I Fought The Law (And The Law Won)                                      14 January 2022

For the past week, ending 14 January 2022, Dubai Land Department recorded a total of 1,559 real estate and properties transactions, with a gross value of US$ 1.23 billion. It confirmed that 1,022 villas/apartments were sold for US$ 613 million, and 219 plots for US$ 305 million over the week. The top three transfers for apartments and villas were all apartments – one was sold for US$ 104 million in Marsa Dubai, a second sold for US$ 74 million in Business Bay, and the third sold for US$ 51 million in Burj Khalifa. The top land transaction was for a plot of land in Island 2, worth US$ 20 million. The most popular locations in terms of volume and value were Jebel Ali First, with 99 transactions, totalling US$ 62 million, followed by Al Hebiah Fifth, with 44 sales transactions, worth US$ 23 million, and Wadi Al Safa 5 with 8 sales transactions, worth US$ 910 million. Mortgaged properties for the week totalled US$ 447 million and 48 properties were granted between first-degree relatives worth US$ 60 million.

Just as in the case of real estate sales, experts indicate that the rental market has had a strong 2021, with more of the same this year, but at a slower rate. The two main factors attributable to 2021 figures were the successful vaccination programme and gradual opening of international borders. ValuStrat reported that “2021 was a year of recovery from pandemic challenges and a beginning of the new normal. Prices and rents mostly recovered to pre-pandemic levels, with record-breaking sales volumes and values.” `The ValuStrat Price Index closed the year on 67.3 – 6.7% and 18.9% higher on the quarter and the year. It also indicated that although the median rents, at the end of 2021, stood at US$ 16.0k and US$ 64.5k, for apartments and villas respectively, average rents are still 4.9% lower than pre-pandemic levels. There was no surprise that annual villa rentals outpaced those for apartments– 26.8% higher cf 14.3%; however, on a quarterly basis, apartment rents performed better – 6.9% v 6.3%. This year, average villa rents will increase by just over 10%, whilst apartments may squeeze 6%.

HH Sheikh Mohammed bin Rashid Al Maktoum issued a new law to regulate the procedures for expropriating property for public use in Dubai. The law covers all areas across Dubai, including special development zones and free zones. The legislation seeks to protect the rights of owners whose properties are expropriated (taken over by an authority from an owner for public use or for social benefit), that they receive a full and fair compensation, as per a decision issued by the chairman of the Ruler’s Court, which will also establish ‘The Expropriation Committee’ to oversee all matters related to the expropriation of properties. The chairman of the Court of the Ruler of Dubai will issue a decision on the formation of the committee, its members, decision-making processes and expropriation procedures.

HH Sheikh Mohammed has also approved six new laws to create a new legal framework for Dubai Chambers and their Boards of Directors. Its two main targets are to further strengthen the emirate’s position as a global economic hub and to support the business community in the emirate. Three of the decrees see the Dubai Chamber of Commerce & Industry being replaced by Dubai Chambers and that HE Juma Al Majid being appointed its Honorary Chairman, with HE Abdul Aziz Al Ghurair as its Chairman. Members of the Board include Faisal Juma Khalfan Belhoul, the Vice Chairman; HE Khalid Juma Al Majid Al Muhairi; HE Omar Sultan Al Olama; Omar Abdullah Al Futtaim; Sultan Ahmed bin Sulayem; HE Helal Saeed Al Marri; Buti Saeed Mohammed Al Ghandi; Dr. Raja Easa Al Gurg; Dr. Amina Abdul Wahed Al Rostamani; Tariq Hussain Khansaheb; Raji Patrick Chalhoub; and Ghassan Ahmed Yahya Al Kibsi. Three other devreees establish the Board of Directors for Dubai Chamber of Trade, the Board of Directors for Dubai Chamber of International Trade , with Sultan Ahmed bin Sulayem as Chairman, and the Board of Directors for Dubai Chamber of Digital Economy, with HE Omar Sultan Al Olama as Chairman.

