Ukraine Agro Mission Visits Israel

Early July saw a mission of 10 Ukrainian agricultural/food product exporters in Israel seeking market opportunities in this sector.  The group had site visits to agriculture/food related companies in the country and held a number of pre-arranged B2B meetings with Israeli companies in Tel Aviv, including importers, distributors, etc.  In this context, EDI is an authorized consultant to the GO ISRAEL program being implemented in 2019-20 and funded by the EU4Business initiative and implemented by the EBRD.  The program includes three trade missions and other business opportunities, with this agro/food mission being the first.  The 2^nd mission in the program is planned for the food sector in November at Israfood, while the 3^rd mission in early 2020 will focus on on “light industries” such as textiles and clothing.  EDI also serves as Authorized Consultant to Ukraine’s Export Promotion Office and organized 2 trade missions on its behalf in 2018.

Indiana Secretary of Commerce Visited Israel in July

In mid-July, Jim Schellinger, Indiana’s Secretary of Commerce (and Chair of the Indiana Economic Development Corp.) visited Israel to meet with Israeli companies considering Indiana as a possible location for their US operations.  He was accompanied by IEDC’s Chief Information Officer Dave Roberts and Associate Vice-President for Domestic & International Operations Jake Miller.  During the visit, he also met with representatives of some of the 7 Israeli companies already present in Indiana and conduct an informational event for the local tech business community.  EDI represents the foreign direct investment promotion interests of Indiana in Israel.

Bring the World to Pennsylvania Scheduled for September

The Pennsylvania Office of International Business Development will host all of their international trade representatives for a two-week road show in the state from September 12-23.  During those two weeks, the representatives will visit all 10 economic development regions in the state and, in each location, meet one on one with local companies interested in exploring further international trade opportunities.  EDI’s Trade Director, Seth Vogelman, will represent the company at the event.  EDI is now in its 23^rd year of representing the export promotion interests of the state in the Middle East.

Delaware to Promote Exports to the Middle East

During the week of September 5^th, EDI’s Trade Director, Seth Vogelman, will be in Delaware to meet with local companies interested in exploring export opportunities in the Middle East.  The visit will also serve as a recruiting vehicle for the state’s planned trade mission to Israel in February 2020.  During that mission, the Secretary of State’s Office will be in Israel as well to meet with law firms given the large number of Israeli companies whose US operations are registered in Delaware.  EDI is now in its 22^nd year of representing the trade and corporate registration interests of the state in the Middle East.

Invest Hong Kong’s Jayne KC Chan to Visit Israel in September

Jayne KC Chan, Head of StartMeUp Hong Kong, will visit Israel in September to meet with late stage tech companies considering Hong Kong as a location for their Asian headquarters.  Invest Hong Kong regularly sends headquarters staff to all of its overseas offices to support the work of the local offices.  Atid EDI Ltd. represents the interest of Invest Hong Kong in Israel.

7 August 2019
6 Av 5779
6 Dhul Hijjah 1440

TOP STORIES

• Avis Partners with Otonomo to Unlock the Potential of Its Connected Car Data
• WeWork to Launch First UAE Location in Early 2020 at Hub71
• US Report Says Morocco Emerges as Hub for Foreign Investment
• Tel Aviv University Scientists Develop a Vaccine for Skin Cancer
• Israel Rises to Top 10 on the Global Innovation Index
• ARABIAN GULF: China’s Gulf Investments Reveal Regional Strategy

TABLE OF CONTENTS:

 1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel Provides $56 Million Boost for Joint Israel-US Research Projects
1.2  Netanyahu Government Meets in Eilat to Approve Development Plan
1.3  Arrow 3 Succeeds in Alaska Tests

2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Minute.ly Raises $8 Million to Help Publishers Boost Video Performance
2.2  Better Juice to Build Pilot Plant for Low-Sugar Orange Juice
2.3  Cervello Raises $4.5 Million
2.4  Parfois Fashion Accessory Chain Opening in Israel
2.5  Lightricks Raises $135 Million in Series C Funding from Goldman Sachs
2.6  monday.com Raises $150 Million as it’s Changing the Face of Work Software
2.7  Amazon Purchases E8 Storage
2.8  Illusive Networks Selected for Swiss Kickstart Innovation Program
2.9  Avis Partners with Otonomo to Unlock the Potential of Its Connected Car Data

 3:  REGIONAL PRIVATE SECTOR NEWS

3.1  WeWork to Launch First UAE Location in Early 2020 at Hub71
3.2  DIFC Furthers Collaboration with India and Signs Deal to Support Fintech Startups
3.3  Hazen.ai Raises Seed Round from Wa’ed Ventures to Launch Traffic Monitoring Solutions
3.4  Zid Raises $2 Million led by Elm VC

 4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Turkey Wastes 15% of National Income
4.2  Turkey’s Zero Waste Campaign Extended To Food & Textiles
4.3  Cyprus Edging Toward Zero-Energy Buildings
4.4  Greece’s Ministry of Health Moves on Smoking Ban

5:  ARAB STATE DEVELOPMENTS

5.1  Average Annual Lebanese Inflation Rate Stands at 3.26% in First Half
5.2  Jordan’s Health Minister Presents Plan to Develop Comprehensive Health Centers

Arabian Gulf

5.3  Kuwait’s Budget Deficit Narrows to $11 Billion on Oil Prices & Revenues
5.4  UAE Remains the Fastest-Growing E-Commerce Market in Arab Middle East
5.5  UAE VAT Collection Set to Grow by 30% to Dh35 Billion in 2019
5.6  Abu Dhabi’s GDP Grows by 3.3% to $61.5 Billion in First Quarter
5.7  Saudi Arabia’s Budget Deficit Widens to $8.9 Billion in Second Quarter
5.8  Saudi Economic Growth Forecast Revised Downward on Oil Output
5.9  Saudi Oil Exports to China Reach Record Levels
5.10  Annual Consumer Prices in Saudi Arabia Show Decline

North Africa

5.11  IMF Disburses Final $2 Billion Tranche to Egypt to Finish the $12 Billion Loan Package
5.12  Egypt’s Suez Canal Zone Achieves Record Revenues
5.13  Egypt Signs Four Assistance Agreements with USAID Worth $59 Million
5.14  King Mohammed VI Announces Development Commission for Morocco
5.15  US Report Says Morocco Emerges as Hub for Foreign Investment
5.16  Moroccan Export Growth Rate Drops in First Half of 2019

6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Rate in July Stood at 16.65%
6.2  Turkish Households Spend Most on Rent, Food and Transportation
6.3  Food Prices in Ankara Rise by 28% This Year
6.4  Turkey’s Foreign Trade Deficit Shrinks by 63.6% in First Half of 2019
6.5  Turkish Tourism Growth Improves in Second Quarter
6.6  World Banks Feels Turkey Needs Higher Productivity for Continual Growth
6.7  Greece’s State Revenues Record Major Slump in June
6.8  Greek Capital Controls set to be Fully Lifted by the End of September

7:  GENERAL NEWS AND INTEREST

Israel

7.1  Tisha B’Av to Be Observed on 10/11 August
7.2  Eid Al-Adha – Feast of the Sacrifice to Begin on 11 August
7.3  Arya Joins Most Popular Names in Israel In 2018

Regional

7.4  Saudi Arabia to Let Women Travel Abroad Without Permission
7.5  Morocco Accredits New Private School Majors

8:  ISRAEL LIFE SCIENCE NEWS

8.1  Better Juice Reduces All Types of Sugar in Juice
8.2  Magenta Medical Closes Funding Led by NEA in Its First Life Sciences Investment in Israel
8.3  Therapix Biosciences’ TheraPEA (CannAmide) Product Issued Canadian License
8.4  Stero Biotechs Starts Clinical Trial of Cannabidiol-Based Formulation for Crohn’s Disease
8.5  MetoMotion Receives $1.5 Million Investment for Its Greenhouse Robotic Worker (GRoW)
8.6  DarioHealth Launches New Blood Pressure Monitoring System
8.7  Foamix Announces $64 Million Capital Financing by Perceptive Advisors and OrbiMed
8.8  Can-Fite to Distribute Piclidenoson for the Treatment of Psoriasis in South Korea
8.9  iCAN: Israel-Cannabis & Citrine Establish iBOT: Israel Botanicals
8.10  Cardiovascular Systems Acquires Gardia Medical’s WIRION Embolic Protection System
8.11  RenalSense Obtains CE Mark for Clarity RMS Critical Care System for Urine Flow Monitoring
8.12  Foamix Submits NDA to FDA for FMX103 for the Treatment of Papulopustular Rosacea
8.13  OWC Receives a Permit for a Cannabis Based Ointment Efficacy Trial
8.14  CollPlant Developing 3D-Bioprinted Implants for Regeneration of Breast Tissue
8.15  Tel Aviv University Scientists Develop a Vaccine for Skin Cancer
8.16  SofWave Medical Closes $8.4 Million Financing Round

9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Foresight’s Successful US Technological Demonstrations Sells Quadsight Prototype
9.2  Bezeq Displaces All-Flash Array with Excelero Nvmesh for Data Warehouse Architecture
9.3  Optibus Releases Multi-Route Planning Capabilities for Public Transit
9.4  My Size Signs License Agreement With Penti for Smart Measurement Application MySizeID
9.5  OptimalPlus Launches Lifecycle Analytics Solution for ADAS
9.6  Nano Dimension Introduces DragonFly LDM for Lights-Out Digital Manufacturing of Electronics
9.7  Safe-T Announces First Tier-1 Collaboration for its IP Proxy Product with Korean ISP
9.8  Safe-T Announces First Tier-1 Collaboration for its IP Proxy Product with Korean ISP
9.9  Teltonika Cooperates with NanoLock Security for Powerful Router Cyber Defense
9.10  Karamba Security Teams with Cypress to Provide Embedded Cybersecurity

10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel Rises to Top 10 on the Global Innovation Index
10.2  Israel’s Unemployment Rate Rises to Over 4%

11:  IN DEPTH

11.1  ISRAEL: S&P Reaffirms Israel’s AA- Credit Rating with a Stable Outlook
11.2  ISRAEL: Tel Aviv’s Tech Hub Ranks 6th in New Startup Ecosystem Report
11.3  ISRAEL: The Monetary Policy Report for the First Half of 2019
11.4  LEBANON: Lebanon’s Air Pollution Nears an Alarming Level
11.5  IRAQ: IMF Executive Board Concludes 2019 Article IV Consultation with Iraq
11.6  IRAQ: Fitch Affirms Iraq at ‘B-‘; Outlook Stable
11.7  ARABIAN GULF: China’s Gulf Investments Reveal Regional Strategy
11.8  QATAR: Qatar’s HVAC Maintenance Service Market
11.9  UAE: Diversified Investment in UAE Shaping China’s Economic Role in the ‎Gulf
11.10  EGYPT: IMF Completes Fifth Review under Extended Fund Facility (EFF) for Egypt
11.11  EGYPT: Egypt Evaluates Digital Upgrades, Prepares for More
11.12  EGYPT: Egyptian Car Market in Limbo
11.13  ALGERIA: Between Radical Change and Superficial Reform
11.14  MOROCCO: Twenty Years Under King Mohammed VI – Domestic Developments
11.15  MOROCCO: Twenty Years Under King Mohammed VI – Foreign Policy Developments
11.16  TURKEY: Turkey’s Current Account Deficit Shrinks, But Budget Gap Widens
11.17  GREECE: Fitch Affirms Greece at ‘BB-‘; Outlook Stable

1:  ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel Provides $56 Million Boost for Joint Israel-US Research Projects

Israel’s Council for Higher Education (CHE) has earmarked some $56 million to a joint US-Israeli research program over five years.  The special budget will be allocated to a joint US-Israel program set up by National Science Foundation (NSF) and the United States–Israel Binational Science Foundation (BSF).  The money will enable the NSF-BSF program to run more US-Israeli scientific research projects in a variety of fields.

The NSF is an independent federal agency set up in 1950 by US Congress to promote the study of sciences.  The BSF promotes scientific relations between the US and Israel by supporting collaborative research programs.  The joint NSF-BSF program began operating in 2013 with the purpose of encouraging research collaboration between American and Israeli researchers.  Through this program, researchers from both countries jointly submit proposals to the NSF-BSF, which reviews submissions and approves the winning proposals.  The program distributes grants for a variety of fields of research, including: exact sciences, engineering, computer science, natural and life sciences, earth and environmental sciences, economics, and psychology.

In addition to the increased funding for NSF-BSF and as part of efforts to increase the scope of support of collaborations between Israeli researchers and institutions and American researchers, the CHE also approved two additional initiatives.  Starting this year, the CHE is increasing the number of postdoctoral scholarships for people studying in Israel, with an emphasis on outstanding postdoctoral students from leading universities in the United States and Canada.  The program, in collaboration with the Columbia’s Zuckerman Institute, will enable the admission of dozens of outstanding postdoctoral students in STEM subjects over the next several years at all Israeli research universities.  The amount of the scholarship for each postdoctoral student is $100,000 over two years, with the possibility of extending the scholarship for an additional two years.  The total budget will be approximately $11 million over the course of four years.

The CHE has also increased support of postdoctoral scholarships granted to Israeli and American scientists in the framework of the Fulbright Israel United States-Israel Education Fund (USIEF) from $20,000 a year to $35,000 a year for American postdoctoral students studying in Israel, and from $37,500 to $47,500 a year for Israeli postdoctoral students studying in the United States.  (ToI 31.07)

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1.2  Netanyahu Government Meets in Eilat to Approve Development Plan

On 4 August, Israel’s cabinet met in Eilat to approve a NIS 400 million development plan for the Red Sea city and the adjacent Eilot region in 2020-2023.  Prime Minister Netanyahu wanted the plan submitted together with the decision to close down Sde Dov Airport in Tel Aviv last June, in view of the consequences of closing the air route to the city, including in health, and Eilat’s need for development for a number of reasons.  The plan, based on budgets diverted from government ministries, includes development in health, tourism, maritime agriculture, maritime biotechnology and business.

The plan to revamp the health system in Eilat is needed primarily because of the lack of doctors and medical staff in the city, which has resulted in dozens of doctors being flown to Eilat weekly for years via Sde Dov Airport.  Eilat residents have also used Sde Dov to obtain medical treatment unavailable in Eilat by flying to the central region.  Since Sde Dov has been closed down, the shortage of staff and services has been exacerbated, now that many doctors have stopped flying to Eilat because flying through Ben Gurion Airport and Ramon Airport (located 20 minutes travel time from Eilat) takes more time.  Specialists currently lacking in Eilat include gynecologists, pediatricians, radiologists, child development doctors, psychiatrists, cardiologists, dermatologists, internal doctors and intensive care doctors.

The plan to boost medical services in Eilat amounts to NIS 150 million, NIS 50 million more than originally approved.  This plan includes grants of up to NIS 1 million for five years for doctors moving to Eilat (the current outlying areas grants are NIS 500,000, but these are motivating doctors to move to cities such as Beer Sheva or Nahariya, not Eilat).  A total of NIS 14 million will be allocated to this purpose, plus NIS 1.6 million for open grants for other health professionals.  Another NIS 13 million will be allocated to flying doctors to Eilat with cooperation between the health funds.  This will be added to the annual NIS 10 million that the health funds were already spending on flying doctors to the city.

NIS 14 million will be allocated for upgrading remote medical services (telemedicine), which can save on flying doctors to the city on the one hand and patients to the central region on the other.  The government will transfer NIS 26 million by 2023 to build a helicopter pad, so that there will be an available helicopter in the city.  NIS 1.6 million will be invested in encouraging a home treatment system, with cooperation between the funds, plus NIS 75 million for upgrading infrastructure lacking in Yoseftal, the only hospital in Eilat, which belongs to Clalit Health Services.  This infrastructure includes operating rooms, a dialysis institute, a gastroenterology institute, a room for treatment of acute cases of sexual assault, a CT scanner and maternity rooms.  (Globes 04.08)

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1.3  Arrow 3 Succeeds in Alaska Tests

The Ministry of Defense and the US Missile Defense Agency (MDA) have successfully completed a series of tests of the Arrow-3 Interceptor missile system, which is designed to intercept ballistic missiles outside the earth’s atmosphere, at Pacific Spaceport Complex-Alaska (PSCA) in Kodiak, Alaska.  The Ministry of Defense announced that a US radar system had been had used in the tests, and that the ability of the various systems to communicate operationally had been successfully demonstrated.  The Ministry of Defense said that the reason for holding the tests in Alaska was to examine the capabilities of the Arrow system, which could not be done in Israel.

The primary contractor for the integration and development of the Arrow Weapon System is IAI’s MALAM division which is responsible for the radar functions, along with Elbit Systems Elisra division which developed the firing management systems and IAI’s TAMAM division together with IMI and Rafael Advanced Defense Systems who jointly developed the interceptor.  America’s Boeing is also a partner in the system.

Considered one of the world’s best interceptors due to its breakthrough technological capabilities, the Arrow 3 is a highly maneuverable system designed to provide ultimate air defense by intercepting ballistic missiles when they are still outside the Earth’s atmosphere.  In addition to the Arrow system, Israel’s air defenses currently include the Iron Dome, designed to shoot down short-range rockets, and the David’s Sling missile defense system designed to intercept tactical ballistic missiles, medium- to long-range rockets, as well as cruise missiles fired at ranges between 40 to 300 km.  (Various 28.07)

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2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Minute.ly Raises $8 Million to Help Publishers Boost Video Performance

Minute.ly announced the closing of an $8 million financing round with investors including Ansonia Holdings, and strategic participation by Switzerland’s Infront, a leading sports marketing company.  They were joined by existing investor, Gilad Shabtai.  The funding will help Minute.ly continue to develop its AI-powered solutions and accelerate global expansion in order to meet growing customer demands for best-in-class video technology. Minute.ly has raised a total of $12 million in funding to date.

Minute.ly offers a comprehensive suite of products for content creators and publishers.  The company’s offerings include: Top Videos, which automatically aggregates top performing video articles and presents internal video recommendations to consumers; mobile-first, Stories By Minute.ly; and Automated Preview Video (APV), which generates highly effective video teasers to increase click-through-rate (CTR) by more than 37%.  The video teasers were utilized to great effect during the 2018 World Cup Russia, growing live stream audiences significantly.  Minute.ly’s offerings are supported across all platforms to trigger audience engagement and provide new revenue opportunities.

Tel Aviv’s Minute.ly is a leading AI-driven video enhancement solution, offering a comprehensive set of tools that empower content creators and publishers.  Founded in 2014, Minute.ly has innovated the industry’s only real-time highlights creator for live-stream broadcasting.  Minute.ly’s solutions automatically analyze hundreds of videos in seconds, extracting the most compelling five seconds from any video to create superior, thrilling teasers.  Minute.ly seamlessly blends crowdsourced data and artificial intelligence using deep/machine learning to provide invaluable insights into video performance and engagement. A pioneer in dynamic video optimization.  (Minute.ly 25.07)

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2.2  Better Juice to Build Pilot Plant for Low-Sugar Orange Juice

Better Juice and Citrosuco Brazil, one of the largest orange juice producers worldwide, are teaming up!  The new collaboration aims to set up a pilot plant to reduce sugars in orange juice. Citrosuco is providing some of the funding plus technical and operational expertise.  Fruit juices contain vitamins, minerals, and many other beneficial nutrients, but this natural drink comes with three types of sugars.  Better Juice’s game-changing enzymatic technology naturally transforms all types of fruit sugars into prebiotic and other non-digestible fibers and sugars.

Better Juice’s device use non-GMO microorganisms to convert the sugars, and provides orange juice manufactures a ready opportunity to meet the trends and claims for reduced sugars, all while keeping the juicy flavor of the beverage.  Their proprietary technology can be tuned to reduce between 30% to 80% of all the sugars in orange juice.  The collaboration with Citrosuco is a vote of confidence in Better Juice’s leading technology and its capabilities for reducing sugar in orange juice.

The startup won the “Most Innovative Technology” award at the 2018 Startup Innovation Challenge at Health ingredients Europe in Frankfurt for its sugar reduction technology, which it developed in conjunction with The Hebrew University in Rehovot, Israel, and The Kitchen Hub incubator, Ashdod, Israel.

Better Juice, Ltd., was founded December, 2017, by a team of food professionals, including a biochemist and microbiologist of The Hebrew University in Jerusalem with extensive experience in product development. The company received its seed investment and is supported by The Kitchen Hub – Strauss Group’s food-tech incubator.  (Better Juice 29.07)

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2.3  Cervello Raises $4.5 Million

Cervello has raised $4.5 million in a seed funding round.  The company says that the investment will accelerate development of its technology and its expansion into international markets.  Among the investors are North First Ventures of Israel and Awz Ventures of Canada, and Comsec Group founder Nissim Bar-El.  An alarming railway-hacking trend in recent years may lead to catastrophes such as trains derailment, taking over trains for ransom, and publicly embarrassing operators. Cervello’s deep technology creates a proactive coverage of the critical assets, securing the core of the rail operation and safety measures, by delivering live network status and notifications of any cyber activity in the operator’s signaling system.

Tel Aviv’s Cervello is a leading provider of comprehensive and proven solutions to protect railways against cyber-attacks.  Cervello enables security and operations teams to perform with full visibility and control of railway critical assets, signaling systems activity and operational procedures.  By delivering the simplest, most mature, effective and safe cyber security platform, Cervello provides best-in-class threat detection and response, asset management, and continuous monitoring of rail and metro operational networks.  (Cervello 25.07)

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2.4  Parfois Fashion Accessory Chain Opening in Israel

Portuguese fashion accessories retail chain Parfois is entering Israel and will open its first store in the Azrieli Center in Tel Aviv at an investment of NIS 2 million.  The new store, which will have 100 square meters on the first floor of the mall, will replace a store of the Enter chain.  Parfois is currently in talks to open three more stores in Israel.   Parfois, a fashion accessories chain, will compete with similar chains already operating in Israel, such as Accessorize and TopTen.  The City Time Israel group received the local franchise to operate the chain, is currently in the midst of expansion.  It imports and markets brands such as Pandora jewelry, the Furla fashion brand, Tommy Hilfiger watches and jewelry, and others.

The Parfois chain, which offers women’s fashion accessories, is widely deployed in Europe, especially in Portugal and Spain, with a presence in France and Italy.  Parfois, which was founded in Portugal in 1994, markets products at discount prices.  The chain has 900 stores in 65 countries, and is expanding aggressively, opening over 100 stores a year.  Parfois offers bags, purses, watches, shoes, clothing, jewelry, hair accessories and hats, scarves and sunglasses.  (Globes 29.07)

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2.5  Lightricks Raises $135 Million in Series C Funding from Goldman Sachs

Lightricks has raised $135 million in Series C funding at a $1 billion valuation in a round led by Goldman Sachs Private Capital Investing with participation from additional investors including Insight Partners and ClalTech.  The latest financing brings Lightricks’ total funding to $205 million to date.

The investment will be used to accelerate development of more powerful, cutting-edge AI enhanced content creation tools, by making strategic acquisitions and expanding the company’s offices around the world.  Lightricks aims to significantly grow its current team of 250 across Israel, the UK and opening a third office in Germany.

Lightricks was one of the first app developers to pioneer the subscription model on the App Store, demonstrating that consumers will pay for and subscribe to apps when significant value is offered.  Lightricks’ seven apps have over 180 million downloads worldwide and nearly three million paying subscribers.  The company’s apps have won awards including Best of Google Play, three Apple’s App of the Year awards and the prestigious Apple Design Award.

Jerusalem’s Lightricks is the creator of several popular, award-winning photo and video editing apps.  Since Lightricks hit the ground running with its flagship product Facetune, the company has built an arsenal of powerful content creation apps used by millions worldwide.  Products also include the Enlight creative apps Photofox, Videoleap, Quickshot, Pixaloop and its newest product, Swish.

Lightricks is on a mission to democratize creativity, a field previously limited to experts with expensive software.  Whether you’re sharing photos with friends on social media, or an artist passionate about creating digital art, or a business owner looking to tell your story online, Lightricks has a fun & powerful app just for you.  (Lightricks 31.07)

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2.6  monday.com Raises $150 Million as it’s Changing the Face of Work Software

monday.com announced it raised a $150 million Series D round, bringing total funding to $234.1 million.  Silicon Valley-based venture capital firm, Sapphire Ventures, led the round with participation from Hamilton Lane, HarbourVest Partners, ION Crossover Partners and Vintage Investment Partners.  As monday.com continues along its rapid growth trajectory, it is democratizing effective management practices in creating the first fully customizable team management platform.

monday.com is a centralized hub for all work processes.  From project management to tracking tasks, HR processes to projecting sales, marketing planning to event coordination, and anything in between, the platform is truly customizable to any team’s needs.  With widespread appeal across over 200 business verticals, including tech-savvy and non-tech savvy teams alike, counted in monday.com’s active paying customers are Carlsberg, Discovery Channel, Glossier, Hulu, Phillips, WeWork, and Zippo, with hundreds of Fortune 500 companies and over 80,000 others.

Earlier this year, monday.com added transformative functionalities to the platform upon releasing automations and integrations.  These new features empower teams with the ability to connect unlimited cloud apps to monday.com, establishing monday as the central work hub for any organization.  What was once only attainable by trained developers, can now be achieved by every team around the world with a simple click.  Users now have the ability to integrate every tool they need into monday.com, such as JIRA for development needs, Typeform for surveying, Mailchimp for email outreach, or Slack for chat, to automate millions of workplace actions so they can focus on what really matters.  This ability streamlines work and gives teams the power of their own personal assistant that always works.  monday.com is projected to have 200 integrated apps by the end of 2019, with plans to add hundreds more next year.

Tel Aviv’s monday.com is a team management platform designed to connect people to processes while creating an environment of transparency in business.  As a web-based SaaS company, monday.com facilitates a more efficient and intuitive way to manage teams and entire operations.  (monday.com 30.07)

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2.7  Amazon Purchases E8 Storage

Amazon has acquired Israeli storage tech startup E8 Storage.  The acquisition will bring the team and technology from E8 in to Amazon’s existing Amazon Web Services center in Tel Aviv.  Sources in the market estimate that the deal is for $50-60 million although others estimate that the acquisition was for a lower price.

E8 Storage’s particular focus was on building storage hardware that employs flash-based memory to deliver faster performance than competing offerings, according to its own claims.  How exactly AWS intends to use the company’s talent or assets isn’t yet known, but it clearly lines up with their primary business.

Tel Aviv’s E8 Storage develops flash storage installations based on software, which according to the company is ten times faster than existing hardware solutions on the market, while costing less.  E8 Storage’s solution is designed for enterprises interested in building a private internal organizational cloud infrastructure, or to speed up performance for cloud suppliers such as AWS.  Using storage installations allows companies to locate their storage drives away from their local servers in large data centers without forfeiting capabilities with an emphasis on the speed of transmitting data.  The combination of software and hardware enables the creation of flexible data centers that can adjust their speed and effectiveness to the customer’s required scale of storage.  (Various 31.08)

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2.8  Illusive Networks Selected for Swiss Kickstart Innovation Program

Illusive Networks was chosen to participate in Switzerland’s Kickstart program.  Kickstart is an ecosystem innovation platform, located in Zurich, bridging the gap between startups, corporations, cities, foundations, and universities to accelerate deep technical innovation.  As a participant in the highly competitive program, Illusive will engage with select Kickstart partners to work on innovation partnerships.  Among the partners are Mobiliar, Swiss Post, PostFinance, AXA, Swisscom, Coca-Cola Switzerland, Credit Suisse, PwC Switzerland, and many more. Several of these organizations have partnered with Kickstart for years.

Tel Aviv’s Illusive Networks empowers security teams to reduce the business risk created by today’s advanced, targeted threats by destroying an attacker’s ability to move laterally toward critical assets.  Illusive reduces the attack surface to preempt attacks, detects unauthorized lateral movement early in the attack cycle, and provides rich, real-time forensics that enhance response and inform cyber resilience efforts.  Agentless and AI driven, Illusive technology enables organizations to proactively intervene in the attack process, avoid operational disruption and business losses, while functioning with greater confidence in today’s complex, hyper-connected world.  (Illusive Networks 01.08)

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2.9  Avis Partners with Otonomo to Unlock the Potential of Its Connected Car Data

Avis Budget Group announced a partnership with Otonomo to unlock new avenues for value creation from the data generated by its connected fleet.  The fleet will cover an estimated 4 billion road miles this year and is anticipated to generate over 7 billion road miles of data with its fully connected fleet in 2020.

The Otonomo Automotive Data Services Platform will help Avis Budget Group gain new and actionable insights from its connected cars, which span a diverse range of makes, models and telematics technologies.  By reshaping this disparate connected car data for new users, Avis Budget Group will gain insights to streamline operations, reduce costs and improve customer satisfaction.  The Otonomo Platform also provides Avis Budget Group with new opportunities for collaboration with cities and other partners that benefit its customers and the general public.

With the help of Otonomo, Avis Budget Group can explore additional “data for good” opportunities that can make smart cities smarter, roads safer, traffic flow and parking more efficient, and driving more enjoyable.  Data from the Avis Budget Group fleet could significantly improve smart city applications such as planning, road hazard identification, or advanced traffic management. In time, this could translate to reduced emissions, accident prediction and prevention, and an overall better experience for all travelers.

Herzliya Pituah’s Otonomo Automotive Data Services Platform fuels a network of 15 OEMs and more than 100 service providers.  Their neutral platform securely ingests more than 2 billion data points per day from over 18 million global connected vehicles, then reshapes and enriches it, to accelerate time to market for new services that delight drivers.  Privacy by design is at the core of the platform, which enables GDPR and other privacy-regulation-compliant solutions using both personal and aggregate data.  (Avis 31.07)

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3:  REGIONAL PRIVATE SECTOR NEWS

3.1  WeWork to Launch First UAE Location in Early 2020 at Hub71

On 24 July WeWork announced the launch of its first location in the United Arab Emirates, scheduled for early 2020 at Hub71, a global tech ecosystem based in Abu Dhabi Global Market Square at Al Maryah Island.  Alongside Hub71, WeWork will open over 5,000 square meters of collaborative and inspirational workspace tailored to tech companies, VCs, universities, corporates and startups.  The space will span across three floors, in what is also known as Abu Dhabi’s financial district.

Abu Dhabi can look forward to having a slice of New York at their doorstep at Hub71, which is already home to world-leading accelerators such as Techstars, Starburst and Plug and Play ADGM, bringing a whole ecosystem to life.  WeWork at Hub71 will offer the ability to choose from a wide range of products and services – from hot desks to private, noise-controlled office spaces, all starting at $400 per desk per month.  As the Ghadan 21 program continues to accelerate Abu Dhabi’s new world economy, Hub71 is bringing global partners together to create an optimal environment for startups.  Mubadala Investment Company leads the tech hub in partnership with Microsoft and SoftBank Vision Fund along with Abu Dhabi Global Market, creating a pioneering global ecosystem.  (MAGNiTT 24.07)

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3.2  DIFC Furthers Collaboration with India and Signs Deal to Support Fintech Startups

A Dubai International Financial Centre’s (DIFC) mission to India has secured several deals to back local FinTech startups.  In the mission’s visit to Maharashtra, officials took part in high-level strategic meetings in Mumbai and surrounding regions of the state.  Through these meetings, DIFC showed itself as the ideal destination for Indian startups looking to expand their operations across the MEASA region.  These meetings were set up to discuss DIFC’s strategic plans for further collaboration and to explore mutually beneficial partnerships with Indian firms and financial institutions.

Another milestone of utmost significance was the Memorandum of Understanding (MoU) signed by DIFC and the Government of Maharashtra.  The memorandum outlines plans for both entities to support Fintech startups based in their respective markets.  Furthermore, the institution intends to support the growth of Indian companies through tailored solutions.  DIFC also engaged key business and industry leaders from across a variety of sectors including infrastructure development, construction, logistics, and more in collaboration with Phillip Capital.  During the session, the center discussed market opportunities for family offices and DIFC’s plans to provide comprehensive regulation and supportive business ecosystems to help family businesses operate successfully in the region.  (DIFC 29.07)

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3.3  Hazen.ai Raises Seed Round from Wa’ed Ventures to Launch Traffic Monitoring Solutions

Hazen.ai announced a Seed round of an undisclosed amount from Saudi Aramco’s Wa’ed Ventures.  This is Hazen.ai’s first funding round and Wa’ed Ventures is the sole investor in this round.  The financing will be used to further invest in the proprietary Computer Vision platform developed by Hazen.ai and to help it reach global markets.  The startup won the Product Innovation Award at Gulf Traffic 2018, which is a leading traffic industry event held in Dubai.

Founded in 2017 in Mecca, Hazen.ai is leveraging on advances in Computer Vision and Machine Learning for the traffic analytics and enforcement industry.  Hazen.ai is building advanced traffic cameras with the capability to detect dangerous driving behavior through video analysis.  (Hazen.ai 01.08)

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3.4  Zid Raises $2 Million led by Elm VC

Zid announced a $2 million pre-series A investment led by Elm VC and joined by regional and international VCs, as well as super angel investors.  The company has witnessed 5-fold growth year-on-year in number of orders by the e-commerce businesses they support, with sales valued at over 140M Saudi Riyals.  This investment will allow Zid to focus on attracting new segments in the retail industry and expanding into new geographical markets.

Riyadh’s Zid is an e-commerce-in-a-box solution that allows offline retailers or first-time sellers to setup an online presence and expand their customer reach.  The Zid community provides services beyond basic technical hosting and payment, with over 20 ecosystem partners contributing their services in a plug-and-play manner, as well as Zid Academy which provides educational programs to improve merchant performance across sectors.   Established in 2017, the company’s team is focused on the single mission: Enabling merchants to scale their sales using online and digital channels.  (MAGNiTT 24.07)

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4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Turkey Wastes 15% of National Income

Turkey is wasting about 15% of its national income, according to the Turkish Foundation for Waste Reduction (TISVA), a non-governmental initiative established to ensure efficient and effective use of resources and prevention of waste, including food waste in the community.  The waste in many consumption items such as energy, water, fruits, vegetables, and bread reached TL 555 billion ($97 billion) a year, which corresponds to 15% of national income, the report prepared by TİSVA said.

Of this figure, TL 214 billion wasted were items of food.  Some 25-40% of 49 million tons of vegetables and fruits grown in Turkey each year goes to waste, said the report, which corresponds to TL 25 billion.  Also, waste in bread is striking.  On average, 6 million loaves of bread go to the trash every day in Turkey.

Another contribution to waste was unnecessary consumption of electricity. According to the report, each household has the potential of saving 35% on its electricity bill. In total though, Turkey has the potential of saving 25% of its energy consumption, the report said.  The report also said that dripping taps cause 3 cubic meters of water waste per year.  Assuming that 10% of Turkey’s 19 million households have dripping taps, the cost of this is around TL 11 billion to the nation, the report said.

The waste of one person brushing their teeth twice a day for one minute without closing the tap is 8 tons of water loss per year.  Assuming that 20% of the population behaves in such a way, this causes a loss of TL 13 billion in Turkey’s resources, said the report.  (HDN 25.07)

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4.2  Turkey’s Zero Waste Campaign Extended To Food & Textiles

Turkey’s ambitious Zero Waste Campaign initiated in 2017 and embraced nationwide in two years, will now cover recycling food waste and textile products.  The Ministry of Environment and Urbanization, which oversees the massive recycling campaign, will also focus on the recycling of food and unused, old or faulty textile products.  The project, which was first applied in the Beştepe Presidential Complex as well as ministries, later spread to municipalities all across Turkey and started taking hold in private companies and public buildings, from hospitals to schools.  The next stage in the award-winning campaign will be run by the Turkish Red Crescent, the country’s leading charity, which will oversee efforts for food and textile recycling.  It will involve a partnership between public and private companies to establish a waste collection system for collecting excess food and textile products.

The charity already launched pilot projects in İzmir and Ankara for recycling food waste.  It collects food before it is dumped into dumpsters.  The Red Crescent will launch a nationwide campaign next year.  Officials say food worth TL 250 billion is wasted every year.  Some 500,000 tons of bread, a staple of Turkish diet, also go to waste every year.  More than 2,500 tons of clothes and fabric and similar leftovers from textile production go to waste daily too.  The Red Crescent will collect excess clothes people do not wear and often throw away.

Turkey, late to the recycling trend and efficient waste management except in big cities, strives to end landfills whose numbers have considerably decreased in recent years.  Turkey has started to prioritize waste management, over concerns of rising environmental damage, with municipalities responsible for garbage collection upgrading their waste management systems.  The country also managed to recycle more than half of the plastic bottles in the market in 2017.  Turkey also seeks to spread compost-making equipment used in businesses for converting food waste to compost for home use.  The country, which lags behind European Union countries in terms of recycling, aims to increase recycling rate to 35% in the next five years.  (DS 30.07)

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4.3  Cyprus Edging Toward Zero-Energy Buildings

While reports have Cyprus failing to meet the majority of its EU 2020 and 2030 environmental targets by large margins, it would appear that the country is performing better in reducing energy consumption of buildings.  Buildings are responsible for 40% of energy consumption in the European Union and 30% in Cyprus.

Cyprus has incorporated into its national law an EU Directive (2010/31 / EU) which aims to improve the energy performance of buildings while taking into account the external climatic conditions and indoor climate requirements.  A series of laws imposed on the construction of new buildings combined with the installation of photovoltaic systems in homes, business and government buildings have significantly contributed to Cyprus coming closer to meeting its goals set regarding energy consumed by buildings.

After a series of laws and amendments introduced by parliament, new buildings built after 31 December 2018 will have to be issued an Energy Performance Certificate classifying them as Energy efficiency class B.  This means that buildings will have to be built with materials insulating the interior while being obliged to generate part of their energy needs from renewable energy sources.  Housing units built after the end of 2018 should be producing up to 25%, blocks of flats 3% and other building types 7%.  Come 2020, however, criteria for constructors to obtain a building license will become even tougher, with all buildings having to be classified as class A.  This entails high-performance thermal insulation (walls, ceilings, windows, exposed floors) and very low heating requirements.  Also, to have a primary energy consumption of under 100 kWh per m2 on an annual basis, to ensure the minimum shading on the building windows and produce at least 25% of their primary energy consumption with the use of RES.  (FM 23.07)

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4.4  Greece’s Ministry of Health Moves on Smoking Ban

Taking the first step in its bid to finally enforce a ban on smoking in public places that was introduced a decade ago, on 29 July, Greece’s Health Ministry sent a circular to regional and inspection authorities, instructing them to intensify checks.  It asks them to boost their inspections, focusing on public buildings including Parliament, ministries and those used by utilities such as Public Power Corporation as well as all public and private health and educational services, chiefly hospitals and schools.  Inspectors have also been asked to monitor kindergartens, crèches, playgrounds, gymnasiums and sports centers. Next on the list are office blocks, restaurants, bars, clubs, airports and public transport services.  Inspections will even extend to private vehicles in the event that children under the age of 12 are passengers.

The Panhellenic Medical Association also welcomed the drive by Prime Minister Kyriakos Mitsotakis to enforce the ban, describing both active and passive smoking as “a major issue for public health.”  One in four deaths in the male population in Greece is attributable, directly or indirectly, to smoking, it said.  (eKathimerini 29.07)

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5:  ARAB STATE DEVELOPMENTS

5.1  Average Annual Lebanese Inflation Rate Stands at 3.26% in First Half

Lebanon’s average consumer prices rose by 3.26% year-on-year (y-o-y) in H1/19 compared to an annual uptick of 6% recorded in H1/18, according to the Central Administration of Statistics (CAS).  The rise in prices during H1/19 mainly came on the back of annual rises seen across all components of the consumer price index (CPI), except Transportation and Health.

The breakdown of the CPI revealed that the average costs of Housing and utilities (including: water, electricity, gas and other fuels) which grasped a combined 28.4% of the CPI, climbed by a yearly 3.10% by June 2019.  In fact, average Owner-occupied rental costs (constituting 13.6% of the category) grew by an annual 2.69%.  In turn, the average prices of water, electricity, gas, and other fuels (11.8% of housing & utilities) recorded a yearly uptick of 3.53% over the same period.  Moreover, the average prices for Food and non-alcoholic beverages (20% of the CPI) and Education costs (6.6% of CPI) registered yearly upticks of 5.56% and 5.15%, respectively, in the first quarter.  In turn, average prices of Clothing and Footwear (5.2% of the CPI) also rose by 14.09% y-o-y in the first half of the year.  However, the average consumer prices of Health (7.7% of the CPI) and Transportation (13.1% of the CPI) recorded the respective downticks of 0.61% and 0.90% y-o-y.  The latter most probably slipped as a result of the retreat in average oil prices which slipped by a yearly 3.77% to $65.78/barrel by June 2019.  (CAS 29.07)

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5.2  Jordan’s Health Minister Presents Plan to Develop Comprehensive Health Centers

Jordanian Minister of Health Dr. Saad Jaber presented the Ministry’s plan to establish and develop comprehensive health centers aimed at solving many of the problems facing the health sector and facilitating access to health services.  Jaber said that typical comprehensive health centers approved and prepared for this purpose were selected across the Kingdom’s Governorates, including Amman, Madaba, Zarqa, Mafraq, Karak and Aqaba.  He added that the ministry will deploy eight comprehensive health centers in the rest of the Kingdom’s Governorates to provide health services to citizens within goals and objectives for which it works to reduce the burden on citizens and provide a comprehensive health service.  The Ministry aims to achieve the goal of solving 95% of simple and non-urgent health problems experienced by citizens in remote areas far from hospitals.  (Petra 29.07)

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►►Arabian Gulf

5.3  Kuwait’s Budget Deficit Narrows to $11 Billion on Oil Prices & Revenues

Kuwait’s budget deficit narrowed to KD3.35 billion ($11 billion) in the last fiscal year, down 31% from a year earlier on higher-than-anticipated crude prices and a rise in non-oil revenue, the Finance Ministry announced.  The shortfall last year was Kuwait’s fifth consecutive deficit.

Revenue in the year ended 31 March rose to KD20.56 billion, while spending increased 13.5% to KD21.85 billion.  Non-oil revenue jumped 24% to KD2.13 billion while oil revenue rose 29% to KD18.4 billion.  Non-oil revenue grew for the second consecutive year, while capital expenditure remained at 14% and is expected to reach 17% during the current fiscal year to stimulate economic growth, said Finance Minister Nayef Al-Hajraf.  Wages and subsidies accounted for 75% of all spending.  The budget gap will be financed by withdrawals from the state’s treasury.  (AB 29.07)

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5.4  UAE Remains the Fastest-Growing E-Commerce Market in Arab Middle East

The Dubai government and Visa conducted a joint study and revealed that e-commerce transactions in the UAE are expected to reach a total of $16 billion by the end of 2019 and are predicted to grow 23% annually between 2018 and 2022.  According to the report, the UAE has the fastest growing e-commerce market in the MENA region.

Another earlier study conducted by Visa stated that the online retail market of the UAE has developed, with nearly two-thirds of small retailers in the Emirates reporting higher revenues after accepting digital payments.  Indeed, global giants like Samsung Pay, Google Pay and Apple Pay have played a vital role in increasing the use of mobile wallets in the UAE, along with local organizations like Etisalat Wallet, Beam Wallet and local banks.

According to a report from TechSci Research in the US, the UAE’s mobile wallet market will grow at a compound growth rate of 24% and will reach $2.3 billion by 2022.  Cashless payments and digital commerce are among the top priorities of the Vision 2021 and the Smart Government initiative aims to turn the country into a cashless society by 2020.  The latest Visa study has also shown that e-commerce penetration in the UAE overcame MENA and GCC averages, with 4.2% of total sales.  On the other hand, MENA and GCC averages were 1.9 and 3% accordingly.  According to The National, the higher growth numbers were fueled by higher internet penetration, a younger population eager to embrace tech-driven solutions, and an advanced digital infrastructure.  (The National 24.07)

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5.5  UAE VAT Collection Set to Grow by 30% to Dh35 Billion in 2019

Greater compliance due to new legal aspects such as country-by-country reporting and Base Erosion and Profit Shifting (Beps), increased spending for Expo 2020, and more companies listing for value-added tax (VAT) will help the UAE to increase its revenues through VAT by up to 30% this year, say tax experts.  The UAE’s VAT collection is expected to increase by Dh8 billion or 30% in 2019 to reach Dh35 billion as compared to Dh27 billion last year.

The Federal Tax Authority’s latest figures showed that the number of businesses and tax groups registered for VAT surpassed 307,000, while the number of those that registered for excise tax totaled 724.  The user base for the tax system is expanding rapidly, hence the clearing and forwarding companies increased to more than 123 while accredited tax agents increased to 395.  The UAE and Saudi Arabia levied 5% VAT on goods and services from 1 January 2018 as part of a framework agreed upon by GCC members.  The UAE collected Dh27 billion through VAT revenues last year, surpassing its last year’s target of Dh12 billion and event 2019 target of Dh20 billion in the first, thanks to high compliance ratio and awareness campaigns by the Federal Tax Authority and ICAI.  Dubai received the largest share of VAT receipts at 42% followed by 30% for federal government, 18% for Abu Dhabi, 6% for Sharjah and 4% for other northern emirates.  (KT 30.07)

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5.6  Abu Dhabi’s GDP Grows by 3.3% to $61.5 Billion in First Quarter

Abu Dhabi’s gross domestic product (GDP) at current prices for the first quarter of 2019 rose by 3.3% to AED226 billion ($61.5 billion) compared to the year-earlier period.  Statistics Centre Abu Dhabi said that oil GDP made up 39.8% of the emirate’s overall GDP in the first quarter of 2019, reaching AED89.9 billion, an 11.6% increase.

The government is working to consolidate public-private partnerships through the launch of various programs as part of the Ghadan 21 plan, a AED50 billion three-year initiative driving economic development, innovation, ease of doing business and liveability in the UAE capital.  One of the key tenets of the program is to develop infrastructure, including transportation, communication and urban development.  The emirate’s GDP growth for the first quarter of the year followed a series of moves taken to stimulate the business environment, including an exemption from license fees for two years.  (AB 26.07)

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5.7  Saudi Arabia’s Budget Deficit Widens to $8.9 Billion in Second Quarter

Saudi Arabia’s budget deficit widened in the second quarter as capital spending increased while oil and non-oil revenue fell.  The budget gap of SR33.5 billion ($8.9 billion) compared to SR7.4 billion in the same period last year, the Finance Ministry said on 30 July.  Oil revenue dropped 5% year-on-year while non-oil revenue declined 4%, despite a significant rise in tax revenue.  Spending rose 5% compared to the second quarter last year, with a 27% increase in capital expenditures and a 71% jump in subsidies.  Officials have been trying to stimulate the economy of the world’s largest oil exporter since it contracted in 2017, promising to inject cash into the government-dependent private sector.  (AB 30.07)

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5.8  Saudi Economic Growth Forecast Revised Downward on Oil Output

Saudi Arabia’s economic growth is likely to be less than previously forecast due lower than expected oil production in the Gulf kingdom, according to new research by Jadwa Investment.  Its forecast for the kingdom has been revised downward wholly on the account of developments related to the oil market.  It previously expected overall growth to hit 2% in 2019, but a downward revision in oil sector GDP means that it now sees growth at around 1.6%.

Lower than previously forecasted Saudi oil production will push oil GDP to a slender 0.3% growth in 2019, Jadwa said, adding that on the non-oil side, it sees higher growth at 2.7% compared to 2.3% previously.  Within this forecast, Jadwa said it expects to see non-oil private sector growth to improve to 2.4%, compared to 1.7% in 2018.

Jadwa added that lower yearly Brent oil prices and crude oil production will result in lower government revenue than previously forecasted.  As a result, it sees a widening of the fiscal deficit to SR196 billion (6.4% of GDP) in 2019.  Overall, it seems that the consolidation of efforts in striving towards the goals of the Vision 2030 (Vision), as well as the targets set under the National Transformation Program (NTP) have paved the way for pick up in momentum for the Saudi economy.  That said, exogenous factors have become more prominent in relation to the kingdom’s immediate economic outlook.  Specifically, global economic developments, in particular with regards to the US and Chinese trade dispute, as well as regional geopolitical tensions, stand out as the main risks to our forecast.  Saudi Arabia recorded a surplus of SR27.8 billion in Q1/19, driven by both oil and non-oil revenues.  The results marked the first time since 2014 that the kingdom posted a surplus.  (AB 27.07)

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5.9  Saudi Oil Exports to China Reach Record Levels

Saudi Arabia’s crude oil exports to China soared to 1.74 million barrels per day (b/d) in July, while shipments to the US fell to 161,000 b/d compared with 1.03 million b/d a year earlier.  In July, Saudi oil shipments declined to 6.7 million b/d, about 200,000 b/d less than in June.  It worth noting that Saudi oil production decreased by the same amount in July to 9.6 million b/d.

Saudi crude flows to markets east of the Suez Canal stood at 5.1 million b/d in July.  On the other hand, Saudi flows west of the Canal have dropped to about 1.1 million b/d.  However, Saudi oil exports to India, Japan and South Korea also declined last month.

Data shows that Chinese oil imports from Saudi Arabia reached a record level, while flows to the US decreased during the same time.  The Saudi Kingdom has compensated China, the largest crude oil buyer in Asia, for the shortage of crude oil supplies that resulted from the US-imposed sanctions on Iran.  Saudi production remains below the maximum level allowed by the production cut agreement, sponsored by the Organization of the Petroleum Exporting Countries (OPEC), at 10.3 million b/d. Saudi Arabia has expressed commitment to the output cut deal until the end of Q1/20.  (SWACO 04.08)

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5.10  Annual Consumer Prices in Saudi Arabia Show Decline

Consumer prices in Saudi Arabia dropped in June compared to figures for the same month last year, but month-on-month the consumer price index (CPI) showed a slight increase.  Government data revealed the CPI index fell 1.4% in June year-on-year in the kingdom, but rose by 0.2% in comparison to May.  The General Authority for Statistics said that food inflation, which accounts for around 20% of the CPI basket, dropped from 1.8% y-o-y in May to 1.3% last month.  Housing inflation, meanwhile, which accounts for a further 25% of the CPI basket, increased for another consecutive month, from -7.5% y-o-y in May to -7.2% in June.

Transport inflation also rose last month.  The continued easing of deflation shows that stronger activity in the non-oil sector is causing price pressures to build.  The main risks to the inflation outlook continue to lie to the upside.  In particular, if oil prices are expected to stay low, the authorities are likely to take steps to rein in the budget.  The International Monetary Fund (IMF) recently said that authorities should consider raising the VAT rate from its current level of 5%.  (AB 28.07)

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►►North Africa

5.11  IMF Disburses Final $2 Billion Tranche to Egypt to Finish the $12 Billion Loan Package

The International Monetary Fund (IMF) approved the disbursement of the final $2 billion tranche to Egypt, completing a $12 billion loan package.  The decision comes a few weeks after Egypt implemented a fresh round of fuel subsidy cuts, which raised domestic prices between 16 to 30%, bringing them in line with their real cost.

Egypt first reached a staff-level agreement with the IMF in August 2016 over the loan after the IMF endorsed the Arab nation’s fiscal reform program, which the government embarked on in 2014 in an attempt to curb the growing state budget deficit, estimated at 12.2% of the GDP in 2015/16.

Last month, Egypt said that it is in talks with the IMF for a non-loan program and hopes to reach an agreement by October.  Egypt is set to begin repaying the loan in tranches after five years of receiving the first tranche of the $2.75 billion in November 2016, shortly after it floated its currency in an unprecedented move.  Relying heavily on imports, Egypt suffered from an acute foreign currency shortage following the 2011 revolution and the ensuing unrest, which spooked investors and tourists before its economy started to recover.  (Ahram Online 24.07)

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5.12  Egypt’s Suez Canal Zone Achieves Record Revenues

Chairman of the Suez Canal Economic Zone (SCZone) Mamish said the SCZone received the highest revenues for the second year in a row, noting that the zone is working to maximize its revenues since it is considered the driving engine for the development of the Egyptian economy.  Mamish pointed out in a statement that total revenues achieved by the zone in fiscal year 2018-2019 reached around EGP 3.69 billion while its net profit recorded EGP 2.198 billion.  The SCZone will sign new contracts with major local and international companies willing to invest in the economic zone in Ain Sokhna, a step that will help create new job opportunities for Egyptian youth within the next two years.  (MENA 27.07)

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5.13  Egypt Signs Four Assistance Agreements with USAID Worth $59 Million

On 4 August, Egypt and the United States, through the United States Agency for International Development (USAID), signed four bilateral assistance agreements worth $59 million.  The agreements are meant to support Egypt’s development priorities in health, higher education, trade, investment, science and technology, as well as boost inclusive, enterprise-driven development in line with Egypt’s Vision 2030 Sustainable Development Strategy.  The agreements will be used to support SMEs and entrepreneurship, improve technical and vocational education and to boost the work force, adding that there is cooperation between Egypt and the US in transportation.

The healthcare agreement builds on USAID’s longstanding support for Egypt’s health priorities through the development agency’s partnership with the Ministry of Health and Population.  Together, the focus will be on improving healthy behaviors, enhancing the quality of health services, and supporting research, monitoring, and training in key areas such as voluntary family planning.  The science and technology agreement maintains US commitment to joint research between US and Egyptian scientists.  USAID’s work in this area addresses development challenges and promotes economic growth, with a focus on applied scientific research and technology commercialization.  (DNE 04.08)

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5.14  King Mohammed VI Announces Development Commission for Morocco

Morocco’s development plans were among the core issues highlighted in King Mohammed VI’s Throne Day speech on the evening of 29 July.  The King first focused on Morocco’s achievements over the past year.  He affirmed that Morocco “made a quantum leap in infrastructure development, whether it is highway construction, the high-speed railway, major ports, renewable energy facilities, or urban development and revamping.”  The King also highlighted Morocco’s advances in consolidating rights and freedoms, stressing its importance “for a strong and healthy anchoring of democratic practice.”  Nevertheless, the King pointed out that infrastructure and institutional reforms, important as they are, are not enough. Therefore, the King attached “particular importance to human development programs, social policies, and the need to respond to Moroccans’ pressing concerns.”

The speech echoed a previous call in October 2017 when the King gave the opening speech of the autumn parliamentary session.  He called for the adoption of a new model of development, “balanced and equitable, guaranteeing the dignity of all, generator of income and employment.”  This evening, he once again called for the re-evaluation and updating of the model.  He said that it has been unable to meet the growing needs of citizens, and emphasized the need to reduce social inequalities.

The King announced the decision to set up a special commission in charge of the development model.  The commission will be established at the beginning of the next school year.  The commission will be neither a second government nor a parallel official institution.  It is an advisory body with a specific time-bound mission.  It is expected to improve sectors such as education, health, agriculture, investment, and the tax system.  (MWN 29.07)

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5.15  US Report Says Morocco Emerges as Hub for Foreign Investment

The US Department of State has issued its 2019 Investment Climate Statements, which generally showcased a positive stance on Morocco’s business.  In its overview, the report extolled Morocco’s geographic location and its strategy for attracting international investors.  The executive summary of the report said that Morocco enjoys political stability, robust infrastructure, and a strategic location, which have contributed to its emergence as a regional manufacturing and export base for international companies.

The Government of Morocco has implemented a series of strategies aimed at boosting employment, attracting foreign investment, and raising performance and output in key revenue-earning sectors, such as the automotive and aerospace industries.  With several ports and investment zones, Morocco has attracted renowned international operations specialized in several fields, including the automotive and infrastructure industries.  The automotive and aeronautical industries are significant assets as they play an intrinsic role in Morocco’s economy.

The aeronautic sector is active with more than 120 companies, generating direct annual revenues of more than $1 billion in 2015.  The sector also creates more than 11,000 direct job opportunities, a number that contributes 8.5% to Morocco’s total employment.

Despite the reforms and the political stability, the report acknowledged that the country faces challenges in several fields, including the insufficient skilled labor and unemployment.  Press releases from the High Commission for Planning (HCP) state that unemployment was 9.8% at the end of 2018.  Unemployment among youth aged 15 to 24 hovers around 40 % in some urban areas.  (ICS 25.07)

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5.16  Moroccan Export Growth Rate Drops in First Half of 2019

According to the Moroccan Exchange Office figures for June 2019, during the first half of 2019 Moroccan exports increased by 3.1%, while imports increased by 3.8%.  Morocco’s trade deficit has therefore increased compared to the same period last year.  Morocco’s trade deficit reached MAD 102.460 million, up from MAD 97.7 million last year.

According to the Exchange Office, the increase in the rate of imports is due to an increase in the imports of capital goods, in particular the acquisition of airplanes (airport import rates increased by 9.9%).  Import rates of finished consumption products (including synthetic fabrics and plastic products) and half-finished consumption products (including steel threads and bars, and other metal products) also increased by 3.2% and 5.7% respectively.

The Exchange Office identifies that the slowdown in exports is due to a slowdown in automobile exports, phosphate exports, and textile and leather exports.  Export growth rates for finished vehicles dropped by 4.8% in the first half of 2019. According to a statement by the Exchange Office in April, this drop is due to a global slowdown in automobile demand.  However, vehicle cabling exports increased by 6.9%, indicating a strong performance in the broader vehicle supply chain ecosystem.  A number of international cabling companies are present in Morocco including French group Nexans, German company Kromberg & Schubert and Japanese company Yazaki.  German group Prettl Automotive entered Morocco’s cabling industry market this year.  The group opened an 8600 square meter cabling factor in Tangier in April, employing up to 600 people.  (MWN 02.08)

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6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Rate in July Stood at 16.65%

Turkey saw a 16.65% annual hike in consumer prices last month, the Turkish Statistics Institute (TUIK) reported on 5 August.  The annual inflation in July rose by 0.93% from 15.72% previous month.  The highest price increase on a yearly basis was seen in miscellaneous goods and services with 26.93% in July.  Furnishing and household equipment with 25.41%, hotels, cafes and restaurants with 19.85%, alcoholic beverages and tobacco with 19.23% and food and non-alcoholic beverages with 18.21% were the other main groups where high annual increases were realized, TUIK said.

Over the past five years, annual inflation saw its lowest level in April 2016, with 6.57%, and its highest level last October with 25.24%.  As laid out in Turkey’s new economic program announced by the government last September, the country’s inflation rate target is 15.9% this year, 9.8% next year and 6% in 2021.

TUIK data on 5 August showed that on a monthly basis, the consumer prices went up 1.36% in July.  The highest monthly decline was 3.2% in clothing and footwear, as the highest monthly increase was seen in transportation, up 4.46%.  Food prices declined by 1.11% in July from June while communication costs increased 0.83%.  The 12-month average hike in consumer prices was 19.91% in July, according to TUIK.  (TUIK 05.08)

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6.2  Turkish Households Spend Most on Rent, Food and Transportation

Most of households’ spending in 2018 went to housing/rent, food and transportation, data from the Turkish Statistics Institute (TÜİK) showed on 26 July.  Housing and rent had a 23.7% share in people’s overall spending last year, down from 24.7% in 2017 while food and non-alcoholic beverages and transportation had 20.3% (19.7% in 2018) and 18.3% (18.7%) shares, respectively.  The monthly average consumption expenditure of households was TL 2,181 ($386) last year, up from the previous year’s TL 1,854.  Household expenditure on health and educational services had the lowest share with 2.2% and 2.3%, respectively, TÜİK showed.

The share spending on hotel and restaurants in total expenditure inched up to 6.5% in 2018 from 6.2% in 2017.  The corresponding figure for communication spending was 3.8% which was slightly lower than last year’s 3.4%.  The share of alcohol and tobacco spending declined to 4% last year from 4.5% in 2017.  TÜİK data also showed that the highest income group spent 21.6% of its budget on transportation (23.9% in 2017) while for the lowest income group the largest spending item was housing and rent with a 31.4% share (31.9% in 2017).  (TUIK 26.07)

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6.3  Food Prices in Ankara Rise by 28% This Year

A study conducted in the Turkish capital Ankara by a public workers’ union found an increase of 28% in food prices in the first seven month of the year and a rise of 59% in the last 12 months.  The union gathers prices from supermarkets and markets regularly and uses a selection of 77 basic foodstuffs to monitor food prices and inflation.  The July study shows a total increase of 28% from in food prices this year, with dairy prices increasing 37% and fruit prices 42%.  According to the Turkish Statistical Institute’s (TÜİK) 2018 Household Consumption Expenditures Survey, food makes up 20% of spending for the general population, with the poorest 20% spending 29% of their income on food and the richest 20% spending 15%.  (Ahval 30.07)

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6.4  Turkey’s Foreign Trade Deficit Shrinks by 63.6% in First Half of 2019

Turkey’s foreign trade gap narrowed by 63.6% to $14.85 billion in the first half of 2019, down from a $40.8 billion deficit in the same period last year, according to the Turkish Statistical Institute (TurkStat).  The country’s exports in the first half of 2019 rose 1.9% to reach $83.7 billion and imports dropped 19.8% to $98.56 billion. Turkey’s exports to the EU, making up nearly half of the country’s exports, amounted to $41.4 billion from January to June.

The manufacturing sectors’ share of total exports was 94.4% or $79 billion during the first half, while the agriculture and forestry sector and the mining and quarrying sector took 2.9% and 2% shares, respectively.  While the ratio of high-tech products in manufacturing industry exports was 3.5%, its share of imports in June was 13.9%.  While intermediate and consumption goods dominated the country’s exports with shares of 46.8% and 40.9%, respectively, 75.8% of imports during the six-month period were intermediate goods.  Last year, the country’s exports hit a historic high of $167.9 billion, with imports of $223 billion.

As for the last month, Turkey’s foreign trade deficit dropped sharply, falling 42.5% to $3.17 billion year-on-year, down from $5.5 billion in June 2018, the statistical body said.  The country’s exports ($11.08 billion) and imports ($14.26 billion) both dropped in June, by 14.3% and 22.7%, respectively, on a yearly basis.  The exports-to-imports coverage ratio rose to 84.9% last month, up from 66.8% the previous June.

