Most govt workers in loan trap

Over the last three years, citizens and residents have suffered four high-spending seasons that have exhausted their budgets, starting with summer vacation and Ramadan and followed by Eid and the start of the new school year.
Economists have warned against the consequences of overspending on the household budgets, noting that 95 percent of government employees have taken out personal loans.
Economic expert Ahmed Pazarah told Arab News that since Ramadan came during the summer, the season was divided into two parts: pre-Ramadan, during which people travel, and post-Ramadan, during which people enjoy Eid. This has put a positive impact on the tourism sector, which grew this year by 30 percent. According to Pazarah, citizens and residents are facing, and will continue to face a severe financial crisis in the coming days due to this month's financial requirements, Eid and the reopening of schools. Because of this and because of high living costs, about 95 percent of government employees are borrowers from banks and about 85 percent of these loans are purely consumer loans rather than loans for investments or projects.
Osama Atargi, human behavior expert, agreed that financial stress is significant for many consumers, which manifests as financial crises for the large number of borrowers.
However, he attributed such consumer behavior to the behavior of societies prior to trading and their lack of financial knowledge. He stressed that Arab societies entertain a culture that lacks financial planning and that Arabs tend to spend all their incomes whether or not they have it.
“Therefore, they suffer from financial crises as a result of making bad financial decisions. These negative factors increasingly impact behavior and spill over into family life, creating additional problems.”
Atargi added: “It is for such reasons that we cannot entirely blame the high cost of living and high rates of inflation, as people have the ability to reduce the damage and rectify their situation with good management of their financial resources and with less involvement in long-term obligations that can affect their behavior.”
There are other seasons besides Ramadan, such as summer, National Day, and the spring vacation, known to be periods of high spending, he explained. Ramadan, however, maintains the greatest share of consumption for societal reasons.
Marian Azhari, an employee in the private sector, noted that summer has become a double burden since there is a greater need to purchase gifts with travel plans and ongoing social events. Such expenses are separate and are in addition to those expenses that have to be borne during vacations and upon returning to school.