Insight and opinion from The National’s editorial leadership
September 15, 2021
Morocco's recent election has delivered much-needed change. "You deserve better" was the campaign slogan of the victorious National Rally of Independents (RNI), led by fuel tycoon Aziz Akhannouch, the new Prime Minister. The now-ousted Justice and Development Party (PJD) had been heading a ruling coalition for 10 years, with an underwhelming record. Last year, the country's economy shrank by 7.1 per cent, while poverty rose to 11.7 per cent. Covid-19 bears some of the blame, but many issues preceded the pandemic and voters punished the PJD at the polls.
Now, the next question is how Mr Akhannouch will deliver. His policy agenda is based on implementing a "new model of development", unveiled by King Mohammed VI, which aims to reduce the country's wealth gap and double per-capita output by 2035. The agenda includes measurable targets for, among other aims, ensuring more than 90 per cent of children learn elementary skills in primary school, as well as bringing the informal unemployment rate below 20 per cent, all by 2035. The PJD, on the other hand, preferred to base its legitimacy on populism and Islamist ideology. As many voters understand, the long-term health of society demands a competence-based approach to governance.
Saad-Eddine El Othmani, Morocco's Prime Minister and president of the Islamist Justice and Development Party (PJD) casts his ballot on September 8. AFP
A man casts his vote at a polling station in Casablanca, Morocco. Reuters
The PJD has dominated Morocco's politics for a decade. Reuters
A voter casts a ballot in the capital Rabat. AFP
Polls are banned in Morocco. AFP
Wednesday's elections came as the country grapples with the economic impact of Covid-19 . AFP
Voter turnout in Moroccan elections is usually below 50 per cent. AFP
Official figures show that about three million young people between 18 and 22 registered to vote for the first time this year. Reuters
Morocco adopted a new constitution in 2011 in response to the February 20 Movement, the local version of the Arab uprisings. Reuters
The step brought the country closer to a system of constitutional monarchy. EPA
A woman prepares to cast her ballot during Morocco's parliamentary and local elections in the capital Rabat. AFP
Similar sentiments are felt in nearby Tunisia, where President Kais Saied is attempting to push for change by amending his country’s political system. Mr Saied is himself a constitutional lawyer as well as a politician, and is confident he can make overdue improvements without losing the democratic tenets of the constitution. His proposed reforms would be more just and have "more defined responsibilities", according to one of his advisers, Walid Hajjem.
One of the great virtues of Tunisia’s political culture is its pluralism, including its labour unions, some of whom view Mr Saied’s motives with suspicion. In a country suffering from a teetering economy and shaky politics, he must prove to them as quickly as possible that his path forward would boost participation in an increasingly dejected society.
Even with competent leadership, the scale of the challenges ahead is great. Protests over low Covid-19 vaccination rates in Tunisia were severe enough to oust former prime minister Hichem Mechichi in July. They were aggravated further by the country's economic crisis. Youth unemployment is dangerously high, and national debt is more than 80 per cent. It will also need to manage its relations with the US, a crucial aid donor, where some in Congress are pushing for a cut in response to Mr Saied's actions.
Similar issues are emerging in Morocco, where Covid-19 has hurt a tourism-dependent society with high poverty rates. In 2020, the country experienced its first recession since 1995. Mr Akhannouch faces another challenge: getting Moroccans engaged in politics again. The Moroccan Institute for Policy Analysis reports that of the 1,400 people surveyed in an annual trust index, 70 per cent did not trust Parliament.
Both countries are capable of addressing the challenges, even if total solutions are not possible in the short-term. Morocco's problem with disenfranchised voters has now shown that it can be improved if candidates are convincing enough. This time around, voter turnout was up seven per cent, albeit still low at 50 per cent. On the issue of vaccination in Tunisia, rates are finally picking up and daily new cases have dropped significantly since July. As the world opens up after Covid-19, Morocco and Tunisia can be confident that their vital tourism sectors will experience growth.
Restrained political realism will be important for both countries in the coming months. It might be a bitter pill to swallow, but at least it is an honest one. As Morocco and Tunisia have shown, words need to be backed up by action. If both leaders bring change in a constructive manner, competence and practicality will deliver much-needed results.
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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.”
Australia squad: Aaron Finch (captain), Mitch Marsh, Alex Carey, Ashton Agar, Nathan Coulter-Nile, Chris Lynn, Nathan Lyon, Glenn Maxwell, Ben McDermott, Darcy Short, Billy Stanlake, Mitchell Starc, Andrew Tye, Adam Zampa, Peter Siddle
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Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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
THE BIO
Ms Davison came to Dubai from Kerala after her marriage in 1996 when she was 21-years-old
Since 2001, Ms Davison has worked at many affordable schools such as Our Own English High School in Sharjah, and The Apple International School and Amled School in Dubai
Favourite Book: The Alchemist
Favourite quote: Failing to prepare is preparing to fail
Daily cash awards of $1,000 dollars will sweeten the Madrasa e-learning project by tempting more pupils to an education portal to deepen their understanding of math and sciences.
School children are required to watch an educational video each day and answer a question related to it. They then enter into a raffle draw for the $1,000 prize.
“We are targeting everyone who wants to learn. This will be $1,000 for 1,000 days so there will be a winner every day for 1,000 days,” said Sara Al Nuaimi, project manager of the Madrasa e-learning platform that was launched on Tuesday by the Vice President and Ruler of Dubai, to reach Arab pupils from kindergarten to grade 12 with educational videos.
“The objective of the Madrasa is to become the number one reference for all Arab students in the world. The 5,000 videos we have online is just the beginning, we have big ambitions. Today in the Arab world there are 50 million students. We want to reach everyone who is willing to learn.”
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
