Only Time Will Tell

Only Time Will Tell                                                                                        19 March 2021

For the week ending 18 March, there were almost 1.5k real estate and property transactions, valued at US$ 1.55 billion, with 104 plots selling at US$ 150 million and 900 apartments/villas for US$ 589 million. The top three transfers for apartments/villas were all apartments, with one in Marsa Dubai selling for US$ 123 million, followed by sales of US$ 71 million and US$ 67 million for units in Palm Jumeirah, and in Al Thanyah Fifth. The three top transactions of the week all involved land selling at Wadi Al Safa 3, (US$ 11 million and US$ 10 million) and Al Thanayah Fourth for US$ 11 million. The three most popular locations for sales were found in Al Hebiah Fourth, (22 sales transactions worth US$ 21 million), followed by Nad Al Shiba Third, with 20 sales transactions at US$ 14 million, and Nad Al Shiba First with 15 sales transactions, worth US$ 9 million. The highest mortgaged property was land in Burj Khalifa for US$ 272 million, with the total amount of mortgages being US$ 817 million. Sixty-nine properties were granted between first-degree relatives worth US$ 88 million.

HH Sheikh Mohammed bin Rashid Al Maktoum has released ambitious plans to increase the emirate’s tourism and hotel capacity by a massive 134%, along with a 400% increase in beach capacity, over the next twenty years; by 2040, 60% of Dubai will be classed as nature reserves. This is part of the strategy to prepare the emirate’s readiness for life after the post-oil era and to maintain its regional superiority. Tourism is only part of the Dubai-2040 Urban Master Plan, which also includes adding 168 sq km of lands, allocated to logistics and other businesses, as Dubai realises that neighbouring countries will be piling on the pressure to take a bigger slice of the regional economic cake. (For example, from 2024, the Saudi government will stop giving state contracts to companies and commercial institutions that base their Middle East hubs in any other regional country). The plan also aims to provide Dubai the highest standards of urban infrastructure and facilities, with the Dubai Ruler also noting, “we have adopted the new urban plan for Dubai until the year 2040. Our goal is to make Dubai the best city to live in the world.” Over that time period, Dubai’s population is expected to grow from its current 3.3 million level to 5.8 million by 2040.

The Urban Master Plan will see development focused on five key centres, including Deira/Bur Dubai (representing Dubai’s history, tradition and heritage), Downtown/Business Bay, (business and finance), and Dubai Marina/JBR (leisure/hospitality). The remaining two centres are Expo 2020, which is fast becoming an economic and growth hotspot, and a focal point for the exhibitions, tourism and logistics sectors, as well as Silicon Oasis (tech development and start-ups).

The plan is keen to see equitable access to facilities across the whole of the emirate, with the plan outlining a hierarchy of communities, with the five main ‘towns’ built around each of the five main urban centres (indicated above), each with a population of 1 to 1.5 million. Under this “umbrella” will be the multi sector (with a population of between 300k-400k) and then sectors with between 70k-125k people, then districts of between 20k-30k and finally a community of some 6k-12k, with up to 2k residences. Based on these levels, infrastructure and transit systems, energy and government services, along with public facilities such as hospitals, schools and leisure centres will be established. In making Dubai the world’s best city to live and work in, prioritisation will be given to improving the efficiency of resource utilisation, developing vibrant, healthy and inclusive communities along with doubling green and leisure areas. Other targets include providing sustainable and flexible means of mobility, enhancing environmental sustainability, safeguarding the emirate’s cultural and urban heritage and developing a comprehensive legislation and planning governance model, which in turn will foster greater economic activity and attract increased foreign investments.

The latest upbeat forecast from the Central Bank of the UAE sees the country’s real GDP fully recovering in 2022, following growth levels of overall real GDP 2.5% and 3.5%, along with non-oil GDP up 3.6% and 3.9%, in 2021 and 2022 respectively. There are several drivers in. place including consumer confidence moving higher, increased fiscal spending, real estate slowly improving and a pick-up` in credit. This year, the two major events, that should boost the economy, are the six-month Dubai 2020 Expo and the country’s fifty-year anniversary.

