When people analyze wealth they tend to look for wealth. I instead, thanks to Argentine entrepreneur and dear friend Maximiliano Fernandez who once educated me on this matter, think differently. I think that the richest countries are those with the richest poor. Why? Because if the poor are not doing that badly then the rest are all doing better.

Today I found out that the World Bank keeps the closest proxy to this assertion.

Their analysis shows the percentage of national income that the poorest 20% of the population have and proves what many believe, that USA maybe the best developed country in which to be rich but it is also one of the worst in which to be poor. In general Europe and Japan have the richest poor people in the world.

Why do I care about these things? Other than the fact that I “just care”, as an entrepreneur I care because the countries with the richest poor are likely going to be the countries with the highest internet penetration among all the richest countries and therefore the best for Fon.

Now looking at the countries in which the majority of the people are poor, like China and India you can see that China Communist China is much less Communist than what it seems when compared to India. The Indian poorest quintile have about twice the share of the national income as the poorest Chinese.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

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China Law Blog on May 29, 2006  · 

Thanks for posting this. Very interesting. I think I’m going to do my own post on this re China, linking back.

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Hasan on May 30, 2006  · 

I think the Kingdom of Bhutan, with its stated goal being having the highest GNH (Gross National Happiness) in the world is related to the idea stated in the piece.

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Marco on May 30, 2006  · 

Very interesting index. I sorted the table and sadly observed the “top” ten are all latin american.
Paraguay 2.2
Brazil 2.4
Panama 2.4
Guatemala 2.6
Colombia 2.7
Honduras 2.7
El Salvador 2.9
Peru 2.9
Venezuela 3
Argentina 3.1

The main reason I can think why latin america is in a worst state than africa is that our countries are globally richer but the poorer are exactly as poor, so the share decreases. Another interesting point would be to measure true growth with this index, i.e. Argentina 3.1 is pre-crisis but I don’t believe this has changed much in the last years.

On the other end there are no surprises except for Laos and, from a Fon potential, eastern europe.

Thanks for the link.

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Doug Dobbins on May 30, 2006  · 

Your post was a great read.

I did my own post on this and what is means to poor and rural America. In some ways we need a Rural Electric Administration (REA) type effort for Internet access in America.

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Joe Cooper on July 25, 2006  · 

The method sited of using percentage of national income to determine how well the poor are doing is extremely misleading. In a country where everyone is poor, the poorest of those will have a percentage of the national income not far below everyone else. In a country that is wealthy, if you added more millionaires to the population the percentage of national income for the poor would decrease but their standard of living may actually go up at the same time. Percentage of national income is in no way a reliable indicator.

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