Two Thousand Dinars: A Lamentable Legacy By Nejoud Al-Yagout is a story that is fairly common to all countries of the GCC.
The picture above is for illustration and is of the Parliament of Kuwait.
First, we heard that residents above the age of 60 would not be allowed to renew their residencies if they did not hold a college degree. Then, after outrage on social media (by locals, to be sure, since any outrage by a resident would lead to arrest or deportation), there was talk that the rule may not be implemented; instead, we heard that those who came up with the decree would, at least, reconsider the age bracket, perhaps hiking it up to residents over 70 years of age (which in and of itself is lamentable).
Then, it was back again to 60 a few months ago, but with a proposal to fine residents annually (that is when talk of KD 2,000 arose). This latter proposal brewed for a while until it was announced only recently – in the midst of a pandemic, in the throes of increased unemployment and suicides and drug-taking and crimes, and in the whirlwind of murders and corruption – that the Public Authority of Manpower would “allow” residents above the age of 60 who do not hold university degrees to renew their residency provided they pay an annual fee of KD 2,000; as though by making it look like a favor, a permission granted, so to speak, the harsh brutality of the cost of remaining in Kuwait would seem less pronounced, brushed under the rug.
Though already considered official by all of us who read about it in the news, it appears that the “decision” needs a couple more weeks, perhaps, to be considered bureaucratically official, unless a person with strings will use his position of power to take a stand against it. The likelihood of such a selfless act transpiring is well, let’s just say, unlikely. Highly unlikely.
Although many residents above 60 who have graduated from college may have breathed a collective, perhaps even audible, sigh of relief, many others will be in tears, for they have parents and siblings aged 60 and above who live with or near them and who do not hold college degrees, and they themselves, holders of college degrees, will not be able to afford such a fee to keep the family together. And what about us locals? We cannot ignore the two-thousand-dinar elephant in the room.
Many of us who work in the public or private sector, with or without university degrees, or even with Master’s degrees and PhDs, would not ourselves be able (or willing) to pay such a lofty fee. Two. Thousand. Dinars. Imagine. And if we think this will not affect us, we are wrong. “They” are us! They, who we consider expatriates and foreigners and residents are us. We are them. We are one in this society. All of us. Each one of us, a thread of the same fabric, interwoven. What hurts us hurts them and vice versa. Let this register for all of us. Again and again and again.
There are residents in their sixties who were born here and have lived here their entire lives; residents who do not want to go “home” because their “home” is here, in Kuwait, where they belong, with us. Kuwait is the land in which they want to be buried, in which their parents were buried. After all their years of service to our country, we are now showing them the door under the pretext of making rules we know people cannot implement, all so that residents can leave of their own accord.
But they will not leave of their own accord. Ever. They will leave because neither they nor their university-degree-holding families were able to pay such an outrageous sum; they will leave because they are tired of living in a country that does not want them here. So many have left already; others are waiting for the right moment to leave. Others are waiting anxiously to see whether things will get better (or get worse).
We cannot stay silent. We cannot. And the last thing residents need is sympathy; if we are to feel sorry for anyone, we should feel sorry for ourselves for who we have become. Instead of patronizing them with our sympathy, residents should be applauded for their resilience, their bravery, and their contribution. They should be rewarded; they should be given more benefits as time elapses, not less.
We have a lot to learn from them. Even while many are treated as second-class members of the community, they stay, they work, and they support their families. This rhetoric of residents profiting from us is immature and arrogant; we must remember they are doing us a favor, a huge one, by being here as well. We are in this together; and in a healthy community, that is how things work; we give and we take; we take and we give.
Some residents may still find a way to stay here, in their home. But with this new “fine,” there is no way they can save money or help their families. And how can we sleep at night knowing we are creating obstacles for residents to send money back home? How can we sleep at night knowing that there is no money to pay for a parent’s kidney transplant or a relative’s tumor removal or a child’s education because the money is being paid to an oil-rich country instead? What principles are we building our foundation on?
These are certainly not our principles. And as long as we hold on to these pseudo-principles, we will continue to create laws which protect us and ostracize others, laws which are far, far away from the values of our heritage, founded on hospitality and inclusivity. Aren’t we tired of this us vs them attitude? Do we really want a Kuwait for Kuwaitis? Is this our legacy? Can’t we remember who we are?
