"A current-account deficit is not a sin" says Indonesia's Finance Minister Sri Mulyani Indrawati, "but we are punished just the same". The minister -- former professor, former top World Bank official -- makes a telling point.
In textbook economics, it makes good sense for countries like Indonesia to run a current-account deficit, funded by foreign capital inflows. Its saving rate, at well over 30% of gross domestic product, is high but this is not enough to fund all the viable investment opportunities.