Twelve years after its inception, the long-winded Special Tribunal for the Settlement of Cheque Disputes Relating to Real Estate Transactions has been dissolved, following a decree by the Dubai Ruler. In future, all complaints, claims, lawsuits and appeals, being reviewed by the Special Tribunal that have not received a final judgement, will now be referred to the judicial entity (to date, not yet named) concerned. The ‘old’ tribunal comprised a judge each from the Court of Appeal and the Court of `First Appeal, as well as a representative from the Dubai Land Department. It had an exclusive jurisdiction to settle complaints related to dishonoured cheques. Even the police were directed to refer all cheque-related complaints to this tribunal. The new body will have jurisdiction over all property disputes in the emirate relating to unfinished or cancelled projects, meaning cases over stalled projects cannot be filed at the Dubai International Financial Centre Courts. There are many who feel that this latest ruling is a welcome change for the industry.

In another related real estate story, the Dubai Ruler has issued a decree to form a special tribunal to resolve disputes over inherited property and to “protect the rights and interests of all concerned parties, especially the elderly, minors, femmes sole, divorced women, widows and people of determination”. Part of the decree stipulated that all Dubai courts, including the DIFC Courts, will no longer review petitions or appeals related to the sale of inherited property. The special tribunal will also adjudicate and issue rulings on appeals against decisions and procedures issued by the Dubai Land Department or the Mohammed bin Rashid Housing Establishment. The tribunal will comprise a president, to be announced by the chairman of Dubai’s Judicial Council, with other members drawn from the legal, financial and real estate sectors.

This week, Dubai Refreshments had a rare “win” at the expense of the Federal Tax Authority, who have to recompensate the F&B company on administrative penalties wrongly charged. This is the result of a judgement passed by the UAE Federal Supreme Court which overturned an appeal by the FTA that “had wrongly imposed administrative penalties because the FTA imposed them on the incorrect premise that the company had collected funds as tax and had not reported or voluntarily declared such tax”.

DP World is committed to investing up to US$ 442 million to expand the Moroccan port of Berbera and, once completed, it will increase its annual capacity by 500k TEUs. As part of its expansion and development strategy, it introduced three new ship-to-shore (STS) gantry cranes – each at 51 mt high, a capacity of 65 tonnes, with an outer reach of 24 rows of containers; in January, the port installed eight new rubber-tyred gantry (RTG) cranes. This will enable some of the world’s largest container vessels to utilise the port, allowing importers and exporters to make the most of the resulting economies of scale for DP World Berbera, a multi-use port regional maritime hub in the Horn of Africa.

In troubled times, there always seems to be a rise in the number of scams, with the aim of defrauding innocent – and often gullible – people from their money. This week, an Abu Dhabi court has sentenced four expats to five years in prison, along with fining each US$ 2.72 million for money laundering and fraud. Having set up a jewellery company, owned by one of the four, they managed to dupe up to 4k people by enticing them to buy dubious gold investments; the company was fined US$ 13.6 million and 7.4kg of gold and US$ 375k in cash were seized. The scam included a mock pyramid scheme, where an investor, introducing another ‘victim’, was paid US$ 272 and new clients were ‘offered’ a US$ 545 subscription to buy into the scheme.

The Securities and Commodities Authority has announced that UAE listed companies need to have at least one female director on their boards. The move is the latest in a series of measures being taken to boost female representation at the highest levels of UAE business. The regulator commented that the country’s markets be elevated “to meet the highest global standards”. Aurora50, a social enterprise co-founded by Sheikha Shamma bint Sultan bin Khalifa, noted that women currently sit on the boards of 28 of the 110 listed companies in the UAE, equating to 26% of the total but when it comes to member numbers, they only account for 29 of the 823 board members. The World Bank has estimated that, with 57.5% of its women in the workforce, the UAE has the highest level of working women the MENA region.

