JULY 1 — Greece’s failure to service its loan taken from the International Monetary Fund (IMF) has sent ripples across the globe especially countries in the European Union. It is the talk of the town throughout the world at the moment especially financial institutions and financial markets.
No country had ever defaulted in servicing loans borrowed from IMF except Greece, which stands out as a sore thumb in the light of its inability to service the loan.
Greece’s likely departure from the Euro Zone could be the final nail to its coffin unless the country starts to implement painful measures to get the country out of it financial mess and back on its foot even if it means going an extra mile to implement painful austerity drive to extra-ordinary level if the country is serious of wanting to get out of its financial predicament.
Its failure to service the loan is a strong indication Greece is totally a bankrupt country, unable to carry out vital measures to contain its financial woes, which, since 2010, has borrowed US$270 billion (RM1 trillion) from three different sources namely the European Commission, the International Monetary Fund and the European Central Bank.
With its inability to pay US$1.8 billion taken on a loan from IMF, many financial experts are wondering how Greece is going to come out of its financial mess unless they carry out major cuts to its budget.
With the newly elected government financially incapacitated, immobilized and hors de combat to bring the country out of bankruptcy, the Greek population, including retirees who highly depend on pensions for survival will have to accept painful austerity drive by tightening their belts and to accept that the good times are over.
It is the beginning of “birth pain” for the entire nation to begin with.
Without a shadow of doubt, Greece is a classical example to nations, which are bent to spend and spend with no controls in place, exposing their financial vulnerability and susceptibility to external economic threats and with no savings in hand to off-set their careless spending pattern.
It is a case of spending too much with very little in the national coffers to support its lavished spending pattern, much to the disappointment of its European financial backers and other international financial institutions, which feel Greece is not serious and doing enough to bring the country out of its financial turmoil.
We saw the same scenario happening in a number of countries including developed countries until the day came when the country found to its dismay there was nothing left in the coffers to spend.
We saw that happened to Argentina in 2002 where banks and businesses had to close and millions went into financial debt.
Did not we see the same with Iceland in 2008, which became the first sovereign country to be impacted by the credit crisis in 2007?
Have we forgotten a number of countries in the Far East including Malaysia suffered much during the 1997 economic crisis, which saw our Ringgit badly devalued in the international financial market?
Did not our government went begging to a neighbouring country for a billion Ringgit assistance but was turned down as our government then did not agree to the terms.
South Korea, Indonesia, Thailand, among others, suffered the same and the journey to come out of the mess was painful. Many homes were never the same after that crisis.
We were in the same boat, didn’t we? We paid the price. We had no alternative but to do what we needed to do.
It was a national shame and embarrassment and we had to bear with gut and determination.
We thought we have learned from that experience and is smarter now to better manage our national coffers but recent events indicate otherwise.
We have allowed careless speeding and bad investments to take place under the nose of those who sit in the pinnacle of power. Those badly perceived investments are still under investigation and only time will prove whether our money was rightly invested by those we have trusted and placed into office to govern and to manage our national coffers.
What is alarming too is the Auditor-General’s Annual Report which indicates many fraudulent purchases and mismanaged spending that runs into millions and the masses through different means have voiced their concern many times over but little was done to ensure accountability, chargeability and explainability were the order of the day.
We cannot fathom as to why this nation blessed with many natural resources and its workers generally hard working labouring long hours have not had enough and we are not better off than our fore-fathers who under their peculiar circumstances were actually doing better than us.
Houses are expensive beyond the reach of even the middle-income group; what more the lower earning group. The cost of living has escalated and is escalating, while the exchange rate for our beloved Ringgit is tested and tested again and found to be at a disadvantage and unfavourable position for many “moons” already.
Whatever it is, I hope the government of the day will learn from Greece to be careful, prudent, circumspect and sagacious with our money, which tax-payers have faithfully contributed since taxes were imposed on wage earners as long as we can remember.
We had suffered much during the 1997 economic crisis and we do not need another financial crisis, calamity or catastrophe to “re-learn” the lesson again.
Let Greece, once a world conqueror and a great empire under Alexander the Great, be a warning and a lesson to our elected government that careless and uncontrolled spending pattern can lead to national disaster and recovery can be snail speed and extremely painful. It is unthinkable if ever our national coffers are depleted due to bad management and incautious, lackadaisical and thoughtless disbursement.
I have no doubt Malaysia can prosper and reach higher heights as never before.
I have no doubt Malaysia can be the head and not the tail if there is a political will and the fear for the Almighty to do things right.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