Germany remained Turkey’s top export market by country, receiving some $1.07 billion worth of Turkish goods, or a 9.6% share of total exports, followed by the U.K. ($684.6 million), France ($639.6 million) and Italy ($613.1 million).  On the import side, Russia made the lion’s share of imports to Turkey in the month, with over $1.5 billion.  It was followed by China, Germany and the U.S. with $1.27 billion, $1.19 billion and $919 million, respectively.  (TurkStat 01.08)

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6.5  Turkish Tourism Growth Improves in Second Quarter

Turkey’s revenue from tourism increased at a faster pace in the second quarter of the year as the number of visitors to the country grew.  Tourism income rose by an annual 13% to $8 billion in the three months to June, the Turkish Statistical Institute said.  Revenue had increased by an annual 4.6% to $4.63 billion in the first quarter of the year.

Turkey is seeking to bolster its returns from tourism to help offset an economic downturn brought on by a currency crisis last year.  The economy contracted on a quarterly basis for two-straight quarters in the second half of last year, signifying a recession, before growing in the first three months of this year.  The fall in the value of the lira makes Turkey a cheaper place to visit.  Visitors increased by an annual 15% in the second quarter to 12.8 million people, the institute said.  The number of arrivals had risen 8.5% to 6.64 million in the first quarter.  Average expenditure of the visitors fell by 1.7% to $625 per head, the figures showed.  (Ahval 31.05)

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6.6  World Banks Feels Turkey Needs Higher Productivity for Continual Growth

Sustaining growth and improvements in living standards in Turkey will require higher productivity, the World Bank said on 24 July.  The World Bank highlighted that economic integration and innovation have boosted firm-level productivity, though reforms could further accelerate these positive impacts.  The group said that while construction and services have expanded rapidly, they also exhibit low and falling productivity.  The World Bank also noted that growth and development required more productive companies to compete in the current world market, which can be enabled through structural reforms.  The group concluded that Ankara could adopt reforms to promote productivity growth in firms and allocate resources more efficiently.  Further economic integration, for instance, would increase the connectedness of Turkey’s firms with international business and global value chains, precipitating fresh gains in productivity.  Well-targeted public incentives for innovative firms, including young enterprises, could also encourage new business lines, new technology, and more efficient processes, it added.  (WB 24.07)

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6.7  Greece’s State Revenues Record Major Slump in June

The primary budget surplus for the year’s first half was curtailed by the drop in revenues in June, according to figures published by Greece’s State General Accounting Office.  State revenues posted a decline of €605 million at the end of the month before the general election, resulting in the primary surplus for the January-June period shrinking to €382 million, against €916 million in the year’s first five months.

In June the sum of net budget revenues reached €3.264 billion, against a target for €3.896 billion.  At the same time there was also a significant reduction in state expenditure because of the incomplete execution of the Public Investments Program.  The new leadership of the Finance Ministry is now eagerly awaiting the figures for July, the first month with income tax payments, as this will point to whether or not the budget will be executed as projected.  (eKathimerini 25.07)

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6.8  Greek Capital Controls set to be Fully Lifted by the End of September

The Bank of Greece will propose the full elimination of capital controls at the end of September in a step aimed also at encouraging credit rating upgrades for Greece, with the goal being investment grade.  The government and the central bank agree that conditions now allow for the final step to be taken, more than four years since the restrictions were imposed in June 2015 by Alexis Tsipras’ government.  Sources say preparations for lifting the capital controls have already begun, as consultations with the country’s creditors are required, as well as legislative intervention, with the final decision resting with the government.

The full removal of controls is expected at end-September, after the negotiations with the creditors who will be coming to Athens in mid-September to prepare their fourth post-bailout enhanced surveillance report; this will focus on the 2020 budget preparation, and if the outcome of the talks is positive, it will also favor the full lifting of the capital flow restrictions.  Controls have already eased considerably, as there are no restrictions to cash withdrawals domestically and transactions with entities abroad up to €100,000 are also allowed without the approval of the central bank.  (eKathimerini 25.07)

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7:  GENERAL NEWS AND INTEREST

*ISRAEL:

7.1  ‎Tisha B’Av to Be Observed on 10/11 August‎

Tisha B’Av will be observed this year from Saturday evening, 10 August, until the nightfall on 11 August.  ‎Tisha B’Av (or the Ninth of Av) is an annual fast day in Judaism, named for the ninth day (tisha) ‎of the month of Av in the Hebrew calendar.  Tisha B’Av is the culmination of a three week period ‎of increasing mourning, beginning with the fast of the 17th of Tammuz.  The fast ‎commemorates the destruction of both the First Temple and Second Temple in Judaism’s ‎holiest site, Jerusalem, which occurred about 656 years apart, but on the same Hebrew ‎calendar date.  Accordingly, the day has been called the “saddest day in Jewish history”.  ‎While the day recalls general tragedies which have befallen the Jewish people over the ages, ‎the day focuses on commemoration of five events: the destruction of the two ancient Temples in ‎Jerusalem, the sin of the ten spies sent by Moses, who spoke disparagingly about the Land of ‎Israel, the razing of Jerusalem following the siege of Jerusalem in 70 CE and the failure of Bar ‎Kokhba’s revolt against the Roman Empire.‎

The fast lasts about 25 hours, beginning at sunset on the eve of Tisha B’Av and ending at ‎nightfall the next day.  In addition to the prohibitions against eating or drinking, observant Jews ‎also observe prohibitions against washing or bathing, applying creams or oils, wearing leather ‎shoes, or having marital relations.  In addition, mourning customs similar to those applicable to ‎the shiva period immediately following the death of a close relative are traditionally followed for ‎at least part of the day, including sitting on low stools, refraining from work and not greeting ‎others.  The Book of Lamentations (Eicha) is traditionally read, followed by the kinnot, a series ‎of liturgical lamentations.  ‎
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7.2  Eid Al-Adha – Feast of the Sacrifice to Begin on 11 August

The first day of the Islamic holiday Eid al-Adha will fall on 11 August.  Eid al-Adha is a ‎religious festival celebrated by Muslims worldwide as a commemoration of Ibrahim’s willingness ‎to sacrifice his son Ishmael for Allah.  It is one of two Eid festivals that Muslims celebrate.  Eid al-Adha begins with a short prayer followed by a sermon.  Eid al-Adha is usually three ‎days long and starts on the 10th day of the month of Dhul Hijja of the lunar Islamic calendar.  ‎This is the day after the pilgrims in Hajj, the annual pilgrimage to Mecca in Saudi Arabia by ‎Muslims worldwide, descend from Mount Arafat.  It happens approximately 70 days after ‎the end of the month of Ramadan.  This year, many Moslem countries will observe the entire week of 11 August as a work holiday.

Men, women and children are expected to dress in their finest clothing and perform the Eid ‎prayer in any mosque.  Muslims who can afford to do so sacrifice their best domestic animals ‎‎(usually sheep, but also camels, cows and goats) as a symbol of Ibrahim’s sacrifice.  The ‎sacrificed animals, called udhiya, also known as qurbani, have to meet certain age and quality ‎standards or else the animal is considered an unacceptable sacrifice.  Generally, these must be ‎at least 4 years old.  At the time of sacrifice, Allah’s name is recited along with the offering ‎statement and a supplication as Muhammad said.  A large portion of the ‎meat has to be given towards the poor and hungry people so they can all join in the feast which ‎is held on Eid al-Adha.  The remainder is cooked for the family celebration meal in which ‎relatives and friends are invited to share.  ‎

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7.3  Arya Joins Most Popular Names in Israel In 2018

Muhammad remained the most popular Israeli name in 2018, both overall and among Muslims, but the perennial favorite appears to be slightly in decline, according to figures released by the Central Bureau of Statistics on 30 July.  According to the list, 2,646 boys were named after the Prophet of Islam, while the most popular boy’s name among Jews was David, at 1,447.  The most popular name for girls among Jews was Tamar, with 1,289 babies receiving it, while 523 Muslim babies were named Miriam.

The second most popular name for Jewish boys was Ariel at 1,323, followed by Noam.  The second and third most popular Muslim boys’ names were Ahmad and Adam.  David was the most popular Jewish name in Jerusalem, while Eitan was the favorite in Tel Aviv.  Maya was the most popular name for girls in Haifa, Tel Aviv, Beer Sheva, Ra’anana and Rishon LeZion.  Sixty-seven newborns were named after Game of Thrones character Arya Stark.  (CBS 30.07)

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*REGIONAL:

7.4  Saudi Arabia to Let Women Travel Abroad Without Permission

Saudi Arabia will allow women to travel abroad without approval from a male “guardian”, the government said on 1 August, ending a restriction that drew international censure and prompted extreme attempts to flee the kingdom.  The landmark reform erodes the longstanding guardianship system that renders adult women as legal minors and allows their “guardians” — husband, father and other male relatives — to exercise arbitrary authority over them.  The decision, following years of campaigning by activists, comes after high-profile attempts by women to escape their guardians despite a string of reforms including a historic decree last year that overturned the world’s only ban on female motorists.

The regulation effectively allows women over the age of 21 to obtain passports and leave the country without their guardian’s permission.  The changes also grant Saudi women what has long been a male entitlement – the right to officially register childbirth, marriage or divorce and to be recognized as a guardian to children who are minors.  The reform comes as Saudi Arabia faces heightened international scrutiny over its human rights record, including an ongoing trial of women activists who have long demanded that the guardianship system be dismantled.  (AB 02.08)

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7.5  Morocco Accredits New Private School Majors

The global list of Morocco’s state-accredited private institution majors now includes additional options.  The ministry accredited the new majors and renewed established courses after their expiry.  The global list now includes Business Management (SIST), Entrepreneurship and Economic Intelligence (ESTEM), Graphic and Digital Design (ESDAV), to name a few.  The accreditation of the new majors, published in the Official Bulletin on 18 July will expire either in the 2019-2020 academic year or the 2025-2026 year (in the case of private medical schools).

Major accreditation means that the related training programs become state-approved.  Once all its majors are accredited, the institution can apply for state-recognition of their degree.  The application for accreditation is submitted by the owner of the institution to the department in charge of higher education according to a set of specifications.  The accreditation procedure is carried out according to a number of conditions.  The institution must have a Scientific Council and at least 30% of its teaching staff must be permanent.

For management, commerce, and communication majors, one teacher for every 40 students is required for accreditation.  One teacher for each 25 students is required for the science and technology majors, while paramedical majors require one teacher for each 10 students.  The institutions must also respect national pedagogical methods.

Morocco has 202 private institutions for higher education.  In the academic year of 2015-2016, 1,231 students graduated from Moroccan private universities such as Mundiapolis or Universiapolis.  The universities had 7,032 students already enrolled and 2,153 new students for the same year.  In 2016-2017, 6093 students graduated from private schools all around Morocco.  New students registered in private schools to study Business and Management, Science and Technology, and Health Sciences increased from 7,912 in 2010-2011 to 10,623 in 2016-2017.  (MWN 25.07)

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8:  ISRAEL LIFE SCIENCE NEWS

8.1  Better Juice Reduces All Types of Sugar in Juice

Ashdod’s Better Juice has developed innovative technology to reduce the load of simple sugars in orange juice.  The patent-pending enzymatic technology uses all-natural ingredients to convert monosaccharides and disaccharides (fructose, glucose, and sucrose) into prebiotic and other non-digestible fibers and sugars, while keeping the juicy flavor of the beverage.

Better Juice’s process harnesses a natural enzymatic activity in non-GMO microorganisms to convert a portion of the simple fructose, glucose, and sucrose sugars into fibers and other non-digestible natural sugars.  The process works on all types of sugars.  However, the process also preserves the flavor and the full complement of vitamins and other nutrients inherent in the fruits.  The technology was developed in collaboration with Hebrew University Department of Agriculture in Rehovot, Israel.

Better Juice conducted several trials with different beverage companies and succeeded in reducing sugars in orange juice from 30%, up to 80%.  The start-up can now provide proof of concept for orange juice.  The company will market an advanced device with the unique technology to fruit juice producers and, eventually, to cafés and restaurants.

Mono-and disaccharides ‑ often called “simple sugars” ‑ are easy for the body to digest and thus quickly metabolized.  If the energy they provide can’t be used, it is converted to fat and stored.  But when these individual sugar molecules link up, they become prebiotic fibers that are non-digestible.  The shorter of these fibers, called oligo-saccharides, are still sweet yet have been shown to bestow a number of health benefits, from protecting against disease to helping manage weight. There are other natural monosaccharides that are not easily digested.  These sugars have no glycemic index and low caloric values.  (Better Juice 30.07)

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8.2  Magenta Medical Closes Funding Led by NEA in Its First Life Sciences Investment in Israel

Magenta Medical announced a financing round led by global venture capital firm New Enterprise Associates (NEA), with participation from existing investors, including Pitango Venture Capital, JVC Investment Partners and a group of private investors led by Prof. Jacques Seguin (CoreValve, ReCor).  The financing will be used to advance the development of the company’s two products and support Magenta Medical towards its first FDA approval.

Heart failure is a global public health epidemic and a leading cause for hospitalization, with over one million admissions each year in the US alone.  Magenta Medical’s technology aims to improve the outcomes of patients admitted with acute heart failure, whether they suffer from cardiogenic shock or from volume overload and systemic congestion.

Magenta Medical’s second product is intended to be used in patients undergoing high-risk coronary interventions and admitted patients with cardiogenic shock, a severe manifestation of acute heart failure where the failing left ventricle is unable to adequately deliver blood, oxygen and nutrients to vital organs.  Given the well-documented limitations of existing treatment methods, there is a growing appreciation that temporary unloading of the left ventricle is an important recovery tool for the heart.  Magenta Medical’s device, a percutaneous Left Ventricular Assist Device (pLVAD), is a miniaturized catheter-mounted arterial pump that moves blood from the left ventricle into the aorta, unloading the failing left ventricle for hours to days and serving as a robust bridge-to-recovery.

Kadima’s Magenta Medical is a privately-held company dedicated to the development of heart failure solutions based on its proprietary miniaturized blood pump technology.  Magenta’s current pipeline includes: a percutaneous device intended to decompress the kidneys of patients with acute venous congestion and volume overload; and a percutaneous left ventricular assist device intended to support patients undergoing high-risk coronary interventions and treat patients with cardiogenic shock.  (Magenta Medical 29.07)

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8.3  Therapix Biosciences’ TheraPEA (CannAmide) Product Issued Canadian License  

Therapix Biosciences announced the issuance of a product license for its proprietary Palmitoylethanolamide (PEA) oral tablet CannAmide by Health Canada’s Natural and Non-prescription Health Products Directorate (NNHPD) for the recommended use as an anti-inflammatory and to help relieve chronic pain.  This license is issued by Health Canada under the authority of the Natural Health Products Regulations.  Dosage form of the described natural health product is tablets composed of 400 mg. PEA with a recommended dose of 1 tablet 3 times daily.  CannAmide was approved for the use as an anti-inflammatory to help relieve chronic pain.

CannAmide is a cannabimimetic compound that regulates endocannabinoid levels by enhancing receptor sensitivity and inhibiting their metabolism, and is particularly attractive therapeutically as it appears to have a very high safety profile with low or no abuse liability.  Although numerous clinical trials have shown the favorable effect of PEA, as an analgesic agent it has low solubility.   Using their proprietary CannAmide, Therapix offers an immediate release formulation to improve bioavailability.

On 23 July, Therapix announced the signing of a letter of intent for a proposed merger with Alberta’s Destiny Bioscience Global Corp.  The transaction will create a combined company that focuses on Therapix’s proprietary IP and related technology, and assets pertaining to all clinical stage pharmaceutical applications and Destiny’s genomics-based breeding techniques and development capabilities.  The product license issuance for Therapix’s CannAmide furthers the joint strategy that Therapix and Destiny are pursuing.

Givatayim’s Therapix Biosciences is a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists.  Their focus is creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals.  (Therapix 31.07)

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8.4  Stero Biotechs Starts Clinical Trial of Cannabidiol-Based Formulation for Crohn’s Disease

Stero Biotechs received its second Helsinki approval to move forward with a second Phase 2a clinical trial.  The trial will be a randomized, double-blind, placebo-controlled, multicenter study of ST-SDCD-01, a CBD based solution in an effort to lower the steroid dosage in patients with Steroid Dependent Crohn’s Disease (SDCD).  The purpose of the study will be to evaluate the tolerability, safety, and efficacy of the formulation as a steroid-sparing therapy in SDCD patients.  Up to 30 participants with SDCD will be included in the study with a 2:1 CBD: placebo treatment ratio.

Crohn’s disease is an incurable form of Irritable Bowel Disease that can cause severe chronic symptoms that are most often treated with immunosuppressant and steroid medications.  Chronic use of such medications are associated with a number of serious side effects including bone loss/fractures, weight gain, hypertension, mood disturbances, cataracts, glaucoma, diabetes, increased risk of infection and more.  CBD was shown to have immunosuppressive and anti-inflammatory effects and may provide a path to reducing steroid treatment dose and duration for SDCD patients.

Bnei Brak’s STERO Biotechs, founded in 2017, is a clinical-stage company committed to the research and development of novel Cannabidiol (CBD) based treatment solutions that will potentially benefit millions of patients by reducing the side effects and the need for steroid therapy.  STERO was granted a U.S. patent on over 130 potential indications and is planning to commence more clinical trials in 2019 on various indications.  (Stero Biotechs 23.07)

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8.5  MetoMotion Receives $1.5 Million Investment for Its Greenhouse Robotic Worker (GRoW)

MetoMotion, a portfolio company of The Trendlines Group, has completed an investment round of $1.5 million, which was led by a leading Netherlands-based company in the greenhouse industry.  Greenhouses today face two critical problems, both of which contribute to economic damage: (1) increasing labor shortages and (2) a lack of skilled labor.  With labor costs accounting for up to 50% of total greenhouse production costs, growers are looking to technology to solve the labor crunch.  Greenhouse equipment companies are keen to make technological developments fit their product offerings.

Misgav’s MetoMotion has developed a multipurpose robotic system, GRoW, for labor-intensive tasks in greenhouses to reduce the reliance on and high costs of human labor in greenhouse vegetable production.  The Company’s first application for its GRoW system is harvesting greenhouse tomatoes.  GRoW incorporates state-of-the-art robotics and automation technology including advanced 3D vision system and machine vision algorithms to identify and locate the ripe fruit, multiple, custom-designed, robotic arms, an end-effector for damage-free harvesting, and an onboard boxing system.  The autonomous vehicle is designed for seamless integration with existing greenhouse infrastructure.  The company’s capabilities include adapting its robotic technology to other labor-intensive greenhouse tasks such as pruning, pollination, de-leafing and data collection for cultivation analysis.  (MetoMotion 31.07)

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8.6  DarioHealth Launches New Blood Pressure Monitoring System

DarioHealth Corp. announced the addition of a new digital monitoring solution on its Dario app platform that will allow patients to monitor their blood pressure throughout the day, in addition to their blood glucose levels.  The Dario Blood Pressure Monitoring System assists patients with hypertension and is a critical part of DarioHealth’s strategy to go beyond diabetes to reach patients with a variety of chronic conditions.

The Dario Blood Pressure Monitoring System is a medical device composed of a digital monitor and a blood pressure cuff that synchronizes with the Dario mobile app which allows users to track their blood pressure and a variety of health markers, along with the daily actions that influence them.  Combining the Dario Blood Pressure Monitoring System, with the Dario Blood Glucose Monitoring System, creates a harmonized digital health solution, enabling users to better monitor their health and make data driven choices.

Caesarea’s DarioHealth Corp. is a leading Global Digital Therapeutics (DTx) company revolutionizing the way people manage their health across the chronic condition spectrum.  By delivering evidence-based interventions that are driven by precision data analytics, high quality software, and personalized coaching, DarioHealth have developed a novel approach that empowers individuals to adjust their lifestyle in a unique and holistic way.  DarioHealth’s cross functional team operates at the intersection of life science, behavioral science, and software technology to deliver seamlessly integrated and highly engaging therapeutic interventions.  (DarioHealth 30.07)

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8.7  Foamix Announces $64 Million Capital Financing by Perceptive Advisors and OrbiMed

Foamix Pharmaceuticals has secured up to $64 million in financing from Perceptive Advisors and OrbiMed.  The financing consists of term loans of up to $50 million under a Credit Agreement, with $15 million provided immediately upon satisfaction of certain closing conditions, $20 million available upon the achievement of certain regulatory milestones and $15 million available upon the achievement of certain revenue milestones.  Additionally, the Company will receive $14 million in gross proceeds from Perceptive Advisors through a direct registered offering of the Company’s ordinary shares.  Proceeds from the transactions are expected to be used to fund the Company’s filing of a New Drug Application (NDA) with the FDA for FMX103 for the treatment of papulopustular rosacea as well as, assuming FDA approval is received, the anticipated product launches of FMX101 for the treatment of moderate to severe acne and FMX103, as well as for working capital and general corporate purposes.

Rehovot’s Foamix is a specialty pharmaceutical company focused on the development and commercialization of proprietary, innovative and differentiated topical drugs for dermatological therapy.  Their leading clinical stage product candidates are FMX101, our novel minocycline foam for the treatment of moderate-to-severe acne and FMX103, their novel minocycline foam for the treatment of rosacea.  Foamix continues to pursue research & development of proprietary, innovative foam technologies for the treatment of various skin conditions.  (Foamix 30.07)

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8.8  Can-Fite to Distribute Piclidenoson for the Treatment of Psoriasis in South Korea

Can-Fite BioPharma has signed a distribution agreement with Kyongbo Pharm Co. to distribute Can-Fite’s lead drug candidate, Piclidenoson (CF101), for the treatment of psoriasis in South Korea, upon receipt of regulatory approvals.  Under the terms of the distribution agreement, Kyongbo Pharm, in exchange for exclusive distribution rights to sell Piclidenoson in the treatment of psoriasis in South Korea, is making a total upfront payment of $750,000 to Can-Fite, with additional payments of up to $3,250,000 upon achievement of certain milestones.  Can-Fite will also be entitled to a transfer price for delivering finished product to Kyongbo Pharm.

Can-Fite is currently enrolling over 400 patients in Europe, Canada, and Israel for its Phase III Comfort trial of Piclidenoson in the treatment of psoriasis.  The study is designed to establish Piclidenoson’s superiority as compared to placebo and non-inferiority versus Otezla in patients with moderate-to-severe plaque psoriasis.

Petah Tikva’s Can-Fite BioPharma is an advanced clinical stage drug development company with a platform technology that is designed to address multi-billion dollar markets in the treatment of cancer, inflammatory disease and sexual dysfunction.  The Company’s lead drug candidate, Piclidenoson, is currently in Phase III trials for rheumatoid arthritis and psoriasis.  Can-Fite’s liver cancer drug, Namodenoson, recently completed a Phase II trial for hepatocellular carcinoma (HCC), the most common form of liver cancer, and is in a Phase II trial for the treatment of non-alcoholic steatohepatitis (NASH).  The company is investigating additional compounds, targeting A3AR, for the treatment of sexual dysfunction.  These drugs have an excellent safety profile with experience in over 1,000 patients in clinical studies to date.  (Can-Fite 01.08)

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8.9  iCAN: Israel-Cannabis & Citrine Establish iBOT: Israel Botanicals

iCAN: Israel-Cannabis, Israel’s leading cannabis incubator, and Citrine Biotech and Cannabis Investment Funds are pleased to announce the establishment of iBOT: Israel Botanicals, a botanical nutraceutical company located in central Israel.  iBOT completed the acquisition of a GMP-certified contract manufacturer of white label botanical formulations with over 20 years of formulation experience

iBOT announced full certification by the Israeli Ministry of Health and ISO certification bodies accrediting iBOT to GMP, ISO 9001 and HACCP standards.  iBOT will continue to serve existing customers with a range of vitamin and herbal formulations in tablets, capsules, syrups and tinctures.  iBOT looks forward to introducing a wide range of new products with a focus on quality and innovation.  These full-spectrum botanical supplements will be developed together with leading research scientists and herbal formulators to provide the local and global supplement market with the highest of quality products developed and manufactured in Israel.

With the acquisition of the botanical facility now complete, iBOT will begin the process of licensing the facility by the Yakar (the Medical Cannabis Unit of the Ministry of Health) for the production and distribution of IMC-GMP cannabis products for the local and global market.

Beit Shemesh’s iCAN: Israel-Cannabis is building the Global Cannabis Ecosystem.  iCAN is committed to accelerate Israel’s CannaTechnology industry, capitalizing on Israeli innovation and a leading cannabis regulatory environment to bring premier products to market.  Tel Aviv’s Citrine is a leading technology-focused investment group that enables Israeli entrepreneurs to materialize global breakthrough companies.  Citrine Biotech and Medical Cannabis investment funds have already invested in several promising Cannabis companies and are in the process of entering additional investments.  (iBOT Israel Botanicals 01.08)

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8.10  Cardiovascular Systems Acquires Gardia Medical’s WIRION Embolic Protection System

St. Paul, Minnesota’s Cardiovascular Systems, a medical device company developing and commercializing innovative interventional treatment systems for patients with peripheral and coronary artery disease, has acquired the WIRION Embolic Protection System and related assets from Gardia Medical, a wholly owned Israeli subsidiary of Allium Medical Solutions.

The device, which received CE Mark in June 2015 and FDA clearance in March 2018, is a distal embolic protection filter used to capture debris that can be associated with all types of peripheral vascular intervention (PVI) procedures.  Physicians typically use embolic protection devices in vessels located above the knee with long lesions, high plaque burden and poor run off.  The WIRION System is easier to use and more versatile than other available embolic protection systems because it can be used with any .014” guidewire and for all types of peripheral interventions.  In addition, the WIRION System is the only embolic protection device indicated for use with any atherectomy system.  The WISE LE study also demonstrated a major adverse event (MAE) rate of 1.9%, which is lower than any other previously reported rates with other embolic filters.  Importantly, no clinically significant distal embolization was observed when the WIRION System was used.

CSI plans to commercialize the WIRION System in the United States following the transfer of manufacturing from Gardia Medical.  CSI expects the manufacturing transfer to be completed after a 12- to 15-month transition period.  Gardia will retain the rights to the WIRION System for angioplasty and stenting procedures in the carotid arteries.

Caesarea’s Gardia Medical develops specialized catheter-based delivery systems to Deliver, Lock and Deploy devices on any guidewire, anywhere on the wire, in minimally-invasive interventional procedures.  Allium Medical Solutions develops, manufactures and markets minimally invasive products internationally in various medical disciplines.  These innovative products serve the need for minimally invasive interventions benefitting the patient by improving their recovery process and shortening it.  Allium Medical Solutions’ products are used by physicians to treat a wide range of diseases and patients worldwide.  (CSI 26.07)

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8.11  RenalSense Obtains CE Mark for Clarity RMS Critical Care System for Urine Flow Monitoring

RenalSense has obtained CE Mark approval for its Clarity RMS system for real-time monitoring of urine flow in the critical care and peri-operative setting.  The CE Mark approval allows RenalSense to commercialize its technology in the European Union (EU), where Fresenius Medical Care (Bad Homburg) is its distribution partner.  In addition to obtaining the CE Mark approval, RenalSense also received ISO:13485:2016 certification for its quality management system.

Jerusalem’s RenalSense is a privately owned medical device company dedicated to real-time renal diagnostics.  The company’s first product, Clarity RMS, provides continuous, automatic monitoring of urine flow, enabling better patient care and ICU economics.  RenalSense’s next generation products will provide additional real-time parameters and expanded diagnostic capabilities, to further improve critical care management in the ICU and peri-operative setting.  (RenalSense 05.08)

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8.12  Foamix Submits NDA to FDA for FMX103 for the Treatment of Papulopustular Rosacea

Foamix Pharmaceuticals has submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) seeking approval for FMX103 for the treatment of moderate-to-severe papulopustular rosacea in patients 18 years of age and older.

The NDA submission is supported by the previously communicated results from two Phase 3 clinical trials, FX2016-11 and FX2016-12.  In these trials, FMX103 achieved both co-primary endpoints, demonstrating statistically significant improvements in inflammatory lesion count and Investigator Global Assessment (IGA) treatment success.  In both trials, and in the long-term safety extension study FX2016-13, the safety profile of FMX103 was shown to be generally favorable and consistent throughout the clinical development program.  The NDA submission also incorporates information on chemistry manufacturing and controls, and data from non-clinical toxicology studies.

Rehovot’s Foamix is a specialty pharmaceutical company focused on the development and commercialization of proprietary, innovative and differentiated topical therapies to treat dermatological diseases.  Their leading clinical stage product candidates are FMX101 and FCD105 which are intended for the treatment of moderate-to-severe acne vulgaris and FMX103 which is intended for the treatment of papulopustular rosacea.  (Foamix 05.08)

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8.13  OWC Receives a Permit for a Cannabis Based Ointment Efficacy Trial

OWC Pharmaceuticals Research Corp. announced that on 18 July 2019 it received long-awaited approval from the Israeli Medical Cannabis Agency to perform an efficacy study with OWC topical ointment on psoriatic patients.  Currently, the study is planned to be conducted at the Kaplan Medical Center, an academic medical center in Israel.  OWC believes this is the first time that the Israeli Medical Cannabis Agency has issued a permit for the treatment of psoriasis with a cannabis-based product.  The study will be divided into the following two consecutive stages: (1) a pilot efficacy and dosage study; and (2) based on the results of the first stage, a double blind, placebo-controlled study.

Ramat Gan’s OWC Pharmaceutical Research Corp. conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD, and migraines. OWCP is also developing unique and effective delivery systems and dosage forms of medical cannabis.  (OWC 05.08)

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8.14  CollPlant Developing 3D-Bioprinted Implants for Regeneration of Breast Tissue

CollPlant announced that it is developing 3D bioprinted implants for regeneration of breast tissue and has successfully produced first prototypes. The implants will be comprised of CollPlant’s proprietary type I recombinant human collagen and additional materials.  Loaded with fat cells taken from the patient, these implants are intended to promote breast tissue regeneration.  Eventually, the scaffold is designed to degrade and be replaced by newly grown natural breast tissue, which is free of any foreign material.

Rehovot’s CollPlant is a regenerative medicine company focused on 3D bioprinting of tissues and organs and medical aesthetics.  Their products are based on our rhCollagen (recombinant human collagen) that is produced with CollPlant’s proprietary plant based genetic engineering technology.  The products address indications for the diverse fields of organ and tissue repair, and are ushering in a new era in regenerative medicine.  (CollPlant 05.08)

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8.15  Tel Aviv University Scientists Develop a Vaccine for Skin Cancer

Researchers at Tel Aviv University have developed a novel nano-vaccine for melanoma, the most aggressive type of skin cancer.  So far the vaccine has been proven effective in mice in preventing the development of melanoma and in treating primary tumors and metastases that result from the disease, the researchers said in a study, revealed in the 5 August issue of Nature Nanotechnology.  The vaccine still hasn’t been tested on human beings, only on human tissue.

The researchers used tiny particles, about 170 nanometers in size, made up of biodegradable polymers. Within each particle, they “packed” two peptides – short chains of amino acids, which are found in melanoma cells.  They then injected the nanoparticles (or “nano-vaccines”) into mice that had melanoma.  The researchers demonstrated the effectiveness of the vaccine under three different conditions: as a preventive measure in healthy mice; to treat a primary tumor in mice in conjunction with immunotherapy, and to treat tissues taken from patients with melanoma brain metastases.  The study shows that it is possible to produce an effective nano-vaccine against melanoma and to sensitize the immune system to immunotherapies.  The researchers believe that their “nano-vaccine” approach could be expanded beyond melanoma.  (IH 06.08)

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8.16  SofWave Medical Closes $8.4 Million Financing Round

SofWave Medical, an aesthetic medical company developing Non-Invasive Fractional Ultrasound Technology for skin tightening, announced the closure of an $8.4 million financing round.  SofWave Medical’s Fractional Ultrasound Beam Treatment is based on proprietary technology developed by the company over the last four years.  This unique technology enables very accurate targeting of layers within the skin (dermis) or deeper layers using an array of Ultrasound transducers that cause controlled thermal injury, resulting in tightening of the skin, reduction of wrinkles and better-looking skin.  A 60 patient clinical study performed by SofWave Medical with leading US dermatologists, has shown excellent clinical results with no down-time to patients and an exceptional safety profile.  This study was used as part of the 510K FDA submission of the company.  Recently the company obtained a CE Mark for the product which will enable commercialization outside of US markets.

Yokneam’s SofWave Medical brings a novel approach to skin tightening and wrinkle reduction using proprietary Fractional Ultrasound.  SofWave Medical’s breakthrough technology brings a new standard of care to aesthetic treatments, providing physicians with smart yet simple, effective and safe aesthetic solutions for their patients.  (SofWave 06.08)

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9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Foresight’s Successful US Technological Demonstrations Sells Quadsight Prototype

Foresight Autonomous Holdings announced an additional sale of a prototype of its QuadSight four-camera vision system targeted for the semi-autonomous and autonomous vehicle market.  The prototype system was ordered by the American subsidiary of a leading global Tier One automotive supplier.  Revenue from the prototype system sale is expected to total tens of thousands of dollars.

The American supplier participated in a technological roadshow that took place in the Silicon Valley area at the beginning of July.  The roadshow consisted of live, real-time demonstrations of the QuadSight system to vehicle manufacturers and Tier One suppliers.  Different scenarios were tested, simulating obstacle detection in challenging weather and lighting conditions.  Customer satisfaction following initial installation may lead to additional orders of QuadSight systems by the American supplier, to be integrated into cars of leading vehicle manufacturers.

Ness Ziona’s Foresight Autonomous Holdings, founded in 2015, is a technology company engaged in the design, development and commercialization of sensors systems for the automotive industry.  Through the company’s wholly owned subsidiaries, Foresight Automotive and Eye-Net Mobile, Foresight develops both “in-line-of-sight” vision systems and “beyond-line-of-sight” cellular-based applications.  Foresight’s vision sensor is a four-camera system based on 3D video analysis, advanced algorithms for image processing, and sensor fusion.  (Foresight 25.07)

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9.2  Bezeq Displaces All-Flash Array with Excelero Nvmesh for Data Warehouse Architecture

Excelero announced that telecommunications company Bezeq is deploying Excelero NVMesh as the centerpiece of a new scale-out storage architecture behind its mission-critical data warehouse.  Replacing a high-end all-flash array with the simplicity and scale of an architecture using Excelero NVMesh along with Fujitsu servers and Mellanox 100 Gbps Ethernet switches, Bezeq achieved a 2x to 3x throughput improvement and cut database run times by up to 90%.  Bezeq’s results with Excelero typify the advantages that NVMe over Fabrics architectures deliver in superior throughput, ultra-low latency, scalability and flexibility.

The new infrastructure incorporates Excelero NVMesh running on a Fujistu RX4770 server, featuring 96 cores and 1TB memory, and Fujitsu RX2540 storage nodes with 4 TB NVMe drives – totaling 48 TB.  The servers are connected with Mellanox 100 Gbps Ethernet switches and NICs.  A key benefit of NVMesh was the flexibility to choose the most suitable and cost-effective commodity hardware for Bezeq’s requirements, eliminating vendor lock-in.  Early trials showed that in contrast to the maximum 8 GB/s throughput of the Fusion IO devices, the NVMesh environment delivered 16-23 GB/s – well above Bezeq’s requested 15 GB/s throughput.  The Excelero storage also reduced run times by an average of 30% compared to the legacy all-flash array environment, and in some workloads, reduced run times up to 90%.  Replacement was simple and while formal metrics weren’t established, Bezeq’s IT team detected reduced CPU demand, helping it squeeze maximum compute power from existing resources.

Tel Aviv’s Excelero delivers low-latency distributed block storage for web-scale applications such as AI, machine learning and GPU computing.  Founded in 2014 by a team of storage veterans and inspired by the Tech Giants’ shared-nothing architectures for web-scale applications, the company has designed a software-defined block storage solution that meets the low-latency performance and scalability requirements of the largest web-scale and enterprise applications.  (Excelero 25.07)

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9.3  Optibus Releases Multi-Route Planning Capabilities for Public Transit

Optibus launched a new set of multi-route planning capabilities within the Optibus cloud-native platform.  The new capabilities enable transportation agencies and operators to plan multiple routes at the same time, making it easier for them to prioritize passenger needs for reliable, frequent and high-quality bus service while increasing operational efficiency and reducing costs.  With Optibus’ multi-route planning, transit agencies and operators are able to rely on a high-tech, user-friendly solution to plan multiple routes at the same time.  This allows transit providers to get a view of the entire transit corridor at once and coordinate trip times that would benefit passengers traveling through the corridor.

Optibus’ multi-route planning capabilities are part of an advanced planning and scheduling platform powered by a tech stack that includes powerful optimization algorithms, artificial intelligence (AI) and distributed cloud computing.  These can also be used to improve a bus network’s appeal to riders. For instance, Optibus uses AI to evaluate historic on-time performance and then assess and predicts the likelihood that buses in any given schedule will arrive and depart on time.  These pioneering, easy-to-use solutions enable transportation agencies and operators around the world to quickly and flexibly plan mass transportation on one cohesive platform, including route and timetable planning, vehicle and crew scheduling, and roster building.

Tel Aviv’s Optibus‘ software-as-a-service (SaaS), cloud-native planning and scheduling platform leverages artificial intelligence and powerful algorithms to rapidly reduce labor, fuel and vehicle costs as well as improve passenger service and grow ridership for mass transportation operators and agencies.  With the most intelligent platform in the industry, Optibus ensures an improved rider experience through expertly planned and controlled core operations.  Optibus has been chosen by more than 300 cities to drive some of the most complex and large-scale transportation operations worldwide, streamlining operations while reducing congestion, emissions and costs.  (Optibus 25.07)

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9.4  My Size Signs License Agreement With Penti for Smart Measurement Application MySizeID

My Size has signed a license agreement for its MySizeID smart measurement solution with Penti, a Turkish company that is taking vigorous steps to become a global brand with a total of 550 retail stores in more than 35 countries.  Penti is backed by the Carlyle Group, one of the world’s largest global investment firms.

The MySizeID app is a turnkey solution that helps merchants’ customers choose the appropriate apparel size for that brand, based on the shopper’s real measurements.  My Size’s innovative technology enables consumers to measure themselves using their smartphone and then be matched with a brand-specific apparel item in their size.  Within the retail channel, sales associates can now be equipped with a tool to quickly and accurately measure customers to enhance the shopping experience.

Airport City’s My Size has developed a unique measurement technology based on sophisticated algorithms and cutting-edge technology with broad applications including the apparel, e-commerce, DIY, shipping and parcel delivery industries.  This proprietary measurement technology is driven by several algorithms which are able to calculate and record measurements in a variety of novel ways.  (My Size 25.07)

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9.5  OptimalPlus Launches Lifecycle Analytics Solution for ADAS

OptimalPlus launched their new Lifecycle Analytics Solution for Advanced Drivers Assistance System (ADAS) cameras.  The new offering provides the manufacturers of ADAS with real-time data insights based on big data and machine learning to optimize production and increase product quality.  A cornerstone of the technologies being developed for autonomous and semi-autonomous vehicles, ADAS cameras are electro-optical systems that aid vehicle drivers and are intended to increase car and road safety.

Assembling ADAS cameras relies on a complicated supply chain to provide electronic and optical components from different geographical locations, all with different methods of ensuring and monitoring reliability, and with manufacturers relying on separate silos of product data and information, it is exceedingly difficult to ensure that these components will perform up to the required standards.  OptimalPlus addresses these issues by providing unprecedented visibility throughout the supply chain, connecting supplier data to field performance, enabling a full overview of production, increasing efficiency and enabling preemptive actions to find problematic products earlier in the manufacturing cycle and preventing unreliable products from being deployed or removing them in real-time from the factory floor, reducing scrap rates and avoiding costly recalls.

OptimalPlus is able to accomplish this level of insight by combining big data with machine-learning algorithms on a global data infrastructure to drive real-time product analytics that extracts hidden insights across data silos throughout the supply chain, enhancing all measurable production metrics.  The ADAS camera solution is part of OptimalPlus’ growing role in the automotive industry, where the company is working with OEMs and Tier-1s to optimize their production methods for mechanical and electronic systems.

Holon’s OptimalPlus is the global leader in lifecycle analytics solutions for the automotive, semiconductor, and electronics industries, serving tier-1 suppliers and OEMs.  Analyzing data from over 100 billion devices annually, OptimalPlus enables enhancements in key manufacturing metrics such as yield and efficiency, improves product quality and reliability, and provides full supply chain visibility.  Seamlessly integrated with other already existing tools, the OptimalPlus Open Platform combines machine-learning with a global data infrastructure to provide real-time product analytics and to extract insights from data across the entire supply chain.  (OptimalPlus 25.07)

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9.6  Nano Dimension Introduces DragonFly LDM for Lights-Out Digital Manufacturing of Electronics

Nano Dimension introduced its new DragonFly Lights-Out Digital Manufacturing (LDM) printing technology, the industry’s only comprehensive additive manufacturing platform for round-the-clock 3D printing of electronic circuitry.  The initial deployment took place at the Munich premises of sensor and defense electronics provider HENSOLDT.  The unique DragonFly LDM system is designed for Industry 4.0 and manufacturing for the Internet of Things and is the extension of the successful DragonFly Pro precision system, which is dedicated to printing electronic components such as multilayer Printed Circuit Boards (PCBs), antennas and sensors.  The DragonFly LDM is already available through Nano Dimension’s global sales channel.  In Germany, the launch of the DragonFly LDM was already initiated by Nano Dimension’s reseller, Phytec New Dimension.

The Lights-Out Digital Manufacturing (LDM) is a manufacturing methodology in which systems run with little to no human intervention, around the clock. In the case of additive manufacturing,  LDM means DragonFly users can 3D-print more functioning electronic circuitry faster, extending the DragonFly’s rapid prototyping capabilities and increasing opportunities for short-run, small volume manufacturing of printed electronics.  Nano Dimension’s DragonFly LDM extends 3D printing for printed electronics beyond prototyping to true in-house, lights-out digital manufacturing, enabling one-off prototypes as well as low-volume manufacturing of printed electronics.

Ness Ziona’s Nano Dimension is a leading electronics provider that is disrupting, reshaping, and defining the future of how cognitive connected products are made.  With its unique 3D printing technologies, Nano Dimension is targeting the growing demand for electronic devices that require increasingly sophisticated features.  (Nano Dimension 25.07)

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9.7  Safe-T Announces First Tier-1 Collaboration for its IP Proxy Product with Korean ISP

Safe-T Group announced a first collaboration agreement with a tier-1 Internet Service Provider (ISP), in Korea.  Safe-T’s enterprise IP proxy network service is based on its deployment through ISPs, using collaboration agreements which enable the installation of the Company’s carrier-grade technology at the core network of the ISPs who join the global network.  Deployment in larger ISPs enables broader coverage of the network, and as a result increase the number of potential customers, while preserving the stability and the speed of the service.  To date, the Company has similar agreements with more than 100 ISPs in more than 25 countries, and is in negotiations with numerous additional potential collaborators.

Herzliya’s Safe-T Group is a provider of Zero Trust Access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data, while ensuring uninterrupted business continuity.  Safe-T’s cloud and on-premises solutions ensure that an organization’s access use cases, whether into the organization or from the organization out to the internet, are secured according to the ‘validate first, access later’ philosophy of Zero Trust. This means that no one is trusted by default from inside or outside the network, and verification is required from everyone trying to gain access to resources on the network or in the cloud.  With Safe-T’s patented reverse-access technology and proprietary routing technology, organizations of all size and type can secure their data, services and networks against internal and external threats.  (Safe T Logo 29.07)

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9.8  Videocites AdTrack Revealing the True Reach of Promotional Videos

One of the biggest challenges in measuring the actual reach of a video Ad is the ability to track all of its re-uploads together with their views and engagement. Using its AI-based video tracking technology, Videocites AdTrack is now offering advertisers and brands with the ability to measure the true Ad exposure across the social/video platforms, hence providing access to priceless data that was unreachable until now.  AdTrack provides comprehensive analytics for both official and organic boosts copies, including copies and viewership breakdown per platform through time, true effective media value, performance report of affiliates and potential new influencers/opinion leaders, audience interests and demographics, comments analysis and other engagement-relevant metadata that derives from all tracked copies.

Netanya’s Videocites is an AI-based video tracking and analytics company, using a proprietary video fingerprinting technology to provide robust Live and VOD content tracking services throughout the web and other video repositories regardless of metadata, language, audio or severe video manipulations.  Videocites is already a leading solutions provider for the anti-piracy and security domains, serving major Hollywood studios, TV Networks, Homeland Security Agencies, as well as Sports and Live events.  (Videocites 30.07)

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9.9  Teltonika Cooperates with NanoLock Security for Powerful Router Cyber Defense

NanoLock Security announced that Lithuania’s Teltonika, a leading manufacturer of IoT connectivity solutions, has partnered with NanoLock Security to provide additional optional security layer for its RUT955 professional cellular router.  Teltonika’s routers are often deployed in remote locations in the public domain and are recognized by the market as highly secure devices. However, as more and more critical infrastructure gets connected into unified systems, security threats become increasingly relevant, therefore, require strong protection from internal and external cyberattacks.  To achieve this high level of security, Teltonika has cooperated with NanoLock’s revolutionary cloud-to-flash technology to implement an optional additional security layer.

NanoLock Security provides cloud-to-flash protection for IoT and connected devices, such as routers, blocking access to firmware, boot images and critical code through a hardware-root-of trust in the flash memory.  This approach places the root of trust in the flash memory of devices, effectively securing connected edge devices from persistent attacks such as VPNfilter and enabling trustworthy remote management and control of devices.  NanoLock protects and monitors connected edge devices from the moment they are created on a factory floor.  Through secure, over-the-air (OTA) upgrades, NanoLock protection continues when the devices are in operation and exposed to vulnerabilities, extending monitoring and protection throughout the device’s entire lifecycle.  This approach is both processor and operating system agnostic and requires virtually zero processing power or additional energy.

Nitzanei Oz’ NanoLock Security provides the industry’s only cloud-to-flash defense for connected edge devices.  NanoLock creates a powerful solution that secures the entire chain of connected devices vulnerability—from deeply embedded endpoints in the device, to the cloud, with no additional costs or computing power.  Securing a HW-root of trust, NanoLock is disrupting edge device security with hermetic protection, secured firmware updates, and a unique cost structure that shifts security investments from CAPEX to OPEX.  NanoLock’s solution provides tremendous savings in cyber spending through robust protection and tight control of the entire connected edge network that is crucial to the success of industries like telecom, smart cities, automotive.  (NanoLock 30.07)

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9.10  Karamba Security Teams with Cypress to Provide Embedded Cybersecurity

Karamba Security announced a collaboration with San Jose, California’s Cypress Semiconductor Corp. to enhance security hardening for the automotive industry.  Karamba’s embedded cybersecurity solutions for connected systems are used by tier ones and OEMs to protect vehicles and reduce vulnerability exposures.  Karamba and Cypress will leverage the Cypress Semper Flash in-memory compute capabilities for connected systems hardening, using standard flash memory form factors, to reduce cybersecurity risks.  Cypress Semper NOR Flash architecture allows users to add advanced cryptographic capabilities to the flash in addition to superior performance and industry-leading functional safety and reliability.  With Karamba’s focus on performance excellence, end-to-end security of connected systems is possible with a zero-trust approach to cybersecurity.  Karamba’s technology automatically hardens the full image of the connected system and prevents modification of the factory settings.

Hod HaSharon’s Karamba Security provides industry-leading embedded cybersecurity solutions for connected systems. Product manufacturers in automotive, Industry 4.0, IoT, and enterprise edge rely on Karamba’s automated runtime integrity software to self-protect their products against Remote Code Execution (RCE) cyberattacks with negligible performance impact. After 32 successful engagements with 17 automotive OEMs and tier 1s, product providers trust Karamba’s award-winning solutions to increase their brand competitiveness and protect their customers against cyberthreats.  (Karamba 05.08)

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10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel Rises to Top 10 on the Global Innovation Index

Israel has been listed in the Global Innovation Index top 10 for the first time – ranked tenth for innovation in 2019 after being ranked 11th in 2018 and 17th in 2017.  Switzerland topped the innovation ratings again this year, followed by Sweden.  The US advanced from fourth place in 2018 to third place this year.  The rating, published by Cornell University in the US, the INSEAD School of Business, and the UN World Intellectual Property Organization (WIPO), is composed of 80 different indicators measuring various aspects of innovation.

Israel was in 17th place in innovation inputs and eighth place in innovation outputs, which the report’s authors say shows that Israel excels in producing innovation with relatively little investment.  In business sophistication, Israel was ranked in third place.  This ranking is composed of high secondary indicators, such as cooperation between industry and higher education (second place worldwide), foreign investments in R&D (third place), and participation by women in the highly trained labor force (third place). Israel led the world in investments in R&D, research talent, Wikipedia editing, creating applets and exports of high-tech services.

Israel has poor rankings in infrastructure and institutional indicators (31st and 33rd place, respectively). Israel was particularly low in government investment per student (56th place) and the cost of layoffs resulting from streamlining (111th place).  The index authors note that Israel is the leading country in innovation in North Africa and Western Asia, and stands out in the ratio of innovation to investment.  Jerusalem and Tel Aviv were rated in 23rd place on the index of the world’s largest innovation centers.  (Globes 25.07)

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10.2  Israel’s Unemployment Rate Rises to Over 4%

The Central Bureau of Statistics announced on 31 July that the unemployment rate in Israel among those age 15 and older rose to 4.1%, compared with 3.7% in the preceding month.  Unemployment in the second quarter, however, was still lower than in the first quarter of the year.

The unemployment rate among men rose to 4.2%, compared with 3.5% in the preceding month, while the rate among women rose from 3.9% in the preceding month to 4.1% in June.  The employment rate, consisting of the proportion of employment in the general population age 15 and older, dipped from 61.1% in the previous month to 60.9% in June.  The rate fell from 65.2% to 64.9% among men and from 57.3% to 57% among women.

The number of full-time employees (working 35 or more hours a week) declined by 0.8% in June, a loss of 20,000 jobs, while the number of part-time employees was 5.9% higher than in the preceding months (58,000 additional part-time jobs).  The number of employees temporarily absent from their jobs in the week of record rose 7.5% above the preceding quarter, representing 29,000 additional employees.

Despite the increase in June, the unemployment rate in the second quarter among those age 15 and older declined in most districts, in comparison with the preceding quarter.  The rate fell from 4.1% in the first quarter to 3.9% in the second quarter in Jerusalem, from 4.8% to 4.1% in the northern district, from 4.2% to 4.1% in the Haifa district, from 3.6% to 3.3% in the Tel Aviv district and from 4.1% to 3.8% in the Tel Aviv district, while increasing from 4.0% to 4.1% in the southern district.  The proportion of participation in the labor force among those age 15 or older declined in most districts.  (CBS 31.07)

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11:  IN DEPTH

11.1  ISRAEL:  S&P Reaffirms Israel’s AA- Credit Rating with a Stable Outlook

On 2 August, Standard & Poor’s (S&P) reaffirmed Israel’s credit rating at AA- with a stable outlook.  S&P raised Israel’s rating to its current one, the highest rating awarded to the country to date, in August 2018, and reaffirmed it in February.

In its most recent research note, S&P stated Israel’s economy is showing continuous strong growth.  This growth is expected to weather internal political volatility, with a second election in just under six months coming up in September, the various criminal investigations against Prime Minister Benjamin Netanyahu, and the external instability caused by the slowing of many of the world’s leading economies and by global trade tensions.

Israel’s economy, which S&P defines as “diversified, competitive, and resilient,” is expected to grow annually by 3% on average until 2022.  While higher than the OECD average, this still represents is slower growth than Israel has experienced over the past few decades.  The country has not faced recession in the last 15 years, S&P wrote, and its GDP has increased by 60% since 2010 in U.S. dollar terms, combined with historically low unemployment rates.

“Growth will stem from private consumption on the back of a strong labor market, continued corporate investment activity,” and Israel’s strong services export, S&P wrote.  In 2020, the Leviathan gas field is expected to start operations and boost the economy further, S&P said.

The agency is expecting Israel’s political institutions to withstand the country’s political fragmentation, as it is not a new situation, but state that it could prevent the chosen government from making changes necessary to solve long-term structural issues such as weak labor market participation, a problematic real estate market, infrastructure gaps, bureaucratic red tape, and the low skills of specific population groups.

The two main restraints on Israel’s credit rating are geo-political risks and Israel’s government debt.  The central government deficit reached 3.9% in June 2019, compared to an annual target of 2.9%, an even weaker fiscal outcome than S&P expected.  Due to the dissolution of the Knesset, only minor budget changes will be possible until perhaps even 2020, leading the S&P to revise its general government deficit forecast upwards to 3.6%.

“Now that the business cycle is maturing, fiscal performance will, in our view, likely deteriorate as the significant cyclical contribution—to government revenue in particular—fades away,” S&P wrote.  However, the agency said, there is no reason to be very concerned about Israel’s fiscal and macroeconomic stability, as over the past decade government debt has actually decreased by over 10% and fiscal tightening will likely be on the agenda of the next government no matter the political outcome.  The agency therefore expects net general government debt to stay below 60% of Israel’s GDP through the forecast horizon.  (Various 05.08)

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11.2  ISRAEL:  Tel Aviv’s Tech Hub Ranks 6th in New Startup Ecosystem Report

As reported by NoCamels, Startup Genome’s 2019 Global Startup Ecosystem Report (GSER), one of the world’s most comprehensive reports on startup ecosystems and subsector trends, firmly states that there will be no “next Silicon Valley.”  Instead, there will be 30 “next” hubs throughout the world that don’t quite achieve the density of the Bay Area, but do go beyond “critical mass” driven by regional or sub-sector leadership, the report explains.

Among them – in sixth place overall – is Tel Aviv, Israel’s finance and tech capital, which has helped earn the country’s reputation as the “Startup Nation” with more startups per capita than anywhere in the world.  The report dubs Tel Aviv and other cities in the top seven as “leaders,” noting they have “strong performance across many ecosystem success factors, each of them creating at least $30 billion in ecosystem value, with a median of $56 billion.”

Tel Aviv received top marks for a number of “success factors,” ranking in the top tier for connectedness, referred to in the report in terms of links the city has to other top global ecosystems, and knowledge, as a result of “a culture of founders helping founders, frequent events, and entrepreneurs getting meaningful help from local experts and investors.”  Tel Aviv’s abundance in tangible IP, in the form of patents, research, and favorable policy environments leads to its strong performance in the knowledge category, according to the survey. In the IP commercialization sub-factor, Tel Aviv scored 10 (out of 10).

The city also ranked in the second tier for performance, talent, experience, funding and market reach.  Since Tel Aviv operates within a small local market, the ecosystem sells to global customers at high rates – over 50% of Tel Aviv’s startups’ customers are foreigners, the report says.  A small local market facilitates an ecosystem’s totality and scale.

In a number of sub-factors, Tel Aviv also scored high including in funding access (nine out of 10) and quality (seven out of 10), global reach (eight out of 10), startup output (eight out of 10), and startup success (seven out of 10).  The city received lower marks for sub-factors such as infrastructure (four out of 10), which the report says is a “Life Sciences-focused measure of accelerators and incubators, research grants, and R&D anchors in the ecosystem (e.g., top research hospitals and R&D corporate labs),” and scaling experience (four out of 10).  The comprehensive report also notes that Tel Aviv has sub-sector strengths in AI, Big Data, and analytics, as well as cybersecurity.

In Cyber, Israel ranks second, with exports of some $6.5 billion in cybersecurity products per year, according to the report and exits of $2.81 billion in 2018. Israel is also the first country in the world to offer a PhD in cybersecurity and is home to six university cybersecurity research centers.  In AI, Tel Aviv ranks third in the world for its ecosystem, with the report highlighting Google’s launch in March 2018 of a startup accelerator focused on artificial intelligence and machine learning.  It was the first such accelerator launched outside the US. Later that year, US tech giant Nvidia opened a research center in Tel Aviv to focus on AI. And AI chip developer Habana Labs raised $75 million in Series B funds with Intel Capital as a lead investor.  Finally, retail giant Walmart acquired AI startup Aspectiva in early 2019 for an undisclosed sum.

The report, released in May this year and published annually since 2012, is a joint effort between Startup Genome, a management consulting firm that advises startups, and the Global Entrepreneurship Network (GEN), a producer of projects and platforms for entrepreneurs in 170 different countries. Startup Genome has collaborated with more than 300 partner organizations for over a decade and has collected data on over a million companies across 150 cities.  The index is in its 12th edition and this is Israel’s first time in the top 10.  (NoCamels 29.07)

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11.3  ISRAEL:  The Monetary Policy Report for the First Half of 2019

Summary

On 27 July, the Bank of Israel released its monetary policy report for the first half of 2019.

Monetary policy: This report reviews the monetary policy in the first half of 2019 and in the beginning of the second half of 2019.  In the first half of 2019, the Monetary Committee kept the interest rate unchanged, after increasing it to 0.25% at the end of the previous half year.  The Committee’s decisions kept the forward guidance, which stated that the Committee assesses that the rising path of the interest rate in the future will be gradual and cautious, in a manner that supports a process at the end of which inflation will stabilize around the midpoint of the target range, and that supports economic activity.  In the period reviewed, the Bank of Israel bought a small amount of foreign exchange – $86 million.

 The inflation environment: The 1-year inflation rate was slightly above the lower bound of the target range during the entire reviewed period (the CPI for January through May), similar to its level in most months in the previous half year, and one-year inflation expectations, based on most sources, were as well.  Inflation expectations for medium and long terms remained well entrenched within the target range throughout the half year.  With regard to the inflation environment, the Monetary Committee members noted that for a notable period of time there had not been a significant change in it.  Inflation in non-tradable goods prices (an approximation of the domestic component of inflation) was above 2% throughout the half year, and the inflation rate in tradables became slightly negative in some of the months, as opposed to the previous half year, but afterwards it returned to being positive.  After the end of the period reviewed, the CPI for June, which was lower than expected, was published, and the 12-month inflation rate in June was slightly below the lower bound of the target range.

Real domestic activity: The data on real activity published during the reviewed period supported the assessment that activity is converging to growth at a pace slightly lower than its potential of approximately 3%, and that data on the previous half year indicated a transitory slowing in the second and third quarters of 2018 that derived from supply constraints.  This assessment is supported mainly by the tight labor market and the continued increase in wages, primarily in the business sector.

Fiscal policy: During the course of the half year reviewed, the marked uncertainty in the fiscal sphere was discussed, among other things in view of the general elections that were held during the period: this derived from the possible ramifications of the coalition-forming negotiations, from the steps that the future government might take in order to deal with the expected deficit and from their possible effects on economic activity and on the inflationary path.  In any case, the fiscal uncertainty is expected, in the Committee’s assessment, to continue for some time.

 Capital market developments: Telbor market-based expectations with regard to an interest rate increase declined for all ranges during the course of the half hear, and they reflect a relatively high probability of no change in the interest rate in the coming year, in contrast to forecasters’ assessments and the Research Department’s staff forecast.  In the half year reviewed, a downward trend in nominal and real yields in Israel for all ranges was seen, similar to their declines worldwide.

The housing market: Data published toward the end of the period reviewed indicated an increase in home prices of 1% in the past 12 months, following a year over year decline of more than 2% in some months of the previous half year.  This is in parallel to the marked increase in the number of transactions.  Despite the increase in home prices, the Committee members agreed that it is still too early to assess if the trend of rising prices is renewing or if their decline will continue.  There has been a continued moderate rising trend in new mortgage volume since the end of 2017, against the background of a slight decline in the weighted real interest rate on mortgages, which started in the beginning of 2019.

The global economy: The Committee discussed the global economy – the moderation of activity, the uncertainty and the risks, as well as the downward revision of growth forecasts and the expected change in the interest rate path and in monetary policy worldwide.  In the US, a lower interest rate path than before, and even an interest rate reduction, is expected, and in Europe, the expected date of the beginning of raising the interest rate was deferred.  The Committee members assessed that the decline in world trade is expected to continue to impact on activity in Israel.  The Committee discussed additional risk factors that impact on the global economy, including the possible US-China trade agreement and the uncertainty regarding Brexit.

The shekel exchange rate: During the half-year reviewed, the shekel strengthened markedly against major currencies, after it had depreciated in the fourth quarter of 2018.  From the beginning of the half year, the shekel strengthened in terms of the nominal effective exchange rate, the dollar, and the euro; it appreciated by 5.4% in nominal effective exchange rate terms.  The Committee members noted that the appreciation is the main factor delaying the continued increase of the inflation rate toward the midpoint of the target.

Research Department staff forecast: The Research Department’s staff forecast did not change markedly during the period reviewed.  Based on the forecast compiled by the Research Department and published with the interest rate decision on 8 July 2019, GDP is expected to grow by 3.1% in 2019 and by 3.5% in 2020, a downward revision of 0.3% for 2019 (compared with the forecast compiled in January 2019).  Inflation is expected to be 1.6% in 2019 (an upward revision of 0.3% for 2019 vis-à-vis the forecast in January) and 1.6% in 2020 (a downward revision of 0.2% for 2020 vis-à-vis the forecast in January).  According to the forecast, the Bank of Israel interest rate is expected to increase to 0.5% toward the end of the third quarter of 2019 and to continue to increase gradually to 1% by the end of 2020 (a downward revision of 0.25%age points for 2020, compared with the forecast compiled in January 2019).  Since the publication of the forecast, there were two developments in relatively significant parameters that impact on it: the CPI for June surprised to the downside, and there was a slight increase in the probability ascribed by the markets to monetary accommodation soon in the US.  (BoI 25.07)

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11.4  LEBANON:  Lebanon’s Air Pollution Nears an Alarming Level

Nicholas Frakes noted in Al-Monitor on 26 July that under new austerity measures and budget cuts, Lebanon’s Ministry of Environment was forced to close its air monitoring stations across the country, raising the concerns of experts amid high levels of pollution.

As the Lebanese government continues to discuss austerity measures, the Ministry of Environment saw its funding cut following the passing of the 2019 budget on 20 July, causing air monitoring stations throughout the country to be shut down even as air pollution continues to reach dangerous levels.

