Hichem Mechichi has been appointed to form the next government. AFP
Hichem Mechichi has been appointed to form the next government. AFP
Hichem Mechichi has been appointed to form the next government. AFP
Hichem Mechichi has been appointed to form the next government. AFP

Tunisia’s new PM must heal country’s fractures or face costly new election


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  • Arabic

Tunisian President Kais Saied has given the country’s Interior Minister, Hichem Mechichi the task of forming a government after the resignation of his predecessor over accusations of corruption.

Mr Mechichi has a month to form a government capable of commanding a majority across the fractured Parliament, or face a new round of potentially costly legislative elections.

The task ahead is significant. Divisions within the Parliament appear to be widening while economic and social conditions are deteriorating.

His predecessor Elyes Fakhfakh’s government lasted only five months and on Thursday there was a vote of censure against the Speaker, Rached Ghannouchi, who leads the moderate Islamist Ennahda party.

To make Mr Mechichi's job even more challenging, Tunisia has a potential second wave of coronavirus looming.

The IMF in April predicted that Tunisia's economy would shrink by up to 4.3 per cent this year, in the sharpest contraction since independence in 1956.

Unemployment, a long-standing driver of social unrest, is also expected to increase because of the coronavirus pandemic and the loss of this year’s tourist season.

  • Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
    Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
  • Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
    Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
  • Impoverished protest against the general confinement and to claim the financial aid promised by the government. AFP
    Impoverished protest against the general confinement and to claim the financial aid promised by the government. AFP
  • Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
    Impoverished Tunisian citizens gather in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
  • Security forces close the gate as impoverished Tunisian citizens protest against the general confinement and to claim the financial aid promised by the government. AFP
    Security forces close the gate as impoverished Tunisian citizens protest against the general confinement and to claim the financial aid promised by the government. AFP
  • Impoverished Tunisian citizens to protest against the general confinement and to claim the financial aid promised by the government. AFP
    Impoverished Tunisian citizens to protest against the general confinement and to claim the financial aid promised by the government. AFP
  • Protests raged against the general confinement and to claim the financial aid promised by the government. AFP
    Protests raged against the general confinement and to claim the financial aid promised by the government. AFP
  • Tunisian soldiers stand guard in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
    Tunisian soldiers stand guard in front of the headquarters of Mnihla delegation in Ariana Governorate. AFP
  • Impoverished Tunisian citizens gather with their identification cards. AFP
    Impoverished Tunisian citizens gather with their identification cards. AFP

Many were surprised by the choice of Mr Mechichi, with none of the ruling parties including him on their lists of proposed candidates.

"What we are seeing is the formation of a 'president's government' – Kais Saied's government as opposed to a parliamentary one," Sharan Grewal, a visiting fellow at the Brookings Institution in the US, told The National.

“The constitution says that Saied is supposed to consult with the parties in Parliament but it does not specify whether he has to choose someone nominated by a party.

"So Saied is exploiting that ambiguity to put forth his own candidate.”

Few parties want to face with the prospect of more elections in a period of parliamentary unpopularity, Mr Grewal said.

“The other dynamic at play here is that no party wants to take the lead right now," he said.

"The economic forecast is dire and there is little chance that any government will succeed."

In a marked contrast to many of his contemporaries, Mr Mechichi was born to working-class parents in north-western Tunisia.

After training as a lawyer, including a stint studying in Strasbourg, Mr he established himself as one of the country’s early specialists in anti-corruption.

In more recent years, Mr Mechichi served as chief of staff to the ministries of transport, health and social affairs. before being appointed legal counsellor to the president in February 2020.

He was named Interior Minister several days later.

Reactions to Mr Mechichi’s designation appeared divided.

Outside Tunis’s historic medina, shopkeeper Amor Laabidi, 51, appeared less than reassured by Mr Mechichi's appointment.

“I don't know anything," Mr Laabidi, said. "He's been in the ministry for two months now but he’s done nothing. I see nothing.

"I still don't feel safe when I walk in the streets at night. I don't feel safe in my own neighbourhood. I was born here.”

Mr Laabidi was dismissive of Mr Mechichi's chances of forming a government.

“I wish the Parliament would be abolished,” he said.

Malak Mhamdi, 23, a student from the southern port city of Gabes, was more optimistic.

“I don’t know the guy but given the fact that he had been the president’s adviser, he can manage to form a government," Ms Mhamdi said. "I think he has the credibility."

But she said she doubted his ability to handle the country's finances.

“But he doesn’t have knowledge about the economy, the one field that needs revival in Tunisia,” Ms Mhamdi said. "So that can be a huge negative.”

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From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

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The specs

Engine 60kwh FWD

Battery Rimac 120kwh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry

Power 204hp Torque 360Nm

Price, base / as tested Dh174,500 

ESSENTIALS

The flights 
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
 

The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.

Living in...

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.

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Racecard

6pm: The Pointe - Conditions (TB) Dh82,500 (Turf) 1,400m

6.35pm: Palm West Beach - Maiden (TB) Dh82,500 (T) 1,800m

7.10pm: The View at the Palm - Handicap (TB) Dh85,000 (Dirt) 1,400m

7.45pm: Nakeel Graduate Stakes - Conditions (TB) Dh100,000 (T) 1,600m

8.20pm: Club Vista Mare - Handicap (TB) Dh95,000 (D) 1,900m

8.55pm: The Palm Fountain - Handicap (TB) Dh95,000 (D) 1,200m

9.30pm: The Palm Tower - Handicap (TB) Dh87,500 (T) 1,600m

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

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Retirement funds heavily invested in equities at a risky time

Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.

Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.

The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.

The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.

Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.

The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.

• Bloomberg

Electoral College Victory

Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate. 

 

Popular Vote Tally

The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

What vitamins do we know are beneficial for living in the UAE

Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

The specs

Engine: 3.8-litre, twin-turbo V8

Transmission: eight-speed automatic

Power: 582bhp

Torque: 730Nm

Price: Dh649,000

On sale: now  

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'Of Love & War'
Lynsey Addario, Penguin Press

'Worse than a prison sentence'

Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.

“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.

“They were living in perpetual mystery as to how their futures would pan out, and what that would be.

“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.

“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.

“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”

Last 10 NBA champions

2017: Golden State bt Cleveland 4-1
2016: Cleveland bt Golden State 4-3
2015: Golden State bt Cleveland 4-2
2014: San Antonio bt Miami 4-1
2013: Miami bt San Antonio 4-3
2012: Miami bt Oklahoma City 4-1
2011: Dallas bt Miami 4-2
2010: Los Angeles Lakers bt Boston 4-3
2009: Los Angeles Lakers bt Orlando 4-1
2008: Boston bt Los Angeles Lakers 4-2

Brief scores:

Day 2

England: 277 & 19-0

West Indies: 154