It’s done. All we can do now is lament and ensure we resurrect a new Kuwait based on the ideals of our welcoming forefathers who never flinched at demographics. All we can do now is remember that what goes around comes around. This is a law. It is not a doomsday prophecy, but a warning, an invitation to recalibrate, a chance, an opportunity, to restore the karmic balance.
This is our chance to wake up and ask ourselves: Is this our legacy? And we should ask ourselves this question every night. That way, we can rectify the situation before karma knocks on our door. Loudly and fiercely. Two thousand dinars. Let’s remember that number. For it may come back to haunt those of us who stayed silent, those of us who spoke out for justice only when it came to our rights and, often, at the expense of others.
Robert P. Beschel Jr. and Tarik M. Yousef inform that In a region where the governance news is seldom good, on May 6, something very unusual happened in Qatar. Was it a quiet governance revolution in Qatar? wondered these authors in a Brookings article. We would agree that this is happening in the so-called autocratic monarchy of the Gulf and not the other republics of the MENA region. Here is the story.
A quiet governance revolution in Qatar?
17 June 2021
The Minister of Finance, Ali Sharif al-Emadi, was taken in for questioning over a variety of alleged crimes, including misuse of public funds and abuse of power. Al-Emadi had held his position since 2013 and was widely perceived to be one of the most effective finance ministers in the Gulf. Within a day, he was stripped of all governmental duties, as well as his roles in other publicly owned companies and financial institutions. Moreover, the anti-corruption probe is reportedly widening, with scores of businessmen and government officials being questioned by law enforcement authorities and financial regulators.
The publicity surrounding al-Emadi’s ouster is unusual. Throughout the Gulf Cooperation Council (GCC) countries, most high-level cases of corruption or official malfeasance are handled quietly and without ceremony. The officials involved typically resign or leave their posts suddenly, with limited media coverage. Rumors swirl but are rarely confirmed, and investigations almost never result in prosecution, fines, or imprisonment. Kuwait, for example, witnessed a number of high-profile corruption allegations that led the prime minister to leave office in 2011 and the cabinet to resign en masse in 2019, yet no prosecutions followed. In the United Arab Emirates, a corruption probe resulted in the late Mohammed Khalfan bin Kharbash, the Minister of State for Finance, being removed from office in 2008 and charged with embezzlement in 2009. However, he pleaded not guilty, and the case never went to trial.
There is one major, and controversial, exception to this rule: the November 2017 arrest and imprisonment of 400 prominent Saudis in the Ritz Carlton hotel in Riyadh. Supporters of this decision, including many Saudi citizens, maintain that the imprisonment of these individuals was well deserved and long overdue. Critics allege that it had more to do with the consolidation of power by Crown Prince Mohammed bin Salman than with the actual guilt or innocence of those charged; they also claim that the funds recouped came from an effort that resembled a “shakedown” more than a bona fide attempt to recover stolen assets or enforce the rule of law.
In the immediate aftermath of the Ritz Carlton arrests, some observers maintained that the move would be disruptive and create uncertainty, scaring investors away. Others argued that it would signal a seriousness of intent and purpose that would be beneficial to the country in the long-term. The short-term effects of the arrests were indeed disruptive: foreign direct investment in Saudi Arabia fell precipitously in 2017 before rebounding in 2018 and 2019, albeit to lower levels than before. The long-term effects of the decision remain to be seen, although there is a wealth of evidence that countries with lower levels of corruption are better at attracting investment and have higher levels of economic growth over time. It would not be surprising if other countries conducting public crackdowns on corruption followed a similar trajectory to that of Saudi Arabia—an initial drop in foreign investment due to added uncertainty, followed by increased investment downstream if the effort is viewed as serious and credible.
According to Transparency International’s 2020 Corruption Perceptions Index, the Middle East and North Africa (MENA) region “is still perceived as highly corrupt, with little progress made towards controlling corruption.” The reality is more nuanced, with wide variation in performance across the region. For instance, the U.A.E. and Qatar are ranked 21st and 30th, respectively, by the Corruption Perceptions Index—a position placing them ahead of countries including Spain, South Korea, and Portugal. The bulk of MENA countries fall in the mid-range. There is also a significant cluster of countries in the lowest ranks, including Iraq, Libya, Syria, and Yemen, which are perceived to be among the most corrupt countries in the world.
