- Monaco, a tiny city-state on the French Riviera, doesn’t track poverty rates.
- This is partially because the principality has no income tax, according to the Monaco Statistics agency.
- But it’s also because Monaco is so wealthy that poverty essentially does not exist, two local economists told Business Insider.
- An estimated one-third of Monaco residents are millionaires, and the GDP per capita is the second-highest in the world; only Luxembourg’s is higher.
- The country, which is smaller than New York City’s Central Park, hosts glamorous events each year, such as the Monaco Yacht Show and the Monaco Grand Prix.
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Monaco, a tiny city-state on the French Riviera, doesn’t track poverty rates.
The CIA World Factbook, which records poverty rates for countries around the world, lists “NA” for the portion of Monaco’s population living below the poverty line. This is partially because the principality has no income tax and therefore no way to measure the income of its residents, a representative for the Monaco Statistics agency told Business Insider.
But it’s also because Monaco is so lavishly wealthy that there is essentially no poverty to record, two local economists told Business Insider.
In Monaco, which is smaller than New York City’s Central Park and hosts glamorous annual events like the Monaco Yacht Show and the Monaco Grand Prix, an estimated one-third of residents are millionaires. The GDP per capita is $US165,420 – the second-highest in the world.
I recently spent 5 days in Monaco. Here’s what life looks like in the land so wealthy it doesn’t even measure poverty.
Monaco, a tiny sovereign city-state on the French Riviera, is so wealthy that it doesn’t even measure poverty rates.
The CIA World Factbook, which records poverty rates for countries around the world, lists “NA” for the portion of Monaco’s population living below the poverty line.
This is partially because the principality has no income tax and therefore no way to measure the income of its residents, a representative for the Monaco Statistics agency told Business Insider.
But it’s also because Monaco is so lavishly wealthy that there is essentially no poverty to record, local economists told Business Insider.
Damyana Bakardzhieva, a professor of economics at the International University of Monaco, told Business Insider that Monaco doesn’t have a benchmark for poverty like other countries.
But if it were to use the French definition (Monaco is surrounded by France on three sides, and its official language is French) of poverty – living on an income of about €1,000 (about $US1,100) per month – Bakardzhieva said “it is relatively safe to assume” that Monaco would have a 0% poverty rate.
Bassem Kamar, another economics professor at the International University of Monaco and a former International Monetary Fund economist, told Business Insider he could assert that “there are no nationals of Monaco below the poverty line.”
Monaco’s apparent lack of poverty can be traced to a confluence of factors.
Of Monaco’s 38,300 inhabitants, only 9,326 are native Monégasque. The rest are foreign residents from places like France, Italy, the UK, Switzerland, Germany, Russia, and the US.
According to Bakardzhieva, there is a “natural selection” at play that ensures only already wealthy foreigners move to Monaco.
With its size of less than 1 square mile, “housing in Monaco is very scarce despite the city going more and more ‘vertical’ in recent years, with skyscrapers like the Odeon tower, and despite the projects of further sea expansion,” she said.
Real estate is, therefore, wildly expensive. The average property price was $US5.2 million in 2017.
“A person living under the poverty line will find it very hard to afford seeking residency in Monaco,” Bakardzhieva said.
Monaco’s lack of personal income tax likely attracts affluent international residents as well — and its mild climate doesn’t hurt either.
Monaco has 300 days of sunshine per year.
Then there are the robust social programs, including housing subsidies and free education and healthcare systems.
These benefits “attract numerous very wealthy families to seek Monegasque residency for which owning or renting an appropriately sized dwelling in Monaco is a prerequisite,” Bakardzhieva said.
And according to Hans Mühlbacher, a researcher at the University of Monaco, many people with lower salaries who work in Monaco actually live outside the country in neighbouring France or Italy.
Monaco’s population is one of the wealthiest in the world.
So what does this all really mean — and what does it really look like? I recently spent five days in Monaco, and the wealth was evident from the moment I arrived.
Monte Carlo, Monaco’s glitziest district, is filled with five-star hotels, luxury cars, high-end boutiques, and the famous Casino de Monte-Carlo.
I saw more Ferraris in my five days in Monaco than I had in my entire life. Seemingly every woman I saw was carrying a designer handbag, whether it was Chanel, Louis Vuitton, or the elusive but even more esteemed Goyard.
Each year, Monaco hosts the glamorous Monaco Yacht Show, which brings tens of thousands of yachting-industry insiders, as well as buyers and charter customers, to the city-state for four days at the end of September.
