Focus | Are there countries in the world running budget surpluses?
Are there countries in the world running budget surpluses? The short answer is yes. In fact, according to Statista, The Statistics Portal, the 20 countries in the world running the largest surpluses as a percentage of gross domestic product (GDP) in 2017 were: Micronesia (8.68 percent), Macao SAR (7.61 percent), Nauru (7.12 percent), South Sudan (5.75 percent), Norway (4.49 percent), Hong Kong SAR (2.19 percent), Grenada (2.15 percent), Tuvalu (2.08 percent), Chad (1.7 percent), Singapore (1.7 percent), Timor Leste (1.57 percent), Kuwait (1.5 percent), Marshall Islands (1.36 percent), Korea (1.21 percent), Sweden (1.01 percent), Cyprus (0.87 percent), Germany (0.69 percent), Seychelles (0.66 percent), Netherlands (0.65 percent) and St. Vincent and the Grenadines (0.61 percent). With the exception of perhaps Hong Kong, Singapore, Germany, Norway and Sweden, few Bahamians would want to replace their residency in The Bahamas, with its 5.3 percent deficit to GDP, with any of these surplus nations. This simply makes the point that while budget surpluses are a desirable aim, they do not in and of themselves create the quality of life that citizens want to have. In fact, sometimes, social progress is stifled by fiscal constraints because countries neglect the needs of fiscally demanding areas like education, public health, infrastructure and institutional building to save money and avoid deficits.
This much is true, however: For each of the countries that has a surplus, it has one because it is its express aim to do so. They do not have surpluses because they are oil rich or rich in some other wildly valuable natural resource. Micronesia has a predominantly agriculture and fishing economy. Macao has a balance of wholesale and retail trade, gambling, manufacturing, etc. Nauru is a phosphate mining and offshore finance jurisdiction. South Sudan is one of the world’s poorest countries subsisting on oil production. Norway has a balanced economy based on oil and gas production among other activities. All these countries are managing their economies and fiscal affairs, whatever their resource endowments, to avoid crippling deficits and indebtedness. For most of them, if not all, they have room to channel capital into areas of their countries that can enhance their citizens’ quality of life. This room that they have is one that The Bahamas, and so many other developing countries find so limited. Expanding the room to plow resources into greater social development is what the country desires most.
The Bahamas can get back to a state of fiscal health. It may not join these nations of surplus budgets, but it surely can come very close. Doing so is not merely a matter of government operations becoming more efficient or broad economic growth. It will also require a more financially literate population willing to partner with the government in creating a more fiscally healthy nation. Citizens in The Bahamas may not realize it, but their demands drive a great deal of decisions made by politicians, and bad decisions at that. It is not the demands made by the noisy few who call radio talk shows or write letters to newspapers, but the quiet majority whose demands come as MPs visit their homes or entertain them at various community functions. The demands come as ministers try to sense what it is that will drive voters to vote them in again. Though they may want to resist, and some may even dare try, the desire to remain in office, pandering to voters as they attempt to do so, is often far stronger than the desire to do what is fiscally prudent, especially at election time.
The Minnis administration has a real opportunity in the time it has remaining to do something truly remarkable about our fiscal state. I sense it wants to do great things. But desire is only half the battle. The rest to the battle requires strategic know-how and sound execution. Focusing on getting that under their belts can prove beneficial to them as well as the nation as a whole. Perhaps if they succeed, when that list of surplus countries comes out in the future, The Bahamas will be on it, and will also be among those whose surpluses are combined with impressive human development progress.
• Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.