This article was first featured in Gulf News on the 3rd June, 2011
The last time I gave a talk at a university, I admit to getting sidetracked. Barely a few minutes into my speech, I noticed a group of three young girls in the audience, adorned head to toe in a plethora of luxury brands.
A recent study in the UAE reveals that local teens spend about $103 (Dh378) per week, nearly four times the $28 global average. In fact, the UAE comes in at second place globally after Norway in terms of youth spending. A more worrying reality is that many youngsters live far beyond their means, taking out incredibly large loans to splurge on superficial demands. Interestingly, young men take out higher loans than women, spending most heavily on luxury cars and mobile phones.
I see this trend all around me, at malls, schools and, to my utter surprise, even at clinics. Several weeks ago, whilst I sat in a waiting room for my turn, I noticed a girl, not a day over 17, looking through her bright orange Hermes bag. Baffled, I asked myself if this was the appropriate place to be carrying a bag that costs over Dh40,000. Luxury brands seem to have lost their value in the midst of these circumstances, as the novelty and days of saving to buy something special are in decline.
There is no escaping the social issues that surround residents of the Gulf. I’ve wondered about the rationale behind teenage addiction to high-end products, rather than carry a practical duffle bag to college. It seems that peer pressure is one of the reasons, demanding conformity to a certain group, and as we come from very small communities, keeping up with the Jones’ is a constant challenge. We all know how growing up can be a demanding enough experience, and most young people understandably do not wish to stand out and look odd. So if one part of a group is opting to show off by driving a fast expensive car, others will follow. If they do not have the means to be backed financially, they will opt for the quite easy choice of taking out a hefty bank loan. This is a very dangerous path to take, as the problems that come with debt — in extreme cases jail sentences — should be the last thing a young person ought to be dealing with.
The fact of the matter is that there is no borrower without a lender. The responsibility lies equally with the banks and their lending policies. In addition to already strict lending policies, perhaps more needs to be done, including educating future borrowers on the terms and consequences of these debt contracts. Borrowers need to understand that the money on loan will eventually have to be paid back, with interest. I wonder how much of this is grasped by Generation Y as they sign on the dotted line.
Lessons at a young age
Perhaps a lot has to do with what lessons are taught from a very young age. As a parent, instilling a respect for saving from a young age is prudent, no matter what social background one stems from. Learning the value of money, and living within one’s means are lessons that protect a child later in life when faced with options such as borrowing and credit. One of the world’s richest men, Warren Buffet, is known to have said that there are only two things worth getting into debt over, one’s education and house. These lessons would further imbed the values that sustainable pleasure and happiness are rarely achieved through the pursuit of material objects.
Many argue that this phenomenon of extravagance relates to the Gulf economies. A few decades ago, pre-oil, life was indeed simpler and priorities were those of survival — luxury attire was not even an option for adults, let alone a teenager. In reality, things have changed at a global level, and we are more a consumer-driven society today than any other time in history. The Gulf’s set of circumstances are amplified by a higher concentration of wealth in a smaller geographic area. This results in sizeable disparities that further accentuate the issue.
It needn’t be this way. Young people at college can live the carefree life they deserve, concentrating more on their studies and the real pleasures of life, not having to worry about the next haute couture outfit in their wardrobe. It only requires instilling different values into them from a very young age. What a difference this would make if everyone shared these attitudes.