Two elements of the region’s anticorruption efforts are particularly worrying, even with regard to regional leaders such as the U.A.E. and Qatar. The first, as the International Monetary Fund and others have noted, is the delayed progress on “next generation” governance reforms, which stretch beyond eliminating petty corruption and improving the quality of service delivery. This agenda involves thinking more carefully about the boundary between the public and private sectors; improving transparency and public accountability; making regulatory processes more streamlined and predictable; and strengthening the independence of agencies charged with investigating and prosecuting corruption. It also involves moving forward legislation on income and asset disclosure, as well as cracking down on money laundering.
The second troubling feature of MENA anti-corruption efforts is the relatively static nature of the region’s performance over time. According to the World Bank’s Worldwide Governance Indicators, the region’s composite scores for controlling corruption have actually fallen consistently from their peak in 2002. The persistence of these chronic “governance deficits” has been viewed by many as the root cause for the region’s repeated political crises over the past decade, starting with the Arab Spring revolutions in 2011 and continuing through to the protest movements of 2018-19 in Algeria, Iraq, Lebanon, and Sudan. In all of these countries, concerns about corruption were among the most prominent public grievances.
Could it be that Qatar’s recent move heralds a transition toward new and more serious anti-corruption efforts in the Gulf and wider region? And could the country’s public efforts inspire other MENA governments to do better? In response to queries about the arrest warrant for al-Emadi, the Qatari Minister of Foreign Affairs underscored the importance of institutions and noted emphatically that “no one is above the law.” A day prior to the finance minister’s arrest, Qatar’s emir abolished immunity from prosecution for public officials, leveling the legal playing field for all. Such steps, if translated directly into a robust governance reform agenda and taken forward with skill and tenacity, could very well open a new chapter in strengthening the rule of law and building effective and equitable state institutions in both Qatar and the wider MENA region.
Gulf Business‘s article that as an Explainer: Is data the new oil in the GCC? is a good snapshot of the present situation of that part of MENA countries.
We all know that ‘Big Oils’ management and petrol countries alike have underscored scientific research showing the link between burning fossil fuels and a dangerously heating planet. They’ve lobbied and funded reports to either downplay or deny the risks to the climate—and humanity—of using their products. It went on unabated until the advent of clean and accessibility to all the latest technological hard and software for a broad spectrum of commercial activities.
Explainer: Is data the new oil in the GCC?
Technology has now become a key driver of economic growth in the GCC, with data already defining the region’s future, opines Maurits Tichelman, VP – Sales, Marketing, and Communications and GM – Global Markets and Partners, EMEA at Intel
Is the term ‘data is the new oil’ still relevant? Yes, data has practically become the ‘new oil’. Data is playing a significant role as a crucial source of wealth for oil-rich nations and territories such as the GCC, which has historically been particularly dependent on oil as the main contributor to the GDP.
We are witnessing a significant shift from oil to data in the region as governments embark on strategic initiatives to diversify towards more knowledge-based and tech-driven economies. Data is already playing a key role in this transformation. A concrete example of this process could be autonomous driving. Autonomous vehicles run on data in the same way that today’s cars run on gasoline. Therefore, undoubtedly, data will be the new oil.ADVERTISING
In the GCC, oil has been crucial to economic growth. Will technology/data be able to provide the same level of economic prosperity? Countries in the region are heavily investing in diversified industries such as technology, manufacturing, education, and healthcare, among others. As the Gulf states transform and diversify, the importance and impact of technology will take on an even greater role. Data is already defining the region’s future, complemented by mega projects planned with greater focus on smart infrastructure (smart cities), advanced telecoms services, and somewhat accelerated by the rapid rise of remote learning and working due to the Covid-19 pandemic.
Furthermore, technology has now become a key driver of economic growth, from providing goods and services efficiently, to optimising advanced technologies to help businesses and governments access natural resources that can benefit people. Additionally, increased efficiency of labour has improved productivity and profitability.