The national air monitoring network, which measures pollution levels in Lebanon and allows the Ministry of Environment to regulate pollutants in the air, was established over two phases starting in 2013 with the opening of five stations after Lebanon received a $1.64 million grant from Greece, with around $400,000 of that going toward the air monitoring stations.  The second phase was launched with an EU grant of around $8.9 million and saw an additional 21 stations built in 2017 with around $1.68 million of the funding.  All of these stations were connected to a central network at the Ministry of Environment and were the same type of stations used in the United States and the EU and met international standards.

Following the 9 July announcement that the monitoring stations were to be closed due to budget cuts, the delegation of the European Union to Lebanon told Al-Monitor, “The EU delegation was recently informed that the Ministry of Environment is not in a position to continue financing for the maintenance of the stations monitoring air pollution in the country.  This network was partly funded by the EU as one of the main donors to environmental programs in Lebanon.”

The EU said it was regrettable that “the current budget does not allow the Ministry of Environment to maintain this network essential to monitor the implementation of the national strategy” for air quality management and called “for the allocation of adequate resources for this important issue.”  The EU said the cutback is happening “after the parliament passed the law on air quality in 2018, the government subsequently adopted the national strategy for air quality management (2015 – 2030), and the international community assisted Lebanon to strengthen its national capacities.”

UN resident coordinator Philippe Lazzarini also expressed regret that the monitoring stations were closed, while saying the UN “understands it is a result of the ministry’s inability to renew the maintenance and operation contract to upkeep these stations due to austerity and financial challenges.  Securing the needed financing for the maintenance and operation of these stations is essential for the continuation of data production and monitoring to address air pollution.”

Lazzarini added, “Discussions in setting the annual budget to reduce the fiscal deficit should take into account the impact of the work of the government on people’s well-being.”  He cited the environment as a priority of The Lebanon We Want program, which was coordinated by the UN resident coordinator’s office, the Lebanese government and civil society experts to develop goals to tackle issues such as the environment, education, poverty, health, infrastructure, the economy and the security situation and to create a better future for the country and its people.

Bassel Monzer of the Air Quality Department at the Ministry of Environment told Al-Monitor that this was the first time the ministry had to fund the maintenance for all of the stations, as it had previously only needed to fund the five from the first phase with the remaining stations having been funded through the EU.  He also said the stations’ closure is only temporary if the necessary funding is received.  “Stations for air quality can only sustain a determined period without regular maintenance,” Bassel said.  He said that because of a lack of a new maintenance contract, “the technicians’ advice was to shut down to prevent damages and problems.”  He said this is a temporary closure until new funding for maintenance is received.

He said the ministry was working to combat air pollution through efforts such as enforcing Law 78/2018, which aims to protect air quality, issuing new emissions limits that are “more stringent than before” and trying to get funding for the monitoring stations.  He said that without the stations, “We cannot be assertive about the level of pollution in the ambient air where stations are located — and of course — for the criteria pollutants.”

The closure was especially troubling for St. Joseph University professor of atmospheric chemistry Charbel Afif, who said the monitoring stations and air pollution should be a priority for the government.  “They are closed simply due to lack of funding,” Afif told Al-Monitor.  “They need around $500,000 a year to maintain them to get accurate and reliable results.  The Ministry of Environment has a budget of around $9 million.  Having the budget cut by more than 20%, for them it’s a huge amount.  However, it should be a priority for the government.”  He said the measurements are needed to determine how Lebanese policies are working.  “We can’t do that by saying, ‘Oh yeah, it might be decreasing.’  No, we need numbers; we need to know how things are really working.  With this shutdown, we have no idea now.”

Afif added that while it would be a huge step forward if the government implemented and enforced policies that pertained to limiting and preventing air pollution, there is still the need to have the monitoring stations because “we would not know what the impact is quantitatively.”  Afif said the main sources that are causing the increase in air pollution in Lebanon are traffic, power plants and various industries that release particulate matter into the air.  He said, “There are three main forms of air pollution in Lebanon on the national level: carbon monoxide, nitrogen dioxide and volatile organic compounds.  The main source of these is traffic. Then we have sulfur dioxide and particulate matter.  The sulfur dioxide is mainly due to power plants and the PM [particulate matter] is mainly caused by industries on the national level.”

While these are the three main causes for air pollution, private generators also have been one of the biggest polluters as they are located in residential areas and have a greater potential to create health problems for residents.  As air pollution increases, there are also increased health risks for people who breathe in the polluted air on a regular basis.  This can result in minor diseases, the development of coughs and even premature deaths and cancer.

While Lebanon’s air pollution levels have not reached the dangerous levels such as those in China or India, the country is well on its way to catastrophic levels.  Afif said this could happen in less than a decade.  Currently, Beirut has a fine particle pollution level (PM2.5) of around 32 micrograms per cubic meter while the level in Delhi, India, is 122.

While Afif said pollution will reach catastrophic levels if nothing changes, the likelihood of it reaching the point where people need to wear masks outside such as in Beijing is slim.  He said the situation could get very bad “in seven to 10 years if we have the same amount of emissions, if we still have the power plants running on heavy fuel oil, if we still have all of the private generators inside the neighborhoods and so on.  The demand on electricity is getting higher. There isn’t any public transportation and, therefore, [there] are more cars and law enforcement for industries is not very efficient.”

The economic and health costs are also proving to be steep.  A World Bank study estimated that air pollution in Lebanon caused the deaths of more than 1,800 people in 2013 and a loss to society of around $2.6 billion.

Afif said, “Solutions are known.  We’re not going to reinvent the wheel.”  He added, “We know that we need to have [less-polluting] natural gas, we need to have public transportation — just getting the cars that are hybrid and electric cars won’t solve the problem.  We need to decrease the number of vehicles on the road and that can’t happen unless you have a real efficient public transportation.”  This public transportation system would involve trains and, most importantly, buses that run on a schedule and have planned routes and stops rather than the informal system of buses that exists today throughout Lebanon.  Under such a system, ideally not as many people would drive and instead take public transportation, which would help decrease the pollutants emitted by cars.

“The environment isn’t just the problem of the Ministry of Environment,” Afif said.  “It’s not the Ministry of Environment that would regulate the traffic and the public transport system.  That’s the Ministry of Public Works and Transport.  It’s their duty to have a proper system in order to mitigate the environment [risks].  It’s the duty of the Ministry of Energy and Water to have power plants that emit less and to stop all of the private generators. It’s [also the duty of] the Ministry of Justice.”  He said that environmental crimes are being committed, and that he Ministry of Justice needs to take action, saying prosecutions are “not just for killing someone or robbing a bank.”

Nicholas Frakes is a freelance journalist and photojournalist based in Lebanon. He covers the Middle East for multiple outlets, including the New Arab and Public Radio International.  (Al-Monitor 26.07)

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11.5  IRAQ:  IMF Executive Board Concludes 2019 Article IV Consultation with Iraq

On 19 July, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq.

An improved security situation and the recovery in oil prices have improved near-term vulnerabilities.  Large fiscal and current account surpluses – around 8 and 6% of GDP, respectively – were recorded in 2018, allowing the government to retire domestic debt and accumulate fiscal buffers.  Gross international reserves reached $65 billion by end-2018.

However, post-war reconstruction and economic recovery have been slow.  Non-oil GDP rose by only 0.8% year-on-year in 2018 in a context of weak execution of reconstruction and other public investment.  Overall GDP contracted by around 0.6% as oil production was cut to comply with the OPEC+ agreement.

The 2019 budget implies a sizable fiscal loosening that will reverse the recent reduction in vulnerabilities.  Current spending is expected to increase by 27% year-on-year, in part due to a higher public sector wage bill, while revenues will be dampened by the abolition of non-oil taxes.  As a result, the budget is projected to shift to a deficit of 4% of GDP in 2019, and reserves are projected to decline.

The fiscal and external positions are expected to continue to deteriorate over the medium term absent policy changes – with reserves falling below adequate levels and fiscal buffers eroded.  Although the level of public debt will remain sustainable, gross fiscal financing needs will increase.  Non-oil GDP growth is projected to reach 5½ in 2019 but subside over the medium term.

In a context of highly volatile oil prices, the major risk to the outlook is a fall in oil prices which would lower exports and budgetary revenues, leading to an even sharper decline in reserves or higher public debt.  Geopolitical tensions, the potential for social unrest in a context of weak public services and lack of progress in combatting corruption pose further risks.

Executive Board Assessment

Executive Directors agreed with the thrust of the staff appraisal.  They were encouraged by the recent strengthening of Iraq’s economy but recognized that the country continues to face daunting challenges.  Social conditions remain harsh, post-war reconstruction progress is slow, development needs are large, and institutional weaknesses are significant.  Volatile oil prices and a difficult regional and geopolitical environment pose additional difficulties.  Directors encouraged the authorities to seize the opportunity presented by the improved security situation and higher oil prices to implement policies and structural reforms aimed at ensuring macroeconomic and financial stability, tackling long-standing social problems, and promoting sustainable and inclusive growth.

Directors emphasized that building a robust fiscal framework is essential to maintain fiscal and macroeconomic stability and strengthen buffers.  They encouraged the authorities to adopt a risk and rules-based approach to fiscal policy as part of broader reforms to manage oil revenue more effectively, reduce tendencies for pro-cyclicality, and shift to a more growth-friendly composition of expenditure.  Directors supported scaling up reconstruction and development expenditure gradually in line with improving absorptive capacity.  They underscored the need to strengthen public financial management to ensure public spending is appropriately monitored and to reduce vulnerabilities to corruption.  In this context, Directors welcomed the newly adopted General Financial Management Law and encouraged its full implementation.

Directors emphasized that gradual fiscal adjustment, including containing current primary spending and boosting non-oil revenues is essential for maintaining fiscal and debt sustainability.  They recommended that spending measures should give priority to containing the growth in wage bill and lowering subsidies to the electricity sector.  Directors emphasized that the poorest and the most vulnerable must be protected from the adjustment process.

Directors underscored that an overhaul of the banking sector is necessary to maintain financial stability.  They encouraged the authorities to restructure the large state-owned banks, enhance their supervision, and implement other reforms to increase financial intermediation.  Directors highlighted the benefits of increasing financial inclusion, especially for the SME sector, which has a large potential to absorb entrants to the labor market.

Directors agreed that building public institutions and enhancing governance is key for success, and highlighted the scope for IMF capacity development to support these efforts.  They welcomed progress in developing an anti-corruption framework and called for further modifications to the legal regime for combatting corruption coupled with stronger coordination between the relevant government agencies, while continuing to strengthen the framework for Anti-money laundering and combatting the financing of terrorism (AML/CFT).  Directors also recommended strengthening Public Investment Management framework to ensure that spending is well directed and that donor funds targeting reconstruction are put to the most efficient use.

Directors looked forward to continued close engagement between the authorities and the Fund in the context of post program monitoring.  (IMF 26.07)

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11.6  IRAQ:  Fitch Affirms Iraq at ‘B-‘; Outlook Stable

On 25 July, Fitch Ratings affirmed Iraq’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook.

Key Rating Drivers

Iraq’s rating is constrained by commodity dependence, weak governance, high political risk, and an undeveloped banking sector, while the rating is supported by GDP per capita above the ‘B’ median, robust FX reserves, a low level of debt service obligations and international financial support.

Higher oil prices in 2018 boosted Iraq’s credit metrics.  A 33% increase in the Iraqi crude oil export price pushed the budget into surplus, estimated at 8% of GDP, following five years of deficits.  We estimate that government debt fell below 50% of GDP from a recent peak of 66% of GDP in 2016.  Increasing oil revenue also buoyed the current account surplus. FX reserves excluding gold reached $61 billion at end-2018, up from $46 billion the previous year.  International reserves including gold represented more than nine months of current external payments and are also large in the context of the government’s external debt service (forecast at roughly $2.5 billion-$2.8 billion annually in 2019-21).

We forecast that lower oil prices will lead to a renewed worsening of public and external finances in 2019-2021.  Commodity dependence is among the highest of all Fitch-rated sovereigns.  Oil accounts for 85%-90% of fiscal revenue and almost all export revenue.  We assume the price for Brent crude to average $65/barrel in 2019 and around $61/barrel in 2020-2021, with the average Iraqi oil price $3-3.25/barrel lower.  We forecast a return to budget deficits and a renewed increase in government debt, above 54% of GDP in 2021, as well as a decline in reserves to $55 billion in 2021.  This assumes little progress with fiscal and structural reforms, while a renewal of Iraq’s IMF program could foster better outcomes.

Oil price and volume sensitivities for Iraq are significant.  For each $5/barrel change in the oil price, government revenue changes by approximately $6.5 billion (3% of GDP), assuming stable export volume.  In terms of budget sensitivity to export volumes (currently 3.3million barrels/day), an extra 100,000 barrels/day of exports add $2.3 billion a year, or 1% of GDP, assuming constant oil prices.

The 2019 budget, approved in February, plans for a deficit of IQD19 trillion ($16 billion or 7% of our forecast GDP) on the back of a 30% increase in current spending and a doubling of capex.  We expect under-execution of spending, largely related to non-oil capex and the partially-functioning oil sharing agreement with the Kurdistan Regional Government (KRG), to contain the budget deficit to around 2% of GDP.

Budgeted capex has increased to IQD33 trillion, from IQD25 trillion allocated in 2018, to address infrastructure deficiencies including chronic shortfalls in the electricity supply.  The execution of capex has been weak in recent years owing to insecurity and financing constraints.  We assume 70% of planned capex is implemented in 2019, which may be on the high side.

The sharp increase in budgeted current spending highlights the lack of public finance reforms which were a central focus of Iraq’s Stand-by Arrangement (SBA) with the IMF.  The SBA has been dormant since the end of 2017 because of the relief provided by higher oil prices and given the context of the parliamentary elections in May 2018.

Iraq continues to receive international financial support, even though the $5.3 billion IMF program has lapsed.  The 2019 budget incorporates around IQD6 trillion ($5.1 billion or 2.3% of GDP) of bilateral, multilateral and development agency financing related to non-oil capital projects.

Iraq’s total debt stock includes an estimated $41 billion of debt lent to Iraq by GCC countries during the 1980-1988 Iran-Iraq war, which the authorities do not face pressure to repay or service.  If this debt were restructured on the same terms as Paris Club debt was restructured in 2004-06, government debt/GDP would be around 33% in 2018, significantly lower than the current ‘B’ peer median (57%).  The majority of remaining external debt is owed to the Paris Club and multilateral and bilateral institutions.

Political risk and insecurity in Iraq remain among the highest faced by any Fitch-rated sovereign.  Iraq scores the lowest of all Fitch-rated sovereigns on the composite World Bank governance indicator.  This reflects not only insecurity and political instability but also corruption, government ineffectiveness and weak institutions.  Nevertheless, the bulk of oil production facilities and export infrastructure are located away from the areas that have presented the highest security risk.

The security situation has improved since end-2017 when Iraq reclaimed territory from the so-called Islamic State, but the risk has increased of spillovers from escalating tensions between the US and Iran, which has strong links to political and armed groups in Iraq.  In a tail risk scenario in which hostilities close the Straits of Hormuz, Iraq would suffer given its lack of other export routes for southern oil production.  A one-month closure could hit oil earnings by $6.5 billion, close to 3% of GDP.  The impact of a partial closure would be mitigated to some extent by higher oil prices.

Tighter US sanctions against Iran also present difficulties for Iraq, which remains dependent on imports of Iranian electricity and gas as an input for electricity generation.  Iraq has managed to secure short-term sanctions waivers from the US, but the government has said it could take years to eliminate its need for Iranian gas.

The banking sector is under-developed and fundamentally weak.  It is not in a position to provide much domestic financing to the government.  Private sector credit to GDP is one of the lowest of any Fitch-rated sovereign.  The two large state-owned banks, Al-Rafidain and Al-Rasheed, which have high non-performing loans and exceptionally low capital adequacy, dominate the sector.  The government has appointed auditors as required by the IMF, but it remains unclear how the banks will be restructured.

Rating Sensitivities

The main factors that could, individually or collectively, lead to positive rating action are:

-An improvement in Iraq’s public and external finances, for example stemming from a period of higher oil prices, particularly if combined with higher oil production and exports.

-Improvements in the cohesion and credibility of economic policymaking, including reforms of the public finances.

-A sustainable improvement in the country’s security that allows for stronger non-oil economic development, together with enhancements to governance and institutional quality.

The main factors that could, individually or collectively, lead to negative rating action are:

-Heightened risks to fiscal and external financing.

-Deterioration in the country’s security, particularly if insecurity hinders oil production and exports.

Key Assumptions

Fitch forecasts Brent crude to average $65/b in 2019, $62.5/b in 2020 and $60/b in 2021.  We assume that Iraqi oil sells at a consistent discount to Brent.  Fitch forecasts Iraqi oil exports (excluding exports from the Kurdish region) to average 3.65m b/d in 2019-21.

Limited Information

Data on Iraq’s international investment position stops at 2014 and the IMF highlights deficiencies in the balance of payments data.  This complicates external debt estimates and projections.  The availability of reliable data on reserves mitigates these weaknesses.  Fiscal performance is hard to track during the year given weak availability and inconsistencies in published data.  We obtain annual data from the Ministry of Finance and cross reference with the IMF.  (Fitch 25.07)

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11.7  ARABIAN GULF:  China’s Gulf Investments Reveal Regional Strategy

On 29 July, Jonathan Fulton observed in the Arab Gulf States Institute in Washington that a unique pattern of provincial or regional consortia from China are deeply engaged in marquee Belt and Road Initiative projects that are shaping the future of China’s power in the Gulf.

On 23 July, Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan ended a three-day trip to China, signing numerous economic, trade, and other cooperation agreements ahead of the UAE-China Economic Forum.  As China becomes an increasingly important actor in the Middle East, there is a corresponding rise in analysis of its approach to the developing relationships in the region.  The Belt and Road Initiative, the most important foreign policy initiative ever undertaken by the People’s Republic of China, offers a useful blueprint but suffers from a lack of clarity:  Everything, it seems, is part of the BRI.  There are two types of BRI projects being implemented in the Gulf states – those that support Gulf domestic development programs and those that build regional connectivity, and the latter type demonstrates more about what Beijing wants to achieve in the Middle East.

Since it was announced in 2013, the BRI has become the central pillar of China’s foreign policy.  It is a series of hard and soft infrastructure projects consisting of the Silk Road Economic Belt, an overland route across Eurasia, and the Maritime Silk Road Initiative traversing the Indian Ocean region.  Of the two, the Gulf monarchies feature in the Maritime Silk Road Initiative, although Kuwait’s Madinat Al Hareer could eventually be linked to the Silk Road Economic Belt.  Conceived as a means of addressing a shortage of infrastructure investments in Asia, the BRI is expanding China’s influence and power across Asia and into the Middle East, Africa, and Europe.  As its assets and interests increase in states where it has traditionally played a relatively insignificant role, China’s foreign policy is no longer that of a regional power but rather one with global interests.

Among the first type of BRI projects – those that support the Gulf “Vision” plans – there is a range of Chinese state-owned enterprises and private firms contracted to several projects across the Gulf region, building upon a recent history of construction that predates the BRI; the Heritage Foundation estimated that Chinese companies had tendered $30 billion worth of contracts in the Gulf Arab states between 2005 and 2014.  There are many examples of these domestic development projects. In Saudi Arabia, the light railway connecting Jeddah to Mecca and Medina, the Yanbu refinery, and the Middle East’s largest power plant were all undertaken in cooperation with Chinese firms.  In Qatar, Lusail Stadium, the opening and closing venue for the 2022 FIFA World Cup, is a joint project with China Railway Construction Corp and a Qatari company, and Chinese firms have won contracts for a Doha port expansion project and the construction of a mega-reservoir.  In Dubai, a Chinese-Saudi bid was awarded the contract to build an extension for the Mohammed bin Rashid Al Maktoum Solar Park and the China State Construction Engineering Corporation is building Dubai’s Motor City residential development.  All over the Arabian Peninsula Chinese firms are involved in major projects supporting Gulf states’ infrastructure and construction plans.

While this type of project is important in building commercial relations, it is the second type that deserves a deeper look.  Here, there is a unique pattern of provincial or regional consortiums from China that are deeply engaged in marquee BRI projects in the Gulf states that are part of a strategic approach to building a Middle East presence in which the Arabian Peninsula features significantly.  These projects are aligned with official policy documents about the BRI and China’s approach to the Arab world, and also feature in initiatives such as an under-discussed initiative, the “Industrial Park-Port Interconnection, Two-Wheel and Two-Wing Approach” to China-Middle East cooperation.  Rather than cooperation in the pursuit of commercial benefits, these are shaping the future of China’s power in the Gulf as it builds a physical presence that enhances its political, economic, and eventually military capacities.

The park-port approach has identified four industrial parks and ports – two of which are in the same complex – where Chinese multinationals plan to link supply chains and build business clusters.  The industrial parks are Khalifa Industrial Zone Abu Dhabi, the China-Oman Industrial Park in Duqm, Saudi Arabia’s Jazan City for Primary and Downstream Industries, and the TEDA-Suez Zone in Ain Sokhna, Egypt.  The four ports are Khalifa Port Free Trade Zone (also in Abu Dhabi), Oman’s Duqm Special Economic Zone Authority, the People’s Liberation Army Support Base in Djibouti, and Port Said in Egypt.  These form a horseshoe starting from the Gulf, continuing along the Arabian Sea, up the Red Sea, and into the Mediterranean Sea.  At the same time, they collectively underscore the importance of regional connectivity in the BRI and indicate the shape of China’s expanding influence and interests in the Middle East.

An interesting feature in the Abu Dhabi and Duqm port and park complexes has been the role of Chinese regional or provincial business groups.  China’s Duqm Special Economic Zone Authority projects are being developed by Oman Wanfang, a consortium of six private firms from Ningxia Hui Autonomous Region, in China’s north.  Given Ningxia’s landlocked geography, it would seem more likely that Ningxia would be involved with the Silk Road Economic Belt rather than the Maritime Silk Road Initiative.  However, the autonomous region has a large Muslim Hui population and as such has featured prominently in Beijing’s efforts to build relations with Arab states and societies.  Ningxia’s capital, Yinchuan, is home to the annual China-Arab States Expo and has become a hub for China-Arab trade.  With nearly $11 billion committed to the Duqm Special Economic Zone Authority, the Chinese government has designated it as one of the “Top Overseas Industrial Parks.”

In Abu Dhabi’s Khalifa Port complex, much of the early momentum has come from the Jiangsu Provincial Overseas Cooperation and Investment Company.  The group of companies from Jiangsu, an eastern coastal province, has invested over $1 billion into the Khalifa Industrial Zone Abu Dhabi and its chairman described the initiative as “an important cornerstone in China and the UAE’s bilateral industrial agreement.”  In September 2018, an investment promotion conference was held in Nanjing, the provincial capital, where a delegation from the Khalifa Industrial Zone Abu Dhabi and Abu Dhabi Ports was met by more than 180 government agency representatives and 90 Chinese companies looking to invest in Abu Dhabi.  The recent announcement that East Hope Group is considering a $10 billion investment in the Khalifa Industrial Zone Abu Dhabi indicates that the Jiangsu cooperation is not the only Chinese player in Khalifa port, but its established presence will continue to provide a platform for deeper cooperation between the UAE and China.

Saudi Arabia’s Jazan City for Primary and Downstream Industries has not seen the same level of attention or investment yet.  Thus far the only major investment has been a petrochemical plant, valued at nearly $4 billion, from Guangzhou’s Pan-Asia PET Resin Co. If the Duqm and Khalifa Industrial Zone Abu Dhabi pattern holds, more firms from southern Guangdong province are likely to begin hanging their shingles in Jazan.

The scope and scale of the BRI combined with fuzzy definitions of what constitutes a Belt and Road project adds to the perception of it as a catch-all slogan for opportunistic state-owned and private companies to latch on to.  For many Chinese companies operating in the Gulf designating a project as part of the BRI seems like a branding exercise.  These park-port complexes, however, show the growing relevance of the BRI on the Arabian Peninsula and suggest the building of a much deeper level of Chinese engagement and influence in the region.

Jonathan Fulton is an assistant professor of political science at Zayed University in Abu Dhabi, UAE, and the author of “China’s Relations with the Gulf Monarchies.”  (AGSIW 29.07)

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11.8  QATAR:  Qatar’s HVAC Maintenance Service Market

The “Qatar HVAC Maintenance Service Market by HVAC Type, by End-User, by Maintenance Type, by Region – Market Size, Share, Development, Growth and Demand Forecast, 2013-2023” report has been added to ResearchAndMarkets.com‘s offering.

Qatar HVAC maintenance service market is anticipated to reach $291.8 million by 2023, the growth of the market will primarily be attributed to upcoming major events in the country and the growing construction industry propelling the growth of HVAC industry.

On the basis of HVAC type, the Qatar HVAC maintenance service market is segmented into heating, ventilation and cooling, of which cooling, the largest HVAC type in terms of revenue in 2017, is further segmented into variable refrigerant flow (VRF), ducted split/packaged unit, split units, chillers, and room ACs.  Of these categories, ducted split/packaged unit accounted for majority of the revenue share in 2017, in the country.

Ducted as well as packaged units usually provide an extensive service maintenance guide.  A large chunk of maintenance cost of ducted split/packaged unit is comprised of labor charges, filters and fan blades require replacement at regular intervals.  Also, every routine service requires checking for leaks and blocked drain openings making it a cumbersome and time-consuming process.

On the basis of end-user type, the Qatar HVAC maintenance service market is segmented into commercial, industrial and residential, wherein commercial is further split into commercial offices/buildings, hospitality, supermarkets/hypermarkets, government, transportation and healthcare.  Of these, commercial offices/buildings category held the highest market share in 2017.

Moreover, Qatar’s hospitality industry is witnessing unprecedented year-over-year growth, as the country gears-up for Vision 2030 and FIFA World Cup 2022.  There are 106 hotels in Qatar and 62 proposed hotels, including 4-star, 5-star, and 7-star and 13,733 guestrooms are under-construction, which is projected to be completed by 2020.  With construction of around 16 proposed malls underway in the country, these facilities are set to proliferate in the coming years and would further bolster the demand for HVAC maintenance market in hospitality sector.

The country is poised to witness positive growth in the construction market due to major upcoming event FIFA World Cup 2022.  This would assist in boosting HVAC installation in the country thereby positively impacting Qatar HVAC maintenance service market.  Also, refurbishment of preinstalled units in the stadiums is also driving the demand for HVAC maintenance service in the country.  Qatar is spending over $10 billion on stadiums and training grounds for the upcoming events.

Moreover, events such as World Athletics Championships to be held in 2019 in Doha is further expected to offer lucrative market opportunities for HVAC maintenance service market players.  These events would attract major tourists and further propel the construction of new hotels.  These events would attract major tourism in the country, coupled with overall growth in food and beverage industry. These factors would further propel Qatar HVAC maintenance service market growth.

The Qatar HVAC maintenance service market is highly fragmented with large number of players operating in the market.  Moreover, the country’s populace is brand conscious; especially the large enterprises, in oil & gas industries, and large corporate buildings, which is resulting in huge adoption of HVAC maintenance service from Europe-based brands due to their superior quality of service offerings.

Some of the major players operating in the Qatar HVAC maintenance service market are Toshiba Carrier Corporation, Mitsubishi Electric Corporation, Al-Ta’adhod Group, Daikin Industries, United Technologies Corporation, Ingersoll-Rand plc, Leminar Air Conditioning Co., Johnson Controls International, Cayan Facilities Management (FM), Standard Services Qatar, Crafter Qatar, Mitsubishi Electric Corporation, Metri Engineering Services (MES) Qatar, EMCO Qatar and Electromechanical Maintenance Services (EMS).  (R&M 26.07)

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11.9  UAE:  Diversified Investment in UAE Shaping China’s Economic Role in the ‎Gulf

Robert Mogielnicki reported on 29 July in the Arab Gulf States Institute in Washington that despite a large appetite among Gulf Arab states for Chinese investment and trade, the ‎UAE has emerged as China’s primary economic partner in the region.‎

Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan’s three-day state visit to ‎Beijing reaffirmed the United Arab Emirate’s central role in shaping China’s economic ‎influence in the Gulf.  The UAE-China Economic Forum, which the UAE Ministry of ‎Economy organized to take place alongside the state visit, led to the signing of 16 ‎memoranda of understanding.  Mohamed Alabbar, the forum’s guest of honor and ‎chairman of the Dubai-based Emaar Properties, announced that his firm will implement ‎an $11 billion project with the Beijing Daxing International Airport over the next 10 ‎years.  The Abu Dhabi National Oil Company and the China National Offshore Oil ‎Corporation agreed to boost collaboration on upstream, downstream, and liquefied ‎natural gas activities.  This flurry of commercial agreements came three months after ‎Mohammed bin Rashid al-Maktoum, the UAE’s vice president and prime minister as ‎well as ruler of Dubai, traveled to Beijing, where he led an Emirati delegation at the ‎Second Belt and Road Conference for International Cooperation.‎

Other Gulf Arab states are vying for China’s attention: Saudi Arabian Crown Prince ‎Mohammed bin Salman visited Beijing as part of his Asia tour in early 2019; Oman ‎continues to court Chinese investors for the Duqm megaproject; and Kuwait hopes that ‎Chinese investment will generate momentum for its Silk City initiative.  Despite a large ‎regional appetite for Chinese investment and trade, the UAE has emerged as China’s ‎primary economic partner in the Gulf.  Chinese investments and contracts in the UAE ‎totaled $8.16 billion in 2018 – eclipsing the second-largest recipient, Saudi Arabia, by ‎nearly $3.4 billion, according to the American Enterprise Institute’s China Global ‎Investment Tracker.  Bilateral trade between China and the UAE reached $53 billion in ‎‎2018; comparatively, trade between China and Saudi Arabia was around $32 billion, ‎according to the U.N. International Trade Statistics Database.  The combination of robust ‎emirate-level linkages with China and strong complementarities between the two ‎countries suggests that the UAE will be China’s main economic partner in the Gulf over ‎the coming years.‎

Source: China Global Investment Tracker, AEI (‎*Figures not reported on tracker)

Emirate-Level Linkages

The foundations of the economic relationship between Abu Dhabi and China rest on the ‎supply and demand of hydrocarbon commodities.  Crude oil, natural gas, refined ‎petroleum, and other petrochemical products comprised approximately 95% of the ‎UAE’s exports to China in 2017.  More recent commercial agreements between the two ‎countries reflect the continued significance of the energy industry for this relationship.  ‎In addition to its agreement with the China National Offshore Oil Corporation, ADNOC ‎also signed a partnership framework with China’s Wanhua Chemical Group – worth as ‎much as $12 billion – for collaboration in refining, sales, and shipping operations.‎

Economic relations are becoming more diversified.  Substantial Chinese investments ‎increasingly position Abu Dhabi as a “pivot city” in the Belt and Road Initiative, ‎according to Jonathan Fulton, an assistant professor of political science at Zayed ‎University in Abu Dhabi.  These investments span the industrial, shipping, and even ‎financial sectors.  Etihad Credit Insurance, an export credit agency owned by the national ‎and emirate-level governments, signed strategic agreements with three Chinese ‎financial institutions at the UAE-China Economic Forum.  The Chinese state-owned ‎Industrial Capacity Cooperation Financial Group Limited aims to manage $2 billion in ‎investments and promote Chinese enterprises through Abu Dhabi Global Market, the ‎emirate’s financial free zone.  In early 2019, the Chinese tire manufacturer Roadbot ‎invested around $614 million to construct a plant in the Khalifa Industrial Zone Abu ‎Dhabi.‎

Source: The Observatory of Economic Complexity

‎*“Hydrocarbon” refers to crude oil, natural gas, refined petroleum, and other ‎petrochemical products ‎

Dubai stands to benefit disproportionately from the nonhydrocarbon elements of the ‎growing economic alignment between the two countries.  Bilateral trade between Dubai ‎and China reached $9.8 billion in the first quarter of 2019, and China has served as the ‎emirate’s top trading partner since 2014.  During his Beijing trip in April, Mohammed ‎bin Rashid announced $3.4 billion in Belt and Road Initiative investments in Dubai.  The ‎projects included a $2.4 billion storage and shipping station in Jebel Ali Free Zone and a ‎‎$1 billion food processing and packaging plant.  Following the April conference, Dubai ‎Holding, a global investment company owned by Mohammed bin Rashid, signed a ‎commercial agreement with the state-owned China North Industries Corporation to ‎collaborate in the industrial and mining sectors.  Dubai also hosts Dragon Mart – the ‎largest trading hub for Chinese products outside mainland China.‎

There are several examples of Chinese development and trade-related projects in the ‎UAE’s smaller emirates.  Indeed, the Sharjah Investment and Development Authority, ‎the Fujairah Free Zone Authority, the Ajman Chamber of Commerce and Industry, and ‎the Ras Al Khaimah Economic Zone Authority participated in the Beijing economic ‎forum in July.  These emirates offer an avenue for smaller Chinese firms to invest in the ‎UAE and alternative tourist destinations.  Sharjah contains approximately 18% of ‎the 4,000 registered Chinese firms in the UAE, and the emirate aims to boost the ‎number of Chinese tourists to 200,000 by 2021, from 68,000 in 2018.  The Ajman ‎government permitted the Gulf Chinese Trading Corporation to retain free zone status ‎for a China Mall operating outside the Ajman Free Zone.‎

Overlapping Interests

Complementarities in the areas of free zone development, technological innovation, and ‎logistics and infrastructure expertise further encourage economic alignment between the ‎UAE and China.  The development trajectory of the UAE’s expansive free zone sector, ‎which consists of more than 40 free zones, possesses many similarities with China’s ‎development of special economic zones in the country’s coastal regions.  Both countries ‎launched economic zones during the late 1970s and early 1980s to implement a ‎controlled form of economic liberalization.  This process enabled foreign participation ‎in the economy without major disruptions to prevailing economic, political and social ‎systems.‎

The Jiangsu Provincial Overseas Cooperation and Investment Company Limited began ‎operations in the Khalifa Port Free Trade Zone in 2018 with an estimated $1 billion of ‎investments.  A subsidiary of the company is currently developing a nearly square-mile ‎area of the free trade zone and retains the option of expanding operations to incorporate ‎almost 5 square miles.  The Dubai Multi Commodities Centre free zone hosts around 10% of the Chinese firms in the UAE and has signed memorandums of understanding ‎with multiple provincial-level agencies in China, including the Department of ‎Commerce of Shandong Province in Qingdao and the Hangzhou China Council for the ‎Promotion of International Trade.‎

E-commerce presents an opportunity for greater collaboration between the two ‎countries.  Dubai contains one operating e-commerce free zone, CommerCity, and state-‎owned developer Dubai South is building a similar zone, EZDubai.  The e-commerce ‎firm Noon.com, which is headquartered in Dubai, partnered with the Chinese ‎technology company Neolix to experiment with autonomous vehicle deliveries in the ‎UAE and Saudi Arabia.  Meanwhile, major Chinese e-commerce firms like Alibaba and ‎JD.com have expanded global shipping infrastructure to target an international ‎consumer base.  The UAE’s nascent e-commerce platforms can shape how this ‎expansion unfolds across the Gulf.‎

Broader state-led efforts to transform the UAE into a knowledge economy and China’s ‎technological research and innovation capabilities form a natural nexus.  While a state-‎led focus on cultivating indigenous tech sectors is apparent across the Gulf, the UAE ‎has wagered substantial political capital in this domain.  The country has a minister of ‎state for artificial intelligence and the UAE Artificial Intelligence Strategy 2031 – two ‎examples of a concerted government effort to position the country as a “global ‎incubator” for AI and other advanced technologies.  Yet private-sector firms have, for ‎the most part, not opted to relocate their research and development departments to the ‎UAE. China could help to bridge this gap.  Chinese universities play a dominating role in ‎the global production of inventions related to distributed AI, machine learning ‎techniques and neuroscience/neurorobotics.  Moreover, China is among the top global ‎spenders on cognitive and AI systems, behind the United States and Western Europe.‎

The implementation of hard and soft infrastructure projects under China’s BRI requires ‎forming local partnerships with firms demonstrating port management and logistics ‎expertise.  State-owned firms in the UAE, such as DP World, can serve as useful ‎facilitators and commercial conduits in this regard.  The embeddedness of Emirati firms ‎‎– as well as a military presence – in the Horn of Africa, in particular, reflects an ‎attractive proposition for provincial investment groups seeking to develop an integrated ‎network of Asian, Middle Eastern and African markets as part of the Maritime Silk ‎Road Initiative.  The linkages exist in both directions: Dubai-based Emaar plans to ‎expand its business operations in China by opening a new office in Beijing.‎

Emirati policymakers are betting that a rising Chinese economic tide will lift all boats ‎in the country.  For the moment, the UAE is well positioned to attract the largest share in ‎the Gulf of trade and investment flows from China.  However, global trade tensions and ‎neighboring Gulf Arab states with similar interests in attracting Chinese trade and ‎investment may constrain the UAE’s ability to control the depth and direction of this ‎relationship in the coming years.‎

Robert Mogielnicki is a resident scholar at the Arab Gulf States Institute in Washington.‎  (TWI 29.07)

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11.10  EGYPT:  IMF Completes Fifth Review under Extended Fund Facility (EFF) for Egypt

On 24 July, the Executive Board of the International Monetary Fund (IMF) completed the fifth and final review of Egypt’s economic reform program supported by an arrangement under the Extended Fund Facility (EFF).  The completion of the review allows the authorities to draw the equivalent of SDR 1,432.76 million (about $2 billion).  This brings total disbursements to SDR 8,596.57 million (about $11.9 billion or 422% of quota), which is the full amount approved by the Executive Board on 11 November 2016 to support the authorities’ economic reform program.

Following the Executive Board discussion on Egypt, Mr. David Lipton, Acting Managing Director and Chairman of the Board, said:

“Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives.  The macroeconomic situation has improved markedly since 2016, supported by the authorities’ strong ownership of their reform program and decisive upfront policy actions.  Critical macroeconomic reforms have been successful in correcting large external and domestic imbalances, achieving macroeconomic stabilization and a recovery in growth and employment, and putting public debt on a clearly declining trajectory.

“Monetary policy remains anchored by the medium-term objective of bringing inflation to single digits.  Core inflation appears to be well contained, but the central bank should remain cautious until disinflation is firmly entrenched.  Exchange rate flexibility remains essential to improve resilience to shocks and preserve competitiveness.

“The 2018/19 primary surplus target of 2% of GDP was met, helping to anchor a further decline in the public-debt-to-GDP ratio.  It will be important to maintain primary surpluses at this level over the medium term to keep public debt on a downward trajectory.  The elimination of most fuel subsidies, which are regressive, will encourage energy efficiency, help protect the budget from unexpected changes in oil prices, and free up fiscal space for social spending. Improved revenue mobilization is also essential to create room for spending in health, education and social protection.

“The outlook remains favorable and provides an opportune juncture to further advance structural reforms to support more inclusive private-sector led growth and job creation.  The authorities have launched important reforms of competition policy, public procurement, industrial land allocation, and state-owned enterprises, and sustained implementation will be essential to ensure that statutory changes achieve meaningful results in the business climate.  Deepening and broadening of effective reforms is critical to underpin the positive outlook for growth and unemployment.”  (IMF 24.07)

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11.11  EGYPT:  Egypt Evaluates Digital Upgrades, Prepares for More

Amira Sayed Ahmed posted in Al-Monitor on 29 July that the Egyptian government is reporting advances toward achieving its goal of digital transformation in all sectors.  Egypt is making progress in implementing its national goal of streamlining administrative procedures and turning itself into a hub for digital innovation.

On 17 July, the Ministry of Planning, Follow-up and Administrative Reform released a report highlighting the government’s advances in this regard.  One of the successes outlined is its campaign against hepatitis C.  The campaign has been going on for years but a program launched in October is coming to fruition.  The project has provided more than 10,000 digital tablets containing citizens’ data to medical units and helped modernize 197 local medical units in various provinces by introducing modern technology and providing computers.

“Digital transformation has become inevitable. It will help the country move from one era to a completely new era,” Sherif Hashem, head of the executive office of the government-affiliated Egyptian Supreme Cybersecurity Council, told Al-Monitor.

The government is still working on rolling out an electronic platform announced in December to assess the performance of government agencies.  As Egypt is moving ahead with this strategy, many questions are being raised about how it might help curtail corruption and what challenges it will face.  The project, called Egypt’s Performance System, is expected to boost economic growth and help with implementing Egypt’s Vision 2030 for sustainable development.  On 1 July, the Egyptian Planning Ministry held a workshop attended by representatives of several ministries to discuss the digital transformation mechanisms.  Achieving digital transformation is “a must,” Hashem said. “Egypt has an ambitious, realistic plan to achieve it in all sectors.”

Digital transformation started to make headlines in Egypt in 2017 when President Abdel Fattah al-Sisi issued a decree to establish the National Council for Payments.  The council seeks to regulate all issues related to the banking and payment system. It develops electronic payment systems and policies that improve access to financial opportunities and services (financial inclusivity).  The council is authorized to reduce the use of banknotes and spread the use of e-payment methods. In May, the government started implementing the most important steps in the field of financial inclusion by launching an electronic system to collect fees, such as electricity bills and taxes.

Since such progress requires huge infrastructure changes at a hefty cost, the Egyptian government has signed cooperation protocols and fostered partnerships with international information technology (IT) companies.

In December, Sisi and Prime Minister Mostafa Madbouli met with Cisco Systems CEO Chuck Robbins to discuss the US company’s support of digital transformation in Egypt.  The meeting produced a signed memorandum of understanding with the company with the aim of financially and technically supporting digital transformation.

Belal Mohamed, a programmer at a major IT company in Egypt that he preferred not to name, told Al-Monitor there are many challenges facing digital transformation in developing countries in general, and Egypt in particular.  “The idea of digital transformation in Egypt has been delayed because of people’s beliefs.  They don’t want to leave the traditional methods.  Therefore, training cadres and raising awareness among people on how to use modern technology is of paramount importance,” he said, adding that more training centers are needed.

Boosting investments in the IT sector should be given top priority to ensure the transition’s success, Mohamed said.  “Health and transport are among the promising sectors that can make the best use of digital transformation.  Egypt has already taken many steps in these fields. So, developing the investment atmosphere is essential.”

Regarding the electronic performance assessment system, Mohamed said not all public employees may feel comfortable with it.  For example, each government entity assesses workers annually, and currently, their performance is rated at 95% to 100% as a matter of routine.  “This has become a tradition regardless of their performance.  The new system will accurately assess workers based on their productivity,” Mohamed said.  “It may take time to spread digital transformation in all sectors, but it’s not impossible,” he concluded.

Amira Sayed Ahmed is a Cairo-based freelance journalist and full-time editor of local news at The Egyptian Gazette, Cairo’s oldest English-language daily.  She has been involved in writing about political, social and cultural issues in Egypt since 2013.  (Al-Monitor 29.07)

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11.12  EGYPT: Egyptian Car Market in Limbo

Egyptian passenger car sales were down by 10% during the period from January to May 2019, according to the July report of the Automotive Market Information Council (AMIC), with about 41,000 cars sold compared to more than 45,000 in the same period of 2018.  Weak sales over the past seven months prompted car dealers to cut prices.

The decline in sales is widely believed to be due to calls by a campaign called “Let it Rust” to boycott purchases until car dealerships and distributers lower their profit margins.  The campaign is currently urging consumers to wait until September when newer car models are introduced, which might force some dealers to lower the prices of 2019 models further.  The campaign started on social-media networks at the end of 2018 to protest against the high prices of cars in Egypt.  Its Facebook page has attracted some two million followers.

Price cuts and promotions to entice customers to purchase have continued over the last few months, but the head of sales at one of Cairo’s car dealerships believes the campaign is contributing to the slowdown in sales.  “Price cuts on models make more consumers reluctant to buy, as they hope for more price decreases,” he said, adding that the small drops in prices are not necessarily related to the boycott campaign, but could be due to the exchange rate of the Egyptian pound against the dollar.  The value of the dollar against the Egyptian pound has fallen over the last few months from about LE18 against the pound to reach LE16.5 last week.

According to the monthly report by AMIC, total vehicle sales during the first five months of 2019 dropped by 8.5%, recording around 60,000 vehicles, compared to about 63,000 vehicles in the same months of 2018.  Although sales are weak, car imports are steady.  According to the Ministry of Finance, the Alexandria Customs, the main port for receiving car imports, released some 7,100 passenger cars worth LE1.97 billion in June.

Sales of imported cars are better than sales of locally assembled vehicles, with a 0.7% increase in the first five months of 2019 compared to the same period last year, according to AMIC.  About 25,500 cars were sold this year, as opposed to approximately 25,300 in 2018.

The ministry said in a press statement that about LE500 million was collected as taxes on the imported vehicles, and that an additional LE700 million was saved by importers as a result of the exemption of customs duties that is part of the Egypt-EU Association Agreement.  The agreement, which came into effect in January 2010, promised a 10% annual decrease in customs duties on cars from the EU until they reached zero tariffs in January 2019.  (Al-Ahram 25.07)

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11.13  ALGERIA: Between Radical Change and Superficial Reform

Zine Labidine Ghebouli posted in the Fikra Forum on 24 July that since 22 February, Algeria has been witnessing what has been described as the largest political movement since its independence in 1962.  Over the past four months, this popular movement has been able to force changes that most political analysts previously thought to be unachievable in a country such as Algeria.

Bouteflika’s resignation after twenty years of ruling the country was indeed a major event in the modern political life of Algeria.  However, the past few weeks have shown that his resignation was just the beginning of a series of unexpected political events, creating what has now turned out to be an even more complex political climate.

Although Algeria’s protests are entering their fifth month, many expect that the country will still need time to find stability, either through elections, as is prescribed by the constitution, or consensus on a political transition period, as demanded by some social and political forces.  This political ambiguity is the result of both stagnation on the side of the military and a lack of organization among the protesters.  A clearer comprehension of both sides’ motives will help clarify what to expect over the next few weeks in Algerian politics.

The System’s Thirst for Urgent Elections

After the resignation of Bouteflika, the Algerian political system found itself rushed into a situation it could not control.  For the military junta, the real power holder in Algeria, the departure of the former president has unmasked the ruling boite noire and put the military leadership in a direct line of confrontation with those in the streets.  It is for this reason that the army’s chief of staff, Ahmed Gaid Salah, has repeatedly called for presidential elections as soon as possible.  The Algerian military junta rules behind the scenes and is therefore impatient to impose, as usual, its own civilian façade through the next elections.

For the military leadership, organizing elections is the only strategy that would potentially allow the old regime to reconsolidate power.  In order to avoid potential changes outside of their control, the military leadership has passed a series of symbolic but substantive reforms.  As a result, Algeria has witnessed a series of arrests targeting former high officials from both the military and civilian apparatuses on corruption and security-related charges over the past month, many of whom had been seen as symbols of the Bouteflika administration.  The intention of the arrests was to appease Algeria’s popular movement and obtain its trust as it dismantled the Bouteflika ‘clan.’  Yet several political and social actors have labeled the arrests as “political” and “arbitrary.”

Protesters’ lack of trust of the Algerian establishment has derailed this and other attempts to impose the system’s roadmap onto transition in Algeria.  Gaid Salah has also attempted to divide the popular movement along ideological and ethnic lines by evoking Berber identity and labeling the Berber flag a threat to national unity.  Instead, the speech was widely regarded as racist and insulting to one of the major symbols of Algerian identity.  Despite propaganda efforts, protesters remain unconvinced of the military junta’s roadmap and fear that elections without prior systemic change would simply allow the old system to regenerate in a new form.

In response, the Algerian system has returned to its earlier repressive mechanisms; over the past few days, numerous activists and peaceful protesters have been put in provisional detention.  Even during Bouteflika’s rule, with all its restrictions on human rights and freedom of expression, Algerian authorities’ current actions appear more arbitrary and authoritarian.  Today, Algeria appears to be witnessing the regeneration of a military dictatorship.

Additionally, Algeria has witnessed a reshuffling of its security apparatus leadership as Interim President, Abdelkader Bensalah, dismissed four military regions’ chiefs, the commander of the National Gendarmerie, and the director of the Cherchell military academy.  For many observers, this move is considered highly controversial—bearing in mind Bensalah’s constitutional term ended on 9 July.  This reshuffling of military leadership in Algeria is meant to consolidate power within the hands of Gaid Salah and neutralize any potential opposition within the military leadership.

Protester Demands and the Pursuit of Consensus

In contrast, Algeria’s popular movement is demanding a complete removal of the elites of the Bouteflika era from Algeria’s political structure, since protesters view all those who served Bouteflika’s agendas over the past twenty years as responsible for the current crisis.  Though Bouteflika was certainly a significant component of the corrupt political system, he does not carry sole responsibility.

The first initiative took place on 15 June in the form of an inclusive civil society conference.  Approximately forty different organizations, associations, and syndicates came together in order to discuss the political crisis, with the conference concluding that a transitional period of one year was required before the country headed to elections.  During this transitional period, the conference established that a consensus figure or entity should lead the country while an independent body is established to organize future elections.

While the political platform that emerged out of this initiative is commendable, the body lacks recommendations regarding the practical measures that should be taken to ensure a peaceful and smooth transition of power.  Moreover, after twenty years of Bouteflika dismantling community organizations, civil society needs more time to restructure itself in order to become a real alternative to traditional leadership.  While the conference itself served as a noteworthy platform for dialogue during such sensitive times in Algeria, the current unorganized status of civil society made it harder for participants, who rarely used to work collectively, to reach consensus.  Such a political crisis requires mutual trust between the different civil society actors; even though this conference is a good start, the structuration of the civil society will build bridges between its various actors, making the process of building trust easier.

The second initiative was a forum on 6 July focused on establishing the grounds for an inclusive dialogue between most political and social actors.  Unlike the first initiative, the National Forum for Dialogue raised concerns due to its inclusion of former figures of the political system.  Many activists have expressed their concern that the Forum could break the national movement and rejuvenate the old system.  While there was brief discussion of some fundamental issues, such as the release of political prisoners, the rhetoric seems to have mainly adopted the same tone as the Algerian interim head of state, Abdelkader Bensalah.  Open dialogue was emphasized, but no clear or practical conditions for moving forward were advanced.  It is unlikely that any form of dialogue will take place unless major concessions from the Algerian political system are made.  Some of these conditions include the departure of the system’s remaining symbols, lifting the different restrictions on media and civil society, the release of all political prisoners in addition to respecting Algerians’ right to freedom of assembly.

Aside from these main initiatives, several calls and roadmaps have been presented over the past few months, but political and social actors still lack the tools to transform the popular movement into a structured entity.  This lack of leadership and vision is leaving the popular movement without many options and has led to calls for civil disobedience as a last resort.  While most protesters firmly understand the risks of a sustained transitional period, a form of peaceful radicalization of the movement is already taking place.  For the protesters, the departure of the head of state and the government is becoming an essential condition for fair elections.

The Road Ahead

As this political impasse continues to loom over Algerian life, compounded by regional instability along the Algerian border, a peaceful and smooth transition of power is more important than ever.  The success of this transition is, however, conditional upon two major factors: a more structured popular movement and the emergence of dialogue between the political system and the protesters.

It would be naïve to believe that the popular movement, in its current unorganized shape, would be able to serve as an alternative to the extant political leadership.  Despite its capacity to mobilize and its willingness to push the system for more concessions, the movement remains unable to generate clear institutional structures.  Any attempt to push the current political system into departure without an alternative in place would only result in a dangerous power vacuum.  Some of its leaders have begun to understand the urgent need to organize the movement and consolidate the popular demands in a clear, and most importantly, pragmatic roadmap, but building an alternative requires providing the proper and logistical conditions for fruitful discussions to take place.

In addition to conversations within the popular movement itself, another round of dialogue between the rulers and protesters is bound to occur at a certain point.  In his latest speech, Algerian interim head of state Bensalah has reiterated the system’s commitment to open and inclusive dialogue, led by independent figures, that would lead to presidential elections as soon as possible.  Yet protesters see the prospect of such a dialogue as conditional to the release of political prisoners and the departure of the remaining leadership from the Bouteflika era.  Moreover, the military institution has repeatedly expressed its unwillingness to participate in any dialogue, hinting that the military junta is adopted a mechanism of “ruling behind the curtains.”  In order for any successful dialogue, the commitment of the military junta to remain politically neutral even behind the scenes is a necessity.  However, an understanding of the Algerian military’s historic involvement in political affairs suggests that the military leadership is unlikely to engage in a direct and official dialogue with the popular movement unless the latter reaches a solid level of organization and is able to provide an alternative.  Only a real new balance of powers would push the military leadership into dialogue.

What to Expect:

As the country enters its fifth month of protests, it is clear that the transition to a new leadership is unavoidable.  The outcome of this transition is still unclear, but three main scenarios are most likely.

If the protesters can learn to organize themselves, the popular movement will have both energy and a legitimate structure. In such a case, the political system will be forced to sit down and negotiate its departure terms at a certain point.  These terms will undoubtedly include the resignation of Algeria’s old guard and a firm reform of the security apparatus to ensure the dismantling of the military junta and the constraining of the military institution to its constitutional duties.  This is an optimistic scenario, but it is the most likely option for preventing the country from entering into authoritarian rule or violent escalation.

If protesters cannot organize effectively, it is likely that the military junta will be able to impose its presidential candidate and vision for Algerian politics.  Though this scenario may grant a certain short-term stability, such a situation will prevent the economic, political, and social reforms that the country desperately needs from being implemented.  Algeria will return to a fake stability that will end with a potentially violent uprising and overall chaos.  Allowing the system to regenerate itself will only delay the implementation of highly needed reforms that will eventually extract a much higher cost.

If neither the popular movement nor the political system are able to reach their ultimate goal and consolidate power, Algeria will enter a constitutional void.  A prolonged transition period without meaningful restructuring could ultimately result in a violent and chaotic insurgency.  With the difficult situation in Libya and the Sahel, a constitutional void and weakened national security apparatus may grant armed groups relatively easy access to the country.  Several foreign powers, especially the historical strategic ally of Russia, will also seek to protect and advance their interests.  This will turn the country into a new competition field for international and regional powers.

Now is perhaps the most pivotal moment in the last fifty years of Algerian history; there is a golden opportunity for radical change but also the real risk of a sustained period of political chaos.  The situation in Algeria should not only be concerning to the Algerian people but also to its neighboring countries and any international powers with significant interests in the region.  There is an urgent need to agree on a consensus roadmap that satisfies the protesters’ demands according to a realistic time frame. It is essential that the younger generation is given its opportunity to govern, but this must be accomplished in a way that would not compromise the longevity of the state’s institutions.  The challenges facing Algeria both internally and regionally require changing the system of governance rather than reforming and recycling its civilian façade.  The military junta is inherently incapable of bringing peace and stability to Algeria in the long-term.

Zine Labidine Ghebouli is an Algerian student at the American University of Beirut.  He is engaged on political, security, and socioeconomic issues in the MENA region with a focus on Algerian affairs.  (Fikra Forum 24.07)

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11.14  MOROCCO:  Twenty Years Under King Mohammed VI – Domestic Developments

Sarah Feuer and Reda Ayadi posted in TWI‘s PolicyWatch 3155 on 25 July that Morocco has made significant economic progress since 1999, but grievances regarding social issues and political reform continue to pose a challenge.

On 30 July, Morocco’s fifty-five-year-old ruler Mohammed VI commemorated twenty years on the throne.  In 1999, he inherited a kingdom of twenty-eight million citizens facing considerable socioeconomic challenges, including a lack of basic necessities in rural areas, high poverty, a labor market and GDP too reliant on agriculture, and unemployment hovering around 14% nationally and nearly double that among youths.  Moreover, his father’s four-decade reign had been marked by severe political repression and human rights abuses, albeit capped by a controlled opening of the political system and civil society shortly before succession.

In the twenty years since then, Morocco has made significant strides in several areas of economic and human development.  At the same time, Mohammed has largely adopted his father’s preference for limited political openings, eschewing the deeper liberalization many hoped he would introduce.  In the coming decades, Morocco’s ability to remain a stable exception to the chaotic regional rule will likely depend on the viability of this implied bargain.

Schools, Solar Panels and Sufis

Mohammed’s scorecard includes a number of noteworthy economic achievements.  Morocco’s GDP rose from $42 billion in 1999 to $110 billion by 2017 (in 2017 U.S. dollars); economic growth, while still beholden to variable weather effects on agriculture, has averaged 3-4% annually, with the IMF recently predicting an improved economic outlook in the medium term; and the country now ranks second in the region after the United Arab Emirates on the World Bank’s Ease of Doing Business Index.  Signaling a shift from his father, Mohammed invested in Morocco’s long-neglected north early on, one result of which was Tanger Med, the largest port on the Mediterranean Sea and in all of Africa.

Additional bright spots have appeared in school enrollment, women’s advancement and poverty reduction.  In 1999, fully one-third of primary-age children were not attending school.  Following a series of reforms, primary school enrollment now stands at 97%, with the biggest gains among young girls.  In 2004, the monarchy reformed the code of family law (mudawanna), granting women the rights to divorce, child custody and self-guardianship while raising the minimum marriage age to eighteen.  Poverty has fallen substantially since 1999, when roughly 16% of the population and 30% of rural inhabitants were living at or below the poverty line; today those figures are 4% and 19%.  Notwithstanding their higher poverty rates, nearly 100% of rural communities now have access to electricity, compared to only 18% in 1999.

Following the push toward mass electrification, Morocco embarked on a major renewable energy development project, partly to reduce its reliance on hydrocarbon imports and partly to mitigate the adverse effects of climate change.  One result has been the development of the Noor solar power plant, the largest such complex in the world and one that could ultimately make Morocco an energy exporter to Europe and Africa.

The kingdom is also a regional outlier in its approach to countering Islamist extremism.  Four years into Mohammed’s reign, Morocco was rocked by the worst terrorist attack in its history, with twelve suicide bombers blowing themselves up at various tourist and Jewish sites in the capital, killing thirty-three civilians.  The attack prompted the king—who as “Commander of the Faithful” is also the country’s chief religious authority—to launch comprehensive reforms such as bringing mosques and Islamic schools under tighter state control, stripping religious education curricula of extremist content, promoting Sufism and other streams of Islam believed to promote moderation, and establishing an imam training academy for students from North and West Africa and, increasingly, Europe.

These reforms have not immunized the kingdom from homegrown extremism, as attested by the estimated 2,000 Moroccans who joined the Islamic State and other jihadist groups in Syria between 2012 and 2016.  Still, through a blend of heightened security measures and religious reforms, the country has evidently contained the threat of extremism better than most of its regional peers.

Gradualism or Gridlock?

If the Casablanca attack fueled a push to counter religious extremism, it also slowed the momentum toward political liberalization implied in Mohammed’s pledge to rule differently than his father had.  After a series of early initiatives distributed approximately $185 million to over 16,000 victims of King Hassan II’s so-called “Years of Lead,” many expected civil liberties to expand under his son.  But the 2003 bombings spurred a sweeping antiterrorism law that human rights groups condemned for enshrining an overly broad definition of terrorism and enabling the government to obstruct ostensibly peaceful political activity.  Today, press freedom and other civil liberties remain restricted, and Morocco’s Freedom House ranking of “partly free” hasn’t budged in twenty years.

Frustration with the pace of reforms boiled over in 2011, against the backdrop of “Arab Spring” uprisings throughout the Middle East. In response to nationwide protests demanding greater political rights and an end to corruption and high unemployment, Mohammed organized a constitutional referendum and called for new elections.  The main results of these initiatives were partial empowerment of the legislative branch, formal recognition of minority ethnic identities and a new parliament dominated by the Justice and Development Party (PJD).  This mildly Islamist party, with roots in the Muslim Brotherhood, had been active in Morocco’s political landscape for decades and had long since dropped its formal opposition to the monarchy. (The country’s other main Islamist organization, al-Adl wal-Ihsan, advocates eliminating the monarchy and is thus banned.)

At the same time, the 2011 constitution reserved considerable powers for the king, and his allies have since built new parties to counteract the PJD.  The resulting dynamic largely reproduced the contours of a political system long familiar to Moroccans: a monarchy unwilling to cede much power governs alongside (or, rather, above) political parties that are unable to advance shared legislative goals.  A decentralization program was initiated to grant more discretion and responsibility to regional governments, but the process has largely stalled.  Meanwhile, corruption remains rampant; youth unemployment, a driving factor behind the 2011 protests, stands at 22% nationally and 43% in urban areas, a sobering figure given that nearly half of Morocco’s 34 million citizens are under age twenty-four; economic inequality, as reflected in annual measures of Morocco’s Gini coefficient, remains at pre-1999 levels or worse; and access to decent healthcare and education is limited.

Such conditions fueled a series of protest movements in the years following Morocco’s “Spring.”  In 2016-2017, mass demonstrations broke out in the traditionally restive Rif region after a local fishmonger was crushed to death by a garbage truck as he sought to retrieve his confiscated catch.  More than 150 protestors were arrested in the ensuing crackdown on the al-Hirak al-Shaabi movement, whose leaders are currently serving twenty-year jail sentences.  In 2018, an unprecedented boycott targeted three of the kingdom’s leading companies in protest of longstanding links between business and political elites.  Notably, two of the companies are run by individuals with known ties to the palace.

According to the latest Arab Barometer poll, 49% of Moroccans want rapid domestic change (the highest percentage of any Arab country polled), and 70% of adults under age thirty wish to emigrate.  Adequately addressing the frustrations behind such figures will be a central challenge for Mohammed as he enters his third decade of rule.

Considerations for Washington

The United States has a clear interest in helping Morocco preserve its relative stability, particularly given the uncertainties gripping Algeria next door.  That stability largely depends on Rabat’s ability to continue implementing reforms in a way that reduces the drivers of social unrest while avoiding the chaos and authoritarian regression seen elsewhere in the region.  Washington can boost the kingdom’s chances of success by more actively engaging it in the development arena.

Targeted U.S. assistance has already yielded substantial results under Mohammed VI.  For example, a five-year Millennium Challenge Corporation grant of $697 million in 2008-2013 reportedly facilitated Morocco’s poverty reduction efforts.  A second MCC “compact” of $450 million went into effect in 2017, rightly targeting job creation and land productivity.  But the Trump administration has repeatedly sought to reduce its annual aid package, perhaps reasoning that Morocco’s relative calm obviates the need for assistance.  Given the kingdom’s ongoing economic woes and growing indicators of social frustration, the administration should reconsider this stance.

