ECON Debtors prisons in Dubai

[G-Man]

DUBAI, United Arab Emirates -- Hussein Ali Mubarak sits in prison, surrounded by murderers and burglars. His crime: defaulting on his bank loans.

More than 1,200 people in Dubai's central jail -- about 40 percent of the prison population -- have been convicted of not repaying money borrowed from banks so they could get married, buy a car or house, or invest in the stock market.

Jailing debtors -- a practice more common in 18th-century England -- illustrates the downside of this Persian Gulf city-state's frantic economic boom.


Surrounded by so much oil and real estate wealth, many residents succumb to the temptations of a lifestyle they cannot afford. Banks are willing to give consumer loans with virtually no collateral, and because Dubai lacks a central credit-check authority and a personal bankruptcy court system, it's easy for people to get into financial trouble.

Last year, banks here granted $43 million in personal loans -- many with only an undated, blank check as collateral.

The case of Mubarak, a 28-year-old Emirati, is typical. He was working 12-hour shifts as a crane operator in Dubai's port when he took his first bank loan to buy a car and furniture. Even though he fell behind in the payments, he still managed to get two more loans from two different banks, each bigger than the one before.

He paid off one of the loans but stopped making payments on the other two. After he ignored court summons, the bank deposited the blank check he had presented as his sole collateral. The check bounced and he was sentenced to three months in jail.

He'll stay there longer if no one steps forward to pay his $44,700 debt.

http://findarticles.com/p/articles/m.../ai_n19291850/

[mscoffee]

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.

So if you don't have anyone to pay off your debt for you.... you could be in there for a very long time.

Police official Mohammed Murad said 60 percent of the police force is busy chasing deadbeats, and he blames 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.

Like that would ever happen

[etc]

In our civilized western world, we just pass on the failure and insolvency to other people.

Wealthy bankers buy castles and jets while kids go hungry at night.

[G-Man]

Yes the profits made in the US are privatized but the debt is socialized (and always on the backs of the less fortunate working class)

[BigBadBossyDog]

Originally Posted by mscoffee

and he blames banks for promoting rampant consumerism with easy cash.

Uh, huh. Sounds like a lot of slug Americans. It's always someone else's fault.

[G-Man]

More than 1,200 people in Dubai's central jail -- about 40 percent of the prison population -- have been convicted of not repaying money borrowed from banks

gold gambling is in wight now, maybe they could sell of some of their gold plated toilets......

[cory]

Toss them all in debtor's prison. Every last one of those pompous, white robe wearing, know-it-all, financial geniuses.

"Lets build that world's tallest and most expensive building where there is no water, where the legal system is hinkey at best. Companies and people will be happy to come here, dine on goat meat, and give us their money."

Can't repay $60 billion?
Go to prison.

Anyone have a better idea?

[G-Man]

howdy BBBD

[G-Man]

Can't repay $60 billion?
Go to prison.
Anyone have a better idea?

Nope! No need to fight those Muhammads they are taking themselves out.....:

[Old Gray Mare]

He contends banks would be more careful with loans if they had to share the cost of imprisoning debtors.


Like that would ever happen

I remember reading there was a law like that here in the US. Forget which state, it was years ago when I read the article. It was old, on the books for ages. I think a victim paid to keep a convicted rapist in jail to serve their full sentance somehow. The head line read something like "$16 a day keeps rapist in jail". I think the law was quickly negated.

[mscoffee]

Originally Posted by BigBadBossyDog

Uh, huh. Sounds like a lot of slug Americans. It's always someone else's fault.

The case of Mubarak, a 28-year-old Emirati, is typical. He was working 12-hour shifts as a crane operator in Dubai's port when he took his first bank loan to buy a car and furniture. Even though he fell behind in the payments, he still managed to get two more loans from two different banks, each bigger than the one before.

In this case the idiot took out two more loans after he was already in trouble, if he cant pay them back, he is breaking their laws and should go to jail.

But I don't believe the tax payers should be bailing out the banks that push bad loans either, I think banks that intentionally push bad loans should be sharing the pain as well.

Two different crimes and both are guilty IMO.

[China Connection]

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[China Connection]

Fancy being slung into a debtors prison in the UAE? If not, your not the only one...

Bryan Denton for The New York Times

DUBAI, United Arab Emirates — Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai’s fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.


Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.

“I’m really scared of what could happen, because I bought property here,” said Sofia, who asked that her last name be withheld because she is still hunting for a new job. “If I can’t pay it off, I was told I could end up in debtors’ prison.”

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.

The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai — once hailed as the economic superpower of the Middle East — looking like a ghost town.