At this year’s show, which I attended, an estimated 30,000 people came to see the more than $US4.3 billion worth of yachts displayed in the port.
Tis, the largest yacht on display at this year’s show, is a 365-foot behemoth that was built for a Monaco resident who essentially wanted a second home.
“His apartment is very similar to this boat but significantly smaller,” the yacht designer Andrew Winch said.
Tis was only the second yacht I had ever stepped foot on, so I’m not exactly an expert – but the sheer level of opulence on board blew me away. Think sweeping marble staircases with golden handrails, a 16-seat dining room, a beach club and sauna, and a 40-foot infinity pool.
All the yachts might not be a constant in Monaco, but the luxury was equally apparent on land. At ultraluxury hotels like Hotel Hermitage, Hotel de Paris, and Hotel Metropole, you won’t find a basic room for less than $US400 per night, and many suites cost thousands of dollars.
The lavish Princess Grace Suite at Hotel de Paris will cost you $US43,000 per night.
When I was looking at accommodations ahead of my trip, the cheapest Airbnb I could find was $US274 per night for a room in an apartment where other people lived – and that was an outlier. Most of the options were far more expensive, upward of $US400 to $US500 per night.
In Nice, France, on the other hand, which is about 20 minutes from Monaco by train, I was able to book a studio apartment for $US395 for four nights, or less than $US100 per night.
The streets of Monaco are pristine.
They are so clean, in fact, that at one point, I saw a piece of garbage on the ground – and I took a picture of it.
Coming from New York City, where thousands of homeless people sleep on the streets, and trash tornadoes are a common sight on windy days, Monaco’s cleanliness and lack of visible poverty was striking.
Monaco has safety standards so strict that it has been called “the safest square mile in Europe.”
Monaco has one police officer for every 100 residents and a 24-hour video-surveillance system spanning the entire city.
I saw police everywhere – mostly directing traffic or giving tourists directions. And when I paid attention, I spotted security cameras at seemingly every corner and every entrance to a hotel, shop, or restaurant.
“Monaco has the highest density of police per capita in Europe by far,” Mühlbacher said. “There are observation cameras well-hidden to tourists and visitors all over the principality.”
According to the Monte Carlo tourism website, the rule imposed by Monaco’s Prince Rainier is unambiguous: “Monaco must have total security.”
“As would follow, the orders given to the 519 police officers, who must go through a 2-year intensive training program, are extremely strict: anything detrimental to the harmonious atmosphere in Monaco is forbidden, begging is non-existent, indecent clothing is prohibited and traffic laws are rigorously enforced,” the website reads, adding that the court system in Monaco almost always gives the maximum sentences possible.
As Mühlbacher put it: “Monaco is called the ‘Billionaires Paradise’ and does everything not to let that image be disturbed.”
The streets of Monaco were filled with impeccably dressed people from around the world: I heard Americans, British accents, and French, Italian, and Russian speakers.
I seemed to be the only woman in Monaco who wasn’t carrying Prada, Chanel, Louis Vuitton, or a similar luxury bag.
But perhaps most strikingly, I did not see a single sign of anyone living on the streets or sleeping in parks.
Most of the shopping in Monaco seemed to cater to millionaires.
There’s Métropole Shopping Monte-Carlo, an upscale underground shopping centre with 80 high-end boutiques, steps from the famous casino. And in the other direction are shops like Cartier, Celine, Prada, and Balenciaga.
The only nondesigner stores I saw in Monte Carlo were a Zara and a Nike boutique.
While this lack of poverty doesn’t exactly translate to beauty — I actually found Monaco to be surprisingly ugly — it does mean that the city looks different from pretty much every other city I have ever visited across the globe.
Earlier this year, I spent a long weekend in Jackson, Wyoming, the most economically unequal place in the US, according to a 2018 report published by the Economic Policy Institute. In the Western resort town, the average income of the richest 1% is more than $US16.1 million, while the average income of the remaining 99% is $US122,447.
Like in Monaco, I saw virtually no signs of poverty or inequality in Jackson itself, largely because even the bottom 99% earn well over the statewide median – and those who don’t have had to move to more affordable areas like Alpine, Wyoming, and Victor, Idaho.
In Monaco, almost 75% of private-sector workers live in neighbouring France and Italy and commute into the city-state every day.
But while Jackson has become too expensive of a destination for many Americans, Monaco is on an entirely different level. The sheer wealth that exists there was like nothing I’ve ever seen, cementing in my mind its status as a millionaire’s – and billionaire’s – playground.
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