Under the directives of Dubai’s Crown Prince, HH Sheikh Hamdan bin Mohammed, the ‘Talent Pass’ licence was launched for freelance work (self-employment)., available to people with special skills and expertise from around the world. It will target global talent and professionals in the fields of media, education, technology, art, marketing and consultancy, with two aims of doubling the contribution of the creative sector to Dubai’s GDP and increasing Dubai’s ability to attract creative individuals, investors, and entrepreneurs, as well as local, regional, and international investments.  The MoU, signed between the Dubai Airport Freezone, with Dubai Culture and the General Directorate of Residency and Foreigners Affairs, will create the framework for cooperation and coordination to process licenses, visas and other services that support innovators in establishing, operating and growing their business in Dubai. The ‘Talent Pass’ qualifies its holder to obtain a residence visa for three years, in addition to renting office space through a wide range of modern office solutions provided by DAFZ. ‘Talent Pass’ is part of a portfolio of six licences offered by DAFZ, which includes the Commerce Licence, for commercial activities such as import, export and re-export, and the General Commerce Licence.

The portfolio also includes:

• the Industrial Licence for light manufacturing activities and packaging and assembly
• the E-Commerce Licence for online trading of goods and services
• the licence issued in partnership with the Department of Economic Development, which allows companies registered at the DAFZ to apply for the Department’s license, without the need for an office space for working outside the free zone
• the Services Licence for a range of service-based companies

Following the Executive Council’s endorsement of the shared mobility plan and the e-scooter policy, new rules have been introduced by the RTA that will allow residents to ride e-scooters in ten districts across the emirate. They are Sheikh Mohammed bin Rashid Boulevard, JLT, DIC, Al Rigga, 2nd of December Street (specified track and zone), The Palm Jumeirah, and City Walk, as well as safe roads in Al Qusais, Al Mankhool, and Al Karama. Cycling tracks, except those in Seih Al Salam, Al Qudra, and Meydan, can also be utilised. The RTA also added that it “plans to expand the use and tracks of e-scooters to include specific residential areas, and 23 new districts later on.”

The December IHS Markit PMI, up 0.8 on the month, confirmed what many already knew – that Dubai’s business conditions, in the non-oil private sector, were at their best in thirty months; this was driven by a “robust increase in new order volumes”, and an improvement in the tourism sector, as the emirate continued to ease restrictions. In addition, there was the impetus from Expo 2020 and an improvement in local sales, amid growing consumer confidence in the economic recovery. Output was also strong, expanding at the second-fastest pace since mid-2019. Last month, new work at construction companies also grew at its fastest pace since February but lagged the pace of growth seen in the other two sectors; backlog volumes continued to rise as companies struggled to complete orders, whilst there was no change in the quantity of inputs purchased by businesses in the month. Dubai’s employment in the emirate’s non-oil economy showed a modest rise in December, indicating a renewed push to improve staffing. The rate of overall input price inflation rose to its highest level since March, driven by higher energy and raw material costs. There is some concern that the recent Omicron coronavirus variant surge may have a negative economic impact in upcoming months, but if it remains under control, then the 2022 outlook is promising for Dubai.

DMCC has announced the completion of a range of enhancements made to Jumeirah Lakes Towers throughout 2021 and further upgrades in 2022. Infrastructure work includes a new road network, that will facilitate travel between JLT and the Jumeirah Island area, as well as the renovation of the various lakes across JLT, including enhancing the lake’s walls and improving the water quality. DMCC has made significant progress in the palm replacement project, which will go on throughout the year. To better serve JLT’s 100k population, several new sports and recreational facilities will also be added in 2022.

With the DMCC welcoming nearly 2.5k new companies, representing 146 geographies, the world’s flagship Free Zone has seen its member companies nudging above the 20k level. Over the past four years, over 8.3k new companies joined the DMCC. The year has seen strong international demand, including from China, US, UK and Russia, with the launch of the DMCC Crypto Centre and the expansion of its commodities centres. The Dubai Diamond Exchange, the largest global diamond tender facility, held 68 diamond and precious stone tenders, whilst the DMCC Tea Centre posted a 14% hike in 2021, handling over 35.6k metric tonnes of tea.  Meanwhile, the DMCC Coffee Centre, doubling its numbers in 2021, stored and processed more than 9k MT of both green and roasted coffee from a broad range of producing markets across Central and Southern America, Asia and Africa. CEO, Ahmed bin Sulayem is bullish on the prospects for 2022, noting that, “given the incredible momentum that the DMCC team has collectively achieved this year, I am convinced that 2022 will feature major milestones, including the completion of Uptown Tower”; the tower is now more than 270 mt high and the 340 mt structure is scheduled for delivery in Q3 2022.

