We are in an economic slowdown since Q4 2015, this is a fact. The real estate market doesn’t move and retail is fighting against this adverse situation. In brief, we are living a slowdown which has gotten to the point that Capital markets are shadowed in red.
But this slowdown is affecting the entire world. The turbulence in the global economy is threatening countries all over the world, with the price of oil reaching its lowest points since 2003.
We have China, one of the greatest examples of this situation. This country, despite all efforts made by government, seems to don’t show signs of short or medium-term recovery.
In brief, global economy is passing through a time full of uncertainty. We have China with no signs of recovery, the price of oil falling down even more reaching historic low points and the devaluation of the ruble.
We Need To Stop:
So far now bounced cheques are being treated as a misdemeanor, which ends up sending to prison to the issuers of these cheques. But why do we need to stop? Because this is causing a huge damage to the market, we will get to that in a moment.
In a time of such a turbulent economy, when business owners see a financial difficulty they opt for abandoning everything, which leaves a big amount of unpaid debts and this has a poisonous effect in the market. Business owners tend to do this because of fear of imprisonment when they get a cheque bounced, this is where they decide to leave it all behind, which ends up damaging the market.
We need to correct this issue in UAE. If we want our economy to grow, then we must bring merchants a possibility to reach a settlement with their creditors and the opportunity to reschedule their debts.
Creditors see in the fear of imprisonment an opportunity. Because they know they can use this as a tool to exercise more pressure over the merchant or business owner. In fact, creditors tend to discard settlement proposals without rational arguments, and this is a factor which leads to the collapse of once upon a time well-established businesses.
The slowdown we are passing through is due to a problem of confidence. The unique way to contribute to bettering this situation is by sending strong signals of confidence to the market, which can only be sent by the decriminalization of bounced cheques and a bankruptcy law — confidence is the key to solve this puzzle.