10/2016 – Coming from Greece, I guess it’s OK

Saturday, 16 July 2016

AFTER 56 years, I have been duly informed by a taxi driver that the word OK has its origins from the Greek word Ola Kala which means “everything is fine”.

It seems the Greek immigrants working in warehouses in New York many years ago would mark the cartons “OK” after they had checked and before the boxes are moved to another location. It soon became a commonly accepted phrase and has been part of the English language ever since.

Panos, the Greek taxi driver was recommended to me by another Greek, Andreas Vogatzakis when I visited Athens last week. Never mind that you are not able to pronounce Andreas’ family name. None of his Malaysian friends have been able to do so for the last 10 years since this cigar-loving Greek of an advertising man came to our Malaysian shore.

I trust Andreas and Andreas trusted Panos. So Panos who looks like a smaller version of Barry Manilow became my family transporter, travel guide and walking encyclopedia during our 4-day stay in Athens. Panos proudly explained that democracy started in Greece and the first Olympic Games was hosted in 776 BC. Greek civilisation started some 4,000 years ago so there were many ruins and archeological sites of interest.

Greece is also the birthplace of Western philosophy with the likes of Socrates, Plato and Aristotle. Early literary giants like Homer and mathematicians like Pythagoras. A proud country with a long history of achievements.

But modern Greece is in trouble. Panos explained that on average, every working Greek is making one third less than 6 years ago. Civil servants salaries were cut more than 40% in the last two years. Government debt is 180% of GDP and new loans from IMF and European Bank are needed to pay off old loans. The country is effectively bankrupt and living hand to mouth at the mercy of European Union big brothers like Germany and France.

Panos blamed their economic malaise on the corrupt politicians and governments who have been misusing the international sovereign loans and keeping their electorate happy by paying high wages for low productivity. Besides a bloated and unproductive civil service, corruption ensures low collection of taxes. The sense of entitlement to a good life was pervasive and it affected productivity especially amongst the civil service.

Panos was a Coca-Cola salesman before he decided to be an entrepreneur. So he invested his life savings into his major asset – a Skoda taxi. He gets by doing local runs and he gets extra income when he gets to do tourist business. He does not mind the long hours but the peak season happens only in the summer months.

There is just no local investment money in Greece. Consumption is weak and no fresh investment is made by the private and public sector. The government has no money to invest in infrastructure nor utilities. Entrepreneurs are finding it hard to survive if they are not export orientated. Greece has no manufacturing base nor agricultural exports (except olives).

Looking through the eyes of Panos, I feel that entrepreneurs in Malaysia are indeed blessed. We have a stable government with a well-run civil service since we gain independence from Great Britain in 1957.

Our earlier administrations made many good decisions, developing our agricultural base of rubber and palm oil, then agro based industries, manufacturing , infrastructure, well planned housing townships and lately the service industry. All these growth in a secured and peaceful multi-racial environment.

Looking through the eyes of modern Greece, I am worried for my country. In the last 10 years, corruption has been rife and widespread. It is now openly acceptable to be corrupt, the rights of entitlement pervading first through the elites and now the masses in the name of race and religion. National debt is growing at an alarming rate and our depleting resources and national income have to sustain a free spending government and a bloated civil service. Are we heading towards an economic disaster like Greece?

Rule of law

Entrepreneurs can only thrive in a conducive business environment where the rule of law is consistent and just. It can be argued that the well connected and big entrepreneurs will still be able to thrive in chaotic conditions but the bulk of the entrepreneurs are SME’s and irrespective of race or religion, all SME’s will suffer in any national economic meltdown.

So how do SME’s prepare to survive through a slowing economy in a politically turbulent environment? That will depend on the type of business you are in.

I believe hawkers and local eateries are like cockroaches. Selling basic food, they will survive any economic slowdown. In fact, they might thrive as more people downgrade their eating preferences from cafes, bistros and restaurants. Local maintenance services will thrive as more people hang on to their old assets like cars and houses. Downgrading of consumption patterns will be the name of the game so position your business correctly when the hard time comes.

Like any economic cycles, reduce your investment and capital expenditure if you see a down cycle looming right before you. Deleverage, reduce your borrowings, reduce cost or even get out of the industry if you think for sure it is heading for disaster. Better to cut it off than bleed to death surely, slowly and painfully. This is not the time to be sentimental.

This is the time entrepreneurs should have a clear head and make things happen. Adjust your business to the changing environment or adjust the environment to your business. If the environment is politically toxic and unfriendly then the only way to adjust is through the ballot box. Like all democratic processes, righteousness will always prevail. It is just a matter of time.

I am hopeful. Malaysia will not suffer a Greek tragedy.

Zeus, the king of gods and God of the sky, lightning, law, order and justice will use his lightning bolt to bring down Hades, king of the underworld and the dead.

So says Panos, my new friend from Greece. “Ola Kala”. All will be fine.

Published: http://www.thestar.com.my/business/business-news/2016/07/16/coming-from-greece-i-guess-its-ok/


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