A Gross Domestic Product (GDP) is a yardstick used to measure the economic status of a country. It periodically assesses the market value of all final goods and services in a country. The countries with the highest GDPs include Norway, Switzerland, the United States, and Saudi Arabia among others. On the other hand, the ten countries with the lowest GDPs include Kiribati, Marshall Islands, Palau, Federated states of Micronesia, Tonga, Dominica, São Tomè and Prìncipe, Comoro, Vanautu and St. Vincent and the Grenadines.
The 10 States With the Lowest GDPs in the World
Kiribati has a population of slightly over 100,000 people and a GDP of $167 million. It is considered to be one of the least developed countries in the world. The country has few natural resources and the main economic activities are the large scale production of copra and fish which are exported. The low economic growth of Kiribati has resulted to the country importing most of its food. It also depends on external funds to be able to finance its budget. Major financial donors include Australia, Taiwan, New Zealand and World Bank among other nations. The number of tourists who visit the country has recently increased. If this trend continues, the economy is likely to grow significantly.
The Marshall Islands is located in the Pacific Ocean near the equator. The estimated population of the country is 53,376. Its capital city Majuro is the largest town in the country. The economy of Marshall Islands is made up of small-scale industries, agriculture and fishing. The country mainly grows coconuts, tomatoes and melons. Its low GDP of $183 million can be attributed to their possession of few natural resources. Another explanation could also be that the country imports more goods than it exports. Furthermore, the government’s major source of revenue comes from the financial assistance granted by the US government.
Palau is an island nation which consists of about 340 islands with the most populated island being Koror. Its population is 17,948 people with a GDP of $293 million. Palau’s major economic activities include fishing, subsistence agriculture, and tourism. However, the country is still highly dependent on US financial aid to run its businesses. Most recently, there have been opportunities that aim at improving the economy of Palau. One of them is the airline services that it offers to the Philipines. In addition, the East Asian countries have also expressed their willingness to improve Palau’s transport network. These two factors could eventually lead to economic growth.
Federated states of Micronesia
The Federated states of Micronesia is an independent state which comprises of an excess of 600 islands. The country has a GDP of $322 million and the official language spoken is English. The main economic activities in the country are fishing and farming. There are also mineral deposits which can be exploited by the government or private investors. The main hindrances to economic development in the country are its remote location and inadequate facilities. Currently, the country depends on US financial aid as its basic source of government revenue.
São Tomè and Prìncipe
The GDP of São Tomè and Prìncipe is $350 million. It is an African island nation which was discovered by the Portuguese in the 15th Century. São Tomè and Prìncipe are known to have been a major center for the Atlantic slave trade before its abolishment. Its major economic activity is plantation agriculture with cocoa being the main cash crop and export. In the 1990s, the country’s economy experienced challenges as a result of the decrease in value and volume of cocoa exports. Currently, São Tomè and Prìncipe are engaging in ways of improving its economy such as diversification of exports, investing in the tourism sector and exploring petroleum.
Tonga is a nation made up of 169 islands, 29 of which are inhabited. It has a population of 103,000 people and a total GDP of $403 million. Tonga’s economy is highly dependent on remittances made by its citizens who live in foreign nations such as New Zealand and Australia. Other contributions to the economy include satellite and telecommuication services. The government’s plan for improving economic growth includes revamping the vanilla bean sector, investing in the tourism sector, and improving the communications sector.
Dominica is an independent island state which is often referred to as the “Nature Isle of the Carribean.” The name alludes to the beautiful natural environment which surrounds Dominica. There are 72,324 people living in the country. Dominica has a GDP of $520 million. One of the major challenges that the country’s economy faces is natural disasters such as Hurricane Dean which hit in 2007. The hurricane caused a lot of damage to the transport infrastructure and agriculture industry. According to the IMF, the country’s economy can improve if the government focuses on market diversification, reducing the public debt, and increasing regulation of the financial sector.
Comoros is an island found in the Indian Ocean. The neighboring nations include Tanzania, Madagascar, Sychelles and Mozambique. The major economic activities of Comoros are hunting, agriculture, and forestry. Having a GDP of $620 million, Comoros is considered one of the poorest nations in the world. It has an unemployment rate of 14.3% which is very high with reference to other nations. The low GDP is explained by the high inflation rates, trade imbalances, low consumption, and reduced investment. There is also high external debt which cripples the economic growth even further. The government is putting much effort in improving the situation by upgrading education, promoting tourism, and diversifying the country’s exports.
Vanautu is an island state which is located in the South Pacific Ocean. It has a population of 286,429 inhabitants who mainly engage in agriculture. The economy of Vanautu is made up of tourism, agriculture which includes rearing cattle, and offshore financial services. The low GDP of $773 million indicates low economic growth. This is a result of reliance on few commodity exports. Economic development is also hindered by the long distance between the island and the major markets. 12.5% of the revenue collected by the government mainly comes from import duties levied on goods and services.
St. Vincent and the Grenadines
St. Vincent and the Grenadines is an island country which has a population of about 102,000 people. It has a low-middle income economy that is mainly based on agriculture and tourism. The low GDP of only $775 million could be attributed to the country’s over-reliance on the growth of bananas as the main cash crop. The other challenge is the high unemployment rate in the country. In spite of these challenges, there are indicators that there will be growth in the economy. A new airport called “Argyle International Airport” was recently opened. In addition, there has also been a rise in the performance of the tourism sector and improved activity in the construction sector.
The Observations Made and Ways of Improving Economies
Most of the countries which have low GDPs are islands and very small in size. They mostly depend on foreign aid and agriculture to finance their budgets. Fortunately, these governments have opportunities such as tourism that are yet to be explored. There is also the aspect of diversifying agricultural products to avoid dependence on one crop which needs to be practiced. These economies can experience improved economic growth if the above opportunities are explored.