A surplus, in reference to the budget, lists among typical measures to monitor the financial circumstances of a national government in order to determine if it is being operated in an efficient manner economically. For country-by-country comparisons, a surplus is normally put into relative terms, as a percentage of the nation’s Gross Domestic Product (GDP). A budget surplus means to record the difference between national government revenues and expenditures. The figure is then expressed as a percentage relative to the GDP of a nation. When a positive number is indicated (+), it will signify that the revenues exceeded the expenditures, which is called a budget surplus. However, when a negative number is shown (-), it will be an indication that there is actually a budget deficit.
The World-Leading Budget Surpluses
Countries with the biggest surpluses relative to GDP include Tuvalu and Macau, with surpluses greater than one-quarter of their respective GDPs, as well as Qatar, Tonga, and Palau, which each have one or more surplus dollars for every ten GDP dollars. Within these nations, the budget surplus can be a useful indicator in reference to financial situations of a particular body of government. When it is proven that a surplus exists, it is a sure sign that the government is running things in a proficient way. With a budget surplus, countries such as Denmark and Qatar are able to make substantial improvements for society without becoming indebted to others.
Denmark’s Reinvestment into Society
The surplus that a country has as part of GDP results in financial leverage that can be utilized for the betterment of a country. For example, Denmark was in need of economic reforms and infrastructural improvements in 2009, and the government realized that certain changes needed to be taken to enhance development. Robust financial security allowed them to make the changes needed, and today they are one of the strongest countries in the European Union, and a world leader in a variety of different fields.
By using the most technological advancements in pharmaceuticals, agricultures, and foreign trade practices, Denmark has worked diligently in order to build their society on a solid foundation. Ultimately, Denmark rose from the terrible deficit that occurred in 2009, when the economy started to show signs of shutting down, and it has taken a few years for them to get back on their feet. Still, they are one of the countries who most realize the importance of innovation and the use of technology to further sustain their country's growth. It seems as though when Denmark experienced a deficit in 2009, they set out to work hard and fast in order to repair the situation, and are still reaping the rewards as a result.
Qatar’s Vast Resources
In other countries, such as Qatar, the budget surplus that they have experienced comes mostly from their ability to sell the world their natural gas and crude oil resources. They strive to ensure that they maximize internal capital investment to reduce outside funding as a way to decrease costs. Another method they have used to great success is having a strong plan in place to optimize their country's economy.
Lessons Learned from Frugal Governments
Countries with biggest surplus as part of GDP exhibit positive signs that their governments are taking the appropriate measures to prudently use the revenues they have earned. After forming plans that are needed to further and sustain a country, such governments are better enabled to invest in industrial advancements as well as the most recent healthcare technologies. With thriving economies, Denmark, Qatar, and other nations with budget surpluses have the ability to make desirable economic choices that don’t force them into the adverse situations that often result from being indebted to other countries. The actions of these countries with healthy budget surpluses can serve as models and inspiration for those nations struggling with debt. With a proper plan and the determination to actually proceed on the guidelines of proposed budgeting arrangements, any country can become more financially secure.