2021 proved to be a record year for the Dubai Gold and Commodities Exchange, trading 7.1 million contracts, with a total value amounting to US$ 149.7 billion. Its best performing product during the year was again the Indian Rupee Options Futures Contract, which traded up on the year by 1,233%. It also signed agreements with the S & Royal Group Mongolia, to explore future business and trade opportunities, the Victoria Falls Stock Exchange, aimed at supporting with the development of a clearing and settlement commodities exchange in Zimbabwe, as well as the Financial Markets Regulatory in Sudan, to strengthen the gold market across Africa. DGCX ended the year on a strong note, with December trade volumes of over 727.8 million contracts.

Shorages becomes the latest Dubai-based start-up to raise money in a seed funding round. The e-commerce fulfilment company, whose chief executive is Rayan Osserian, raised US$ 700k, with money to be used to build more warehouses in the UAE and to increase hiring. The financing was led by London-based Mayfair Holdings, along with a number of other angel investors. Earlier, it had attracted US$ 1.6 million in an oversubscribed seed roundlast October.

Zone, the first GameFi ecosystem on the Algorand blockchain, raised US$ 2.35 million in new funds before its initial dex offering tomorrow, 15 January. (The IDO coin/token is distributed through a decentralized liquidity exchange that uses liquidity pools to allow traders to swap tokens). Zone’s founder, Adi Mishra, commented that “we see Zone as proof that Algorand is the future of GameFi. The market now has a GameFi ecosystem that supports everything, all without very high fees that discourage user adoption. Institutional investors can see where the market is shifting, and this proves that.” GameFi – or gaming finance – combines gaming, decentralised finance and the opportunity to earn, whether in cryptocurrency or cash, with players trading for non-fungible tokens. NFTs, (with the global market valued at US$ 41 billion), are unique virtual assets and cannot be replaced.

The Central Bank announced that the November Money Supply aggregate M1 increased, month on month, by 2.1%, to US$ 186.9 billion, M2 by 1.3% to US$ 413.4 billion and M3 by 0.6% to US$ 498.6 billion. The November increases in all three groups were attributable to a US$ 3.8 billion in Monetary Deposits (M1), the increased M1 as well as a US$ 1.2 billion rise in Quasi-Monetary Deposits (M2) and the increases in M1 and M2 less the US$ 2.3 billion decline in Government Deposits. (M3). During the month, gross banks’ assets, including bankers’ acceptances, increased by 0.8% to US$ 898 billion, whilst gross credit climbed 1.4% to US$ 487.3 billion. Total Bank Deposits decreased marginally by 0.03%, to US$ 535.9 billion.

The DFM opened on Monday, 10 January, up 75 points (2.4%) on the previous fortnight, shed 18 points (0.6%) to close the week, on Friday 14 January, at 3,202. Emaar Properties, US$ 0.16 higher the previous fortnight, ended the week flat on US$ 1.35. Emirates NBD, DIB and DFM started the previous week on US$ 3.65, US$ 1.50 and US$ 0.72 and closed on US$ 3.58, US$ 1.50 and US$ 0.71. On 14 January, lacklustre trading saw 36 million shares changed hands, with a value of US$ 30 million, compared to 165 million shares, with a value of US$ 61 million, on 07 January 2022.

By Friday 14 January 2022, Brent, US$ 7.58 (10.2%) higher the previous three weeks, gained US$ 2.38 (2.9%), to close on US$ 84.28. Gold, down US$ 34 (1.9%) the previous week lost US$ 14 (0.8%), to close Friday 14 January on US$ 1,831. 

Gold may have a rocky six months ahead and could feel the pinch from the double whammy of inevitable higher interest rates and a strengthening greenback; a stronger dollar makes bullion more expensive for buyers who hold other currencies. However, as a hedge against inflation, it may be able to ride on the back of continuing market volatility from ongoing Covid variants, ongoing high inflation as well as increased demand from central banks and the global jewellery sector.

