A Quarterly Newsletter from the UAE and Oman member firms of the PKF International Ltd.

VOL 14, Issue 2 April 2012

From the Managing Partner - U.A.E.

I have been seeing a lot of seemingly contradictory articles recently commenting on where the world is going from an economic point of view. I have seen expected continued fall-out from “haircuts” being taken on Greek debt and how this may indirectly affect financiers here; I have seen comment that GCC mergers and acquisitions are to surge, despite other commentators indicating that M&A deals are now much harder to put together; tourism, hospitality, retail and transportation appear to be doing very well but I have seen comment that airlines are in for a tough time; restructurings and retrenchments are still being announced; there has been an improvement in US unemployment and spending but Europe is still in the dumps though UK house prices are rising; China and India continue to demonstrate stress; continuing oil prices can benefit producer economies but dent those of importers; and what of Iran?

With all these contradictory indicators business managers are having a tough time planning ahead. The probable consequence of this is continued caution on their part and a general reluctance to expose themselves to higher levels of risk as the downside could be too hard to swallow if remedial opportunities are likely to be hard to come by.

Certainly in the local environment, whilst I am seeing this caution, steps are being taken by the authorities to improve confidence and ease of doing business, such as the recently announced “hassle free” trade licence and the announcement of the cultural and arts centre at Downtown Dubai, a taste of yesteryear indeed. So I think while all are looking forward a fairly strong hand is on the tiller in case fair winds do not prevail.

In this edition I am delighted to have had the opportunity to interview CEO Middle East magazine’s most powerful Arab woman, Her Excellency Shaikha Lubna Al Qassimi, Minister of Foreign Trade. This is an accolade that she has now held for two consecutive years.

In this issue we also carry an important update with respect to the Income Tax Law of Oman contributed by the PKF member firm there.

Please feel free to write to update@pkfuae.com if you would like to express an opinion on any matter inside.

GRAHAM MARTINS