These microstate countries have influenced or inspired their larger neighbours, through various means — economic muscle, political skill, environmental and moral leadership.
Size matters. The reality is that the smallest sovereign states might not receive a whole lot of respect from the larger, more populous members of the international community.
Many so-called microstates are fairly recent creations. And many require special economic, environmental and governance assistance to overcome their size-related disadvantages, according to extensive research by the United Nations, the World Bank and the Commonwealth Secretariat.
This absence of control and influence also extends to the political sphere, since many microstates lack the financial and material means to pursue their own diplomatic interests against bullying neighbours, and if necessary, defend their own territory. Irish-American writer Leonard Wibberley famously spoofed the military impotency of microstates in his novel The Mouse That Roared, which later became a movie in which Stanley Kubrick-favourite Peter Sellers plays the military leader, prime minister and Queen of Grand Fenwick, a tiny Alpine duchy. Faced with bankruptcy, the duchy invades the United States with longbow-men on the hope that their inevitable defeat would inspire the U.S. to shower the duchy with a generous Marshall Plan-like compensation package. Let us say that this plan does not exactly pan out.
Even prosperous and prestigious Monaco exercises its own sovereignty “in accordance with the fundamental interests of the French republic,” according to The Economist and depends on its large neighbour for military protection, a fate many microstates share.
Indeed, had it not been for the charmed diplomacy of American movie icon Grace Kelly on behalf of her husband, Prince Rainier III, in his dispute with powerful French president Charles de Gaulle over the status of his principality as tax haven during the 1960s, Monaco might have suffered “asphyxiation” at the hands of France.
More recently, in 2009, tiny Liechtenstein had to accept a verbal attack from Germany over the grand duchy’s refusal to co-operate in hunting down tax evaders. Two years earlier, Liechtenstein officials had to learn that some 1,170 Swiss troops had “invaded” their country after they had made a navigation error during a night exercise. How did they find out? They received a call from colleagues in Bern!
Liechtenstein, for the record, lacks an army of any kind. While this rather humorous event does not cast the Swiss army in the most professional light — the misguided soldiers carried rifles, but no ammunition during their nightly stumble through the woods — it underscores the genuine vulnerabilities of microstates, something Luxembourg discovered during the first half of the 20th Century, when German troops occupied it not once, but twice, on their way toward France and Belgium.
Many microstates now face a different form of threat to their continued existence: climate change. If current trends hold true, oceanic microstates such as Tuvalu could soon become uninhabitable, a possibility that has prompted the Maldives, a nation of 1,200 low-lying islands in the Indian Ocean, to consider buying land elsewhere in the region.
In other words, it is not easy being small. But small can also be beautiful, as this list aims to showcase. Drawing on a range of economic variables such as gross domestic product (GDP), health, educational achievements and other intangibles, this list shows that being tiny can be fine. One way or another, these 10 countries have found ways to influence or inspire their larger neighbours, be it through their economic muscles (as in the case of Singapore), political skill (Luxembourg), environmental leadership (Monaco) or moral leadership (San Marino). Indeed, as globalization continues to ameliorate the advantages of size in rewarding flexibility, some of these microstates are poised to play larger roles on the global stage. Granted, none of them achieves perfection. But then again, who does?
1. Luxembourg
Geography has blessed, and until recently cursed, this grand duchy, which consistently finishes among the elite in rankings that measure livability. Less than half the size of Prince Edward Island, at 2,586 square kilometres, Luxembourg borders Germany to the east, France to the south and Belgium to the west. (Many of its 500,000 residents speak three languages — French, German and Luxembourgish, a German dialect). This location has made this former steel-manufacturing centre an attractive base for broadcasters such as the German-owned Radio Television Luxembourg (RTL) Group and the foreign-owned finance sector, which accounts for about 28 percent of GDP.
This economic portfolio has made Luxembourg the third-most prosperous country in the world based on per-capita GDP. But this irreversible proximity to France and Germany has also made Luxembourg an object of strategic desires over the centuries, perhaps no more so than during the first half of the 20th Century when the First and Second World War caused significant damage. Against this background, Luxembourg abandoned its historical policy of neutrality, joining the North Atlantic Treaty Organization (NATO) in 1949. Eight years later, it sought economic security by becoming a founding member of what has since evolved into the European Union.
Certainly within Europe, this preference for working through international organizations has earned Luxembourg considerable influence, where old political hands, such as Jean-Claude Juncker, have played a significant role in the creation of the Euro currency. As of this writing, it remains uncertain whether this legacy will survive. If it does, Luxembourg will have played its historic part in further uniting Europe.
