Mustafa Alrawi: UAE bankruptcy law to help break our fear of failure
The Silicon Valley mantra “fail fast, fail often” has become part of its mythology, a phrase used and abused, as normal people are hyped up into super business beings. Failure goes against our basic natures, we cannot invite it, but it is a reality of the business world.
There will be times when an idea, no matter how well conceived and executed, just does not work. Acknowledging this reality, many have hesitated before starting their own business here, knowing that failure could lead, in the worst cases, to jail if debts go unpaid and cheques bounce.
This has been a pretty daunting obstacle in the way of efforts to increase the number of small and medium enterprises and their contribution to the UAE economy. The policy is sound – more people starting their own businesses supports economic growth and reduces public sector employment, which frees up the government to invest elsewhere, adding further stimulus.
To help this policy work, changes have needed to be made. The bankruptcy law is one of those critical reforms; the legislation will, once enacted, give protection to companies, their directors and employees, in the case of insolvency. And it could be passed in a matter of weeks, according to Obaid Al Tayer, the UAE Minister of State for Financial Affairs on Tuesday.
It is difficult to overstate the significance of this move but equally hard to gauge how much of an impact it will have in the short to medium term. Will there be a sudden flowering of entrepreneurial spirit that launches hundreds of new businesses? Will banks and institutions rush to lend again? Most likely the momentum will take a little time to build but once it does we will tip into a dynamic and exciting era, reminiscent of the early days of the property boom a decade ago. Thousands will hear the call and we will all be better off for it.
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Published: September 6, 2016 04:00 AM