A buffalo and fishing boats in Iraq's receding southern marshes in Dhi Qar province. AFP
A buffalo and fishing boats in Iraq's receding southern marshes in Dhi Qar province. AFP
A buffalo and fishing boats in Iraq's receding southern marshes in Dhi Qar province. AFP
A buffalo and fishing boats in Iraq's receding southern marshes in Dhi Qar province. AFP

Cop28 is an ideal opportunity to help Iraq, Syria and Yemen access climate funds


Nick Webster
  • English
  • Arabic

Vulnerable Middle East countries affected by conflict should be offered easier access to global finance to help mitigate the effects of climate change, humanitarian experts said on Thursday.

In a joint report focusing on Iraq, Syria and Yemen, the International Committee of the Red Cross and the Norwegian Red Cross said the combined effects of climate change and armed conflict were creating an alarming mix of humanitarian crises.

Despite their vulnerability, countries plagued by conflict are almost entirely excluded from meaningful financing to mitigate the effects of climate change, the report said.

An adviser to the UAE Cop28 team and the ICRC has called for a global pact to streamline the application process for climate finance to be high on the agenda of discussions for the global climate change conference at Expo City Dubai in November.

“Those most vulnerable to climate change and affected by conflict receive the least of the climate finance action,” Helena de Jong, a senior adviser for the UAE Cop28 team told a forum in Dubai to discuss the Red Cross report.

It is difficult working in countries affected by conflict when there often isn’t even a banking system you can trust
Clare Dalton,
ICRC

“This is a very serious problem, as it becomes a vicious cycle of conflict and climate change that governments struggle to deal with.

“This is something we would like to see change but it is not easy and is a complicated problem.

“The advantage of focusing on this as the Cop28 presidency is that we can talk with all these climate finance profilers, to the multilateral development banks and to the humanitarian and peacebuilding actors in this space to bring all of them together to look at the solutions,” Ms De Jong said.

The Climate Funds Update database, which collates information from 27 UN, World Bank and other multilateral funds, listed only 19 single-country projects in Iraq, Syria and Yemen that have been approved for funding as of January 2022.

The total amount disbursed to date is just $20.6 million, according to the report, less than 0.5 per cent of the money spent on climate projects worldwide.

“It won’t happen overnight and it won’t be all different after Cop28, but we want to see a big step forward,” Ms De Jong said.

“My dream outcome would be to have some global pact that all these actors will sign up to that does not include just principles that we all agree on, but would also include solutions to these issues.”

Extreme weather events such as drought and intense rainfall are becoming more common in the region, as are high temperatures, while access to fresh water is dwindling.

Long, drawn-out conflicts have undermined institutional capacity in environmental governance and taken a toll on natural resources.

The dry bed of a drought-affected reservoir on the outskirts of Sanaa, Yemen. EPA
The dry bed of a drought-affected reservoir on the outskirts of Sanaa, Yemen. EPA

While access to clean water becomes more challenging, livelihoods are disrupted and health problems such as malnutrition, water-borne diseases and respiratory illnesses become increasingly common.

The UN ranks Iraq, still recovering from decades of conflict, as one of five countries most affected by the effects of climate change, including drought.

Syria is also at heightened risk after more than a decade of war that has battered the country's infrastructure.

Clare Dalton, ICRC head of delegation in the UAE, said more support for areas affected by conflict should arise from discussions during Cop28.

“Our hope is that climate financing is better directed to countries experiencing conflict in ways that they can actively apply and use it,” she said.

“The big challenge is knowing why this is not happening already.

“It is difficult working in countries affected by conflict, when there often isn’t even a banking system you can trust. There are many factors.

“It takes all parts of society and sectors to address this.”

One region exposed to humanitarian challenges highlighted by the Red Cross is the Ahwar of Southern Iraq – also known as the Iraqi Marshlands.

Located on the crossroads of conflict and environmental degradation during the 1990s, the region was dried to punish the opposition during the civil war.

The effects are still felt today, with water levels and quality now much lower, affectinf agriculture and biodiversity.

According to the 56-page report, current climate finance distributions almost entirely exclude the most fragile and unstable places.

That must change after Cop28, Ms Dalton said.

“We all know this needs to happen, the question is how,” she said.

“It should not just be addressed in formal negotiations [at Cop)]but the UAE can become a platform and provide a space for actors to come together to address the issues.

“Places like Somalia, Yemen and Iraq all need this support.”

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

If you go

The flights Etihad (www.etihad.com) and Spice Jet (www.spicejet.com) fly direct from Abu Dhabi and Dubai to Pune respectively from Dh1,000 return including taxes. Pune airport is 90 minutes away by road. 

The hotels A stay at Atmantan Wellness Resort (www.atmantan.com) costs from Rs24,000 (Dh1,235) per night, including taxes, consultations, meals and a treatment package.
 

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Where: du Arena, Abu Dhabi

When: Saturday November 24

Rating: 4/5

How much do leading UAE’s UK curriculum schools charge for Year 6?
  1. Nord Anglia International School (Dubai) – Dh85,032
  2. Kings School Al Barsha (Dubai) – Dh71,905
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  4. Jumeirah English Speaking School (Dubai) – Dh59,728
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Emergency phone numbers in the UAE

Estijaba – 8001717 –  number to call to request coronavirus testing

Ministry of Health and Prevention – 80011111

Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre

Emirates airline – 600555555

Etihad Airways – 600555666

Ambulance – 998

Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries

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The flights: South African Airways flies from Dubai International Airport with a stop in Johannesburg, with prices starting from around Dh4,000 return. Emirates can get you there with a stop in Lusaka from around Dh4,600 return.
The details: Visas are available for 247 Zambian kwacha or US$20 (Dh73) per person on arrival at Livingstone Airport. Single entry into Victoria Falls for international visitors costs 371 kwacha or $30 (Dh110). Microlight flights are available through Batoka Sky, with 15-minute flights costing 2,265 kwacha (Dh680).
Accommodation: The Royal Livingstone Victoria Falls Hotel by Anantara is an ideal place to stay, within walking distance of the falls and right on the Zambezi River. Rooms here start from 6,635 kwacha (Dh2,398) per night, including breakfast, taxes and Wi-Fi. Water arrivals cost from 587 kwacha (Dh212) per person.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: May 18, 2023, 3:06 PM