Are we the new Greece?

You may have had a dose of Greek history in primary school. The boys of Sparta, now Lacedaemon prefecture, for their military antics and grooming at tender ages. Tales of Athens and its intellectuals of different measure still reviled amongst philosophers and many that love critical thinking. The mighty Alexander and the various Greek Gods. That was ancient Greece at its best.

You can imagine if they were alive today and what they would do for Europe’s most indebted economy. Malawi is not Greece, but I reckon taking a stroll down the streets of Athens can prove interesting and give the current public service reforms a much stronger resolve.

The Greek capital is thousands of miles from Lilongwe but there are a lot of similarities. I believe the technocrat brain that the Veep has might really find a few punch lines for his reform agenda. The comparisons are quite interesting between the two nations, no matter our different levels of development. We are in debt, love tax avoidance and obsessed with free lunch.

I thought we can crunch some similarities. Athens is in huge debt just like Lilongwe. The levels of debts in both countries are not sustainable and will continue to rise to refinance. It need not matter the actual amounts but the reality is that much of the debt stems from financing consumption.

As we embark on the tough public service reform, linkages to public are quite enormous.  The civil service in this Adriatic nation is the largest single employer just like the nation that fears God the most. The only difference with our friends from this battered nation is that their wages are quite high.

We are a nation in debt and it has a lot of consequences. One way to avoid debt is to generate as much revenue as possible. One might be tempted to think that it is a matter of increasing taxes or expanding the base but it is more than that. Who should pay this tax?

While each one of us has to pay a fair share of tax, there comes a point when there is nothing to tax. It would be tempting to tax weddings and other social events, assuming they create some employment. Like Greece, our country’s single biggest employer is government.

There are few profit-priced services offered by government that can warrant a tax. You would not tax policing or treasury functions. This throws the debt situation as a vintage thinking point in the current public sector reforms led by the vice-president.

Like the Greeks, a huge public sector   is a pain for the Treasury. With rising costs of living, the Treasury has to foot the bill irrespective of its efficiency. The current wave of industrial strikes is good testimony that the size of the public service must be trimmed. If anything, those that choose to stay must be ready to contribute something to their pensions.

A huge public service is often a sign that somewhere individual talent in the form of entrepreneurship is stifled.  The stifling has many consequences that affect the ability for new businesses to rise, create jobs and pay a fair share of taxes. Similarly, those that simply walk to make windfalls from our mineral resources must forget tax breaks. That is the money we need to build new power stations and transport networks to reduce the cost of investing and doing business in this nation.

All I am saying is that public service should be seen as an engine for growth. It should wake us up from a slumber. If government remains the single biggest employer, then the current levels of debt and taxes available for developing the nation are not sustainable and piecemeal solutions will remain a norm.

Some hedonistic calculus may point to the fact that the average pension paid is much higher than the average tax paid on a per capita basis. Such a trend is a bit irrational, but can only be reversed if an efficient and small service is highly remunerated and pays a fair share of taxes and retirement benefits.

With a human face, it is also morally incorrect to advocate for job losses. The serious questions public service reform should answer are many. Will public service reform lead to growth of a private sector that in turn would pay the much needed taxes?

Unlike the Greeks, we do not have the luxury of multinational institutions running to bail us out let alone the leverage to negotiate after a default. We do not have any bond issued in international capital markets but we can force all mining companies to pay a fair share of taxes before they rake in billions of profits and screw our environment.

Well, I would invite the old school philosophers from Athens to help us with a thoughtful process that makes 50 years look like two.