What makes a country ‘rich’: Economic must-reads for this month

According to the latest Global Wealth Report published by UBS, for every $10 the world had in its pocket at the start of 2025, it gained a bit more than $1 by year’s end.

Average wealth topped a half-million dollars in seven different countries. An average can certainly be eye-catching, but it’s also liable to be skewed higher by a small number of big earners outpacing everyone else. “People tend to think about their wealth relative to the wealth of others,” the bank’s chief economist wrote in a foreword to the report. And what people think can have far-reaching impact.

A median provides a fuller read of what’s happening “in the middle of the scale,” as UBS put it. The US ranked second in the report in terms of average wealth, but 28^th in median terms. Belgium moved in the other direction, from 11^th in average wealth to 2^nd in median terms; Italy was 23^rd in average wealth but 11^th in median terms.

The report arrived not long after an editorial published in the US kicked off a debate about whether Europe is now “poor” compared with that country, and just doesn’t realize it yet. The indicator underpinning the piece was GDP per capita – which is an average.

An American economy now two-and-a-half centuries old has had a pretty good run. It recently minted its first trillionaire. But does its GDP per capita reflect how most people feel relative to, say, Finland? The country ranked eight times in a row as the world’s happiest? It has a per-capita wealth figure 60% lower than America’s. Spain’s figure is 133% lower, yet nearly two-thirds of people there polled recently think their personal economic situation is “very good or good.” Are they misinformed?

It’s yet another indication that there’s no single standard. Wealth can look and feel very different, in different places.

It’s certainly making a lot of people anxious. “Most companies will be very hurt by a populist revolt or political violence that this would cause,” the subject of this Washington Post story said of the sweeping job cuts now possible due to AI. She’s a former US commerce secretary leading an effort to ensure this doesn’t happen.

It’s also complicating the climate picture. According to this Bloomberg report, the American tech giants leading the AI charge saw their emissions spike last year as they built out the data centres necessary to make it all possible. One company emitted the equivalent of 19 million gas-powered cars.

And its trajectory may require enabling more people to benefit. Some of the same (very wealthy) people who are contributing to Americans’ sense that the deck is stacked against them are now asking them to embrace AI, according to this piece in Project Syndicate – and they’re not having an easy time of it.

“China is winning a trade war that Europe is only just now discussing.” The trade impasse between the global powers was another topic widely discussed on the sidelines of Summer Davos. This piece in The Economist argues that the bloc may have to take action via a subset of member states, instead of awaiting consensus.

A warming climate complicates things for Europe. This report in The Wall Street Journal describes a rapidly warming continent now in desperate need of Chinese-made air conditioners – which is not great for efforts to reduce its dependence on inexpensive Chinese goods.

‘Reached a point that requires a reset.’ This piece in The Conversation recalls an era when it was cheap Japanese goods distracting Western economies, and an agreement that ended up having severe consequences for Japan. Not surprisingly, China doesn’t seem interested in a similar arrangement.

Supercharged wealth requires labour. Guyana has the fastest-growing economy in the world, and that’s a draw for people fleeing the crisis in Cuba. (New York Times)

One way to potentially get richer. A renowned investor is doubling down on his bet against the AI boom. (The Wall Street Journal)

Another type of bet goes big. The World Cup kicked off a sports betting frenzy; for one US state that means a huge tax revenue haul, but also a need to roll out related prevention programmes. (WBUR)

A means for Iran to raise revenue. The difference between potentially charging “tolls” to pass through the Strait of Hormuz and charging “service fees.” (Geneva Solutions)

Hormuz isn’t the only thing prompting a search for alternatives. Canada’s building a new oil pipeline to reduce its reliance on the US. (Financial Times)

Europe is seeking alternatives for a sweltering workforce. With summer heatwaves now the norm, what can the continent learn from other parts of the world already well-familiar with related challenges? (LSE)