Rama Krishna Sangem
Luxembourg, a small country in the Western Europe is world’s No 1 in per capital income at 1,42,490 US dollars. This is according to a latest International Monetary Fund (IMF) report. This is measured in PPP, means Purchase Power Parity, method of people’s incomes. In this, GDP (Gross Domestic Produce) of a country is converted into US dollars using purchase power parity rates and divided by total population.
In this list of IMF, per capital incomes of UAE is with 88,220 dollars, the US, 89,030 dollars, India, 9,070 dollars, China, 23,380 dollars, UK , 56,470 dollars, Japan, 51,810 dollars, Switzerland 87,960 dollars, Germany 66,130 dollars and Norway is with 82,650 dollars. So we can imagine, the position of Luxembourg in terms of per capital income at the global level.
Many would be wondering how this tiny landlocked European country, not known for much for any of its industrial sources has emerged at the top of world’s per capital incomes. Belgium, Germany and France are it s border nations. This beautiful and peaceful country has enjoyed some form of freedom since 1815, but it got final freedom from Germany Reich in 1944-45 during World War-2.
“We want to remain what we are”
“We want to remain what we are” is the motto (in English) of Luxembourg, though the country follows Luxembourgian along with German and French as official languages. It’s currency is Euro. GDP in nominal prices stands at 86.89 billion US dollars with per capital income of 1,35,046 US dollars. GDP in PPP terms is at 90 billion US dollars, and per capital income at 1,42,490 dollars.
Total population of Luxembourg is 6,60,800 and the total area is 2,586 sq km. It’s capital city, Luxembourg City is of 1,90,000 people with 200 sq km area. If we compare it with our country, it is less than the size of a municipality and of a district size. But, at any given point of time, more than equal number of its population is of foreigners, both those who come here on business and jobs.
Easy financial market, tax haven
Though Luxembourg is famous for steel industry in earlier days, later it acquired reputation for its easy financial market system as a tax haven – where people from all over the world can invest or save their money. Most of the shell companies pump their money through this country and its economy permits with lower tax rates. The situation reached a stage where G-7 rich nations too started complaining about Luxembourg’s tax haven nature.
Now, Luxembourg, headed by a monarch and governed by an elected parliament, is focusing on its rich cultural heritage and tourist potential. World’s major IT start ups have set up their headquarters here for a variety of purposes – lower and stable tax structure and peaceful atmosphere. Agriculture is a small sector here – only 2500 land holders, with an average holding of 60 hectares. But, it gets its food imports from other European countries.
Luxembourg made billions of dollars of investments in the US and other nations to sustain its economy running well. There are about 4.50 lakh employees in Luxembourg – and half of them – around 1.25 lakh are foreigners for working for many MNCs. So, they pay heavy taxes, which in turn spent on the social security of Luxembourg citizens. Many Indians these days are showing interest to move to Luxembourg – which is not a tough process!