Brent ended the year at US$ 77.78, with an average US$ 71 price during the year which showed a yearly US$ 31 rise on the close of the annus horribilis. Last year ended with Brent prices over 50% higher for the twelve months.  Over the past three years, Brent has climbed 12.4% to US$ 66.67 in 2019, fell 22.3% to US$ 51.80 (2020) and rose again by 50.1% to US$ 77.78. It only has to increase by 10.0% to reach US$ 85.58 and there is every chance of that happening in Q1; today 14 January, it was trading at US$ 84.28, as inventory levels continue to head south, whilst global demand heads north, nearing a daily consumption of 100 million bpd. Further in the year, circumstances may change, more so if shale rears its ugly head again which could have a negative impact on Brent.

Tech giant Samsung Electronics expects a 52% hike in Q4 profits, at US$ 11.5 billion, which would be its fourth highest quarterly return posted over the last four years. Despite the global chip shortage, the world’s biggest memory chip maker noted that its revenue figures were boosted by strong demand for server memory chips and higher profit margins in its chip contract manufacturing business, as well as from currency fluctuations, with the Korean won declining during the period, making Korea’s exports more attractive on the global market. However, over the same period, it has seen costs rise, including on employees’ bonuses and marketing for its smartphone business. A potential problem for Samsung relates to its chip manufacturing factory in Xi’an, and with the city being in lockdown since 23 December. The South Koreanconglomerate commented that it would “temporarily adjust operations” at its sites in Xi’an but gave no indication on its short-term plans.

It is reported that Tim Cook’s 2021 salary remuneration was six times higher on the year at US$ 99 million, comprising a salary of US$ 3 million, US$ 1 million in other monetary benefits, US$ 12 million based on incentives and US$ 82 million in stock awards. However, his 2020 US$ 15 million package did not include any stock benefits. When he took over from Steve Jobs in 2011, he struck a deal that gave him a tranche of more than five million shares after he had completed a decade in the top job; this was paid out in August 2021. Four other senior executives picked up compensation packages of between US$ 26 million to over US$ 27 million, whilst the median pay for employees rose from US$ 58k to US$ 68k.

As it expects to raise its UK payroll numbers by over 56% to 10k, Google is to spend US$ 1.0 billion, backing a return to the office and to “reinvigorate” the work environment. According to its UK boss, Ronan Harris, the investment in London reflects the firm’s faith in the office as a place of work; its new King’s Cross development is currently under construction., whilst it is also planning a multi-million-pound refurbishment of its offices

For the second time in four months, Pret A Manger is to raise 6.9k of its 8.5k of its workers’ pay to more than US$ 13.70 per hour. This is in line with several other retailers, including supermarkets Sainsbury’s, Aldi and Morrison’s, who have boosted staff pay already as they struggle to hire and retain workers. Pano Christou, Pret’s Chief Executive of the sandwich chain, which has 550 shops around the world, commented that, “we’ve said all along that as our business recovered, we wanted to invest back into our people”.

After Ikea had made similar changes at the beginning of the month, Next and Ocado have become the latest retail chain to amend their health and safety policies. They have cut sick pay for unvaccinated staff who must self-isolate because of Covid exposure, but any staff testing positive will still receive full sick pay. Unvaccinated workers at the retailers, who test positive, are still being paid in full for the time they need off but if they are required toisolate, having been identified as a close contact of someone with Covid, could now receive as little as US$ 132 a week – the Statutory Sick Pay minimum.  Next, in line with many other companies, faced labour shortages in 2021 and some are now seeing mass absences due to the more infectious Omicron Covid strain.

The value of global Sukuk issuances skyrocketed 36.1% last year to reach a grand value of US$ 252.3 billion and are expected to continue this growth trend in 2022, A new report from Fitch Ratings indicates that much of the improvement can be attributed to robust Islamic investor appetite, a diversification in funding goals and Islamic-finance development agendas, all three of which will be in play again in 2022. It does carry five caveats that could have a negative impact including a downside risk stemming from higher oil prices could reduce a number of sovereigns’ funding needs, AAOIFI [Accounting and Auditing Organisation for Islamic Financial Institutions] compliance complexities, traditional risks such as interest-rate rise, lower global investor appetite for emerging-market debt and political risk. Interestingly, the GCC countries, Malaysia, Indonesia, Turkey and Pakistan accounted for US$ 230.2 billion of total deals, equating to 91.2% of the total value in 2021.