One area that warrants greater attention—and to which Rabat would be especially receptive—is investment in Morocco’s private sector.  Specifically, the Trump administration should consider creating a Moroccan-American Enterprise Fund, based on the highly successful model established by previous administrations with various Eastern European allies.  Such a fund would spur much-needed private-sector growth in the kingdom and could even create opportunities for joint business ventures with American firms.

Of course, any engagement with Morocco will be hampered to the extent that Washington’s diplomatic presence remains limited.  Accordingly, sending an ambassador to Rabat remains an urgent priority.

Sarah Feuer is an associate fellow with The Washington Institute, where Reda Ayadi was a research assistant from 2018 to 2019.  (TWI 25.07)

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11.15  MOROCCO:  Twenty Years Under King Mohammed VI – Foreign Policy Developments

Sarah Feuer and Reda Ayadi posted in TWI‘s PolicyWatch on 29 July that Morocco’s king has invested considerable diplomatic capital in Africa, Europe, the United States and China, but the longstanding Western Sahara dispute remains a source of tension with neighboring Algeria.

Over the past two decades, King Mohammed has reduced Morocco’s footprint in the Middle East, preferring to invest in new relationships across Africa, fortify alliances in Europe, maintain productive ties with Washington, and seek investments from China.  Hostile relations with Algeria remain a bleak spot, though, and while Mohammed has arguably registered successes on the Western Sahara portfolio, resolving the dispute remains elusive.

From the Gulf to Africa and Europe

Under the previous king, Morocco devoted considerable energy to developing ties with wealthy Persian Gulf states and mediating in the Israeli-Palestinian conflict.  Although Mohammed is keen to continue attracting Gulf investments, Morocco has been largely absent from the peace process since he came to power in 1999, and has sought to avoid undue entanglement in Middle Eastern affairs.

Several recent examples are instructive.  In 2015, Morocco joined the initial Saudi-led military intervention in Yemen, but then shortly drew down its involvement after one of its F-16s was reportedly shot down by Houthi rebels.  In 2017, the kingdom pointedly did not pick a side in the Gulf dispute over Qatar, despite Rabat’s ostensibly close ties with Riyadh and longstanding reliance on Saudi investments.  Two years later, Morocco suspended its participation in the Yemen war altogether after the Saudi-owned television outlet Al-Arabiya aired a documentary seen as criticizing Rabat’s position on Western Sahara.  As for the Israeli-Palestinian conflict, U.S. advisor Jared Kushner recently visited the kingdom to solicit its support for last month’s multilateral peace conference in Bahrain.  Ultimately, however, Morocco sent only a low-level Foreign Ministry staffer to the event.

In short, Rabat’s Middle Eastern presence has not flourished under Mohammed.  Instead, the king has focused his diplomatic energies on building ties across Africa and strengthening traditional alliances in Europe.  The former effort is perhaps the most significant shift from his father’s reign, and it has begun to yield dividends.  The kingdom has increased its access to African telecom, mining, banking, and insurance markets, and expanded its regional clout following its readmission into the African Union in 2017.  Morocco had left the organization in 1984 after the membership decided to admit the Sahrawi Arab Democratic Republic (SADR), the name given to Western Sahara by the Algeria-backed Polisario Front, Rabat’s main adversary in that still-disputed territory.

The palace also has ample reason to deepen ties with Europe, where over 50% of the Moroccan diaspora community (around 4-5 million citizens) currently resides.  In 2000, Mohammed inked an EU-Morocco Association Agreement that significantly expanded trade.  Since then, the relationship has broadened to include parliamentary exchanges, EU assistance (€200 million per year in 2014-2017 alone), and cooperation on security and migration.  The latter issue has become especially pressing given last year’s closure of central Mediterranean migration routes and the growing number of people seeking entry into Europe through Morocco.

Relations suffered a setback in 2015-2018 following a European Court of Justice decision to exclude Western Sahara from EU-Morocco trade agreements covering agricultural, agro-food and fisheries products.  Earlier this year, however, the European Parliament adopted a series of amended agreements incorporating the disputed territory, and relations have largely recovered.

Great Power Engagement

Though not as robust as its European alliances, Rabat’s ties with the United States have made important advances since Mohammed ascended the throne.  In 2004, Washington designated Morocco as a “Major Non-NATO Ally”; a year later, the two countries launched Flintlock, an annual regional military exercise focused on counterterrorism.  Indeed, Rabat has established itself as a key counterterrorism partner in West Africa and the Sahel, where jihadist groups such as al-Qaeda in the Islamic Maghreb have sought to exploit failing states in Mali and elsewhere.  The kingdom is a member of the Trans-Sahara Counterterrorism Partnership, a U.S. program that helps regional governments strengthen their capacity to contain and defeat local terrorist organizations.  Rabat was also instrumental in forming the Global Counterterrorism Forum with Algeria, Egypt, Jordan, Qatar, Saudi Arabia and the United Arab Emirates.

Meanwhile, Morocco and the United States have conducted an annual bilateral military exercise since 2008 known as African Lion, focused on improving interoperability.  Since 2012, they have convened a Strategic Dialogue focused on enhancing military, economic, and counterterrorism cooperation.  The kingdom was the first Maghreb country to join the U.S.-led coalition to defeat the Islamic State.  In 2018, the U.S. Navy conducted Lightning Handshake with Morocco’s navy and air force, the most sophisticated bilateral military exercise ever conducted with an African partner.

On the economic front, Washington and Rabat signed a free trade agreement in 2006, the only one of its kind between the United States and an African country.  The FTA has been something of a disappointment to Morocco insofar as the trade deficit with America has only grown.  Still, the agreement had a substantial secondary effect of signaling a hospitable investment climate, and major U.S. companies such as Boeing have committed to projects in the kingdom as a result.

Such relations have not precluded Moroccan engagement with U.S. rivals, chiefly China.  The king’s 2016 meeting with President Xi Jinping led to several accords spanning the tourism, education and infrastructure sectors.  Earlier this July, Morocco’s BMCE Bank and the state-owned China Communications Construction Company agreed to build a high-tech city near Tangier, which if completed could create 100,000 jobs and attract investments estimated at $10 billion.  Yet a previous deal in 2017 largely floundered, fueling skepticism about whether the new agreement will translate into actual investments on the ground.

Stubborn Sahara

Of all the king’s foreign policy goals, the most highly prized yet most elusive has been international recognition of Moroccan sovereignty in Western Sahara.  In 2006 – a full fifteen years after a UN peacekeeping force began monitoring a buffer zone separating the Moroccan-controlled territory from Algeria and Mauritania – Rabat presented an autonomy plan in which Western Sahara would govern itself under the kingdom’s sovereignty.  France endorsed the proposal, while the United States deemed it “serious, realistic, and credible.”  The Polisario rejected the plan, as did its longtime backer, Algeria, and their subsequent talks with Morocco largely petered out in 2012.

Since then, Mohammed has continued seeking support for his autonomy proposal wherever he can find it.  Much of his outreach to Africa, for example, reflected a calculation that it would bring not only economic benefits but diplomatic progress as well.  In some respects, the approach has worked – since the late 1990s, twenty countries worldwide have withdrawn their recognition of the SADR and thirty-five African nations still do not recognize it.  Furthermore, domestic policy initiatives like the “advanced regionalization” program have incorporated Western Sahara into Morocco’s existing governance structures, tilting realities on the ground in Rabat’s favor.

In other respects, however, Mohammed’s Western Sahara diplomacy has come up short, as evidenced by tensions with Europe following the EU court decision on trade, and the African Union’s insistence on allowing SADR participation in its summits.  Washington has strongly hinted at its own frustration with the status quo, with National Security Advisor John Bolton expressing opposition to open-ended peacekeeping missions, and Rabat consequently facing UN pressure to return to the negotiating table.  Meanwhile, Morocco’s relations with Algeria have remained largely hostile, further precluding resolution of the territorial dispute. Still, Mohammed probably deserves much of the credit for keeping tensions in Western Sahara from erupting into large-scale violence.

Sarah Feuer is an associate fellow with The Washington Institute, where Reda Ayadi was a research assistant from 2018 to 2019.  (TWI 29.07)

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11.16  TURKEY:  Turkey’s Current Account Deficit Shrinks, But Budget Gap Widens

Mustafa Sonmez posted in Al-Monitor on 26 July that Turkey’s chronic current account deficit has fallen to a 16-year low, but this ostensible improvement is hardly the outcome or harbinger of sound economic headway.

For the first time in a long time, Turkey’s current account has shown a surplus on a monthly basis, bringing the 12-month current account gap to a 16-year low, according to Central Bank data released on 11 July.  With the $151 million surplus in May, the current account deficit — or foreign-currency deficit — shrank to $2.4 billion year-on-year, heralding that a chronic problem of the Turkish economy was at least temporarily curtailed.

Only three days later, however, fresh economic data showed another problem, a sharp increase in the central government budget deficit.  The deficit stood at TL 78.6 billion ($13.8 billion) in the first half of the year, widening nearly 72% from TL 46 billion in the same period last year.

Deficits in the current account and central government budget are among the basic economic indicators of a country.  When both gaps reach significant levels, economists speak of a “twin deficit,” which means the country is in a deep trouble.

The current account deficit befalls countries when their foreign-currency spending, which goes mostly to imports, exceeds significantly their foreign-currency revenues, derived mostly from exports and the tourism industry.  For emerging economies such as Turkey, current account deficits are considered a chronic problem.  Major countries plagued by current account gaps in times of economic growth include Argentina, Brazil, Chile, Czechia, India, Indonesia, Mexico, Poland, Russia and South Africa.

In emerging economies, growth often relies on imported inputs, including machinery and energy.  The import-reliant production goes largely to domestic consumption, bringing in little foreign exchange.  Foreign-currency revenues from exports, tourism and some services such as shipping fall short of covering foreign-currency spending, leading to current account gaps. To finance such gaps, countries need to secure external funds, which is not always an easy task.

To attract foreign investors, a country’s basic economic indicators, especially inflation, and political climate need to inspire confidence.  Above all, emerging countries are expected to maintain fiscal discipline and keep their budgets sound.  The maestros of the global system, the International Monetary Fund (IMF) in particular, would often advise governments to steer clear of big budget deficits, with current account gaps often condoned.

A budget deficit coming atop a current account deficit is seen as the sign of a government struggling to manage the economy, bereft of sound tools to battle crises — an outlook that scares foreigners away.  Consequently, while the country struggles to lure external funds to bridge the current account gap, hard currencies begin to appreciate and its own currency nosedives.  This, in turn, increases the cost of imported inputs, stoking inflation, while the soaring prices curb domestic demand, causing the economy to slow and even shrink.  Economic contraction results in a decrease in imports, meaning that the current account deficit begins to shrink as well.  This might even result in a period where export and tourism revenues surpass the money spent on imports, leading the country to appear as having a foreign-currency surplus.

In the 2003-2018 period under the Justice and Development Party, Turkey’s economy managed to grow with an average current account deficit of 4.8% of gross domestic product (GDP).  The rate peaked at 8.9% in 2011, when growth was especially high, and fell to 1.8% in 2009, which was a crisis year.

Current account deficits as big as almost 5% of GDP are a rare occurrence in emerging economies.  Turkey managed to sustain that for 16 years before stumbling in the second half of 2018, when external funds fell short of financing the current account gap, causing a spike in hard-currency prices and, ultimately, an economic contraction and crisis.

The economy’s decreasing demand for imports closed the current account deficit before turning it into a surplus in May.  The IMF expects the Turkish economy to contract nearly 3% this year and post a current account surplus of some $5 billion, amounting to 0.7% of GDP.  Yet it expects the deficit to reappear down the road as economic revival begins.  The forecast for 2020 involves a 2.5% growth rate and a current account deficit of $3.4 billion, or 0.4% of GDP.

When economies come to the brink of crisis, governments would use treasury funds to try to cushion the turmoil and limit the damage.  Amid Ankara’s repeated use of budget funds in a bid to manage the crisis, the gaps in the budget have widened sharply since the second half of 2018, with the hemorrhage going on.  Last year, the budget deficit amounted to 2% of GDP, up from 1.5% in 2017 and 1.1% in 2016.  The rate appears on course to easily reach 2.5% this year. Remarkably, the primary balance — the fiscal balance net of interest payments — is showing a deficit for the first time in 16 years.

To rein in the budget gap, Ankara has been scrambling for one-off revenues, with tax revenues falling short of being a remedy.  Standing out among such attempts are the funds generated from paid exemptions from military service and an amnesty for illegal construction.  In an even more controversial step last week, the government pushed through parliament an amendment that allows it to use money from the central bank’s legal reserves — a sum set aside by law for use in extraordinary circumstances — in the budget.  Despite all those measures, however, the budget’s borrowing need has not eased.

To start growing anew, the Turkish economy needs external funds. Foreign investors, for their part, need confidence in the country’s economic balances, especially inflation, and political prospects.  Turkey, however, continues to be a high-risk country amid a lingering crisis with the United States over its purchase of Russian weaponry and a mounting row with the European Union over gas exploration in the eastern Mediterranean.  Such tensions prevent a robust inflow of external funds to spur a fresh growth momentum.  As things stand today, the Turkish economy resembles a punctured ball that has hit rock bottom, unable to bounce back.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question.  (Al-Monitor 26.07)

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11.17  GREECE:  Fitch Affirms Greece at ‘BB-‘; Outlook Stable

On 2 August, Fitch Ratings affirmed Greece’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB-‘ with a Stable Outlook.

Key Rating Drivers

Greece’s ‘BB-‘ rating is underpinned by high income per capita levels, which far exceed ‘BB’ and ‘BBB’ medians.  The profile of Greece’s general government debt stock is exceptionally favorable and fiscal performance over the last three years has been stronger than ‘BB’ rated peers.  Governance indicators are also significantly stronger than in most sub-investment-grade peers.  These strengths are set against weak medium-term growth potential, extremely high level of non-performing loans in the banking sector and high stocks of general government debt and net external debt.

Parliamentary elections held on 7 July saw the center-right New Democracy party returning to power after more than four years in opposition, winning 158 out of 300 seats.  The last Greek election that left one party commanding an overall majority was in 2009.  The advent of a single party majority government should help cement the improvement in political stability seen in recent years.  This could also underpin swift implementation of New Democracy’s policy agenda.

The government (led by Prime Minister Kyriakos Mitsotakis) was sworn in on 8 July.  It is too early to assess government effectiveness and policy implementation.  However, in our view, the policy agenda could further underpin Greece’s economic recovery.  The government’s key economic priorities include a broad reduction in tax rates, an acceleration of the privatization program and a commitment to reduce bureaucracy.  The aim is to improve the business climate and attract private investment to sustain the economic recovery and boost medium-term GDP growth potential.

On 30 July, parliament approved a first set of measures including a reduction in the property tax (ENFIA), which the government expects will cost €205 million (0.1% of GDP) in 2019.  A scheme to settle outstanding tax and social security payments in instalments was also approved.  In September the government plans to present a broader economic package containing tax cuts for both households and corporates to be introduced gradually from January 2020.  Measures are likely to include a gradual cut in corporate income tax to 20% from 28 over two years, a cut to the lowest income tax rate to 9% from 22%, a suspension of capital gains tax on property sales and suspension of VAT on construction activity.  It is too early to assess the overall impact of these measures on GDP growth and public finance outturns but we expect to have more information by September when the 2020 draft budget will be presented.

The government appears to have prioritized acceleration of privatizations and addressing the banking sector asset quality issues.  The oversight of banking sector policies is now the sole responsibility of the Ministry of Finance (as opposed to the previous joint responsibility with the Ministry of the Economy and Ministry of Justice) and the privatization program is overseen by the Ministry of the Economy. In our view, this is a positive development that could lead to swifter policy implementation in these areas.

Public finances continue to improve.  Greece posted a headline budget surplus of 1.1% of GDP in 2018, up from 0.7% a year earlier, driven by higher than budgeted revenues, expenditure restraint and under-execution of capital spending.  This implied a primary surplus of 4.4% of GDP, well above the ESM program target of 3.5% of GDP.  We expect fiscal policy to remain sound and project primary surpluses of 3.5% and 3.4% of GDP in 2019-20.  General government gross debt has peaked at 181.1% of GDP in 2018 and we expect it to decline firmly to 161% of GDP by 2021, on the back of sustained primary surpluses, average real GDP growth of 2% and low nominal effective interest rates.

Although the stock of general government debt will remain high, there are mitigating factors that support debt sustainability.  Greece’s cash reserves are high at €26.8 billion (14% of GDP) in December 2018 and have remained undrawn since the end of the ESM program (August 2018).  Gross financing needs are low and our estimates (which assume full rollover of T-bills) indicate that Greece could be fully funded until 2022-23, providing a significant backstop against any financing risks for a prolonged period.

The concessional nature of Greece’s public debt implies that debt servicing costs are low; 90.8% of general government debt stock is at fixed interest rates (which implies low sensitivity to interest rate shocks), and the average maturity of Greek debt (21.1 years) is among the longest across all Fitch-rated sovereigns.  Interest payments to revenue at 7.2% are slightly below the current ‘BB’ and ‘BBB’ medians of 7.3%.  The nominal effective interest rate on Greece’s general government debt stock is well below that of most Eurozone peers.

In Fitch’s view, the current fiscal policy mix may not be sustainable over the medium term.  The fiscal adjustment since 2016 has relied heavily on tax revenues and under-execution of capital spending.  The new government inherits the challenge of rebalancing the fiscal policy mix without hampering the commitment to the fiscal targets agreed with the official creditors.  The repeal by the previous government of the reduction in the personal income tax threshold would make it harder to rebalance fiscal policy while meeting the primary surplus targets (3.5% of GDP annually until 2022), particularly when taxes are being cut.

New Democracy has said that it would eventually like to reduce the primary surplus targets by at least 1% of GDP, which would still involve running large primary surpluses.  The government has committed to meet the current targets for 2019 and 2020 but will aim to renegotiate them from 2021 onwards.  The government has indicated that it will seek the reductions as part of an agreed process with the ESM that would take account of the implementation of other reforms, and fiscal and growth outturns. This reduces risks of deterioration in relations with the creditors.

Greece continues to make progress towards the resumption of regular bond issuance.  Yields on Greek government bonds fell sharply after the July snap elections.  The sovereign took advantage of the favorable market conditions and on 16 July 2019 placed a new benchmark €2.5 billion seven-year bond with a yield of 1.9%.  The yield was well below 3.45% for the €2.5 billion five-year bond issued in January and the lowest since Greece joined the Eurozone.

We have revised our 2019 real GDP growth forecast to 1.9% from 2.3%, on the back of a weaker than expected Q1/19 outturn, owing to a marked slowdown in export growth and weaker public consumption.  We expect growth to recover to 2.2% in 2020 and 2.0% in 2021.  Pent-up investment demand, declining unemployment rate, rising disposable income and moderate fiscal loosening are set to support domestic demand.  The EC economic sentiment index rose to an 11-year high in July (to 105.3 from 101.0 in June) indicating a post-election rebound in both business and consumer confidence.  The unemployment rate is declining at a steady pace, declining to 17.6% in April 2019 (a seven-year low) and employment grew by 2.4%.

Asset quality is improving but remains weak. Non-performing loans (NPLs) were 45.1% of total loans at end-March 2019, down from 48.5% at end-March 2018.  While the stock is declining at a faster pace (-13.5% y-o-y), the ratio to total exposures declines more slowly due to ongoing loan contraction (-7% y-o-y).  The economic recovery, the gradual rebound in real estate market prices, increased non-performing exposures (NPE) sales, greater use of electronic auctions and, to a lesser extent, out-of-court workouts should help banks meet new NPE targets submitted to the Single Supervisory Mechanism for 2021 (marginally below 20%).  The recently approved Main Residence Protection Law should also provide a more effective mechanism to work out the most problematic NPEs.  The two-large scale NPE reduction schemes proposed by the Hellenic Financial Stability Fund and the Bank of Greece could help banks reduce NPE more rapidly.  However, there are still uncertainties regarding the timeframe, compliance with state aid rules and the use of such schemes by the banks.

The banks’ funding profiles have improved, helped by deposit inflows and debt issuance in wholesale markets. Piraeus and National Bank of Greece (NBG) recently issued subordinated notes (T2 debt) to increase their respective total capital buffers.  Specifically, Piraeus issued €400 million at end-June 2019 (coupon 9.75%) and NBG issued €400 million in mid-July 2019, after the elections (coupon 8.25%).  At end-March 2019, total Eurosystem funding for the four systemic banks decreased to €8.4 billion from EUR33.7 billion at end-2017, reflecting significant improvements in their funding profiles.  This was only made of ECB funding as banks had fully repaid the emergency liquidity assistance by end-February 2019.  We expect remaining capital controls to be lifted by the end of the year, taking into account the improvement in banks’ funding and liquidity profiles and improved access to financial markets for the sovereign and the banks.

Rating Sensitivities

Developments that could, individually or collectively, result in positive rating action include:

-Track record of reduction in general government indebtedness and greater confidence that the economic recovery will be sustained over time.

-Track record of prudent economic and fiscal policy underpinned by an orderly working relationship with official sector creditors and a stable political environment.

-Lower risks of crystallization of banking sector risks on the sovereign balance sheet.

-Developments that could, individually or collectively, result in negative rating action include:

-A loosening of fiscal policy that undermines confidence in general government debt sustainability.

-Adverse developments in the banking sector increasing risks to the real economy and the public finances.

-Re-emergence of sustained large current account deficits, further weakening the net external position.

Key Assumptions

Our long-run general government debt sustainability calculations are assumptions of average primary surplus of 1.9% of GDP over 2019-40, real GDP growth that averages 1.4% over the same period and GDP deflator converging towards 2%.  Under these assumptions, public debt declines steadily to 125% of GDP by 2030 and 111% of GDP by 2040 from 181% of GDP in 2018.  (Fitch 02.08)

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IBG Newsletter Q2 2019

Two recent decisions in Israel point to the fact that the country continues its commitment to funding technological development to ensure that Israel remains “the startup nation.”

First, Israel’s Council for Higher Education (CHE) has earmarked some $56 million for a new five-year research program.  The special budget will support a joint US-Israel program set up by National Science Foundation (NSF) and the United States–Israel Binational Science Foundation (BSF).  The money will enable the NSF-BSF program to run “many more US-Israeli scientific research projects” in “a variety of fields,” the CHE said in a statement in late July.

The joint NSF-BSF program began operating in 2013 with the purpose of encouraging research collaboration between American and Israeli researchers. Through this program, researchers from both countries jointly submit proposals to the NSF-BSF, which reviews submissions and approves the winning proposals.  The program distributes grants for a variety of fields of research, including exact sciences, engineering, computer science, natural and life sciences, earth and environmental sciences, economics, and psychology.

Second, the Israel Innovation Authority has approved the establishment of a new consortium aimed at promoting the development of recycling technologies and the use of recycled materials in Israel’s plastics industry.  Set to receive an investment of NIS 30 million (~ $8.6 million), the CIRCLE consortium will enable companies in the recycling sector, plastic and polymer manufacturers, as well as academic and research institutes in the field to develop innovative technologies to give Israeli industry an edge in international markets. The technologies developed by the consortium will allow for the expansion of the range of recycled materials and their applications.

The consortium’s establishment aims to leverage Israel’s academic and industrial capabilities to close the existing technological gap and situate Israel’s plastics industry as a leader in the field of plastic waste management.

“The world is moving toward a responsible industry and economy through the use of recycled or innovative materials for the sake of environmental protection,” said Israel’s Economy and Industry Minister Eli Cohen.

For 2018, the last year figures were available, UNESCO, the United Nations Educational, Scientific and Cultural Organization, ranked Israel’s spending on global research and development as second in the world in terms of percentage of the country’s gross domestic product.  Only South Korea topped Israel, which was ahead of Japan, Finland, Switzerland, Sweden, Austria, Denmark, Germany and the United States.

All of this is part of the reason why during the last few decades, over 300 multinational corporations operating at the forefront of technology chose to establish R&D centers in Israel, with some even operating several centers in various fields of development. These R&D centers account for roughly 50% of business enterprise R&D expenditure.

Over the years, the multinational corporations who operate R&D centers in Israel acquired more than 100 Israeli companies. A number of them, such as Intel, Microsoft, Broadcom, Cisco, IBM and EMC acquired more than ten local companies over the span of their operation in Israel. This bustling activity feeds off many of the Israeli innovation ecosystem’s assets: leading research, skilled personnel, entrepreneurial culture, technological leadership and a well-established support system. The commitment of the government, in partnership with industry, to continue to increase R&D funding support is what keeps Israeli tech development at the cutting edge of technological achievement.

Sherwin Pomerantz President

Sherwin Pomerantz is president of Atid-EDI Ltd., an economic development consulting firm with 26 years’ experience in assisting overseas companies and public entities in their export promotion and foreign direct investment attraction efforts.

4 September 2019
4 Elul 5779
5 Muharram 1440

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TABLE OF CONTENTS:

 1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel & South Korea Finalize Free Trade Agreement in Jerusalem
1.2  Israel & US Sign MOU to Strengthen Cooperation Between MASHAV and USAID
1.3  Honduras Trade Delegation to Visit Israel & Mark Recognition of Jerusalem as Israel’s Capital
1.4  Prime Minister of Ethiopia Visits Israel

2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Rookout Raises $8 Million in Series A Funding to Set New Standard in Software Observability
2.2  Salesforce Signs Definitive Agreement to Acquire ClickSoftware
2.3  BIRD Partners Take Renewable Energy Microgrids Into the AI & Machine Learning Age
2.4  Tricentis Acquisition Extends Selenium and Appium Test Automation in the Cloud
2.5  Rail is Going Global in India With the Partnership of ConfirmTKT and Save A Train
2.6  WSC Sports Raises $23 Million in Series C Funding
2.7  American Airlines to Launch Tel Aviv – Dallas Flights
2.8  TriEye Raises $2 Million More for Cameras That Can See in the Dark
2.9  Sino-Israel Center to Launch at Bar-Ilan University Nanotech Institute
2.10  Revuze Attracts Investment from the SAP.iO Fund
2.11  BlackBerry to Close Israel Development Center
2.12  El Al to Launch Routes to Dublin and Dusseldorf
2.13  McDonald’s Israel Expands Vegan Burgers to 40 Branches
2.14  Axonius Raises $20 Million More to Support Rapid Market Success
2.15  Music Education Startup JoyTunes Raises $25 Million
2.16  Intel Lays Cornerstone for Mobileye’s New Global Development Center in Jerusalem
2.17  Israel’s F2 Capital is Raising $75 Million to Invest in Homegrown Startups
2.18  Yissum Wins Bid to Host Largest International Technology Transfer Conference in 2019

 3:  REGIONAL PRIVATE SECTOR NEWS

3.1  The Rise of Venture Capital Funding in Jordan
3.2  SINC Raises $250,000 in a Pre-Seed Funding Round
3.3  The Importance of Fashion to the UAE’s Retail Market
3.4  Five UAE Fintech Start-Ups Graduate from Emirates NBD’s Program
3.5  UAE’s Group 42 Invests $65 Million in Chinese eCommerce Platform Jollychic
3.6  Saudi Arabia’s Nana Direct Raises $6.6 Million for Expansion
3.7  NowPay Closes $600,000 Seed Round from Silicon Valley’s Endure Capital & 500 Startups
3.8  Egypt & Bombardier Agree to Build Two Monorails
3.9  Chefaa Closes Significant Seed Funding Round
3.10  Egypt’s Harmonica Acquired by Dallas’ Match Group
3.11  Trella Joins Y Combinator’s S19 Batch
3.12  Egypt’s Wholesale and Retail Food Market in 2019
3.13  ADTRAN to Invest in Egypt to Create a Better Broadband Experience

 4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Vertical Field Launches Study on the Impacts of “Smart Living Walls”
4.2  Israel’s Ashalim Solar Thermal Power Station Begins Operations
4.3  Israel to Invest NIS 30 Million in New Plastic Recycling Technologies
4.4  Jordan Sees Clean Energy to Cover 20% of its Power Needs by 2022
4.5  Bahrain Bans Sand Dredging in Order to Repair Seabed
4.6  Oman’s Dhofar Wind Farm Produces First Kilowatt Hour of Electricity

5:  ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Annual Average Inflation Rate Stands at 3% in July 2019
5.2  Lebanon’s Trade Deficit Ended at $8.04 Billion in First Half of 2019
5.3  Jordan’s Average Inflation Rate for July 2019 Rises by 0.2%
5.4  Jordanian Unemployment Continues to Rise Unabated
5.5  Chinese Company Signs $1.4 Billion Iraq Construction Deal

Arabian Gulf

5.6  Bahrain Says Budget Deficit Narrows to $1 Billion in First Half of 2019
5.7  Trademark Infringements in Dubai Increase By 23% in First Half
5.8  UAE’s Third Nuclear Plant Hits Key Power Testing Milestone
5.9  UAE to Add Sugary Drinks and E-Cigarettes to Excise Tax List in 2020
5.10  Saudi Arabia Replaces Royal Court Chief and Creates Ministry of Industry
5.11  Saudi Arabia Launches $826 Million in Water Projects

North Africa

5.12  Egypt’s Annual Inflation Rate Declines to 7.8% in July
5.13  Remittances from Egyptians Abroad Rose to Around $3 Billion in May
5.14  Morocco’s Consumer Price Index Down 0.8% in July
5.15  Morocco Hosts 5.4 Million Tourists During First Half of 2019
5.16  Morocco Faces High Water Stress and Ranks 22nd Worldwide for Stressed Nations

6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Erdogan Says Turkey Wants to Continue Defense Cooperation with Russia
6.2  Turkey Foreign Trade Deficit Narrows 47% in July
6.3  Turkish Central Bank Says End of Tax Cuts Boosted Inflation
6.4  Turkey Draws Nearly 25 Million Foreign Visitors in 7 Months
6.5  Over 88% of Turkish Households Have Internet Access
6.6  Turkish E-Commerce Growth Stymied by Logistics Problems
6.7  Greece Posts January – July Surplus of €1.76 Billion
6.8  Greek Exports & Imports Decline Steeply In June
6.9  Cyprus-Greece-Israel-US Cement Eastern Mediterranean Security Partnership
6.10  Greeks Expanding Use of Credit Cards
6.11  Greek Housing Sector Rebounds at Strongest Rate in More Than 12 Years

7:  GENERAL NEWS AND INTEREST

Israel

7.1  Immigration to Israel Increases by Nearly 30%, Largely Due to Russian Speakers

Regional

7.2  Saudi Arabia’s Six Flags Qiddiya to Feature World’s Fastest Roller Coaster
7.3  Turkey Bans Istanbul’s ‘Queer Olympix’

8:  ISRAEL LIFE SCIENCE NEWS

8.1  Can-Fite to Treat Advanced Liver Cancer Patients with Namodenoson in Israel
8.2  CartiHeal Performs First Agili-C Cartilage Repair Implantation Procedures at New York Hospital
8.3  Corteva Agriscience Invests in Evogene’s Agriculture Biologicals Subsidiary, Lavie Bio
8.4  Nobio Receives FDA Clearances for Infinix Flowable & Bulk Fill Composites
8.5  GemmaCert Raises $3.5 Million
8.6  Teva Announces Availability of a Generic Equivalent of EpiPen Jr in the United States
8.7  MDClone, Developer of First Healthcare Synthetic Data Engine, Raises $26 Million
8.8  Terason Partners With DiA Imaging Analysis for Superior AI Cardiac Solutions
8.9  Carevature’s Cutting-Edge Dreal Technology Now Available to Spine Surgeons at Scripps Health
8.10  Check-Cap & GE Healthcare Complete Manufacturing Line Transfer for C-Scan System
8.11  V-Wave’s Interatrial Shunt Receives FDA Breakthrough Device Designation for Heart Failure
8.12  FDA Clears Biobeat for Non-invasive Cuffless Monitoring of Blood Pressure
8.13  Genetic Screen Identifies Genes That Protect Cells from Zika Virus
8.14  ApiFix Receives FDA Approval to Commercialize its MID-C System
8.15  DiA Imaging Analysis & Edan Instruments Accelerate Adoption of DiA’s Cardiac Solutions
8.16  CartiHeal Performs First Agili-C Cartilage Repair Implantation Procedure in Texas
8.17  Cannibble Food-Tech Announces the USA Launch of Its New Cannabis Infused Edibles
8.18  Sheba, Tel HaShomer & Telesofia Medical Announce Cutting-Edge Telemedicine Software
8.19  Maverick Medical AI Announces First Commercial Deployment at USHS Health System

9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Mellanox Ethernet and InfiniBand Solutions Deliver Breakthrough Performance
9.2  Checkmarx Named ‘Black Unicorn’ Award Winner for Vision in Software Security
9.3  Netline Provides C-Guard IED Jamming System for the Israel Defense Force
9.4  accessiBe Launches First-Ever AI-Driven Web Accessibility Tool
9.5  Lightbits Labs Cited as Startup of the Year in the 14th Annual 2019 IT World Awards
9.6  Vayyar Launches First Universal Sensor Solutions to Put an End to Hot Car Deaths
9.7  Eye-Net Mobile Successfully Completes Connected Car Controlled-Environment Trial
9.8  S1 Medical Goes Live With Sapiens’ Workers’ Compensation Solution
9.9  D-ID Adds New Anonymization Solution for Video and Still Images
9.10  Israel Selects Elbit Systems’ Iron Fist Light Decoupled Active Protection System
9.11  ECI and KPGCo Selected by CL Tel to Modernize Its Network Infrastructure in Iowa
9.12  Convizit Wins Pitango’s $1 Million Startup Competition

10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Composite State of the Economy Index for July 2019 Increases by 0.2%
10.2  Unemployment Down Sharply in Israel
10.3  Israel’s Budget Deficit Remains at Highest Level Since 2014
10.4  Hi-Tech Sector Employment in Israel Surpasses 300,000 Workers
10.5  Israeli Startups Raised Over $350 Million in August
10.6  August Tourism to Israel Reaches New Record

11:  IN DEPTH

11.1  ISRAEL: Fitch Affirms Israel at ‘A+’; Outlook Stable
11.2  LEBANON: Lebanon Ratings Affirmed At ‘B-/B’; Outlook Remains Negative
11.3  JORDAN: Cash-Strapped Jordan Imposes New Taxes; Public Anger Ensues
11.4  IRAQ: Iraq Ratings Affirmed At ‘B-/B’; Outlook Stable
11.5  GCC: VAT in Gulf Arab States – Balancing Domestic, Regional and International Interests
11.6  OMAN: Challenges to Maximizing Renewables in Oman’s Energy Mix
11.7  EGYPT: Egypt Takes Another Step Toward China
11.8  EGYPT: Egypt Declares Water Emergency as Precaution
11.9  MOROCCO: King Mohammed VI Announces Plan to Promote Social & Economic Equality
11.10  TURKEY: Environmental Problems Provoke Protests on All Fronts in Turkey

1:  ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel & South Korea Finalize Free Trade Agreement in Jerusalem

Israel and South Korea signed a Free Trade Agreement on 21 August, one which is expected to greatly reduce the cost of cars and electronics imported from Seoul.  Israeli Economy Minister Eli Cohen and visiting South Korean Trade Minister Yoo Myung-hee announced the finalization of the accord at a ceremony in Jerusalem.  The accord will also reduce or eliminate tariffs on Israeli exports to South Korea on goods such as wines, cosmetics, metals and industrial machinery.  Afterwards, the two met with Prime Minister Benjamin Netanyahu, who hailed the deal, noting that it is Israel’s first Free Trade Agreement with an Asian economy.  In 2018, trade between Israel and South Korea amounted to approximately $2.5 billion, an increase of almost 15% over 2017.

This agreement with South Korea marks a dramatic change from years past when Seoul was hesitant about cultivating close commercial ties with Israel, out of concern that it would harm their trade relations with the far bigger market with Arab and Muslim countries.  One diplomatic official said that this attitude began to change when Israeli trade ties began flourishing over the last decade with China and Japan, and when it became an open secret that Arabian Gulf countries were cooperating with Israel on a variety of levels.  (Various 21.08)

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1.2  Israel & US Sign MOU to Strengthen Cooperation Between MASHAV and USAID

On 22 August, Israeli Minister of Foreign Affairs Katz and United States Agency for International Development (USAID) Administrator Green signed a Memorandum of Understanding (MOU) between USAID and Israel’s Agency for International Development Cooperation (MASHAV) in Jerusalem.  The agreement seeks to strengthen cooperation between the two countries and leverage expertise on a variety of global development efforts.  The MOU is a groundbreaking step that will elevate Israel’s standing in the world and broaden Israel-US partnership on mutual development priorities in third-party countries.  (MFA 21.08)

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1.3  Honduras Trade Delegation to Visit Israel & Mark Recognition of Jerusalem as Israel’s Capital

Honduran President Juan Orlando Hernández and his wife will conduct a visit to Israel next week to inaugurate a trade office, which will hold diplomatic status, in Jerusalem.  Israel welcomes the opening of this trade office and sees it as an important step towards the future move of the Honduran Embassy to Jerusalem, and the opening of the Israeli Embassy in the Honduran capital.  Moreover, this step reflects the close relations between our two countries, and the warm friendship between our two peoples.

President Hernández is expected to meet with Prime Minister Netanyahu at the Prime Minister’s Residence in Jerusalem.  The two leaders will inaugurate the new diplomatic trade office in Jerusalem.  During the course of the visit, President Hernández will visit Israel’s shipyards and is expected to participate in a high-level economic meeting with leading members of Israel’s business community.  This meeting will take place with the goal of advancing investment and commercial ties between our two countries.  This important visit will serve to strengthen relations between Israel and Honduras, and advance cooperation in a diverse range of fields.  (MFA 21.08)

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1.4  Prime Minister of Ethiopia Visits Israel

On 1 September, Israel welcomed the visit of the Ethiopian Prime Minister, to which it attaches great importance as it will contribute to the enhancement of the relationship and strengthen the cooperation between the two countries.  Prime Minister Netanyahu received Ethiopian Prime Minister Dr. Ahmed upon his arrival with a guard of honor at the Prime Minister’s Office in Jerusalem.  During the course of the visit, the Ethiopian Prime Minister met with President Reuven Rivlin, visited Yad Vashem and toured the National Cyber Directorate.

Ethiopia has a close and friendly relationship with Israel, cooperating in many fields, including agriculture, water and irrigation, health, education, science, technology and innovation.  During the visit the two sides will discuss strengthening bilateral cooperation in the fields of security, agriculture and technology, with special emphasis on cyber.  The Ethiopian Prime Minister’s visit to Israel is further evidence of PM Netanyahu’s ‘Return to Africa’ policy and the common desire of both countries to strengthen the bonds of friendship and deepen bilateral cooperation.  (MFA 30.08)

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2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Rookout Raises $8 Million in Series A Funding to Set New Standard in Software Observability

Rookout has raised $8 million in a Series A funding round that was led by Cisco Investments, who made a strategic investment alongside existing backers TLV Partners and Emerge.  Additionally, industry leaders including Nat Friedman, CEO of GitHub, John Kodumal, CTO and Cofounder of LaunchDarkly, and Raymond Colletti, VP of Revenue at Codecov, added their support. Rookout will use the funding to continue its commercial growth while expanding its core offering to cover additional observability use cases and languages. Coinciding with this news, the company also announced a free tier option.

Since exiting stealth just over a year ago, Rookout’s code-level data collection has defined a new category of observability software that decouples data from code, making understanding and debugging code easier and massively faster.  Companies using Rookout have seen the time it takes to make a single observation reduced from hours to a few seconds, minimizing the chore aspects of debugging, providing deep code insights and freeing up vital R&D resources to focus on features.

Tel Aviv’s Rookout allows software engineers to set “non-breaking breakpoints” with a single click, collecting live code execution data on-the-fly, without stopping the code or requiring any redeployment.  Rookout’s flexibility enables it to be used in the most modern infrastructures, including containerized code on Kubernetes clusters, as well as traditional legacy systems; it’s also the first and only solution for debugging the code of live serverless functions in production.  In the coming year, the company plans to add additional programming languages alongside its existing support for JVM-based languages like Java and Kotlin, as well as NodeJS and Python.  (Rookout 07.08)

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2.2  Salesforce Signs Definitive Agreement to Acquire ClickSoftware

San Francisco’s Salesforce signed a definitive agreement to acquire ClickSoftware, a leader in field service management solutions.  The addition of ClickSoftware will enhance Salesforce Service Cloud’s leadership as the #1 service platform, empowering every service employee from the contact center to the field to deliver more connected, intelligent customer service.

ClickSoftware enables companies to intelligently schedule and optimize field service work.  Salesforce Field Service Lightning, built on Service Cloud, harnesses the latest in dispatching, mobile workforce empowerment and IoT technologies to empower companies to connect their entire service workforce on a single, centralized platform.  With the combined capabilities of Field Service Lightning and ClickSoftware, Salesforce will be positioned to lead the way to the future of field service.

Salesforce introduced Field Service Lightning in 2016 to empower the mobile workforce with a 360-degree view of the customer, predictive insights and an offline-first mobile app.  ClickSoftware and Salesforce have partnered since Field Service Lightning launched to deliver proactive, intelligent field service.  With ClickSoftware and Field Service Lightning, if a mobile employee gets delayed by traffic, a dispatcher can quickly route another field technician to the job so the customer’s appointment does not get delayed.  These interactions are then automatically updated across the entire Salesforce platform so everyone — customers, sales, customer service and field service — has complete visibility.

Petah Tikva’s ClickSoftware is the leading provider of field service optimization solutions that help you improve the efficiency and effectiveness of your field service operations.  (Salesforce 07.08)

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2.3  BIRD Partners Take Renewable Energy Microgrids Into the AI & Machine Learning Age

Portland, Maine’s Introspective Systems has finalized its contract with the Binational Research and Development Foundation (BIRD US-Israel Foundation) to begin a commercialization project with its Israel-based partner, Brightmerge.  The companies will leverage their areas of expertise to create an end to end AI-based data solution for Microgrid design, development, and operations.  Brightmerge and Introspective Systems have the industry knowledge and technological know-how to provide seamless solutions that bring entire economies into the digital age of energy.  Brightmerge currently has several premium, paid pilots with large clients that understand the potential of the microgrid revolution.  These clients wish to move now instead of waiting and keep losing money.  The project is expected to reach alpha stage of development by Q2/20 with first production versions ready at the beginning of 2021.

Introspective Systems is the developer of xGraph, a breakthrough software platform that enables developers to build systems designed for complex software ecosystems.  xGraph is AI-enabled for systems that require autonomous and collaborative decision-making to meet the challenges of complexity in environments including healthcare, IoT, energy and science.

Modiin’s Brightmerge develops an online cloud-based expert system that accurately predicts a microgrid system’s energy and financial performance.  The platform integrates data sets in one platform and automates decision making using ranking and optimization algorithms to choose the best components, suppliers, and contractors for each project.  The company opened a fund round to complete the product and drive first sales.  (Introspective Systems 08.08)

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2.4  Tricentis Acquisition Extends Selenium and Appium Test Automation in the Cloud

Mountain View, California’s Tricentis has acquired TestProject, a first-of-its-kind community-powered test automation platform designed for Agile teams.  As part of its commitment to TestProject, Tricentis will be investing in research and development to advance the product, extend the community, and help testers master best practices for web, Android and iOS test automation.

TestProject is built on the leading open source test automation tools: Selenium and Appium.  It supports all major operating systems, and enables any software team to test web, Android and iOS apps using a “low-code/no-code” approach.  With the community-driven approach, automation building blocks are shared with the entire community – reducing the time required to construct robust test automation.  AI-based matching automatically analyzes the application under test and recommends add-ons that will enhance the tests.

Founded in 2015, Petah Tikva’s TestProject is the world’s first cloud-based, community testing platform. TestProject makes it easier for testers to do their jobs quickly, and to collaborate using popular open source frameworks (e.g., Selenium and Appium) to ensure quality with speed.  By fostering a collaborative community that can come together — as individuals and in teams — TestProject is shaping the future of software testing.  (Tricentis 08.08)

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2.5  Rail is Going Global in India With the Partnership of ConfirmTKT and Save A Train

ConfirmTKT, the largest independent train tickets seller in India, just launched European train ticketing solution in collaboration with Save A Train.  ConfirmTKT is probably the largest OTA to date that is trying to grab this major market, and this launch is only the beginning as Save A Train offerings is planned to extend later this year to North America / China / Russia and more.  Through this partnership, ConfirmTKT aims to expand and strengthen its foothold in the lucrative European market.

Ramat HaSharon’s Save a Train is an innovative Railtech startup developing and implementing a series of rail tech travel products & solutions that enable competitive online trains tickets booking, dynamic pricing for train tickets and advanced revenue systems and BI for railway operators.  (Save A Train 08.08)

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2.6  WSC Sports Raises $23 Million in Series C Funding

WSC Sports has raised $23 million in Series C funding, bringing the company’s total funding to $39 million.  The new capital will be used to further expand WSC’s growth across new sports, products and geographic regions.  This funding round was led by O.G. Tech Ventures – the international tech investment arm of Ofer Global, along with NTT DOCOMO Ventures, HBSE Ventures – the venture arm of Harris Blitzer Sports & Entertainment, Maor Investments, ISF and Go4it Capital.

WSC Sports’ award-winning AI technology generates personalized and automatic sports video content in near real-time. WSC has innovated the way sports and media owners create and distribute short-form video highlights at scale and works with tier-1 clients including NBA, Bundesliga, PGA Tour, US Open, Bleacher Report, Discovery, MLS, FIBA, Cricket Australia, WarnerMedia and many more. In 2018, WSC Sports analyzed more than 17,000 sporting events and produced more than 850,000 videos for its customers.

Existing investors also joined the funding round, including Intel Capital, Detroit Venture Partners (Dan Gilbert’s venture capital firm), Elysian Park Ventures, WISE Ventures (Wilf family, owners of the Minnesota Vikings), 2BAngels and iAngels. The funding comes after a year of explosive growth for WSC Sports – doubling its customer base and revenue year over year for the last 3 years, growing to more than 100 employees worldwide and expanding its global footprint with offices in New York and Sydney.

Givatayim’s WSC Sports‘ platform generates personalized sports videos for every platform and every sports fan – automatically and in real-time.  Currently being used by leading media rights owners such as WarnerMedia, NBA, MLS, US Open, PGA Tour, Bundesliga and others, WSC Sports’ platform utilizes advanced AI capabilities to analyze live sports broadcasts, identify each and every event that occurs in the game, create customized short-form video content, and publish to any digital destination.  This enables partners to instantly generate and distribute professionally edited personalized clips and videos on a large scale to engage audiences and maximize video monetization opportunities.  (WSC Sports 08.08)

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2.7  American Airlines to Launch Tel Aviv – Dallas Flights

American Airlines announced that it will be launching a new Tel Aviv – Dallas-Fort Worth (DFW) route.  The service will include three weekly flights, beginning on 9 September 2020.  American Airlines will use Boeing 787-9s for these flights.  American Airlines flew to Israel until 2015 when it halted its Tel Aviv – Philadelphia route.  The carrier claimed the cancellation was for financial reasons following a drop in tourism to Israel.  DFW is the airlines biggest hub and it will offer passengers connection services to 33 US cities.  (AA08.08)

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2.8  TriEye Raises $2 Million More for Cameras That Can See in the Dark

TriEye expanded its series A round from $17 million to $19 million with an investment from Porsche.  The newfound funds, which bring the startup’s total raised to date to $22 million, will accelerate ongoing product development, operations, and hiring.  TriEye also provides software and AI-powered remote sensing platforms it says are based on well over a decade of nano-photonics research, and that were developed by a team of experts in device physics, process design, electro-optics and deep learning.  The company asserts the full-stack approach positions it well to tackle verticals beyond automotive, like mobile, industrial, security, and optical inspection.

TriEye’s backers include Intel Capital, cybersecurity entrepreneur Marius Nacht, and Grove Ventures.  It competes to an extent with sensor suppliers such as Oregon-based Flir, which manufactures thermal vision cameras embedded with machine learning algorithms, and Boston-based startup WaveSense, which is developing ground-penetrating radars (GPR) for autonomous cars.

Tel Aviv’s TriEye’s Raven is an HD shortwave infrared (SWIR) camera solving the low-visibility challenge for ADAS and AV.  TriEye’s life-saving technology is based on a decade of nanophotonics research, enabling affordable mass production of SWIR sensing on a CMOS-based sensor. SWIR enables vision under adverse weather and night-time conditions, mounting behind the windshield and seamless integration with existing vision AI algorithms (i.e. Object Recognition).  TriEye’s CMOS-based design enables HD resolution, low power consumption, small form factor and 1,000x lower cost compared to current technologies.  (TriEye 21.08)

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2.9  Sino-Israel Center to Launch at Bar-Ilan University Nanotech Institute

Israel’s Bar-Ilan University Institute of Nanotechnology and Advanced Materials (BINA) and the Chinese Academy of Sciences (CAS) signed a joint agreement in Beijing on 20 August to establish a Chinese Center of Excellence within Israel’s Bar-Ilan University.  The Chinese National Academy of Sciences will set up the center, which will include a research lab focused on nanomedicine, 2D materials engineering, and graphene production.  The center will host scientists from additional research institutes in Israel.  The signing ceremony took place at the Chinese National Nanotechnology and Nanoscience Institute (NCNST) in the presence of diplomats from the Israeli Embassy in Beijing.

The main goal of the joint research laboratory, according to the agreement, will be to integrate teamwork between Chinese and Israeli researchers and industrialists from both countries.  This will facilitate the transfer of theoretical research, specializing in nano-medical materials and graphene into products, readily available to consumers.  (NoCamels 21.08)

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2.10  Revuze Attracts Investment from the SAP.iO Fund

Revuze announced that the SAP.iO Fund made an investment in the company, as part of a funding round that included existing and new investors.  The SAP.iO Fund joins other well-known investors in Revuze, including Nielsen, NPD, TIC Group and Prytek.  The funding comes on the heels of fast international adoption of the Revuze solution across multiple industries and geographies, from China to US and Europe.

Revuze’s artificial intelligence solution is the first in the market to transform how brands consume customer experience (CX) insights.  While other solutions are typically requiring experts and manual labor to deliver insights, while being limited to specific feedback channels like Social Media or Surveys, Revuze allows any role in the organization to gain deep insights from any data sources and without any manual labor or experts involved.  With Revuze organizations distribute decision making, making better decisions, faster across the board.  Revuze recently announced that Dolby, the leader in audio and video technologies, is leveraging Revuze to understand Mobile consumer preferences when consuming audio and video.

Backed by investors such as the SAP.iO Fund, Nielsen and NPD, TIC Group and Prytek, Netanya’s Revuze transforms how brands consume CX insights so they can make better decisions, faster across every role in the organization.  While other solutions rely heavily on experts and manual labor, the Revuze solution is up and running without professional resources.  (Revuze 20.08)

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2.11  BlackBerry to Close Israel Development Center

Globes reported that Waterloo, Ontario’s BlackBerry is closing down its Israel development center with 40 employees in Petah Tikva.  BlackBerry founded its development activity in Israel in 2015 on the basis of WatchDox, a startup that it acquired for $100 million.  A staff of 20 employees in North America who have worked on WatchDox’s product simultaneously with employees in Israel will continue to maintain the product.

WatchDox was sold to BlackBerry after the Canadian company lost its momentum in a mobile telephony market now dominated by Google Android and Apple.  The steep decline in its revenue caused BlackBerry to shed a third of its staff worldwide in 2012.  Since BlackBerry’s mobile operating systems were always known for their high level of security, the company decided to switch its focus from sales of telephones to security products and services.  BlackBerry completely closed down its telephone business in 2016 and laid off 200 employees worldwide.  Since that time, part of BlackBerry’s business has prospered, while other parts have stagnated and been closed down.  (Globes 25.08)

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2.12  El Al to Launch Routes to Dublin and Dusseldorf

El Al Israel Airlines announced that it is launching two new routes, from Tel Aviv to Dublin and to Dusseldorf.  The Israeli carrier will offer three weekly flights each to the Irish capital and German city starting in the late spring of 2020.  The Tel Aviv – Dublin flights will begin from May 26 2020 on Sundays, Tuesdays and Thursdays on Boeing 737s.  The Dusseldorf flights begin June 1 on Mondays, Wednesdays and Fridays.  Tickets for the new routes went on sale on 4 September.

In the last quarter, El Al commenced new routes to San Francisco, Las Vegas and Manchester in addition to a new route to Nice in the first quarter.  They have also announced new routes to Tokyo and Chicago, which will begin operating in March 2020.  (El Al 28.08)

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2.13  McDonald’s Israel Expands Vegan Burgers to 40 Branches

McDonald’s Israel has expanded its pilot sales of vegan burgers to 40 branches.  The vegan products, called Big Vegan, is produced by Osem-Nestle subsidiary Tivoll.  It was launched two months ago, and has hitherto been sold at only 18 of the chain’s 186 branches in Israel, most of them in the greater Tel Aviv area.  McDonald’s is also marketing a double-size vegan burger.

In addition to physical expansion, McDonald’s Israel is also expanding its geographic deployment by opening new branches.  Opening of a new branch in the Zim Urban center in Arad, a branch in the Ispro Center in Ness Ziona, a kosher branch in the Holon Mall and a branch in Afula will be completed this month.  The chain will open 10 new branches by the end of the year, including the two new restaurants at Ben Gurion Airport.

The popular global trend is pushing many fast food chains to look for meat substitutes for their products.  Burger King, McDonald’s competitor, has already begun marketing a vegan burger made by Impossible Foods at its branches in the US, and is gradually expanding this line.  Burger King Israel, however, does not yet offer a vegan burger.  Meatless hamburgers made by Beyond Meat have been sold in recent months at restaurant chains in Israel, such as Moses, BBB, and SUSU & Sons, as well as in natural food stores, where they are relatively expensive, with three hamburgers being sold for NIS 54.  (Globes 27.08)

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2.14  Axonius Raises $20 Million More to Support Rapid Market Success

Axonius has raised $20 million in Series B funding, led by new investor OpenView.  Existing investors Bessemer Venture Partners, YL Ventures, Vertex, WTI and Emerge also participated in the round, bringing the company’s total funding to $37 million to date.

This funding enables Axonius to continue to accelerate demand for its Cybersecurity Asset Management Platform, the only asset management solution on the market today that leverages existing security investments to gain unmatched visibility into an organization’s asset inventory.  By seamlessly connecting to over 135 security and management solutions, Axonius uncovers solution coverage gaps and automatically validates and enforces security policies.  The funding will also be used to drive customer acquisition and expedite product innovation following rapid growth and industry validation.  Earlier this year, Axonius was named RSA Conference’s “Most Innovative Startup 2019” for solving the asset management challenge, the security industry’s most fundamental, long-standing problem.  While asset management has been a nagging, decades-old challenge, the simple, agentless approach by Axonius is being rapidly embraced by organizations worldwide.

Tel Aviv’s Axonius is the cybersecurity asset management platform that gives organizations a comprehensive asset inventory, uncovers security solution coverage gaps, and automatically validates and enforces security policies.  Axonius is deployed in minutes, improving cyber hygiene immediately.  (Axonius 27.08)

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2.15  Music Education Startup JoyTunes Raises $25 Million

JoyTunes has completed a $25 million funding round.  The round was led by Tel Aviv-based venture capital firm Qumra Capital with participation from existing investor New York-based venture capital and private equity firm Insight Venture Partners.  The funding round brings JoyTunes’ total funding raised to date to $43 million, the company said.

The company intends to use the new round of funding to expand its product offering rather than expanding its team, Joytunes founder Yigal Kaminka said in a Monday interview with Calcalist. The funds will be used to advance the company and not to buy back employee shares, he added.

Founded in 2011, Tel Aviv’s JoyTunes develops apps that teach users how to play musical instruments.  Simply Piano, JoyTunes’ signature app, shows users which piano keys to press to play the song of their choice.  Through the microphone on the user’s phone or tablet, the company’s technology is able to recognize in real-time which sounds are played.  Simply Piano has 25 courses for different skill levels and hundreds of different songs spanning multiple genres.  The app has been downloaded more than 10 million times and JoyTunes now has more than 200,000 paying subscribers, surpassing $20 million in annual revenues.  (JoyTunes 28.08)

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2.16  Intel Lays Cornerstone for Mobileye’s New Global Development Center in Jerusalem

Mobileye President and CEO Prof. Shashua and Israeli Prime Minister Netanyahu laid the cornerstone for Mobileye’s new global development center in Jerusalem on 27 August.   They were joined by Israel Economy Minister Cohen and Jerusalem Mayor Lion.  When complete, the eight-story complex will span 50,000 square meters above ground and 78,000 square meters below ground and provide work space for as many as 2,700 employees. It is scheduled to open in 2022.  Intel, a leader in the semiconductor industry, is shaping the data-centric future with computing and communications technology that is the foundation of the world’s innovations.

Mobileye, a developer of cutting-edge autonomous driving tech and advanced driver assistance systems, was acquired by chipmaker giant Intel in March 2017 for $15.3 billion, marking the largest acquisition of an Israeli company to date.  Chinese tech giant Baidu announced it was teaming with Intel to integrate Jerusalem-based Mobileye tech into its autonomous vehicle platform in July 2018.  In October 2018, German auto giant Volkswagen joined forces with Mobileye to deploy Israel’s first driverless, electric ride-sharing service.  (Intel 29.08)

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2.17  Israel’s F2 Capital is Raising $75 Million to Invest in Homegrown Startups

Israel’s first pre-seed technology accelerator, F2 Capital, is raising a $75 million fund to invest in Israel-based startups, according to an SEC-filing.  So far the accelerator has raised around $55 million for the fund.  F2 Capital was spun out of Genesis Partners, another Israeli venture firm, in 2016.  F2 Capital took with them Genesis Partners’ pre-seed program: The Junction.  The firm, taking on the role of accelerator as well, offers guidance, networks, and $100,000 in capital to each startup that joins the program.  It has coached over 5,000 alumni and over $500 million has been raised by the startups born out of it.  F2 Capital’s business partners include Deloitte, Facebook, Amazon Web Services (AWS) and Google Cloud Platform.  F2 Capital’s fund raising shows that despite late-stage sector activity in Tel Aviv, early seeds are also being planted.  (F2 Capital 27.08)

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2.18  Yissum Wins Bid to Host Largest International Technology Transfer Conference in 2019

Yissum announced its selection as the host of AUTM ASIA 2019, the largest international conference for technology transfer experts and related professionals.  The conference, which will be co-hosted by the Israel Technology Transfer Network (ITTN) will take place in Jerusalem, Israel on 4 – 7 November 2019, bringing together hundreds of academics, government and industry experts from across the globe to discuss the most important and current issues in Technology Transfer.

The announcement of the conference coincides with the publication of ITTN’s 2018 annual report showing the collective impact of the Technology Transfer sector in Israel.  In 2018, Israeli tech transfer organizations (TTOs) evaluated 1,000 new innovations and filed over 620 new patents.  In 2018, ITTN member organizations, which include universities, research institutions, hospitals, and HMOs, launched 74 spinoff companies, produced over 1,000 sponsored research and consulting agreements and hundreds of new license agreements.  The most active sectors for Israeli TTO’s were pharma and biotech, accounting for some 40% of activity, followed by MedTech.

Yissum is the technology transfer company of The Hebrew University of Jerusalem.  Founded in 1964, it serves as a bridge between cutting-edge academic research and a global community of entrepreneurs, investors, and industry.  Yissum’s mission is to benefit society by converting extraordinary innovations and transformational technologies into commercial solutions that address our most urgent global challenges.  (Yissum 03.09)

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3:  REGIONAL PRIVATE SECTOR NEWS

3.1  The Rise of Venture Capital Funding in Jordan

Much of the Arab Middle East’s VC investment growth has come from Jordan.  The Hashemite Kingdom, which represents roughly 2% of the region’s population, accounted for 8% of startup investments last year — registering an increase that was second only to Egypt.  Amman’s Oasis500 fund was among the most active investors with between seven and eight disclosed deals in 2018 alone.

It has been observed that none of this growth would be possible without Jordan’s vibrant entrepreneurial ecosystem.  When a team worked with the American University of Beirut to design a Growth Readiness Program for small- and medium-sized enterprises, they found no shortage of firms to compete for a spot in the challenging, 12-week course.  Still, despite a robust effort to reach them through outreach programs and countrywide boot-camps, many of Jordan’s best ideas may not get on the radar of its more prominent funds.

USAID JCP, working with the Companies Control Department at Jordan’s Ministry of Industry, Trade & Supply, has been working hard to put in place new regulations to attract venture capital investors to the country.  Those efforts reached a peak on 27 December 2018, when the country’s official Gazette published new regulations operationalizing the 2018 Venture Capital Law.  USAID assisted in developing the new law, its support pushing through the regulations.  The new regulations now allow the establishment of VC funds in Jordan, bringing them in line with international best practice in governance, taxation, and a full range of support services.  One of the primary objectives of the new regulations is to make that framework more familiar to international fund managers, lawyers, and other service providers who work with venture capital funds — thus lowering barriers to entry in the Jordan market.  (MAGNiTT 29.08)

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3.2  SINC Raises $250,000 in a Pre-Seed Funding Round

SINC, a Bahrain based Software-as-a-Service (SaaS) mobile platform that simplifies the management of a mobile workforce by operating timesheets, location tracking, staff scheduling, and job tracking, has raised $250,000 in a pre-seed funding round led by Dubai Angel Investors and other prominent regional angel investors.  The funds will be used in the short-term to expand SINC’s development team and build out the job tracking functionalities that small businesses in North America desperately need.

One of the main problems facing blue-collar small and medium sized enterprises (SMEs) is that with labor costs growing exponentially compared to revenue, the accurate analysis of such data can be difficult and traditional timesheets may result in employers overpaying staff.  Overcoming such issues, the SINC mobile app or web platform improves the reporting on staff tardiness and no-shows, as well as improving productivity and accountability with job costing analysis capabilities being placed at employer’s fingertips.  Additionally, the application reduces payroll administration time by 98% and reduces payroll costs by 10-15%.  SINC is built with mobility and convenience in mind as the mobile app allows human resources management and staff to undertake their in-office functions on-the-go.

