Coronavirus: Uncle Sam, the world really needs you
I grew up in a time when the US wanted to lead the world, and indeed it did, but its current leader is overseeing a retreat just when we need it to stay the course
The US has always been an indispensable ally. That could be changing – not because America’s friends want it to change, but because President Donald Trump does not value alliances. Co-operation with others does not suit his "America First" mindset.
What a pity.
As a teenager in Scotland, I had American friends, sons and daughters of officers at a US Air Force base. One friend’s mother made us a snack, a sandwich that lives in my memory. It was enormous. The sandwiches at my Scottish home had cheese or meat but this American sandwich was four centimetres thick, stuffed with chicken, cheese, tomatoes and pickles – simply wonderful. That was the beginning of my love for America.
The once all-powerful US
The famous poster featuring Uncle Sam was used extensively in the First and Second World Wars to attract recruits. AFP
As children, we learned that the US Air Force was part of Nato defending us against communism, and that together with our European allies we were stronger. There was so much to admire. American businesses, music, movies, writers all seemed to lead the world. American people were among the friendliest I met anywhere. The western US – Wyoming, Arizona and the likes – really did have cowboys on horses.
And it is still true. From Bill Gates and Jeff Bezos to Google and Facebook, many of America’s greatest entrepreneurs, musicians, movie directors and novelists are world beaters.
But the America I fell in love with years ago seems destined to avoid leading the world in any of the great battles that affect us all. The US still has the most powerful military machine, but does anyone look to American leadership to solve the biggest of our problems? The global pandemic? Climate change? Providing an example of good health care for all Americans? Good governance?
Even if you disagreed with specific policies or foreign military interventions, America always tried to be – in former president Ronald Reagan’s striking phrase – a “shining city on a hill". But now? Viewing Mr Trump’s daily news conferences, the shining city on a hill looks and sounds more like grumpy, eccentric muttering to himself behind a wall.
From Bill Gates and Jeff Bezos to Google and Facebook, many of America entrepreneurs and artists are world beaters. Victor Besa / The National
There are good reasons to discuss with Beijing a better way to manage trade, revitalise the world economy and other multilateral relationships. But instead of cool-headed (and quite boring) discussions, this has now evolved – at least as far as the White House is concerned – into a blame game about coronavirus and the biggest economic slowdown of our lives.
Every country is learning lessons in dealing with the disease. Perhaps America's superb scientists will be first with a vaccine. But Mr Trump has taken his dislike of China and multilateral international institutions to new levels by cutting US funding for the World Health Organisation. The WHO now joins the United Nations, the European Union and even Nato as an organisation that he clearly finds tiresome.
In historical terms, this is like a rerun of the worst of 1920s American isolationism. It did not end well. After helping create the League of Nations, the US refused to join, pursuing an "America First" policy that only truly ended when Japan bombed the US Pacific Fleet at Pearl Harbour.
When US isolationism previously ended
The Japanese attack on Pearl Harbour on December 7, 1941 brought America out of its isolationism. The rest is history. Corbis
Now in 2020, the person whose office once proudly boasted of the President of the United States being "the leader of the free world" may be offering some kind of leadership – but the world is not following. It is no surprise that a popular US board game is called Fortress America, in which North America fights against the world. It is a strangely negative mindset for the world's strongest military power.
With Mr Trump attacking state governments run by Democrats, we are in for a nasty presidential election at the same time as scientists fear Covid-19 will be a disaster for poorer countries. It is thought likely to mutate and hit the rich world again in a second wave, perhaps this autumn. That is why international co-operation and the WHO is so necessary. That is why if American leadership fades and Mr Trump takes away American dollars, the vacuum could be filled by the very country Mr Trump is trying to punish, China.
Donald Trump's divisive politics
In difficult times, most of us need friends. Mr Trump seems to need enemies. And listening to his daily news conferences, berating journalists for asking necessary questions, offering answers that America’s scientific experts then patiently correct, it made me think of an American crooner from the past, Jim Reeves. He once sang: “Make the world go away / Get it off my shoulder / Say the things we used to say / And make the world, make it go away.”
But the world will not go away. The global economic shock and coronavirus will not go away. And much of the world would like to have our indispensable ally back.
In November, American voters can show that their country's influence does not have to decline just because its current leader is out of his depth. But for now, an American president on the brink of an economic slump who did not take coronavirus seriously at first and who still does not take climate change seriously is not a leader. He is a liability.
Signing off with Jim Reeves
Gavin Esler is a journalist, author and presenter
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.”