Despite all the supply chain problems, labour shortages and the onset of Omicron, most of the UK’s big retailers posted bumper Christmas sales. It was another great Yuletide for the sector, with consumers prepared to spend both on food and non-food, and willing to pay full price, pushing up retailers’ margins. Whether the good times are coming to an end remain to be seen but there will be an inevitable squeeze on spending, with inflation and supply issues pushing up prices, along with tax and national insurance increases in April.

Both M&S and Tesco have been performing better than expected, with the former posting a Q4 18.6% jump in sales to US$ 4.0 billion; this figure was also 8.9% up on the same quarter in 2019. Although in-store clothing and home demand fell10.8%, total revenue from its clothing and home division rose, driven by online sales. M&S also noted that its shops at retail parks continued to outperform stores in city centres. Chief executive, Steve Rowe, reiterated the problems facing not only his brand but the sector in general. These factors, pushing up prices, included supply chain pressure, combined with pandemic supply interruptions, rising labour costs, EU border challenges and tax increases.

After reporting an “exceptional” festive period for sales, Tesco now expects annual income to hit the top end of forecasts at US$ 3.6 billion. Tesco’s chief executive Ken Murphy said that “once again, Covid-19 led to a greater focus on celebrating at home”, as Tesco’s Christmas sales in the UK rose 0.3% compared to the previous year and were 9.2% higher than the pre-pandemic festive period in 2019.

According to Euromonitor, since the onset of Covid, global online shopping has expanded 43.5% to US$ 2.87 trillion, with 50% of that total emanating from Asia. The end result is that warehouse space is close to capacity, with vacancy rates at record low levels as businesses, including retailers, run out of space for items bought online. The CBRE estimates that the current vacancy rate in Asia is a historic record 3% low and that in a recent survey, more than 75% of companies, using warehouses in the Asia-Pacific region, indicated their keenness to expand in the next three years. It is obvious that this increased demand for more space, allied with the ongoing supply chain disruptions, means that the requirement for companies is to hold the highest safety stock levels. to meet online demand. With a lack of space to build traditional warehouses, it is inevitable that they will become taller as well as becoming increasingly more automated.

With its third base rate increase in six months, South Korea’s new rate of 1.25%, (the same level it was pre-pandemic), is an attempt by the Bank of Korea’s to contain rising inflation, (with consumer inflation for 2021 as a whole jumping to 2.5%), and soaring household debt. In August, it was the first major Asian country to raise rates since the onset of the pandemic.

Since the beginning of 2020, central banks, governments and international financial bodies have pumped trillions of dollars into the global economy to help cushion the impact of Covid restrictions. Now these institutions have started to phase out these stimulus measures and use monetary policy tools such as rate hikes. The Bank of England raised rates last month for the first time in three years, whilst the Fed has signalled that up to three rate hikes are possible in 2022; latest figures show that inflation in the UK and US was at 5.1% and 7.0%.

A report by Chainalysis claims that 2021 was one of most successful years on record for North Korean hackers as they stole almost US$ 400 million worth of digital assets in at least seven attacks on cryptocurrency platforms. The cyber criminals mainly targeted investment firms and centralised exchanges. It seems their modus operandi involves various techniques including phishing lures, code exploits and malware to siphon funds. Chainalysis considers that the so-called Lazarus Group, a hacking group sanctioned by the US, is largely responsible for these attacks; it is thought that the group is controlled by North Korea’s primary intelligence bureau, the Reconnaissance General Bureau. The North Korean government continues to deny its involvement in any of these incidents. In February 2021, three North Korean computer programmers were indicted for a hacking spree, aimed at stealing more than US$ 1.3 billion in money and cryptocurrency.

Last week’s blog pointed to the fact that China had become the biggest global lender and that Sri Lanka was one of more than forty low and middle-income countries, whose debt exposure to Chinese lenders was more than 10% of the size of their GDPs. Over the past ten years, the country had received at least US$ 5 billion from the Chinese government for projects including roads, an airport and ports, but now, it is claimed that some of these loans were used for unnecessary schemes, with low returns. The current classic example is that of the massive Sri Lankan port project in Hambantota, a one billion dollar project financed by Chinese money; it did not live up to its promise and soon became unviable leaving the country mired in debt; the only way out was to hand the state-owned China Merchants a controlling 70% stake in the port on a 99-year lease in return for further Chinese investment. This week, President Gotabaya Rajapaksa made a request to Chinese foreign minister Wang Yi to restructure its debt repayments, as part of efforts to help the South Asian country navigate its worsening financial situation.