SINC has ambitious targets, looking to initially expand its presence and customer base across North America, targeting a sizeable portion of the estimated 1.5 million small blue-collar businesses in that geography.  The company then seeks to develop tailor-made solutions for the ever-growing and unique labor environment in the MENA region.  (SINC 28.08)

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3.3  The Importance of Fashion to the UAE’s Retail Market

The value of clothing sales in the UAE amounted to $12.3 billion in 2018, registering an annual growth rate of about 4.8%, according to new analysis released by Dubai Chamber of Commerce and Industry.  The research also said the apparel retail sector is expected to see stronger performance over the 2019-2023 period.  The analysis, based on recent data from Euromonitor International, described the apparel market as a major segment and key contributor to the UAE’s retail sector.  It said global fashion brands still view the country as a preferred entry point for establishing their presence in the MENA region.

The analysis identified menswear as the top-performing category with the segment accounting for $6.2 billion worth of sales last year (53%), followed by womenswear with 34% and children’s apparel (7%).  It added that the outlook for UAE apparel sales is expected to improve over the next five years as economic conditions become more favorable and consumer confidence strengthens.  The research also said that online retail sales are witnessing strong growth, a trend expected to put pressure on prices.

Menswear is expected to register a compound annual growth rate (CAGR) of about 3.8% between 2019 and 2023 to reach $7.8 billion in 2023 while womenswear is expected to see a CAGR of 4.9% in sales over the same period to reach $5.2 billion in 2023, largely driven by stable footfall and an increasing in spend on modest fashion.  Meanwhile, children’s apparel sales are projected to register a CAGR of 3.7% over the 2019-2023 period to reach $1 billion by 2023.  (AB 23.08)

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3.4  Five UAE Fintech Start-Ups Graduate from Emirates NBD’s Program

Five financial technology (FinTech) start-ups have become the first to graduate from a Sandbox testing platform.  The Sandbox program is run by Emirates NDB, in collaboration with the largest financial technology accelerator in the Middle East, Africa and South Asia, the DIFC FinTech Hive.  The two financial institutions have been working together to help startups integrate their technologies with an API (application programming interface) sandbox set up by Emirates NDB.  These APIs allow developers to access over 200 of Emirates NDB’s APIs and 500 other endpoints covering retail, corporate and SME customers, along with over five million simulated customer transactions.  The five startups that graduated were:

-Monimove, a digital trade finance firm

-Norbloc, a shared KYC (know your customer) system using blockchain

-Gamechanger, a keyboard banking system

-Bankbuddy, a chatbot for the finance industry

-Leap FinTech, a digital onboarding program for SMEs

The API Sandbox, launched by Emirates NBD Future Lab in 2018, is a first in the region, marking a significant landmark in the bank’s AED1 billion digital transformation program.  (Emirates NDB 22.08)

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3.5  UAE’s Group 42 Invests $65 Million in Chinese eCommerce Platform Jollychic

Jollychic, a Chinese cross-border ecommerce platform focused on the Middle East, has secured $65 million from UAE tech giant Group 42 in a series C+ funding round.  Group 42, which is behind several national strategic tech projects in the region, considered Jollychic’s potential and position in the Middle East and its vision of building an ecommerce-based internet ecosystem for the investment.  Jollychic said it plans to use the fresh funds to expand its segmentation, improve its logistics system, and develop third-party payment options and e-wallets.  The funding will also help the company further strengthen its localization efforts.

Its payment platform, JollyPay, recently received relevant licenses in the UAE and online payment service qualification in Saudi Arabia.  The development will help Jollychic with its goal to build an ecommerce ecology and “no cash society” in the Middle East.  (TechInAsia 08.08)

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3.6  Saudi Arabia’s Nana Direct Raises $6.6 Million for Expansion

Middle East Venture Partners (MEVP) and Impact46 have co-led an investment round in Riyadh based Nana Direct, an online grocery platform serving 13 cities across the Saudi kingdom.  Other investors in the round, which raised $6.6 million, included Watar Partners, Saudi Venture Capital (SVC) Company and Wamda Capital.

Nana, a mobile-only company, said it aiming to transform the traditional supermarket experience and gain traction all over the Gulf kingdom.  It added that it is in advanced stages of onboarding new stores and supermarkets to offer greater availability to users.  It will use the new capital to accelerate its growth plans, continue to build its team and further develop vendor relations.  (AB 20.08)

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3.7  NowPay Closes $600,000 Seed Round from Silicon Valley’s Endure Capital & 500 Startups

NowPay, a Cairo-based fintech startup has raised $600,000 in a SEED funding round. Investors included Silicon Valley’s Endure Capital and 500 Startups.  Founded in 2018, NowPay commits itself to helping employees get their salaries in advance whenever they apply for it during the month.  A simple process that requires the employees to log into NowPay’s application through their account and enter the advance amount which they require.  The account by this point will already be verified by the employer himself and the employees would be able to get their requested amount within a day or two.  In order to rescue employees from financial stress and other relevant worries, it is essential that the employees feel that they can get their salaries whenever they are out of cash.  The scheme that defines NowPay can help employees better manage their budgets and overcome cash flow problems thereby avoid any unnecessary tensions.

The application offers additional features such as allowing the user to see their salary status, salary details, account balance and maximum load that they can request, on the application.  NowPay is at the forefront of revolutionizing the corporate culture in Egypt that seeks to harmonize the interoperability of the employers and the employees.  (NowPay 29.08)

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3.8  Egypt & Bombardier Agree to Build Two Monorails

On 5 August, Egypt’s Ministry of Transportation signed a contract with Quebec’s Bombardier Transportation to build two monorails, linking the Sixth of October City with Giza, and Nasr City with the New Administrative Capital.  Bombardier was selected to establish a €3 billion monorail project in Egypt in May.  Bombardier will deliver the project in partnership with two Egyptian companies Orascom Construction and the Arab Contractors.  (DNE 05.08)

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3.9  Chefaa Closes Significant Seed Funding Round

E-health startup Chefaa has closed a six-figure US dollar seed funding round from Flat6Labs and 500 Startups as it plans geographic expansion and the rollout of more products.  Chefaa received pre-seed funding from Flat6labs Cairo in 2018, as well as a social impact grant from the StartEgypt initiative, and has now closed its seed round.  The undisclosed investment, which Disrupt Africa has been told is a six-figure US dollar amount, comes from Flat6Labs and 500 Startups, and will be used to help the startup expand both geographically and in terms of its product offering.

They currently serve nine Egyptian cities, including Delta and Upper Egypt, and plan to cover Egypt totally by the end of this year.  They will start expansion plans to the Gulf Cooperation Council (GCC) region by the end of this year as well.  Chefaa is free to use for patients, with the startup charging pharmacies a commission fee on transactions and a monthly subscription fee in case of scheduled monthly packages for chronic patients.  It also charges monthly subscription fees to medical and pharmaceutical organizations in return for access to insights.

Founded in May 2017, Cairo’s Chefaa helps patients make scheduled medicine orders in a bid to tackle challenges with accessing medication in a timely fashion.  Chefaa is a vision-driven company to help patients order/schedule & have medicine delivered from nearest pharmacy according to GPS location with the easiest user trip.  Locate medicine in a click by their real-time search engine.  Their services extend to non-pharmaceuticals via their e-commerce Marketplace to be one-stop shop, using AI technology.  Chefaa is HIPAA compliant.  (Disrupt Africa 18.08)

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3.10  Egypt’s Harmonica Acquired by Dallas’ Match Group

Egypt-based Harmonica, a seed-stage startup that offers mobile matchmaking with a large presence in the Middle East and other countries with a large Muslim population, has been acquired by international dating giant Match Group.  The Dallas, Texas based acquirer is the holding company of Tinder, OkCupid and Match.com, among others.  After the acquisition, 12 full-time employees from Harmonica are joining Match Group to help it serve the Muslim demographic globally.

Harmonica was founded in April 2017 by four Egyptian entrepreneurs who wanted to use technology to enhance the matchmaking process in a traditionally acceptable manner.  The idea came out of personal experience, and the belief that technology could improve this process and facilitate meaningful relationships, as well as empower singles to meet their future life partners.

Match group with a market cap of over $20 billion, is ranked from the world’s top 20 digital companies according to Forbes.  The investment in Harmonica follows Match Group’s April 2019 reorganization of its international leadership team to double down on the market opportunities for products in Asia, which includes many countries that are predominantly Muslim.  Harmonica will remain headquartered in Cairo; this will be Match Group’s first office in the Middle East.  (MAGNiTT 07.08)

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3.11  Trella Joins Y Combinator’s S19 Batch

Trella announced that it has joined Y Combinator’s S19 batch.  Joining the network of the globe’s top startups further validates Trella’s commitment to digitizing trucking and offering a grade-A end-to-end solutions to both shippers and carriers in the trucking industry.  Mountain View, California’s YC opens the door for invaluable opportunities for synergies and collaboration with fellow YC companies and alumni, as well as unparalleled access to YC’s network of investors, mentors, and partners

Addressing an enormous pain-point in a deeply fragmented industry plagued by asset under-utilization and a lack of transparency, consistency, and reliability, Trella’s tech platform has already piqued the interests of regional and global investors and businesses.  Earlier this year, Trella raised $600k+ in a pre-seed funding round led by Algebra Ventures, with participation from strategic investors, global VCs, and notable angel investors including Esther Dyson and Jambu Palaniappan.

Cairo’s Trella is a platform that connects shippers to carriers.  Trella offers services and technology to empower drivers, improve their efficiency, boost their earnings and utilization as well as creating job opportunities.  Trella aims to reduce costs for shippers, introduce a transparent pricing structure and provide them with a more reliable source of carriers. All the while allowing them to track their shipments in real-time as well as report key insights on their transportation trends and performance.  (Trella 18.08)

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3.12  Egypt’s Wholesale and Retail Food Market in 2019

The “Wholesale and Retail Food in Egypt 2019” report has been added to ResearchAndMarkets.com‘s offering.  The wholesale and retail of food in Egypt has been under pressure since the floating of the Egyptian pound in 2016 which drove up inflation and put pressure on import prices.  This was coupled with the introduction of value-added tax and the withdrawal of several fuel and food subsidies.  Over-crowding, lack of parking facilities and out-of-stock situations are all commonplace experiences for shoppers.

However, there is long-term growth potential given that on average Egyptians spend 35% of their income on food, and more than 40% of the population are under 30, the generation widely regarded as most likely to understand the benefits of the one-stop approach to shopping.

Egypt’s food retail sector is fragmented and dominated by small, traditional, grocery retailers, whose 115,000 outlets account for 98% of the nearly 119,000 stores in the country and 80% of sales.  The growing formal sector of modern supermarkets, hypermarkets and convenience stores makes up the remaining 2% comprising 1,500 outlets and representing around 20% of total sales.  It is dominated by five major retailers. The modern grocery retail market is forecast to double between 2017 and 2021.  Among leading retail outlets, UAE-based Majid Al Futtaim holds the Carrefour franchise in Egypt, and there are growing local and regional chains such as Metro and Spinneys.  (RAM 07.08)

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3.13  ADTRAN to Invest in Egypt to Create a Better Broadband Experience

Huntsville, Alabama’s ADTRAN, a leading provider of next-generation open networking and subscriber experience solutions, announced an agreement with the Arab Organization for Industrialization (AOI) to work on a joint manufacturing program in Egypt to deliver ADTRAN’s market-leading fiber products for Egypt and the region.  A signing ceremony was held today at the AOI headquarters and was attended by executives from both companies, leading network operators, government ministers and industry leaders.

As part of an initial focus, the team will work on ADTRAN’s fiber access portfolio, including its award-winning XGS-PON, GPON and other SD-Access solutions.  AOI is a leading manufacturer in the region and partners with companies in a diverse range of fields including electronics, renewable energy, automotive and aeronautics.  (ADTRAN 19.08)

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4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Vertical Field Launches Study on the Impacts of “Smart Living Walls”

Vertical Field announced the launch of the world’s largest ever research study on the impact of “Smart Living Walls” in urban settings in terms of the environment, human health and wellbeing.  The long-term research study, led by Professor Itamar Lensky and colleagues from Bar-Ilan University (BIU), the Agricultural Research Organization, and the Hebrew University of Jerusalem, together with Vertical Field, will take place over a number of years, and will monitor and analyze a range of scientific parameters pertaining to living walls, such as CO2 footprint reduction, heat reduction, impact on air quality, health impact assessment, economic benefits evaluation, establishment of winning economic models, and other aspects.  The research aims to alleviate and minimize the adverse effects of rapid urbanization and increased building density on the environment, as well their impact on human health in an urban ecosystem.

The research is supported by the Israeli Science Foundation and the Ministry of Science, Technology and Space.  It also integrates innovative solutions from Environmental Resources Management (EnviroManager), Israel’s largest private company engaged in continuous environmental monitoring, and from Netafim, a global manufacturer of irrigation equipment.

Ramat HaShavim’s Vertical Field is a leading provider of natural smart living wall solutions for urban environments and smart cities.  The company is operated by professionals in the field of agricultural technology, enabling the development of smart walls that combine the best of design and manufacturing, smart computerized monitoring, soil-based technology, water technology and more.  (Vertical Field 22.08)

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4.2  Israel’s Ashalim Solar Thermal Power Station Begins Operations

Shikun & Binui Group announced the start of the commercial operation of Ashalim Solar Thermal Power Station, the largest renewable energy project in Israel and one of the largest in the world.  In recent months, the plant has begun to generate electricity and is now supplying renewable energy to the national electricity grid that meets the consumption needs of an estimated 70,000 households.  The plant has been a significant contributor to the implementation of government policies as well as to the goals in connection with generating electricity from renewable energy.

Several months ago, when the plant was completed and connected to the national electricity grid, Negev Energy Co. obtained the necessary permits, including a permanent electricity production license from the Electricity Authority and the Ministry of Energy, and began the commercial operation of the solar thermal power plant in Ashalim for the duration of the franchise.

Negev Energy, a joint venture of Shikun & Binui Energy (50%), the Noy Infrastructure Fund (40%) and the Spanish firm TSK (10%), won the tender that had been issued by the Accountant General at the Ministry of Finance and entered into a design franchise agreement in 2013, for the planning, design, financing, construction, operation and maintenance of a 121 MW thermo-solar plant for a period of 25 years.  The 988-acre plant is composed of some 16,000 parabolic troughs and about half a million concave mirrors, which converts solar energy into steam that is then used to generate electricity.  The Negev Energy Power Station has a unique system for storing thermal energy, based on molten salt, which allows the plant to operate for approximately an extra 4.5 hours daily at full power following sunset, maximizing the plant’s efficacy and efficiency.  The investment in the construction of the plant is estimated to be about NIS 4 billion.  Hundreds of workers, sub-constructors and suppliers, most of them residents of south Israel and the Negev region, took part in the construction of the plant.  (Shikun & Binui 03.09)

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4.3  Israel to Invest NIS 30 Million in New Plastic Recycling Technologies

The Israel Innovation Authority has approved the establishment of a new consortium aimed at promoting the development of recycling technologies, and the use of recycled materials in Israel’s plastics industry.  Set to receive an investment of 30 million (around $8,600,000), the CIRCLE consortium will enable companies in the recycling sector or plastic and polymer manufacturers, as well as academic and research institutes in the field to develop innovative technologies to give Israeli industry an edge in international markets.  The technologies developed in the consortium will allow for the expansion of the range of recycled materials and their applications.

The consortium’s establishment is aimed at leveraging Israel’s academic and industrial capabilities in order to close the existing technological gap and situate Israel’s plastics industry as a leader in the field of plastic waste management.  It will operate within Israel Innovation Authority’s MAGNET consortium, a nonprofit association of industrial firms and academic research institutes for the research and development of cutting-edge technologies.  (IH 13.08)

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4.4  Jordan Sees Clean Energy to Cover 20% of its Power Needs by 2022

Jordanian Energy Minister Zawati said on 27 August, at the sixth international and fifth Arab forum on renewable energy, that Jordan has developed a legislative environment that has facilitated the creation of renewable wind and solar energy projects, providing “clean electricity” to the national grid at a current capacity of 1,200 megawatts.  This figure constituted 12% of electricity generated in the Hashemite Kingdom in 2018.  Clean energy sources are expected to contribute 20% of Jordan’s electricity needs by 2022, compared with 1% in 2014, according to Zawati.   The value of renewable energy investments has exceeded the $4 billion mark.  The ministry is preparing a “long-term strategy” for the energy sector to last up to the year 2030, Zawati said, pointing to the ministry’s vision for the year 2050, which is to be shared with institutions from the private and public sectors.

The strategy boasts four key pillars, which include reducing the import of energy, boosting reliance on locally produced renewable energy, achieving energy security and diversifying its sources as well as slashing energy costs.  The minister highlighted Jordan’s efforts, through cooperation with neighboring countries, towards enhancing the connection between the Kingdom’s grid and those of stakeholder nations, allowing for the exchange of energy, especially renewable energy.  (JT 27.08)

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4.5  Bahrain Bans Sand Dredging in Order to Repair Seabed

Bahrain has banned the extracting and dredging of sand, in a bid to allow the kingdom’s seabed to recover from decades of damage.  The order was announced by Bahraini Prime Minister Prince Khalifa bin Salman Al Khalifa on 31 August and was welcomed by fishermen and environmentalists.

Sand dredging and extraction cuts large chunks of the seabed without any differentiation or thought to its importance to the marine cycle.  The operations stir up the seabed, causing irreparable damage to the marine environment over long distances; this worsens when there are strong currents.  The order focuses on the seabed area north of Muharraq and around the Jarradah island, the report said.  (AB 01.09)

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4.6  Oman’s Dhofar Wind Farm Produces First Kilowatt Hour of Electricity

The 50-megawatt (MW) Dhofar Wind Farm in Oman has produced its first kilowatt hour of electricity, marking a major milestone for the GCC region’s first utility-scale wind farm.  The landmark wind farm, which is fully funded by the Abu Dhabi Fund for Development (ADFD), was successfully connected to Oman’s electricity transmission grid in August during the commissioning of the project’s first wind turbine, which is now supplying clean power. The remaining 12 wind turbines will be commissioned, tested and connected to the grid in sequence, ensuring the start of commercial operations before the end of 2019.  The project is being implemented by Abu Dhabi Future Energy Company (Masdar) through an EPC consortium of GE Renewable Energy and Spain’s TSK.  Once fully commissioned, the wind farm is expected to generate enough electricity to supply 16,000 homes – equivalent to 7% of Dhofar Governorate’s total power demand – and will offset an estimated 110,000 tonnes of carbon dioxide emissions annually, while reducing reliance on natural gas for domestic power generation.

The Oman Power and Water Procurement Company (OPWP) will be the purchaser of the generated power, from the Rural Areas Electricity Company of Oman (Tanweer), which is responsible for operating the wind power plant upon completion.  GE Renewable Energy has provided the project’s 3.8MW wind turbines, which have been built to withstand Oman’s hot and arid desert conditions, while TSK is responsible for the remainder of the wind farm’s infrastructure and electrical transmission facilities connecting the plant to the grid.  (KT 14.08)

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5:  ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Annual Average Inflation Rate Stands at 3% in July 2019

According to the Central Administration of Statistics (CAS), Lebanon’s average consumer prices rose by an annual 3% in the first seven months of 2019, compared to an annual rise of 6.23% recorded by July 2018.  The increase in prices over the period came on the back of yearly rises registered across all components of the consumer price index (CPI), except Transportation and Health.  The breakdown of the CPI revealed that the average costs of Housing and utilities (including: water, electricity, gas and other fuels) which grasped a combined 28.4% of the CPI, climbed by an annual 2.65% by July 2019.  Average Owner-occupied rental costs (constituting 13.6% of the category) grew by an annual 2.64%.  In turn, the average prices of water, electricity, gas, and other fuels (11.8% of housing & utilities) recorded a yearly uptick of 2.54% over the same period.  Moreover, the average prices for Food and non-alcoholic beverages (20% of the CPI) and Education costs (6.6% of CPI) registered yearly upticks of 4.85% and 5.14%, respectively, by July 2019.  As for the average prices of Clothing and Footwear (5.2% of the CPI), they also rose by 14.55% year-on-year (y-o-y) by July 2017.  Meanwhile, average consumer prices of Health (7.7% of the CPI) and Transportation (13.1% of the CPI) recorded the respective downticks of 0.80%YOY and 0.96% YOY.  The latter slipped mainly due to the decline in average oil prices which slipped by an annual 8.16% to $65.87/barrel by July 2019.  (CAS 21.08)

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5.2  Lebanon’s Trade Deficit Ended at $8.04 Billion in First Half of 2019

Lebanon’s trade deficit widened in the first 6 months of the year to reach $8.41B, up by 4.58% compared to the same period in 2018.  Regardless of the promising progress in exports, which grew by a yearly 12.38% to $1.73B, the wider deficit came as a result of a 5.83% yearly increase in the value of imports to $10.14B, noting that Mineral products and Vegetable products are the only 2 categories to witness an increase in its imported value.

In terms of value, Mineral products were the leading imports to Lebanon by June 2019, grasping a 33.24% stake of total imported goods.  Products of the chemical or allied industries followed, constituting 10.15% of the total, while machinery and electrical instruments grasped 8.99% of the total.  Specifically, Lebanon imported $3.37B worth of Mineral Products, compared to a value of 1.64B in the same period last year.  In fact, the net weight of imported mineral fuels, oils and their products witnessed a yearly increase from 2,707,439 tons by June 2018 to reach 6,008,753 tons by June 2019, the highest volume in more than 10 years.  The increase in volume is mainly due to the smuggling to Syria amid the rationing of oil in the country, as the Syrian Government is trying to limit capital outflows from the country.  Meanwhile, the value of chemical or allied industries recorded a decrease of 9.47% y-o-y to settle at $1.02B and that of machinery and electrical instruments also declined by 14.87% over the same period to $911.74M.

In terms of top trade partners, Lebanon primarily imported from US, China, and Russia with shares of 9.08%, 8.60% and 6.92%, respectively, by June 2019.  As for exports, the top category of products exported from Lebanon were pearls, precious stones and metals, which grasped a share of 32.88% of total exports, followed by a share of 11.57% for prepared foodstuffs, beverage, and tobacco and 10.74% for Machinery; electrical instruments over the same period.  The value of pearls, precious stones & metals surged by 43.88% by June 2019 to reach $568.92M.  As for the value of Prepared foodstuffs; beverages, tobacco, it declined by 3.96% y-o-y to $200.15M.  Meanwhile, the value of Machinery; electrical instruments recorded an important increase of 22.95% year-on-year to $185.90M.  In H1/19, Switzerland followed by the UAE and Saudi Arabia were Lebanon’s top three export destinations, respectively constituting 19.08%, 12.94%, and 6.72% of total exports.  (Blom 26.08)

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5.3  Jordan’s Average Inflation Rate for July 2019 Rises by 0.2%

The monthly report on inflation in Jordan issued by the Department of Statistics indicates that the Consumer Price Average (Inflation) reached 125.55 in July 2019 against 125.30 during the same month of 2018, recorded an increase by 0.2%.  The main commodities groups, which contributed to this increase, were Rents by 0.51%, Meat & poultry by 0.35%, Cereals and its products by 0.12%, Education by 0.07% and Culture & Recreation by 0.06%.  Meanwhile, the main commodities groups which witnessed a decrease in their prices were Transport by 0.38%, Dairy and its products and eggs by 0.16%, fuel and lighting by 0.13% and Tobacco and Cigarettes  by 0.15%.

On the monthly level, the Consumer Price index for July 2019 has decreased by 0.1% compared with the previous month (June) 2019.  The main commodities groups which contributed to this decrease were Meat & poultry by 0.15%, Transport by 0.18%, Fruits & Nuts by 0.04% and Sugar and its products and Fuel & lighting by 0.02% for each.  Meanwhile, the main groups which witnessed an increase in their prices were Dairy and its products and eggs by 0.12%, Vegetables, Dried and Canned Legumes by 0.11%, Beverages by 0.03% and Oil & fats by 0.02%.  (DoS 19.08)

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5.4  Jordanian Unemployment Continues to Rise Unabated

The Hashemite Kingdom’s unemployment rate registered a 0.5% increase at the end of this year’s second quarter, currently standing at 19.2%.  In its quarterly unemployment report, the Department of Statistics (DoS) reported that the unemployment rate for men stood at 17%, compared with 17.2% for women, denoting increases of 0.5 and 0.4% respectively in comparison with the same period of last year.

Unemployment amongst university-degree holders also registered an increase, standing at 25.9%.  The unemployment rate for those who have completed their secondary education or beyond amounted to 56%, compared with 44% for those with a lesser qualification.  Unemployment was most prevalent among the 15-19 and 20-24 age groups, reaching 46 and 40% respectively.  The DoS reported that 30% of men with a bachelor’s degree were unemployed, compared with 84% unemployment among their women counterparts.  (DoS 02.09)

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5.5  Chinese Company Signs $1.4 Billion Iraq Construction Deal

A Chinese company has reportedly signed a $1.39 billion construction contract in Iraq.  According to Xinhua, China Construction Third Engineering Bureau will implement civil engineering projects and infrastructure in southern Iraq, including low-cost housing, education, medical centers and facilities projects in governorates of Najaf, Karbala and Basra.  (Xinhua 08.08)

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►►Arabian Gulf

5.6  Bahrain Says Budget Deficit Narrows to $1 Billion in First Half of 2019

Bahrain has announced it has narrowed its budget deficit to BD404 million ($1.07 billion) in the first half of 2019.  The kingdom feels it is ahead of its projected deficit reduction schedule, after the deficit fell from BD650 million in the same period a year earlier.

Last month, a report from the Institute of Chartered Accountants in England and Wales (ICAEW) and Oxford Economics said Bahrain’s economic outlook for the remainder of 2019 remains “challenging” due to weakness in government finances, limited prospects for oil sector growth and a general slowdown in the non-oil economy.  According to ICAEW’s report, economic growth in the kingdom more than halved last year from 3.7% in 2017 to 1.8 in 2018, with further deceleration seen in 2019 to 1.6%.  ICAEW said it expects a range of measures to be taken to reduce the fiscal deficit from an estimated 10.1% of GDP in 2018 to around 7% of GDP in 2019.  Bahrain, which does not benefit from the vast oil wealth of other Gulf Arab states, last year released a plan to fix its debt-burdened finances after securing a $10 billion Gulf aid pledge.  (AB 07.08)

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5.7  Trademark Infringements in Dubai Increase By 23% in First Half

There was a 23% increase in the number of trademark infringement cases brought in Dubai over the first half of the year.  The Intellectual Property Protection section in Dubai Economy resolved 186 cases as opposed to 151 over the same period in 2018.  Commercial agencies brought forward 16 cases of trademark infringement in the first six months of 2019, a 33% increase over H1/18.  Among the cases, 38 were relating to cosmetics and 22 were about personal care products while the other brands involved were mostly perfumes (21 cases), clothes (14), gold and ornaments (13), phones and accessories (12), glasses (10), bags and leather products (7) and watches (6).  It comes as the Commercial Compliance & Consumer Protection (CCCP) sector in Dubai Economy witnessed a 63% year-on-year increase in trademark files registered on its ‘IP Gateway’ portal during the first six months of 2019.

The top five source countries among the trademark files opened in the first six months of 2019 were: USA (1,482 files, representing 29% of the total); UAE (742 files, 14.8% of the total); Germany (325 files, or 7%); France (273 files, or 5.2%) and the UK (260 files, 5%).  (AB 25.08)

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5.8  UAE’s Third Nuclear Plant Hits Key Power Testing Milestone

The Emirates Nuclear Energy Corporation (ENEC) achieved another milestone in the construction of Unit 3 of the Barakah Nuclear Energy Plant, being built in the Al Dhafra region of Abu Dhabi.  ENEC said it has safely and successfully energized Unit 3’s main power transformer and gas insulated bus, an important step in the continued testing and commissioning of the plant.  Unit 3’s auxiliary power transformers and excitation transformer were also energized in normal operating configuration, ENEC said, adding that it comes approximately one year after the completion of similar work on Unit 2.  Testing and commissioning teams will now begin preparing for the start of hot functional testing at Unit 3 which consists of almost 200 tests performed on major systems.  The construction of the Barakah plant is progressing with Unit 1 complete, while Unit 2 stands at 95%, Unit 3 at 91%, and Unit 4 at 82%.  Unit 1 is currently undergoing commissioning and testing, prior to regulatory review and receipt of the operating license from regulators.  (AB 20.08)

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5.9  UAE to Add Sugary Drinks and E-Cigarettes to Excise Tax List in 2020

On 20 August, the UAE Cabinet announced a decision to expand the list of excise taxable products to include sweetened beverages, sugary drinks and electronic smoking devices, starting from 1 January 2020.  The decision to add a tax of 50% is part of efforts to reduce consumption of unhealthy goods and modify consumers’ behavior.  The decision also requires manufacturers to clearly identify the sugar content in order for consumers to make “sensible healthy choices”.  A tax of 100% will be levied on electronic smoking devices, whether or not they contain nicotine or tobacco, as well as the liquids used in electronic smoking devices.  The decision aims at reducing the consumption of harmful products that put the health of people and environment at risk.  In 2017, the UAE Government started introducing excise tax on specific goods, which are typically harmful to human health or the environment.  (AB 20.08)

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5.10  Saudi Arabia Replaces Royal Court Chief and Creates Ministry of Industry

On 30 August, Saudi Arabia announced the creation of a new natural resources ministry, separating it from the energy ministry, while replacing the head of the royal court in a series of official decrees.  Bandar al-Khorayef, a top business executive, was appointed head of the new Ministry of Industry and Mineral Resources as the world’s top crude exporter seeks to diversify its oil-reliant economy.

Other royal decrees published on state media named Fahd al-Essa as head of the royal court, the center of power and politics in the absolute monarchy.  Essa is a royal insider said to be close to Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler and heir apparent.  Former information minister Awwad al-Awwad was appointed head of the human rights commission, while Mazen al-Kahmous was named new chairman of the national anti-corruption commission.  (AB 31.08)

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5.11  Saudi Arabia Launches $826 Million in Water Projects

Saudi Arabia has launched water developments in Mecca and across other holy sites worth over $826.6 million.  Projects include setting up a pipeline for carrying desalinated water from the desalination plant in Al-Shuaibah to Mecca and the holy sites at a total cost exceeding $233m and the second phase of Al-Shuaibah Desalination Plant with a capacity of 250,000 cubic meters per day at a cost of over $313m.

Other water services projects include water networks, connections to homes, strategic reservoirs and sanitary drainage networks and connections at a cost of over $160m in several districts of Makkah and the holy sites.  This is in addition to the $124m Desalination Unit Project in Al-Shuaibah.  The new projects are an attempt by the authorities to reach a sustainable water sector that will develop and preserve the water resources, protect the environment and provide high quality and efficient services that will contribute to socio-economic development.  (AB 14.08)

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►►North Africa

5.12  Egypt’s Annual Inflation Rate Declines to 7.8% in July

The annual inflation rate in Egypt declined to 7.8% in July, according to a monthly statement issued by the Central Agency for Public Mobilization and Statistics (CAPMAS).  On a monthly basis, the rate dropped in July from June by 1.5%, registering 307.8 points in July down from 312.5 points in June.  The annual inflation rate reached 11.7% before the end of July due to the increase in fuel prices during that month, compared to 8% during June.  In May, the annual inflation rate in Egypt had reached 14.1%, a 1% increase on April.

In June 2019, Egypt’s annual urban consumer price inflation fell sharply for the first time this year to 9.4% from 14.1% in May, continuing its drop to 7.8% in July.  The annual inflation rate declined during the past June to reach 8.9% compared to the same time in 2018 which had recorded 13.8%, while the inflation rate recorded 12.4% during the first half of 2019.

Earlier this month, Egypt implemented its latest round of fuel subsidy cuts, raising prices by 16 to 30%, as it neared the end of its loan agreement with the International Monetary Fund (IMF) for economic reform.  As well, the Egyptian government raised prices on cooking gas, oil, electricity and some food items.  (CAPMAS 08.08)

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5.13  Remittances from Egyptians Abroad Rose to Around $3 Billion in May

Egypt’s remittances from workers abroad rose 43% month-on-month in May to around $3 billion, the central bank said.  The remittances, one of the country’s main sources of hard currency, stood at $2.1 billion in April.  Egypt received $2.6 billion in remittances in May 2018.  (Ahram Online 27.08)

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5.14  Morocco’s Consumer Price Index Down 0.8% in July

Morocco’s High Commission for Planning (HCP) has announced that the consumer price index (CPI) fell by 0.8% in July compared with the previous month.  The drop in the price consumer index is due to the decline of the food index by 2.0% and the non-food index by 0.1%.

The Core inflation indication (ISJ) fell by 0.2 % in one month but went up 1.3 % annually, HCP said.  HCP explained that the decreases in food products between June and July 2019 mainly concern vegetables (8.1%), 4.3% for seafood, 3.6% for fruits, 1.7% for meat, and 0.5% for milk, cheese and eggs.  With regards to non-food products, the decline mainly concerned fuel prices and stood at 1.0%.

HCP also compared July’s 2019 consumer price index with that of 2018.  The figures indicate that the consumer price index rose 0.3% in July 2019 compared with the same period of the previous year due to the rise in the non-food product index by 0.9 % and the decline of that of food products by 0.5%.  CPI evaluates prices of goods and services, including medical care, food and transportation.  (HCP 22.0)

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5.15  Morocco Hosts 5.4 Million Tourists During First Half of 2019

The Moroccan Tourism Observatory reported that more than five million tourists visited Morocco in the first half of 2019.  The number represents a 6.6% increase compared to the same period last year.  The Tourism industry market saw an increase in arrivals from a range of countries, especially from France, Italy, German, and Spain.  Key markets include Italy, with an increase of 12 %, France (9%), Spain (8%) and Germany (8%).  The arrivals from the Dutch, British and Belgian tourists also increased.  The report shows that tourists to Morocco favor Marrakech and Agadir.  The report shows that Marrakech saw an increase of 8% of tourist arrivals, while Agadir recorded an increase of 4%.  Last year, Morocco received 12.3 million tourists, recording an increase of 8 million from the previous year.

Morocco has introduced a vision to enhance the sector.  The 2020 vision offers “a spatial planning policy of tourism offer, guarantor of the benefits to spread and the socio-economic development of all the Kingdom’s regions,” according to the Ministry of Tourism.  Morocco’s projects to enhance tourism include the preservation of Morocco’s heritage and legacy.  (MWN 12.08)

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5.16  Morocco Faces High Water Stress and Ranks 22nd Worldwide for Stressed Nations

In its latest reports on overall water stress, the World Resources Institute (WRS) has ranked Morocco among the countries threatened to face high baseline water stress.  Morocco ranks 22nd in the overall ranking and 12th in Arab countries.  The WRS attributed water scarcity to climate-change, socio-economic development, urbanization and population growth.  The report found that 12 out of the 17 most water-stressed countries are in the MENA region – home to one-quarter of the world’s population.  The 17 countries use more than 80% of the available supply on average every year.

The WRS has stated that there are countless solutions to tackle water shortage but only stated the most 3 effective ways.  The solutions include: Investing in grey and green infrastructure by building pipes and treatment plants, as well as wetlands, and healthy watersheds.

With 100% of its water treated and 78% of it is reused, Oman – ranked 16th in the list – has emerged as a leader in water treatment and reuse.  Gulf Cooperation Countries (GCC) treat around 84% of wastewater collected, but only 44% are reused.  (MWN 08.08)

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6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Erdogan Says Turkey Wants to Continue Defense Cooperation with Russia

On 27 August, Turkish President Erdogan said that Turkey wants to continue defense industry cooperation with Russia, including on warplanes, following talks in Moscow with his Russian counterpart Vladimir Putin.  Erdogan spoke after the leaders visited an air show outside the Russian capital where Sukhoi Su-57 stealth fighter jets performed demonstration flights and the Turkish leader inspected aircraft.  In another step that could further strain ties with NATO ally the United States, Turkey took delivery on Tuesday of a second batch of Russian S-400 air defense equipment.

The initial delivery of parts of the S-400s, which Washington says is not compatible with North Atlantic Treaty Organization (NATO) defenses, arrived in Ankara in July despite warnings about possible US sanctions over the purchase.  Washington has not yet acted on the threat, but it did begin last month to remove Turkey from its program of manufacturing F-35 jets, which Turkey also planned to buy. In response, Erdogan said Turkey would turn elsewhere for jets to meet its needs.  Putin said he and Erdogan discussed cooperation on Russia’s Su-35 jet and possible joint work on its new Su-57.  (HDN 28.08)

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6.2  Turkey Foreign Trade Deficit Narrows 47% in July

Turkey’s foreign trade deficit almost halved on an annual basis in July, the Turkish Statistical Institute reported on 29 August.  The deficit shrank by 47% to $3.19 billion.  Exports rose by an annual 7.9% to $15.2 billion, while imports fell 8.5% to $18.4 billion.  Turkey’s government has introduced measures to boost exports, including providing cheap credits and other incentives, as it seeks to reverse an economic downturn.  A currency crisis that peaked a year ago has curtailed demand for imported goods and made exports cheaper.  Seasonally and calendar-adjusted exports and imports increased by a monthly 15.2% and 4.6%, respectively, compared with June.  Calendar-adjusted exports increased by 4.8% and imports dropped by 9.1% on an annual basis.  (TUIK 29.08)

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6.3  Turkish Central Bank Says End of Tax Cuts Boosted Inflation

Turkey’s central bank said an end to temporary tax cuts on some durable goods led to an acceleration in inflation in July.  Increases in energy prices had also helped reverse a recent slowdown in consumer price inflation (CPI), the central bank announced on 6 August.

Turkish CPI advanced to an annual 16.7% last month from 15.7% in June, the Turkish Statistical Institute said.  Most economists predict that the rate will slow in the third quarter before accelerating again.  The government’s year-end target for CPI is 15.9%.  The central bank noted that annual increases in food prices continued to slow. A jump in the price of food, stoked by a currency crisis, had helped inflation reach a 15-year high of 25.2% in October.  A recent increase in tobacco prices will impact inflation during August.  (CBT 06.08)

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6.4  Turkey Draws Nearly 25 Million Foreign Visitors in 7 Months

Turkey welcomed 24.69 million foreign visitors in the first seven months of this year, according to a recent Culture and Tourism Ministry data.  The number of foreigners visiting the country rose by 14.1% in January-July from the previous year.  Istanbul remained Turkey’s top tourist draw, attracting 34.2% of all visitors- around 8.4 million.  The Mediterranean resort city of Antalya followed with 31.8% or over 7.85 million foreign visitors in the same period.  Edirne, in northwestern Turkey, which borders both Bulgaria and Greece, received the third-highest number of foreigners, with 2.5 million during the first seven months.  (AA 29.08)

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6.5  Over 88% of Turkish Households Have Internet Access

Almost nine out of 10 households have internet access in 2019, a Turkish Statistical Institute (TÜİK) survey announced on 27 August.  Internet access of households in the country rose 4.5% to 88.3% in 2019, versus the last year, according to the Information and Communication Technology Usage Survey.  While some 87.9% of households had a broadband internet connection, 86.9% of households also used a mobile broadband connection in 2019.

Internet usage of individuals aged 16-74 was 75.3% in 2019.  This proportion was 72.9% in 2018, according to the survey.  While the proportion of males aged 16-74 using the internet were 81.8%, this proportion was 68.9% for women.  During the twelve months (April 2018 – March 2019), 51.2% of internet users among the individuals aged 16-74 interacted with public authorities over the Internet for private purposes.  This proportion was 45.6% in the previous period, TÜİK.

In the April 2018 – March 2019 period, 34.1% of internet users used online services to buy goods or services, up from 29.3% in the previous period.  The proportion of shopping over the internet was 38.3% for men and 29.9% for women.  TÜİK will release next data on this subject in August 2020.  (TÜİK 27.08)

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6.6  Turkish E-Commerce Growth Stymied by Logistics Problems

Nearly 85% of e-commerce in Turkey is carried out in the northwest, west and center of the country with lack of logistics in other regions putting people off taking their business online, a report by the Turkish Industry and Business Association (TUSIAD) and consultants Deloitte Digital said.  It said 84% of e-commerce is in just three of Turkey’s seven regions – the Marmara, Central Anatolia and Aegean, with 56, 16 and 12% of the volume respectively.

Infrastructure is important: A Centre for International Governance Innovation (CIGI) study cited in the report showed that 17% of users do not shop online due to issues with logistics.  In the World Bank’s Logistics Performance Index (LPI) for 2018, Turkey ranked 47th out of 160 countries.  Unsurprisingly, the impact e-commerce has on the gross national product (GNP) correlates with internet penetration levels. For Turkey, the e-commerce market size was found to be $6.1 billion, while the gross national product (GNP) was $766 billion in 2018.  An increase of 10% in internet penetration correlates to a 1.8% increase in gross domestic product (GDP), said the report.

According to the Information Technologies Authority (BTK), there are 61 million mobile broadband internet users in the country, out of 80 million people in total.  Two-thirds of internet users in Turkey (63%) use social media, according to the report, only six points behind the world-leader, the United States.  YouTube is used most actively with 92%, followed by Instagram’s 84%.  One platform that stood out was Pinterest, where three quarters of users (72%) with no intention of shopping end up making a purchase after being inspired by the digital moodboard, the report showed.

Despite the lack of PayPal, and a decrease in the number of websites for holiday bookings, multi-channel retail and online retail, Turkey’s online shopping increased by 42%, said the report, and total revenue for online sales in Turkey for 2018 increased to 60 billion liras ($10 billion) from 42.2 billion liras in 2017.  Consumers shop in digital marketplaces for clothing, electronics, food, holidays and books in Turkey, in this order. The biggest sellers are mobile phones (50% of electronics) and nappies (53% of children’s goods).  The biggest digital marketplaces in Turkey were listed in the report were N11 and Hepsiburada. Trendyol, which received investment from Chinese giant Alibaba in 2018, is another key player, according to the report.

In mid-May 2019, Turkey removed all customs tax exemptions, as announced in the Official Gazette. The tax-free limit had been reduced over the years, from €150 to eventually €22, with electronics and cosmetics in particular excluded from the exemptions.  Turkey now imposes an 18% customs tax on goods from the EU, and 20% for the rest of the world.  (Ahval 19.08)

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6.7  Greece Posts January – July Surplus of €1.76 Billion

The first seven months of the year went unexpectedly well for Greece’s finances and an expected primary shortfall of €803 million turned into a surplus of €1.76 billion, boosting the government’s belief that it can achieve the surplus target agreed with the creditors, equal to 3.5% of GDP.  Net revenue rose 8.1% to €28.59 billion, €2.13 billion more than planned.  The results were helped by a one-off item, the extension of the management of the Athens International Airport which brought almost €1.4 billion to state coffers, including €271.6 million in value-added tax.

The previous government had agreed to a much smaller amount for the extension, but was pressured by the European Union into reopening talks.  The airport deal extension alone accounted for well over 40% of VAT collected by the government (€662 million), but total VAT revenue rose just 8% from last year.  Revenue from taxing properties rose 11.8%, to just over €600 million, while another €644 million came from other EU central banks returning the profits they had made from the sale of Greece bonds.  (Various 27.08)

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6.8  Greek Exports & Imports Decline Steeply In June

Greek exports dropped 9% year-on-year in June, but the country’s trade deficit narrowed 22.9% because imports dropped even more, according to preliminary data compiled by ELSTAT.  Total exports in June came to €2.76 billion, compared to €3.03 billion in June 2018, while imports stood at €4.28 billion, a drop of 14.5% from last June’s €5.05 billion.

For the first half of the year, exports rose 2.2% year-on-year, to €16.82 billion, while imports rose 4.8%, to €27.7 billion.  This brought the first-half trade deficit to nearly €10.9 billion, or 8.8% higher than last year’s.  Raw materials and chemicals led the first half’s export growth, rising 16.1% and 14.5%, respectively.  By contrast, exports of fats and oils tumbled 48.4%.  Exports of industrial products grew by a modest 1.1%.

Greece’s 27 European Union partners remain the customers for its exports:  Overall, 55.7% of Greek exports headed to other parts of the EU. Excluding refined petroleum products, the percentage of Greek exports to the rest of the EU rises to 67.9% of the total.  (ELSTAT 23.08)

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6.9  Cyprus-Greece-Israel-US Cement Eastern Mediterranean Security Partnership

Cyprus, Greece, Israel and the United States agreed to enhance cooperation in energy, cyber and infrastructure security, after ministerial summit in Athens.  On 7 August, Greek Energy Minister Hatzidakis hosted the first energy summit of the four countries that underlines the growing importance of hydrocarbon wealth and need for stability in the region.  Natural gas discoveries in the Eastern Mediterranean have rendered the region a viable alternative energy source for Europe, but also exposed long-simmering disputes between neighbors jostling for rights over resources.

East Med regional tripartite summits between Israel and Cyprus, which have made discoveries, and Greece, keen to be a hub, have recently been extended to include the United States.  Cypriot Energy Minister Lakkotrypis said he had received assurances from his Israeli, Greek and U.S. counterparts of full support over Cyprus’ right to search for natural resources.  Turkey, which has no diplomatic relations with Cyprus, disputes the EU-member state’s right to explore for natural gas, staking a claim over offshore areas that breach the island’s designated maritime zone.  Ankara has dispatched two drill ships east and west of the island, a move Cyprus says is a violation of international law and triggered EU sanctions against Turkey.  (FM 07.08)

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6.10  Greeks Expanding Use of Credit Cards

Use of credit and debit cards in Greece expanded 12.8% in the second quarter of 2019, but the average value of each transaction declined, according to data published by the Hellenic Bank Association.  The upward trend in the use of credit and debit cards continued, and the drop in the average transaction value is an indicator that Greeks now use credit cards to pay even small bills, which in the past they would have settled with cash.  Efforts by tax authorities to catch tax-evading businesses by providing tax breaks for submitted credit and debit card receipts are behind this change in paying habits, bankers believe.  The data do not include Greeks’ purchases abroad or tourists’ purchases in Greece.  (HBA 13.08)

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6.11  Greek Housing Sector Rebounds at Strongest Rate in More Than 12 Years

The recovery in Greece’s housing market gained speed in the second quarter with prices increasing at the strongest pace in more than 12 years, helped by an expanding economy and growing foreign interest.  Property accounts for a large chunk of household wealth in Greece, where the home ownership rate is 80%, above the EU average of 70%.  Apartment prices rose 7.7% in the second quarter compared with the same period a year earlier, Bank of Greece data showed, accelerating from a 1.3% increase in the first quarter of 2018.  More specifically, prices rose by 11.1% year-on-year in Athens, where home-sharing platforms such as Airbnb and a “golden visa” program – a renewable five-year resident’s permit in return for a €250,000 ($285,000) investment in real estate – have grown very popular.

Greek house prices fell 42% between 2008, when the country’s protracted recession began, and the end of 2017.  A similar trend is unfolding in Greek prime office prices, which rebounded by 7% last year.  The rise was seen in all market segments – including old and newly built apartments – and in all regions, though prices in the capital led the way.

The Greek market had been hurt by property taxes imposed to plug budget deficits, tight bank lending and a jobless rate still around 17.2%, the highest in the 19-nation Eurozone.  But economic prospects have improved since 2015 when Greece signed up to a third bailout package worth up to €86 billion ($107 billion).  The country emerged from its latest bailout in August last year and is now relying on markets to cover its financial needs.  Greece’s €180 billion economy expanded in January-to-March, but at a slower annual pace than the quarter before, mainly driven by consumer spending and a pick-up in investments.  (Reuters 02.09)

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7:  GENERAL NEWS AND INTEREST

*ISRAEL:

7.1  Immigration to Israel Increases by Nearly 30%, Largely Due to Russian Speakers

Immigration to Israel rose by almost 30% in the first half of 2019 compared to the previous year, according to the Jewish Agency for Israel.  The increase of 16,005 newcomers from 2018 comes mostly from Russian speakers who have been leaving countries associated with the former Soviet Union.  The overwhelming majority of new immigrants reportedly came from Russia, numbering 7,884 (a 73% increase) and Ukraine with 3,007 (a 6% increase).  Immigration from the United States remained stable, with French immigration dropping 21%.  According to the Jewish Agency, 839 new arrivals came from France to Israel in the first six months of 2019.  Immigration from France spiked from 2013 to 2015 but has dropped as many have struggled with finding employment and failing to acclimate to the Middle East.  (JNS 20.08)

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*REGIONAL:

7.2  Saudi Arabia’s Six Flags Qiddiya to Feature World’s Fastest Roller Coaster

Qiddiya, Saudi Arabia’s entertainment city, will include twelve record-breaking attractions when it opens to the public in 2023, including the world’s longest, tallest and fastest roller coaster and the world’s tallest drop-tower ride.  In a ceremony in Riyadh on 26 August, American theme park operator Six Flags unveiled the designs for its park in Qiddiya, which David McKillips, who manages development of the company’s parks outside the United States, said it will be “the most unique Six Flags theme park ever built”.  There will be twelve world record-breaking rides that will be inside this park.

Six Flags Qiddiya will cover 32 hectares and include 28 rides and attractions across six themed lands including The City of Thrills, Discovery Springs, Steam Town, Twilight Gardens, Valley of Fortune and Grand Exposition.  Within The City of Thrills will be two of the major record-breaking rides: The Falcon’s Flight, inspired by the kingdom’s famous raptor, will be the longest, tallest and fastest roller coaster in the world, while the Sirocco Tower will be the world’s tallest drop-tower ride.  The Citadel, a central hub area, will be covered by a billowing canopy form inspired by traditional Bedouin tents and McKillips said this was reflective of the park’s plans to embrace its local Saudi surroundings.

Qiddiya is operated by the Qiddiya Investment Company (QIC), which was incorporated in May 2018 and is wholly owned by the Public Investment Fund (PIF) of Saudi Arabia, the kingdom’s sovereign wealth fund. The project broke ground on April 28 last year and the first of three phases is due to open in 2023.  (AB 26.08)

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7.3  Turkey Bans Istanbul’s ‘Queer Olympix’

Authorities in Istanbul have banned the “Queer Olympix” sports event, making it the latest in the string of pro-LGBT events to be banned in the country.  The third annual Queer Olympix, included football, beach volleyball and long jump.  Police in Istanbul’s Kadıköy arrived at the scene of the event, where organizers were setting up, with water cannons.  The Kadiköy district governorate in an official statement said banned the event for the first time as a precaution against the provocations that may occur due to social sensitivities.  Turkish authorities this year banned for the fifth year in a row the annual pride march for LGBTI rights in Istanbul, which attracts tens of thousands of people.  The ongoing ban in Turkey’s largest city as well as the ban on pride week activities in several other provinces such as the southern provinces of Antalya and Mersin have stirred a debate on creeping conservatism under President Erdoğan’s ruling Islamist Justice and Development Party (AKP).  (Ahval 29.08)

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8:  ISRAEL LIFE SCIENCE NEWS

8.1  Can-Fite to Treat Advanced Liver Cancer Patients with Namodenoson in Israel

Can-Fite BioPharma announced that a supply of Namodenoson has been manufactured and is ready for use in the treatment of advanced liver cancer patients under compassionate use at the Rabin Medical Center in Israel.  Compassionate use allows doctors and their patients the option of early access to investigational new drugs, under closely controlled and monitored circumstances, when a patient who is facing serious illness has exhausted all available treatment options.

Can-Fite recently announced results from its Phase II study of Namodenoson in the treatment of advanced liver cancer.  Namodenoson was found to increase overall survival in HCC patients with Child Pugh B7, the largest subpopulation of the study, as compared to placebo, even though the trial did not meet its primary endpoint.

Petah Tikva’s Can-Fite BioPharma is an advanced clinical stage drug development Company with a platform technology that is designed to address multi-billion dollar markets in the treatment of cancer, inflammatory disease and sexual dysfunction.  The Company’s lead drug candidate, Piclidenoson, is currently in Phase III trials for rheumatoid arthritis and psoriasis.  Can-Fite’s liver cancer drug, Namodenoson, recently completed a Phase II trial for hepatocellular carcinoma (HCC), the most common form of liver cancer, and is in a Phase II trial for the treatment of non-alcoholic steatohepatitis (NASH).  (Can-Fite 06.08)

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8.2  CartiHeal Performs First Agili-C Cartilage Repair Implantation Procedures at New York Hospital

CartiHeal announced the successful enrollment and operation of the first two patients in the Agili-C Investigational Device Exemption (IDE) pivotal study at Hospital for Special Surgery (HSS), New York, NY.  The surgeries were performed by site Principal Investigator Prof. Andreas Gomoll, MD, a sports medicine orthopedic surgeon.  The multi-site clinical study will involve a minimum of 250 patients, which 228 patients have already been enrolled.  HSS is one of 15 U.S. clinical sites participating in this randomized and controlled Food and Drug Administration (FDA) IDE clinical study.  The primary study objective is to show superiority of the Agili-C cartilage regeneration implant over the current standards of care: microfracture and debridement.

Kfar Saba’s CartiHeal, a privately-held medical device, develops proprietary implants for the treatment of cartilage and osteochondral defects in traumatic and osteoarthritic joints.  CartiHeal’s cell-free, off-the-shelf implant is CE marked for use in cartilage and osteochondral defects.  Agili-C has been implanted in over 400 patients with cartilage lesions in the knee, ankle and great toe in a series of clinical studies conducted in leading centers in Europe and Israel.  In these clinical studies, the Agili-C implant was used to treat a broad spectrum of cartilage lesions, from single focal lesions to multiple and large defects in patients suffering from osteoarthritis.  In the United States, the Agili-C implant is not available for sale – it is an investigational device limited for use in the IDE study.  (CartiHeal 07.08)

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8.3  Corteva Agriscience Invests in Evogene’s Agriculture Biologicals Subsidiary, Lavie Bio

Wilmington, Delaware’s Corteva, a leading pure-play agriculture company, and Evogene announced that Corteva will make an investment in Evogene’s agriculture biologicals subsidiary, Lavie Bio (Lavie).  The transaction includes the exchange of all shares of Corteva’s wholly owned subsidiary Taxon Biosciences along with an equity investment by Corteva in Lavie.  As consideration for the Taxon Biosciences shares and equity investment, Corteva will be issued approximately 30% of Lavie’s equity while Evogene will hold approximately 70% of Lavie’s equity.

Corteva subsidiary Taxon Biosciences’ capabilities are expected to provide significant synergetic value to Lavie and accelerate the development of Lavie’s products.  Taxon Biosciences’ assets, including a large microbial collection and product candidate pipeline, will be integrated into Lavie’s pipeline, accelerating Lavie’s ‘biology driven design’ approach and its product development.  Corteva’s investment in Lavie will also provide to Corteva certain rights with respect to Lavie’s corn and soy pipelines, allowing Lavie to benefit from Corteva’s world-leading corn and soybean market access.

Lavie focuses on improving food quality, agricultural sustainability and productivity through the development of novel microbiome based agriculture biological products.  Lavie’s unique approach utilizes a proprietary Computational Predictive Biology (CPB) platform, developed by Evogene, leveraging big data and advanced informatics through discovery, optimization and development stages in order to create next generation microbiome-based products.  Lavie’s product candidate pipeline addresses major needs in row crops such as corn and wheat as well as specialty crops such as grapes.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and advanced computational technologies.  Today, this platform is utilized by the Company to discover and develop innovative products in the main following areas (via subsidiaries or divisions): ag-chemicals, ag-biologicals, seed traits, human microbiome based therapeutics and medical cannabis.

Evogene’s CPB platform has been designed for the in silico (computational) prediction and prioritization of genes, proteins, microbes and small molecules based on multiple attributes that will be key to successful development and commercialization of novel life-science based products.  Successfully addressing these multiple product attributes at the beginning of the discovery process, rather than one at a time during the development phase, is expected to reduce the time and cost of a program, but much more importantly, increase the probability of reaching a successful outcome.  (Corteva 07.08)

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8.4  Nobio Receives FDA Clearances for Infinix Flowable & Bulk Fill Composites

Nobio’s Infinix advanced dental restoratives – Flowable Composite and Bulk Fill Flow Composite – received U.S. FDA clearance to market.  These are the first FDA-cleared products incorporating Nobio’s patented QASi particle technology for maintaining restoration integrity and protecting against degradation by bacteria over time.  Two other Infinix products with QASi technology are pending FDA clearance, the Universal Composite and the Universal Bond, which has an antibacterial cavity cleansing effect.

More than 200 million tooth restorations are performed each year in the U.S. only, most of them to replace existing restorations that fail due to bacteria that penetrate the tooth-restoration interface (e.g., the micro-gap between the restoration and tooth, a common site of recurrent decay).  The estimated annual cost of replacement dentistry is more than $5 billion in the U.S. alone.  Recurrent decay may eventually lead to tooth loss. QASi particles (quaternary ammonium silica-dioxide) are a member of Nobio’s family of antimicrobial particles.

These particles are said to combine a high concentration of antimicrobial molecules that are covalently bonded to a solid core, reportedly forming an insoluble, potent, long-lasting antimicrobial structure.  The antimicrobial effect occurs only when bacteria contact the material containing these particles, offering significant advantages versus traditional approaches relying on the release of antimicrobial molecules, which eventually deplete and may affect also normal flora.  Nobio particles are said to have a long-term effect because they’re retained in the filling material following polymerization and are insoluble.  Long-term antimicrobial protection and a stable molecular structure are especially important in dental restorations which are intended to remain in the oral environment for decades.

Petah Tikva’s Nobio provides an infection and biofilm prevention solution based on antimicrobial materials.  The technology is already incorporated in antimicrobial dentistry products to improve the longevity of restorations and antimicrobial indwelling catheters, which are associated with hospital-acquired infections.  The technology core consists of proprietary particles with very high antimicrobial activity that can be permanently embedded in a broad range of products and materials to prevent the formation of biofilm, indefinitely.  The Nobio particles are safe and highly effective and provide a permanent, scalable, and cost-effective solution against biofilm formation and contamination.  (Nobio 08.08)

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8.5  GemmaCert Raises $3.5 Million

GemmaCert has raised NIS 12 million ($3.5 million) for its organization, which incorporates an honor winning cannabis strength testing application.  The funds were raised by speculators from Japan, Latin America, and Europe just as the Hebrew University of Jerusalem, which contributed $573,000 through an opportune reserve for college workers.  The venture was made by a post-subsidizing organization valuation of NIS 100 million ($28.6 million).

The organization’s cannabis strength testing application breaks down the complete THC and CBD levels in an example of cannabis, incorporating levels in ground cannabis, dry blossom buds and CBD oil.  The application won the esteemed 2019 iF Design Award in the Medicine and Health class in Hamburg, Germany in March.

Ra’anana’s GemmaCert is developing the world’s first truly non-destructive and non-invasive analytical device for the precise verification of the potency of cannabis flowers.  It is suitable for growers, processors, distributors and dispensaries along the value chain.  With their eco-friendly device, no solvents or grinding is required since there is no need for sample preparation ahead of testing, flowers remain intact and undamaged after analysis; it is easy-to-use and delivers quick results for real-time decision-making.  Their proprietary technology combines advanced optics and imaging analysis to overcome the challenges of the heterogeneous cannabis flower.  It comes with an integrated cloud database, also to be available with sorting and labeling functionality, traceable packaging, mobile apps and more.  (GemmaCert 20.08)

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8.6  Teva Announces Availability of a Generic Equivalent of EpiPen Jr in the United States

Teva Pharmaceutical Industries announced availability of the FDA-approved generic version of EpiPen Jr®1 (epinephrine injection, USP) Auto-Injector, 0.15 mg, in the U.S.  The product is available in most retail pharmacies and the Wholesale Acquisition Cost is $300 for a 2-pack.

Teva’s generic equivalent of EpiPen® and EpiPen Jr® utilize the Antares Pharma VIBEX® device. Antares and Teva have an exclusive License, Development and Supply Agreement for epinephrine auto injector products that Teva markets in the U.S.  Epinephrine Injection (Auto-Injector) is a prescription medicine in a disposable, prefilled automatic injection device (auto-injector) used to treat life-threatening, allergic emergencies including anaphylaxis in people who are at risk for or have a history of serious allergic emergencies. Each device contains a single dose of epinephrine.

Israel’s Teva Pharmaceutical Industries has been developing and producing medicines to improve people’s lives for more than a century.  They are a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area.  Around 200 million people around the world take a Teva medicine every day, and are served by one of the largest and most complex supply chains in the pharmaceutical industry.  (Teva 20.08)

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8.7  MDClone, Developer of First Healthcare Synthetic Data Engine, Raises $26 Million

MDClone announced the closing of a $26 million Series B funding round led by health-tech venture capital fund aMoon, with additional funding from existing investors OrbiMed Israel Partners and Lightspeed Venture Partners.  MDClone has built the first of its kind platform which democratizes data to the entire healthcare ecosystem, enabling on-demand and self-service access to healthcare data without IT mediators and, using synthetic data, without risk to patient privacy.

MDClone’s platform addresses the myriad of problems accessing healthcare data for operations and quality improvement, research or innovation.  At the core of MDClone’s platform is a healthcare-oriented data lake and discovery tool which, together with MDClone’s patented Synthetic Data Engine, provides a rapid and safe self-service environment for caregivers and researchers to understand any element of the care path for any population of interest.  This breakthrough in speed to data and insights, while fully protecting patient privacy, has opened new opportunities for collaboration and the development of new services, technologies and treatments by MDClone clients.

Beer Sheva’s MDClone introduces the world’s first Healthcare Data Sandbox, finally putting data in the hands of those who can use it to transform care.  Powered by MDClone’s Synthetic Data Engine and Longitudinal Database, the Sandbox eliminates privacy concerns and data limitations to improve quality, empower research and drive innovation.  The Healthcare Data Sandbox has been deployed worldwide in health systems, HMOs, pharma companies and research institutes.   (MDClone 22.08)

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8.8  Terason Partners With DiA Imaging Analysis for Superior AI Cardiac Solutions

Terason, a leading global ultrasound imaging company based in Burlington, Massachusetts, has partnered with DiA Imaging Analysis, a leading provider of Artificial Intelligence (AI)-based solutions for ultrasound analysis, to provide its cardiac solutions on Terason’s point-of-care ultrasound devices.  The partnership fills a market need for more accurate and objective image analysis for clinicians in hospitals and outpatient settings, which commonly analyze ultrasound images visually.

