The Bankruptcy Committee published on its website that the total number of announcements published on its official website during June 2026 reached (60) announcements, including (30) announcements of opening bankruptcy proceedings, and the remaining announcements are decisions and notices issued during different stages of the proceedings. The bankruptcy system includes various procedures that correspond to the different circumstances of establishments, such as protective settlement, financial reorganization, liquidation, and administrative liquidation. As the committee's statement on its website indicated, these do not necessarily mean the exit of establishments, but sometimes mean requesting temporary protection from creditors (protective settlement and financial reorganization) so that the viable establishment can address its financial situation and continue its activity. The statement concluded.

In this regard, I would like to say that bankruptcy in the corporate world is very natural, indeed inevitable as an average in any economy. There is no economy where some of its companies have not faced severe financial problems. Since ancient times, we have read about merchant bankruptcy, but in the modern era, bankruptcy tools have been developed that protect against company collapse, and even provide an opportunity for reorganization so that the company can survive, then reform, return to work, and pay off dues.

In a published report on bankruptcy statistics worldwide, global bankruptcy cases rose to a peak over 12 years, recording a compound annual growth rate of 5% during the period 2012-2024. However, after the pandemic, the rate of increase in bankruptcy cases doubled, as the compound annual growth rate over 4 years (2021-2024) reached 10%.

The report also indicates that between 2023 and 2024, the largest increases in bankruptcy cases were recorded in Ukraine (126%), Singapore (40%), Belarus (39%), Australia (37%), Canada (35%), Romania (35%), and the Netherlands (30%). In contrast, the largest decreases were recorded in Greece (-48%), Colombia (-43%), China (-31%), and Russia (-26%). The difference between the situation in Russia and Ukraine may be noted.

Overall, in 11 economies out of 47, corporate bankruptcy cases in 2024 reached their highest levels in more than 5 years, reaching a 12-year high in Canada, France, Poland, Sweden, and the United States, and a decade high in Australia, Japan, Spain, and Switzerland. The report also notes that between 2020 and 2022, the average number of bankruptcy cases decreased by 16% compared to pre-pandemic levels (2018-2019).

This is also natural, as government support and creditor leniency toward distressed companies helped them survive for a while, but without addressing structural problems. However, this support does not create a solution and is not a sustainable situation. With the decline of political support coinciding with rising interest rates, bankruptcy rates have been rising again since 2023 and accelerated further in 2024, causing corporate bankruptcy cases to reach their highest level in more than a decade.

The global report confirms that the retail, hospitality, and construction sectors are facing difficulties, due to structural changes in consumer spending and the high cost of project financing. OECD data shows that 70% of economies with available data experienced a decline in retail sales in 2024 compared to 2022.

Companies that failed to effectively integrate e-commerce face difficulties in competing and attracting consumers, while companies that adopted full digital transformation face similar challenges with loss of credibility and shoppers returning to traditional stores. The issue is a middle ground between the two. The report concludes that risk management has become a priority for those who wish to survive.

Bankruptcy is a natural global phenomenon that varies between countries, and even between economic periods within the same economy. However, bankruptcy is not a macroeconomic issue but a microeconomic one, meaning that the cause always lies in the way companies and entrepreneurs respond to structural problems they face in markets or in the correct application of administrative thought that prioritizes risk management.

The matter is not just entrepreneurship and adventures or winning temporary government support; the issue lies at the heart of business administration theory. Problems generally appear in one of four main components of the theory: either in the institutional theory itself, where institutions fail during the formation or transformation stage, or both. They fail to classify themselves, define products, markets, customers, suppliers, or funders, or during the transformation stage by adopting the form of joint-stock companies while unprepared for it. Companies may succeed in this formation stage but fail in applying organizational theory, where organizational forces within the company conflict: the board with the chairman, the chairman with executive management, and executive management entering into conflict among its components—a power struggle for control over decision-making, which strips companies of their democratic spirit that keeps them alive and enlightens decision-making.

Companies sometimes fail to build a balanced organizational structure, or fail to implement it. And companies may succeed in both but fail in the stage of building the company or firm theory. Companies exist for one goal: maximizing profit. Companies cannot succeed in maximizing profit (or benefit for the public sector) unless they succeed in building a strong and strict internal control system that ensures a balance between efficiency and effectiveness.

Companies are established to reduce the cost of using human resources, and reduce the cost of distribution, production, etc., by balancing between two options: either through internal or external contracting. Instead of contracting with a transport company, the company's transport department can be developed, but this depends on efficiency and effectiveness. Failure to apply firm theory leads to another failure, the agency problem. Failed contracting causes conflicts of interest and maximizes the benefits of others rather than the company. Companies and institutions in general (public and private) fail and go bankrupt due to their failure to apply one of these four issues.

Ventures may endure for a while, support may arrive in time, they may gain some trust from the family, but in the end, they will not last long. Therefore, I said in a previous article, and I repeat today: Do not support initiators, but rather help them solve the problems that arise due to these four issues. The theory of support for support's sake to improve numbers is incorrect; problems will certainly appear in other numbers. The economy does not favor anyone.

Academic and economic writer.