"The Economist labels Ireland as not being 'completely affluent.'"
The Economist Magazine recently published its annual ranking of the world's richest countries, but the Republic of Ireland was noticeably absent from the list. This exclusion was due to concerns about tax arbitrage and the distortion of GDP figures, making them an unreliable indicator of Ireland's true economic well-being.
Ireland's unique economic structure, with a large presence of multinational corporations engaging in profit-shifting and tax optimization strategies, inflates GDP numbers without corresponding increases in resident income or wealth. As a result, The Economist concluded that Ireland's GDP data is "polluted" and does not accurately reflect the country's genuine domestic economic wealth or income levels.
Norway, on the other hand, took first place when adjusted for hours worked, indicating a higher standard of living for the Norwegian people. Tiny territories such as Bermuda were considered too small to rank, while Burundi finished at the bottom of the ranking, with one Swiss income being shared between 100 Burundians.
Switzerland, Singapore, and Norway were among the top countries in the ranking. Switzerland had the highest average earnings in dollar terms, above $100,000 (€86,000) last year, while Singapore had the highest average earnings when adjusted for local costs.
In contrast to Ireland, the United States ranked fourth in terms of GDP per person, seventh in terms of incomes adjusted for local costs, and sixth when adjusted for hours worked. The UK was placed 19th, 27th, and 25th on the three measures.
The Central Statistics Office in Ireland produces an alternative indicator called modified GNI to measure activity in the domestic economy. Meanwhile, the column "Cantillon" in The Irish Times offers analysis and comment on business and economic issues.
In the past, Nobel laureate Paul Krugman has described Ireland's GDP numbers as "leprechaun economics." It remains to be seen how Ireland will address these concerns and re-enter The Economist's ranking in the future.
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