DiA’s flagship, FDA cleared and CE marked cardiac solution, LVivo Toolbox, leverages its pattern recognition, machine learning and deep learning-based technology to identify cardiac functions and abnormalities.  LVivo’s AI-based algorithms generate fast, quantitative and objective results that support clinicians’ decision-making process and reduce the subjectivity associated with cardiac ultrasound analysis.

Beer Sheva’s DiA Imaging Analysis is the leading provider of artificial intelligence (AI) powered ultrasound analysis solutions that make ultrasound analysis smarter and accessible.  By using its advanced AI-based technology, DiA assists clinicians at all levels of experience to acquire and analyze ultrasound images – objectively and accurately, improving patient management.  (Terason 20.08)

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8.9  Carevature’s Cutting-Edge Dreal Technology Now Available to Spine Surgeons at Scripps Health

Carevature Medical’s unique Dreal technology has been approved for use by neurosurgeons and orthopedic spine surgeons at Scripps Green Hospital in La Jolla, California.  According to Carevature, Dreal technology allows surgeons to effectively target the impinging bone causing pain, and to preserve the soft tissue and bone critical to the patient’s spinal stability.  This technology also has significant potential to prevent more extensive fusion surgery.  To date, Carevature Medical’s Dreal® technology has assisted surgeons in over 1,500 cases, both non-fusion and fusion.  The company’s highly targeted approach has it working with medical systems and surgeons located across the US, in Chicago, Boston, Dallas, southern California, Michigan, Tennessee, and Florida, with plans to expand throughout 2019 and 2020.

Rehovot’s Carevature Medical, a privately held medical device company, Israel, is dedicated to developing advanced orthopedic surgery solutions that minimize trauma, resulting in long-lasting improved patient outcomes.  (Carevature Medical 20.08)

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8.10  Check-Cap & GE Healthcare Complete Manufacturing Line Transfer for C-Scan System

Check-Cap announced the completion of manufacturing line transfer implementation and qualification for the C-Scan System.  This collaboration between Check-Cap and GE Healthcare was primarily initiated to enable the manufacture of C-Scan Systems for U.S. clinical trials.  Upon the successful completion of this current clinical trial phase, both companies intend to explore collaboration expansion opportunities.

Check-Cap is currently conducting a pilot clinical trial in the U.S. to evaluate the safety, usability and subject compliance of the C-Scan System at the New York University School of Medicine and Mayo Clinic.  In addition, Check-Cap intends to continue collecting clinical data in additional studies in preparation for its planned pivotal study.  Assuming positive pilot clinical trial results, the Company plans to file with the U.S. FDA for approval of a pivotal clinical trial, to be initiated in-2020.  The C-Scan System has received CE marking for marketing in Europe and approval from the Israeli Ministry of Health, the Medical Device Division (AMAR) for marketing in Israel.

Usfiya’s Check-Cap is advancing the development of the C-Scan® System, the first and only preparation-free ingestible scanning capsule-based system for the prevention of colorectal cancer (CRC) through the detection of precancerous polyps.  The patient-friendly test has the potential to increase screening adherence and reduce the overall incidence of CRC.  (Check-Cap 19.08)

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8.11  V-Wave’s Interatrial Shunt Receives FDA Breakthrough Device Designation for Heart Failure

V-Wave announced that the U.S. FDA just granted the company a Breakthrough Device Designation for its interatrial shunt for Heart Failure (HF).  V-Wave’s minimally invasive, implanted interatrial shunt is being evaluated in a global, randomized, controlled, double-blinded, 500 patient pivotal IDE trial called RELIEVE-HF.  The study is enrolling advanced HF patients with preserved or reduced left ventricular ejection fraction who remain symptomatic despite the use of guideline directed medical and device therapies.

This breakthrough designation provides V-Wave with additional options for FDA communication that will facilitate collaboration, as well as a prioritized review of submissions and marketing applications.  The potential for early CMS support for this program, makes their Breakthrough Designation a double-win for HF patients who need access to novel therapies as quickly as possible.  Caesarea’s V-Wave is a privately held medical device company with offices in Israel and the U.S.  (V-Wave 15.08)

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8.12  FDA Clears Biobeat for Non-invasive Cuffless Monitoring of Blood Pressure

Biobeat announced that the U.S. FDA has granted a 510K clearance for its patch and watch for measurement of blood pressure, oxygenation and heart rate in hospitals, clinics, long-term care and at home.  Biobeat’s products enable cloud-based healthcare with connectivity either through a smartphone or a dedicated gateway.  Biobeat’s smartwatch and patch connect to the cloud through either a smartphone or a dedicated gateway.  The user will use one or the other device; whereas the watch is worn on the wrist the patch is to be placed anywhere on the upper torso.  Biobeat’s smartwatch and patch connect to the cloud through either a smartphone or a dedicated gateway.  The user will use one or the other device; whereas the watch is worn on the wrist the patch is to be placed anywhere on the upper torso.

Petah Tikva’s Biobeat employs 15 employees and has initiated sales in Israel and Europe.  Biobeat’s sensors are based on the company’s exceptional proprietary technologies in the field of reflective Plethysmography (PPG), developed by a team of world-renowned experts in this field.  The company is focusing on wireless medical-grade products that allow health providers to care as efficiently for patients outside of their facility as on-site.  (Biobeat 26.08)

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8.13  Genetic Screen Identifies Genes That Protect Cells from Zika Virus

TAU researchers said they have identified genes found to safeguard against infection as well as resuscitate infected cells.  A new Tel Aviv University study uses a genetic screen to identify genes that protect cells from Zika viral infection.  It may one day lead to the development of a treatment for the Zika virus and other infections.  The study was based on a modification of the CRISPR-Cas9 gene-editing technique.  CRISPR-Cas9 is a naturally occurring bacterial genome editing system that has been adapted to gene editing in mammalian cells.  The system is based on the bacterial enzyme Cas9, which can locate and modify specific locations along the human genome.  A modification of this system, known as CRISPR activation, is accomplished by genetically changing Cas9 in a way that enables the expression of specific genes in their original DNA locations.

The results provide a better understanding of key host factors that protect cells from ZIKV infection and might assist in identifying novel antiviral targets.  Moving forward, the researchers hope to discover the mechanism by which the IFI6 gene inhibits infection.  (AFTAU 25.07)

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8.14  ApiFix Receives FDA Approval to Commercialize its MID-C System

ApiFix received approval from the U.S. FDA via a Humanitarian Device Exemption (HDE) to market the Minimally Invasive Deformity Correction (MID-C) system for the treatment of progressive adolescent idiopathic scoliosis (AIS).  FDA approval of ApiFix’s MID-C system is a significant achievement for ApiFix.  More importantly, it makes a notable treatment advancement available for patients and their families who want FDA approved alternatives to permanent spinal fusion.  The MID-C System addresses a significant unmet clinical need for a motion-preserving alternative to spinal fusion and is a viable treatment option for progressive scoliosis in a select group of AIS patients.

ApiFix’s MID-C technology is a posterior dynamic deformity correction (PDDC) system that enables surgeons to perform a unique treatment providing permanent curve correction while retaining spine flexibility, all via a less invasive surgical procedure compared to spinal fusion.  Patient recovery is relatively pain-free and is measured in days, not months.  The MID-C system acts as an “internal brace” with a patented unidirectional, self-adjusting rod mechanism and motion-preserving polyaxial joints, allowing additional post-operative correction over time.

Founded in 2011, Misgav’s ApiFix is a privately held medical device company and is a portfolio company of The Trendlines Group.  ApiFix is a leading motion-preservation scoliosis correction company developing a unique platform technology that represents a disruptive approach to spine deformity treatment.  ApiFix’s Minimally Invasive Deformity Correction (MID-C) system has FDA and CE Mark approvals and is now available in the USA, Canada, Europe, Israel and Singapore.  (ApiFix 27.08)

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8.15  DiA Imaging Analysis & Edan Instruments Accelerate Adoption of DiA’s Cardiac Solutions

DiA Imaging Analysis announced a partnership with China’s Edan Instruments, a leading medical products and services company.  DiA’s AI-based cardiac solution, LVivo Toolbox, provides a fast and objective cardiac ultrasound analysis that assists in reducing the subjectivity and increasing the efficiency of clinician’s decision-making process.  LVivo Toolbox could be easily used by clinicians with various levels of experience and fits to operate as an integrated add-on solution on ultrasound devices and Healthcare IT systems.  Edan Instruments has developed unique ultrasound devices that offer advanced imaging technologies, dual touch screens and a gesture-control user interface, supporting a wide range of clinical applications and delivering excellent image clarity.

Beer Sheva’s DiA Imaging Analysis is the leading provider of artificial intelligence (AI)-powered ultrasound analysis solutions that make ultrasound analysis smarter and accessible.  By using its advanced AI-based technology, DiA assists clinicians at all levels of experience to acquire and analyze ultrasound images – objectively and accurately, improving patient management.  DiA’s solutions are cross-platform that can be easily implemented to ultrasound devices and healthcare IT systems, as an integrated part of clinician’s workflow.  (DiA Imaging Analysis 27.08)

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8.16  CartiHeal Performs First Agili-C Cartilage Repair Implantation Procedure in Texas

CartiHeal announced the first implantation of the Agili-C implant, as part of Investigational Device Exemption (IDE) clinical study by Joseph M. Berman, MD at Arlington Orthopedics Associates (AOA), Arlington, Texas.  The clinical study will involve a minimum of 250 study patients, currently 234 patients have already been enrolled.  Arlington Orthopedics Associates is one of 15 U.S. clinical sites participating in this randomized and controlled IDE clinical study.  The primary study objective is to demonstrate the superiority of the Agili-C implant over the current surgical standards of care: microfracture and debridement in the treatment of large spectrum cartilage defects.

Kfar Saba’s CartiHeal, a privately-held medical device company headquartered in Israel and New Jersey, develops proprietary implants for the treatment of cartilage and osteochondral defects in traumatic and osteoarthritic joints.  CartiHeal’s cell-free, off-the-shelf implant is CE marked for use in cartilage and osteochondral defects.  Agili-C has been implanted in over 400 study patients with knee, ankle and big toe cartilage lesions in a series of clinical trials at leading centers in Europe and Israel – treating a broad spectrum of cartilage lesions, from single focal lesions to multiple and large defects in osteoarthritic patients.  In the United States, the Agili-C implant is not available for sale – it is an investigational device limited for use in the IDE clinical study.  CartiHeal 27.08)

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8.17  Cannibble Food-Tech Announces the USA Launch of Its New Cannabis Infused Edibles

Cannibble announced the USA launch of its new brand, “The Pelicann” to lead their line of products.  The Pelicann products will be manufactured in the USA and Cannibble is targeting the USA first as it is the biggest cannabis market worldwide.  The Pelicann presents powder-mixes enhanced with cannabinoids and hemp products.  The products are proposed for personal use with ‘single-serve’ packages and for kiosks and convenience stores with instant servings of prepared products.  The easiest preparation concept promises freshly made cupcakes, shakes, flavored popcorn or many others in just a few seconds, by the consumer. It’s easy to make it anywhere.

The Pelicann products are offered in three families of cannabis, easy to spot by unique colors and carrying all types of cannabis ingredients from Hemp seeds, Hemp seeds oils and Hemp protein (Green); Full-spectrum CBD to Isolated CBD (Pink)  and THC infused (Blue).  All of The Pelicann products are manufactured under a strict Food manufacturing QA protocols and with a known, tested and fixed cannabinoids dosage.

Kfar Saba’s Cannibble Food-Tech is a food developer company with more than 35 years accumulated food developing, manufacturing and global distribution and 7 years’ experience with the Pharma-grade and Recreational Cannabis markets, by its founders.  Cannibble manufactures and sells its products: Cannabis premixed powder foods, beverages, nutritional supplements, and spices infused with Cannabinoids with a controlled and measured dosage according to global and local Cannabis regulations.  (Cannibble 28.08)

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8.18  Sheba, Tel HaShomer & Telesofia Medical Announce Cutting-Edge Telemedicine Software

Sheba Medical Center, Tel HaShomer, in collaboration with Telesofia Medical, has announced the launch of a new, personalized telemedicine program that will enable cancer patients to quickly reach their doctors and get personalized feedback via video within the comfort of their own homes.  It will also allow oncologists to more closely monitor and treat their patients between doctor office visits.  The innovative program will begin as a pilot within the Oncology Department at Israel’s Sheba Medical Center, the largest hospital in the Middle East and one of the top ten hospitals in the world.  It will be offered to several hundred patients within the gastrointestinal oncology unit during the next few months.

The app allows patients to report side effects and other issues in real time to their doctors.  Tailor-made videos based on the oncologist’s instructions then pop up on the patient’s phone.  The technology has the potential to increase patient empowerment, reduce unnecessary medical complications and increase treatment efficiency.

Ramat Gan’s Telesofia Medical is the leading provider of personalized videos designed to enhance patient education and engagement.

Sheba Medical Center, Tel HaShomer is the largest and most comprehensive medical center in the Middle East.  Sheba is the only medical center in Israel that combines an acute care hospital and a rehabilitation hospital on one campus, and it is at the forefront of medical treatments, patient care, research and education.  (Sheba 26.08)

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8.19  Maverick Medical AI Announces First Commercial Deployment at USHS Health System

Maverick Medical AI has entered into a commercial agreement with US Health Systems (USHS), a leading health management company in partnership with Arizona Complete Health.  As part of the agreement, USHS will pay for expanded deployment within its organization of Maverick’s software for reading primary care physician progress notes and extracting chronic conditions and risk factors with reimbursable value.  The agreement follows an initial pilot in which, over a period of a few months, Maverick’s software was tested and validated by USHS’s specialists and was proven to achieve 98% accuracy on both precision and recall.

Maverick’s software is powered by the company’s cutting-edge Clinical AI Cognition platform technology that utilizes advanced machine learning and AI capabilities.  Maverick’s technology is unique in its value-added approach to analyzing patient documentation by mimicking the way specialists read and understand clinical text.  Using this approach, the platform can read and understand sentences and context and translate unstructured data into structure data as would a physician.

Founded in 2017 by former senior executives in the digital health industry, Tel Aviv’s Maverick Medical AI meets unaddressed needs in today’s complex value-based healthcare environment.  Maverick is entering the market with the only Clinical Cognition AI platform for medical documentation, enabling users such as physicians, providers and payers to identify and monetize clinical insights hidden deep in available documentation.  (Maverick Medical AI 03.09)

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9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Mellanox Ethernet and InfiniBand Solutions Deliver Breakthrough Performance

Mellanox Technologies announced that Mellanox Ethernet and InfiniBand ConnectX smart adapter solutions are optimized to provide breakthrough performance and scalability for the new AMD EPYC 7002 Series processor-based compute and storage infrastructures.  Leveraging the 2nd Gen AMD EPYC processors’ support of PCI Express 4.0, innovative architecture, and four times peak FLOPS per-socket performance over the AMD EPYC 7001 series processor, mutual customers can maximize their data center return-on-investment.  With PCI Express 4.0 connectivity, the AMD EPYC 7002 processor platform is also ideal for advanced server based storage solutions.  The large number of PCI Express 4.0 lanes enables direct connectivity to 24 NVMe storage drives plus Mellanox ConnectX 100 and 200 gigabit per second adapters and achieve full I/O throughout.

Yokneam’s Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications, unlocking system performance and improving data security.  (Mellanox 08.08)

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9.2  Checkmarx Named ‘Black Unicorn’ Award Winner for Vision in Software Security

Checkmarx has been named a winner in Cyber Defense Magazine’s 2019 Black Unicorn Awards, recognizing its significant growth trajectory in software security and future potential as a cybersecurity market leader.  Notably, this comes on the heels of the company’s continued strong business momentum, securing 60% year-over-year revenue growth for the first half of 2019.  Checkmarx competed over a five-month period against many of the industry’s leading providers of cybersecurity products and services for this prestigious award.  The term “Black Unicorn” signifies a cybersecurity company that has the potential to reach a $1 billion or greater market value as determined by private or public investment.

Checkmarx’s elite security research team also has contributed to the company’s notoriety over the past few months, most recently discovering critical flaws in popular devices such as the Lenovo smartwatch X and the AEG Smart Scale PW 5653 BT.  These findings ultimately help vendors become more aware of the vulnerabilities plaguing modern software and help better protect businesses and consumers worldwide.

Ramat Gan’s Checkmarx is the global leader in software security solutions for modern enterprise software development.  Checkmarx delivers the industry’s most comprehensive software security platform that unifies with DevOps and provides static and interactive application security testing, software composition analysis and developer AppSec training to reduce and remediate risk from software vulnerabilities.  (Checkmarx 06.08)

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9.3  Netline Provides C-Guard IED Jamming System for the Israel Defense Force

Israel’s Netline Communications Technologies is supplying its C-Guard Reactive Jamming (RJ) manpack system to the Israel Defense Force.  The C-Guard RJ manpack system is designed to provide frontline forces with a real-time counter-IED solution.  The system detects and prevents IED activation attempts, creating a secured zone around soldiers on the frontline and reacting to real-time electronic warfare threats by both detecting the threat and providing an immediate response of jamming RF signals that are attempting to detonate the IED.  The solution offers advanced reactive jamming capabilities, wide coverage, simple operation by an individual soldier to provide protection of personnel within a specific radius, and improved overall control of the operational situation without requiring any additional hardware.

Tel Aviv’s Netline Communications Technologies develops, manufactures and delivers high-end Electronic Warfare and spectrum dominance systems for leading defense forces and homeland security & intelligence agencies.  The company specializes in counter-IED Electronic Warfare, military/insurgency communication jamming, information security, prison cell phone control, and intelligence solutions.  Among Netline’s range of products are active and reactive RF jamming systems in different configuration, as required in different operational scenarios (vehicular, portable, stationary and rapid deployment jamming systems), counter drone solutions, Prison solutions and more.  (Netline 07.08)

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9.4  accessiBe Launches First-Ever AI-Driven Web Accessibility Tool

accessiBe has recently launched a pioneering web accessibility tool powered by artificial intelligence (AI).  The solution simplifies the way companies and site owners can make their content accessible to users with disabilities by using AI to automatically apply accessibility standards to their websites.  The AI solution scans and analyzes the website and, within 48 hours, applies the necessary modifications so that the site transmits compliant and accessible content to the end users.  The AI also re-scans for new and revised content daily which benefits sites that feature dynamic or fast-changing content.

After two years of development, accessiBe was eventually launched in 2018 in Israel where it went through successful pilot efforts.  The company signed over 2,000 paying customers while providing the solution for free to over 300 non-profits.  Among its clients are the Israeli licensees of leading brands like Burger King, Volvo, Deloitte, HStern, and others.

Ra’anana’s accessiBe began in 2016 when laws and legislations that mandated the promotion of web accessibility started to spread.  Starting 2019, the company has expanded its reach in the US and other countries following insistent customer demand.  (accessiBe 08.08)

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9.5  Lightbits Labs Cited as Startup of the Year in the 14th Annual 2019 IT World Awards

Lightbits Labs announced that Network Products Guide, the industry’s leading technology research and advisory guide, has named it the Bronze winner as Information Technology Cloud/SaaS Startup of the Year in the 14th Annual 2019 IT World Awards.  These industry and peer recognitions from Network Products Guide are the world’s premier information technology awards honoring achievements and recognitions in every facet of the IT industry.

Lightbits earned this recognition for its work in delivering a unique scale-out software-defined storage solution purpose-built for cloud infrastructure.  Early on, Lightbits recognized that cloud infrastructure requires a different approach than traditional enterprise infrastructure.  Most notably, cloud-scale data centers require disaggregation of storage and compute, as evidenced by the top cloud giants’ transition from inefficient direct-attached SSD architecture to low-latency shared flash.  The Lightbits team pioneered NVMe/TCP so their solution is easy to deploy at scale, while delivering performance that is indistinguishable from direct-attached SSDs.

Kfar Saba’s Lightbits Labs, founded in early 2016, is remaking modern clouds on a global scale.  The company’s mission is to reinvent the way storage and networking are deployed in hyperscale data centers.  As trailblazers in this field, Lightbits’ solutions are already being successfully tested in industry-leading cloud data centers around the globe.  (Lightbits 14.08)

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9.6  Vayyar Launches First Universal Sensor Solutions to Put an End to Hot Car Deaths

Vayyar launched the world’s first sensor solution capable of meeting industry dual-band needs.  Developed specifically to increase safety and passenger monitoring in the interior of a car, this solution is the first to provide manufacturers with sensors that meet country-specific frequency requirements, such as a 79GHz band in Japan, or a 60Ghz band in Europe and the United States.  Addressing these regulatory bands provides new flexibility to manufacturers and tier 1 suppliers by offering a choice between these frequencies.  Compared to other options, this sensor suite is far more advanced and cost-efficient, meeting all requirements for faster and more effective interior sensor implementation.

The need for more advanced interior car monitoring and safety has become a critical issue in the industry, especially for infants; since 1998, over 800 children have died as a result of vehicular heatstroke with more than half of the cases showing that the child was forgotten by the caregiver.  By 2022, child presence detection will be a requirement through the HOT CARS Act legislation in the USA and the Euro NCAP.  Vayyar’s universal sensor solutions create a new, holistic solution for manufacturers to maximize in-cabin safety and prevent such accidents.  These sensors are able to detect if an infant has been left in a vehicle, even if they are covered by a blanket or in a car seat, and send a notification to a driver’s phone to alert them of the danger.  As the only sensor capable of meeting all country-specific frequency requirements, Vayyar is dedicated to preventing hot car deaths around the world, not just in one country.

The sensors’ point cloud capabilities are able to display the dimension, shape, location and movement of people and objects, and enable the complete identification of the car’s environment – regardless of environmental conditions like darkness. In-cabin safety solutions include seat belt reminders (SBR), optimized airbag deployment, gesture control, driver drowsiness alerts and Child Occupancy and Detection (COPD) alarms.

Yehud’s Vayyar Imaging is a global leader in 4D imaging technology, providing highly advanced sensors to a wide variety of industries including automotive, smart home, robotics, retail and medical.  The company’s sensors can see through walls and objects and track and map everything happening in an environment in real-time, all while maintaining privacy.  Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost 4D imaging sensors.  (Vayyar 14.08)

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9.7  Eye-Net Mobile Successfully Completes Connected Car Controlled-Environment Trial

Foresight Autonomous Holdings announced that its wholly owned subsidiary, Eye-Net Mobile, successfully completed a controlled-environment trial of its Eye-Net cellular-based accident prevention solution for a leading vehicle manufacturer.  The trial, conducted in a designated test track, was designed to demonstrate Eye-Net’s advanced capabilities of protecting vehicles and vulnerable road users from oncoming collisions, to test the system’s performance and robustness, and to discuss possible suitability of the Eye-Net solution for the connected car platforms of the leading vehicle manufacturer.

Eye-Net Mobile’s market penetration strategy is directed at potential partners, such as this leading vehicle manufacturer and location-based service providers.  Integrating Eye-Net as a feature in the partners’ applications at a very early stage in order to optimize the solution to their needs will help facilitate Eye-Net’s rapid market penetration, thus reaching millions of users.  A controlled trial demonstrating the system’s capabilities will help to engage potential partners and present the potential of the solution and its advantages in the commercialization phase.  The Company believes that such cooperation will add substantial value to potential strategic partners by enhancing their users’ safety.

Ness Ziona’s Eye-Net is a cellular-based vehicle-to-everything (V2X) accident prevention solution designed to protect the most vulnerable road users in real time—including pedestrians, cyclists, scooter drivers and car drivers—by providing collision alerts when the road users have no direct line of sight.  Eye-Net relies on proprietary, cutting-edge technology, a set of sophisticated algorithms and advanced system architecture, and existing cellular infrastructure.  (Foresight 14.08)

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9.8  S1 Medical Goes Live With Sapiens’ Workers’ Compensation Solution

Sapiens International Corporation announced that Philadelphia’s S1 Medical, an independent cost containment and medical management firm that provides unique niche programs to the casualty market, has successfully launched Sapiens ClaimsGo for Workers’ Compensation.  The first major program being supported by the joint S1 Medical-Sapiens’ solution is Broward County Public Schools, the sixth-largest school district in North America.  Sapiens ClaimsGo (formerly called StoneRiver CompSuite Claims) is a full-featured solution developed for specialized and quick administration of workers’ compensation policies and claims, offered in a hosted environment.

S1 Medical chose Sapiens’ comprehensive solution for its end-to-end claims capabilities, particularly the ability to integrate with data reporting & managed care systems.  S1 anticipates improved productivity through joint/cooperative usage of ClaimsGo, more effective automation, and resulting in better claims processing across their customer’s claims management program.

Holon’s Sapiens International Corporation empowers insurers to succeed in an evolving industry.  The company offers digital software platforms, solutions and services for the property and casualty, life, pension and annuity, reinsurance, financial and compliance, workers’ compensation and financial markets.  With more than 35 years of experience delivering to over 450 organizations globally, Sapiens has a proven ability to satisfy customers’ core, data and digital requirements.  (Sapiens 21.08)

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9.9  D-ID Adds New Anonymization Solution for Video and Still Images

D-ID introduced the newest addition to its products portfolio: Smart Anonymization for video and still images.  Utilizing the most advanced computer vision and deep-learning models, D-ID’s proprietary anonymization algorithm replaces facial features and other Personally Identifiable Information (PII) including license plates, with computer-generated data. D-ID’s Smart Anonymization is easy to deploy and ensures immediate privacy compliance.

D-ID removes facial images without processing or profiling the subject.  It then replaces the images with AI-generated, photorealistic faces of nonexistent people.  These anonymized faces retain a natural complexion, making the technology far superior to legacy solutions that rely on blurring or pixelation.  Moreover, anonymized faces preserve key non-identifying attributes of the original face including age, gender, expression, gaze direction and more, allowing for analytics to be collected while respecting privacy laws and regulations.

Tel Aviv’s D-ID allows organizations to enhance security and ensure their customers’ and employees’ privacy by removing sensitive biometric Personally Identifiable Information (PII) from videos and still images. The company’s revolutionary De-Identification solution makes images unrecognizable to facial recognition algorithms – while keeping them similar to human eyes. At the same time, D-ID’s smart anonymization replaces facial images with AI-generated faces, allowing organizations to apply advanced analytics and monetize video data, while still meeting strict privacy regulations.  (D-ID 21.08)

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9.10  Israel Selects Elbit Systems’ Iron Fist Light Decoupled Active Protection System

Elbit Systems announced that following a competitive bid, the Israeli Ministry of Defense (IMOD) selected Iron Fist Light Decoupled (IFLD), the Company’s Active Protection System (APS), for the Israeli Defense Forces’ (IDF) Eitan new eight-wheeled Armored Fighting Vehicle (AFV) and the D-9 Bulldozer.  The award of the contract for the program is subject to completion of negotiations between the parties.  The selection of the IFLD for the IDF’s Eitan AFV comes on the heels of the decision by the U.S. Army to proceed with the IFLD for the Bradley AFV.

IFLD uses independent optical sensors, tracking radar, launchers and countermeasure munitions to defeat threats at a safe distance from the defended combat vehicles.  The system provides 360-degree protection coverage for close-range scenarios in both open terrain and urban environments.  Its low size and weight, versatile high-performance, negligible residuals and ease of integration position IFLD as an optimal active protection solution for any fighting vehicle.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world.  The company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land, and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems and munitions.  (Elbit Systems 20.08)

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9.11  ECI and KPGCo Selected by CL Tel to Modernize Its Network Infrastructure in Iowa

ECI is working with channel partner KGPCo to upgrade the network infrastructure of Iowa-based CL Tel, a full service telecommunications and broadband service provider.  Transitioning to next generation transport technologies will enable CL Tel to continue providing outstanding service to local Clear Lake, Ventura and Mason City communities.  The solution, based on ECI’s Apollo and Neptune portfolios, ensures that the CL Tel network is capable of supporting the growing bandwidth demands of its constituency.

To address increasing bandwidth demands and ensure continued support to the communities it serves, CL Tel sought to replace its current fiber optic transport network.  Through KGPCo, ECI was chosen to deploy a next-generation solution – a multi-ring, optical transport network which supports Layer2 over MPLS functionality.  This will allow CL Tel to reliably meet today’s network demands and grow bandwidth as needed.  Moreover, the MPLS-TP over ROADM network will provide Ethernet and TDM services with under 50 millisecond protection as required for many mission-critical and legacy services.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical industries, and data center operators.  With the advent of 5G, IoT, and smart everything, traffic demands are increasing dramatically, and network operators must make smart choices as they evolve their infrastructure.  ECI’s Elastic Services Platform leverages our programmable packet and optical networking solutions, along with our service-driven software suite and virtualization capabilities, to provide a robust yet flexible solution for any application.  (ECI Telecom 14.08)

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9.12  Convizit Wins Pitango’s $1 Million Startup Competition

Convizit was selected as the winner of Pitango Venture Capital’s TRIFECTA early-stage startup competition.  One of 11 companies that participated in the competition’s semi-finals in New York City in April, Convizit received the competition’s $1 million investment prize.

Jerusalem’s Convizit‘s autonomous insight-generation solution enables companies to quickly and easily leverage behavioral data to generate tangible business benefits.  Whereas existing behavior analytics tools require extensive time and skills, and ignore most user actions, Convizit automatically captures, tags (based on context) and analyzes comprehensive behavioral data to continuously reveal new opportunities for increasing engagement and revenue – with zero human effort required.  The company’s top-notch data scientists and developers, led by two former alumni of an elite army data intelligence unit, are pushing the envelope of big data analytics and AI to usher in the next generation of user behavior analysis.  (Convizit 14.08)

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10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Composite State of the Economy Index for July 2019 Increases by 0.2%

The Bank of Israel’s Composite State of the Economy Index for July increased by 0.19%.  The Index’s rate of increase since the beginning of the year reflects growth at the long-term pace, while the fluctuation in Composite Index data between the first and second quarters reflects a fluctuation in National Accounts data during that period, which affected the trend of the index.  The fluctuation in National Accounts data is due to the change in green taxation rules, which led to vehicle purchases being brought forward to the first quarter at the expense of the second quarter.

The Index for July was positively impacted by increases in goods exports and in the job vacancy rate in July, and by an increase in the retail trade and services revenue indices in June.  In contrast, declines in the imports of consumer goods and of manufacturing inputs in July, as well as declines in the industrial production index in June, moderated the Composite Index’s rate of growth.  The Index for previous months was revised slightly downward due to the growth data published for the second quarter, which, as mentioned, reflected the fluctuations in vehicle purchases.  (BoI 20.08)

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10.2  Unemployment Down Sharply in Israel

Unemployment fell to 3.7% in July from 4.1% in June, according to the latest workforce figures for Israelis over 15 published on 26 August by the Central Bureau of Statistics.  The employment rate, consisting of the proportion of employment in the general population, dipped from 63.4% in June to 63.1% in July.  The rate among Israelis aged 15 and over remained unchanged last month at 60.8%.  (CBS 26.08)

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10.3  Israel’s Budget Deficit Remains at Highest Level Since 2014

Israel’s budget deficit remained at a record 3.8% of GDP for the second successive month in July.  This is the highest level that the deficit has been since 2014 in both absolute numbers and in terms of a percentage of GDP.  The Ministry of Finance’s revised forecast is that 2019 will end with a budget deficit of 3.6% of GDP, almost NIS 10 billion in excess of the budget target.  According to the Ministry of Finance data, there has been a moderation in the rapid growth rate of expenditure by government ministries, which have grown by 8.5% since the start of 2019.  The planned growth rate for the budget in 2019 was meant to be 5.1% compared with 2018 – the difference between the planned performance has been gradually narrowing since April.  On the other hand, state revenues have risen by only 1.5% compared with last year.  According to the Israel Tax Authority, tax collection grew by an annual average of 6% between 2013 and 2017.  The Israel Tax Authority said that bringing car imports forward to April cost the government NIS 200 million in lost revenues in July.  (Globes 06.08)

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10.4  Hi-Tech Sector Employment in Israel Surpasses 300,000 Workers

The Israel Innovation Authority announced that the number of tech employees increased by 19,000 in 2018, and by 11,000 in the first five months of 2019, raising the number of employees in the tech industry to a record 307,000.  The figures for tech employees, published by the Central Bureau of Statistics, exclude telecom sector employees.  According to the Central Bureau of Statistics, the average monthly wage in the technology industry was NIS 24,000.

Figures for 2018, published last January by the Central Bureau of Statistics, showed a 0.4% rise in the proportion of employment in the technology industry, including the communications sector.  The Innovation Authority’s figures, which exclude the communications sector, show the same rate of increase, from 8.3% to 8.7% at the end of 2018.

This is the steepest rise in the proportion of those employed in the technology industry since 2006.  In general, the proportion of those employed in the technology industry rose from 7% to 8% in 2002-2016, with fluctuations along the way.  The figures for 2018 and 2019 reveal that the proportion of those employed in the technology industry, excluding communications, is nearing 9% for the first time.  According to the figures for January-May 2019, the steep increase in the proportion of those employed in technology sectors is continuing in 2019.

The Innovation Authority attributes this growth to the various measures taken by the government to increase the supply of qualified human capital for the industry, such as the Council of Higher Education Planning and Budgeting Committee’s plan to increase the number of students in technological subjects in higher education and the Innovation Authority’s support tracks, such as the Coding Bootcamps track and special tracks for encouraging entrepreneurship among Arabs, Haredim (ultra-Orthodox Jews), and women.  (Globes 27.08)

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10.5  Israeli Startups Raised Over $350 Million in August

Globes reported that Israeli tech companies have raised $4.9 billion since the start of 2019, and are on course to easily exceed last year’s record figure of $6.4 billion.  Israeli startups raised over $350 million in August, according to press releases issued by companies that have completed financing rounds.  The figure may be more as some companies prefer to remain in stealth and not to publicize the investments they have received.

After raising $3.9 billion in the first half of the year, according to IVC, Israeli tech companies have now raised $4.9 billion since the start of 2019, including $650 million in July and now a further $350 million in August.  This figure is on course to beat last year’s record tech company fund raising, when according to IVC-ZAG, Israeli companies raised $6.4 billion, up from $5.24 billion in 2017.

August was a relatively quiet month for startup financing rounds with $200 raised by cybersecurity company Cybereason alone.  Other significant sums raised included $29 million by healthcare data cloning company MDClone, $25 million by music teaching app JoyTunes, $23 million by AI sports platform WSC Sports, and $20 million by cybersecurity company Axonius.  (Globes 01.09)

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10.6  August Tourism to Israel Reaches New Record

Israel has so far received 3.1 million visitors during 2019 and looks set to break last year’s record, when 4.1 million tourists visited Israel.  Some 305,000 tourists came to Israel in August, the Central Bureau of Statistics reported, up 9% from August 2018.  Between January and August 2019, 2.9 million tourists came to Israel, up 10% from 2018.  Overseas tourists spent an estimated NIS 1.5 billion in Israel last month and have spent NIS 15 billion since the start of the year.

August is traditionally a strong month for tourism, for vacationers rather than business tourists: 22% of tourists visiting Israel come from the US, with large numbers of tourists from France, Russia, Germany and the UK.  (CBS 03.09)

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11:  IN DEPTH

11.1  ISRAEL:  Fitch Affirms Israel at ‘A+’; Outlook Stable

On 29 August 2019, Fitch Ratings affirmed Israel’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook.

Key Rating Drivers

Israel’s IDRs balance strong external finances, robust macroeconomic performance and solid institutional strength against a government debt/GDP ratio that is high relative to peers and ongoing political and security risks.

Israel’s public finances remain a weakness relative to ‘A’ category sovereigns.  The sustained trend of decreasing indebtedness reversed in 2018 and the fiscal outlook has become more challenging in the near term.  The central government budget deficit widened to 2.9% of GDP in 2018 (in line with the budget target), from 1.9% in 2017.  We forecast the deficit to widen to 3.6% of GDP in 2019.  Government debt/GDP increased moderately in 2018, to 61%, ending a long downward trend from 75% at end-2007 and 95% at end-2003.  It remains significantly higher than the ‘A’ median of 49% in 2018.  The general government budget deficit and interest spending/revenue are also weaker than the peer medians.

Other features of public debt are fairly favorable.  The share of external debt is low, at 8% of GDP in 2018 down from 20% of GDP in 2006. Israel benefits from high financing flexibility, having deep and liquid local markets, good access to international capital markets, an active diaspora bond program and US government guarantees in the event of market disruption.

Israel passed the 2019 budget in March 2018, earlier than normal due to political considerations and it rested on overly optimistic revenue projections.  The failure to form a government after the April 2019 elections has prevented the adoption of corrective measures.  We project the central government budget deficit to widen to 3.6% of GDP compared to 2.9% budgeted.

Fitch’s base case scenario is that the 2020 budget will be adopted around March 2020, several months after the formation of a government following the 17 September elections.  We expect the government coalition will take steps to narrow the deficit, given the country’s track record of deleveraging and the high level of the deficit given Israel’s position in the business cycle.

We forecast the central government deficit to narrow slightly to 3.5% of GDP in 2020 and 3% in 2021, resulting in a moderate rise of government debt/GDP ratio.  The forecast factors in that the deficit will reach close to 4% of GDP in 2020 in the absence of fiscal consolidation.

While the deficit will narrow, it will remain above the debt-stabilizing level in the medium term, estimated at close to 2.5% of GDP.  Recent budget planning has been pro-cyclical and has sought to respond to long-standing public complaints regarding the cost of living.  There is also more discussion of tolerating a moderate increase in the debt ratio in order to boost investment in infrastructure and education.

Israel’s macroeconomic performance has been strong and the economy will remain buoyant in 2019, with real GDP growth of 3.1%, low unemployment, rising wage growth and still low inflation.  Five-year average real GDP growth is stronger than rating category peers and growth volatility has been lower.  We forecast that growth will remain robust in 2020-2021, at close to 3% per year despite fiscal tightening, which will partly be mitigated by the start of gas output from the Leviathan offshore field in 2020.  There are upside risks, related to production gains at the Intel factory or larger than forecast gas exports to Egypt.  Downside risks relate to any large security incidents or further weakening of world trade.  More generally, the economy has benefited from supportive monetary and fiscal policies and a stronger global economy.  The last two factors are likely to become less supportive over the medium term.

The Bank of Israel (BOI) is unlikely to raise rates in 2019.  While the BOI is aiming to normalize monetary policy, it still faces inflation at the lower limit of its target band, recent dovish monetary policy decisions in the US and Europe limit its room to maneuver and the shekel is appreciating.  Inflation hovered mostly just above the lower end of the BOI’s 1%-3% target band since mid-2018 but dipped below it in June and July 2019.

Israel’s external balance sheet remains strong. Israel has returned current account surpluses each year since 2003, and Fitch expects further surpluses in 2019-2020.  In recent years, the weakness of the trade balance in goods has been mitigated by the strong growth of services exports.  Foreign exchange reserves reached $120 billion in July 2019 (11 months of current external payments). Israel’s net external creditor position reduced slightly to 48% of GDP at end-2018 but remains significantly stronger than the ‘A’ median and stronger than the ‘AA’ median.  Fitch’s international liquidity ratio for Israel has continued to improve strongly.

Israel’s ratings are constrained by political and security risks, but its credit profile has shown resilience to periodic conflict and political shocks over an extended timeframe. Conflicts with military groups in surrounding countries and territories flare up intermittently and can lead to increased spending commitments or be damaging to economic activity. Domestic politics can be turbulent, with coalition governments often not lasting their full term.

The September repeat parliamentary election is unlikely to present a clearer outcome than the previous one in April, and building a coalition is likely to prove challenging.  Both Blue and White party, led by former chief of staff Benny Gantz, and Mr. Netanyahu’s Likud party poll at close to 30 seats out of 120.  If Mr. Netanyahu is able to form a coalition, potential confirmation of his indictment in several criminal cases later in 2019 could destabilize the government.

Ongoing instability in Syria and geopolitical risks centered on Iran, in the context of the latter’s rising tensions with the US, continue to present risks to Israel.  Israel is concerned by the influence of Iran in neighboring Syria and Lebanon, and continues to intervene in Syria with air strikes to counter the presence and activities of Iran or Iranian proxies.  Risk remains of another conflict with Hezbollah, although there has not been a clash since 2006 and both sides would suffer losses.  There are periodic flare-ups in the Gaza strip, although they are unlikely to present a material security risk to Israel.  There has been no tangible progress towards peace between Israel and the Palestinians and Fitch assumes no breakthrough in agreeing a peace deal.

Israel’s well-developed institutions and education system, despite disparities of quality among demographic groups, have led to a diverse and advanced economy, with an innovative high-tech sector.  Human development indicators and GDP per capita are well above the peer medians.  However, Doing Business indicators, as measured by the World Bank, remain below those of peers.  The government also faces socio-economic challenges in terms of income inequality and integration of growing but less economically productive sections of the population into the labor force.

Rating Sensitivities

The main factors that could, individually or collectively, lead to positive rating action are:

-Renewed progress in reducing the government debt/GDP ratio.

-Sustained easing in political and security risks.

The main factors that could, individually or collectively, lead to negative rating action are:

-Sustained deterioration of the government debt/GDP ratio, either through widening fiscal deficits or a structural decline in GDP growth.

-Serious worsening of political and security risks.

Key Assumptions

Fitch assumes regional conflicts and tensions will continue.  Fitch does not assume any breakthrough in the peace process with the Palestinians or a prolonged serious deterioration in domestic security conditions.  (Fitch 28.08)

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11.2  LEBANON:  Lebanon Ratings Affirmed At ‘B-/B’; Outlook Remains Negative

On 23 August 2019, S&P Global Ratings affirmed its long- and short-term foreign and local currency sovereign credit ratings on Lebanon at ‘B-/B’.  The outlook remains negative.

The negative outlook reflects that we could lower our ratings on Lebanon in the next six-12 months if banking system deposits and the Banque du Liban’s (BdL; the central bank) foreign exchange (FX) reserves continue to fall, likely reflecting a weak policy environment and impaired market access.  Continued weakness in foreign currency inflows and the use of BdL’s FX reserves to meet government debt-service could test the country’s ability to maintain the currency peg, in our view.

We could revise the outlook to stable if the Lebanese government is able to significantly improve foreign investor confidence by taking credible steps to implement its fiscal consolidation and medium-term electricity sector reform plans.

Rationale

The affirmation reflects our view that, despite a significant decline in investor confidence, BdL’s usable FX reserves, estimated at about $19 billion at end-2019, remain sufficient to service government debt in the near term.  In our base-case scenario, we expect BdL will draw on FX reserves to finance the $1.5 billion Eurobond maturity and about $1 billion of coupon payments in November.

The Lebanese government’s debt-servicing capacity depends largely on the domestic financial sector’s willingness and ability to add to its government debt holdings.  In turn, this relies on bank deposit inflows, particularly from nonresidents.  However, customer-deposit growth has slowed in recent years and total deposits contracted for the first time in May 2019 by close to 1% year on year.  We expect nonresident deposits will rebound following BdL’s recent financial engineering operation in July.  These operations are BdL’s efforts to increase U.S.-dollar inflows into Lebanon by offering high interest rates and other financial incentives to banks, and to depositors.  Notwithstanding these operations, we expect gross FX reserves (including gold) will decline by $5.5 billion in 2019 given large external financing needs.

In the next six months, the government will face the challenging task of implementing announced measures to address fiscal and economic issues.  Given the weakness of foreign currency inflows, on which the whole economy depends, we expect the government will make some progress on reforms in the short term to improve investor confidence.

Recent government measures include the approval of a fiscal deficit reduction plan in 2019, a roadmap to reform the electricity sector, and plans to finalize the 2020 budget before the end of this year.  The authorities have indicated that the 2020 budget will incorporate major changes to the pension system and public sector, as well as new procurement, customs, and tax evasion laws.  While the historical track record on reforming these areas remains mixed, even partial implementation could support the disbursement of some donor funds for infrastructure projects pledged at the Cedre conference in 2018.

The ratings on Lebanon reflect our view of the country’s sizable fiscal and external deficits and very high and rising public debt levels.  These partly stem from weak institutions and sectarian tensions. Lebanon’s net general government debt, projected at 130% of GDP in 2019, is the fourth-highest among all the sovereigns we rate after Venezuela, Greece, and Japan.

Institutional and economic profile:  We view Lebanon’s governance and institutional effectiveness as very weak.

-Deep sectarian divisions in the political system and high regional security risks will likely continue to hamper policymaking.

-However, implementation of fiscal and economic reforms will be key to stemming the deterioration of public finances and foreign currency buffers.

-We expect growth will remain subdued, but gradually improve to 2.2% by 2022, supported by the government’s investment program and easing tensions in Syria.

We see long-term constraints on Lebanon’s institutional and economic profile, largely stemming from a divided political environment organized along confessional lines.  The fragile political landscape continues despite an end to the political vacuum that persisted in one form or another for more than a decade.  A new cabinet was formed on 31 January 2019, after a nine-month delay and at a time of heightened investor fears regarding Lebanon’s debt sustainability and the possibility of debt restructuring.  Parliamentary elections were held in May 2018, the first since 2009.

The new government has shown some willingness to address extremely weak public finances.  The approved 2019 budget was more austere than expected, reflecting some level of political cooperation.  Reducing the fiscal deficit over five years is one of the key conditions to release the $11 billion donor funds pledged at the Cedre conference in April 2018, which will be critical to restoring investor confidence.

In addition, after decades of electricity shortages, meager investment, and costly government subsidies (of 3% of GDP in 2018) to Electricite du Liban (EdL), in April the cabinet approved a medium-term plan to transform the electricity sector.  The plan targets a reduction in technical losses, the introduction of smart meters, new power plants, and a change in the fuel mix from diesel and heavy fuel oil to cheaper natural gas.  A key fiscal measure to achieve cost recovery for EdL is an increase in electricity tariffs in 2021. This is contingent on a substantial increase in electricity generation financed by the private sector and donors.

However, efforts to implement structural reforms remain an uphill battle.  We note that even after long delays in forming a government, there was a government shutdown for more than 40 days until mid-August, following a shooting that targeted a minister’s convoy and stirred tensions between rival Druze parties in the cabinet and their allies.

Official estimates show that real economic growth slowed to 0.3% in 2018, and we expect the weak performance will persist in 2019.  Credit to the private sector contracted by 7% year on year in first-half 2019 following a 3% decline at end-2018.  Leading economic indicators for the first half of the year point to a decline of 30% or more in cement deliveries, construction permits and property sales’ value.  We estimate subdued but positive growth of 0.2% in 2019 based on some offsetting factors, such as increasing tourist arrivals from the Gulf Cooperation Council, the gradual start of exports to Syria, and the disbursement of BdL’s $1.1 billion 2019 stimulus package, which was delayed until July.

We forecast growth will recover only gradually, to 2.2% by 2022, far below the average real GDP growth of 9.2% seen in 2007-2010.  Our growth forecasts assume some increase in exports and public and private investment following the partial implementation of the government’s Capital Investment Program.  The Cedre donor funds are mostly in the form of concessional debt targeted for infrastructure and other investments.  Because this funding is contingent on structural reforms, including improving public finances, we expect disbursements will be gradual and far lower than the pledged amounts.

The government expects to start the second round of licensing for offshore blocks in 2020, following the signing of oil and gas exploration and production agreements for two blocks in 2018.  However, we have not incorporated potential oil and gas production into our economic forecasts at this time, given uncertainty surrounding discoveries and the ongoing maritime dispute with Israel.

We also expect external security risks will remain high.  The Syrian conflict has abated, but has yet to be resolved, and we expect Lebanon’s political, security, and economic trajectories will remain entwined with those of its larger neighbor.  There is also an increasing risk of escalating tensions between Hezbollah and Israel amid growing tensions between Iran and the U.S.  Moreover, Lebanese banks risk being affected by a further ramp up in sanctions against Hezbollah, following new sanctions imposed against Hezbollah members in the government for the first time.  Nevertheless, our base-case scenario does not incorporate a destabilization of the country’s banking industry.

Flexibility and performance profile: Very high debt burden, with debt-servicing capacity increasingly dependent on the central bank’s foreign reserves

-We expect a general government deficit of 10% of GDP in 2019, compared with the official target of 7.6% of GDP.

-We do, however, forecast gradually narrowing fiscal deficits through 2022, although these will not be enough to reverse the rise in government debt levels.

-We expect a small turnaround in nonresident deposits for the rest of 2019, mainly because of BdL’s recent financial engineering operation.  Nevertheless, these inflows will be insufficient to meet the country’s high external financing requirements.

We estimate Lebanon’s fiscal deficit will shrink slightly to 10% of GDP this year, from a peak of 11% in 2018.  The 2019 budget was only passed in July and the impact of the government’s policy measures will be limited to the remaining five months of 2019.  While the fiscal deficit decreased by 18% year on year during the first five months of 2019, we understand that this was mainly due to delayed payments to municipalities, hospitals, and contractors that will likely be fulfilled before the end of the year.

Lebanon’s fiscal flexibility remains constrained by high interest costs – above 50% of government revenue and the highest ratio among our rated sovereigns – along with still-high public sector wages.  Although the 2019 budget envisaged the issuance of treasury bills (T-bills) at 0%-1% interest rates, aiming for fiscal savings of 1.2% of GDP, we understand that there is no commitment from BdL or the banks to subscribe to these bills.  On the revenue front, the ratio of tax revenue to GDP is low, at about 15%, and tax evasion is widespread.

We forecast Lebanon’s deficits will gradually narrow to 9% of GDP by 2022.  Authorities expect electricity sector reforms will bring savings of $1.7 billion over the next three years and help narrow the deficit to 4.8% in 2022.  While we expect the government to make some progress on these reforms, several challenges remain, including vested political interests, subdued economic growth, public opposition to austerity, and the expiry of several of the fiscal measures included in the 2019 budget after three years.

As a result of Lebanon’s large financing needs, we expect gross general government debt will increase to 157% of GDP by 2022, from about 140% in 2018.  Although the proportion of foreign currency-denominated debt to total government debt is high, at about 40%, nonresident holdings of government commercial debt are relatively low, at about 10%.

Domestic banks support government debt-servicing in two ways:  They buy certificates of deposit (CDs) issued by BdL, which in turn buys government debt.  BdL held about 53% of the government’s outstanding domestic debt as of end-May 2019, which amounted to around 36% of total central government debt.  They buy Lebanese government debt directly.  Banking-system claims on the public sector accounted for about 13% of total banking-system assets, or about 40% of total central government debt.

The proportion of government debt BdL holds has been steadily increasing, while the proportion held directly by the banks has decreased.  BdL has absorbed banks’ liquidity through the issuance of long-term deposits and CDs, which constrains banks from converting local currency to U.S. dollars and limits rapid dollarization.  As a result, bank deposits at BdL accounted for 56% of total bank assets as of June 2019.

BdL was the key contributor to the repayment of maturing government Eurobonds in 2018 and 2019.  In April and May 2019, BdL repaid Eurobond maturities of $500 million and $650 million, respectively, through bridge financing to the Ministry of Finance (MoF).  The MoF has also issued Eurobonds directly to the BdL.  We view these Eurobonds as an accounting transaction that does not generate foreign currency until the Eurobonds are issued to investors.  We deduct the Eurobonds on BdL’s balance sheet from FX reserves–the residual amount held by BdL was $2.9 billion as of end June.

In the past, growth in nonresident and total deposits has provided a reliable source of funding for the current account and fiscal deficits, and supported BdL’s FX reserves.  However, during the first six months of 2019, there were total deposit outflows of almost $2.5 billion.  This reflects reduced investor confidence, partly driven by the delays in the formation of the government at the start of the year and the budget’s approval.

We expect continued pressure on FX reserves through 2022, given the large external financing needs, an expected drop in nonresident deposit inflows, and rising dollarization to above 70%.  Between December 2017 and June 2019, BdL’s official FX reserves (excluding gold) dropped by $6.8 billion to $33.5 billion.  BdL has implemented several financial engineering operations since 2016, the latest in July 2019.  We understand that banks attracted a little over $2 billion in deposits over July to mid-August.  As a result, central bank FX reserves improved by nearly $700 million in July, the difference reflecting other foreign currency drains on reserves.  The risk of large deposit outflows is mitigated to some extent by the increase in average deposit maturity to over one year from about just 45 days in 2017.

We forecast the current account deficit will decline only slightly through 2022, helped by gradual growth in exports following the opening of the land border with Syria.  Nonetheless, we expect the deficit will remain very large, averaging about 21% of GDP over 2019-2022, reflecting the large current account payments including imports for expected capital projects.

BdL plays a material role in steering macroeconomic and financial policy and assists in financing the budget deficit.  However, the financial engineering operations have substantially increased BdL’s domestic FX liabilities, albeit with long tenors.  BdL does not publish its net FX position.  Given the high levels of current account payments and short-term and maturing long-term external debt, we expect Lebanon will face rising pressure to maintain sufficient levels of FX reserves if it is to preserve confidence in the currency peg.

We currently believe that BdL will utilize all available tools to support the banking system and ensure financial stability in the event of sudden market distress or stress on banks’ capital position.  (S&P 23.08)

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11.3  JORDAN:  Cash-Strapped Jordan Imposes New Taxes; Public Anger Ensues

Osama Al Sharif posted on 30 August in Al-Monitor that economists suggest the Jordanian government should cut its own expenses and those of its staff instead of imposing taxes that add to the people’s economic burden.

A couple of tax-related measures recently introduced by the Jordanian government have triggered criticism and even riots in one city on the border with Syria.  Residents of Ramtha, 56 miles north of Amman, took to the streets on 23 – 24 August to protest an unexpected government decision issued on 22 August that limits the quantity of certain items — for example, only one carton of cigarettes per person — that an individual can bring into the kingdom.  Anyone caught entering with more than the allowable limits could be charged with smuggling.

Ramtha’s economy heavily depends on cross-border trade with Syria, and hundreds of taxi drivers from the city transport passengers and goods on a daily basis between the two countries.  The city’s economy suffered when the border was closed between 2015 and 2018 after the Syrian government lost control of the crossing point to rebel forces.

Rioters in Ramtha burned tires and police cars and clashed with anti-riot police for two days, until late on 24 August, when the government reached an agreement with city notables to cease all forms of escalation.  The Jordan Times reported the government justifying its decision as part of an anti-smuggling effort aimed at protecting citizens and residents from narcotics, weapons and smoking.  The government claimed on 24 August that cross-border smuggling had cost the treasury $183 million in the first seven months of this year.

On 15 August, the government announced the imposition of customs fees on products for personal use bought online outside the kingdom.  It gave the Customs Department one week to create an “electronic platform” for residents to register online to track progress toward the annual cap on online shopping of around $700, which replaced the previous cap of $3,380.  Those who fail to register will have to pay higher customs and fees when clearing the goods through customs.

The decision has forced one local company, CashBasha, which facilitates online shopping through Amazon, to suspend operations in the kingdom.  Its business model had allowed customers to order products through CashBasha’s online interface and pay in local currency to have goods delivered directly to them without having to go through the customs authority.

Interviewed by Al-Mamlaka TV on 22 August, Digital Economy and Entrepreneurship Minister Muthana Gharaibeh said that only 5% of Jordanians shop online and that the decision to impose customs fees is aimed at achieving “tax justice,” leveling the playing field as it were, given that local retailers must charge sales tax, which increases the prices of their goods, and must also pay income tax.  Gharaibeh announced that the government will soon impose a sales tax on local advertising posted on Google and Facebook.  He claimed that Google and Facebook had cut into the revenue of local ad agencies, forcing many to close.

The latest measures, described by some as desperate, were triggered by what is now expected to be a drop in government revenues for 2019.  In January of this year, the government raised custom fees on hybrid cars, resulting in a drop in related customs and sales tax revenues by $318 million in the first six months of this year compared to last year’s figures.

The government had anticipated an increase in sales tax revenue to $5 billion in 2019 compared with $4.5 billion in 2018.  During the first quarter of this year, however, total tax revenue dropped by 1.4%, or $33 million, compared to the same period of last year.  Economists attributed the decline to higher sales taxes increasing the cost of goods and the low purchasing power of consumers.

Last year, the government raised the sales tax on many consumer items, some from 0%, with a maximum of 16%.  The move was part of a three-year economic reform program agreed to with the International Monetary Fund (IMF) in 2016.  Most economic sectors in the kingdom have seen a decline in revenues over the past three years due to higher taxes, higher energy costs and lower purchasing power.

On 5 August, Deputy Prime Minister Rajai Muasher told lawmakers that the decision made last year to end the subsidizing of bread had backfired. He said that the government had disbursed JOD 170 million dinars ($239 million) annually for the subsidy, but after lifting it, was shelling out JOD 270 million ($380 million) in compensating low income families directly and bearing the total cost of keeping bread prices stable.

Jordanians mocked Finance Minister Izziddin Kanakrieh after he remarked on 5 August that government revenues from taxing cigarettes and petroleum products amount to JOD 2 billion ($2.8 billion), but that this revenue stream will decline as citizens switch to electronic cigarettes and electric cars.  Critics were quick to portray the minister as appearing to encourage cigarette smoking and fossil fuel use when the world is heading in the opposite direction.

The IMF has conducted two reviews of the Jordanian economy this year and will undertake a third assessment before the end of the year. Jordan’s annual economic growth remains modest, at around 2%, far from the all-time high of 10.58% in the first quarter of 2007.

Labib Kamhawi, an economic expert, told Al-Monitor that what is happening is a result of failed economic strategies and arbitrary decisions aimed only at raising and levying taxes.  “Instead of focusing on growth and development, successive governments have only cared about managing the bulging national debt and the growing budget deficit,” Kamhawi said.  The unsettled economic environment, Kamhawi said, has driven away local and foreign investors.  “The situation now is critical, and we are witnessing an economic stagnation that is a prelude to total collapse,” he asserted.

Khaled Zubaidi, head of the economic section at the daily Addustour, told Al-Monitor, “This government has no economic team, and its sole function is to levy taxes as our national debt reaches $42 billion.”  He added that the government has failed to encourage development projects that create jobs and attract investors.  “The government should start with itself, first by streamlining its more than $1 billion annually in salaries and other running expenses, instead of provoking citizens with arbitrary decisions,” Zubaidi said.

Osama Al Sharif is a veteran journalist and political commentator based in Amman who specializes in Middle East issues.  (Al Monitor 03.09)

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11.4  IRAQ:  Iraq Ratings Affirmed At ‘B-/B’; Outlook Stable

On 23 August 2019, S&P Global Ratings affirmed its ‘B-‘ long-term and ‘B’ short-term foreign and local currency sovereign credit ratings on Iraq.  The outlook is stable.

Outlook

The stable outlook reflects our opinion that risks from Iraq’s expansionary fiscal position will be contained, to some extent, given that spending is limited by the government’s ability to finance it.  We could lower the ratings if the government increased spending beyond our expectations, resulting in either a decline in foreign currency reserves or a sharp rise in its net debt and debt-servicing costs.  This could also occur if oil revenue fell further than we expect and the government was unable to cut expenditure or implement countermeasures.

We do not expect to raise the ratings over the next 12 months, but we could over the forecast period if higher-than-expected nonoil growth, for instance from reinvigorated reconstruction efforts, which resulted in an increase in Iraq’s economic growth and higher GDP per capita.

Rationale

Our ratings on Iraq are constrained by its nascent political institutions and domestic political tensions – including divisions between the Sunni, Shia and Kurdish ethnic and sectarian groups – as well as security risks.  Despite a significant hydrocarbon endowment, Iraq’s GDP per capita remains low and economic activity weak, in our view.  Monetary policy is largely constrained by the weakness of the banking system.  The fiscal position remains constrained by a dependence on oil revenue and large spending needs for reconstruction.

Our ratings are underpinned by the fact that the majority of Iraq’s oil output is in areas under the control of the federal government.  Crucially, more than 85% of Iraq’s oil fields and oil output are located in the south of the country, some distance from the volatile areas formerly held by Islamic State (IS).  The government’s debt levels are moderate, and the country’s external indebtedness is relatively low, reducing external risks.

Institutional and economic profile: Growth will accelerate alongside increasing oil production, but nonoil growth remains constrained

-There are some indications that the security situation is improving, which, along with increasing oil production, will support growth.

-Fostering nonoil growth will remain difficult, given slow reconstruction efforts and a weak business climate.

-We expect that Iraq’s institutional profile will remain weak, with a divided society and unpredictable policymaking.

Iraq has the world’s fourth-largest proven crude oil reserves and is the second-largest oil exporter in the Organization of Petroleum Exporting Countries (OPEC).  Oil dominates the Iraqi economy, contributing about 50% of GDP, 90% of government revenue, and more than 95% of exports.  Nevertheless, with a population of about 40 million, Iraq has relatively low economic wealth with per capita GDP at an estimated $5,200 in 2019.

After a two-year recession, we expect overall GDP growth to pick up in 2019 to 3.0%, with further acceleration in 2020 to 4.3%, as OPEC production cuts cease and production continues to ramp up.  We expect production will average 4.5 million barrels per day (mbpd) in 2019, which factors in partial compliance with OPEC production cuts, up from 4.4 mbpd in 2018.  We expect that total oil production will increase toward 5.0 mbpd by the end of our forecast period in 2022, though growth should moderate to about 2.5% in later years as oil production growth slows.

Nonoil growth has struggled to take off, not least because of slow reconstruction efforts.  Low public investment and a difficult business environment have slowed the post-war recovery.  We expect lower oil prices will likely hamper private consumption in the coming years.  The nonoil sector’s contribution to growth harbors upside potential, which could be at least partly unlocked as the government’s increased fiscal expenditure gives rise to more positive consumer sentiment.  However, the delicate political situation and weak governance will continue to constrain growth outside the oil sector over our forecast period.