2. Singapore
This island nation of some 4.7 million people controls a combined land and sea territory of less than 700 square kilometres. But if this figure ranks Singapore as one of the smallest nation-states, its location between Malaysia and Indonesia grants it an immense, if not disproportionate, amount of strategic influence, for it sits near one of the most important shipping lanes in the world. Not surprisingly, Singapore’s port ranks among the world’s busiest. In 2010, more than 120,000 vessels called on the port.
Granted, it might be tempting to dismiss the status of Singapore as an accidental product of geography. But such a position would prohibit us from seeing the skill with which the elites of Singapore (under the leadership of the long-ruling People’s Action Party) have leveraged the human capital of their resource-poor land to the country’s benefit. They have turned a multi-ethnic, multi-religious, multi-lingual polyglot into one of most livable and prosperous states, whose virtually corruption-free economy grew by almost 15 percent in 2010 on the strength of high-end exports, such as consumer electronics and pharmaceuticals.
Singapore also continues to position itself as an escape hatch for global financial institutions, whose corporate leaders might be unwilling to face tougher restrictions in the northern hemisphere. While one might have good reasons to question the ethics of this behaviour, it speaks to the ability of this resource-poor country to quickly spot and fill niches. Newsweek, for example, recently ranked Singapore as the most economically dynamic state.
Such flexibility, however, appears to be unlikely in other spheres of Singaporean society. The country continues to enforce strict laws and penalties against actions that may be legal or may be minor offences in Canada. They include jaywalking, littering, spitting, smoking in public places, and the importation and sale of chewing gum. Acts of graffiti remain punishable through caning. And this catalogue of apparent crimes and their punishments hardly represents the worst, as Singapore continues to crack down on homosexuality and other perceived vices.
Freedom House, a Washington-based non-governmental organization tracking civil liberties, currently ranks Singapore as “partly free” and heading in the wrong direction, thanks to measures that restrict public assembly and press freedoms, a frustrating condition that has even appeared on Washington’s radar. This said, Singapore and its eponymous capital, also known as the Lion City, might be truly the mouse that roars, at least when it comes to being heard in the global economy.
3. Andorra
Andorra’s location, wedged between France and Spain in the Pyrenees Mountains, has endowed the country with one of the most unique forms of government in human history. From 1278 to 1993, Andorrans lived in a diarchy (or co-principality) ruled jointly by outsiders — the Bishop of the Catholic diocese Seu d’Urgell in bordering Spain and the French head of state.
While this unusual, if not anachronistic, form of rule formally ended in 1993 with the adoption of a constitution that transformed Andorra into a representative democracy, the Bishop of Seu d’Urgell and the French President continue to serve as ceremonial heads of state.
They certainly have reasons to speak highly of their country, even if they do not reside in Andorra per se. A member of the European Council, the Organization for Economic Co-operation and Development and the United Nations, Andorra is one the healthiest and wealthiest places in the world. Its infant mortality rates rank among the lowest and its 85,000 residents can expect to reach an age in excess of 82 years, the fourth-highest life expectancy in the world, according to the CIA World Factbook. On the economic side of the ledger, Andorra ranks 12th in the world in terms of GDP per capita. Much of this wealth comes from financial services and tourism.
While Andorra has recently agreed to open up its opaque tax laws following pressure from the international community, its alpine mountains and duty-free shopping continue to attract foreign visitors and their money. Some nine million tourists, mostly from France and Spain, visit annually, secure in the knowledge they are traveling in a country free (for the most part) of major social pathologies and at peace with the world around it even if outsiders might struggle to find Andorra on a map.
4. San Marino
Officially known as the Most Serene Republic of San Marino, this prosperous enclave of 60 square kilometres in the Apennine Mountains of Italy has often served as a safe harbour for persecuted groups who were seeking shelter from the countless storms of history that have swept over this part of Europe. According to legend, this tradition as a place of refuge from the powerful forces of oppression dates back to 301 A.D. when a stonemason named Marnius founded San Marino as a sanctuary for Christians who were trying to escape the religious intolerance of the declining Roman Empire. Over time, their descendants have granted asylum to Italian nationalist Giuseppe Garibaldi and his Red Shirts during the unification of Italy in the 19th Century and some 100,000 Jews who were trying to escape fascism during the 20th Century.
While San Marino could not entirely escape the devastation of the Second World War, over the centuries it has stubbornly maintained its political independence in the face of ambitious aggressors, such as the powerful Borgias of the Italian Renaissance, Napoleon, the Austrian monarchy and Mussolini. San Marino has managed this diplomatic balancing act without sacrificing its republican traditions, which date back to its founding days. But San Marino is not just the oldest republic. It also possesses the oldest constitution, which has been effective since 1600, well before the United States would adopt its constitution to become the second-oldest constitutional republic.
