EVERY year when the holy month of Ramadan approaches, donation campaigns begin in order to pay the debts of those in financial distress and those burdened by debt. These campaigns have become an annual habit that portrays the State as incapable of resolving this easily manageable crisis, only if there is a strong will. First of all, we must put things on the right path.
The debtors languishing in prison for their inability to pay their debts are victims of the greed and avarice of some merchants. Second, the State granted numerous loans to countries struggling to pay these loans. The government restructured most of these loans and even converted some of them into non-refundable grants. Therefore, we ask: Is it the policy of Kuwait to help foreigners while depriving its own people? Third, the total debt of individuals does not exceed KD2 billion.
This figure may seem large, but it looks very tiny when compared to the debts of other nations. Fourth, more than 120,000 citizens are subject to court rulings due to financial cases. This fact must set the alarm bell, as it means that 10 percent of the population is facing legal action. So, this matter must be resolved, because the negative social consequences are serious and threaten the society, if left unaddressed.
Fifth, State institutions should not become debt collectors for creditors who provided their money as loans without taking the required guarantee. The legal rule, which we have mentioned previously and reiterate here, stipulates that “he who squanders his money is more entitled to the loss.” In other words, a person who neglects to safeguard his money bears the consequences of his negligence and he has no right to demand for compensation from others. This rule is derived from the Islamic legal principle, “He who squanders his money is more entitled to the loss.”
Nevertheless, the State must close this file. Solutions exist, such as the government purchasing the debts of indebted individuals and allow them to pay the debts in installments divided into 30 years, just as it does with housing loans and other loans offered by the government. With this solution, the State encourages consumer spending on one hand, and eases the burden of citizens on the other one hand.
For example, if the loan amount is KD30,000, the borrower will pay KD1,000 annually. This is an affordable installment plan that does not burden the debtors or force them to borrow again. We should consider the fact that bank loans are not included in this calculation, as they are secured by collateral, which is a form of guarantee. This differs from bounced checks signed by the beneficiary due to their need for money for the treatment of a family member or pay for educational expenses.
The lender exploits the borrower’s difficult circumstances, granting the loan at high interest rates, relying on State institutions to ensure he receives his due in one way or another. In this manner, the relevant government agencies seem to be protecting the usurer. I have mentioned several times that issuing bounced checks is no longer a crime in advanced countries, or even in developing countries.
This is what Saudi Arabia, Jordan, the United Arab Emirates (UAE) and Tunisia have done. For decades, most European countries, as well as the United Kingdom, France and Ireland, have abolished penalties for issuing bounced checks. Disputes arising from bounced checks are now resolved through civil channels, unlike in Kuwait, where official agencies act as debt collectors for creditors who have misappropriated funds.
Moreover, donations are ineffective because they are insufficient. The collected donations are not enough to solve the problem, they rather exacerbate it and even the social problems. Consequently, the government must take a decisive action. It must address the suffering of 10 percent of the Kuwaiti people.
