GREECE’S failure to service its loan taken from the International Monetary Fund (IMF) has sent ripples across the globe, especially the European Union member nations.
It is the talk of the town throughout the world, especially in financial institutions and financial markets.
No country has ever defaulted in servicing IMF loans.
Greece’s likely departure from the Euro Zone could be the final nail in its coffin unless it starts to implement painful measures to get out of the financial mess and back on its feet, even if it means going the extra mile to implement painful austerity drives.
Its failure to service the loan is a strong indication that the country is bankrupt, unable to carry out vital measures to contain its financial woes, which, since 2010, it had borrowed US$270 billion (RM1.02 trillion) from three sources, namely the European Commission, IMF 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 it carries out major cuts to its budget.
With the newly-elected government financially incapacitated, the Greek population, including retirees who depend on pensions for survival, will have to accept painful austerity measures by tightening their belts and accepting that the good times are over.
It is the beginning of “birthing pain” for the nation.
Without a shadow of doubt, Greece is a classic example to nations which are bent on spending with no controls in place, exposing their financial vulnerability and susceptibility to external economic threat, and with no savings in hand to offset their careless spending patterns.
Greece is a case of spending too much with very little in the coffers to support its lavish spending, much to the disappointment of its European financial backers and other international financial institutions, which feel that the country is not serious and doing enough to bring it out of its financial turmoil.
We saw the same scenario happening in a number of countries, including developed ones, until the day came when the affected country found, to its dismay, that 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 we not 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, which suffered much during the 1997 economic crisis, which saw our ringgit badly devalued in the international financial market?
Did not our government go begging to a neighbouring country for a billion-ringgit assistance, but was turned down, as our government then did not agree to their terms?
South Korea, Indonesia and Thailand, among others, suffered the same fate, 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, weren’t we? And 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 it with guts and determination.
We thought we had learnt from that experience and are smarter now to better manage our national coffers, but recent events indicate otherwise.
What is alarming, too, is the Auditor General’s Annual Report, which indicates many fraudulent purchases and mismanaged spending that run into the 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 her people generally hard-working, has not had enough, and we are not better off than our forefathers 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.
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 taxpayers have faithfully contributed.
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 can lead to national disaster, and recovery can be at snail’s pace and extremely painful.
It does not bear thinking, if ever our national coffers were to be depleted due to bad management and incautious, lackadaisical and thoughtless disbursement.
I have no doubt Malaysia can prosper and reach greater 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.
Dr Tan Eng Bee, Kajang, Selangor