Governments take charge of their country’s finance, they are delegated by their people to handle the national budget in a responsible way. Governments collect, on behalf of the country, the tax revenues and other national income, then use them on national expenditure like infrastructure development, public works, defence, welfare, and more.
When governments spend more than the budget allows, they incur a budget deficit. The amount of deficit would be taken out from the national reserves to cover that shortfall. On the other hand, if there’s money remain after all those spending, the country incur a budget surplus. High budget deficit is unfavorable, the American and European debt crises of 2011, for instance, is a product from decades of deficits.
And so, which Southeast Asian nations treat their finance most seriously? Let’s take a look at their 2011 full year budget balance.
Singapore is the only nation in Southeast Asia to run a budget surplus. The country had a huge USD$4.78 billion surplus in 2010 and decided to channel that surplus into developmental programs for the poorest members of society with aim to bring the income gap nearer, thereby producing a far smaller surplus in 2011. Singapore however, has indicated that the distribution would not continue in 2012. While easily topped in Southeast Asia, Singapore has a hard time challenging what it perceived as its closest rival, Hong Kong, who just reported USD$7.67 billion surplus in 2011. Another rival, Macau, whom Singapore competes in the gambling industry, is expected to post a USD$6 billion surplus.
The US has the biggest budget deficit, at over $1 trillion for 4 consecutive years since 2008
Timor Leste and Brunei, both highly dependent on petroleum revenues and who recorded a surplus few years back, saw their budgets swung back as oil prices has fallen sharply from the highs of $150. Brunei moved into the red with a budget deficit, while Timor Leste managed to score a balanced budget. Observers however, forecast that high reconstruction costs may pull the country into budget deficit in 2012.
Laos, Cambodia, Philippines, Indonesia and Thailand all posted budget deficits and have announced it may worsened in 2012 as global economy slows. Vietnam has successfully narrowed its deficit as government income rose 28% due to growing investments and industrial expansion, the country is confident it can further cut the deficit in 2012. Myanmar is optimistic that its deficit will shrink this year, the country has recently open up itself to the world and investments have begun to flock in.
Malaysia continues to incur the largest deficit in Southeast Asia. The government explains that high spending, vast social programmes and extensive subsidies have all contributed to the budget shortfall, and admitted it couldn’t scale back the spending in near term as it might resulted in more social problems. Malaysia nevertheless has promised to reduce the deficit from the 5.4% of GDP in 2011 to 4.7% in 2012.