While we are producing ample amounts of data in the region, are we currently maximising its benefits? We are surrounded by data and it continues to grow exponentially. According to estimates, in 2021 alone, there will be 74 zetabytes of generated data and it is expected to reach 149 zetabytes by 2024. As a result, the need to understand and optimise data has become even more significant as every business uses data to some extent. However, there is a lack of knowledge and skills in utilising the data to its full potential. With the rise of digitalisation, companies and governments across the region and worldwide are investing in digital transformation, a positive indication that more organisations are now realising the importance of data.
The Covid crisis has highlighted the importance of technology – but will it retain its relevance post-pandemic across industries? The pandemic has undeniably prompted companies to invest more in technology adoption across industries including healthcare, education, retail and real estate, among others. The use of innovation technology such as virtual medical/doctor consultation has helped people during lockdowns. The Covid crisis has forced organisations and governments to adapt and prepare better to tackle future calamities with the aid of technology.
Businesses have seen the advantages and have started deploying smart and intelligent technologies such as artificial intelligence (AI) to improve safety standards and increase productivity. Thus, it is clear that technology has become an absolute necessity rather than a mere option; its relevance has never been so crucial and without a doubt the use and benefits will play a bigger role post-pandemic across industries locally, regionally and internationally.
What are the biggest challenges hindering tech adoption/data-driven growth in the region? Although organisations are implementing advanced technologies, the vast majority still operate on outdated and traditional models, which prevent them from utilising the benefits of the latest available technologies. Secondly, reluctance and resistance from employees in adopting technology poses challenges for companies. Lastly, a lack of skilled professionals is a key factor that has restricted organisations in the region from completing their digital transformation.
Looking ahead, GCC states are seeking to become global knowledge hubs. How can that journey be accelerated? GCC governments are accelerating their digital transformation journeys with progressive strategies and initiatives. Smart Dubai, Dubai Data Strategy, Saudi Arabia’s The National Strategy for Digital Transformation and the Qatar Smart Program (TASMU) are examples of the regional commitment and ambition to explore all possibilities of technology and its impact on daily life and business. These strategies, roadmaps and ambitions are the key drivers and accelerators of their technological transformation journey.
What Is the Internet of Taxes? A question answered by Toby Bargar in his article dated May 13, 2021, explains how in this day and age, the Internet generally is gradually spreading wider and wider to cover most daily life. But to this extent, who would have thought so?
So, let us see what it is all about.
What Is the Internet of Taxes?
According to a McKinsey Global Institute report, IoT could have an annual economic impact of $3.9 trillion to $11.1 trillion by 2025. Adoption is accelerating across several settings, including factories, retailers, and even the human body. In fact, smart cities will reportedly create business opportunities worth $2.46 trillion by 2025, and by 2030 more than 70% of global smart city, spending will be from the United States, Western Europe, and China. With AI and the rollout of 5G facilitating faster speeds and scalability, we will see even greater demand across sectors for IoT solutions.
An oft-repeated phrase says that nothing is certain but death and taxes; however, in the case of IoT, we can say that nothing is certain but growth and taxes – we don’t yet know how it’s all going to shake out. The demand for IoT is going to tempt federal, state, and local jurisdictions to tax it. With voice communications taxable revenues declining, taxing IoT is an attractive option to replenish their coffers.
In 1998, Congress passed a moratorium banning state and local governments from taxing internet access. This ban was extended several times. The Permanent Internet Tax Freedom Act (PITFA) converted the moratorium to a permanent ban and was fully implemented nationwide on July 1, 2020. Since the initial moratorium, the internet has risen to be a critical communication tool over other more highly taxed wireless and landline voice options, which continue a steady decline.
The ability to tax IoT may require changing laws and regulations. This process could take some time, but there is a complicated web of laws, regulations, and tax liabilities surrounding IoT in the interim. As we continue to adopt smart solutions, companies have to get smart about the nuances and risks of IoT taxability.
There are two easy questions that will help you to begin to understand your IoT taxability risk.
1) Is your company selling internet access? 2) Is your connectivity embedded or over-the-top?
