ME PoV Summer 2020 issue

On pandemics and history

About this issue

It’s a good day to be a historian.

Historians can see events with more alacrity. As Niall Ferguson, economic historian and senior fellow at the Hoover institute at Stanford University put it: “Historians are more alert to these disasters because they spend their time studying disasters. We are sensitized to this kind of risk.” While they are able to stave off panic with a been-there-done-that mindset, historians are also able to resist being drawn to unrealistic expectations: “There’s no way this is going to be a V-shaped recovery,” says Ferguson, referring to projections of economic growth by some governments and investment banks.

But while it may still be early to prognosticate the end of the world as we know it, the effects of the COVID-19 pandemic and the panic it has wrought have been huge. And who is bearing the biggest brunt, be it businesses or the common folk, or even countries as a whole, is moot. As put by Soughit Abdelnour in her article Signing the pact: “The pandemic escalated matters with the once controversial and blurry line between work and life completely vanishing, and work seeping into people’s homes […] affecting not just their physical wellness with the extra-long working hours, but more importantly, their mental health.”

The effects of the pandemic have not only blurred the lines between work and life, but also taxes. Abi Man Joshi, in his article Pillars in cyberspace, writes that “while some tech companies prosper due to the work-from-home environment, the international tax community is clamoring louder for the imposition of a digital tax as the government authorities are facing growing budget deficits.” Tax authorities in various countries have been confused too according to Wissam Merhej and Fernando Costa. In their article Taxing Covid the authors write: “With strict quarantine guidelines and so many restrictions in place as regards the movement of people, companies and individuals raised concerns about the tax implications on cross-border workers and other related cross-border matters such as tax residency, permanent establishment, and right to tax, among others.”

Mustafa Ibrahim and Michael Yehya voice concern over the effects of the pandemic on the GCC countries’ plans to diversify their economies. “Combining competitiveness with a strong and diversified economy contributes to the positioning of these countries as key destinations to do business on a global level,” they write in their article Changing mindset, “what remains to be seen is how things play out in terms of existing plans, given the altered nature of the global business environment that has risen as a result of the widespread COVID-19 virus.”

Perhaps it is not all bad news. One effect of the current work order is a conversion of the skeptics to the better uses of technology. In his article Auditing disruption, Haseeb Akram writes: “From data analytics to blockchain technology to artificial intelligence, auditors must continue to harness technology for better and more informed decision-making.”

Another area where technology is proving its worth is compliance. In their article Follow the money, Ralph Stobwasser, Nipun Srivastava and Saad Qureshi write that in terms of source of wealth corroboration, “digital technology solutions can improve the effectiveness of the remediation programs while helping to reduce operational costs, client interaction and human error. Due to more accurate reporting and monitoring, FIs have a more comprehensive understanding of their risk portfolio.” 

Whatever the speed of technological growth before the pandemic, prompting anxiety in some families with younger children, the pandemic has accelerated it. As concluded in the article of Tamer Charife and Mohamed El Nems, Cyber smarts: “Connectivity is here to stay, don’t fight it! Control it in your family’s best interests.” The authors offer tips for parents to keep their children safe in cyberspace.

As concerned as we are with COVID-19, it is refreshing to note that the world still moves on. The show, as Queen famously sang, must go on. And it does in India where a new notification recognizing the UAE as a reciprocating territory enables judgments issued by the competent courts in the UAE to be enforced in India, and vice-versa. “This update to the Code of Civil Procedure 1908 marks a new milestone in the UAE’s struggle to enforce legislation around non-performing loans,” write Ralph Stobwasser and Nikita Vaidya in their article A new dawn.

For his part, Syed Samar Abbas is concerned with interest rate benchmark reform. “Although the transition from IBOR is not expected before end-2021, the reform will have a major impact on financial products already being offered and the risk management approaches adopted by financial institutions and corporates,” he writes in his article Beyond IBOR: An important paradigm shift for markets.

It is said that it is in times of adversity that one’s true character shows. Can the same be said of companies? Pandemics take a while, says Niall Ferguson, they come in several waves. He knows that, of course, because he’s a historian. The German philosopher Nietzsche believed that perhaps the best use of history is an understanding of the past to build a better future. That will be the task of governments, companies and individuals today.

Signing the pact

Over the last two decades, the make-or-break for organizations has been the ability to attract, develop, and retain talent. The so-called “war for talent” has become a constant strife for companies competing to hire the best talent with the hopes that this talent will help them identify potential threats and uncover new opportunities; in other words, contribute to their survival and growth.

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Pillars in cyberspace

Consumers in the Middle East region apply their smartphones each day for online research, e-shopping, GPS navigation, and social media. The ongoing digital transformation spurs innovation, generates efficiencies, and improves services while building sustainable growth and enhancing well-being. However, as the digital economy grows, the taxation complexities facing digital businesses grow also. 

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Auditing disruption

A number of new technologies such as radio-frequency identification (RFID), in combination with advanced wireless services have now enhanced the ubiquity of the internet—it is accessible from almost any point—as well as its mobility—it is accessible from small, portable hand-held devices. 

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Beyond IBOR: An important paradigm shift for markets

In July 2017, the UK Financial Conduct Authority (FCA) reported that the London Interbank Offered Rate (LIBOR) will be phased out as the interest rate index used in calculating floating or adjustable rates for loans, bonds, derivatives and other financial contracts by the end of 2021. But with LIBOR underpinning approximately US$350 trillion in financial products globally, what are the implications for businesses?

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Changing mindset

Investors around the world are exploring destinations that maximize returns or create cost efficiencies via: proximity to markets, access to technology, finance or natural resources, or the cost of doing business. 

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Follow the money

The UAE’s geographical location, its open economy and status as crossroads between the East and West, exposes it to increased risks. The recently published Financial Action Task Force (FATF) Mutual Evaluation Report1 complimented the UAE on demonstrating a high-level of commitment to better understand and mitigate its money laundering and terrorist financing risks. However, the report also highlighted gaps in the effectiveness of the financial crime controls in the country, which may impact its development as a global financial and business center.

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Cybersmarts: a parent’s guide

The Internet has created a world within our world, building a cyberpathway that parents may sometimes find difficult to navigate. But it doesn’t have to be complicated say these authors. Most often what works in the real world works in cyberspace. Here’s how parents, like their kids, can have cybersmarts.

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A new dawn

On 17 January 2020, the Government of India issued a new notification recognizing the UAE as a reciprocating territory1. This update to the Code of Civil Procedure 1908 (CPC) marks a new milestone in the UAE’s struggle to enforce legislation around non-performing loans (NPL) as it enables judgments issued by the competent courts in the UAE to be enforced in India, and vice-versa. 

Click here to read the full article

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