Iraq’s political situation will remain complex and unpredictable, in our view.  The new prime minister, Adil Abdul-Mahdi, was appointed in October 2018, five months after parliamentary elections.  Although all cabinet appointments were made by July 2019, we view these substantial delays as symptomatic of weak administrative capacity.  They might also point to weak parliamentary support for the prime minister given that cabinet nominations require the majority support of parliament.

In our opinion, the 2019 budget highlights the unpredictability of Iraq’s policymaking.  The budget incorporates numerous concessions to quell the risk of public discontent, following years of conflict, and address substantial reconstruction needs.  However, it results in a significant public spending increase that we estimate will be about 20% above 2018 levels.

Iraq’s three-year standby arrangement (SBA) with the IMF expired in July 2019, with an estimated $2.1 billion of the $5.3 billion program disbursed, despite Iraq’s inability to meet all of the program’s conditions.  The IMF program had been an important source of support for Iraq’s fiscal situation in that it unlocked further budget financing from both official and unofficial creditors.  With no new program planned, we expect that other bi- and multi-lateral lenders will be less willing to lend to Iraq.  Although, we note that there are still actively engaged bi- and multi-lateral lenders in the country.  As a result, we expect the magnitude of the government’s planned fiscal spending and deficit to be contained.

The threat of domestic conflict remains.  The government has thwarted two would-be states within its borders in recent years: An IS caliphate and an independent Kurdistan.  However, risks of further political turmoil from both groups persist.  In September 2017, the Iraqi Kurdistan independence referendum resulted in a 93% vote in favor of independence.  However, shortly afterward, the Iraqi government took control of territory disputed by the Kurds, including the southern Kirkuk oilfields.  The Kurdistan Regional Government’s (KRG’s) position has weakened since the referendum, and it is unlikely to achieve independence.  We note more conciliatory provisions have been made for the region in the 2019 budget and that fiscal transfers from the federal government have resumed.  In addition, there is a risk that the continued influence on Iraqi politics by external parties – including Iran, the U.S. and Turkey – could destabilize consensus building.

We also believe Iraq’s political and economic development is hampered by widespread corruption.  The country ranks among the world’s worst in the Corruption Perceptions Index and the World Bank’s governance indicators.  The government has taken active measures to address this issue, including the recent reintroduction of the Supreme Anti-Corruption Council.  We believe that fighting corruption, the lingering presence of IS, and tensions with the KRG are Iraq’s major political and security challenges in the near term. Strengthening governance, accountability, and transparency could help unlock Iraq’s economic potential.

Flexibility and performance profile: Though the current account should remain in surplus, we expect a fiscal deficit moving forward

-The expansionary budget in 2019 should return the government to a deficit from a surplus in 2018.

-Following a substantial current account surplus in 2018, Iraq’s liquid external assets now exceed its external debt.

-We expect the Iraqi dinar will remain pegged to the U.S. dollar.

After a general government fiscal surplus of about 8% of GDP in 2018, from higher oil prices and a 25% underspend largely on capital expenditure, we expect a deficit of about 4.8% in 2019 and a slight increase in the deficit in the later years of our forecast horizon.  This forecast takes into account our lower oil price assumptions and the government’s ambitious spending plans.  Keeping in mind that the political pressures that contributed to this expansionary stance are unlikely to fully abate – and that Iraq’s reconstruction needs are very significant – we see limited prospects for consolidation measures to be implemented without a new IMF program.

However, even though the government envisages a budget deficit of around 10% of GDP in 2019, we expect that limited access to bi- and multi-lateral funding lines, given the end of the IMF program and no approved budgetary support, will moderate government spending.  In 2018 the government resumed reparation payments to Kuwait and in 2019, fiscal transfers to the KRG started.

The government plans to finance its 2019 deficit by running down assets accumulated from the 2018 fiscal surplus, and if needed through a mixture of short-term domestic financing (T-Bills bought by domestic banks) and increasing the pension fund’s holdings of government securities.  We expect net general government debt to average around a moderate 44% over the forecast period.

The 2018 current account surplus was nearly 17% of GDP due to high oil prices and slightly higher export volumes over 2017.  We expect the current account surplus to fall by about half in 2019, due to lower oil prices and increased imports, but the current account should remain in a surplus of about 7% on average over the forecast period.  We believe Central Bank of Iraq (CBI) data significantly underreports imports, since imports into the region of Iraqi Kurdistan are not included and imports at other entry points into Iraq are not systematically measured.  We use IMF data because we believe it provides a more accurate representation of Iraq’s external position.

After two strong years of oil exports, we estimate usable reserves at $5.8 billion at year-end 2018.  We deduct the monetary base from official reserves because we regard them as somewhat encumbered by the need to defend the currency peg in a time of stress.  The increase in reserves has had a positive effect on Iraq’s international investment position, pushing liquid external assets above external debt.  At the same time, Iraq’s external position is highly dependent on the oil price outlook.

We expect the Iraqi dinar’s exchange-rate peg to the U.S. dollar will remain in place over the next few years.  While the peg has helped control inflation, it limits the CBI’s monetary flexibility.  We view the monetary policy transmission mechanism as weak.  The banking sector in Iraq is still burdened by high nonperforming loans, and does not fully fulfill the lending functions of stronger banking systems.  For this reason, the monetary policy tools that rely on the banking sector, such as the reserve requirement and the provision of standing facilities, are of limited effectiveness in Iraq.

The financial stability of domestic banks is uncertain and we view the risk stemming from the financial sector as a moderate contingent liability for the government.  In our view, the government would bear the cost of any needed recapitalization resulting from a reorganization of the banking sector.  Financial accounts audited to international standards are not available for most banks in Iraq.  We believe that the two largest banks, Rafidain Bank and Rasheed Bank, which are both owned by the state, are severely undercapitalized, and consider that there are high nonperforming loans across the whole sector.  (S&P 23.08)

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11.5  GCC:  VAT in Gulf Arab States – Balancing Domestic, Regional and International Interests

Robert Mogielnicki posted on 26 August in Arab Gulf States Institute in Washington that the Gulf Arab states remain in the early stages of implementing a value-added tax following the Gulf Cooperation Council’s adoption of the Unified VAT Agreement in 2016.  A VAT functions as an indirect tax on select goods and services – often referred to as a consumption tax – that is imposed wherever value is added along the supply chain.  This fiscal measure is part of a series of economic reforms Gulf Arab states have introduced since the oil price shock beginning in 2014, seeking to diversify government budgets and boost non-oil revenue with new taxes and fees.  International organizations, such as the International Monetary Fund, have strongly encouraged Gulf Arab states to introduce a VAT and also recommended an increase in the standard tax rate beyond 5%.

Progress to date has been mixed.  Saudi Arabia and the United Arab Emirates each imposed the VAT in January 2018, whereas Bahrain began implementing the tax at the outset of 2019.  Total revenue collection figures in Saudi Arabia and the UAE exceeded initial expectations, averaging 1.55% and 1.79% of gross domestic product respectively.  Inflation jumped in both countries following the introduction of the tax, but price increases are expected to moderate over the coming years.  Saudi Arabia, the UAE and Bahrain simultaneously passed measures to minimize the economic impact of the VAT on businesses and local citizens.  These measures include zero rating (levying a VAT at the rate of 0% on a product or service), exemptions and VAT-free zones.  Preferential treatment not only reduces the overall tax base – and consequently the total revenue potential – but also complicates the future integration of each country’s VAT system.

The remaining GCC states have delayed the VAT implementation.  Kuwait, Oman and Qatar are expected to launch domestic VAT systems by 2020 or 2021.  The reasons behind the delays are not entirely clear.  Kuwait’s slow-moving political bureaucracy, Oman’s challenging economic environment, and the boycott of Qatar posed genuine challenges to an implementation of the tax by the beginning of 2018.  These countries have achieved more progress in the adoption of a modest excise tax, in accordance with the GCC’s Common Excise Tax Agreement of 2016.  Qatar and Oman adopted an excise tax in 2019, and Kuwait plans to introduce the tax in 2020.

Despite beginning as a regional policy and being strongly encouraged by international organizations like the IMF, the VAT in the Gulf is becoming an increasingly country-focused initiative.  This approach may be required for individual countries to advance a VAT system that is palatable to political insiders, members of the economic elite, and other actors in key sectors.  The regional context also shifted since the adoption of the Unified VAT Agreement in 2016: A less cohesive GCC hampers policy coordination among the bloc’s member states.  Variation in the timing of implementation and technicalities of tax policy designs could increase competitive dynamics among states.  Moreover, uncoordinated development of local tax systems complicates the regional integration of tax systems needed for the smooth functioning of intra-GCC trade in goods and services.  (AGSIW 27.08)

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11.6  OMAN:  Challenges to Maximizing Renewables in Oman’s Energy Mix

Aisha Al-Sarihi posted on 27 August at the Arab Gulf States Institute in Washington that climate change and increasing energy demand have prompted a global search for ways ‎of producing less pollution-generating energy.  The oil- and gas-rich Gulf Arab states are ‎highly impacted by climate change and are also challenged by increasing domestic ‎energy demand.  The surge in energy demand of 5% per year on average for the Gulf ‎Arab states has been mainly met by fossil fuel resources, namely oil and gas, which ‎comprise nearly 99% of the total energy mix; this has been associated with regional ‎growth in greenhouse gas emissions. Increasing energy demand has already triggered ‎some of the Gulf Arab states, such as Oman, the United Arab Emirates and Kuwait, to ‎import natural gas to meet domestic energy needs.  This growing demand has also ‎affected the ability of these hydrocarbon-dependent states’ economies to maintain oil ‎and gas exports, the major sources of income.‎

Furthermore, deficits in states’ budgets due to the 2014 drop in oil prices have prompted ‎Gulf Arab governments to seek alternative sources of income to hydrocarbon revenue. ‎ However, the Gulf states have pursued economic diversification largely through the ‎expansion of oil downstream industries and petrochemicals, which necessitate ‎reallocation of oil and gas feedstocks for their operation.  Reallocation of oil and gas ‎feedstocks to petrochemical industries, however, is challenging because oil and gas ‎supplies are also needed to meet increasing demands for electricity, water desalination, ‎and, in some cases, enhanced oil recovery.‎

The Gulf Arab states are therefore searching for alternative energy resources, such as ‎renewable energy.  Renewables could contribute to reducing greenhouse gas emissions ‎while also supporting the Gulf states in their economic goals of meeting increasing ‎domestic energy demand and creating jobs.  However, renewable energy remains ‎extremely underutilized in the Gulf Arab states: By the end of 2018 renewables ‎accounted for a mere 0.6% of total electricity capacity.  In Oman, for instance, the ‎share of renewables in total electricity capacity was around 0.5% in 2018 despite ‎ambitious plans of sourcing 10% of electricity from renewable energy sources by ‎‎2025.  Natural gas is the main fuel used for electricity generation, constituting nearly ‎‎96.7% of the country’s energy mix.‎

Types and share of fuel used for electricity generation in Oman

Aware of the economic, social, and environmental challenges associated with 100% ‎reliance on hydrocarbons, the Omani government has started focusing on developing ‎alternative energy resources, such as renewables. In 2008, Oman’s Authority for ‎Electricity Regulation launched a study to assess the potential renewable energy ‎resources in the country. It found significant available resources, especially wind and ‎solar. The study indicated that 50% of houses in Oman, with 20 square meters of ‎available roof area, are suitable for solar photovoltaic installation; utilizing the total ‎available area would provide space for an installation capacity at around 420 ‎megawatts.  Also, the study indicated that around 100 square miles of desert area (0.1% ‎of the country’s land area) could be utilized to build concentrated solar power plants, ‎providing around 2,800 megawatts of solar energy capacity.  Additionally, the ‎installation of 375 wind turbines, each with 2 megawatts of capacity, would have the ‎generation potential of at least 750 megawatts; this would require a wind farm land area ‎of nearly 40 square miles.  If all available solar and wind resources are harnessed, a total ‎‎3,970 megawatts of electricity could be generated from renewables – around 48.2% of ‎total installed electricity capacity in 2018.‎

The release of the 2008 study sparked interest among investors, researchers, and other ‎governmental entities in Oman in renewable energy research and development.  In 2017, ‎Oman launched two policy initiatives and the Oman Power and Procurement Company ‎signed a power purchase agreement for the first utility-scale 50 megawatt wind-based ‎renewable project in southern Oman.  The first policy initiative, Sahim, allows entities ‎such as homeowners and commercial buildings to install rooftop solar photovoltaic ‎systems to produce solar electricity for their own use and to sell surplus energy to ‎electricity distribution companies.  Secondly, Oman announced a national renewable ‎energy target, which aims to source 10% of total electricity generation capacity from ‎renewables by 2025.  Oman’s installed renewable energy capacity increased from 1 ‎megawatt in 2014 to 8 megawatts by the end of 2018.  Oman’s progress toward ‎incorporating renewables is in line with its commitments to the Paris Agreement, which ‎it signed in April 2019, and its target of reducing greenhouse gas emissions by 2% set in ‎its nationally determined contribution.‎

In considering increasing renewable energy adoption in hydrocarbon-rich states, it is ‎important to explore the interactions between renewable energy and economic, social, ‎and environmental domains.  This can help to measure the role of renewables in ‎addressing the challenges of energy security, job creation and reducing carbon ‎emissions.‎

‎Interactions between renewable energy technologies and economic, social, and environmental ‎domains ‎

In the case of Oman, considering four scenarios with different degrees of integration of ‎renewable energy sources in the sultanate’s energy mix (including solar photovoltaic, ‎concentrated solar, and wind power) shows varying impacts on levels of hydrocarbon ‎consumption, carbon dioxide emissions, and job creation.  These scenarios include a ‎business-as-usual situation in which there is no additional incorporation of renewables ‎as well as moderate, advanced, and ambitious scenarios, with 10%, 30% and 50%, ‎respectively, of electricity generation sourced from renewables through 2040.  The ‎ambitious scenario is estimated at 50% renewable energy integration in line with the ‎‎2008 Authority for Electricity Regulation’s findings projecting that, if harnessed fully, ‎renewables could meet 48.2% of Oman’s total electricity installed capacity.  Also, solar ‎photovoltaic remains at 10% in the advanced and ambitious scenarios due to its ‎potential to meet only 10% of Oman’s total electricity installed capacity.‎

Proposed Renewable Energy Integration Scenarios Through 2040 ‎

By 2040, in the business-as-usual scenario, the use of natural gas for electricity ‎generation could increase by 28% compared with 2010. In comparison to the business-‎as-usual scenario, in the moderate, advanced, and ambitious scenarios, there could be ‎‎27%, 46%, and more than 64% less natural gas consumption, respectively. Furthermore, ‎if no renewables are included in the future energy mix, carbon dioxide emissions are ‎expected to significantly rise. Under the current growth rate of natural gas consumption ‎for power generation, in the business-as-usual scenario, total carbon dioxide emissions ‎are expected to rise by 400% from 2010 to 2040. The integration of renewables, ‎however, could reduce carbon dioxide emissions in comparison to the business-as-usual ‎scenario by more than 20%, 40%, and 58% in the moderate, advanced, and ambitious ‎scenarios, respectively. In terms of job creation, given the increase in the renewable ‎energy share in Oman’s energy mix in the moderate, advanced, and ambitious scenarios, ‎the employment in installation, operation, and maintenance of renewable energy ‎technology would increase correspondingly. Concentrated solar power provides the ‎largest number of jobs over time compared with other renewable technologies, such as ‎solar photovoltaic and wind power.‎

Yet, a number of barriers continue to constrain large-scale adoption of renewable ‎energy in Oman. These include a fragmented energy policy, the lack of a comprehensive ‎renewable energy regulatory framework, and a highly controlled energy market. To ‎better integrate renewables into the country’s energy mix, Oman needs to make ‎institutional changes to harmonize the efforts of different energy sector entities and ‎define accurate roles and responsibilities; develop a comprehensive renewable energy ‎regulatory framework to promote the integration of renewables in different energy ‎sectors, such as electricity, transportation, and industry; and gradually liberalize the ‎energy market, which could improve decision-making processes and attract renewable ‎energy investors.‎

Overcoming barriers that hinder the integration of renewables would unlock many ‎socioeconomic and environmental advantages. However, solar and wind energy alone ‎cannot meet all of Oman’s energy needs, especially given their nature of intermittency ‎and low technical efficiency due to high temperatures, humidity, and dust in the ‎country. Therefore, the enhancement of a mixed clean energy profile, including off-‎shore wind, waste-to-energy, hydrogen, thermal, and hydropower energy sources, as ‎well as developing smart grids and enhancing regional cooperation on renewables are ‎promising options that need further investigation.‎

Aisha Al-Sarihi is a non-resident fellow at the Arab Gulf States Institute in Washington.  Her ‎areas of research interest include political economy of environmental sustainability, energy ‎policy, renewables, and climate policies, with a focus on the Arab region.‎   (AGSIW 27.08)

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11.7  EGYPT:  Egypt Takes Another Step Toward China

Haisam Hassanein posted in TWI PolicyWatch 3168 on 19 August that port projects and other outreach may help President Sisi check off some of his policy goals, but giving China such a foothold could threaten a number of U.S. interests in the region.

On 5 August, Egypt signed a memorandum of understanding with the Chinese company Hutchison Ports to establish a Mediterranean container terminal in Abu Qir.  President Abdul Fattah al-Sisi himself attended the signing ceremony, where he praised the company’s global reputation in the field and emphasized the importance of executing the project in accordance with the highest international standards.

The project is in line with Sisi’s track record of seeking Chinese help to fulfill his ambitious domestic and foreign agenda.  Hutchison is one of the world’s leading port networks, operating terminals in twenty-seven countries; in Egypt, it operates the country’s two main commercial ports, Alexandria and El Dekheila.  The company’s representatives commended the opportunity for direct investment in Abu Qir and announced that they will be training more than 1,500 Egyptian engineers and other workers for jobs at the terminal.  According to them, the facility will be able to handle up to 1 million containers annually once completed.

Sisi’s Outreach to China

Since Sisi took office as president in 2014, he has visited China six times and met with President Xi Jinping seven times.  His first trip took place in December 2014, when he signed twenty-five bilateral agreements, mainly on energy and transport issues.  He also pledged to cooperate on what has come to be known as the Belt and Road Initiative (BRI), China’s sweeping strategy to build a new Silk Road by investing in roads, rail, energy production, transit and other infrastructure projects across some sixty countries.

In September 2015, Sisi showed the seriousness of his intent to deepen ties by attending Beijing’s celebration of the seventieth anniversary of the end of World War II.  Four months later, President Xi traveled to Cairo at Sisi’s invitation, the first such visit by a Chinese leader since 2004.  Xi in turn invited Sisi to two multinational events: the G20’s Hangzhou summit in September 2016, and the BRICS summit and business forum in Beijing a year later.

In September 2018, Sisi visited China for a fifth time to take part in the Forum on China-Africa Cooperation.  During his speech at the event, he praised Beijing’s outreach to African nations and emphasized the intertwining importance of the BRI and Agenda 2063, an African Union plan for transforming the continent into a global powerhouse.

Most recently, Sisi traveled to Beijing this April to attend the Belt and Road Forum for International Cooperation alongside thirty-seven other world leaders.  There, he argued that Egypt has changed for the better under his rule—and, by extension, become a more attractive investment location—by successfully countering terrorist threats, implementing economic reforms, and practicing a balanced foreign policy in the Middle East.

Sisi’s reasons for wooing China so ardently are legion:

Prioritizing “no pressure” relationships.  The Chinese government has stayed out of Egypt’s internal affairs since the 2011 uprising and was quick to congratulate Sisi when he became president, even sending a special representative to his inauguration ceremony.  Unlike the United States, Beijing has not criticized Cairo for its record on political detainees, torture of prisoners, or other human rights abuses.  In return, Sisi has remained silent on China’s crackdown against Uyghur Muslims.

Accelerating economic growth. China is the world’s second-largest economy and Cairo sees it as being the global model on this front in the future.  Hence, Sisi has sought to establish close logistical relations in the hope of eventually making Egypt a central player in the Middle East and North Africa.  Thus far, Chinese investments in Egypt have centered on industrial projects (55%), construction (20%) and services (19%).  To further enhance bilateral investment, the two countries founded the Egyptian-Chinese Chamber of Commerce Association, and business delegations from both nations have visited each other.  Sisi looks fondly at China’s success in transforming itself from a developing nation into a major economic power, seeing Beijing’s model as a blueprint for how a state can spur such growth while still ruling with an iron fist.

Courting a great power.  Sisi also regards China as the world’s future political and security superpower, so having Beijing on his side is crucial to raising his own status in the international arena.  In exchange, he has offered to open Egypt’s large markets to Chinese products, which in turn could give Beijing a window to the rest of the Arab world and Africa.  These and other goals spurred the two governments to sign a comprehensive strategic partnership deal in 2014.

Diversifying Egypt’s foreign policy and military options.  In Sisi’s view, Egypt’s biggest mistake during the Mubarak era was throwing all of its eggs in one basket, namely, the Western world.  He believes Cairo should engage with every world power so that it does not become dependent on one geopolitical axis or another.

Bolstering political legitimacy at home.  Historically, most Egyptian leaders have relied on their military backgrounds and heroic war records to boost their legitimacy during times of economic or political crisis.  For instance, Hosni Mubarak constantly reminded the public that he had led the air force during the 1973 war.  Anwar Sadat marketed himself as the man of war and peace who restored Sinai to Egypt, and Gamal Abdul Nasser was the hero of the poor and a symbol for resistance against “Western imperialism.”

Until recently, Sisi used a similar strategy, rallying the public around the goals of confronting the Muslim Brotherhood and jihadist terrorist groups.  Now that his security apparatus has contained the Brotherhood and noticeably diminished the number of terrorist attacks, he apparently believes he has to reinvent himself for the Egyptian public in order to maintain his grip on power.  One way to do so is by getting close with world leaders and appearing on the international stage as often as possible to show audiences back home that he is still relevant.  Indeed, his media machine in Egypt never misses an opportunity to glorify his international speeches.

Implications for U.S. Policy

China has become an essential component of Sisi’s agenda at home and abroad.  Without its financing and expertise, showpiece projects like the new administrative capital and a new Suez Canal industrial zone are unlikely to get off the ground.  In return, China wants to take advantage of Egypt’s position in the Arab world and Africa to facilitate bilateral and collective cooperation in both regions, including on projects that further the BRI.  All of this should worry the United States, especially since China could use its access to Egyptian ports to improve its standing in the Middle East and potentially gather intelligence on U.S. interests, similar to Washington’s concerns about Israel’s Haifa port.

Other potential security concerns should be assessed as well, including: Chinese military sales to Egypt competing with U.S. sales; Chinese technology posing a counterintelligence risk; Chinese arms or forces establishing anti-access/area-denial bubbles in the East Mediterranean or Suez; and Beijing’s relations with North Korea accelerating Cairo’s own troubling engagement with Pyongyang.  Determining the severity of such threats will help Washington decide how Egypt fits into America’s growing great-power competition with China.

Haisam Hassanein was the 2016-2017 Glazer Fellow at The Washington Institute.  (TWI 19.08)

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11.8  EGYPT:  Egypt Declares Water Emergency as Precaution

Ayah Aman posted on 20 August in Al-Monitor that Egypt is cautious but optimistic on its water supply for the year, with strategies to address last year’s drop in Nile River flow.

Though water-scarce Egypt is on the verge of flood season, Cairo has declared a state of emergency due to a decline in water flow from last year.  Yet water experts say the country is in good enough shape because of its reserves and water conservation measures.  “The job of an irrigation engineer in Egypt has changed,” Mohammed al-Sibai, spokesman for the Ministry of Water Resources and Irrigation, told Al-Monitor.  “We no longer manage water flooding but manage water scarcity, and make precise plans to deal with it, so as not to harm the main interests and the citizens’ needs.”

The ministry reported on 27 July that the total annual Nile River flow dropped 5 billion cubic meters (1.3 trillion gallons, or 6.5 billion cubic yards) from the year before due to decreased floodwaters from the Ethiopian plateau and equatorial lakes.  The government imposed a state of emergency in all governorates to regulate and manage water, especially to meet water needs for drinking and domestic use.  “Egypt’s annual water quota … will not be affected by the decline,” Sibai said.  “A state of emergency means keeping all of the Water Ministry’s departments on maximum alert to periodically follow up on the water situation in the main riverbed and all canals and water channels in the governorates.”

Sibai said, “According to the ministry’s Nile Flood Forecasting Center’s data on the amount of rainfall on the Ethiopian plateau [and equatorial lakes] during the current rainy season, flood rates are still moderate,” meaning there won’t be any extra water to increase the storage level in the Aswan High Dam reservoir.

Floodwaters flow into the Nile and then into the man-made Lake Nasser reservoir, created by the Aswan High Dam in Aswan province.  Some of the flow comes from rain in Ethiopia’s hills.  Another source is water that Sudan discharges from its dams to accommodate the new season’s floodwater coming from the Ethiopian plateau.  The annual water flow from the Nile is estimated at an average of 84 billion cubic meters of water.  Egypt gets 55.5 billion cubic meters of water a year from this flow, while Sudan receives 18.5 billion cubic meters under the 1959 Nile Waters Agreement.  The rest of the river’s flow is stored behind the Aswan High Dam and is considered a strategic stock for Egypt in case of water shortage or droughts.

Egypt is diligent about monitoring water availability.  “In addition to the declining water flow, Egypt is dealing with a water gap that is widening every year,” Sibai said.  “Internal needs are now estimated at 114 billion cubic meters annually, while only 59.4 billion cubic meters of running surface water is available.”  Sibai said, “The water deficit will be fixed through water recycling projects, which provide 24 billion cubic meters of water. Egypt is now one of the top countries in terms of water-use efficiency, reaching a rate of 95%, according to international estimates.”  Egypt also imports food and industrial products that, if grown or made internally, would require 34 billion cubic meters of water.

Despite the water scarcity in Egypt, “the water year 2018-2019 has ended well,” Sibai said.  “The daily challenges and problems that farmers face were dealt with in a number of ways, as endorsed in the 2017-2037 Water Resources Plan between nine ministries.”  The plan addresses four areas: developing water resources, improving water quality, making water use more efficient while reducing the amount used, and community awareness.

According to experts in Egyptian water affairs, the decrease in the Nile River’s flow from floodwater may not present a major danger at the present time, given Egypt’s strategic water reserves in the Aswan Dam, in addition to the absence of serious climatic events such as the drought that hit the Nile basin in the 1980s.

Abbas Sharaqi, a water and geology professor at Cairo University, told Al-Monitor Egypt’s current water scarcity is mainly due to its population growth, not the lower water flow from the Ethiopian plateau or equatorial lakes.  “The main rainy season in Ethiopia, which feeds the Nile, is in July, August and September, and the water reaches Egypt three weeks after the rainy season begins.  The amount of floodwater can’t be judged before the season ends in September,” Sharaqi said.

“It’s not possible to be in real danger, as long as there is a strategic water reservoir in the Aswan Dam, and official figures indicate that the water level there is so far within the safe limits,” he said.  “The most important challenge is to maintain safe [levels] of water in Lake Nasser.”

The decline in the Nile’s water flow is a chronic but manageable challenge for the Egyptian government.  Ethiopia had delayed filling the estimated 74 billion cubic meters of the Grand Ethiopian Renaissance Dam reservoir due to internal tensions.  Prime Minister Hailemariam Desalegn resigned in February 2018; the dam project manager killed himself that July, according to authorities; and dam officials were arrested on corruption charges.  Meanwhile, Cairo has yet to reach a clear agreement with Ethiopia to set common rules for filling the dam reservoir and avoiding any harm.

But last month, Egyptian Minister of Water Resources and Irrigation Mohamed Abdel Ati led an official delegation to Sudan and Ethiopia to discuss resuming negotiations and present Ethiopia with Egypt’s vision of the rules for filling the Renaissance Dam.  Speaking about the effectiveness of such steps, Sibai said, “Leaderships in Egypt, Ethiopia and Sudan do not trust one another, and we recognize the parties’ appreciation of how critical the situation is.  The issue is being managed by virtue of agreements and treaties that guarantee no harm is done to any party.”

Ayah Aman is an Egyptian journalist for Al-Shorouk specializing in Africa and the Nile Basin, Turkey and Iran and Egyptian social issues.  (Al-Monitor 20.08)

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11.9  MOROCCO:  King Mohammed VI Announces Plan to Promote Social & Economic Equality

As reported by Al-Monitor, Morocco is taking action on unemployment, King Mohammed VI said recently, stressing the need to develop a social protection program and enhance education, especially vocational training.  Speaking on 20 August on the 66th anniversary of the Moroccan revolution, the monarch said the government is ready to select a commission to reduce social and economic disparities.  One way to do this, he believes, is by emphasizing education. He wants priority placed on vocational education over academic and university programs.

He said, “Passing the baccalaureate exam and going to university is not a privilege but a phase in the education process.  It is even more important to receive training that opens up prospects for professional integration and social stability.

However, such job prospects look dim.  Higher Planning Commission figures from May 2018 showed unemployment among vocational school graduates reached 26% in 2017.  A new development model is needed because of deteriorating conditions.  Morocco has suffered setbacks in the political, human rights, social and economic arenas, with protests igniting in multiple parts of the country.  There have been demonstrations over jailed activists in the northern Rif region, protests over water scarcity in Imider and Zagora in the south and marches in Jarada in the northeast.

What has led to these declines?  At the political level, most parties are struggling with internal conflicts that are using up what’s left of citizens’ trust.  At the economic level, the worsening budget deficit and national debt have affected productivity and the quality of public services and utilities, especially in the education and health sectors.  The poor have been affected disproportionately.

One obstacle to approaching parity among citizens is the imbalance of power in managing the country’s political affairs.  The late Driss Benali, who was a prominent economics professor at Mohammed V University in Rabat, said in 2011, “In order to bring about a just distribution of wealth, societal pressure is required.  This is why a democracy based on power and counterweight [to state] power is intrinsic.  There is no need for us to form consultative committees.”

Looking back over Mohammed VI’s rule, there were signs at the beginning of his reign in 1999 that he wanted to move away from the oppressive methods of his predecessor and father, King Hassan II.  He toured Morocco advocating help for marginalized groups and was nicknamed the “king of the poor.”  He soon dismissed his father’s Interior Minister Driss Basri, who was accused by political and human rights organizations of gross human rights violations.  Basri was called Hassan II’s “iron fist” during his repressive rule (1961-1999), known as the “Years of Lead.”

Perhaps to ease his son’s transition, Hassan II had appeared to soften in the last years of his reign, and in 1998 agreed to a rotation government chaired by socialist Abderrahmane Youssoufi.  This government was still in place at the beginning of Mohammed VI’s rule.  However, after the 2002 legislative elections, he appointed Driss Jettou, who had no political affiliation, as prime minister in a move that critics predicted would end the democratic transition process.

Today, eight years after the Arab Spring and 2011 constitution, the executive body is still subject to royal prerogatives.  Speaking to Hespress in March, Abdullatif Wehbi, a leading figure of the Authenticity and Modernity Party, said Jettou in effect had abandoned his powers as head of the executive body.

Mohammed VI has implemented some humanitarian ventures, but with questionable success.  In 2004, the Equity and Reconciliation Commission was set up with the goal of investigating human rights violations under Hassan’s rule and making sure victims received reparations.  The experiment, a first in the region, fell short: Victims’ documented testimony provided a factual account but did not include the names of the perpetrators.  Some human rights activists warned that failing to prosecute human rights violators would lead to a culture of impunity.

In 2005, under Mohammed VI’s watch, the National Human Development Initiative for Morocco was launched to combat poverty by setting up income-generating micro-enterprises.  However, in 2013 the Economic, Social and Environmental Council reported on the project’s defects: low productivity and profitability, poor governance and no continuing support for the enterprises.  These problems eventually contributed to the UN Development Programme ranking Morocco 123rd in its 2018 Human Development Index.

As for the king’s record regarding freedom of expression, there are still notable violations.  Some media outlets have been closed for good, such as the Demain magazine in 2003 as well as Nichane and Le Journal, which both closed in 2010.  Following the Arab Spring, increasing members of the press were arrested and prosecuted, including journalist Ali Anouzla in 2013, editor-in-chief of Badil.info Hamid el-Mahdaoui in 2017 and Taoufik Bouachrine, editor-in-chief of Akhbar al-Youm newspaper, in 2018.

Economist Najib Akesbi, a public policy professor at the Hassan II Institute of Agronomy and Veterinary Medicine in Rabat, gave his take on the situation during a 2018 seminar at the pro-democracy think tank Abderrahim Bouabid Foundation.  He said, “The current political regime has made decisions without taking into account the community’s needs or correlating responsibility and accountability.”

Amine Belghazi is a freelance journalist and video producer based in Casablanca. He holds a master’s degree in international finance.  (Al-Monitor 29.08)

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11.10  TURKEY:  Environmental Problems Provoke Protests on All Fronts in Turkey

Orhan Kemal Cengiz posted on 12 August in Al-Monitor that the Justice and Development Party government’s policy of ignoring environmental concerns cause tensions in Turkey.

In May 2013, Turkey was shaken by mass protests that were labeled as the Gezi Park uprising.  In the beginning, there were only a few tents erected by environmentalists in Gezi Park in Istanbul to prevent the cutting down of some trees.  After a harsh police intervention where tents were set on fire, millions of Turks took to the streets across the country in an unprecedented social movement.  Some of the protesters are still in prison and being tried.

Nowadays, tensions are running quite high once again on environmental matters with protests, campaigns and strong reactions across the country.  Thousands of protesters staged demonstrations on the outskirts of a small town in the northwestern province of Canakkale over the Kirazli Gold Mine Project owned by Dogu Biga Mining, the Turkish subsidiary of Canada-based Alamos Gold, after disturbing images of clear cutting in the Ida Mountains shared on social media sparked public outrage.  Alamos Gold allegedly cut down 195,000 trees, four times more than it declared in the environmental impact report.

In addition, some 123,000 people signed a petition in just under two days to protect Lake Salda in the Yesilova district of Burdur province in southwestern Turkey.  Lake Salda is referred to as “Turkey’s Maldives” because of its white sand and turquoise waters.  The petition demands that the Turkish government cancel plans to build a park around the lake.

Meanwhile, protests continue against the filling of the controversial Ilisu Dam, whose artificial lake will submerge 12,000-year-old town of Hasankeyf in Batman province in Turkey’s southeast.  Police took 19 protesters into custody before releasing them.

These and other protests and actions against environmental degradation took place this month; the numbers of protesters point to some critical social and political trends in Turkey.

One may need to understand what caused all these environmental problems and the sense of alarm they created before trying to comprehend what these protests signify for the future of Turkey.  For the last 10 years, there has not been a single day where has not been an image in print and on social media showing serious environmental problems.  Some of these issues were caused by large construction projects such as Istanbul’s third bridge, Istanbul’s third airport and so on.  It is estimated that 13 million trees were cut down just for Istanbul’s third airport.  For Erdogan’s summer residence the number was 40,000, and for his official residence (they are both called the Palace) 10,000 trees were cut down.

Hydroelectric power plants not only destroy forests but also create serious environmental problems.  Hydroelectric power plants and nuclear reactors are being built or planned in many parts of the country, causing serious concerns.

Gold mines such as the one operated by Canadian Alamos Gold in the Ida Mountains cause serious anxiety because of the huge amounts of cyanide that are used to reach the gold companies want to extract.  Canakkale Mayor Ulgur Gokhan warned that the region is a first-degree seismic zone and that an earthquake could spell a disaster and that water sources might be poisoned.

In fact, Turkey was condemned by the European Court of Human Rights for not closing down a gold mine after it was established by local courts that cyanide leaching caused health problems for people living in the vicinity.  The Canakkale mayor told the press that 26 other mining licenses have been granted in the region so far, meaning that the deforestation caused by Alamos Gold could be repeated many times over in this region.

These environmental issues are occurring not just from mines in northwest Anatolia, where Alamos Gold cut down the trees, but across the country.  The root cause of these problems is legal amendments made by Erdogan’s Justice and Development Party government.  In 2004, the government changed the mining laws, making obtaining permission to operate much easier for Turkish and foreign investors.  The government granted more than 40,000 mining licenses between 2006 – 2008 alone.

According to 2019 Turkey Forestry Report of the Foresters’ Association, as a result of the 2004 legal amendments, it became possible to operate mines even on the best-quality forest land in Turkey.  Thus, foreign and Turkish investors have been operating mines in areas with some of the best ecosystems in the world, such as the Ida Mountains and Artvin.  Ahval News reported that during the reign of the AKP, forest areas opened for mining have increased by 170%.

Protests against the construction of the Ilisu Dam have also employed strong messaging by evoking the symbols of international destruction.  Hundreds of Twitter users have likened the blowing up of Hasankeyf with dynamite to the Taliban’s shattering of Buddha statues in Afghanistan.  These bitter reactions show, first, that people are outraged, and second, that even though thousands of people have been arrested, taken into custody and punished just for their social media messages, the anger caused by the environmental problems has trumped people’s fear of being retaliated against.

Professor Berkan Gultekin, an expert on environmental problems, says the government will continue to open natural resources to exploitation and commercialization to overcome the country’s economic crisis.  This means that protests will continue.  For example, 220 tents have been erected to join the Water and Conscience Watch to protect the forest against the gold mine in the Ida mountains, showing how environmental struggle will be playing a prominent role in the future of Turkish politics.

Orhan Kemal Cengiz is a human rights lawyer, columnist and former president of the Human Rights Agenda Association, a Turkish NGO that works on issues ranging from the prevention of torture to the rights of the mentally disabled.  (Al-Monitor 12.08)

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18 September 2019
18 Elul 5779
19 Muharram 1440

TOP STORIES

• Finistere, OurCrowd, Tnuva & Tempo Launch “Fresh Start” FoodTech Incubator
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• JORDAN: Ratings Affirmed At ‘B+/B’; Outlook Remains Stable

TABLE OF CONTENTS:

 1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Finance Ministry Plans to Cancel VAT Exemption on Online Imports
1.2  Bank of Israel Warns of Potential National Insurance Institute Bankruptcy

2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Zoomd’s Continues Its International Expansion with Toronto IPO
2.2  Stoke Raises $4.5 Million in Seed Funding to Bring the Open Talent Economy to Businesses
2.3  Stage Fund Acquires Cymmetria
2.4  Syte Raises $21.5 Million in Series B Funding to Accelerate Global Expansion
2.5  Syte Raises $21.5 Million in Series B Funding to Accelerate Global Expansion
2.6  OurCrowd Expands U.S. Operations and Opens Office in Chicago
2.7  Polytex Technologies Receives Major Investment from Fortissimo Capital
2.8  Tipa Closes a $25 Million Growth Financing Round
2.9  BigID Raises $50 Million to Help Companies Comply With Global Privacy Regulations
2.10  Snyk Raises $70 Million to Accelerate Dev-first Security
2.11  Cyber Risk Modeling Company Kovrr Raises $5.5 Million
2.12  vHive Raises $5.5 Million in Series A Funding, Led by Octopus Ventures
2.13  Foresight Signs Agreement with Leading Chinese Infrared Camera Manufacturer
2.14  Finistere, OurCrowd, Tnuva & Tempo Launch “Fresh Start” FoodTech Incubator
2.15  Trigo Raises $22 Million A Round to Enable More Grocery Retailers to Battle Amazon Go
2.16  Igentify Raises in $10.5 Million in Funding Round

 3:  REGIONAL PRIVATE SECTOR NEWS

3.1  Kuwait’s Largest Law Firm Signs Collaboration Agreement with Andersen Global
3.2  Dubai’s Numu Capital Invests in Medical Tourism Facilitator Doctoorum
3.3  Foloosi Raises $500,000 in Most Recent Funding Round
3.4  Saudi Arabia’s Pharmaceutical Sector to be Worth over $10 Billion by 2023
3.5  Norwegian Firm Plans to Create First Salmon Farm in Saudi Arabia

 4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Electric Buses Deployed on Jerusalem’s Streets
4.2  UAE’s Masdar Partners with UK Government to Invest in New Tech Fund
4.3  How Abu Dhabi Plans to Reduce Energy Consumption by 2030

5:  ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Balance of Payments Records a $5.32 Billion Deficit in July 2019
5.2  Number of Total Registered New Cars in Lebanon Dropped by 24% in August 2019
5.3  Jordanian Unemployment Continues to Rise Unabated

Arabian Gulf

5.4  Food Consumption in the GCC Growing to 60.7 Million Tonnes by 2023
5.5  Arab Middle East Defense Spending Forecast to Total $100 Billion in 2019
5.6  UAE Healthcare Sector Outlook 2019-2023
5.7  UAE Approves Nutrition Labelling Plan to Help Curb Obesity Rates
5.8  Baskin Robbins Leads as the UAE’s Most-Loved Fast Food Brand
5.9  Medical Tourism Sales in the UAE Increased by 5.5% in 2018
5.10  New Deal Aims to Make Abu Dhabi a Top Medical Tourism Destination
5.11  Dubai FDI on US Mission to Chase More Foreign Investment
5.12  Saudi Oil Production Cut in Half Following Drone Attacks

North Africa

5.13  Egypt’s Foreign Reserves Reach a Record $44.96 Billion
5.14  Morocco is the 2nd Largest Wine Exporter in Africa

6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Rate Falls to 15% in August
6.2  Turkish Exports Rise by 1.7% in August
6.3  Turkey’s Biggest Firm to Halt Steel Production on Demand Slump
6.4  Greece’s Jobless Rate Falls to 16.9% in the Second Quarter
6.5  Greek Tax Revenues Over Perform in First Eight Months of 2019

7:  GENERAL NEWS AND INTEREST

Israel

7.1  Israel’s Election Results Pending Final Count
7.2  TAU Among World’s Top 10 Universities Producing Entrepreneurs, Startup Founders

Regional

7.3  Construction Begins on $272 Million in New Schools in Abu Dhabi
7.4  Moroccan Universities Rank Poorly in the World University Rankings 2020
7.5  Only Two Turkish Universities Ranked Among the World’s Top 500

8:  ISRAEL LIFE SCIENCE NEWS

8.1  NRGene Advanced Technology Joins the Amazon Web Services Partner Network
8.2  EarlySign’s Machine Learning Algorithm Predicts High-Risk Cardiac Patients Following Discharge
8.3  PolyPid Announces Completion of $50 Million Series E-1 Financing
8.4  Wize Pharma Enters Exclusive Agreement for Ophthalmic Gene Technology
8.5  CorNeat Vision Completes Pre-clinical Phase for Synthetic Cornea and Scleral Patch
8.6  Assuta Ashdod Medical Center Deploys MedAware’s Patient Safety Platform
8.7  CollPlant Biotechnologies Closes on $5.5 Million Financing
8.8  Rootella Mycorrhizal Inoculants Registered for Commercial Use in Canada
8.9  Endospan Enters Into Strategic Distribution Agreement with CryoLife
8.10  Baxter Acquires Cheetah Medical to Expand Specialized Patient Monitoring Portfolio
8.11  Can-Fite & Univo Pharmaceuticals to Develop Cannabinoid-Based Pharmaceuticals
8.12  Healthy.io Raises $60 Million in Series C Funding and Receives FDA Clearance
8.13  Redefine Meat Raises $6 Million Round Led by CPT Capital for its 3D Alt-Meat Printer
8.14  Equinom Beefs up Plant-based Meat Products
8.15  Kanabo Joins Forces with CiiTECH to Launch Targeted Terpene Formulas
8.16  Tarsius Pharma Granted €2.4 Million by EU to Support First-in-human Clinical Trial for TRS01
8.17  Horizon 2020 Program Backs Filterlex’s Embolic Protection Device – CAPTIS
8.18  Canadian Hospital Specialties to Distribute Eitan Group’s Sapphire Infusion Systems in Canada
8.19  SofWave Medical’s Low-divergence Ultrasound Technology Receives FDA Clearance

9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Universal Electronics Selects SecuriThings for Cyber Security for Connected Devices
9.2  ISI and Balcony are Leading the Revolution in Situational Awareness on Demand
9.3  SafeRide Technologies’ CAN Optimizer Unlocks Value of Connected Vehicle Data
9.4  ColorChip Introduces Ultra-Compact RGB Pico-Projector for SmartGlasses Applications
9.5  Guardicore & Mellanox Deliver Agentless Micro-Segmentation in Data Centers
9.6  Otonomo is Collaborating with Microsoft to Transform the Driving Experience
9.7  Primis Introduces Closed Captions
9.8  Valens Unveils Ultra-High-Speed Automotive Chipset with 16 Gbps Bandwidth
9.9  Octopai’s Automated Business Glossary Creates a Common Language Across Departments
9.10  Ingram Micro Teams With ITsMine For AI Based Data Loss Prevention
9.11  Elbit Systems Introduces Vehicular Anti-Drone Protection and Neutralization System

10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Rate Rises by 0.2% in August
10.2  Israel’s Economy Grew by 3.6% in First Half
10.3  Foreign Exchange Reserves at the Bank of Israel in August 2019 Over $119 Billion
10.4  Immigration to Israel Increases by 21% in 2019

11:  IN DEPTH

11.1  JORDAN: Ratings Affirmed At ‘B+/B’; Outlook Remains Stable
11.2  SAUDI ARABIA: Saudi Arabia has a New Energy Minister – What it Means for Oil
11.3  TURKEY: Crisis-Hit Turkey Suffers Erosion in Investments

1:  ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Finance Ministry Plans to Cancel VAT Exemption on Online Imports

The Ministry of Finance is seeking to eliminate the VAT exemption on personal imports of products.  According to Globes, the proposal to cancel the exemption on imports of products up to $75 will be part of a package of measures in the proposed 2020 state budget to provide NIS 20 billion missing in the budget.  The measures will be presented to the minister of finance appointed in the next government.  The Ministry of Finance plans to bring the budget for cabinet approval in December, and to complete approval of the budget bill by the Knesset by March.  Assuming that the cabinet and the Knesset approve the proposal, based on the planned timetable, elimination of the exemption will become effective around April.

The volume of purchases exempt from VAT was most recent increased in early 2012 in response to the social protest against the cost of living in the summer of 2011.  As of now, a delivery containing products with an aggregate value of up to $75 is completely exempt from VAT and customs duties.  There are nevertheless a number of exceptions.  The exemption does not apply to tobacco and alcohol, and does not include packages sent from the same supplier to the same customer at intervals of less than 72 hours.

The significance of canceling the VAT exemption for the budget will only grow in the coming years.  The volume of VAT-exempt imported products is currently estimated at NIS 3 billion a year, and the market is rapidly growing.  In recent years, the volume of goods purchased online from abroad by Israelis has increased by 20% a year annually in recent years.  This means that eliminating the VAT exemption will generate NIS 600-700 million in tax revenue, starting in 2020.

The ecommerce market in Israel was estimated to be worth NIS 13 billion in 2018 and is projected to growth to NIS 20 billion in 2023.  The Israel Postal Company estimates that 70 million packages ordered from overseas will be delivered by the end of 2019.  Ecommerce is estimated at NIS 2.3 billion in the fashion sector alone.  (Globes 15.09)

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1.2  Bank of Israel Warns of Potential National Insurance Institute Bankruptcy

Israel’s National Insurance Institute will be bankrupt in 2050 and will require a government bailout but it would be better if it intervened sooner, the Bank of Israel’s Research Department has found.  This forecast is markedly later than those presented in previous discussions held in the public sector with some suggesting that the National Insurance Institute could be bankrupt by 2037.  This latest analysis is based on a model integrating the demographic forecasts of the Central Bureau of Statistics, a long-term growth model developed at the Bank of Israel, and statistical analyses of the development paths of various allowances and of National Insurance Institute contributions based on past trends.

The Bank of Israel found that annual expenditure on National Insurance allowances is expected to increase gradually in the coming four decades, to as much as an additional 0.8% of GDP.  In a more plausible scenario, in which past trends in allowances’ growth continue, old-age and child allowances, as well as the ceiling for income subject to National Insurance contributions, are indexed to the average wage in the economy rather than to the CPI, and which assumes a moderate rise in the retirement age – an identical increase is expected.

The Bank of Israel concluded that despite the long time until the point in which cash flow gaps are expected in National Insurance Institute financing, there is considerable benefit in enacting the adjustments required to balance the system at an earlier time.  If the government only makes the necessary adjustments in 2050, an immediate adjustment of 0.8% of GDP will be required.  This means a reduction of 40% in old-age and survivors’ allowances.  In contrast, beginning the adjustments in 2021 can reduce the size of the annual adjustment to 0.4% of GDP, meaning a reduction of only 10% in benefit payments.  Similarly, an adjustment through increasing the National Insurance Institute contributions can be more moderate, as it will be spread over more citizens and a longer period.  (Globes 15.09)

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2:  ISRAEL MARKET & BUSINESS NEWS

2.1  Zoomd’s Continues Its International Expansion with Toronto IPO

Zoomd has successfully completed a public offering raising CA $9.27 million at price of CA $1 per share and commenced trading on the Toronto Stock Exchange Ventures under the ticker ZOMD.  The offering was managed by A-Labs Finance & Advisory and co-led by Canadian bankers including Haywood Securities, Eight Capital and Paradigm Capital.  Zoomd is the first-of-its-kind site search, mobile user-acquisition and retention platform offering one solution for both online publishers and advertisers looking to increase content monetization via higher user engagement.

Since merging with Moblin in 2017, the company has demonstrated aggressive growth, tripling its revenues and profitability.  Zoomd is currently working with clients in more than 80 countries, including major worldwide companies such as Poker Stars Group, Shein, bWin (GVC Group), FoxNews, 90Min, Alibaba Group, Wowcher, TikTok, ComScore, NHN and many more.

Herzliya’s Zoomd‘s business is the monetization of on-site search and distribution of mobile sites and apps.  Zoomd Publisher’s business has a specific focus on leveraging on-site search data to increase monetization results and extend average session length.  Zoomd Advertiser’s business has a specific focus on mobile apps user acquisition.  Zoomd has built a key performance indicator-based algorithm that enables intelligent media buying in a manner that improves the accuracy of consumer targeting.  Zoomd provides advertisers the ability to acquire new users, while understanding better the needs of their target audience in almost every existing mobile inventory via a smart platform that connects to more than 600 digital media channels under one unified dashboard, reducing advertisers campaign management resources drastically.  (Zoomd 04.09)

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2.2  Stoke Raises $4.5 Million in Seed Funding to Bring the Open Talent Economy to Businesses

On-Demand talent platform Stoke has raised $4.5 million to help companies access the growing talent pool of self-employed freelancers and contractors and manage this flexible workforce at scale.  The seed round was led by TLV Partners with participation from Bogomil Balkansky (former VP Cloud Recruiting Solutions at Google), Flatiron Health founder Zach Weinberg, Boaz Chalamish (CEO of Clarizen), and others.

Stoke’s talent-on-demand platform will enable companies to find, hire and manage freelancers at scale.  Stoke will provide organizations with a management platform for their existing external workforce, as well as integrate with popular online freelancer marketplaces, enabling Stoke users to search these sites in from Stoke’s own unified interface and easily on-board new people.

Tel Aviv’s Stoke solves the problems companies face managing an agile workforce.  The founders’ experience managing departments in large technology companies including senior positions at Mercury / HP, VMWare and Microsoft.  They experienced the challenges of hiring and managing a modern, flexible freelance workforce.  (Stoke 04.09)

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2.3  Stage Fund Acquires Cymmetria

Denver’s Private equity turnaround and growth firm, Stage Fund, announced the acquisition of Cymmetria.  Cymmetria is a premier CyberSecurity deception platform on the market with offices in Tel Aviv and Denver.  Stage Fund will work with the Cymmetria team to bolster their research and development activities in Tel Aviv while growing a powerful sales and marketing machine out of the new headquarters in Denver.  With the support of the Stage Fund team, Cymmetria is poised to grow and take hold of the burgeoning Cyber Deception market.

Tel Aviv’s Cymmetria is a cybersecurity company at the forefront of deception technology.  Cymmetria’s deception products, MazeRunner and ActiveSOC, give organizations the ability to hunt attackers, detect lateral movement inside the perimeter, automate incident response and mitigate attacks.  The company also offers deception as a service, enabling organizations to customize deception technologies for their business environment.  (Stage Fund 04.09)

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2.4  Syte Raises $21.5 Million in Series B Funding to Accelerate Global Expansion

Syte has raised $21.5 million in Series B funding led by Viola Ventures and joined by high profile investors, Storm Ventures, Commerce Ventures and Axess Ventures.  All previous investors also participated in the round, bringing Syte’s total funding to $30 million to date.  Syte has led the retail industry’s adoption of Visual AI technology, by providing the most accurate visual AI on the market, according to Microsoft.  Their camera solution allows shoppers to take a picture of a product that inspires them and search for all visually similar products within a retailer’s site.  The company’s roster of clients includes Farfetch, Marks & Spencer, boohoo, and Tommy Hilfger.

Syte also now offers Recommendation Engines, In-Store solutions such as Smart Mirrors and In-Store Stylists, as well as Deep AI Tagging to assist in product attribution tagging.  With this round of funding, the company plans to further extend their offering to include Visual AI powered personalization.

Syte reports it has opened its New York City office this past July and will establish a San Francisco location later this year.  The company is also planning to hire 70 new team members for 2020 in their US and Tel Aviv offices to support their growing clientele and facilitate their anticipated 300% revenue growth in the coming year.

Tel Aviv’s Syte is a Visual AI technology provider that empowers retailers to tap into the personal inspiration of individual shoppers and deliver the right products at the right time, using the most accurate artificial intelligence on the market.  Founded in 2015, Syte has raised $30 million from investors.  (Syte 09.09)

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2.5  MyHeritage Acquires Promethease and SNPedia

MyHeritage announced the acquisition of SNPedia and Promethease, through acquiring the company that owned and operated them, River Road Bio.  This marks the 10th acquisition by MyHeritage and reinforces the company’s position as a global leader in consumer genomics.

SNPedia.com was launched in 2006 and is a wiki that contains a broad, community-curated knowledge base linking between genetic variants and medical conditions, as well as traits, citing over 30,000 peer-reviewed scientific publications.  Promethease.com is a literature retrieval service.  It allows consumers to upload their raw DNA data (from services such as Ancestry.com, 23andMe and others) and automatically compare it to SNPedia to see relevant scientific findings regarding their genome.  People who wish to take a genetic health test or receive health reports are encouraged to purchase the MyHeritage DNA Health+Ancestry test, which is based on clinically validated genetic markers and robust scientific research.

Or Yehuda’s MyHeritage is the leading global discovery platform for exploring family history and gaining valuable health insights.  With billions of historical records and family tree profiles, and with sophisticated matching technologies that work across all its assets, MyHeritage allows users to discover their past and empower their future.  Launched in 2016, MyHeritage DNA has become one of the world’s largest consumer DNA databases, with more than 3 million people, and it is about to grow further following the acquisition of Promethease by MyHeritage.  (MyHeritage 07.09)

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2.6  OurCrowd Expands U.S. Operations and Opens Office in Chicago

OurCrowd announced the opening of a new office in Chicago, Illinois.  This will mark OurCrowd’s 3rd U.S. location and the 12th dedicated location worldwide.  OurCrowd’s new Midwestern office’s activities will include the growing community of Chicago and Midwest investors, bringing new companies onto the OurCrowd platform, and leveraging the investor network on behalf of OurCrowd’s portfolio companies.

OurCrowd currently has 33,000 individual accredited and institutional investors, family offices, and venture capital partners from over 183 countries.  The platform expects to add thousands of new US investors while increasing US deal flow by partnering with VC funds and helping Israeli startups enter the US market.  OurCrowd recently announced having topped $1.1 billion of committed funding, and investments in 180 portfolio companies and 18 venture funds.

Jerusalem’s OurCrowd is a global venture investing platform that empowers institutions and individuals to invest and engage in emerging companies.  The most active venture investor in Israel, OurCrowd vets and selects companies, invests its capital, and provides its global network with unparalleled access to co-invest and contribute connections, talent and deal flow.  OurCrowd builds value for its portfolio companies throughout their lifecycles, providing mentorship, recruiting industry advisors, navigating follow-on rounds and creating growth opportunities through its network of multinational partnerships.  (OurCrowd 05.09)

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2.7  Polytex Technologies Receives Major Investment from Fortissimo Capital

Polytex Technologies has received a major investment by private equity fund Fortissimo Capital.  Fortissimo, a leading Israeli private equity fund that invests primarily in technology and industrial companies with high growth potential, made a major investment in Polytex Technologies.  Hadera’s Polytex Technologies, established in 2003, is a world-leading developer and manufacturer of advanced, easy-to-use systems for garment management in hotels, healthcare institutions, fitness centers and manufacturing sites.  The patented Polytex system is a fully automated solution for distribution, retrieval and management of folded garments, workwear, linen, towels and PPE.  (Polytex 05.09)

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2.8  Tipa Closes a $25 Million Growth Financing Round

Hod HaSharon’s TIPA, a leading developer and provider of fully compostable flexible packaging solutions, has secured $25 million in its recent financing round.  Investors who participated in this financing round include Blue Horizon Ventures, Triodos Organic Growth Fund and existing investors Chestnut and GreenSoil Investments.

As global demand for viable alternatives to conventional plastic soars, this new investment round will enable the company to continue its growth, expanding its sales in new territories, and to further develop its portfolio of unique packaging solutions.  TIPA was founded with the vision of offering sustainable packaging solutions that break down and return to nature, and are glad to continue expanding as we offer a patented technology to leading brands all over the world.

Inspired by nature, TIPA’s compostable packaging solutions are designed to break down within months under compost conditions just like any organic matter, such as orange peels.  TIPA packaging provides solutions for the food and fashion industries, and is built to fit existing machinery and supply chains.  The company’s packaging solutions are currently being implemented worldwide by leading global brands in Europe, Australia, and the US.  (TIPA 09.09)

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2.9  BigID Raises $50 Million to Help Companies Comply With Global Privacy Regulations

BigID raised $50 million in Series C funding to help enterprises comply with global privacy regulation and meet their data protection needs.  Bessemer Venture Partners led the round, with participation from existing investors SAP.io Fund, Comcast Ventures, Boldstart Ventures, Scale Venture Partners and ClearSky, as well as new investor, Salesforce Ventures.  BigID has now raised nearly $100 million in the last 18 months and has 150 employees globally.  The new funds will help BigID meet the growing demand for its technology, expand global sales and engineering and introduce new products for data privacy, data governance and protection.

BigID is the first data intelligence platform that helps organizations get detailed insight into what and whose data they collect and process.  Using BigID’s suite of products, enterprises can find, classify, inventory and map all their sensitive data and automate critical data privacy, protection and governance tasks like personal data rights and data sharing.  BigID’s AI tools allow companies to comply with global data privacy regulations and be better privacy stewards for their customers.

Based in New York and Tel Aviv, BigID uses advanced machine learning and identity intelligence to help enterprises better protect their customer and employee data at petabyte scale. Using BigID, enterprises can better safeguard and assure the privacy of their most sensitive data, reducing breach risk and enabling compliance with emerging data protection regulations like the EU’s General Data Protection Regulation and California Consumer Privacy Act.  (BigID 05.09)

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2.10  Snyk Raises $70 Million to Accelerate Dev-first Security

Snyk announced the company raised $70 million investment, led by Accel and existing investors GV and Boldstart Ventures, to further boost their growth and leadership in the dev-first security market.  After a year that saw revenue exceeding 4x growth and the acquisition of DevSecCon, the new funding will be used to fuel the company’s ambitious growth plans that include further product development, expanding global resources and community investment to bring their developer-first security solutions to even more development teams and enterprise organizations.  Investors included Accel, Boldstart Ventures and GV.

Tel Aviv’s Snyk was founded on the belief that developers will embrace security given the right solution. Four years later, they’ve seen that vision become reality, with hundreds of thousands of developers using our solutions to secure their containers and applications.  Snyk has reached a number of major milestones since the last round of funding.  The global user community has expanded to more than 300,000 developers worldwide, and Snyk’s customer base grew dramatically – by 200% in 2019. Added to this, more than 90% of Snyk’s customers originate from inbound and product-led opportunities.  (Snyk 09.09)

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2.11  Cyber Risk Modeling Company Kovrr Raises $5.5 Million

Kovrr, a Tel Aviv based predictive cyber risk modeling company, announced a $5.5 Million financing round.  The round was led by StageOne Ventures and Mundi Ventures, with participation of Banco Sabadell and other private investors.  The proceeds will be used for product development as well as to further accelerate the company’s global growth.  Kovrr was founded in 2017 in order to give underwriters, exposure managers and risk professionals the unparalleled visibility they need to keep up with a rapidly changing cyber risk landscape.

Today, the company provides the world’s leading insurance carriers, reinsurers & government regulators with an end-to-end platform that delivers transparent, data-driven insights that enable them to quantify and manage their affirmative and silent cyber risk exposures across all lines of insurance.  Kovrr accurately quantifies potential financial loss caused by various types of cyber events.  The platform uses open-source, proprietary and third-party business and threat intelligence data to train predictive cyber risk models.  (Kovrr 10.09)

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2.12  vHive Raises $5.5 Million in Series A Funding, Led by Octopus Ventures

vHive announced a $5.5 million investment led by Octopus Ventures, with participation from existing investors StageOne Ventures and private investors.  This funding will support vHive’s mission to expand its customer base and accelerate growth as well as to further develop its technology leadership.  Since its seed investment, vHive has attracted Fortune 500 companies who use its software platform across a variety of industries and geographies.  vHive has enabled its customers to conduct thousands of drone surveys in industries such as cell towers, construction, insurance and rail.

Herzliya’s vHive is the global software provider to enterprises, accelerating their continuous digital transformation, enabling them to make better decisions based on accurate field data and analytics.  vHive is the only software solution that enables enterprises to deploy autonomous drone hives to digitize their field assets and operations.  vHive is making an impact in a variety of industries including communication towers, construction, insurance and rail by dramatically cutting operational costs, generating new revenue opportunities and boosting employee safety.  (vHive 11.09)

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2.13  Foresight Signs Agreement with Leading Chinese Infrared Camera Manufacturer

Foresight Autonomous Holdings signed a strategic cooperation agreement with Wuhan Guide Infrared Co., a $2.7 billion Chinese corporation traded on the Shenzhen Stock Exchange.  Guide Infrared, through its subsidiary Global Sensor Technology, develops, manufactures and markets infrared thermal imaging systems.  According to the agreement, the parties will cooperate in the development, marketing and distribution of Foresight’s QuadSight vision system, incorporating Guide Infrared’s solutions, to potential customers in Greater China.  For the purposes of such cooperation, the parties will consider establishing a joint venture in China, thus leveraging each party’s competitive strengths.  The parties intend to determine other material terms of collaboration in a future agreement.  Furthermore, pursuant to the agreement, Guide Infrared will consider a strategic investment in Foresight.

