The emirate of Dubai is named after the daba, a desert locust that eats everything in its path.
For three decades, Dubai gorged first on oil, then on credit. Swarms of expatriates — reportedly as many as a thousand a week — came to the feast.
But with the global credit crunch of 2008, the consumption came to a gut-sickening halt. Dubai was revealed — it really is a city built on sand.
Quicksand, as it turns out. Those sucked in found it difficult, and in some cases impossible, to get out.
But Dubai pre-2008 is another story. It is jokingly referred to as South Africa’s ‘tenth province”.
Thousands of skilled professionals made their way north to the shores of the Arabian Gulf in the expectation of long-term or permanent work. They eventually formed one of the largest expat communities in the emirate.
The classifieds in The Sunday Times and other South African newspapers heaved with Dubai-based job vacancies, and local companies such as Group Five and Murray & Roberts cashed in on major construction contracts.
Then, all of a sudden, construction simply stopped and building sites emptied out within weeks.
Claire Waterhouse, a South African student whose parents have worked in Dubai since 1997, used to buy several hundred cold Cokes in summer ‘to give as a small token to the workers who are forced to work through the heat, which is awful, often 48°C or more,” she says.
But in 2009, she had to search six construction sites ‘that would normally have been buzzing” before finding any workers.
Skilled workers were not immune either. Group Five recalled two thirds of its mid- to senior-level back to South Africa between April and May 2009, according to human resources (HR) director Junaid Allie.
Allie also confirmed an even more troubling side to the economic downturn — one of Group Five’s South African nationals was arrested and prevented from leaving Dubai because of bad debt.
Like the multiheaded dog Cerberus, who guards the entrance to the underworld by simultaneously looking both ways, Dubai’s debt laws are a dual combination of oldworld conservatism and new-world liberalism. On the one hand, Islamic sharia law disapproves of loans, interest and debt.
Local Emiratis conduct most of their business in cash or by cheque; until recently, there was no credit bureau in the United Arab Emirates (UAE). The penalty for bankruptcy is jail.
But expats, on the other hand, arrive without assets and need to pay for vehicles, furniture and their biggest outlay — rent. It is customary to pay a year’s rent in advance and, during the boom years, this could amount to as much as 100 000 dirhams (R200 000) for a two-bedroom flat.
The banks offer credit out of necessity but, in the absence of a credit bureau, protect themselves by insisting on a security cheque to offset any defaults.
Lose your job, fall behind on your credit payments, bounce your security cheque, and you are effectively a criminal who can be jailed. Again, just like Cerberus at the gates of Hades, the law makes it easy for expatriates to enter, but much harder to leave.
Yacoob Abba Omar, the South African high commissioner to the UAE, said in an email this week that ‘it is very difficult to give any authoritative figure” for the number of South Africans living in Dubai, let alone those languishing in debtors’ jails.
But many in the community say there are more than a handful of South Africans who have been detained in Dubai for defaulting on their debts.
Omar would not confirm this.
‘As you can imagine people do not want any information of their imprisonment to be publicised,” he wrote.
‘So my response is as follows: we are aware of only one.”
Jan de Wachter, a Dubai-based South African HR consultant, knows a South African woman who was arrested with her children when she tried to leave Dubai for a holiday in South Africa: ‘It turns out she fell behind in her credit-card payments with Barclays and her husband’s company had to pay the full outstanding amount before she was released or sentenced.”
The children, all under age, were allowed to continue on to South Africa, while her husband travelled ahead hastily to receive them at OR Tambo International Airport.
Martine Schaffer, the managing director of Homecoming Revolution — an NGO that assists South Africans living overseas to return home — says that she has received similar reports.
But nobody with first-hand experience of a Dubai debtor’s jail would respond to the Mail & Guardian‘s requests for an interview. ‘Pride plays such a big part in people’s decisions to keep quiet,” Schaffer says.
Christine Botes, who is back in South Africa after a disastrous 18- month stint in the emirate, was willing to talk about her experience. Botes, a single mother of two twenty-somethings, says she ‘did a quiet duck” from Dubai in February last year, having lost her job, maxed out her credit cards and finally defaulted on her loan repayments.
She said it would take her three years to write off the debts she accrued in Dubai and South Africa. As an HR manager, Botes knew Dubai’s laws well, and knew exactly what could happen to her next.
In a short while, her former employer would cancel her work visa, cashing in on a 4 000 dirham government rebate, and then she’d be stuck, and possibly jailed.
With the banks hounding her, Botes ensured her children had left Dubai a few weeks beforehand, then locked her three-bedroom villa and asked a friend to drive her to the airport. At 4 o’clock in the morning, Botes calculated that customs officials would probably be at their least alert.
‘After I went through passport control, they couldn’t touch me. I phoned the friend who’d dropped me off and said, ‘I’m free’.
Back in South Africa, Botes relied on the kindness of friends and family for eight months, while she looked for work. ‘If it wasn’t for them, I don’t know where I would be — probably in a pondok [shack] by the side of the road.”
She couldn’t even afford the R400 monthly storage fee for the belongings she’d packed away before she left South Africa.
It’s a long way from the giddy glass and gleaming glitter of Dubai to the Panado-popping predictability of Kempton Park, where Botes now sits on her couch, cradling her pooch, Poplap, on one knee.
‘At first I felt like a real criminal,” she says, ‘then I sat, did some calculations, and thought, ‘Bugger this! I’ve left a freezer and cupboards full of food behind, as well as a house full of brand stinking new furniture’.”
But was it enough to cover her debt? ‘The debt wasn’t astronomical,” she says. Between two credit cards and her rent loan, Botes owed 55 000 dirhams (R110 000). The loans came from the bank owned by her former employer who, Botes says, still owes her one month’s pay.
‘Given what they owe me, I actually have no qualms about leaving at all,” she says.
But these days Dubai’s debt laws are changing slowly. A new credit bureau is one measure. Another is the realisation that you can’t jail everybody.
‘Creditors and banks initially opened criminal cases in almost every instance of bad debt or bounced cheques but subsequently they seem to have realised that imprisoning their debtors is the least likely means of recovering their money,” says Angus Hayes, senior legal counsel for a UAE-based newspaper, Gulf News, in an email.
‘The police also became so overloaded with bad-debt cases that they began acting on them a lot more lethargically.”
Meanwhile, back in Homecoming Revolution’s Johannesburg boardroom, Schaffer leans across the table, her sky-blue earrings swaying with faint agitation, and says: ‘You know what? The grass isn’t always greener.
The bubble may have burst over there already, but people must still be warned about what can go wrong.”