It is reported that because of the fact that an unvaccinated workforce could create operational issues, Emirates has told its employees to take a free coronavirus vaccine or pay for tests to prove they are not infected; the airline reportedly advised cabin crew, who have not been vaccinated, that they must pay for a test valid for seven days to the start of flight or standby duty. The airline noted that “certain countries may in the future differentiate entry criteria between those who have taken the vaccine and those who did not. Keeping this in mind, having a vaccinated workforce has become essential not just from a health and safety angle but from an operational one too.” Those exempted from this new rule include those due for their second vaccine dose, have registered to take their initial dose, have a valid medical reason, or have been recently infected or are infected are exempt. The airline has offered free vaccines to all staff since the beginning of the year.

Earlier in the week, it was reported that Saudi Arabia’s Almarai had acquired Bakemart’s business, in the UAE and Bahrain, for US$ 26 million that will expand the Saudi company’s regional presence. The biggest dairy company in the ME has financed the deal internally from its operating cash flow. The agreement remains subject to regulatory approvals, including from Saudi Arabia’s General Authority for Competition. Bakemart, which employs 800, produces bakery items and frozen foods for the retail and hospitality industry in the ME, as well as running a number of its own food retail and cake stores.

The bourse opened on Sunday 14 March and, having gained 36 points (1.4%) the previous fortnight, was 31 points (1.2%) higher to close on 2,604 by Thursday 18 March. Emaar Properties, US$ 0.03 lower the previous week, nudged US$ 0.01 higher to close at US$ 0.99. Emirates NBD and Damac started the week on US$ 3.17 and US$ 0.31 and closed on US$ 3.22 and US$ 0.30. Thursday 18 March saw the market trading at 118 million shares, worth US$ 73 million, (compared to 192 million shares, at a value of US$ 50 million, on 11 March).

By Thursday, 18 March, Brent, US$ 12.46 (21.6%) higher the previous five weeks, lost ground this week shedding US$ 5.95 (8.6%) in this week’s trading to close on US$ 63.51. Gold, US$ 33 (2.0%) higher the previous week, was up a further US$ 8 (0.4%), by Thursday 18 March, to close on US$ 1,729. For the first time in three years, the Central Bank of the UAE sold gold bullion, worth UAE 463 million, in January, bringing its gold reserve down to US$ 3.4 billion, as it capitalised on the near record prices at that time.

With news that a supplier had changed its production processes, and reports that they may not be up to standard, Boeing has decided to test flight deck windows on a select number of its 787 Dreamliners. This potential problem will no doubt delay the scheduled end of March restart of deliveries of the aircraft. This is not the first of glitches that the manufacturer has faced – last month, the US Federal Aviation Administration published an airworthiness directive, requiring the examination of 222 Dreamliners, after dimples were found in 787s’ inner lining. Both Emirates and Etihad are 787 customers, with the Dubai carrier having signed a US$ 8.8 billion order for thirty 787-9 aircraft at the 2019 Dubai Air Show.

If you want to talk about looking after yourself, you only have to refer to bankers – and Deutsche Bank is a good example. It is facing investor backlash because, although it has frozen dividends for the second year in a row, it has decided to hand a 46% increase in bonuses – equating to US$ 1.05 billion and almost eight times the bank’s net profit – to its investment bankers; its chief executive, Christian Sewing, was not to be left out, seeing his remuneration also increasing by 46% last year, as did the executive board’s pay to US$ 70 million. 47% of the total bonus pool of the US$ 2.3 billion has been awarded to its 16.2k investment bankers, representing 20% of the workforce; the groupwide bonus pool rose 29% last year. It is also interesting to note that the ECB would not allow the bank to raise the bonus pool above the Eur 2.0 billion level. Although its share price has doubled over the past twelve months, it is still 6% lower than its April 2018 level.

