Kuwaiti Gov’t: A FREE Collection Agency (Re-post)

Collection Agency? I’m not sure this term rings a bell in Kuwait for a simple reason: the government is doing an exceptional job collecting money for companies. Consequently, this deems the existence of collection agencies unnecessary! The good news: For once our government is actually doing something remarkable. The bad news: It is not supposed to do it!

The arabic headline above is from the front page of Kuwaiti Al-Qabas daily newspaper. It reads, “136 thousand individuals prohibited from traveling- the largest statistic in Kuwait’s history.” So why are these folks banned from traveling outside Kuwait? Don’t rush- we don’t have that much murderers in Kuwait! These individuals simply have some debt outstanding: a phone bill, a credit card balance, a car payment installment- you name it. Yes, this stuff happens in Kuwait. So what’s wrong with the government becoming a forceful and FREE collection agency? A WHOLE LOT.

Doing business entails various risks. One of these is credit risk. The presence of credit risk inherently limits the amount of risk companies take when they extend credit to individuals. Without it, companies will give credit to virtually anyone regardless of their credit history/financial abilities. Companies operating in Kuwait don’t need to worry about the ability of a client to pay their bills because if they don’t, they can’t travel and you know how much Kuwaitis relish traveling! Not only that, but they can even go to jail.

By doing this, our government is endorsing companies to overwhelm Kuwaitis with credit. A car dealership will sell a Porsche to an underprivileged young man, banks will provide a low-income earner with a KD 2000 credit card, and mobile phone companies will allow customer bills to reach high levels. Companies are doing all this and more because the collection of their money is taken for GRANTED courtesy of the Kuwaiti government!

And then of course you have Parliament members ask our one and only spoiling government for debt forgiveness. Rather than focus on the end-result, Kuwait’s parliament members should tackle the causes of Kuwaiti indebtedness which I believe partially stem from our government’s role as a free collection agency.