Qatar's Emir Sheikh Tamim bin Hamad Al-Thani during a Gulf Cooperation Council summit in Doha. Osama Faisal / AP
Qatar's Emir Sheikh Tamim bin Hamad Al-Thani during a Gulf Cooperation Council summit in Doha. Osama Faisal / AP
Qatar's Emir Sheikh Tamim bin Hamad Al-Thani during a Gulf Cooperation Council summit in Doha. Osama Faisal / AP
Qatar's Emir Sheikh Tamim bin Hamad Al-Thani during a Gulf Cooperation Council summit in Doha. Osama Faisal / AP

Qatar crisis: a regional schism that's been years in the making


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The world seems startled by the seemingly sudden rift between key Arab states and Qatar. Yet the crisis has been in the making for more than a decade.

It is certainly drastic, but there’s nothing remotely mysterious in Saudi Arabia, the UAE, Bahrain, Egypt and others cutting diplomatic relations and suspending many other ties with Doha.

Outrage over Qatar’s conduct has been brewing for many years in a bitter battle of Arab ideas.

Qatar casts Al Jazeera, and its extensive assembly of other media assets, as a breath of fresh air. In the early days, there was some truth to that. Al Jazeera was, at first, new and different.

But it was also always, and mainly, a mouthpiece for political radicalism, primarily of the Islamist and Muslim Brotherhood varieties, but also for old-fashioned pan-Arab nationalism. Every populist, “revolutionary” anti-status quo and downright irresponsible viewpoint was welcome and frequently championed.

The Al Jazeera airwaves were therefore typically putrid.

In addition to marketing them, Qatar funded, hosted and otherwise supported extremist groups — especially those, such as Hamas, that kept one foot in the Arab and another in the Iranian camp. Doha’s ambition is to project its regional influence by promoting radical organisations that strategically deploy chaos, instability and even violence to overthrow existing governments and seize power.

Qatar has thereby effectively meddled in the internal affairs of many other Arab states, including nominal allies.

Indeed, the same countries at the core of the current dispute – Saudi Arabia, the UAE and Bahrain – broke diplomatic relations with Qatar in 2014 and induced Doha to sign a pledge to mend their ways, which has largely remained unfulfilled.

So, there’s nothing new or sudden about these tensions.

In addition, Doha now stands accused of supporting a range of other regional miscreants, including through what the Financial Times says was a $1 billion ransom payment for Qatari royal family members kidnapped in Iraq and rebels captured in Syria. About $700 million reportedly went to Iran and Iranian-backed Iraqi militias, and the remainder, apparently, to Al Qaeda affiliates.

Qatar is being put on notice, in the strongest terms, that all such conduct must finally stop.

Much commentary implies that the confrontation is essentially opportunistic, cynical, capricious or planned. But the extreme measures taken against Qatar by this grouping of key Arab states illustrates how seriously they take the need to rein in Doha once and for all.

These measures are hardly cost- or risk-free. They carry a hefty financial burden for all sides. The consequences cannot be controlled or fully predicted. The present unity, and even the long-term future, of the Gulf Cooperation Council is at stake. But unity worthy of the name is exactly what is being demanded.

Qatar’s massive media arsenal will try to convince people throughout the region, including Islamists, Arab nationalists, some liberals and others around the world, to side with Doha. Many will.

The rift also presents potential opportunities to Iran and its proxies, and other malefactors, who could perhaps find a way of taking advantage of these tensions between Gulf countries.

In short, this is by no means capricious or undertaken lightly. Rather, it is plainly a matter of the utmost seriousness. Otherwise so much would not be placed at hazard to try to bring Qatar, at long last, back into the responsible Arab camp.

Unlike in 2014, though, it won’t be enough now for Doha to sign a document and go back to business as usual.

This time it is being told to close numerous media outlets, retool others, and end the political and religious incitement; expel or muzzle demagogues such as Youssef Al Qaradawi and Azmi Bishara; and stop undermining efforts to contain and roll back Iran’s hegemony and destabilising policies.

Unless it wants to try to defect fully to the Iranian camp, which is unthinkable, Doha’s hopes now seem pinned on American mediation. That seems unlikely: yesterday Mr Trump tweeted that “all reference was pointing to Qatar” for funding extremism.

Mr Trump’s priorities — combating terrorism and confronting Iran — are precisely the two issues that are driving actors in both the Middle East and Washington to pressure Doha to see reason.

American mediation is almost inevitable and can serve the interests of both sides. Washington wants to end the confrontation and is uniquely positioned to leverage both sides. But Doha cannot expect Washington to ignore the clear-cut history and context.

In 2014 Qatar gave way on paper, but its conduct remained largely unaltered. This time Doha must amend its behaviour — and that of its media empire and mouthpieces — or face unsustainable isolation. Arab countries apparently are no longer willing to go through this every few years.

Qatar resists the idea tooth and nail, but its conduct will now surely have to change.

Hussein Ibish is a senior resident scholar at the Arab Gulf States ­Institute in Washington

On Twitter: @ibishblog

Avatar: Fire and Ash

Director: James Cameron

Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana

Rating: 4.5/5

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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

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.”