Middle talented service sector Brits, for example, seemed to be able to come over and live the lifestyle: posh new flat, new car, no taxes, and loads of relatively cheap restaurants, bars and nightclubs.
Bright Lights. Bright Opportunities!! From http://makkah.files.wordpress.com
They work in publishing, marketing, sales, account management, promotions, advertising, real estate.... Yeah, all those areas of employment heavily hit by Dubai's meltdown.
The problem is a lot of them believed the hype. They found themselves spending all that money on rents, loans to pay the rent in advance as demanded, car loans, going out. You know.
Then they got into the credit cards and personal loans too. Maybe even bought a place off plan. Ooops.
The UAE response to debt: Stop, Go to Jail. Go directly to jail. Do not pass go. Do not collect $200.
When such people get laid off, a whole new lifestyle kicks in. The UAE don't have a personal bankruptcy law, you see. And if you can't get another job to service your debts, the banks you owe money to can (and do) block your right to leave the country. If you can't pay your debts you get thrown in jail, for quite some time.
See the story of the guy who escaped by boat to India, and the facts about debt in Dubai
"Welcome to Debt City". By Tom Huntley
Ford also left behind an anguished “open letter” to friends and creditors that neatly encapsulates the predicament of many expats in Dubai who took out loans during the flush times and now find themselves out of work and unable to keep up with the payments on their seaside villas and luxury cars.
“I am not running away from debt, I am purely protecting those dearest to me and getting out of a country which, due to the lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments, drives people to make horrible decisions,” he wrote in an open letter to local media.
He promised to repay all of his creditors.
Dubai authorities won’t say precisely how many people have been jailed for their debts, but local news accounts put the number at about 1,200 — more than 40 percent of the total prison population.
Even trickier to gauge is how many others took Ford’s route and simply fled. Judging by the number of apparently abandoned BMW’s and Mercedes gathering dust on city streets and the ensuing chatter on expats’ discussion boards, the number is not insignificant.
This situation has created a whole subclass of expats in the UAE who are in the hole (only a little bit, say $15k), unemployed, and therefore desperate. Hey, OK, so the banks lent them money. But 2 years in prison? How does that help pay their debt anyhow?
UAE Ministry of Tourism Photo: Everyone agreed the Ministry's new expat marketing campaign - though true - wasn't going to work.
So here's the sort of thing that's going on, and worryingly, Oman and our expat Governments' Representatives seems to be assisting the UAE to continue to imprison minor debtors.
Here's a cautionary tale folks. It's a true story. Some names have been changed.
PART ONE: The Fall From Grace
Roughly 5 months ago, NBD (National Bank of Dubai) put a case against me for missing 2 payments on a loan, this was due to loosing my job, as so many other people when the credit crisis hit. I was working in a construction related job.
I never once broke contact with the bank and as far as I am aware I would only be in serious default for missing 3 payments. I found another position and continued to pay, even paying a little more so I would eat away at the arrears and showing a determination to resolve my problem.
When NBD joined with Emirates Bank that they applied the case [law], this meaning a travel ban. They informed me of this situation by text message, not by letter or call..the arrears totalled 9000 dirhams which I paid immediately, therefore having a normal running loan account.
They insisted I have my salary paid into NBD but this was a problem due to commitments to Citi Bank ...
As time went on the [new] company I was with had difficulties, and a number of us where let go. But they also requested the residence visa back. This would have meant I could not go to the border to get a tourist visa due to the [travel ban], therefore I would eventually over stay, making it impossible to get another job with residency as all over stayers must be cleared and therefore I would be arrested.
Also as I must be a residency holder to have the loan in the first place, another reason I would not be able to clear the [travel ban]
So no matter what, he's screwed and will be arrested and put in jail for a debt - in this case - he was up to date with repaying!! What can our poor UAE expat do? What would you do?
These UAE laws are monstrous and barbaric. People guilty of nothing more than doing what was expected and encouraged by the Dubai authorities are being sent to prison in droves. With NO intervention by their embassies.
Why? In the west this would NOT be a cause for prison, but a negotiated settlement with creditors. Just like other bankrupt people or corporations (like Dubai World & Nakheel perhaps?) it's just a negotiation. It's not like the banks thought an expat Nakheel marketing guy was 'sovereign backed' when they loaned him money either, eh, Sh. Maktoum?
Coming in Part 2: The Escape... to Oman