It is therefore more than appropriate to give the final word on San Marino to the man who eventually freed the United States from the tyranny of slavery, U.S. President Abraham Lincoln. Writing in May of 1861, after he had received an admiring letter from the Regent Captains of San Marino on the occasion of his first inauguration, Honest Abe penned this still-fitting sentiment. “Although your dominion is small, your state is nevertheless one of the most honoured in all history.”
5. Liechtenstein
Lodged between Switzerland and Austria, this principality of 160 square kilometres bears the name of what once was one of the most powerful houses in the aristocratic order of Austria, indeed, in all of continental Europe. Loyal to a fault, Liechtensteins served the House of Habsburg as political advisers and as military generals from the late 13th Century until its collapse in 1918. Almost exactly 200 years earlier, Liechtensteins had achieved one of their greatest ambitions, when the Austrian Crown granted them a princely possession — today’s Liechtenstein.
With Napoleon’s dissolution of the Holy Roman Empire of German Nation, Liechtenstein became independent, a status confirmed during the Congress of Vienna. Liechtenstein retained close ties with the Austrian rump state after 1918 until its forced Anschluss (annexation) to Nazi Germany in 1938. Neutral during the Second World War and the Cold War, Liechtenstein has deepened its economic and monetary ties with Switzerland to the point that many Swiss consider it as the 27th canton of their country.
The similarities do not stop there. Like its larger neighbour, Liechtenstein has prospered as a picturesque but powerful financial centre, whose banks manage the fortunes of the rich, the famous and perhaps the infamous, with, shall we say, a high level of discreetness, which not all of its larger neighbours have always appreciated, until recently. This said, it is hard to argue with success. The 35,000-plus residents of Liechtenstein are the second highest per-capita earners in the world and confront few, if any, major social problems.
6. Monaco
Katharine Hepburn once called Monaco “the pimple on the chin of the south of France.” Ouch! This acidic quip about Monaco’s apparent status as a feudal outcrop of France must have doubly hurt the Monegasques, for it originated from an immortal cinema icon, whose celebrity represents the very stock in which the principality has traded since 1956 when Prince Rainier III of the Grimaldi family married Alfred Hitchcock’s iconic and icy muse, Grace Kelly, partly out of love, partly out of need to save his principality from financial ruin.
While this historic period with its tragic personalities has long faded into Hollywood lore, this principality of less than 30,000 residents continues to charm the imagination of audiences around the world as the Mediterranean playground of the rich, the famous, and the beautiful.
Faced with on-going pressure from the international community to bring its opaque banking sector into line, the principality continues to diversify its economy by attracting high-end, non-polluting industries in the arts and entertainment sector (notwithstanding its annual Formula One Race). This economic strategy seems to be paying off as Monaco boasts the world’s lowest unemployment rate, according to The CIA World Factbook: zero percent.
The principality has also sought to sharpen its global leadership in environmental matters by placing part of its shoreline under environmental protection and promoting the local use of ‘green’ products such as organically grown food and electro-powered vehicles. But for all of its newly-found earnestness, Monaco did turn back the clocks to its more extravagant days on July 2, 2011, when Crown Prince Albert married the former South African Olympic swimmer, Charlene Wittstock. It was the first royal wedding since his father had married another striking blonde, Grace Kelly.
7. Malta
The attractions of this island chain include a Mediterranean climate that produces hot, dry summers and mild, rainy winters; rugged, if not dramatic, coastlines that have had several supporting turns in Hollywood blockbusters; and countless historical sites that span the breadth of human history, from the Neolithic through the classical Greco-Roman era to modernity.
Yes, Malta offers much to recommend itself to anyone who seeks a break from the ordinary. Its strategic location in the middle of the Mediterranean, between Sicily and the North African coast, has certainly made the archipelago a prized possession over the centuries. Its historical functions varied wildly: as the forward fortress of the Christian Knights of Malta against the expanding Muslim Ottoman Empire during the 16th Century, as an unsinkable British aircraft carrier during the Second World War or as a major shipping centre today. This trade supplies a significant share of the country’s GDP, along with tourism, agriculture, fishing and financial services.
