In determining the relative richness of a country, Bespoke takes a look at the liquid assets of governments around the world. These holdings determine the creditworthiness of a country, and hence its ability to repay foreign debt. When considering which governments are wealthiest, we have decided to consider their total reserves, meaning all holdings of monetary gold, special drawing rights, the reserves of IMF members held by the IMF, and the holdings of foreign exchange under the control of monetary authorities.
Of course, we are aware of the fact that big national reserves do not guarantee prosperity. For instance, China, which is officially the country with the largest reserves, overspent 110 billion dollars last year, much of it going towards modernising its military. Were this to continue, its reserves would last only 22 years.
A country can normally borrow up to 100 per cent of its GDP; a very strong industrial nation, or one that is financially very stable, can borrow up to perhaps 200 per cent. But once debts exceed 250 per cent of GDP, a country is considered bankrupt. Now you have the background, let us see how it all stacks up.
At the head of the global list sits China, with national reserves of 3,197 billion dollars against public debt of just 18 per cent of GDP, followed by Japan on 1,138 billion dollars, though carrying a striking 225 per cent debt load. Russia ranks third with 531 billion dollars and a slender 10 per cent debt, ahead of Saudi Arabia on 497 billion dollars and Brazil on 346 billion dollars. India, South Korea, Switzerland, Hong Kong and Singapore round out the top ten, their reserves ranging from 317 billion down to 236 billion dollars.
Across the Middle East, excluding Saudi Arabia, Algeria leads with 155 billion dollars in reserves and modest debt of 26 per cent, trailed by Libya on 103 billion dollars and Iraq on 46 billion dollars. Lebanon follows with 39 billion dollars, though its public debt reaches a precarious 151 per cent of GDP, with the U.A.E. close behind on 36 billion dollars. Egypt, Morocco, Kuwait, Qatar and Syria fill the next places, while Oman, Jordan, Tunisia, Yemen and Bahrain bring up the rear, the last holding just 4 billion dollars against debt of 32 per cent of GDP.
