View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Thursday, August 20, 2009

Paying and Cancelling Debts this Ramadan in the UAE

One of the valuable aspects of Ramadan is that it is a time for the payment and cancellation of debts but which debts in the UAE will be at the heart of this holy imperative?

Forgive Us our Debts
According to WAM (19 August 2009), the cancellation of debts is already being modeled in the America’s Cup emirate:

“H.H. Sheikh Saud bin Saqr Al Qasimi, crown prince and deputy ruler of Ras al-Khaimah, has ordered the release of 84 prisoners from the emirate's Punitive and Correctional Establishments on the occasion of the advent of the holy month of Ramadan.”

It was further mentioned that the release include settlement of debts and other financial commitments of the pardoned inmates and that the pardon would provide the prisoners with a second opportunity to reunion with the families and become good citizens.

Month of Liberation
Ramadan was first called a period of ‘purification’ and ‘cleansing’. It is a time for getting relationships right, paying off bills and building trust with those to whom we owe money.

Pay Up
The onus is on the person in debt to pay up and part of the motivation given by Ramadan is that if the debt is unpaid, believers will be asked about it on the Day of Judgment! In Islam, Allah is seen to be concerned about finance and restoring the relationships that debt often spoils.

What If You Cannot Pay?
People are not encouraged to opt out of responsibility while waiting for a benevolent ruler to cancel one’s debts. But what happens when you are unable to pay off the debts? What happens about the credit card bills, the car loans and the mountain of bills that quickly accumulate when you have lost your job through a recession?

The huge numbers of expats skipping the UAE this year has largely been due to the loss of jobs and income and the high probability of imprisonment for failing to meet their financial commitments. No doubt there are many expats now back in their homelands wrestling with their consciences, wishing it hadn’t happened in this way and wondering whether there are still means by which they can make amends. Judging by the number and intensity of the comments on Internet web sites there are hundreds of former UAE expats hoping the international debt collectors will not be knocking on their front doors.

Ramadan in Time of Recession
What does the Ramadan message have to say about debt caused by a recession? Many writers have already commented on the lack of opportunity for debt counseling, mediation and negotiation and such practices in the UAE would help to overcome the skipping syndrome and open the way to more creative and mutually responsible solutions.

Could some amnesty be granted by the UAE government for expats now (hopefully employed) back in their home country to pay off their debts without incurring punishment and so enabling them to make recompense?

Could the UAE leadership grant a pardon on expat debtors (outside the country and within) rather than leaving the situation incomplete and unresolved?

These questions may well appear to be simplifying what is a complex issue and one which if done according to the book may well require unique responses. What does the Ramadan spirit have to say about this type of debt? What is the application of the following texts for the current unprecedented situation in the Emirates?

‘Best for You’
According to the holy Koran a key aspect of Ramadan charity (sadaqa) involves the forgiving of debts and it sees this as a win-win situation:

“If the debtor is in difficulty, grant him time till it is easy for him to repay, but if you forgive it by way of charity, it is best for you, if you only knew.” (2:280)

The holy Koran commends individuals for taking responsibility for their finances, paying their dues, the value of giving time for repayment and an easy repayment process for the person who is in debt.

The Islamic scriptures also applauds the gracious initiative by those with power and wealth to choose the better way, for those who have no power to set the relationships right.

Making Atonement
Furthermore, the cancelling of punishment or debt “is an act of atonement for himself.” (Koran 5:45)

This means that cancelling debt by the powerful is not simply a matter of dirhams and debt but people coming to a state of at-one-ment.

Pronouncing Absolution
Who knows the dirham figure on the mountain of debt that is currently stockpiled in the UAE? Is it too high to tackle? Is it beyond the spirit and calling of Ramadan to be addressed?

In July 2008, His Highness Sheikh Khalifa bin Zayed al Nahyan granted ‘debt forgiveness’ to the government of Iraq. Officials said the pardon was to the level of $4 billion but financial experts calculated that if interest had been factored in, the cancelation was worth $7 billion.

The payment of international debts and the setting of prisoners free are good and laudable actions but the Ramadan message must be worked out in the lives of ordinary people who yearn for mercy and relationships to be set right.

RAK Ruler Pardons 84 Prisoners, WAM, 19 August 2009.

Alarm at High Number of Australians on the Wrong Side of the UAE Law, ETE, 28 July 2009.

Thousands Skip UAE Without Paying Debts While Honest Ones Pay Dearly, ETE, 25 May 2009.

On Related Sites
Photo Blogging Fujairah, Fujairah in Focus, 19 August 2009.

Will the Cat Have the Advantage over the Trimaran at the America’s Cup? America’s Cup in the UAE, 19 August 2009.

Dr Geoff Pound

Geoff can be contacted by email at geoffpound(at) on Facebook and Twitter.

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Image: “What does the Ramadan spirit have to say about this type of debt?”