Sunday, Jan 18, 2009
Are our jobs safe?
Middle East Online: Dubai dream turns sour as job losses mount
I wonder if anyone will leave without being sacked just because they have so much debt? If your employer has to tell your bank they have sacked you so you can be pursued for your debt prior to departure, this will surely prove to much of a worry to many!?
Posted by brickormortis @ 09:37 AM (669 views) Add Comment
8 Comments
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1. paul said...
"If your employer has to tell your bank they have sacked you so you can be pursued for your debt prior to departure"
Your employer has about as much to do with your debts as your aunt Gladys.
No, you can walk away from debt pretty straightforwardly in any country, although its not recommended unless you are walking away permanently - in the UK at least they may well try to trace you using the (borderline illegal) Gone Away Information Network or GAIN. This system basically allows organizations to speculate that you may be out of the country, and use redirection or current abroad address details to try to trace you so that you can be pursued when you come back. The Data Protection Act doesn't really allow this, but the Information Commissioner turns a blind eye (as usual).
2. Flackster said...
I have lived in Dubai for the last three and a half years. The bubble here was bigger than anywhere, the number of moron speculators without a clue of basic economics topped even the UK BTL clowns. The Dubai government (which would make alastair campbell's spin machine weep) says it can control the supply of property to cushion the price falls. The problem is that if you stop construction, you put 50% of your residents out of a job (virtually all of them are expats and will leave). Well done Dubai, yet again you have failed miserably to think this through - you have emptied half the rental properties in the country, halved the number of people in malls, and so on.
I wonder how long before they prevent people leaving who have too much debt (because they worry they won't come back). You say it could not happen, but they'll throw you in jail if you bounce a cheque.... those with debt should be scared, very scared.
3. brickormortis said...
In the UAE it is a requirement that employers do two things, as I understand, in the event of termination of contract, not least because they are ordinarily your "sponsor" to be in the country (unless you are the wife of an employed male in which case he would be). So there is a responsibility in the part of the employer I guess, given that they basically agree to oversee your being in the country if you like. I woudl be interested to see the written law if anyone knows it.
1) Inform the ministry so your VISA can be cancelled which would require you to leave the country almost immediately
2) Inform that bank so that they may freeze account or pursue owed monies in form of loans/credit etc.
The UAE works in a rather different way due to a 90% expatriate workforce and therefore has an unusual protocol in such events. If people can simply walk away from the debts and get away with it then Dubai is going to have a massive problem as are the banks who will be significantly out of pocket. I hear that there are now auctions selling of cars that have been abandoned at the airport or repossessed. I am not sure about the validity of these stories though.
There are, I understand agencies employed to pursue debtors overseas although I am not sure in realty what would happen if you ran away to your home country.
4. Matt_the_hat said...
Please ignore the first comment he does not know what he is on about wrt Dubai.
If I owed money I knew I could not repay I would leave secretly and never return to avoid a prison sentence.
All loans are checked with employers to prove that they have a contract long enough to repay. When a contract ends the employer informs the authorities and all outstanding debts are checked, exit from the country is stopped at the boarder if all is not well.
I know of a dubai resident who continues to do business being refused exit for non-payment of a utility bill. This same business man owns a multibillion dollar business in Dubai and knows the ruling family. The only way this was resolved was by getting one of his staff to go and pay the bill immediately so he could make the flight on business.
Unless you are more connected than the example I illustrate, leave to avoid a prolonged stay at his majestys pleasure.
5. Saywhat!! said...
A few years ago I lived in Dubai. In the UAE the non payment of debts is a criminal offense that carries a jail term. The bank can demand full payment of the debts, if you fail to pay then you find yourself in great difficulty. They have a very advanced border control system so if you try to leave the country and there is an issue it will show up and you will be arrested. Dubai does not play games.
6. montesquieu said...
Is anyone else getting bored with all these middle east postings? apart from a bit of schaddenfreude with the Dubai types (especially those pampered footballers) getting their comeuppance, what's the interest?
7. drewster said...
Brickormortis,
There was a similar story in California when the dot-com bubble burst. A lot of foreigners (mainly Indians) who lost their jobs in the IT industry simply abandoned their leased / contract-hire cars at the airport and left the country.
Montesquieu,
I find the middle-east stories interesting. Dubai's big plan was to reinvent itself as a global finance hub like London or New York - in retrospect not so clever. There are lots of parallels with the UK.
8. Jon said...
I was talking to someone who'd moved away from Dubai just before Christmas and she'd mentioned that people were abandoning their cars in the rush to leave the country.
Apparently, not paying back debt results in a prison sentence over there, so people who have lost their jobs and owe the bank money are fleeing the country before they can be tracked down.