Sunday, February 1, 2015

Tough times for Arab world; Obama for tax on overseas profits; UK business leaders' confidence falls again

1 Tough times for Arab world (Ahmed Mokhtar in Khaleej Times) The beginning of 2015 apparently doesn’t have any signs of contentment or quiet days ahead. January was a sad month for the world, beginning with the horrific attack on Charlie Hebdo newspaper in Paris on January 7. A few days later, the Arab world lost King Abdullah bin Abdulaziz Al Saud, who was one of its wise leaders. The grief continues with the volatile situation in many Arab lands, including Yemen, Syria, Iraq, Libya and Egypt.

From a security perspective, the ongoing war with militant organisations in the region doesn’t appear to be ending anytime soon, especially with Yemen’s internal conflicts over power, and Daesh’s announcement that their militants will attack neighbouring countries from Libya to achieve their dream of establishing a ‘Caliphate’.

As for the political situation, the effort spent by the Kingdom of Saudi Arabia, the United Arab Emirates and Kuwait to reach reconciliation between Cairo and Doha is crucial to guarantee a united Arab nation in the face of many dangers. These problems and dangers require a serious initiative from the various Arab organisations like the Arab League or the Gulf Cooperation Council.

The current year might be considered a decisive year for the future of the Arab region. Whether it will be an evidence of the ability of the Arab states to unite visions and actions, or it will leave the region as an arena for conflicts and instabilities? Most countries around the world create scenarios for what the global map would look like in a period extending to 50 years, but the Arab countries still lack that. Will this year be the beginning of future planning for the Arab world?


2 Obama for tax on overseas profits (BBC) US President Barack Obama plans to close a tax loophole that allows US firms to avoid paying taxes on overseas profits, the White House says. His 2016 budget will impose a one-off 14% tax on US profits stashed overseas, as well as a 19% tax on any future profits as they are earned.

The $238bn raised will be used to fund road projects in the US. The spending plan, including the proposal on overseas profits, would require approval from the Republican-controlled Congress to be made law, something seen as unlikely.

Research firm Audit Analytics calculated last April that US firms in total have $2.1 trillion-worth of profits stashed abroad. It found US conglomerate General Electric had the most profit stored overseas at $110bn.

Tech giants Microsoft and Apple and drugs companies Pfizer and Merck all featured in the top five. No tax is currently due on foreign profits as long as they are not brought into the US. The tax rate is far lower than the current US top corporate tax rate of 35%.


3 UK business leaders’ confidence falls again (Terry Macalister in The Guardian) Business confidence has fallen for another quarter as companies become more cautious about their prospects in the year ahead, according to a survey by a leading accountancy body.

Fewer businesses are as confident about their prospects as they were last quarter. The banking and construction sectors are considerably more pessimistic with investment falling and concerns about skills shortages, but the Institute of Chartered Accountants in England and Wales (ICAEW) said most executives were still upbeat about the prospects for the wider British economy. IT and communication businesses remain particularly upbeat.

The institute runs the survey with the accountancy firm Grant Thornton. “The decent UK business growth that has been achieved over the last couple of years has put the UK in one of the strongest positions among global economies as we entered the year. Yet, in the context of a highly unpredictable election, coupled with uncertainties across the eurozone and the UK’s relationship with the EU, some jitters are inevitable,” said Scott Barnes, chief executive of Grant Thornton.

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