How do small countries make money?
Hi, I was just curious--how do small states/countries generate revenue with their limited natural resources and often high population? For example, I would imagine Hawaii relies heavily on tourism, but Hawaii is a state, which has a sovereign entity as a factor. And Japan, a densly populated country, but exports greatly in technology, and the same goes for Taiwan. So it appears that Tourism helps, as it brings money in from foreign countries, and exports of technology is good as well, as it probably requires less resource (or costs of resource vs revenue) than other productions. That said.. it's just self observation, but I'm really curious. What thoughts do you guys have on this? What are some potential revenues for a small, highly-populated country?
Economics - 2 Answers
Random Answers, Critics, Comments, Opinions :
1 :
There aren't any really, that's why they are so poor and why the major countries, particularly the U.S, enact Hegemony on the small countries. I guess you could say that's a part of your answer. The United States using Hegemony on a smaller poorer country, in exchange for some minute cash flow. Mercenary Services? Small favors? Apart from that, these smaller countries usually tarry in the Agricultural Market. Not because they have a choice, Hegemony comes back here again (First World Countries hold them at that level of progress for many reasons, less competitive markets being one and the fact they can buy cheap food being another.) Buying Agricultural Products can be used to enhance the Supply Market of the First World Countries and can also be used as a power to be reckoned with in terms of Dumping the products in another Market, thus constituting a massive Market Breakdown which could spiral a country into a recession and cause a great many social problems.
2 :
The same as for large countries: they make and sell goods and services. Singapore is an extreme example: https://www.cia.gov/library/publications/the-world-factbook/geos/SN.html Very high per capita income (higher than the U.S.), https://www.cia.gov/library/publications/the-world-factbook/geos/SN.html very small population (about 4.6 million), and very high population density (17,000 people per sq. mile) http://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population_density South Korea and the the Netherlands are other countries with high population densities (1,260 and 1,020 people/mi^s respectively) and reasonably high per capita GDPs ($26K and $40.3K respectively) For small countries with smaller population densities that are doing well, consider: Norway, Ireland, and Switzerland. In any country, of any size, you can't be well off without high productivity. You seem to dismiss this as technology, but that isn't all it is. It involves cultural aspects such as a strong work ethic, a low level of corruption, political stability, a well-educated work force, etc. If you have those resources, then small size doesn't hurt. If you don't then large size doesn't help. Russia, for example, has incredible resources. But its per capita GDP is not all the high and would be much lower if it weren't for its oil and natural gas sales. It all goes back to comparative advantage as opposed to absolute advantage. http://internationalecon.com/Trade/Tch40/T40-0.php
