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8 Countries That Was Rich But Are Now Poor

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2 years ago

July 4, 2022

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A country’s economic fortunes can change hugely over the course of centuries and even decades, and many nations considered poor or middle-income these days were once among the most affluent in the world. Looking back over the past 500 years or so, we reveal 8 countries that have gone from riches to rags.

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1. Thailand

Thailand may not be the most hard-up country in the world, but its GDP per capita of around $6,000 (£4,200) is well below the global average, and pockets of severe poverty exist, particularly in the northeast and deep south of the nation.

During the 16th and 17th centuries, the Ayutthaya Kingdom, which covered much of modern-day Thailand, was richer than many European nations. The kingdom was a centre of international trade and its eponymous capital rivalled Paris in size and splendour.

Unlike other countries in the region, the Ayutthaya Kingdom welcomed foreign traders with open arms, exchanging goods with merchants from China and Japan, as well as nations further afield such as France and Portugal.

The boom times didn’t last. Trade declined in the early 18th century, hitting the economy hard. A bloody game of thrones, which saw several potential heirs bumped off, destabilised the monarchy, and the threat of invasion from neighbouring Burma loomed large.

Taking advantage of the weakened kingdom, the Burmese army invaded in 1765 and besieged the capital. After two years, Ayutthaya capitulated and was largely destroyed, and the country eventually re-emerged as the far less powerful Thonburi Kingdom, the precursor to modern Thailand.

2. Mali

Mali is one of the poorest countries on the planet with a GDP per capita of just $837 (£589). The drought-prone African nation features on the United Nation’s list of 47 least developed countries and much of its population relies on subsistence farming to scratch out a meagre living.

Rewind hundreds of years and things were very different. The country was at the heart of the illustrious Mali Empire, one of the largest and richest empires in Africa spanning 439,400 square miles (1.1 million square kilometres).

The empire was at its height under emperor Mansa Musa I, who ruled from 1312 to 1337. Mansa Musa I is among the wealthiest people who ever lived and is thought to have amassed the equivalent of $415 billion (£293bn) during his 25-year reign.

Mali was a major gold producer and the emperor had at his disposal half the world’s supply of the precious metal, which was traded with merchants from as far away as Egypt, Persia, Genoa and Venice.

A jewel in the Sahara, the empire’s capital Timbuktu was a renowned centre of learning, culture and trade. The Mali Empire survived into the 16th century but by then its riches and power had largely diminished. A shadow of its former self, Mali has remained impoverished ever since.

3. Turkey

Turkey is far from poor but it isn’t especially rich. The country is classified an emerging market economy with a GDP per capita of around $11,000 (£7,700), which is more or less the global average but lower than the majority of European countries.

Back in the 16th century, the Ottoman Empire, from which modern Turkey emerged, boasted a GDP which was two-thirds that of Western Europe. In the middle part of the century, the affluent empire covered Anatolia and large swathes of Southeastern Europe, North Africa and the Middle East.

The empire attained superpower status during the reign of Sultan Suleiman the Magnificent, who was at the helm from 1520 to 1566 and presided over a golden age of military prowess, unprecedented prosperity and great artistic achievement.

Territorial expansion waned in the late 16th century, and the Ottoman Empire was overtaken by Europe’s colonial powers in the 1700s. In an attempt to catch up, the Ottomans modernised the economy during the 19th century, but they were fighting a losing battle.

Internal divisions were rife and, by the early 20th century, the empire was unravelling. The nation sided with Germany in World War I and had most of its territories confiscated as a result. The Turkish War of Independence followed, and the Ottoman Empire was reborn in 1922 as the much scaled-down Republic of Turkey.

4. India

India’s GDP per capita of about $7,000 (£4.9k) is stubbornly low. While much progress has been made in recent years to stamp out extreme poverty in the country, hundreds of millions of Indians still live hand to mouth.

India wasn’t always so poverty-stricken. The Mughal Empire, which was founded in 1526 and extended over almost the entire Indian subcontinent during its peak in the 17th century, was positively rolling in money.

By the turn of the 18th century, Mughal India had bypassed China to become the world’s foremost economic power, accounting for just under 25% of global GDP, which would translate to a staggering $21 trillion (£14.8trn) today.

India was also the leading manufacturing country, generating a quarter of the world’s industrial output up until the start of the 18th century. Real wages and living standards in Mughal India were even higher than in England, which had the best standard of living in Europe at the time.

