The local IT trade has been hit by a spate of bounced cheques during the last few weeks brought on by a steep fall in demand from Iraq and Iran.
The problems were created by some major orders from these markets being cancelled at the last minute, primarily because of the unfolding situation in Iraq.
According to market sources, not a day has gone by without at least one bounced cheque emerging from the information technology sector during the period. This being the case, the extent of unpaid bills in the IT market may have swelled to Dh20 to Dh30 million.
"Re-export demand has caved in because demand has gone down to zero in markets such as Iraq and Iran. People do not want to spend their dollars, and this has really affected the local trade," said a senior credit manager at a leading international IT distribution house in Jebel Ali.
"There are many local suppliers to Iraq and Iran who are now coming back to us pleading we extend a longer credit period. But this will have dangerous consequences."
It is not as if the problems are confined to the IT trade alone. A leading building materials group in Dubai confirmed that they are owed up to Dh25 million from the markets here and in Iran.
Some of the outstandings are over 90 to 120 days, while the firm usually gives only a maximum of 60 days of credit.
Gulf News 2003
