It was so cold up at the Schatzalp Hotel last weekend that the mineral water was freezing in the carafes before you could pour it in your glass. You could turn the whole thing upside down and not a drop would come out.
We all sat there as long as we could stand it, though, because the art-nouveau Schatzalp is where by tradition every annual meeting of the World Economic Forum ends, with a big buffet on a sunny lawn overlooking Davos, the grills turning out meaty snacks and a Swiss country music band complete with alphorn playing its rendition of Bob Marley's Redemption Song.
Before we gave up and headed indoors, I found Nouriel Roubini, the New York University economist who predicted the financial crisis years before it finally hit, standing with Tony Tan, the chairman of the Government of Singapore Investment Corporation and its roughly US$100 billion (Dh367.3bn) in assets. Bundled up against the blistering cold, they were as congenial as anyone could be when their lips are freezing to their teeth. What I first mistook as hypothermia, though, I later realised was most probably gloom.
These two gentlemen had delivered some of the most sobering messages of the entire meeting, only to have their warnings drowned out by the din over how to mend the global financial system. The bulk of the conversations in Davos this year revolved around how to fix it so banks can't lose everyone's money and imperil the global economy again. More specifically, people hope somehow to cure bankers of caring so much about the one thing they're paid to care about - making money.
It dawned on me that this hullabaloo over banks was becoming something of a red herring during a session on financial risk management. Here was a high-level panel consisting of top insurance executives, central bankers, multilateral lenders, one head of state and one of the world's most famous leveraged buyout professionals. Yet their biggest contribution to the financial redesign debate was an analogy.
The wreck of the western financial industry, they postulated, was akin to a speeding car that had run off a winding road into a ditch. After hemming and hawing for a while over how to make the car safer to drive, someone on the panel cautioned that there was no point improving the car's bumpers if it only encouraged drivers to speed faster. The discussion then focused on how to reform the driver, to better police him - perhaps installing an annoying little bell that rings whenever he exceeds the speed limit? - or re-educate him so he no longer desires to speed.
Left out of this hand-wringing, though, was much concern over the fact that we passengers are still lying at the bottom of the ravine the car plunged into.
Mr Roubini and a few others tried to hammer this point home. We aren't out of the hole yet. We've been floating back upwards thanks to a deluge of government borrowing and spending. But if we don't figure out how to get to dry land soon, we risk being washed over another cliff. Or we could end up like Japan, spending 10 years or more spinning our wheels in economic mud.
Only a few people seemed interested in discussing the passengers' role in the crash. After all, the banks and their customers - the pension funds, the sovereign wealth funds, the hedge funds, the mutual funds and individual savers, large and small - were all struggling to beat a deadline. Everyone wants their money to earn enough to push them to a certain level of prosperity while they're still young enough to enjoy it, or at least enough to retire on.
That all seemed possible before the crisis. Interest rates were kept low and markets kept opening, providing new opportunities for investors. The problem is that wealth is relative. A million dollars may make me rich until everyone has a million dollars. Then I need $10 million.
This fed the race for yield. At the centre was the US, where the most meaningful pension scheme available to most Americans is the equity in their homes. The housing bubble was good for them. But opening markets also unleashed the consumers of the developing world onto the global economy. Their cheap labour had the effect of muting price increases but it also meant more people competing to afford more stuff: TVs, SUVs, steel, copper, coal and oil.
The competition for yield intensified, encouraging money managers to take on even greater risk and inventing more complex ways to do so, like credit derivatives backed with subprime US mortgages.
"Countries need to do their homework to reduce the risks of these instruments and investing habits," the Chilean central bank president Vittorio Corbo said in Davos. But that was in 2007, over a year before the crisis struck, and Mr Corbo is no longer heading Chile's central bank.
Yes, we can fix the banking system and maybe even restrain the bankers. But the passengers will still be clamouring for more speed. A generation of American baby boomers have seen their nest eggs collapse with the housing market.
China's population is ageing and needs to fund its own retirement. Meanwhile billions of young people from India, Saudi Arabia and Egypt are looking for jobs. Where will the money come from?
Mr Tan in a session on capitalism offered a bleak prognosis. The days of heady economic growth and opportunity that the world enjoyed in the 1980s and 1990s are over, he said, and with them the kind of fat returns that made it seem like we could get rich off our savings.
