Job Discussion Forums

[Sheikh N Bake]

http://www.nytimes.com/2009/09/12/world/middleeast/12dubai.html?_r=1&hpw

The article points out that since Dubai has indeed become an economic miracle and wishes to join the ranks of Singapore and Hong Kong, it has come to be judged to some degree by western legal standards (and found wanting, as financial law is still based on old Egyptian law and Shariah).

[helenl]

Very interesting, but not all that new in terms of the numbers of people in jail for debt - this has been going on for years (long before the global financial meltdown).

Of course, it hasn't touched "outsiders" to the same degree as it has those who were born and brought up in the UAE (not necessarily nationals) until recently. One unofficial estimate I heard about 5 years ago was that 75% of people jailed in UAE were there for debt. And it only seems to spawn poverty by doing so, the families of these detainees have lost their bread winner and so are hurting (many very badly) financially and socially.

Unfortunately, the laws have not kept up with the changing financial times. Perhaps this is an opportunity for the powers that be to take a look at what is and is not working from both a business and social perspective? However, I won't hold my breath.

[veiledsentiments]

Yes, Helen... please don't hold your breath... we need you here.

They have never quite figured out the whole check thing. When I first arrived in the Oman back in the late 80's, I opened a checking account in the first week. Then I learned that no one accepted checks. Why not? I asked - coming for a country where at that time one paid for everything with checks. (this was before everyone changed to using a credit card instead) We barely remembered what cash was. I was told that the locals had not yet figured out that one actually had to have money in their checking accounts before writing the checks... and there was no law on the books to go after these people. So, small business just stopped accepting them.

On the other hand, that same first week I went to the Nissan dealer to look at cars. I had decided on a Nissan Sunny - taxi model. They asked if I had a check. They were in my purse, but I assured them that there was no money in the account. No problem, they said. Just call us and tell us when to deposit it. So, I wrote them a check for the full amount of the car... at a bank that had about $10 of my money... based on a loan that I hadn't even applied for... based on a contract that I had not yet seen or signed... without an Omani driving license or proper visa...

And I left with the car. It was about two months before all the paperwork was competed and the money was in my account.

I expect that things are not done this way anymore.

VS

[Sheikh N Bake]

I found it interesting that the Iraqi diplomat who kidnapped and beat up two brothers was a woman. If she had no help, uhm...wow! Well, women have two arms and two legs too, especially with a little training...

By the way, good old Howard of DWC knows the Dubai scene pretty well, and he always used to marvel at how easy and lax the credit market was to Emirati nationals. He said they got away with defaults on car loans all the time and that most of the S-class Mercedes and Land Cruisers were never paid for. That was up until I left in 2002.

[veiledsentiments]

I expect that few, if any, nationals are sent to jail for bad checks. The punishment is likely for expats only.

VS

[Zoot]

And how does sending someone to jail for unpaid debts assist with their being paid? Or is that question too sensible I ask.

[johnslat]

Dear Zoot,

Yup.

"But in Dubai, with no laws regulating defaults on personal borrowing, a person jailed for such an infraction is likely to remain there even when their sentence is over until a relative, charity group, wealthy businessman or even a member of the ruling family pays off the debt.

Police official Mohammed Murad complained that 60 percent of the police force is busy chasing deadbeats and chides banks for promoting rampant consumerism with easy cash. He contends banks would be more careful with loans if they had to share the cost of imprisoning debtors.

"Each one of them costs as much as someone in a five-star hotel," Murad said."

But I'll bet the accommodations and service are inferior.

http://english.pravda.ru/news/hotspots/10-06-2007/93150-debtors_jail-0

Regards,
John

[Green Acres]

That site is blocked from the UAE browser, but thanks John

[Zoot]

Which of course means the debt never can be paid, John Slat, is that right? Intelligence gone crazy! I'd have to agree with the expressed sentiments regarding the banks.

[johnslat]

Well, at least England outgrew them (Charles Dickens helped with that.)

The Marshalsea was an English prison on the south bank of the River Thames in Southwark, now part of London. For over 500 years, from at least 1329 until it closed in 1842, it housed seamen being tried for mutiny, piracy, and "unnatural crimes," political figures accused of sedition, and�most famously�London's debtors, the length of their stay determined largely by the whim of their creditors.
Privately run for profit, as were all prisons in England until the 19th century, it looked like an Oxbridge college and functioned largely as an extortion racket. For prisoners who could afford the fees, it came with access to a bar, shop, and restaurant, and the crucial privilege of being allowed to leave the prison during the day, which meant debtors could earn money to pay off creditors. Everyone else was crammed into one of nine small rooms with dozens of others, possibly for decades for the most modest of debts, which increased as unpaid prison fees accumulated. A parliamentary committee reported in 1729 that 300 inmates had starved to death within a three-month period, and that eight to ten prisoners were dying every 24 hours in the warmer weather."

http://en.wikipedia.org/wiki/Marshalsea

[MrScaramanga]

It appears that the deal is this: one month in prison (30 days) = one bad check. I also appears that since credit cards are "secured" here by a "security check", one's debt would equal a month in prison, regardless of amount owed. For a car loan, the prison sentence would end up being far longer. Say if you take a car loan over 4 years, the bank will require you to sign 48 checks = 48 months in prison! At least, that's the theory. Yikes!
MrS

[veiledsentiments]

So MrS... does that mean that if you get a car loan, you presign all the checks for all the payments up front??

I only had one car loan in the Gulf... my very first car in '88. The bank in Oman deducted the payment each month automatically from my checking account the same day as pay day. It worked very nicely actually.

But, I paid it off early just because I hate paying interest.

VS