Internal conflict led to the breakup of the empire during the late 18th century, and it was finally taken over by the British in 1858. By that point, competition from industrialised Europe had decimated India’s industries and the colonised nation had lost much of its power and wealth.

5. Latvia

Controlled by foreign powers for centuries, Latvia declared independence in 1918 and adopted a liberal constitution in 1922. Throughout the 1920s and 1930s, the country was wealthier than Baltic neighbours such as Finland and Denmark, and really came into its own.

The economy went from strength to strength during this time, fuelled in the most part by buoyant agricultural and timber exports, and the standard of living in Latvia eclipsed that of the Scandinavian countries.

Latvians were the largest consumers per head of meat, milk and butter in Europe and the country had the highest percentage of university students on the continent. Sadly, the period of abundant prosperity was relatively brief.

During the Second World War, Latvia was ravaged by the Nazis and the Soviets, eventually falling into Red Army hands. In 1944, the country became a satellite state of the USSR and was under Soviet control until 1990, which pretty much obliterated the economy.

Since re-gaining independence in 1990, Latvia, which is now part of the European Union, has made great economic strides, but with a GDP per capita of around $14,000 (£9.8k), Latvia continues to lag far behind the Scandinavian nations it once outshone.

6. Cuba

Decades of communist rule and crippling US sanctions have impoverished Cuba. The Caribbean nation has a GDP per capita of just $7,815 (£5.5k) and the government struggles to provide adequate housing, transportation and other essentials.

Before Fidel Castro led the Cuban Revolution and stormed to power in 1959, the country had one of the highest GDPs per capita in the Americas, the second highest per capita ownership of cars and telephones, not to mention booming sugar and tourism industries.

A gambling playground for moneyed Americans, Cuba was thriving economically, but things weren’t all rosy. Wealth inequality was extreme during the 1950s and Cuba, which was under repressive military rule, was plagued by organised crime, drugs and prostitution.

Following the revolution, Cuba suffered a long-term decline in GDP per capita. The economy reached a low point in the early 1990s when Soviet subsidies dried up, and hasn’t recovered in any spectacular way since.

Even now, GDP per capita is lower in relative terms than it was during the 1950s, though wealth inequality has improved, and the country’s healthcare and education systems are highly regarded worldwide.

7. Iraq

During the 1960s and 1970s, Iraq was fast becoming a highly developed nation. Blessed with abundant oil and gas reserves, the Middle Eastern country cashed-in big-time from the boom in oil prices that followed the OPEC embargo and oil crisis of 1973.

Iraq enjoyed one of the highest standards of living in the region. GDP per capita had skyrocketed since the 1950s, and more than doubled during the 1970s, and the country had advanced infrastructure, social services and healthcare.

Iraq’s prospects headed downhill when Saddam Hussein formally assumed power in 1979. In 1980, the brutal dictator dragged the country into a devastating eight-year war with neighbouring Iran, which ravaged the economy. Internal corruption and the drop in oil prices exacerbated Iraq’s dire financial situation.

By the end of the decade, GDP per capita had dropped to a paltry $938 (£659). Saddam Hussein’s invasion of Kuwait in 1990 and the ensuing Gulf War further damaged the economy, which was subject to wide-ranging sanctions throughout the decade.

Growth took another major blow in the Iraq War, which began in 2003 and ended in 2011, but since then, the economy has recovered significantly, despite a sketchy security situation. Be that as it may, GDP per capita is only around $5,000 (£3.5k) currently.

Zimbabwe

Since 2000, Zimbabwe has gone from Africa’s booming bread basket to its most notorious economic basket case, running the gambit of financial disasters, from extreme hyperinflation to deep recession.

During the 1980s, Zimbabwe’s economy was in robust shape thanks to the country’s abundant natural resources and lucrative agricultural sector, but the cracks were beginning to show in the 1990s as the nation’s financial situation worsened.

In 2000, President Mugabe’s government began to seize the country’s highly productive white-owned farms, a policy that proved disastrous. The new owners of the farms lacked agricultural skills and experience, and production soon plummeted, damaging the economy no-end.

Endemic corruption and a financially draining war in the Congo intensified the economic crisis. Hyperinflation kicked in by 2003 and the unemployment rate hit 95%. Not an awful lot has improved since then.

Despite the ousting of President Robert Mugabe, Zimbabwe’s economic prospects are grim. The new president, Emmerson Mnangagwa, is courting major Chinese investment, which could kick-start the economy, but life is likely to remain tough for most Zimbabweans for some time yet.