"We must expect to have lower returns," said Mr Tan. In a world of people raised on TV commercials promising ever brighter, shinier lives, that doesn't bode well. "I think the world will be a more uncomfortable place," he said.
Bundle up.
@Email:warnold@thenational.ae
The%20specs
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The Buckingham Murders
Starring: Kareena Kapoor Khan, Ash Tandon, Prabhleen Sandhu
Director: Hansal Mehta
Rating: 4 / 5
if you go
The flights
Flydubai flies to Podgorica or nearby Tivat via Sarajevo from Dh2,155 return including taxes. Turkish Airlines flies from Abu Dhabi and Dubai to Podgorica via Istanbul; alternatively, fly with Flydubai from Dubai to Belgrade and take a short flight with Montenegro Air to Podgorica. Etihad flies from Abu Dhabi to Podgorica via Belgrade. Flights cost from about Dh3,000 return including taxes. There are buses from Podgorica to Plav.
The tour
While you can apply for a permit for the route yourself, it’s best to travel with an agency that will arrange it for you. These include Zbulo in Albania (www.zbulo.org) or Zalaz in Montenegro (www.zalaz.me).
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Abu Dhabi GP schedule
Friday: First practice - 1pm; Second practice - 5pm
Saturday: Final practice - 2pm; Qualifying - 5pm
Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm
Company%20profile
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
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How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Schedule for show courts
Centre Court - from 4pm UAE time
Johanna Konta (6) v Donna Vekic
Andy Murray (1) v Dustin Brown
Rafael Nadal (4) v Donald Young
Court 1 - from 4pm UAE time
Kei Nishikori (9) v Sergiy Stakhovsky
Qiang Wang v Venus Williams (10)
Beatriz Haddad Maia v Simona Halep (2)
Court 2 - from 2.30pm
Heather Watson v Anastasija Sevastova (18)
Jo-Wilfried Tsonga (12) v Simone Bolelli
Florian Mayer v Marin Cilic (7)
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
AL%20BOOM
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Company%20profile
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The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV
Bareilly Ki Barfi
Directed by: Ashwiny Iyer Tiwari
Starring: Kriti Sanon, Ayushmann Khurrana, Rajkummar Rao
Three and a half stars
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
The%20Hunger%20Games%3A%20The%20Ballad%20of%20Songbirds%20%26%20Snakes
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SPECS
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Company%20Profile
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First Person
Richard Flanagan
Chatto & Windus
THE%20SPECS
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
COMPANY%20PROFILE
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The years Ramadan fell in May
TWISTERS
Director: Lee Isaac Chung
Starring: Glen Powell, Daisy Edgar-Jones, Anthony Ramos
Rating: 2.5/5
The%20US%20Congress%20explained
%3Cp%3E-%20Congress%20is%20one%20of%20three%20branches%20of%20the%20US%20government%2C%20and%20the%20one%20that%20creates%20the%20nation's%20federal%20laws%3C%2Fp%3E%0A%3Cp%3E-%20Congress%20is%20divided%20into%20two%20chambers%3A%20The%20House%20of%20Representatives%20and%20the%20Senate%3C%2Fp%3E%0A%3Cp%3E-%C2%A0The%20House%20is%20made%20up%20of%20435%20members%20based%20on%20a%20state's%20population.%20House%20members%20are%20up%20for%20election%20every%20two%20years%3C%2Fp%3E%0A%3Cp%3E-%20A%20bill%20must%20be%20approved%20by%20both%20the%20House%20and%20Senate%20before%20it%20goes%20to%20the%20president's%20desk%20for%20signature%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%20218%20seats%20to%20be%20in%20control%20of%20the%20House%20of%20Representatives%3C%2Fp%3E%0A%3Cp%3E-%20The%20Senate%20is%20comprised%20of%20100%20members%2C%20with%20each%20state%20receiving%20two%20senators.%20Senate%20members%20serve%20six-year%20terms%3C%2Fp%3E%0A%3Cp%3E-%20A%20political%20party%20needs%2051%20seats%20to%20control%20the%20Senate.%20In%20the%20case%20of%20a%2050-50%20tie%2C%20the%20party%20of%20the%20president%20controls%20the%20Senate%3C%2Fp%3E%0A
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
