The ranking of the 20 best-in-class nations provides examples of different economy management styles. Many nations show positive balances because they have fossil energy that the world craves for and that provides a good rent. Some others, however, have been smart enough to develop capabilities that compensate their non-existent or insufficient natural resources endowment. This is the case of Singapore, Hong Kong, Switzerland, Sweden, Germany, and of course China and other. On the deficit side, one finds countries that, with or without a wealth of resources, live above their means and are unable to balance their current accounts. This comes at a price. The Current Account is a key component of the Balance of Payments. To put it simply, the latter must always balance. It follows that, if a nation has a positive Current Account balance, it can control its way of life and its path to prosperity. On the contrary, if the balance is negative, the nation must "sell" IOUs (I owe you – that is to say: debt) to whomever is willing to buy, thus placing itself in a situation of dependency and vulnerability to the potentially harmful decisions made by others. The risk is obvious.
2008 Current Account Balance | ||||
Rank | World Largest Surplus | World Largest Deficit | ||
1 | China, People's Republic of | 440 | United States | -477 |
2 | Germany | 235 | Italy | -67 |
3 | Japan | 157 | Spain | -57 |
4 | Saudi Arabia | 139 | India | -43 |
5 | Russian Federation | 102 | Greece | -36 |
6 | Norway | 84 | Australia | -34 |
7 | Kuwait | 71 | South Africa | -21 |
8 | Switzerland | 45 | Mexico | -20 |
9 | United Arab Emirates | 41 | Brazil | -18 |
10 | Sweden | 40 | United Kingdom | -18 |
11 | Libya | 39 | Romania | -17 |
12 | Venezuela | 39 | France | -17 |
13 | Malaysia | 39 | Portugal | -17 |
14 | Netherlands | 38 | Turkey | -16 |
15 | Algeria | 37 | Poland | -15 |
16 | Qatar | 36 | Pakistan | -9 |
17 | Hong Kong SAR | 31 | Belgium | -6 |
18 | Singapore | 27 | Ukraine | -5 |
19 | Taiwan Province of China | 25 | Ireland | -3 |
20 | Iran, Islamic Republic of | 18 | Bulgaria | -2 |
Sources: see IMF.