Malaysia has confirmed that the trust account, set up to collect recovered 1MDB funds, has only received US$ 6.58 billion, (including US$ 111 million from audit firm KPMG paid to settle a lawsuit filed against it by 1MDB), and that it has repaid US$ 4.58 billion of 1MDB’s debt so far, with US$ 13.37 billion still outstanding. The government noted that it had recovered enough funds linked to the scandal-tainted state fund 1 Malaysia Development Berhad to pay off only the principal amount of the bonds for 2022. It is estimated that at least US$ 4.5 billion was milked from the fund in an elaborate globe-spanning criminal scheme. Between 2009 – 2013, 1MDB raised billions of dollars in bonds, ostensibly for investment projects and joint ventures. The government confirmed that it would pay off all the debts of 1MDB, once all the trust account funds are utilised, but still remained committed to recover all outstanding balances created by the scandal. At least six countries have launched investigations into 1MDB, co-founded by former Prime Minister Najib Razak, who has already been sentenced to twelve years in prison and millions in fines over corruption and money laundering linked to funds misappropriated from a 1MDB unit.

According to a YouGov study, the UAE is ranked fifth globally for gaming influencers, with 13% of those polled, behind China and Indonesia (both with 20%), India (17%) and Hong Kong (12%). Out of that percentage, 34% are aged between 25 and 34 years, indicating that influencers appeal strongly to Generation Z. The study noted that, “gaming influencers attract a very loyal and distinctive fan base. This high level of appeal is significant: the stronger the connection between influencer and audience, the more likely fans are to develop a favourable opinion of the influencer and the content they create.” The global gaming market has over three billion users and is expected to grow at a CAGR of 8.7% from 2019 to 2024 to US$ 218.8 billion.  Meanwhile, the market for influencers is projected to more than double to US$ 374 million by 2028. Gaming influencers have created a massive community around themselves with a common interest in video gaming, mainly using their marketing platforms in search and discovery of clients, campaign management, influencer relationship management, analytics and reporting.

US venture capital deal making topped a record high of nearly US$ 330 billion, and over 17k deals, on the back of excess liquidity and a monetary policy that encouraged such spending; leading sectors were technology, biotech, healthcare and fintech sectors. VC fundraising also had a record year at US$ 128.3 billion, with the two standout performers being crypto firm FTX Trading, valued at US$ 25 billion, and AI platform Databricks, with a valuation of US$ 38 billion, both raising US$ 1 billion. More of the same is on the horizon this year mainly because of liquidity in the market and returns outpacing all other assets classes.

This week, the World Bank came out with some gloomy news, indicating that the global economy faces a “grim outlook”, with 2022 global growth at 4.2% – down 1.4% on the year – with poorer countries suffering more from widening global inequality. It noted that two other drivers behind this decline were government aid unwinding and an initial bounce in demand fading. Although it estimates that the advanced economies will have recovered to pre-pandemic levels, those of the poorer nations will fall further behind and be still 4% lower than when the pandemic first struck. A major problem facing most of the world, but more so for the weaker economies, is inflation. The World Bank points the blame for the recent surge in inflation on the stimulus packages, introduced by the richer countries, which now will have to be rolled in and phased out. While officials in many countries, including the US, are now expected to raise interest rates, to try to rein in price increases, higher borrowing costs could hurt economic activity – especially in weaker economies – as loan rates increase and local currencies devalue.

US December inflation topped 7.0%, with prices climbing at their fastest rate since 1982, driven by strong demand and scarce supply for key items.  It is a certainty that the Fed will soon start raising interest rates, which will pump up borrowing costs so as to reduce demand. The current rate, which is well ahead of policymakers’ 2.0% target, was caused by the likes of energy, groceries and housing surging at annual rates of nearly 30%, 6.5% and 4.1%. The US is not alone with the 30 nation OECD bloc posting its highest inflation rate in twenty-five years and the UK rate at a ten-year high, and the World Bank noting that inflation is rising at its fastest pace since 2008. The fact that the pandemic is not going away, and that supply and production problems continue, means that the price increases have been more persistent than expected. What is known is that Fed Chair was hopelessly wrong thinking that inflation pressures would be transitory and admitted to Congress this week that “it’s proving more difficult than we had hoped to end the pandemic.”

