Saudi Arabia and UAE—Collecting debts is particularly difficult
Euler Hermes index of the debt collection procedures from 50 countries shows the relative difficulty of collecting debts in Saudi Arabia and the UAE. The index looks at payment experience, court and insolvency proceedings from an international perspective. Euler Hermes cite difficulties dealing with SMEs in the UAE. As insolvent debtors may be gaoled, many SME owners disappear when faced with insolvency. A complex legal framework and lack of an insolvency regime also make it difficult to recover debts. In Saudi Arabia, late payment is common practice and late interest cannot be charged. The legal system is also slow and costly.
The scores of Australia’s major emerging market trading partners—China, India and Indonesia—were also constrained by longer payment times, complex court and insolvency frameworks, lack of transparency and/or poor recovery rates. On the flip side, collecting debts in Japan, Singapore, Hong Kong and New Zealand was relatively easy.