Over-the-Top or Embedded Connectivity
If your device is networked over a user-supplied connection, then access is over-the-top or bring-your-own Internet connectivity. The over-the-top connection can be wired, Wi-Fi, or purchased separately from a wireless service. For example, if you sell a wireless printer, users connect through their home or office network. You are not supplying the internet, but the device. In these cases, as an IoT device maker, you likely have no responsibility for the customer’s internet connection.
Different than over-the-top, an embedded connection is part of the device. If you sell a device that comes with its own data connection as a component of the sale or service plan, it is embedded. Smartphones are a great example of an embedded connection. The relationships between device makers and network operators can feature widely variable structures. The device provider may need to account for any taxes that need to be collected related to the connection.
The World Wide Web of Gray
Defining internet access may appear intuitive, but not all connectivity is considered internet access. If you are selling a service that meets the statutory definitions of ISP service, the federal law provides a moratorium against state and local taxes.
Private connectivity, however, is often taxable. Unlike the public internet, private connectivity occurs via a Local Area Network (LAN) or Wide Area Network (WAN). This type of access is considered a taxable communication service in most states. If the network is interstate, this will also subject you to the Federal Universal Service Fund fee (FUSF), which is currently 33.4%, an all-time high for this fee and growing higher every quarter.
However, there are questions about whether connections to devices that do not enable a WWW experience – you connect to the internet, but the end-user can’t log onto Facebook or perform a Google search – meet the federal definitions of ISP service. If you do not meet those definitions, then your likely tax destination could be LAN/WAN.
Avoid the Dead Zone
IoT is here to stay. As you develop and deploy IoT solutions, it will be critical to stay informed on the web of tax rules that may or may not apply to your business. Monitor federal and state agencies that have jurisdiction over internet taxation and stay abreast of any changes on the horizon.
With so much uncertainty, it can be tempting to push the envelope, but a conservative interpretation of tax guidance can proactively protect you from being caught off guard.
Finally, to avoid hitting a dead zone, don’t try to navigate the changes on your own. Consult with your tax and legal advisors to ensure that you are aware of the latest developments and plan your course of action accordingly.
Our thoughts are autocratic and authoritarian regimes here and there plagued by collateral youth bulges and ‘rentier’ organisational systems that bogged down any reach towards a working Democracy in most MENA region countries result in what is described in this article. Historically, these countries opted for Modernity, but the poor institutional quality that ensued leads to heavy bureaucracy here and absent leadership elites there.
Public sector reform in MENA region on the achievable governance revolution
May 4, 2021
Across the Middle East and North Africa, there are countries working to modernise state institutions to make them more efficient, effective and responsive. This column argues that while it is common for Arab governments to look elsewhere for reform ideas, there is a wealth of experience within the region that practitioners should consider. Lessons from public sector reform in MENA from the past two decades suggest that transformative change is possible.
In a nutshell
The revolutionary impulse unleashed by the Arab Spring a decade ago may again sweep through the region once lockdowns are lifted, economies attempt to restart and the full scale of damage to jobs and livelihoods caused by Covid-19 becomes clear.
Even if such pressures do not materialise, governments would be wise to not let the opportunity for disruptive change presented by the pandemic to slip by untapped.
Arab reformers are embarking on the critical task of ensuring that their governments and public sectors can respond to the pronounced development challenges, both known and unknown, that they will be asked to address during the coming decade.
As we approach the tenth anniversary of the Arab Spring, much attention is rightly being given to the broader governance trajectory of the Middle East and North Africa (MENA) region over the last decade.
With the notable exception of Tunisia, the story is hardly encouraging. The aging autocrats are gone, but many of the heady expectations of that time have given way to the consolidation of authoritarian rule by entrenched elites. The luckiest countries have witnessed merely cosmetic changes on key issues of democracy, transparency and rule of law. The less fortunate have witnessed brutal domestic crackdowns and flagrant human rights abuses. And the truly unlucky have descended into chaos and civil war.
Beyond the public debate over democratic change, another long-standing struggle is taking place as many MENA countries work to reform and modernise state institutions to make them more efficient, effective and responsive – an agenda that is less controversial but no less urgent.
