When I worked in the Malaysian capital of Kuala Lumpur long ago, my office looked across Jalan Tun Razak, a boulevard named in honour of the country’s second prime minister and ‘father of development’. This week his son Najib Razak, its sixth prime minister (2009-2018), was convicted of charges relating to the disappearance of $4.5 billion from a sovereign wealth fund called 1MDB which he once controlled. More trials await, but 1MDB may go down not only as the world’s biggest corruption scandal but also the most vulgar — proceeds that might have helped Malaysia’s poor having been frittered on private jets, penthouses, parties in Las Vegas and the financing of The Wolf of Wall Street.
The alleged mastermind of all this, the financier Jho Low by whom Najib claims to have been misled, is still at large. But Goldman Sachs, which reaped $600 million in fees for managing 1MDB’s bond issues, has extricated itself from potential charges by paying $2.5 billion and guaranteeing recoveries of $1.4 billion. Many other reputable banks and professionals as well as Hollywood celebs overcame any doubts they may have had to sup with Jho Low and help shuffle or spend the 1MDB loot — and if you want the whole story, read Billion Dollar Whale by Tom Wright and Bradley Hope. It’s an absolute shocker. ‘There are important lessons to be learned… and we must be self-critical to ensure that we only improve from the experience,’ said a Goldman spokesman. The first lesson, I fear, is that easy access to giant sums of other people’s money is an overwhelming temptation.
A tax on big boxes
Rishi Sunak is contemplating a 2 per cent tax on goods sold online, possibly combined with a ‘green’ levy on delivery vans and a radical review of business rates, all designed to improve the survival chances of high-street retailers while harvesting more revenue from online sellers who have boomed during lockdown. About time too — but the question is whether the likes of Amazon are so smart at tax minimisation that they will simply outflank new measures and pass costs to consumers. Attacking on several fronts at once might be the answer, and one idea — from the veteran thinktanker Lord Vinson — is that business rates on ‘big box’ online distribution centres should be increased in line with those paid by supermarkets, proportionate to sales: Tesco’s £700 million business rates bill on £50 billion of sales offers a benchmark. Even better, of course, to deter distribution centres from moving straight to Belgium or Ireland, would be an international treaty on taxing digital giants. But in these strained times, that prospect looks further away than ever.
Sweden’s no-lockdown coronavirus response has arguably cost 5,000 lives, given a death rate per million ten times the average of its northern neighbours — though still not as bad as the UK’s. So it’s fascinating to read in the FT of a spate of better-than-expected second-quarter results from major Swedish companies. Volvo trucks, Ericsson telecoms, Electrolux household appliances, lenders such as Swedbank and Handelsbanken: reports from these and others suggest the downturn has been far less severe than analysts predicted. The country’s GDP fall for this year is now forecast at 5 per cent, about half of the likely impact in the UK and western Europe. Many Swedish firms operate within global supply chains, so observers are not attributing this performance wholly to lighter-touch domestic restrictions — but they do cite the advantage that Swedes are ‘less scared of working [and] shopping’ and that ‘the decision to keep schools and kindergartens open was a game-changer’.
Future historians must judge how policy-makers in different countries weighed the balance of lives and livelihoods in this crisis, taking account of demography and political culture as well as perceived risks of post-lockdown collateral damage. The Swedes, having lost 5,700 of their ten million citizens so far, will naturally compare outcomes with Norway and Denmark, which together have lost fewer than 1,000 out of 11 million but also appear to have suffered relatively mild economic harm. As to comparisons of leader-ship between Stockholm and London, I consulted a source with a toe in both capitals: ‘Sweden made a calculated decision and applied it consistently. You can argue about whether that was right. But Johnson’s crew just fucked up.’
Form? What form?
What a joy to be back in Leeds-Bradford airport among an early-morning crowd of lager-drinking lads mostly bound for Ibiza. And two hours later, another joy to hear that little fanfare Ryanair plays to mark an on-time arrival. My flights to Limoges and back last week were brisk, cheerful and hygienic, and I’m sure somewhere among the airline’s emails was a reminder to complete the new online contact-tracing form required for entry into the UK. But I’d missed it — as, I guessed, had many others in the arrivals queue. Some were being filtered out to put their details into touchscreen terminals. Confused, I asked a Border Agency official whether a French ‘sworn statement of absence of Covid symptoms’ would suffice. Evidently unsure, she waved me forward. I assumed the passport officer would either collect my form or put me right; but he waved me through too.
So I’m here to tell you that system ain’t working. Meanwhile the Ibiza boys will return to a fortnight’s quarantine even though the island (with its neighbour Formentera) currently has only 20 known Covid cases. Chaotic government decision-making means more travel operators will go bust as Britons abandon hope of breaks abroad this summer. In which case, let me recommend a spectacularly refreshing destination that could not be closer to my Yorkshire home: Helmsley Walled Garden and its Vine House café, both reopening this week.