Republic
Latest GDP Estimate: $127 billion
The Slovak Republic, commonly known as Slovakia, is one of the smallest countries in the world with an area of just 49,000 kilometers square. Yet, it has a $127 billion GDP.
23. Kingdom of Morocco
Latest GDP Estimate: $138 billion
The Kingdom of Morocco is a Northern African country. It has a $138 billion GDP and is the third largest country on our list in terms of area.
22. Hungary
Latest GDP Estimate: $188 billion
Hungary is a European landlocked country which despite having less than three times of Morocco’s population has a larger $188 billion GDP.
21. State of Qatar
Latest GDP Estimate: $219 billion
The State of Qatar is the smallest country on our list in terms of population and area. It has a population of just 2.9 million, but a GDP of $219 billion.
20. Hellenic Republic
Latest GDP Estimate: $239 billion
The Hellenic Republic, commonly known as Greece is a European coastal country. It has a population of 10.4 million people and exports significant volumes of petroleum products.
19. New Zealand
Latest GDP Estimate: $251 billion
New Zealand is an Oceanic country with a population of just 5.1 million people – the third lowest on our list. Despite this, it has a $251 billion GDP.
18. Portuguese Republic
Latest GDP Estimate: $267 billion
The Portuguese Republic, or Portugal, is a coastal European country. It has been inhabited for thousands of years, and has an area of 92 thousand square kilometers.
17. Republic of Iraq
Latest GDP Estimate: $267 billion
The Republic of Iraq is a Middle Eastern country that exports significant amounts of petroleum products. It has a $267 billion GDP and a population of 41 million people.
16. Republic of Finland
Latest GDP Estimate: $301 billion
The Republic of Finland is a Nordic European country. It is a sparsely populated region, with just 5.5 million people living in an area of 338 thousand square kilometers.
15. Czech Republic
Latest GDP Estimate: $330 billion
The Czech Republic is a landlocked Central European country. One of the smallest countries in the world, it has an area of just 78 thousand square kilometers.
14. Romania
Latest GDP Estimate: $348 billion
Romania is a European country and one of the larger ones on our list with an area of 238 thousand square kilometers. It has a $348 billion economy.
13. Denmark
Latest GDP Estimate: $405 billion
Denmark is a prosperous European nation, which despite being five times smaller than Romania, has a much larger economy of $405 billion.
12. Malaysia
Latest GDP Estimate: $447 billion
Malaysia is a Southeast Asian country with a vibrant tourism industry and geographical diversity. It has a $447 billion economy and is made of Peninsular and East Malaysia.
11. United Arab Emirates
Latest GDP Estimate: $498 billion
The United Arab Emirates is one of the more prosperous countries in the world, despite being relatively small and having an area of 83 thousand kilometers squared.
10. Republic of Austria
Latest GDP Estimate: $515 billion
The Republic of Austria is a landlocked Central European country. Despite being similar in size to the U.A.E., Austria has a larger $515 billion GDP.
9. State of Israel
Latest GDP Estimate: $539 billion
The State of Israel is a Middle Eastern country that is the second smallest on our list with an area of just 20.7 thousand square kilometers.
8. Kingdom of Norway
Latest GDP Estimate: $554 billion
The Kingdom of Norway is a Nordic European nation with a $554 billion GDP and a population of just 5.5 million people.
7. Republic of Ireland
Latest GDP Estimate: $594 billion
The Republic of Ireland is a European nation of five million people but a $594 billion economy.
6. Kingdom of Sweden
Latest GDP Estimate: $599 billion
The Kingdom of Sweden is a Nordic country with a $599 billion economy and a developed nation status.
5. Kingdom of Belgium
Latest GDP Estimate: $624 billion
The Kingdom of Belgium is a Northwestern European country. It is the smallest country on our list after Israel with an area of 30.5 thousand square kilometers. However, it has a relatively higher population, with more than eleven million people residing in it. This makes it one of the more populous countries on our list, and Belgium has a $624 billion economy. The country exports a variety of products such as medicaments, cars, and diamonds.
4. Republic of Poland
Latest GDP Estimate: $748 billion
The Republic of Poland is a Central European country. It sits at the higher end of our list in terms of area, since it covers close to 313 thousand square kilometers. Poland also has the second highest population on our list, at 37 million people. The country has a $748 billion economy, which is one of the largest in the European Union. Poland has a strong history of contributions to science and technology and is a transportation hub in Europe due to its location.
3. Swiss Confederation
Latest GDP Estimate: $869 billion
The Swiss Confederation, commonly known as Switzerland, is one of the most prosperous countries in Europe. It is also one of the smaller ones on our list, with an area of 41 thousand square kilometers. Despite this, Switzerland has a $869 billion economy, even though it has a small population of just 8.8 million people. Swiss banks are famous all over the world for their secrecy, and the country also has some of the most advanced healthcare companies in the world such as the gene editing firm CRISPR.
2. The Netherlands
Latest GDP Estimate: $1.08 trillion
The Netherlands, also called Holland, is a Northwestern European country. While it covers nearly the same area as Switzerland, the Netherlands has more than twice the population and a relatively larger economy of $1.08 trillion. It is also one of the more technologically advanced countries in the world, and exports products such as cars, medicaments, and broadcasting equipment. The Dutch firm ASML is also the only company in the world capable of manufacturing machines that fabricate leading edge semiconductors.
1. Kingdom of Spain
Latest GDP Estimate: $1.4 trillion
The Kingdom of Spain is the largest country on our list in terms of area since it covers almost 506 thousand square kilometers. However, its population of 48 million people is still comparatively less than other more economically prosperous countries such as the United Kingdom, South Korea, Japan, and Germany – all of which have a smaller area but significantly higher populations and larger economies as well.
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Disclosure: None. 25 Smallest Countries In the World That Matter the Most is originally published on Insider Monkey.
