Singapore is uncomfortably sandwiched between Greece and Italy, the two poster children of excess while China now makes up 15 percent of all sovereign liabilities worldwide. 

Government debt is this ineffable, intangible thing, particularly when you aren’t an analyst or economist, and you don’t trade bonds for a living. At best, the vague idea of it becomes a passing source of frustration once a year when you have a tax form to file.

At that point, your internal ledger, rightly or wrongly, is quick to see the mismatch between what will be paid and what has been received.

Snowballing Issue

It is one of those things that isn’t a problem until it is. And then the sting, and international stigma, linger for years, if not decades. 

In the early 2000s, for example, the underground vault of a major bank in Zurich still held a few actual czarist-era Russian bonds on the off chance they would, at some point, be able to redeem them.

Volunteering Gold Jewelry

More recently and closer to home, the 1997 debt crisis lives on as a kind of financial PTSD in the minds of many.

While stuck in a traffic jam in Seoul, for example, it would not be altogether unheard of to find yourself listening to an acquaintance reminisce off-hand about some aunt or uncle’s contributions of gold jewelry to the government to pay back the IMF loan made to the country back then.

Bond after Bond

But recent data collated by online publisher Visual Capitalist makes it succinctly clear that the lessons of that era are getting lost in the mists of time, with many countries in the region joining the ranks of the world’s top spendthrifts.

Indeed, it might come as surprising as some to see Asia Pacific debt at levels traditionally regarded as precarious, and treading the same path as countries in the West who happily seem to stumble from one tranche of government bonds to another.

Not Far Behind

When it comes to gross debt, the data shows the US remains the largest offender, making up just more than a third of the world total, although it is followed by China in second place with 15 percent. It is a percentage that is not close, but not that far behind either.

Then comes Japan, which takes third place with a share of 11.1 percent, followed by eighth-ranked India, which contributes 3 percent to the total stock of the world’s fiscal indebtedness. 

Regional Tally

When it comes to comparing the major economic regions, speak blocs, Asia again puts in a middling performance at best. It makes up 35.3 percent of all debt worldwide, just behind North America’s 37.5 percent while far surpassing Europe’s 20.7 percent. The debt-to-GDP ratio looks just as bad. In Asia, it is at 92.5 percent, behind North America’s 117.6 percent but very much ahead of Europe’s 79.1 percent.

By country, on a per capita basis, the situation is only starker, and, in many respects, worse. Here, Japan is parked in second place with an eye-watering GDP-to-debt ratio of 255.2, just edged out by Sudan’s 256 percent. 

The Big Sandwich

Still, the big surprise here is Singapore, which shatters any notion of what had been an almost taken-for-granted level of financial propriety by coming in fourth at 167.9 percent. The US, which comes in seventh with 123.3 percent, looks almost modest by comparison.

Not only that but the city-state places just behind Greece (168 percent) and Italy (143.7 percent), two countries that in the last decade, at different times, have sorely tested both the eurozone and the euro.

Up 40 Percent

Overall, Visual Capitalist forecast the total stock of the world’s government liabilities was expected to reach $97.1 trillion in 2023, implying a 40 percent increase from that seen in 2019 although the online publisher did have several rationales on hand for that. 

The pandemic was a key one, given it was marked by large-scale efforts from governments worldwide to save jobs and stem bankruptcies, although they also state that this has since «exposed vulnerabilities» given the impact of higher interest rates on borrowing costs.

Mainland Infrastructure

When it comes to China, the publisher indicated a large share of the debt had been issued by local government funding vehicles for infrastructure projects, something that likely portends little good in the near or medium term given the continued property crisis on the mainland.

But, at the same time, not everything is all bad. When you reverse the table, some surprising conclusions pop out. The gambling hub of Macau, a short ferry and bus ride from Hong Kong, has a uniquely healthy debt-to-GDP ratio of exactly 0.0 percent, the lowest anywhere in the entire world.

Sensible Levels

Hong Kong itself keeps very tight reins on its balance sheet, coming in fifth worldwide with a very sensible, levelheaded ratio of 6.1 percent. South Korea, at a still moderated 54.3 percent, also clearly doesn’t want to go back to the dark days of getting athletes to hand back their medals and trophies. Unlike Japan, China – or Singapore – all three are still taking the lessons from 1997 to heart.