Arab News reports that there are currently 300 Saudis now in jail because they are unable to pay their civil debts. Debtors’ prison is a concept on its way out in the Western world. In the US, for example, it is only debt that results from court proceedings that are likely to lead to jail. But in the Arab Gulf States, it’s not uncommon for debtors to be jailed until they pay off their debts.

How, exactly, this is supposed to work is indeed a question. While in jail, a debtor isn’t usually capable of earning money with which to pay off those debts. It’s left to the debtor to seek funds from friends and family, if that’s at all possible. The article notes various schemes (all poor choices) Saudis are employing to keep one step ahead of the bill collectors. It notes, too, that six Saudi women are in jail for debts. These women, all previously employed, were forced by their husbands to take out loans in their own names. When the loans went unpaid, the women were jailed.

Here’s another area in which Saudi legal reform could make a difference.

60,000 Saudis unable to repay their debts

About 60,000 Saudis are unable to pay off their loans, said Abdullah Marei bin Mahfouz, chairman of the Jeddah branch of the national committee for the care of prisoners and their families.

Bin Mahfouz said that currently about 300 Saudis are imprisoned in the Kingdom who are unable to settle their bank debts. In addition, about 500 prisoners are unable to pay off credit card debts, and car installments.

Between 2009 and 2011 the increased effectiveness of the payment system — which protects the rights of banks — contributed to lowering the number of people who borrowed money to buy consumer goods, he said.

“I think Saudis are becoming more cautious about getting indebted due to the strict procedures that banks are following. Still, too many Saudis make debts to fund their summer vacation or to buy a luxurious car,” he said.

He added, “The majority of Saudis who are unable to refund their debts, start looking for another source of money, like car companies. They buy two or three cars on an installment system. Then they sell these cars for cash. In most cases the borrowers are unable to refund the car installments.

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