Before becoming the Bank of England governor, Andrew Bailey, was head of the Financial Conduct Authority and in that position, he was criticised by Dame Elizabeth Gloster, a former appeal court judge for his – and the FCA’s – role in regulating London Capital & Finance; the company collapsed in 2019, with 11k having lost their life savings. The judge criticised him for failing to supervise and regulate LCF and her report named Mr Bailey as responsible for that failure and said he had made legal representations to prevent responsibility for the FCA’s failings being attributed to him by name. Last month, the BoE governor told a Treasury committee of MPs that he was “angry” and “disturbed” by her criticisms, adding it was “not correct” to say he did not want his name mentioned. Unusually, the retired judge wrote to the committee releasing extracts of representations from Mr Bailey’s legal team, revealing that they had asked for him not to be named on a number of different grounds. In another issue, he has come under further criticism for his role in the RBS scandal, with the bank accused of benefitting at the expense of thousands of its customers, who were left in financial ruin. It is reported that Mr Bailey did not reveal his role in the scandal and, to the surprise of no-one, the Bank of England said there was no interest to declare.

NatWest, formerly known as the Royal Bank of Scotland, is being taken to court by the Financial Conduct Authority for allegedly failing to comply with money laundering rules by not adequately monitoring and scrutinising this activity between 2011 and 2016. The UK’s watchdog claimed “increasingly large cash deposits” were made into a UK account, totalling US$ 520 million, including US$ 370 million in cash. The bank, still 62% owned by the government after the 2008 GFC bailout, saw their share value dip 1% in early Tuesday trading.

The supply chain finance firm, Greensill Capital, has claimed another scalp, with Credit Suisse axing its asset management head Eric Varvel and suspending bonuses for senior executives; a number of lower-ranking managers have been dismissed. His successor, ex-UBS Group asset management head Ulrich Koerner, will take over next month when the division will be run separately from international wealth. It will take the bank some time to recover from the debacle, as it was forced to suspend funds it ran that invested in Greensill’s notes when it became apparent that it could no longer value them. There is no doubt that some notes, underlying the funds, are worthless, whilst the value of what’s left is highly uncertain. The bank confirmed that it had already paid out US$ 3.1 billion and had a further US$ 1.3 billion in liquid funds. (Coincidentally, Lex Greensill and his family sold about US$ 200 million worth of shares in the company in 2019, during a fund-raising round led by SoftBank Vision Fund, which valued the business then, at US$ 3.5 billion).

Now there are reports that David Cameron, who became an adviser to Greensill in 2018, lobbied for the company access to UK Covid loan schemes. It is alleged that he pushed ex-colleagues to see whether the company could play a bigger part in programmes designed to keep credit flowing to cash-stricken businesses. It seems from public records that Greensill representatives had at least ten virtual meetings between March and June 2020, with the two most senior Treasury officials, in their attempt to seek access to a BoE loan scheme. The FT notes that the ex-Prime Minister also intervened personally when it appeared that Treasury officials were reluctant to include the Australian company in the BoE CCFF (Covid Corporate Financing Facility). One wonders what the premium is to obtain a person with such contacts, compared to the “normal” adviser – and whether there are any possible conflicts of interest.

Last Thursday, Born Kim became a multi-billionaire when the company he founded, Coupang, listed its shares on the New York Stock Exchange. At the start of the day’s trading, the South Korean’s stake in the company was worth US$ 8.6 billion but things got even better, with the share price surging a further 41% during the day. This was the biggest Asian listing in seven years, since Alibaba’s debut in 2014, and the biggest US IPO for two years, the year Uber went public. The e-commerce giant, backed by SoftBank, has indicated that its warehouse staff, and 15k full-time delivery workers, would be beneficiaries of as much as US$ 90 million worth of its shares. In line with a lot of mega tech companies, it is still posting losses, although revenue more than doubled in 2020, driven by the impact of Covid-19 and the subsequent surge in online shopping.

