Who are the richest people on earth? The Americans? Japanese? Swiss? No, the surprising answer is the Australians, according to a provocative new study by the World Bank. Australia, a largely suburban, middle-class nation of 18 million, has never been known for great financial wealth, but the Lucky Country came in tops after the bank's economists decided to count natural treasures, ranging from minerals to farmland and even protected zones like the Great Barrier Reef. The analysis, published last week, ranks 192 countries in all--using a novel yardstick for gauging the wealth of nations and the potential for economic development.

Downgrading traditional measures such as gross domestic product, the study gives new weight to natural resources, environmental protection, education, social flexibility and other generally undervalued assets that can be important instruments of long-term growth.

"This new system challenges conventional thinking by looking at wealth and not just income," explains Ismail Serageldin, the World Bank official who oversaw the study. "And it expands the concept of wealth beyond money and investments." The new approach awards the highest rankings to countries with small, comparatively well-trained populations and abundant natural resources. After Australia, the list's per capita tally puts Canada in second place, followed by Luxembourg, Switzerland, Japan and Sweden. The U.S., usually regarded as the world's richest nation, comes in a mere 12th. Ethiopia, Nepal and Burundi rank as the world's poorest nations.

The study assigns a dollar value to three kinds of national wealth. The first is "produced assets," such as machinery, factories, roads and other infrastructure required for industry. Then comes natural bounty, counting not only minerals but also land, water and other environmental resources. Third, people power is measured, employing criteria such as nutrition and educational levels. The economists who conducted the research concede that its quantitative estimates amount to a "complex chain of educated guesses" that will require considerable revision.

Pre-empting the potential criticism that the new calculus is fuzziness times p.c. to the nth power, bank officials argue that the usual failure to value broader assets leads to faulty and uneconomic decision-making. The aim is to begin changing the way people and governments think about development.

Two-thirds of the wealth of most countries can be found in their populations, the report says, while produced assets, such as manufactured goods, represent only about one-fifth of the total. Madagascar, for example, derives about 16% of its wealth from produced assets, about the same proportion as the U.S. A major reason the U.S. is so much richer is that it derives a lot more wealth from human capital than Madagascar does. "Richer countries are generally those that invest more in human resources," concludes the report. And they zealously guard their natural wealth: "Good environmental policies are good economic policies and vice versa."

Those weren't always the views of the World Bank, which has long been criticized for doing little to improve the lot of the poor and doing much to damage the environment--by financing giant dams, for example. But with the appointment in June of American investment banker James Wolfensohn as its new president, the institution has been trying to be greener and more people-friendly. That, according to the new calculations, is the best way to promote growth that is not only robust but also sustainable.

THE NEW WORLD TALLY

Estimated wealth per capita in U.S. dollars. The new system takes into account human resources, produced assets and natural capital to measure a nation's wealth. The world average is $86,000. Source: The World Bank [text not available--tables listing the top 20 and bottom 20 countries by their estimated wealth per capita]