Insider Monkey
25 Smallest Countries In the World That Matter the Most
Ramish Cheema
8 min read

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In this piece, we will take a look at the 25 smallest countries in the world that matter the most. For more countries, head on over to 5 Smallest Countries in the World That Matter the Most.

In modern day geopolitics where everything boils down to resources, economic and military power, geographic size usually does not matter when it comes to international politics and influence. Take for instance the example of Africa. Africa is the world's second largest continent in terms of both its population and its area. However, Africa's gross domestic product (GDP) is a mere $2.96 trillion in nominal terms. Compare this GDP with that of New York City - the world's largest city in terms of economic output. New York's GMP (gross metropolitan product) sits at $2.01 trillion - more than two thirds of the entire African economy. In fact, New York's most prosperous district, Manhattan, had a GDP of $651 billion in 2020 - greater than the $376 billion GDP of Pakistan, the world's fifth most populous country according to data from the United Nations.

So, as is clear from New York's example, size really doesn't matter in a lot of cases. Another example of this phenomenon comes from the corporate world. In terms of employees, one of the world's largest companies is Walmart Inc. (NYSE:WMT). Walmart has a whopping 2.1 million employees working for it, and it earned $11.6 billion in profits during its fiscal year that ended in June 2023. However, one of the world's most valuable companies in terms of market capitalization, Apple Inc. (NASDAQ:AAPL), has a mere 164,000 employees working for it - less than one tenth of Walmart's workforce. Yet, despite this, Apple's profit during its fiscal year ending in September 2022 was $99 billion - almost nine times that of Walmart's. Of course, the different nature of the duo's business model requires Walmart to have more employees. It is after all primarily a retailer which needs more employees to run its stores. Yet, as is evident, a higher number of employees does not translate into higher profit gains for shareholders as these depend more on the product category and technology involved.

On the flip side, being larger comes to Walmart's benefit when we consider its total revenues. The firm earned $611 billion in revenue during its latest fiscal year, more than $200 billion higher than Apple's latest fiscal year revenue of $394 billion.

In the financial world too, size is a key factor. For instance, one of the largest investment holding companies in the world is Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK-B). Berkshire does not operate in a way that a hedge fund does, i.e. the firm does not seek to rapidly trade shares to make a profit. Instead, it takes up stakes in firms that it believes will do well in the future and makes money from investments in sectors such as manufacturing and energy as well as through dividends. The firm had a whopping $948 billion in assets as of 2022 end, and its size ensures that when it buys shares, the entire market moves.

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