Having cut thousands of jobs since 2015, Nokia is planning another cull of between 5k to 10K of its current 91k payroll, as part of its US$ 720 million cost-saving strategy. The Finnish telecoms giant is playing catch-up on 5G, following major missteps by the previous management, and also plans to invest in cloud computing and digital infrastructure research. The new chief executive, Pekka Lundmark, appointed in 2020, has made changes to get closer to their rivals, such as Sweden’s Ericsson and China’s Huawei. The Finnish telecom was formerly the leading global handset manufacturer but was superseded by Apple’s iPhone and Samsung’s Galaxy, as it failed to anticipate the popularity of internet-enabled touchscreen phones.

One company that has faith in a strong post-Covid recovery is Greggs, planning to open 100 new shops this year and coming after the UK bakery chain’s first ever annual loss, (of US$ 17 million), in thirty-six years; it currently has 2.1k outlets in the country. As High Street sales fell by 36% in the year, Greggs compensated by ramping up deliveries, wholesale, and click-and-collect.

On Monday, UK retailer Thorntons announced that it is to close all its sixty-one stores, but it appears that its 100+ franchisees will remain active. The chocolate-maker noted that “we proactively communicated with all our franchise partners this morning to reassure them that we remain committed to supporting them and continuing to supply their business with our Thorntons range.” Up to 2004, the only outlets that sold the chocolates were Thorntons own shops and its franchisees, but since then it has been open season, with its products being sold in supermarkets and elsewhere. There is an example of a franchisee who claims he paid an annual US$ 10k to Thorntons and was told at what price he could sell the chocolate, as well as adhering to strict protocols for items such as specific lighting requirements. Since then, potential customers could get the same product at much cheaper prices, at petrol stations and discount retailers. In one case, it is alleged a franchisee could buy Easter eggs for US$ 4.20 from Wilko that cost him US$ 7.00 to buy direct from Thorntons.

With its latest fundraising, yielding US$ 600 million, Stripe has become the most valuable private company in Silicon Valley, with an estimated market value of US$ 95 billion. The eleven-year-old company – founded by Irish brothers, Rick and John Collison – has seen its value almost triple over the past twelve months. Last year, the firm handled 5k transactions a second. Two high profile names in the finance world – former BoE governor, Mark Carney, and Christa Davies, CFO at Aon – joined Stripe’s board in 2020, with the likes of PayPal founders, Elon Musk and Peter Thiel, being among early investors.

After fifteen years as head of the 37-nation Organisation for Economic Cooperation and Development, Mexico’s Angel Gurria is to stand down in May, to be replaced by Australia’s former finance minister, Mathias Cormann. The 51-year-old politician, who quit parliament last year to challenge for the job, was chosen “by a slim majority”, beating Sweden’s Cecilia Malmstrom, a former EU trade commissioner. He becomes the first person from the Asia-Pacific region to lead the OECD, despite his contrarian stance on climate change.

BA’s Chief Executive, Sean Doyle, is asking the Johnson government to allow vaccinated people to travel, without restrictions, while those yet to receive the jab should be allowed to travel with a negative Covid-19 test. It is reported that the airline has negotiated a deal with a testing kit provider to give its passengers tests, costing US$ 59, to take abroad. The latest government advice is that citizens will not be allowed to take holidays until 17 May at the earliest; however, on 12 April, it will announce how and when non-essential travel, into and out of the country, could resume. BA has called on the government to work with other countries to allow vaccines and health apps to open up travel, noting that France, Greece, Portugal, Cyprus and Spain had all sounded positive about welcoming British holidaymakers this summer.

One of the main sectors impacted by the pandemic is the aviation sector and even though global airlines have received a cumulative total of US$ 225 billion from the various governments, via direct aid, wage subsidies, tax relief and loans, IATA has warned that much more is needed. It now considers that borders may not fully re-open until October, rather than June, and has urged governments to consider stimulus measures. The world body commented that airlines could not cope with more debt and that one new measure could be to subsidise tickets to help the sector and also supported the EU’s proposal on a bloc-wide “green digital certificate” to allow travel.

