x Abu Dhabi, UAEThursday 18 January 2018

Rise of wealth brings more indebtedness

A reader cites the easy availability of credit for the UAE's rising indebtedness, calling the situation "a giant killer" that only stands to worsen without more stringent lending policies.

A reader questions the long-term viability of many airlines in the Gulf region.
A reader questions the long-term viability of many airlines in the Gulf region.

I refer to the front page news article Wealth of the UAE has tripled in the past decade (October 10). While I am happy to read that the wealth of UAE residents has tripled, I was touched in the same article that the residents have also quadrupled their indebtedness. These statistics are indications of a giant killer, already in action, and waiting for more action in the coming months. As the demand for credit cards and loans grew a couple of years ago, consumers and banks equally cashed in on the booming market. There was a plentiful availability of credit facilities provided by the banks without any real credit checks.

Without any insights about what would be the impact on the overall customer base, many banks rearranged their credit policies including the interest rate on lending, card usage and payment periods. Mounting interest for delayed payments have severely affected customers. This explains the increased overall debt figures currently prevailing. Any realistic analysis will show the result of these changes initiated to rescue bank funds which were depleted due to wrong financial investments in local and international markets.

Customer confidence in banks and their lending policies has taken a deep dive and it will take a lot of restructuring of the prevailing credit policies for confidence to return. It is time for banks to have competent financial advisers placed within their lending and collection departments before they offer credit to customers and before collection agents proceed with actions against hapless customers.

Ramesh Menon, Abu Dhabi 

Shiites are underestimated 

The article A friend or foe, that is the question (October 12) addressed the concerns of Lebanon's non-Shiite population about the visit of the Iranian president Mahmoud Ahmadinejad. Really, isn't it ludicrous to make any comment on Lebanon's demographics as a foundation for the rest of this article when the last census was taken in 1932 and it's pretty much accepted by most Lebanese that the Shiites are now a significant majority?

It's a bit misleading to state they are a minority as it makes it look like Hizbollah is forcing its way to the political platform and does grave injustice to the legal advances the movement has made democratically at elections. 

DJ, Dubai 

Note from a climate sceptic 

The Frontiers article Climate science blinded by the Sun (October 10) puts into perspective some of the possible motivations behind ignoring the fact that the Earth has indeed cooled for the last 12 years (global average temperatures) and the ongoing effort to blame carbon dioxide and more specifically man-made carbon dioxide which accounts for just 0.0117 per cent of the theoretical, but unproven, greenhouse gas effect.

Chris Ryan, Abu Dhabi 

More awareness of Islam in the US 

Fatima al Shamsi's "Emirati in New York" column Even baby steps that show Islamic practices can fight ignorance (October 9) is a great article which illustrates the growing awareness of Islam in New York City. As an Emirati who's been in the United States for eight years, I totally agree. I must say that now, much more than eight years ago, people know what the Muslim holidays are, what the athan sounds like most of the time, and what Islam is.

This is a major change from when I first entered the States when no one knew what a hijab and the UAE were. Many of the Islamic holidays and prayers are observed in the States now, not just Jewish holidays, which is awesome. 

Fatema Kazim, US 

Gulf airlines are headed for M&A 

I refer to the business article Turbulence for region's airlines (October 10). The logistics of air travel in the Gulf will reveal that almost 90 per cent of the travel is by the expatriate work force. The world economic downturn forced many of them to return to their countries and this was immediately reflected in the financials of the airlines. More squeezing is in the offing in the next couple of years. Why the UAE, being a small country, needs three airlines is a baffling business proposition. It is difficult to endorse the economic viability in the long run.

The GCC generally gets carried away by success in the short run, imagining that to be a permanent way of life. Advisers originating from western countries, the masterminds behind the world-wide economic downturn, have been consistent in their lopsided approach and failed advice which today is fully manifested in the economies of the GCC in general. Airlines and banking will be the first to be ask for mergers and acquisitions while others may follow soon thereafter.

Dr VB Vijayakumar, Dubai