x Abu Dhabi, UAEFriday 28 July 2017

There must be a better way than jail for consumer debt

As more people come to treat loans as income, throwing them into prison when they can't repay is not a viable solution

One measure of just how materialistic our society has become is that so many people have a wallet full of credit cards - and a long list of loans. But of course too much of anything is never good for you, as we should all know by now.

If you aren't careful, the consequences of trying to "keep up" - or otherwise make an impression on people who really don't add value to your life - can lead you to jail.

This is, or should be, unnecessary. There is an easier way to deal with the problem of excess debt: instead of throwing people into prison after they run up too many bills, it would be preferable to teach them ways to avoid winding up so deeply in debt.

Most people who find themselves in consumer-debt trouble are not really criminals, and are more a menace to themselves and their families than to the rest of society. Because it is so easy to walk into a bank and get a loan, some people don't bother to consider how they will pay it off, and instead think of it as a second or third income.

But throwing people in jail to teach them a lesson imposes a cost on the Government and society - you have to feed these prisoners and maintain them. Jail should be the last resort, not the default option.

In an editorial last month, The National raised the sensible possibility of having prisoners, expatriates in particular, work off their debts with paid employment of some kind, within the walls of the prison.

There is concern about the large number of Emiratis who are jailed for debts they cannot pay off. There has even been talk about amending the bankruptcy laws of the UAE. But nothing comes without a cost.

The first step towards fixing the growing problem of jail-for-debt is to understand why consumer debt is growing and how we can control this. Some have proposed putting a cap on each individual's total debt, based on age, salary and other factors.

One step that would help would be to have a consolidated credit-reporting system, so that when someone applies for a new loan, the lender can see how much the person already owes, and to whom.

In other parts of the world getting into debt is not so close to the top of the list of horrible crimes. Where there was no intent to defraud, those in debt trouble are given an opportunity to work off their debts, and not within a prison. These people are allowed to work, earn, live frugally and pay back.

I for one would like to see some former "high rollers" who have fallen into debt trouble working on the construction of a skyscraper, in the summer heat. That would teach such people the value of a dirham.

These prisoners might see this as a cruel punishment but in fact, the concept of "community service" punishment is almost non-existent here. Those who do something for society or a disadvantaged group almost always seem to think they deserve a reward. Many times I have heard people talking about doing good and expecting a certificate or financial reward.

For a debt prisoner, the reward would be to pay off his debts, gradually, and also to learn that nothing comes easily, even though banks make it seem that credit is easy to obtain and painless to use.

The UAE and other GCC countries have been blessed with wealth, as is evident in the infrastructure, schools, medical facilities and so on that allow us to compete on a global level.

But in the course of this growth, accountability got lost somewhere along the ride on the wave of success.

As Arabs, humility is one of the most important virtues we should possess. Greed and gluttony are frowned upon.

Maybe it's time we reviewed the basics of who we are, to begin avoiding the problems we have created for ourselves.

Being held accountable for your mistakes is an essential part of life, no matter what nationality you are.

 

Aida Al Busaidy is a social commentator and the former co-host of a Dubai television show

On Twitter: @AidaAlB