Dubai, the city with the first man made Island-the Palm Jumeirah, tallest tower in the world, the cosmopolitan city that was growing too fast. It changed the trend of Asian community immigrating towards the west to look for a secure future. It had it all for every nationality (except Israel).
The idea was good. The vision was to become the biggest and brightest trading hub connecting the east with the west. The Ruler of Dubai had planned it well but then there were certain moves and laws in place that were incompatible with the vision.
The amount of investments in Dubai were like a dream come true for a small city. Everyday one reads business news and there was hardly a single day when there were no talks about millions and billions of Dollars being invested in a certain project.
People moved in hoping to build their future in this small land full of opportunities and they did make a good decision. Why would'nt one want to live in a place where buying a dream car was like a day out, shopping for snacks. One just required a salary certificate from a company for a couple of thousand dirhams, the least to acquire luxury.
Banks did play a big role by posting profits which surpassed their required targets. They just had to know the contact details of the person that had found a job, completed atleast three months and they were ready to give everything out. If one went to buy a car and the loan got approved, the person was eligible to not only drive the car from the showroom, the bank would even provide a credit card consisting 4-8 times the salary of the person to add modifications to the car.
When the times are good, no one complains whether it rains or never rains in the desert. Human mind is made with the capability of making mistakes, especially if the mistake is bringing fortune for a while without burning oneself in the sun. If a salary of a person is AED 3600(US$1000 aprox.), the bank is running behind the person trying to handover AED 28000 (US$7600 aprox.), why would'nt the person agree, especially if the loan is smart enough to be paid back in 5-6 years. Then there are many banks in Dubai and UAE as a whole. One would borrow from a couple of banks, max out the money, borrow from the third bank and pay the second while borrowing from the fourth bank to pay the first and it goes on and on.
In a city like Dubai, before July 2008 if someone was asked whether what was the meaning of recession, no one knew. As soon as the Government realized a patch of land was empty, immediately a signboard will rise with a 3 dimensional picture of a building, golf course, Hotel, etc.
As soon as the recession hit and after July 2008, people started loosing their jobs like everywhere else in the world. The only difference was, as soon as one looses a job, the banks got informed, they blocked the customer's bank account for further withdrawal and if the customer was unsuccessful in finding a job, they will receive a call from the bank in a totally different tone. This time its not the banker with a versace suit trying to sell a credit card or personal loan. This time there was a heavy voice at the other end of the phone, threatening to throw a person in jail for a loan as low as 50,000 AED (US$13,500 aprox.).
Soon there were one way tickets purchased and all the respectable expatriates became thieves. They ran away leaving their cars in the airport parking. When the time was good, people never realized the seriousness of spending someone else's money. When the time went wrong, most of the unfortunate ran away.
Why did this happen? People did go bankrupt due to loss of jobs. It was an unfortunate incident that gripped the whole world. It changed the way people think today. But instead of threatening people with jails, if the banks would have co-operated with the people, no one would have wanted to leave a city like Dubai. It is arguably one of the most secure cities in the world. Wherever law and order prevails, people are happy to invest. UAE was not different. But unfortunately due to lack of Bankruptcy laws for individuals, individuals had to suffer by running away from the dreamland and Banks had to suffer because they had to spend more on collections agencies and case filings, than the amount they had to get from the customers.
As long as a talented person is naive of utilizing talent, we call him a wasted talent.
As long as Dubai will shy away from a constructive bankruptcy law for individuals, it will continue to be identified as a waste of money in the desert.
The Government of UAE and Dubai in particular has to take some steps in revamping its image as a tolerant society for debtors. They will realize that the run away debtors will come back and pay them back. It might help Dubai to be able to pay its debt to investors as well.
What goes around DOES come around. Its high time the initiative is to go around in a positive and tolerant direction.