Whether they continue the lockdown and prioritise public health, or ease measures to avoid an economic collapse that will be devastating for their current and future financial and psychological wellbeing, nations and their leaders will be forced to reinvent themselves. Certainly, it will not be possible for them to return to the broad-based policies that had been put in place before Covid-19, with the virus having already altered the globalised landscape and upended nations’ geopolitical plans.
Even as the large, rich and powerful countries currently struggle to contain the coronavirus pandemic, the International Committee of the Red Cross (ICRC) has warned of its dire consequences on the future of vulnerable countries in the Middle East.
A medical worker prepares to check the temperature of an AFP photojournalist before a COVID-19 coronavirus test in Wuhan in China's central Hubei province. AFP
People queue up outside a fruit shop in Beijing. AFP
A man eats in a restaurant that has only one seat per table and markings on the floor to enforce social distancing in Beijing. AFP
A delivery courier tapes a package along a road in the central business district in Beijing. AP Photo
A man walks past bronze bull statues along a business street in Beijing. AFP
A vendor waits for customers at a market in Shenyang in China's northeastern Liaoning province. AFP
A security guard in Personal Protective Equipment suit gives directions to a passerby during lunch hour in Beijing's Central Business District. Reuters
Office workers wear protective during lunch hour near Beijing’s Central Business District. Reuters
Office workers wearing protective masks walk in a park as people practice boxing during lunch hour near Beijing's Central Business District. Reuters
A worker produces face masks at a factory in Shenyang in China's northeastern Liaoning province. AFP
The ICRC has also noted that these nations are vulnerable not just due to their poor health and social infrastructure, but also because they are susceptible to violent social and political unrest as a reaction to their respective governments’ inadequate response to the crisis.
Iran, despite being one of the first countries in the Middle East to be hit by the coronavirus, has discovered that even in these circumstances, the US will not lift sanctions and Europe will not circumvent them. Tehran could well be upset by this reality, but it may also have concluded that unless it changes its regional policies, as well as its nuclear and ballistic missile programmes, the sanctions will remain in place.
The question, therefore, is whether the pandemic will force the region’s countries to reconsider their policies and reinvent themselves in order to save themselves. One problem is that global powers will be less capable of coming to their rescue due to their focus on the devastation in their own backyards.
In the post-Covid-19 brave new era, countries such as China, Russia and the US – as well as members of the EU and the G20 – will be forced to submit to radical reforms, both locally and globally.
Reform could also be waiting to happen within global institutions, such as the United Nations and its various agencies – including the World Health Organisation. President Donald Trump’s decision to suspend US funding for the WHO – in a protest against its alleged bias towards China – has been met with positive and negative responses within that country. The reaction outside the US has mostly been negative – irrespective of whether Mr Trump was justified or not in taking such action – given the realisation that we are all in this together.
Supranational groups such as the European Union have also been seen to be wanting in their ability to deliver solutions. The 27-nation bloc can no longer pretend as if nothing has changed following Brexit and the spread of Covid-19. Few will doubt the EU is facing huge economic, political and social challenges at the moment.
The dynamics that prevailed before the pandemic within the Group of 20, or G20, cannot continue to exist either, while the Gulf Cooperation Council (GCC) will find an opportunity to review some of its policies amid shrinking oil prices – due in large part to the glut in oil supplies, which can be attributed to a collapse in the demand for hydrocarbons in the wake of the global viral outbreak.
GCC ministers met via video link. Wam
Dr Andrei Fedorov, former deputy foreign minister of Russia and chairman of the Fund for Political Research, expects oil reservoirs to be nearly full in Russia, the US and everywhere else in the world – to the extent that these countries will be “obliged to get rid of it at any price even if the oil price goes down to zero” and the reason is that “you cannot stop production in the pipelines”. He added that this could happen in four weeks, and therefore, “by the end or mid-May, there will be a new oil crisis if it is not possible to go back to oil production”. He warned that if we get to the zero-point in May, “there will be no chance to restart the world economy without heavy losses”.
Most world leaders are moving with extreme caution, fearing they could squander a chance to restart the world economy, and expedite collapse.
May seems to be the month when most leaders hope to see a return to work and a gradual reduction in unemployment that has especially been devastating for the US, where more than 20 million people are claiming jobless allowances. The stakes are high, including Mr Trump’s re-election chances later this year. There is also concern of the adverse impact of America’s continued lockdown on other economies around the globe. “If the US economy is not reopened soon, this will kill the world economy,” Dr Fedorov said.
Iranian army commander-in-chief Abdolrahim Mousavi speaking during an army parade in Tehran. AFP
For its part, he added, “Russia is unable to play a role in the global economic agenda because of oil as well as the impact of the global economic crisis”. For this reason, there is talk in Moscow about reformulating the priorities of Russian foreign policy as the global conversation focuses on assessing how the coronavirus has impacted globalisation and the world economy.
There is, of course, an opportunity to restart the economy between the months of May and September – instead of keeping everything on lockdown indefinitely. But with fears of a second wave of the pandemic in China in the autumn season, many world leaders will be expected to formulate plans accordingly but also fearing for the future.
Raghida Dergham is the founder and executive chairwoman of the Beirut Institute
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
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.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion
6pm: Al Wasl Plaza – Handicap (TB) Dh95,000 (T) 1,200m; Winner: Jadwal, Dane O’Neill, Doug Watson
Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
