Dr Hassan Saeed

"Thousands  are seeking food from an international charity more used to helping refugees and bringing aid to famine or disaster zones"

"There are supplies food for impoverished families and soup kitchens that serve daily meals to thousands of residents in the capital"

"A staff of five volunteers produces 400 meals a day, up from 250 last year, with recipients lining up with their own plastic containers outside a kitchen in the cultural centre."

"To prevent malnutrition among the most vulnerable – children, pensioners and the homeless – volunteer organisations have become critical, says a retired army general who runs the Food Bank, a group that distributes products donated by local manufacturers, mostly goods nearing their sell-by date."

"Many of the town's 25,000 residents have begun flocking to a free clinic set up by Doctors of the World seeking medical care and, lately, staples like milk and bread."

"One in five workers unemployed, pensions cut by around 30 per cent and personal savings steadily eroding"

"Savage cuts to the health service have seen the country's HIV and Tuberculosis rates soar...Aid agencies said the cutting of hospital budgets by an astonishing 40 per cent had also led to a sharp rise in the number of citizens being diagnosed with Malaria. In the south, they said, it is reaching near endemic levels not seen since 1970s. It comes as pharmacists revealed the country had almost run out of aspirin"

"There are some days when we have no bread, or food," said a 50-year-old resident. "My young daughter who goes to school is forced to go some days without taking any food with her."

"In a one-room shack with a ceiling damaged by water and held together with bits of rope and wood, a 36-year-old mother lives in fear her electricity will be cut off because she cannot pay back power bills."

"Children are being abandoned on the streets by their poverty-stricken families who cannot afford to look after them any more. Youngsters are being dumped by their parents who are struggling to make ends meet in what is fast becoming the most tragic human consequence of the crisis."

These are not descriptions about a third world country or a developing economy. This is what’s happening in Greece. Now. It might seem unimaginable for this to be happening in a developed European country. But Greece has huge debts and is now totally dependent on limited support from other European countries on condition it implements a tough austerity programme.

And of course these economic problems have an impact across Greek society with increased crime and the rise of political extremists.

But for us the big question is, if this can happen to the Greeks, could we see similar hardship in the Maldives?

Our public finances show similar challenges. The Government's budget for the year was originally set at 14 billion ruffia . The Majilis increased the original budget to 16 billion but we have now overshot even this increased sum by another 2 billion. So in fact the budget will have risen to 18 billion ruffia by the end of the year. Just 8 years ago in 2004 - the year of the tsunami - our budget was 6 billion!

At the same time Government revenue is forecast to be 9 billion, leading to the fundamental question: can we sustain a massive 9 billion deficit?

I predicted this dire situation two years ago but was accused at the time of scaremongering.

A deficit on this scale requires vast amounts of borrowing. But the Maldives has almost exhausted its capacity to borrow with interest on bonds as high as Greece – which has been a major factor in the economic catastrophe which has developed in that country.

People may ask why have we got to this situation and one explanation is that Government spending has increased as it becomes a vehicle for currying political favour. Not only have our citizens benefited with popular new welfare schemes and free health care but our politicians have substantially benefited too. With, for example, increased salaries for MPs and some 200 million ruffia being spent on a new administrative building for them.

If politicians are willing to sanction spending as if there is no limit, it is not surprising the public are perhaps not aware of this looming problem.

And to make matters worse the proportion of the economically active population that is supporting the dependant part of the population is getting smaller. We simply cannot put off the changes we need to make.

As I said two years ago and repeat today, we must stop spending beyond our means.

We need to redefine the role of government. Its core purpose should be to provide efficient services to the public not job creation for a privileged few. Instead we need the government to be supporting entrepreneurship amongst our people and the creation of small and medium sized businesses which are able to innovate and foster efficiencies in our economy.

Population consolidation needs to start so we can deliver public services fairly to all people as well realising economies of scale in delivery. This cannot be just an aspiration; action has to start now.

If nothing is done, there will, very soon, be an abrupt turn-off of the spending tap, with a vast deficit to deal with, leading to many unpredictable consequences.

None of us want to see the quotes above becoming the reality for our own country, for our friends, for our relatives and for our children. So let’s take the decisions needed now to tackle this problem before we find ourselves facing economic catastrophe too.

Note: Dr Hassan Saeed is currently the Special Advisor to President Dr Mohamed Waheed Hassan Manik

The Haaveru, 28 June 2012