The MENA region is home to some of the largest public sectors in the world, yet the quality of service delivery is often poor. The region trails most other parts of the world (with the exception of South Asia and sub-Saharan Africa) on global indices for government effectiveness, quality of regulation and control of corruption. Even more troubling, it is one of the few places in the world that has actually lost ground on these indices over the past decade.
During the Covid-19 pandemic, MENA governments have rediscovered the critical importance of government institutions. Initially, through a combination of luck and skill, regional countries were able to keep their mortality and morbidity rates well below those of hard-hit regions in Europe, North America and Latin America.
The region witnessed many instances of effective policy coordination across traditionally conflicting bureaucratic structures; several countries also built on earlier investments and expertise in e-governance and m-governance to address challenges such as contact tracing and distance learning. Despite pressing financial constraints, governments were quick to adopt unprecedented fiscal and monetary measures to mitigate at least some of the pandemic’s economic impact on the vulnerable segments of society.
Yet the need for broader institutional reforms that go well beyond those adopted in response to the Covid-19 pandemic is immediate and palpable. As the large-scale protests of 2019 demonstrated, ‘the Arab Street’ is becoming less willing to accept the uneven quality of service delivery, or the preferential treatment of large and well-connected firms. Corruption and cronyism are increasingly being recognised and called out for what they are.
The Covid-19 pandemic has underscored the need for flexible, responsive institutions that can adapt to changing circumstances and coordinate complex policies. At the same time, the recent volatility in oil markets and external remittances has made clear that the region must urgently diversify revenue sources and make government expenditures more efficient.
The public sector challenges confronting the region over the next decade are both clear and massive. To cope with the demographic pressures that are already underway, governments will need simultaneously to expand the scope and quality of services that they provide to their citizens, paying particular attention to lagging regions and under-served communities.
They will need to educate the next generation to compete in a changing global economy. They will need to serve as an attractive destination for capital, providing the business environment that will facilitate foreign and domestic investment. They will need to extend their under-funded healthcare systems to serve neglected regions and populations better. And they will need to be agile enough to respond to a host of cross-cutting threats – from climate change and water scarcity, to global energy market transitions – that will require an integrated, nuanced and sustained response across the whole of government.
Of all the challenges that MENA governments must confront, perhaps the most politically fraught is the reality that their traditional social contract, which trades political acquiescence for public sector jobs, is ultimately a Faustian bargain. The problem with the existing social contract is not merely its lack of fiscal sustainability – although that threat is real and will only get worse with time.
The problem is that this bargain undermines meritocracy and hinders the creation of the sort of high-performing public sectors that will be necessary to address the region’s most pressing economic and social problems. It also creates perverse incentives that undermine other critical objectives, such as labour force diversification.
Our assessment provides hope for the region’s future by illustrating that transformative change is possible. And change will be needed. The revolutionary impulse unleashed by the Arab Spring a decade ago and its more recent echoes in 2019 may again sweep through the region once the lockdowns are lifted, economies attempt to restart and the full scale of damage to jobs and livelihoods caused by Covid-19 becomes clear. And even if such pressures do not materialise, governments would be wise to not let the opportunity for disruptive change presented by the pandemic to slip by untapped.
While it is common for Arab governments to look elsewhere for reform ideas, we believe that there is a wealth of experience within the region that practitioners should consider. It may not align perfectly with global knowledge and practice, but neither is it wholly distinct. To the extent that MENA countries differ, it is only in certain areas, and often more by degree than in kind.
The lessons from this experience, both good and bad, will be of great value to the next generation of Arab reformers as they embark on the critical task of ensuring that their governments and public sectors can respond to the pronounced development challenges, both known and unknown, that they will be asked to address during the coming decade.
Originally posted on Gharamophone: In May 2020, I posted Sariza Cohen’s stunning recording of “أَشْكُوا الْغَـرَامَ”(Ashku al-gharam), released on Polydor in 1938. This is the other side of that record. It is no less remarkable. Here the pianist and vocalist from Oran performs a composition by Algerian Jewish impresario Edmond Nathan Yafil. The title of…
It’s a truism that Europe is unstable if its North African neighbours are unstable. That being so, it should be of some concern to EU leaders that, on the bloc’s south Mediterranean border, Tunisia’s 10-year-old democracy appears to be on life support.
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