UHY GLOBAL JANUARY 2020 GLOBAL NEWS GLOBAL NEWS


NEW HEAD AT IMF Bulgarian economist Kristalina Georgieva became the second female managing director of the International Monetary Fund (IMF) in October 2019 – the first IMF leader from Eastern Europe and an emerging market economy. Georgieva has worked for the World Bank and European Union (EU). She joined the World Bank as an environmental economist in 1993, going on to hold various positions including Director of Sustainable Development, and Vice President and Corporate Secretary. She left in 2010 to become European commissioner for humanitarian aid and crisis response. She was named European of the Year and Commissioner of the Year by European Voice newspaper for her leadership in the EU’s humanitarian response to crises. She was EU commissioner for international cooperation and humanitarian aid during the Euro area debt crisis and 2015 refugee crisis. In 2017, she returned to the World Bank as its CEO. Speaking on her appointment, Georgieva acknowledged the challenges of slow economic growth, trade tensions and historically high global debt. “Our immediate priority is to help countries minimise the risk of crises and be ready to cope with downturns,” she said. “Yet we should not lose sight of our long-term objective – to support sound monetary, fiscal and structural policies to build stronger economies and improve people’s lives. This means also dealing with issues like inequalities, climate risks and rapid technological change.” Georgieva replaces Christine Lagarde, who left the IMF in September 2019 to become President of the European Central Bank


DUBAI DELIVERS NEW REAL ESTATE LAWS Dubai started 2020 with a raft of measures in place to regulate and manage its real estate market. In September 2019, Sheikh Mohammad bin Rashid Al Maktoum, vice president of the United Arab Emirates (UAE) and ruler of Dubai, announced a new Higher Committee of Real Estate, aimed at balancing supply and demand to ensure that construction projects add real value to the economy. The city of Dubai, the most populous in the UAE and a major regional and international business hub, is renowned for its large-scale construction projects and opulent hotels. Despite contributing 13.6% of GDP to Dubai’s economy in 2018, the oversupply of property has led to a reduction in the value of real estate in recent years. Sheikh Mohammed stressed the need for ‘quality projects’ built at a pace that brings value to the economy. With a membership including the General Secretariat of the Dubai Executive Council, the Dubai Land Department and senior representatives of major property developers, the committee was welcomed by industry experts, who believe that restoring balance in Dubai’s real estate market will consolidate its position in premium global real estate. The committee forms part of a broader regulatory framework to boost competitiveness and enhance investment in Dubai real estate. This includes new laws on joint ownership and reorganising the Real Estate Regulatory Authority.


HUMAN TOUCH FOR EMERGING TECH The World Economic Forum (WEF) has announced a Global Technology Governance Summit in April 2020, aimed at shaping a human-centred approach to the governance of emerging technologies. The summit follows the first meeting of the WEF’s Global Fourth Industrial Revolution Councils at the Centre for the Fourth Industrial Revolution (CFIR) in San Francisco, US, in 2019. It brings together stakeholders from government, business, civil society, startups and international organisations. CFIR was established in 2017 as a hub for stakeholder cooperation in developing policy and collaborations that accelerate the benefits of science and technology. The councils align with CFIR’s core focus areas – artificial intelligence, autonomous and urban mobility, blockchain, drones and aerial mobility, the Internet of Things, and precision medicine. Governing emerging technologies to benefit business and society while minimising risks, is one of four urgent global issues to be discussed at the WEF Annual Meeting in Davos in January 2020. Next-generation life-sciences, smart cities, mobility, robotics and human labour and advanced computing in the light of artificial intelligence and machine learning are themes likely to be significant. The announcement comes as other international organisations aim to shape policy and governance around emerging technologies in a societally-focused way. In 2019, the 36 member countries of the Organisation for Economic Co-operation and Development (OECD) and six others adopted the OECD Principles on Artificial Intelligence (AI), with the aim of promoting AI that is “innovative and trustworthy and that respects human rights and democratic values.” The G20 have also adopted human-centred AI Principles based on the OECD model.


DIGITAL TAX EXPANSION As of January 2020, Austria, Malaysia, Nigeria and Singapore have joined the growing number of countries around the world implementing taxes on digital services. Other countries are also set to follow during the course of the year. In Austria, the digital services tax (DST) that came into effect on 1 January 2020 is targeted at online advertising. Service providers in Austria with a global annual turnover of EUR 750 million (USD 825 million) or more, and a turnover in Austria from online advertising of at least EUR 25 million (USD 27.5 million), will be subject to DST at a rate of 5%. In Malaysia, DST at a rate of 6% is now applicable on the sale of digital services to local consumers by non-resident providers with an annual turnover in Malaysia of over MYR 500,000 (USD 120 million). The definition of digital services is broad, and includes streaming, cloud services, apps, software, e-learning and advertising services. The approach being taken in Singapore is similar, with Goods and Services Tax (GST) now applicable on the provision of local digital services by overseas suppliers. The focus in Nigeria is on domestic and international sellers of online goods or digital services, which are now subject to value added tax (VAT) at a rate of 5%. Among the other countries expected to implement taxes on digital services this year are the UK and Mexico. In the UK, a levy of 2% on the revenue of search engines, social media platforms and online marketplaces will be imposed from April 2020. The tax will apply to organisations with a global annual turnover of more than GBP 500 million (USD 642 million), and is expected to raise over GBP 1.5 billion (USD 1.9 billion). In Mexico, VAT at a rate of 16% will be imposed on the revenue from digital services supplied by foreign businesses from 1 June 2020. This includes online sales to customers based in Mexico. While there are differences in how these new digital services taxes are levied, their implementation reflects a growing trend around the world to ensure that providers of digital services are appropriately taxed. The Organisation for Economic Cooperation and Development (OECD) has also indicated an intention to advance international negotiations to ensure that “large and highly profitable” multinational enterprises, including companies providing digital services, pay tax in jurisdictions where they have significant consumer-facing activities and where they generate profit.


ESG DATA PORTAL LAUNCHED The World Bank has launched a publicly available online ESG data portal, designed to enable investors to better align environmental, social and governance (ESG) data analysis with key sustainable development policy indicators, and to support private sector investment in emerging markets. On the launch of the Sovereign ESG Data Portal, George Richardson, Director of Capital Markets at the World Bank Treasury acknowledged the increase in interest from private sector investors for better information to support the evaluation of environmental and social factors when considering investment strategies. “The platform aims to advance both the use and understanding of ESG data to channel more capital to sustainable development,” he said.The Sovereign ESG Data Portal aims to improve the availability, use and transparency of ESG data. A framework of 67 ESG indicators link to the United Nations’ 17 Sustainable Development Goals (SDGs), while the data is organised into themes identified by the World Bank as essential to the contribution of investment to sustainable development. Further indicators relating to natural capital, human capital, poverty measures, stranded assets and other areas are expected to be developed and added to the portal in the future. Alongside the data itself – which is drawn from multiple sources and World Bank programmes – the portal provides a comprehensive set of on-site tools that to help users understand it. These include including data visualisation tools that enable the exploration of data trends, and the ability to look at country-level profiles. Haishan Fu, Director of the World Bank’s Development Data Group, believes that access to high-quality ESG data will help investors to make informed decisions that are aligned with the UN SDGs. “The Sovereign ESG Data Portal is a great example of how better data can inform investment choices and lead to improved development outcomes,” he said. For more information, and to access the Sovereign ESG Data Portal, visit esgdata.worldbank.org.


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