Good news and bad news: the good news is that we (Australians) are richer than we thought; the bad news is that global poverty is worse than we thought, as is the gap between rich (us) and poor (them). Last month, the International Comparison Program released its preliminary results of a global co-operative effort to collect comparative price data and estimate purchasing power parities for 146 economies.
It is not simple to compare the wealth of different people in different countries. The simplest way is to use the foreign exchange rates. For example, one Australian dollar is worth 34 Indian Rupees, so you could say that an Australian with an income of $1,000 is just as wealthy as an Indian with an income of 34,000 Rupees. However, the prices of items in different countries are different, so the Indian with 34,000 Rupees may be able to buy twice as much as the Austtralian with $1,000, making him twice as rich in reality. The only way to know for sure is to make a detailed comparison of the prices of different items in the different countries. The value of money in each country can then be compared in terms of currency units which have the same purchasing power as one US dollar has in the US.
The International Comparison Program has resulted in a 4% increase in the estimated GDP per head of Australians, but at the same time it has resulted in a decrease in the estimated GDP per head of people in most developing countries. GDP per person in Australia is estimated at PPP$32,798, while GDP per person in Zimbabwe is PPP$538, and in Democratic Republic of Congo PPP$264.