We start the story uncovered by McKinsey Global Institute’s latest research on human development in Mapusa, a small town along a historic trade route in the Indian state of Goa, and in Porto, the second largest city in Portugal. Both places had virtually the same GDP per capita of $33,000 in 2019.¹All GDP figures in this report are expressed in purchasing power parity, constant 2017 international dollars.

At the country level, they are worlds apart: India’s GDP per capita was $6,700 in 2019, compared to $34,900 in Portugal—overall more than five times less.