On pandemics and history
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.
The views and opinions expressed herein do not represent nor reflect those of Deloitte & Touche (M.E.) LLP (DME). Opinions, conclusions and other information in this blog post which have not been delivered by way of the business of Deloitte & Touche (M.E.) LLP (DME) are neither given nor endorsed by it.
