The IMF’s estimate of GDP by country: a window into our time in history

Every April, the Washington-based International Monetary Fund releases its estimate of the gross domestic product of 150 countries for the previous year. Now I do realise this kind of report isn’t everyone’s cup of tea. But I want to convince you otherwise. This year’s release is a cracker! It deserves to be a bestseller, even though it’s free to download.

This year the report shows the impact of the pandemic on the world’s economies. And as such it isn’t a boring list of numbers; this is a document that tells stories of hope and aspiration and of utter devastation. It also hints at challenge and conflict. It is a window into our time in history and our place in the unfolding pantheon of global events. At least this is what I see when I read it.

We Australians may be barely 26 million in number – less than the cities of Tokyo or Delhi – but our economy ranks 13th largest on Earth. In terms of economic force we sit above Spain (14th) and below Brazil (12th) and perhaps more tellingly there is no country ranked above Australia that has a smaller population. We are very rich per capita. Now I do understand that Australia’s wealth is not equally or even fairly distributed, but I don’t think any country of a similar scale does much better on this measure.

The US, which heads the list, assumed the mantle of the world’s largest economy from the United Kingdom around 1870, although it didn’t really exercise that authority until 1945.

The second largest economy is China; its output increased by 3 per cent during 2020, while all others in the Top 15 went backwards, including Australia (by 2 per cent). According to the IMF, China’s economy is now 70 per cent of the size of the US economy, up from 12 per cent in 2000. At this rate China will become the world’s largest economy by 2030, if not earlier, depending on how the US recovers from the pandemic, navigates potential conflict and cultivates innovation. But even if China overtakes the US in economic terms, the latter will remain the world’s most powerful military force for at least another generation.

A year ago Australia ranked 14th but we overtook Spain, which has had a bad pandemic. Brazil’s economic output plummeted 24 per cent last year. Russia, now the world’s 11th largest economy, has almost six times the population of Australia but supports an economy that is barely one-tenth bigger.

There are few (if any) countries on this list that offer Australia’s quality of life and at a broad level the reasons are simple. We control the resources of an entire continent and we generate great wealth from exports. Compared with many other nations, we are a peaceable people. It takes a lot to get us riled. Not because we don’t see injustices but because we tend to have other priorities. Americans are united by their love of freedom; we tend to take freedom (and security) for granted and channel our energies and affections into housing and lifestyle. We are fortunate to have had military protection from the US, so we don’t have a culture of diverting excessive funds into defence.

All this means that, at budget time, funding can be allocated to social welfare to create a stronger community, and to infrastructure projects to adorn and embellish our cities and further improve our quality of life. Other nations spend a far greater proportion of their wealth on armaments and/or on corruption. That’s why we’re rich and generally contented. And that’s why, in comparison with other nations of a similar or larger scale, Australia will continue to offer the opportunity of a good quality of life in the post-pandemic world.