Much as the case has often been made in this column that the northern economies of the Asian region (excluding Japan) are doing better than the southern ones, there is one area in which the positions are reversed.
The governments of Asean (Association of Southeast Asian Nations) were still overall showing fiscal surpluses at mid-year while governments in the northern part of the region were showing an overall deficit. It indicates that lessons have been learned from the last big regional financial crisis in 1984-85. That one was particularly severe in Asean and, more than anything else, it resulted from profligate government spending. Fiscal deficits mounted and, when they could no longer be sustained, the result was a collapse in economic growth.
Over the following years Asean governments put considerable effort into keeping expenditures down while economic recovery boosted revenue growth. They also retired debt to remove one of their biggest burdens.
The present slowdown is once again taking a toll of government finances and both the Philippine and Thai governments have slipped into deficit again. But these deficits are still relatively small given conditions at the moment and continuing surpluses elsewhere in Asean suggest the lesson has not been forgotten.
The northern governments never suffered as much in 1984-85 from excessive spending and, with no old wounds to re-open, seem less worried about running deficits now.
The figures used for the chart are open to a good deal of interpretation, however. Governments have a way of muddying their figures and are often tardy in reporting them.