Colin Huang, China’s seventh richest person, and worth more than US$ 50 billion, has stepped down unexpectedly as chairman of the company he founded. His high-flying e-commerce group Pinduoduo, with 788 million active buyers on its platform, is now bigger than local rivals, JD.com and Alibaba. Shares in the company dipped 8% on the news, cutting US$ 4 billion from Huang’s personal wealth. The company is known for introducing novel ideas to the market including team buying, where customers combine to purchase more units at a lower price, and allowing users to play games on the site, sometimes rewarding them with gifts. On the flip side, the tech company continues to make losses and has raised US$ 9 billion from investors since its New York market launch in 2018; it has also been criticised for its intense work culture and its “996” schedule – working daily from 9am-9pm, six days a week.

There is no doubt that Chinese regulators are becoming increasingly concerned on the relative freedom afforded to its tech giants and are stepping up their scrutiny on their operations and content platforms. It is reported that the Chinese cyber space administrator – along with the public security ministry – have met with eleven tech companies, including Alibaba, Tencent and ByteDance, for talks on their use of “deepfake” technologies.  (Deepfakes use AI to simulate hyper-realistic but fake videos or audios where a person appears to say or do something they did not). Over the past six months, there is no doubt that the Chinese authorities are paying closer attention to the working of the tech giants, worried about their power, size, monopolistic behaviour and potential infringement of consumer rights.

Impressive figures from China for the first two months of 2021 saw its industrial output grow 35.1%, compared to the same months last year – an indicator that the recovery has been stronger than expected. However, there is a caveat because over this period in 2019, the country and many of its factories were in pandemic lockdown. Export growth was driven by a rebound in foreign demand, whilst retail sales climbed by a third in the period, with the major growth products being jewellery (up 99%) and cars (78%), whilst spending on travel, restaurants and leisure activities were subdued because of government imposed travel restrictions before the Chinese New Year holidays, early in February. One disappointing figure was the jobless rate climbing 0.3% to 5.5% from December to February.

The US Fed Reserve noted that interest rates will remain near to zero until at least 2023, despite some analysts predicting problems with higher inflation. Another positive take from this announcement is the uptick in its 2021 economic growth forecast – up to 6.5% from its previous 4.2% December prediction. Meanwhile, inflation will be nearer 2.4%, rather than the previous 1.8% forecast. The markets approved this announcement but there are some who think it wiser for the Fed to start reining in the current low-rate policies. Unemployment is expected to dip even faster, with the current 6.2% level dropping to 4.5% by the end of this year – and to 3.9% by the end of 2022.

Applications for US jobless claims sank to their lowest level since early November, driven by an uptick in vaccinations and the easing of lockdown restrictions. The latest weekly report showed that initial claims fell by 42k to 712k – and on an adjusted basis by 47k to 709k. Continuing claims declined by 193k to 4.14 million as at the last week in February – this is an approximate figure of the number of Americans filing for unemployment benefits.

The number of Australians with jobs is almost back to pre-pandemic levels, as the country’s unemployment rate dipped 0.5% to 5.8% last month, with interestingly women securing 75% of the new jobs in February. The fall was larger than expected but an indicator that the labour market and the economy are definitely on the mend. For the first time in eleven months, there were more than thirteen million Australians in employment, with February numbers of 89k finding jobs. The next examination on the state of the labour market will come when the JobKeeper programme expires at the end of this month. However, the underemployment rate – which measures the number of employed people, who already have jobs, but want to work more hours – rose 0.4% to 8.5%.