In her first interview of 2022, the IMF’s Managing Director Kristalina Georgieva told Abu Dhabi’s ‘The National’ that the latest surge of Covid-19 infections will slow the pace of the global economic recovery. It will have to downsize its October global 4.9% growth forecast “because the two big engines of growth of the world economy, the US and China, were slowing down, and then we got hit by Omicron”. The IMF supremo commented that the world will have to adapt to a “shock-prone world”, in addition to ensuring greater global co-operation. Noting that that the recovery is quite uneven, with different countries in different positions, the IMF will “use a great deal of our capacity to protect people and our economy”. Two major issues facing the world body were that divergence is “deepening” due to “unequal access to vaccines and countries’ access to finance. Since the onset of Covid, the IMF has provided nearly US$ 170 billion of financing to ninety countries”. The IMF supremo has concerns about global debt which had been a major problem even before the onset of the pandemic and has worsened since then; in 2020, the world debt level was estimated at over US$ 226 trillion. The MD said that some low-income countries are now in debt distress, and for some emerging markets raising money is becoming increasingly difficult, and that the issue of debt is “at the top of our agenda”.

She was “cautiously optimistic” that supply chain disruptions will be resolved to ease inflation and that the inflationary pressures will recede “by the end of 2022, early 2023.” She did warn that other developments, like “climate shocks”, could have an impact on food prices. Her advice to some global central banks, with high levels of debt was to “already now work on a rational response, meaning if you can stretch maturities, push payments down the road, do it, improve the transparency, look at ways where currency mismatches can be addressed”. A further message to central banks was that “Our view is central banks are now in a place where they have to use their instruments to push inflation, and more importantly inflation expectations, down. As they do that, we know there will be a spillover impact on the recovery, growth and on emerging markets in developing markets with lower denominating debt”.

Some of the major economies will see 2022 growth slow, compared to a year earlier; China will be 2.9% lower at 5.1%, the US 1.9% down at 3.7% and the eurozone 1.0% at 4.2%. The negative growth trend will be most felt in the poorer nations, such as those in Latin America/Caribbean, 4.1% lower at 2.6%. India is expected to buck the trend rising 0.4% to 8.7%.

Australian politicians are very much like politicians from anywhere else in the world and most of them like to court opinion and to win elections – Scott Morrison is no exception. It seems to an outsider that he saw an opportunity, in the case of Serb tennis champion, Novak Djokovic, to ensure a boost in his flagging popularity just before the federal May elections. However, it seems that the first set went to the non-vaccinated 34-year old, as a judge ordered that he be released from a five-day immigration detention after quashing his visa cancellation by the authorities over his vaccination status.

Notwithstanding his anti-vax stance, there is no doubt that Novak Djokovic has never been the most popular sportsman in Australia, and he would have faced an icy reception at the Australian Open, even before the legislators took over. Initially, it seemed that Prime Minister, Scott Morrison did not want to get involved accepting that the matter was a decision of the Victorian government who wanted their main drawcard to play tennis in Melbourne. Within twenty-four hours, the Prime Minister, who must have received advice that he could make political capital out of this, did a U-turn. With a federal election due, and already under pressure from his mishandling of the pandemic, this was a golden opportunity to garner public support by appearing to act tough on the country’s stringent border policies. The player’s visa was cancelled shortly after he arrived in Melbourne late on Wednesday because officials decided he did not meet the criteria for an exemption. Djokovic argued he did not need proof of vaccination because he had evidence that he had been infected with the coronavirus last month. Djokovic’s legal team ended up successfully challenging the decision to deport him in court on Monday, five days after his arrival in Melbourne. Judge Anthony Kelly ordered Djokovic’s release after the government acknowledged in court that he was not given enough time to respond following the notification to cancel his visa. By Friday, Australia’s Immigration Minister, Alex Hawke swung his axe and exercised his power to re-cancel the visa and deport the unvaccinated player. A final appeal will be heard this Sunday, but it could be game, set and match to ScoMo, and Novak’s last day in Australia will be in the wrong court. I Fought The Law (And The Law Won).