Monaco

THE PRINCIPALITY OF MONACO is an independent state wholly located within France, on the coast of the Mediterranean Sea, and between the city of Nice to the west and the Italian border five miles to the east. Members of the Grimaldi family, who have been monarchs since the end of the 13th century, rule Monaco. It is less than one square mile in size. Income and life expectancy rates are both high.

Monaco's leading industry is tourism and it is famous for its casino, the Grand Prix, the Riviera, beach life, and other high-class and high-cost activities. The principality does not charge income tax and many of its residents take advantage of this arrangement. International companies are also not taxed. However, since 1962, an arrangement with the government of France has meant that residents who have been living in Monaco for five years or less are taxed at French rates and some corporate taxes were introduced. Nevertheless most of the government budget derives from transaction taxes and government-controlled industries, including the casino. Necessarily, other residents are required to provide the comparatively low-cost labor in the tourism service sector. Foreign workers are controlled through the work permit and work contract scheme.

Residents of Monaco enjoy one of the highest standards of living in the world. In 2000 the Gross Domestic Product annual per capita income (puchasing power parity) was $27,000. (Figures of the percentage of the population living below the poverty line are not available.) However, there have been increasing concerns that at least some of the incoming wealth derives from illegal activities and has been brought to the principality in the form of money laundering. The banking sector is also significant and has been subject to scrutiny of its governance, particularly with respect to the confidentiality offered to patrons.

Monaco has hosted a number of international organizations and networks involved with economic management and poverty reduction. These help to extend the reputation of the principality, as do international broadcast networks that are headquartered in Monaco.

Human Development Index Rank: Not included.

Human Poverty Index Rank: Not included.