It seems that thirty-four listed companies, that had received hundreds of millions of dollars in JobKeeper subsidies, posted higher profits in H2 2020 than in the same period in 2019. It is estimated that these government ‘hand-outs’ account for about 20% of their underlying earnings on average. Last year, 25% of the companies listed on the ASX 300 received JobKeeper payments. An analysis showed that ninety-five of the listed entities had reported receiving 2020 government subsidies, worth a combined US$ 2.96 billion, with JobKeeper payments received by seventy-five of those companies accounting for US$ 1.94 billion (more than 60%) of the total. 63% of all JobKeeper payments were received by only six companies – Qantas (US$ 565 million), Crown Resorts (US$ 198 million), Flight Centre (US$ 152 million), Star Entertainment Group (US$ 118 million), Eagers Automotive (US$ 100 million) and G8 Education (US$ 79 million).

One drawback for the government in applying JobKeeper was that when introduced, it was based on the temporary turndown in profit over the period March to June and the scheme would offset any fall by up to US$ 15k per employee in subsidies until September 2020. There was no requirement to return the JobKeeper subsidy if sales or profits increased after the recipient had qualified. To date, it seems that only twenty listed companies have announced that they would return some of this subsidy paid. The total amount of US$ 112 million would be net of tax and only accounts for about 4% of all disclosed JobKeeper receipts by ASX 300 entities – to date only US$ 15 million has been received. To add to the ATO’s woes, it appears that companies, that have been caught rorting the system, still owe hundreds of millions of dollars.

At the weekend, Merkel’s Christian Democrats slumped to their worst ever results in what had been one of their traditional strongholds. The elections were a litmus test for the upcoming national elections in September, when the Chancellor relinquishes power after sixteen years. Her party’s image was badly damaged by one of their leading MPs, Nikolas Lobel, having to resign because of his involvement in a US$ 300k commission payment on a deal to procure face masks. Her party also suffered voters’ wrath, with her government’s handling of the pandemic; her programme is seen to have gone too slowly and that promises to introduce rapid testing have yet to materialise.

The Covid crisis has seen cracks appearing in the EU, as well as seeing Angela Merkel’s party slump in the latest regional elections in Germany. Six countries – Austria, Bulgaria, Croatia, the Czech Republic, Latvia and Slovenia – have complained to both the presidents of the European Council and the European Commission of “huge disparities” in the allocation of vaccines between member states. The commission has commented that the allocation of doses had followed a “transparent process”. Earlier in the year, the EU had been expecting at least 100 million and 180 million doses in Q1 and Q2, from AstraZeneca – now the numbers will be 30 million and 70 million. These delivery shortfalls highlight the systems, by which vaccines are shared out between member states under the control of bloc’s vaccine procurement strategy.

Last week, it was the European Council president, Charles Michel, seemingly defaming the UK government, claiming that the UK had imposed an “outright ban” on the export of vaccines and their components. Now, apparently driven by post Brexit disagreements, the European Commission president has taken a pot shot at the UK warning that, if Covid vaccine supplies in Europe do not improve, the EU “will reflect whether exports to countries who have higher vaccination rates than us are still proportionate”. Because of poor management, the EU has always been behind when it comes to vaccines and evidently made their order three months after the UK placed theirs. It is claimed that the number one export destination for vaccines manufactured in the EU is the UK, with 41 million vaccines being produced over the past six weeks, of which 10 million went to the UK; Canada and Mexico have received 3.9 million and 3.1 million doses from the EU. There is no doubt that the EU has handled – and continues to handle – its vaccine protocol badly and the bureaucracy will not take responsibility for their failings. Until someone takes control of the shambles, the bloc will continue to fall behind the rest of the developed world.

With the UK economy contracting a further 2.9% in January, it is now 9.0% smaller than it was prior to the onset of the pandemic in 2020. In the first month of the year, EU imports and exports were both lower – imports 28.8% (US$ 12.4 billion) down and exports by 40.7% (US$ 7.4 billion). The Office for National Statistics indicated that these monthly figures, the first since the introduction of new post-Brexit trading rules, were “likely the result of temporary factors”, whilst saying that January’s fall was a “notable hit”, albeit smaller than some had expected. There is no doubt that the UK economy will recover quicker than most analysts anticipate – when it will return to pre-pandemic levels, Only Time Will Tell.

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