No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai’s major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.

Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country’s reputation or economy, punishable by fines of up to 1 million dirhams (about $272,000). Some say it is already having a chilling effect on reporting about the crisis.

Last month, local newspapers reported that Dubai was canceling 1,500 work visas every day, citing unnamed government officials. Asked about the number, Humaid bin Dimas, a spokesman for Dubai’s Labor Ministry, said he would not confirm or deny it and refused to comment further. Some say the true figure is much higher.

“At the moment there is a readiness to believe the worst,” said Simon Williams, HSBC bank’s chief economist in Dubai. “And the limits on data make it difficult to counter the rumors.”

Some things are clear: real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. Last week, Moody’s Investor’s Service announced that it might downgrade its ratings on six of Dubai’s most prominent state-owned companies, citing a deterioration in the economic outlook. So many used luxury cars are for sale , they are sometimes sold for 40 percent less than the asking price two months ago, car dealers say. Dubai’s roads, usually thick with traffic at this time of year, are now mostly clear.

Some analysts say the crisis is likely to have long-lasting effects on the seven-member emirates federation, where Dubai has long played rebellious younger brother to oil-rich and more conservative Abu Dhabi. Dubai officials, swallowing their pride, have made clear that they would be open to a bailout, but so far Abu Dhabi has offered assistance only to its own banks.

“Why is Abu Dhabi allowing its neighbor to have its international reputation trashed, when it could bail out Dubai’s banks and restore confidence?” said Christopher M. Davidson, who predicted the current crisis in “Dubai: The Vulnerability of Success,” a book published last year. “Perhaps the plan is to centralize the U.A.E.” under Abu Dhabi’s control, he mused, in a move that would sharply curtail Dubai’s independence and perhaps change its signature freewheeling style.

rest of article....http://www.nytimes.com/2009/02/12/wo...2dubai.html?em

[China Connection]

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[G-Man]

I have been reading that Dubai was circling the dreain for over a year now, finally looks like the SHTF - guess it wasn't too big to fail eh? .....

[etc]

The case of Mubarak, a 28-year-old Emirati, is typical. He was working 12-hour shifts as a crane operator in Dubai's port when he took his first bank loan to buy a car and furniture. Even though he fell behind in the payments, he still managed to get two more loans from two different banks, each bigger than the one before.

The scary things is that this is the exact economic model being followed by "our" gov. Deep in debt - no problem, just borrow more to get things going -- which is all that the stimulus/bailout amounts to, more debt.

And debt leads to depression (As in Great Depression, part II) and unemployment.

It will all end when we are burning the green fishwrapper Notes in the fireplaces instead of wood a la Weimar Republic.

[etc]

Is this why Dubai went bankrupt?

Mercedes made from gold (Mostly)


http://www.siyalla.com/modules.php?n...iewtopic&t=419

[G-Man]

Is this why Dubai went bankrupt?

Dubai was some fruitcake "vision" "The City of Gold" (LOL) a tourist spot with ski resorts in the desert, man made islands shaped like palm trees, and other assorted "Disney Land" delusions of grandeur.

A city built on sand (litterly lol) and debt - (ie a huge speculative real estate project that was a total failure)



Schadenfreude does abound

[Volleyball Granny]

Debtors' prisons...opening soon in a state near you. Seriously, I believe we'll see it here, too...eventually.

[Lost Patriot]

Debtor's prisons already exist in the USA.. If you don't believe it, try not paying your child support, or your taxes, or a court ordered lawsuit.

Although it's unconstitutional according to the "Anti-Peonage Act" as outlined in the 13th Amendment, it's still done.. Ask yourselves, in the case of child support, why do they throw you in a prison costing taxpayers over $2,000/month per prisoner, when child support is a CIVIL not Criminal action??? What good is that doing the kids, the support payer or the tax payers?

Does that make any sense to anyone at all?

Why do they throw Child Support Payers and Non-payers in jail, but do nothing to punish the freeloaders of society who feed their children on the taxpayer's dime? It's fine to throw a single father/mother in jail because they can't afford the payments.. But the welfare bunch can live for free on their neighbors tax dollars with no repercussions at all?

Why not make the law the same for everyone? If you can't feed your kids, go to jail? That would be ridiculous wouldn't it?

Child Support Laws are nothing but revenue builders for the prison industrial complex, and a tool to estrange family members from each other! Period!

For the time being.. I pay child support.. But what happens when I can no longer afford to? Which may be soon...They destroy the economy, destroy our income base, then punish us for it?

We have Debtor Prisons.. Don't fool yourselves!

[China Connection]

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