Granted, Malta is neither as rich nor as influential as Luxembourg, the other microstate that holds membership in the European Union and the Euro-zone. Its 408,000 residents (most of whom live on the eponymous main island, a rock of 246 square kilometres) import most of their food and energy from the outside. Malta also possesses limited fresh water supplies. And if these infrastructure challenges are not demanding enough, Malta has become a call of port for illegal immigrants crossing the Mediterranean from North Africa in rickety boats. Yet if the history of this former British colony is any indication, its resourceful people will likely survive for a long time in a place that is as unique as their culture, forged through countless influences.
8. Palau
On Oct. 31, 2009, the U.S. Department of Justice announced it had transferred six Muslim Chinese (also known as Uyghurs) from the terrorist detention facility in Guantanamo Bay on Cuba to another island on the other side of the globe, namely Palau, a small Pacific nation some 500 kilometres south of the Philippines. Freed from charges of terrorism against the United States, the men did not wish to return to their native China, on fears that officials there might prosecute them as terrorists, as Beijing continues to crack down on Muslim separatists. A long-time ally of the United States, Palau does not recognize China and eventually resolved the impasse by offering itself as the temporary home for up to 17 Uyghurs.
This unusual transfer turned the eyes of the world to what must surely be a hidden gem. Despite its tropical climate, this archipelago of atolls attracts few foreign tourists. But those who have discovered Palau over the years have consistently raved about its pristine beauty. Its coral reefs are particularly popular among recreational divers, partly because they might get a chance to experience sharks up close and personal. Conscious of this fact, the government of Palau has worked with surrounding Pacific island nations to protect this increasingly threatened animal, by creating the first world’s shark sanctuary in 2009.
This wise policy promises to lessen Palau’s economic dependence on the United States by boosting the domestic tourism industry, poised to make gains in the future thanks to foreign investors, who have recognized the island’s potential. Such an influx promises to boost the average per-capita income of Palau’s 21,000 residents, which is already 50 percent higher than that of the Philippines. But in a way, this prospect of more development is also a pity.
9. Saint Lucia
The path to Brazil, where World Cup 2014 takes place, is still a long shot for the Canadian soccer team. However, one of the benefits of their qualification efforts thus far was getting to play and winning on the lush, tropical island of Saint Lucia in the eastern Caribbean. But while few Canadians regularly follow their soccer team, it is likely that even fewer could find Saint Lucia on a map.
The island nation certainly deserves a closer look since its recent history and immediate present highlight many of the common problems faced by many of the world’s microstates. But this observation should not obscure the genuine accomplishments of this Caribbean island nation of some 162,000 residents. Most of their ancestors came to Saint Lucia against their will, as African-born slaves, forced to work in the sugarcane plantations that made Saint Lucia such a profitable and prized colonial possession during the 17th and 18th Centuries.
It is, perhaps, no wonder then that ownership of Saint Lucia ping-ponged between France and the United Kingdom 14 times before the latter became the island’s final colonial master in 1814. This relationship formally ended in 1979, well after the major phase of decolonization had run its course. Since this occasion, Saint Lucia has forged an economic base that consists of banking and of tourism — the country’s largest employer. Yes, this member of Commonwealth confronts some inescapable economic realities, such as its dependence on foreign energy sources and tourism dollars, which tend to dry up during economic downturns. Saint Lucia, nonetheless, possesses one of the most diversified economies in the region, as its government seeks ways to revive its manufacturing sector. It can also lay claim to literary prominence, as the birthplace of Derek Walcott, who won the 1992 Nobel Prize for Literature, among other honours. Indeed, Walcott is yet another reason why Canadians would do well to learn a thing or two about Saint Lucia, as he taught at the University of Alberta, in Edmonton, for a three-year engagement that ended last autumn.
10. Barbados
Newsweek claimed in its 2010 country ranking that the “best countries tend to be small, rich, safe, and cold.” Well, Malta and, to a lesser degree, Barbados [population 285,000] prove that a nation can be small, relatively well-off, safe and blessed with a climate that does not chill your bones for a good portion of the year. Thanks to its financial sector, which operates in the same time zone as major financial centres in the eastern United States, this island nation at the outer eastern edge of the Caribbean enjoys one of the highest per-capita incomes in the region. Other major sources of income include tourism, agriculture and light manufacturing, with emerging Brazil being the country’s most important trading partner alongside Trinidad and Tobago.
Thanks to major government investments in education, Barbados also possesses one of the most educated workforces in the region. Unfortunately, not all of the country’s best and brightest stay home. Several prominent names in the world of popular entertainment (Rihanna) and literature (Canadian Austin Clarke, who holds the Order of Canada) have joined countless others in leaving Barbados for greener pastures. The country must wrestle with a growing debt-to-GDP ratio. But then again, which country does not face that problem these days?