According to the agreement, Guide Infrared will connect Foresight to the company’s network of Chinese vehicle manufacturers (OEMs), Tier One suppliers, and commercial vehicles and heavy machinery customers.  In addition, Guide Infrared will promote the QuadSight system through exhibitions, conferences and technological demonstrations, and will position Foresight as its official business partner and Tier One customer within Greater China.  Both companies will cooperate to optimize the performance of Guide Infrared solutions incorporated into Foresight’s QuadSight system by developing technical hardware and software solutions to cope with all weather and lighting conditions; and developing optical safety solutions targeting Chinese automotive market requirements.

Ness Ziona’s Foresight Autonomous Holdings, founded in 2015, is a technology company engaged in the design, development and commercialization of sensors systems for the automotive industry.  Through the company’s wholly owned subsidiaries, Foresight Automotive and Eye-Net Mobile, Foresight develops both “in-line-of-sight” vision systems and “beyond-line-of-sight” cellular-based applications.  (Foresight 13.09)

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2.14  Finistere, OurCrowd, Tnuva & Tempo Launch “Fresh Start” FoodTech Incubator

 In a ceremony in Kiryat Shmona on 11 September, Finistere Ventures, a global agrifood investment leader, OurCrowd, Israel’s most active venture investor, Tnuva, Israel’s largest food manufacturer, and Tempo Beverages, the leading Israeli beverage company formally launched their NIS 1 Billion “Fresh Start” FoodTech Incubator.  The consortium, who won the tender to operate the FoodTech incubator from the Israel Innovation authority in June 2019, will invest in over 40 advanced technology startups that will drive the food industry.

The incubator will focus on advancing Food Technologies along the entire chain of the food and beverage industry, specifically in the following fields: milk and protein substitutes; improving nutritional value and personalized nutrition; innovative raw materials; smart food packaging; cannabis and Industry 4.0, including IoT, AI and Big Data.

Tnuva and Tempo, two of Israel’s leading food and beverage companies already have existing operations in Northern Israel and will utilize this existing stronghold on the local food industry to advance the incubator’s efforts.  Global food giants PepsiCo, Bright Food and Heineken will be actively involved in the incubator offering their rich experience in research and development, innovative prowess, as well as their access to global markets.  The incubator will also work alongside leading research and academic institutions in northern Israel, including the MIGAL Galilee Research Institute in Kiryat Shmona, the Tel Hai College, the Northern Research and Development and others.

The consortium “Fresh Start” is currently reviewing several startups, with the aim of accepting its first company by the beginning of 2020.  The consortium will operate the Fresh Start incubator over the next eight years with the goal of supporting approximately 40 startups.  It is expected that Fresh Start will invest NIS 200 million in direct operational costs and in investments in the startups.  The consortium will also take the lead on attracting follow on investments at an estimated NIS 800 million provided by partners in the consortium, venture capital funds and global companies.  (OurCrowd 12.09)

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2.15  Trigo Raises $22 Million A Round to Enable More Grocery Retailers to Battle Amazon Go

Trigo raised $22 million in an A Round led by growth fund Red Dot Capital with the participation of existing investors Vertex Ventures Israel and Hetz Ventures.  The funds will enable the company to scale the technology for even larger store sizes (currently at 2X the footprint of Amazon Go), and advance its partnerships with leading US and European grocery retailers.  Trigo is currently installed in stores as large as 5,000 square feet, the largest checkout-free stores in the world.

Tel Aviv’s Trigo is already partnering with a number of global grocery chains including leading European chains and Israel’s largest grocer – Shufersal, which will be deploying Trigo’s technology in 280 stores over the next 5 years.  Trigo has raised $29 million in total funding to date.

Trigo’s computer-vision system uses advanced AI and algorithms to identify and record items grabbed by shoppers while they are in the store.  The company’s unique 3D space-mapping technology can be retrofitted into existing stores and enables consumers to spend their shopping time simply picking up the items they need – not waiting in long checkout lines and avoiding any kind of scanning activity altogether. Shoppers can be billed automatically or may pay cash or card.  Trigo’s system allows shoppers to personalize their in-store experience by giving them the option upon arriving at the store to either “opt in” by identifying themselves via a loyalty program, effectively allowing the retailer to gain insights on their purchases; or “opt out” by choosing not to check-in and having an “unidentified experience”.  Shoppers will still enjoy the same benefits of the checkout-free experience either way.  (Trigo 16.09)

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2.16  Igentify Raises in $10.5 Million in Funding Round

Genetic analysis startup Igentify has raised a $10.5 million funding round led jointly by life sciences venture capital firm aMoon and equity crowdfunding company OurCrowd Management through its digital health investment fund OurCrowd Qure.  The new round brings the company’s total equity raised to date to $12 million.  Founded in 2016 and based in Haifa, Igentify develops a digital genetic testing analyzer for various genotyping technologies like microarray and next-generation sequencing (NGS), and also offers machine-generated personalized genetic counseling.  The company’s technology is currently being used at several medical facilities, including Israeli hospitals Sheba Medical Center and Kaplan Medical Center and New York-based nonprofit integrated healthcare network Northwell Health.  Igentify intends to use the funding to continue product development, for further commercial expansion, and to hire an additional 10 developers for its Haifa office.  (Igentify 17.09)

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3:  REGIONAL PRIVATE SECTOR NEWS

3.1  Kuwait’s Largest Law Firm Signs Collaboration Agreement with Andersen Global

San Francisco based Andersen Global announced that it has signed a collaboration agreement with Kuwait’s largest law firm, Al Khebra.  The addition of Al Khebra marks the 50th country with a legal services practice among the member and collaborating firms of Andersen Global. Andersen Global has nearly 400 professionals in 10 countries and more than 20 locations in the Middle East region.

Al Khebra, based in Kuwait City, has nearly 50 legal and tax professionals and five partners provide numerous legal services throughout the Middle East.  The firm’s legal practice areas include corporate and commercial, M&A, private equity, partnerships, tax, banking and finance, real estate, venture capital, investments, restructuring and employment.

Andersen Global is an international association of legally separate, independent member firms comprised of tax and legal professionals around the world.  (Andersen Global 10.09)

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3.2  Dubai’s Numu Capital Invests in Medical Tourism Facilitator Doctoorum

Dubai based Numu Capital announced its investment in Doctoorum.  The deal was actually closed a few months ago during the graduation of Doctoorum from the AUC Venture Lab accelerator.  Medical Tourism is on the rise globally and it’s expected to reach $180 billion by 2026.  The GCC is one of the top ranked regions in terms of outbound medical tourism and countries like Jordan, Egypt and Morocco are becoming increasingly popular as inbound destinations.  Doctoorum is planning to expand its operations beyond Egypt & MENA region to include destinations such as Turkey, India, Germany and Thailand.

Cairo’s Doctoorum is currently ramping up their growth and is expected to raise a Series A round in the next few months.  Numu Capital usually invests in startups to help them increase their traction, and secure the next funding round.  The fund’s unique value proposition to entrepreneurs is its friendly and quick deal cycle; which usually takes less than 30 days from initial pitch to wiring the funds to the startup’s bank account.  (Doctoorum 05.09)

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3.3  Foloosi Raises $500,000 in Most Recent Funding Round

Foloosi, a Dubai based Fintech startup facilitating consumer-to-business card payments by enabling the business to display QR code, Payment Link and API integrations for the customer to scan & pay conveniently, has raised $500,000 in seed funding from existing investor Rasheed Alfalasi, along with new investor Mohammed Alsuwaidi.  Some four months back Foloosi has raised a pre-seed fund from Angel fund investor Rasheed Alfalasi.

Foloosi was founded in 2018 and launched its product in the year 2019 that enables simple and easy way to accept, process, disburses payment solution for businesses.  It helps businesses by providing payment gateway, payment link, subscriptions and POS software.  Foloosi’s payment solutions can be integrated by both web and mobile applications.  Foloosi connects merchants with customers while giving an easy way to make payments.  They see solid interest from businesses in the UAE for this service, with the transaction volumes reliably growing at above 40% month-on-month.  Transacting millions of dirhams of sales every month was a key achievement for us as the business keeps on growing.  The startup has achieved over one million AED revenue rate at the end of July 2019 and over 300 businesses signed up to accept card payments and over 2000 users paid through Foloosi to partner businesses.  Foloosi supports over 150 currencies for international digital payments, including major currencies like USD, Euro, UK Pound and INR.  (Foloosi 04.09)

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3.4  Saudi Arabia’s Pharmaceutical Sector to be Worth over $10 Billion by 2023

The rapid growth of Saudi Arabia’s pharmaceutical market is attracting notice, as the latest industry data reveals it is expected to be valued at $10.74 billion by 2023.  According to new research ahead of the event, the kingdom’s pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of 5.5% until 2023.  Saudi Arabia is one of the largest pharmaceutical markets in the Middle East, and its expansion over recent years can be attributed to a growing population, an increase in non-communicable diseases and strong state support for health services, with major government investment in new hospitals and clinics.”

According to UN figures, Saudi’s population stands at an estimated 34 million, 32% of which are under 14 years and is growing at around 2% annually.  Life expectancy has increased from 69 years in 1990 to over 75 years today.  In addition, the country has seen a rise in non-communicable diseases such as cardiovascular diseases, cancer, chronic respiratory disease, diabetes and obesity, which tend to require long-term treatment and medication.  Many of these diseases are a consequence of poor lifestyle choices, but alarmingly over 35,000 children have been diagnoses with Type 1 diabetes placing the kingdom in the top four countries worldwide in terms of incidence.

At present pharmaceuticals manufactured overseas continue to account for the majority of the market – with around just 20% of the drugs consumed in the country made locally.  The government has implemented long-term development strategies in a bid to promote local medicines.  (AB 14.09)

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3.5  Norwegian Firm Plans to Create First Salmon Farm in Saudi Arabia

Vikings Label, a company majority-owned by Norwegian investors, is planning to set up Saudi Arabia’s first salmon farming-project, with an aim to supply Saudi consumers with as much as 5,000 tons of the cold-water fish each year by 2023.  The facility will cost about $90 million, and the company is seeking $25 million of that from investors.  So far, one Saudi investor – Hani Al-Saleh, CEO of transportation services company Arabian Hala – has pledged funds to the project.  Vikings Label is also in talks with Saudi banks and the Saudi Industrial Development Fund.

Seafood companies like Vikings Label see growth opportunities in Saudi Arabia, which is increasingly promoting healthy lifestyles and eating habits as part of Crown Prince Mohammed bin Salman’s broader strategy to overhaul the economy and transform society.  Aquaculture is one of the businesses where Saudi officials hope to attract investment.  Vikings Label would be the country’s first salmon farm, according to the government’s National Fisheries Development Program.  The company hopes to start building fish tanks and other aquaculture facilities north of Jeddah in the first quarter of next year.  Saudi authorities want to almost double per capita fish consumption in the country to 13 kilograms (29 pounds) by the end of 2020 and to 22 kilograms – the global average – by 2030.  That’s an ambitious target for a nation where lamb dominates palates, and heart ailments and diabetes are common.  (AB 11.09)

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4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Electric Buses Deployed on Jerusalem’s Streets

On 4 September, ten electric buses began operating in Jerusalem as part of the implementation of a government initiative to reduce air pollution in Israel’s capital city.  The buses were added to the 15 line which runs from the Central Bus Station to Talpiot.  The Ministry of Environmental Protection gave the Egged bus cooperative a NIS 4 million subsidy to purchase the electric buses, which have zero pollution emissions, less than half of the greenhouse gas emissions than diesel buses, and quieter operation.  The drivers of the electric buses have been specially trained for their operation and will be the only ones permitted to drive them.  A designated parking lot with charging stations was established in the Egged parking lot near the Ramot Junction in Jerusalem.  The buses were imported from China, where most of the world’s electric buses are manufactured.  (INN 05.09)

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4.2  UAE’s Masdar Partners with UK Government to Invest in New Tech Fund

UAE-based clean energy giant Masdar and the UK government have invested £70 million ($86.3 million) in a new fund to grow green technologies in the United Kingdom.  The UK Treasury launched a £400 million fund (CIIF) to bolster Britain’s electric vehicle charging infrastructure, with the first £70m provided by Masdar and the UK government – allocated for 3,000 charge points.  This more than doubles the number across the UK to 5,000.  The fund is managed by London based Zouk Capital.  (AB 10.09)

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4.3  How Abu Dhabi Plans to Reduce Energy Consumption by 2030

On 10 September, the Abu Dhabi Department of Energy (DoE) unveiled a new strategy that aims to reduce electricity consumption by up to 22% and water consumption by 32% by 2030.  The nine core DSM programs include building retrofits, demand response, efficient water use / re-use, building regulations, street lighting, district cooling, standards & labels, energy storage, and rebates & awareness.

With Abu Dhabi’s energy demand projected to increase steadily over the next decade and consumption rates projected to increase by 1.4% each year until 2035, energy efficiency and rationalization present key solutions to energy and climate change concerns.  In the context of Abu Dhabi, a rising population and growing economy have been the key factors driving the increase in peak power demand which grew by an average of 8.3% per year between 2007 and 2017.  The growth in demand has largely come from a range of industrial and business sector activities and increased exports to the smaller Northern Emirates.  (AB 10.09)

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5:  ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Balance of Payments Records a $5.32 Billion Deficit in July 2019

According to the Central Bank of Lebanon, Lebanon’s Balance of Payments (BoP) witnessed a deficit of $5.32 billion by July 2019 compared to $757.2 million deficit recorded during the same period in 2018.  The Net Foreign Assets (NFA) of BDL and commercial banks dropped by $2.59 billion and $2.73 billion by July 2019.  It is worth mentioning that the BoP recorded a monthly surplus of $72.5 million in July 2019 alone, compared to a deficit of $548.9 million in July 2018.  In fact, the NFAs of BDL recorded an increase of $691.1 million, while the commercial banks’ NFAs declined by $618.6 million in July 2019.  (BDL 01.09)

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5.2  Number of Total Registered New Cars in Lebanon Dropped by 24% in August 2019

The slump in the Lebanese car market persists in the first 8 months of 2019, as the number of new registered commercial and passenger cars retreated from 25,153 by August 2018, to stand at 19,151 cars by August 2019, according to the data provided by the Association of Lebanese Car Importers (AIA).  The breakdown of the AIA’s statistics revealed that the number of newly registered passenger cars dropped by 23.18% year-on-year (y-o-y) to settle at 18,165 cars.  In turn, the number of new registered commercial vehicles contracted by a yearly 34.62% to 986 cars.  According to the BlomInvest Bank, the top selling brands were Kia, Nissan, followed by Toyota and Hyundai which grasped the respective shares of 15.28%, 11.2%, 10.77% and 10.63% of total newly registered passenger cars.  (AIA 11.09)

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5.3  Jordanian Unemployment Continues to Rise Unabated

Jordan’s unemployment rate registered a 0.5% increase at the end of this year’s second quarter, currently standing at 19.2%.  The Department of Statistics (DoS) reported that the unemployment rate for men stood at 17%, compared with 17.2% for women, noting increases of 0.5 and 0.4% respectively in comparison with the same period of last year.

Unemployment among university-degree holders also registered an increase, standing at 25.9%.  The unemployment rate for those who have completed their secondary education or beyond amounted to 56%, compared with 44% for those with a lesser qualification.  Unemployment was most prevalent among the 15-19 and 20-24 age groups, reaching 46 and 40% respectively.  The DoS reported that 30% of men with a bachelor’s degree were unemployed, compared with 84% unemployment among their women counterparts.  (DoS 02.09)

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►►Arabian Gulf

5.4  Food Consumption in the GCC Growing to 60.7 Million Tonnes by 2023

Food consumption in the GCC is expected to grow at a compound annual growth rate (CAGR) of 3.3% to 60.7 million metric tonnes (MT) in 2023, according to new research.  Increase in population, growing tourism, high per capita income and a sustained economic recovery are likely to drive the growth of the food sector in the region, said Alpen Capital in a report.

As the staple food of the region, cereals are expected to remain the most consumed food category with a share of 48.2% by 2023.  The report said increasing demand for milk products will drive the growth of the dairy sector while consumption of egg, fish, potatoes and fats & oil will also increase.  Alpen added that consumption of healthy and organic food is likely to increase with growing awareness.  However, the respective share of most food categories in the overall consumption is anticipated to remain broadly unchanged.

The country-wise food consumption share in the GCC is also projected to largely remain unchanged through 2023 with Saudi Arabia and the UAE expected to remain the largest food consuming nations with their combined share of around 81%.  Oman is expected to experience the fastest annualized growth at a CAGR of 4.6%.  The report said an expanding consumer base will drive the growth in food consumption in the region. Increasing urbanization and a growing affluence of expatriates continue to drive the demand of packaged and international food.

It added that due to high prevalence of lifestyle diseases in the region, there is a growing awareness of healthy eating habits, which has boosted the demand for organic food and food items that are sugar and fat free, low in salt, and with no preservatives.  Due to the region’s unfavorable climate, limited water resources and arable land in the region, the GCC countries import around 85% of the total food consumed.  This has exposed the region to food price fluctuations and any adverse changes in the socio-political environment in the source countries and vital trade routes could pose a threat to GCC food imports, Alpen said.  (AB 15.09)

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5.5  Arab Middle East Defense Spending Forecast to Total $100 Billion in 2019

Arab Middle Eastern defense spending will reach $100 billion in 2019, led predominantly by Saudi Arabia and the UAE, according to Jane’s by IHS Markit.  Out of the top 10 defense spending nations per capita, five are in the Middle East as are nine of the top 15 defense budgets per GDP.  On average, Middle Eastern countries spend 13% of their fiscal budgets on defense annually with Oman and Saudi Arabia spending close to 20% and 30% respectively.  According to the report, Saudi Arabia’s 2019 defense budget is $51 billion, making it the third largest military spending nation in the world.

The figures come ahead of the Dubai Airshow taking place in November, when the world’s leading defense companies will be displaying their latest innovations to an audience from around the world.  Lockheed Martin will be joined at the Dubai show by key global defense names including Rafale from France, Raytheon from the US and the Korea Defense Industry Association.  Saudi Arabian representation is also growing in line with its market commitment with first time appearances from INTRA Defense Technology and Saudi Arabian Military Industries (SAMI).  At the last show in 2017, 279 delegations from 76 countries around the world attended, with that number expected to increase in 2019.  (AB 13.09)

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5.6  UAE Healthcare Sector Outlook 2019-2023

The UAE Healthcare Sector Outlook 2023 report has been added to ResearchAndMarkets.com‘s offering.  This research and analysis depicts that the healthcare market of UAE will grow at a CAGR of around 8.5% during the forecast period 2018 to 2023.

With rising initiatives by government, the UAE Healthcare market is witnessing an astonishing growth.  This is due to sedentary lifestyle by the population of Emirates and growing medical tourism in the region.  Also, the UAE government is extensively expanding and upgrading its healthcare system to develop strong world class healthcare infrastructure.  The government is also encouraging private sector participation to upgrade the existing infrastructure and match the quality of services offered in developed countries.  Further, the UAE Government is also liberalizing policies to attract foreign investments, in order to improvise the healthcare standard and boost the healthcare industry.  According to UAE Healthcare Sector Outlook 2023, the UAE has witnessed significant deals in terms of mergers, acquisition and strategic tie ups between healthcare stakeholders, public and private entities to enhance the healthcare industry.  (R&M 05.09)

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5.7  UAE Approves Nutrition Labelling Plan to Help Curb Obesity Rates

The UAE Cabinet has approved a Nutrition Labelling policy which aims to raise community awareness and nudge people into adopting a healthy lifestyle.  The approval represents a significant outcome of the Community Design for Wellbeing Initiative launched by the National Programme for Happiness and Wellbeing in April.  The implementation of the policy will be voluntary in its initial phase until it becomes compulsory in January 2022.  The new policy aims to label nutritional information on fat, saturated fat, sugars and salt content in three colors – red, amber and green – on the front of food packages based on their levels, making it easy for customers to see whether the contents are high or low.  Information on calories will also be included in the labels.

Recent studies have shown that 68% of people in the UAE are overweight, 28% are obese, 44% have high cholesterol levels, 29% have high blood pressure, 20% eat high-sodium foods and that these diseases are responsible for 30% of all deaths in the UAE.  The policy was developed by the National Programme for Happiness and Wellbeing in cooperation with the Food Security Office, and will be implemented by the Emirates Authority for Standardisation and Metrology (ESMA).  It will include canned solid and liquid foods, but will exclude fresh foods, such as fruits, vegetables, meat and fish.  The initiative supports the National Food Security Strategy, which aims to sustain food safety, improve nutritional intake and reduce the consumption of unhealthy food elements by 30%.  (AB 11.09)

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5.8  Baskin Robbins Leads as the UAE’s Most-Loved Fast Food Brand

Baskin Robbins, the US-based chain of ice cream and cake restaurants, leads the industry rankings in the 2019 Brand Intimacy Report for the first time in 2019, gaining six spots after ranking seventh in 2018.  The remaining top 10 positions in the industry were taken by Costa Coffee, Starbucks, Subway, McDonald’s, KFC, Tim Horton’s, Pizza Hut, Burger King and Shake Shack.

Brands in the industry showed a wide variation in performance among different demographics.  Millennials displayed stronger relationships with Costa Coffee, while users between the ages of 35-64 reported more intimacy with KFC.  Looking at gender and income, Starbucks ranked first with female users, while Baskin Robbins took the top spot with both male and high-income users.

Other findings for the fast food industry included 2% of users in the study saying that they couldn’t live without Baskin Robbins while 1% of users said they have an immediate emotional connection with McDonald’s, 33% higher than the industry average.  The report also revealed that 3% of users reported that they are willing to pay 20% more for Burger King’s products while Starbucks ranked highest in the industry for daily frequency.  MBLM, which produced the report, said the fast food industry ranks 13th out of 15 industries studied in report, its first move upwards after ranking 14th in both 2018 and 2017.  (AB 06.09)

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5.9  Medical Tourism Sales in the UAE Increased by 5.5% in 2018

Dubai attracted 337,011 international health tourists last year and is on track to achieve its target of attracting 500,000 by 2021, according to the Dubai Health Authority (DHA).  The authority also revealed that the tourists spent AED1.2 billion in health tourism last year and that the top three specialties sought out by health tourists were dentistry, orthopedics and dermatology.

A recent analysis by Dubai Chamber of Commerce and Industry revealed that medical tourism sales in the UAE increased 5.5% year-on-year to reach AED12.1 billion in 2018.  The majority of international patients who come to Dubai are from Arab and GCC countries, including Saudi Arabia, Kuwait and Oman, comprising 33% of the total.  Other parts of Asia make up 30% of visitors coming from India, Iran and Pakistan while European tourists consisting mostly of UK, French and Italian citizens share 16%.  Dental treatment is the most popular taken by health tourists, which account for 46% while orthopedics made up 18% and dermatology 10%.  Ophthalmology, wellness, aesthetics and fertility treatments were also popular.  The DHA aims to attract more than half a million medical tourists by 2021, ensuring that they have a quality health experience and the ideal treatment environment.  A 2019 Dubai Health Tourism guide has also been launched to further strengthen the position of Dubai on the health tourism world map.  (AB 06.09)

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5.10  New Deal Aims to Make Abu Dhabi a Top Medical Tourism Destination

Mubadala Investment Company, through its healthcare arm, has signed an agreement with Nirvana Travel and Tourism to work together to establish Abu Dhabi as a leading medical tourism destination.  The areas of collaboration will focus on potential visitors from the GCC, MENA, Russia, China and India, and will include aspects such as creating attractive and all-inclusive medical tourism packages, as well as exploring joint marketing and business opportunities.  Abu Dhabi currently attracts patients from more than 80 countries.

The partnership between the medical and tourism entities follows the lead set by Abu Dhabi’s Department of Health and Department of Culture and Tourism.  As part of their collaboration, the departments have jointly set up a patient portal that will serve as a one-stop shop where potential medical tourists can find useful information.  Mubadala’s healthcare network includes Cleveland Clinic Abu Dhabi, Healthpoint, Imperial College London Diabetes Centre, National Reference Laboratory, Abu Dhabi Telemedicine Centre, Capital Health Screening Centre and Amana Healthcare.  (AB 13.09)

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5.11  Dubai FDI on US Mission to Chase More Foreign Investment

Dubai FDI, the investment development agency of the Department of Economic Development (DED) in Dubai, is on an investment mission to the United States.  The delegation visited Houston, Texas and Denver, Colorado in mid-September as a part of Dubai’s Global Mission Program.  The delegates held meetings with both government and private sector organizations, in addition to three seminars to discuss investment opportunities in the emirate and promote Dubai as a preferred global destination for foreign direct investment (FDI).  The planned global investment promotion mission to the two states follows the steady growth of FDI capital inflows from the US to Dubai.  FDI capital inflows from the United States to the emirate reached AED14 billion in 2018, making it the largest foreign investor, based on latest data from the Dubai FDI Monitor.  It also reported that the total number of US investment projects in Dubai reached to 119 in 2018, reinforcing the US position in the lead in terms of the total number of FDI and FDI capital.  (AB 10.09)

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5.12  Saudi Oil Production Cut in Half Following Drone Attacks

Saudi Arabia’s oil production was cut by half after a swarm of explosive drones struck at the heart of the kingdom’s energy industry and set the world’s biggest crude-processing plant ablaze – an attack blamed on Iran by a top US diplomat.  About 5.7 million barrels per day of output has been suspended, Saudi Aramco said in a statement.  Gas output was also disrupted, with 2 billion cubic feet in daily output, about half of normal production, stopped by the attack.

The biggest attack on Saudi Arabia’s oil infrastructure since Iraq’s Saddam Hussein fired Scud missiles into the kingdom during the first Gulf War, the drone strike highlights the vulnerability of the network of fields, pipeline and ports that supply 10% of the world’s crude oil.  A prolonged outage at Abqaiq, where crude from several of the country’s largest oil fields is processed before being shipped to export terminals, would jolt global energy markets.  Aramco is working to compensate clients for some of the shortfall from its reserves.  Emergency crews have contained the fires, Aramco said.

Saudi Aramco, which pumped about 9.8 million barrels a day in August, will be able to keep customers supplied for several weeks by drawing on a global storage network.  The Saudis hold millions of barrels in tanks in the kingdom itself, plus three strategic locations around the world: Rotterdam in the Netherlands, Okinawa in Japan, and Sidi Kerir on the Mediterranean coast of Egypt.  The US Department of Energy said it’s prepared to dip into the Strategic Petroleum Oil Reserves if necessary to offset any market disruption.

The attacks come as Aramco, officially known as Saudi Arabian Oil Co., is speeding up preparations for an initial public offering.  The energy giant has selected banks for the share sale and may list as soon as November, people familiar with the matter have said.  Khurais is the location of Saudi Arabia’s second-biggest oil field, with a production capacity of 1.45 million barrels a day.  Abqaiq has a crude oil processing capacity of more than 7 million barrels a day, according to the U.S. Energy Information Administration.  (AB 15.09)

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►►North Africa

5.13  Egypt’s Foreign Reserves Reach a Record $44.96 Billion

Egypt’s foreign reserves have risen by about $52 million, recording $44.969 billion by the end of August 2019, compared to $44.917 billion by the end of July 2019, according to the Central Bank of Egypt (CBE).  The CBE added that this amount, which is an initial estimation, is the highest ever recorded by the bank.

However, Egypt’s foreign reserves are built up depending on the loans from fund corporations.  They do not reflect production or investment revenues.  By receiving the last tranche of a loan from the IMF, Egypt will not have another major source of foreign reserves.  Key sources of foreign reserves for Egypt’s banking system are tourism and the export sector, as well as the Suez Canal, but all these sources are suffering and do not provide the required revenues, especially in foreign currency.  International instability due to the US-China trade war and a looming global recession are also casting a shadow over Egypt’s economy, especially for the upcoming year.

Foreign currency reserves reached $44.9 billion at the end of July 2019, when Egypt received that last tranche of the $12 billion IMF loan.  Foreign exchange reserves in Egypt averaged $2.5 billion from 2003 until 2019, reaching an all-time high of $44.9 billion in August of 2019 and a record low of $13.45 billion in March 2013.  (CBE 04.09)

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5.14  Morocco is the 2nd Largest Wine Exporter in Africa

Spanish news outlet Periodistas published a report on 16 September on Morocco’s wine production and the consumption of wine in Morocco.  The report indicates that Moroccans consumed 38 million bottles of wine in 2018.  Morocco’s production constitutes 77% of Moroccan red wine, 6.6 % of white wine and 16.4 % of rose and gray wine.  The gray wine is only produced in Morocco.  The Spanish source indicates that in Spain Moroccan wine is a minor import.  Only 10 or 15% of Moroccan wine is for export.  Moroccan wine reaches Europe and other continents, including the US, Japan and China.  In Europe, the wine is also exported to the Netherlands, France, and Belgium.

In addition to exports in Europe, Asia, and America, Morocco is also the second-largest exporter of wine in Africa after South Africa.

The Spanish report also gave statistics about alcohol consumption in Morocco, indicating that in addition to wine, 310 million liters of beer were consumed over the last three years.  That is amounts to some 103 million liters per year, in addition to 14 million bottles of other alcoholic beverages.  The best-known beer brands are Casablanca, Flag, and Stork.  The news report also emphasized the increase in alcohol since the Justice and Development Party (PJD) came to power in 2011.  The price of wine has increased more than 20% and beer 12 % since the arrival of the PJD.  Between January and May 2017, Moroccan consumers drank 7% more compared to the same period last year.  (MWN 17.09)

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6:  TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Rate Falls to 15% in August

Consumer prices in Turkey rose by 15.01% in August compared to the same month last year, the Turkish Statistical Institute (TurkStat) announced on 3 September.  August’s figure was down from 16.65% in July, beating expectations.

Last month, change in consumer price index saw a rise of 0.86% on a monthly basis, data showed.  Data showed that the highest monthly rate of change in consumer prices was seen in 19.11% in alcoholic beverages and tobacco.  It was followed by education with 4.26% and housing with 2.04%.  Among the main expenditure groups, the highest monthly decrease was in transportation with a 1.94% decline.

The country’s inflation rate target is 15.9% this year, 9.8% next year, and 6.0% in 2021, under the new economic program announced last September.  Since the beginning of this year, annual inflation saw its lowest level in August and hit the highest level in January at 20.35%.  (TurkStat 03.09)

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6.2  Turkish Exports Rise by 1.7% in August

Turkey’s exports were worth $13.2 billion in August, up 1.7% from a year earlier, the country’s trade minister said on 4 September.  Ruhsar Pekcan said the country’s imports inched down 0.27% on a yearly basis to $15.5 billion in the month.  Turkey saw nearly 10% annual decline in foreign trade deficit to $2.4 billion last month, she added.  Foreign trade volume stood at $28.7 billion, up 0.62% during the same period.

Through the end of every month, Turkey’s statistical authority TurkStat releases the final foreign trade figures for the previous month, as the Ministry of Trade announces preliminary general trade system data in the first week of every month.  (AA 04.09)

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6.3  Turkey’s Biggest Firm to Halt Steel Production on Demand Slump

Koc Holding, Turkey’s biggest industrial group, will halt steel production at its Iskenderun plant unless the market situation in the country improves.  The company’s Koc Celik unit will suspend production from the end of September until January, as it has been unable to offset a slump in domestic demand for steel billet with overseas sales.  Demand in Turkey sharply decreased in August last year, when a currency crisis sparked an economic recession.

Koc’s local customers slowly reduced their purchases over a prolonged period, prompting the company to make the decision to shut production.  Other Turkish steelmakers cut output slightly in August as a deterioration in the overseas market weighed on sales.  The company, which has the capacity to produce 1.2 million tonnes of liquid steel at Iskenderun, informed a local environmental agency as early as June of the potential shutdown.

Turkey’s economy has contracted on an annual basis for the past three quarters.  Most economists expect growth of around zero for the whole of 2019.  Consumer confidence in Turkey edged up to 58.3 in August from 56.5 in July.  Any reading below 100 reflects pessimism about the future.  Koc Celik also manufactures rebar at a mill in Hatay, which has an annual capacity of 500,000 tonnes, Argus said.  (Ahval 05.09)

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6.4  Greece’s Jobless Rate Falls to 16.9% in the Second Quarter

Greece’s jobless rate fell to 16.9%% in April-to-June from 19.2% in the first quarter, data by the country’s statistics service ELSTAT showed on 12 September.  About 70.8%% of Greece’s 805,047 jobless are long-term unemployed, meaning they have been out of work for at least 12 months, the figures showed.  Greece’s highest unemployment rate was recorded in the first quarter of 2014, when joblessness hit 27.8%.

The data showed that women and young people in the 15-19 age group were most affected among the unemployed.  The jobless rate for women was 20.9% versus 13.7% for men in the second quarter, while for people aged 15-19 it stood at 41.5%.  Athens has already published monthly unemployment figures through June, which differ from quarterly data because they are based on different samples and are seasonally adjusted. Quarterly figures are not seasonally adjusted.  June unemployment fell to 17%, the lowest since May 2011.  Greece’s economy remained on the path of recovery in April-to-June, with its pace of expansion picking up from the first quarter thanks to a boost from net exports and government spending.  Economic growth accelerated to 1.9% year-on-year from a 1.1% clip in the first quarter.  (ELSTAT 12.09)

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6.5  Greek Tax Revenues Over Perform in First Eight Months of 2019

Tax revenues in the year’s first eight months exceeded their target by €468 million, according to budget figures published by the State General Accounting Office, allowing Deputy Finance Minister Skylakakis to express his optimism that “the target for a primary surplus of 3.5% of GDP, which is our commitment, will be achieved.”  Besides the course of revenues, the government is optimistic thanks to the projected underspending of the budget, due to the high target originally set.  The accounting office estimates this will create an additional fiscal space of some €500 million.  (eKathimerini 16.09)

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7:  GENERAL NEWS AND INTEREST

*ISRAEL

7.1  Israel’s Election Results Pending Final Count

At press time, the results of Israel’s election were too close to call.  Prime Minister Benjamin Netanyahu’s Likud party and the Blue and White were again locked in a parity situation, whereby their potential ruling coalition partners had yet to claim any seats in a definitive way.  Even if preliminary results were to indicate a political direction, it would still take a few days for the final allocation of seats.

The two parties had tied in April elections at 35 seats.  Prime Minister Netanyahu was tasked with forming a government, but was unable to come up with the necessary support because of an impasse between ultra-Orthodox and secular right-wing parties, eventually forcing the vote on 17 September.

The secular right-wing Yisrael Beiteinu party is poised to win between 8 to 10 seats.  The party has not committed to either the right wing or left wing; the former defense minister has called for a unity government.  Following the April balloting, Yisrael Beiteinu refused to join a governing coalition unless it endorsed a bill obligating ultra-Orthodox men to participate in the mandatory military draft.

Should the left achieve a relative advantage, it is unlikely to get a majority of the Knesset to support it without Yisrael Beytenu, which has vowed it would only sit in a unity government comprising Likud and Blue and White.  Analysts expect the deadlock to remain for at least several weeks until one of the major parties agrees to modify its terms.

The votes of soldiers, prisoners, hospital patients, poll workers, on-duty police officers, and Israeli diplomats and officials working overseas are not counted until the day after the election, which has led to some shifts in the number of seats for parties.  Israel does not have absentee ballots for citizens who live abroad or who are out of the country on Election Day.  (Various 17.09)

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7.2  TAU Among World’s Top 10 Universities Producing Entrepreneurs, Startup Founders

Pitchbook, a research company covering private capital markets, announced that Tel Aviv University (TAU) ranked 8th in the world in producing entrepreneurs with an undergrad degree from the university and went on to found startups that raised significant capital.  According to Pitchbook, some 640 entrepreneurs emerged from Tel Aviv University’s undergraduate programs, starting 531 companies that raised almost $8 billion in funding over the years.  TAU was the only non-American university in the top 10.

In the same category ranking the top 50 undergrad programs, the Technion-Israel Institute of Technology ranked 14th, producing 468 entrepreneurs who have gone on to found 395 companies raising $7.2 billion.  The Hebrew University of Jerusalem came in 35th, with 304 entrepreneurs, 268 companies and $4.31 billion in raised capital.

Pitchbook went on to name the top five Israeli companies, by capital raised, founded by entrepreneurs with an undergraduate degree from TAU: Houzz, the Israeli-American interior design company said valued at over $4 billion; Signifyd, the San Jose-based company that developed enterprise-level fraud detection tech and has raised $185 million in capital; BlueVine, a company that developed payment solutions tech for small businesses and has raised almost $600 million; Trax Image Recognition, which leverages computer vision for retail tech, raising almost $300 million; and Next Insurance, which provides entrepreneurs with online insurance and has raised over $130 million.

In the top 25 MBA programs category, Tel Aviv University came in 13th with 233 entrepreneurs and 221 companies.  The top five Israeli companies by venture capital raised in this category were Houzz, BlueVine, IronSource, a market leader in app monetization and distribution valued at $1.5 billion, Stratoscale, a Herzliya-based cloud computing startup that has raised close to $70 million, and Gigya, the customer identity tech firm acquired last year for $350 million by SAP, Europe’s largest software company.  In the unicorns category, TAU ranked 9th in the top MBA programs with two companies by Israeli entrepreneurs valued at over $1 billion (Houzz, IronSource).

For the number of exits category, TAU ranked 8th for alumni with an undergrad degree who exited (118 entrepreneurs) and 11th for alumni with an MBA who exited.  The Technion ranked 11th for producing entrepreneurs who sold their companies or had them acquired.

With over 30,000 students, half of whom are in Master’s or doctoral programs, Tel Aviv University is the largest in Israel.  The public research university boasts nine faculties, 17 teaching hospitals, 18 performing arts centers, 27 schools, 106 departments, 340 research centers and 400 laboratories.  In 2017, TAU was ranked among the top 10 colleges worldwide that have graduated the most founders of unicorns, according to British business management firm Sage, which ranked the Israeli institution at number eight.  That same year, the university was among three Israeli universities ranked in Reuters’ 100 World’s Most Innovative Universities.  (NoCamels 02.09)

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*REGIONAL

7.3  Construction Begins on $272 Million in New Schools in Abu Dhabi

Abu Dhabi General Services Company (Musanada) has begun the construction of six new schools in the emirate worth more than AED1 billion ($272 million).  In collaboration with the Department of Education and Knowledge (ADEK), the new schools are being built across Bani Yas, Al Rahba, Al Riyadh, Al Dhaher, Al Bahia and Shiab Al Ashkhar.  The execution of the projects is part of Musanada’s efforts to realize the vision of President Sheikh Khalifa Bin Zayed Al Nahyan towards delivering projects that offer a stimulating educational environment to both students and teachers.  Musanada said that eco-sustainability would play a big part in the construction of the educational projects.

All new schools will deploy the latest electromechanical systems, including air conditioning and firefighting systems.  The construction will conform to best practices as laid down in the Abu Dhabi Future Schools Programme relating to the design of the classrooms and multipurpose halls.  (AB 10.09)

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7.4  Moroccan Universities Rank Poorly in the World University Rankings 2020

On 11 September, Times Higher Education magazine published the World University Rankings 2020.  Four Moroccan universities were part of the 1400 universities, from 92 countries that appeared on the list.  However, none of them made it to the Top 500.

Sidi Mohamed Ben Abdellah University, in Fes ranked first on the national level.  Internationally, however, the university ranked in the 601-800 section.  Hassan II University in Casablanca, Cadi Ayyad University in Marrakech and Mohammed V University in Rabat all ranked in the 1001+ section.

The University of Sidi Mohamed Ben Abdellah made a steady progress from ranking 1001+ in 2018, to 801-1000 in 2019 and then 601-800 in this year’s rankings.  Meanwhile, Mohammed V University and Cadi Ayyad University went down the ranking ladder through the years.  Rabat’s University went from Top 800 in 2017 to 1001+ in 2020, while Cadi Ayyad University made an alarming decline from 301-350 in 2015 to this year’s ranking.

In the MENA region, two universities from Saudi Arabia ranked first and second. King Abdulaziz University (201-250 globally) and Alfaisal University (251-300), respectively.  The third best university in the MENA region is the United Arab Emirates University (301-500).  Other universities in the MENA region that made it to the Top 500 of the rankings include Khalifa University (UAE), American University of Beirut (Lebanon), Jordan University of Science and Technology (Jordan), Qatar University (Qatar), Aswan University, and Mansoura University (Egypt).  (MWN 16.09)

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7.5  Only Two Turkish Universities Ranked Among the World’s Top 500

Cankaya University in Ankara and Sabanci University in Istanbul are the only two Turkish institutions among the world’s top 500 universities, according to the 2020 edition of the Times Higher Education Rankings released on 11 September.  Bilkent University, Hacettepe University and Koc University are ranked between 500 and 600, while Turkey’s three most well-known state universities, Bogazici University, Istanbul Technical University and Middle East Technical University, made it into the top 800.

In 2017 and 2018, five Turkish universities ranked among the top 500 universities in the Times rankings.  The changes in the rankings of Turkish universities indicate a serious decline in higher education.  Following a supposed coup attempt in 2016, more than 23,400 academics lost their jobs, with thousands dismissed by government decree during a two-year emergency rule.  Turkish President Erdogan has increased his control over universities, issuing a decree last year that stripped much of the supervisory powers of the country’s education watchdog and gave the president sole authority to appoint university rectors.  (Ahval 12.09)

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8:  ISRAEL LIFE SCIENCE NEWS

8.1  NRGene Advanced Technology Joins the Amazon Web Services Partner Network

NRGene has joined Amazon Web Services (AWS) Partner Network (APN) as an Advanced Technology Partner.  The APN Advanced Technology Partner designation is the highest tier for APN Technology Partners.  This achievement underscores NRGene’s mission to provide the power of genomic solutions to leading agriculture breeding companies to improve yields for the world’s food and biomaterials.  NRGene provides turn-key solutions to support new and existing plant breeding programs, aimed to maximize crop yield for commercial companies.  The company’s portfolio relies on cloud-based big-data and AI solutions.

Joining the APN builds on an existing relationship between NRGene and AWS. NRGene has been leveraging AWS to provide cloud services tailored to the needs of commercial companies looking to improve their agricultural products.

Ness Ziona’s NRGene is an AI genomics company that provides turn-key solutions to leading commercial companies that practice plant breeding.  Using advanced algorithmics and extensive proprietary databases, we empower plant breeders to reach their full potential by achieving stronger and more productive yields in record time.  NRGene’s tools have already been employed by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia.  (NRGene 04.09)

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8.2  EarlySign’s Machine Learning Algorithm Predicts High-Risk Cardiac Patients Following Discharge

Medial EarlySign announced the results of new research with Mayo Clinic assessing the effectiveness of machine learning for predicting cardiac patients’ future risk trajectories following hospital discharge.  The peer-reviewed retrospective data study, Leveraging Machine Learning Techniques to Forecast Patient Prognosis After Percutaneous Coronary Intervention, published in JACC: Cardiovascular Interventions, evaluated the ability of machine learning models to assess risk for patients who underwent percutaneous coronary intervention (PCI) inside the hospital and following their discharge.  The analyzed algorithm was developed by Medial EarlySign data scientists to identify patients at highest risk of complications and hospital readmission after undergoing PCI, one of the most frequently performed procedures in U.S. hospitals.

The study revealed that Medial EarlySign’s algorithm had an excellent discriminatory ability using only data points available at time of admission or at discharge.  Compared with standard regression methods, it was more predictive and discriminative at identifying in-patient sub-groups at high risk for 180-day post-PCI mortality and 30-day rehospitalization for congestive heart failure.  The algorithm also proved effective at identifying patient subgroups at high risk of post-procedure complications and readmission, supporting the potential role for integrating machine learning into clinical practice.

Founded in 2013, Tel Aviv’s Medial EarlySign helps healthcare systems with early detection and prevention of high-burden diseases. Their suite of outcome-focused software solutions (AlgoMarkers) find subtle, early signs of high-risk patient trajectories in existing lab results and ordinary EHR data already collected in the course of routine care.  EarlySign’s AlgoMarkers are currently helping clients identify patients at high risk for conditions such as lower GI disorders, pre-diabetic progression to diabetes, downstream diabetic complications, first coronary artery disease (CAD) and equivalent events, and chronic kidney disease (CKD).  The company’s machine learning platform has been supported by peer-reviewed research published by internationally recognized health organizations and hospitals.  (Medial EarlySign 04.09)

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8.3  PolyPid Announces Completion of $50 Million Series E-1 Financing

PolyPid announced the closing of its $50 million Series E-1 preferred shares financing round.  The financing was led by existing institutional shareholders and included US-based high-net worth investors. National Securities Corporation acted as the placement agent for the financing.  PolyPid plans to use the proceeds from the financing to advance the clinical development of its lead product D-PLEX100 into two phase 3 pivotal registration trials.

PolyPid’s lead drug product candidate, D-PLEX100, is a novel pharmaceutical agent designed to provide local and prolonged anti-bacterial activity to prevent surgical site infections.  Following the administration of D-PLEX100 into the surgical site, D-PLEX technology enables the constant and prolonged release of a broad-spectrum antibiotic, generating high local concentrations for up to four weeks.  Through this mechanism, D-PLEX100 has demonstrated the ability to effectively prevent surgical site infection including those caused by antibiotic resistant bacteria. D-PLEX100 has received Fast Track status and two Qualified Infectious Disease Product (QIDP) designations from the FDA for the prevention of sternal wound infection post cardiac surgery and for the prevention of post-abdominal surgery incisional infection.

Petah Tikva’s PolyPid is a clinical stage biopharmaceutical company focused on developing and commercializing novel, locally administered therapies using its transformational PLEX (Polymer-Lipid Encapsulation Matrix) technology to treat a wide variety of localized medical conditions with an initial focus on the management of surgical site infections.  PLEX-based products have demonstrated an excellent efficacy and safety profile during extended clinical trials.  (PolyPid 04.09)

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8.4  Wize Pharma Enters Exclusive Agreement for Ophthalmic Gene Technology

Wize Pharma has entered into an Exclusive License Agreement with Cleveland’s Copernicus Therapeutics, pursuant to which, at the closing, it will be granted exclusive rights to license, develop and commercialize products based on a non-viral gene therapy technology developed by Copernicus for the treatment of Choroideremia (CHM).  CHM is a rare, degenerative, inherited retinal disorder which leads to blindness and currently has no FDA-approved treatments.

WP-REP1, Wize’s gene therapy product to be based on the licensed technology from Copernicus, will be comprised of a DNA compacted nanoparticle (NP), administered by intraocular injection, which is designed to provide a functioning CHM gene to photoreceptors and retinal pigment epithelial (RPE) cells.  Copernicus has demonstrated proof of concept data in multiple preclinical animal disease studies in IRD models utilizing its NPs to improve vision.  As part of the planned regulatory path for WP-REP1, the parties will aim to demonstrate in a planned Phase 1/2 clinical study that the use of NPs targeting the REP-1 protein with CHM DNA NPs demonstrates a satisfactory safety and tolerability profile while also providing indications of clinical benefit.

Hod HaSharon’s Wize Pharma is a clinical-stage biopharmaceutical company currently focused on the treatment of ophthalmic disorders, including DES.  Wize has in-licensed certain rights to purchase, market, sell and distribute a formula known as LO2A, a drug developed for the treatment of DES, and other ophthalmological illnesses, including CCh and Sjogren’s syndrome.  (Wize Pharma 09.09)

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8.5  CorNeat Vision Completes Pre-clinical Phase for Synthetic Cornea and Scleral Patch

CorNeat Vision has completed the pre-clinical stage of its revolutionary cornea implant (CorNeat KPro / Keratoprosthesis) and the first synthetic, non-degradable scleral patch (CorNeat EverPatch).  CorNeat’s synthetic biology technology enables its ophthalmic implants to completely and permanently integrate with surrounding tissue.  This is done using a synthetic and non-degradable extra cellular matrix (ECM) that provides structural support to surrounding cells and stimulates their growth and proliferation into the implants.  CorNeat Vision’s pre-clinical trials, which included several animal ocular implantation studies, proved the safety of its technology as it applied to its synthetic cornea (CorNeat KPro), synthetic scleral patch (EverPatch) and glaucoma shunt (eShunt).

Ra’anana’s CorNeat Vision is an ophthalmic medical device company with an overarching mission of improving health, sustainability and equality worldwide.  CorNeat Vision was the 1st prize winner of China’s (Shenzhen) Innovation Award in 2018 and was nominated as the 2018 BioMed Startup of the Year by the Israeli Innovation Authority.  CorNeat Vision produces a lineup of innovative, safe, affordable and long-lasting ophthalmic medical solutions, including the CorNeat KPro, the CorNeat EverPatch and the CorNeat eShunt.  Their products will significantly impact ophthalmic surgery practices in the areas of cornea, sclera, glaucoma and more.  (CorNeat Vision 09.09)

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8.6  Assuta Ashdod Medical Center Deploys MedAware’s Patient Safety Platform

MedAware announced that Assuta Ashdod, Israel’s newest hospital, will deploy its life-saving AI-driven solution within its 300-bed facility.  The live implementation follows a successful “silent mode” trial deployment, which validated the accuracy and clinical relevance of MedAware’s safety platform.  MedAware’s flagship solution utilizes big data analytics and machine learning algorithms to identify and prevent medication errors at the point of care and notifies providers about evolving medication risks, including adverse drug events, contraindications and opioid dependency – all of which could lead to patient harm and poor outcomes.

Ra’anana’s MedAware is transforming patient safety through AI-empowered clinical decision support solutions.  By continuously mining data gathered from electronic health records and prescription drug claims, MedAware’s flagship solution accurately detects and prevents medication related risks, such as medication errors, opioid dependency risk, evolving adverse drug events and contraindications.  MedAware’s system improves patient safety and significantly reduces avoidable risks and costs each day.  (MedAware 09.09)

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8.7  CollPlant Biotechnologies Closes on $5.5 Million Financing

CollPlant has closed on a total of $5.5 million in convertible loans.  A group of U.S. accredited investors with deep experience in the 3D printing industry purchased $3.5 million of the convertible loans, and the Company’s largest shareholder, Ami Sagi, purchased $2 million of the convertible loans, through a non-brokered private placement.  An additional $1.0 million investment will be made by Ami Sagi following the execution of a license and/or a co-development agreement between CollPlant and a strategic business partner, if such were to occur.

Rehovot’s CollPlant is a regenerative medicine company focused on 3D bioprinting of tissues and organs, medical aesthetics.  Their products are based on our rhCollagen (recombinant human collagen) that is produced with CollPlant’s proprietary plant based genetic engineering technology.  Their products address indications for the diverse fields of organ and tissue repair, and are ushering in a new era in regenerative medicine.  CollPlant’s flagship rhCollagen BioInk product line is ideal for 3D bioprinting of tissues and organs.  (CollPlant 09.09)

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8.8  Rootella Mycorrhizal Inoculants Registered for Commercial Use in Canada

Groundwork BioAg announced that Rootella F, Rootella G, Rootella S and Rootella WP mycorrhizal inoculants have all been approved for commercial use by the Canadian Food Inspection Agency (CFIA).  These product registrations follow similar achievements in additional territories, including the United States, Brazil, Ukraine and Belgium.

Each Rootella product is formulated to accommodate specific cultivation methods.  The four products currently registered in Canada cover the gamut of Canadian crops, from seed treatment and in-furrow applications for row crops and specialty crops, to nursery and transplantation applications for vegetables and trees.  Canadian farmers stand to increase crop yields while saving on fertilizer and protecting their crops from various types of stress.  All Rootella products are biological, 100% natural and suitable for regenerative agriculture.

Moshav Mazor’s Groundwork BioAg produces effective mycorrhizal inoculants for commercial agriculture. Natural mycorrhizal fungi improve soil nutrient uptake in 90% of all plant species.  When applied to agriculture, mycorrhizal inoculants increase crop yields, especially under stress conditions.  Growers may also reduce fertilizer application rates, notably phosphorus.  Groundwork BioAg’s uniquely vigorous and highly concentrated Rootella products have demonstrated impressive field trial results in several major crops, such as corn, soybean, lentil, bean, tomato, pepper, onion and potato.  (Groundwork BioAg 06.09)

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8.9  Endospan Enters Into Strategic Distribution Agreement with CryoLife

Endospan has entered into strategic distribution and credit facility agreements with Kennesaw, Georgia’s CryoLife, a leading cardiac and vascular surgery company focused on aortic disease.  Under the terms of the agreement, CryoLife will have exclusive European distribution rights to NEXUS, the first off-the-shelf endovascular stent graft system approved for the repair of both aneurysms and dissections in the aortic arch.  CryoLife will pay a total upfront payment of $10 million.  Additionally, CryoLife will provide up to $15 million in debt financing to Endospan subject to progress on the U.S. clinical development program for the NEXUS Stent Graft System.  This investment also positioned Endospan to seek U.S. FDA approval for the NEXUS Stent Graft System through a Premarket Approval (PMA) study that is expected to start enrolling patients in 2020.

Minimally invasive techniques are standard-of-care for treating descending aortic disease and heart disease, but highly invasive, high-mortality open surgery is still being used in the difficult-to-treat aortic arch anatomy.  The NEXUS Stent Graft System is uniquely engineered to address this significant area of unmet and underserved clinical need.  The European market for the treatment of aortic arch disease including aneurysms and dissections is approximately $150 million annually.

Privately held Endospan, headquartered in Herzliya, is a pioneer in the endovascular repair of aortic arch disease including aneurysms and dissections.  Endospan is the first CE endovascular off-the-shelf system to treat aortic arch disease, which includes a greatly underserved group of patients diagnosed with a dilative lesion in, or near the aortic arch.  While minimally invasive endovascular repair has been the standard of care for Abdominal Aortic Aneurysm (AAA), Aortic Arch Disease patients with aneurysms or dissections have not been as fortunate and have had little choice but to undergo open-chest surgery with its invasiveness and risks, lengthy hospitalization periods, and prolonged recuperation.  (Endospan 12.09)

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8.10  Baxter Acquires Cheetah Medical to Expand Specialized Patient Monitoring Portfolio

Deerfield, Illinois’ Baxter International, a leading global medical products company, entered into a definitive agreement to acquire Cheetah Medical.  The agreement demonstrates Baxter’s ongoing commitment to improving clinical outcomes with an established patient monitoring technology to better inform and guide clinicians’ treatment decisions.  Cheetah Medical is a natural adjacency for Baxter, given Baxter’s longstanding leadership in infusion systems and intravenous (IV) solutions, breadth of knowledge in fluid management, and strong presence in critical care and IV therapy.  The transaction consists of an upfront cash consideration of $190 million, with potential for an additional $40 million based on clinical and commercial milestones.

The addition of Cheetah Medical will accelerate Baxter’s presence in the specialized patient monitoring space with key technology used to guide fluid management—a critical aspect of patient care—as too little or too much fluid can increase mortality and risk of complications.  Cheetah Medical’s technology is helping to shift care away from a “one-size-fits-all” approach to fluid administration to one that is data-driven and tailored to individual patient needs.  Through this integrated approach to medication delivery and patient monitoring, clinicians will be better able to manage patients with sepsis, acute kidney injury (AKI) and other critical conditions, as well as patients undergoing surgery.  Cheetah Medical’s technology will also serve as a foundational component of a novel platform of specialized patient monitoring technologies currently under development.

Cheetah Medical, headquartered in Tel Aviv, was founded in 2000.  Today, its technology is available in approximately 30 countries around the world, including the United States.  Cheetah Medical will provide Baxter with the company’s non-invasive hemodynamic monitoring systems, including the latest Starling SV system.  These monitoring technologies provide dynamic measurements of fluid responsiveness, enabling clinicians to make more confident and informed treatment decisions regarding the proper amount of fluid required to maintain organ and tissue perfusion.  (Baxter 10.09)

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8.11  Can-Fite & Univo Pharmaceuticals to Develop Cannabinoid-Based Pharmaceuticals

Can-Fite BioPharma announced it entered into a collaboration agreement with Univo Pharmaceuticals to identify and co-develop specific formulations of cannabis components for the treatment of cancer, inflammatory, autoimmune, and metabolic diseases.

It is widely recognized that the identification of specific receptors and pathways through which CBD operates is expected to greatly enhance the development of CBD-based pharmaceuticals.  Can-Fite is uniquely positioned to contribute its deep pharmaceutical development expertise to the CBD market, based on findings published in peer reviewed scientific journals demonstrating that CBDs bind to the Gi protein-coupled A3 adenosine receptor (A3AR), which is over-expressed in pathological cells.  Can-Fite is a global leader in the research and development of drugs that target A3AR.

Under the collaboration agreement, Can-Fite and Univo will jointly collaborate in the discovery of, and Can-Fite will have a first right to express interest to clinically develop, cannabis and cannabis components for the treatment of cancer, inflammatory, autoimmune, and metabolic diseases.  Can-Fite will also develop a screening assay to identify therapeutically active cannabis components, and once developed, Univo will market the assay on a ‘fee for service’ basis to other pharmaceutical companies worldwide.

Petah Tikva’s Can-Fite BioPharma is an advanced clinical stage drug development Company with a platform technology that is designed to address multi-billion dollar markets in the treatment of cancer, inflammatory disease and sexual dysfunction.  Ashkelon’s UNIVO is a vertically-integrated medical cannabis company including cultivation, manufacturing and distribution as well as the creation of innovative products and dosage forms for next-generation medical cannabis products.  UNIVO holds initial licenses for the entire supply chain: growing, breeding and nursery, production of medical cannabis products, research and development and distribution.  (Can-Fite 10.09)

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8.12  Healthy.io Raises $60 Million in Series C Funding and Receives FDA Clearance

Healthy.io has received 510(k) clearance from the U.S. FDA for its smartphone-based ACR test to be used in the aid of diagnosing chronic kidney disease (CKD), which affects over 35 million Americans.  This is the second FDA clearance the company has received.  The company also closed a $60 million Series C funding round led by Corner Ventures with participation by Joy Capital and all previous investors: Ansonia Holdings, Aleph and Samsung NEXT.  The funding round will be used to accelerate Healthy.io’s global expansion and product development.

The FDA clearance designates Healthy.io’s smartphone-based ACR test as substantially equivalent to lab-based testing and authorizes the use of the test by healthcare professionals at any point of care.  It makes it possible for any pharmacy, urgent care center, or health clinic to perform the test without investing in a tabletop lab device.  In addition, Healthy.io’s solution allows immediate electronic medical record (EMR) connectivity through the automated smartphone scan.  Last year, the company received clearance for its at-home, smartphone-based 10 parameter urinalysis test kit, called Dip.io, that can be used in testing for UTIs or in prenatal care.  Next, the company plans to continue the approval process for its ACR test kit for at-home use.

Tel Aviv’s Healthy.io is the global leader in turning the smartphone camera into a clinical grade medical device.  By combining AI and machine learning for colorimetric analysis, best-in-class UX design, and rigorous science, Healthy.io is expanding access to health care.  The company’s first offering —  the only smartphone-powered urinalysis cleared by the FDA and European regulators as equivalent to lab-based testing —  has been used by tens of thousands of patients using a range of smartphones.  (Healthy.io 11.09)

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8.13  Redefine Meat Raises $6 Million Round Led by CPT Capital for its 3D Alt-Meat Printer

Redefine Meat announced the completion of a $6 million seed round led by CPT Capital, joined by Israel-based Hanaco Ventures, Germany’s largest poultry company The PHW Group and leading Israeli angel investors.  Redefine Meat will use the investment to finalize the development of its revolutionary alternative-meat 3D printer, which will be released during 2020.

The company is developing a comprehensive solution that combines a proprietary semi-industrial 3D digital printing platform – in fact, one of the world’s fastest 3D printers, a 3D meat modeling system and plant-based food formulations.  The solution delivers a new category of complex matrix “meat” that is both delicious and craveable, while also being cost effective and scalable.  Redefine Meat’s animal-free meat comprises natural and sustainable ingredients that deliver the same appearance, texture and flavor of animal meat used for steaks, roasts and stews.  The breakthrough technology will also enable meat distributors and retailers to design the characteristics of their meat to cater for seasonality, changing demands and consumers preferences with “printed meat” that is 100% predictable and replicable.  Redefine Meat products have a 95% smaller environmental impact than animal meat, no cholesterol, and are cost-effective.

Tel Aviv’s Redefine Meat is leading a technological revolution in the food industry by creating craveable animal-free meat using proprietary industrial 3D printers.  Founded in 2018, Redefine Meat has developed patent-pending technology that replicates the texture, flavor, and eating experience of beef and other high-value meat products.  The company uses plant-based ingredients and technology as opposed to animals, allowing for a dramatically more efficient, sustainable and moral way to produce meat without compromising on the experience.  Redefine Meat’s alt-meat is 95% more sustainable, significantly healthier and costs less than beef.  (Redefine Meat 11.09)

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8.14  Equinom Beefs up Plant-based Meat Products

Seed-breeding specialist start-up, Kibbutz Givat Brenner’s Equinom, is helping food manufacturers unlock the true potential of plant-based meat products.  Equinom’s innovative designer non-GMO seeds are enabling food companies to close the gap between consumer demand for cleaner meat alternatives and innovating palate-pleasing, affordable products.

Equinom’s multifaceted proprietary solution can give manufacturers the opportunity to brand their products with a cleaner label in order to drive strong consumer adoption.  Equinom breeds specifically for organoleptic properties, custom-designing plant varieties that have revived great taste, appealing texture and improved nutrition.  The company has restored these high-demand qualities naturally in the crops, demonstrating that one plant can have it all.  By leveraging the whole plant and designating key components to meet food company product development needs, Equinom maximizes component contribution using minimum separation, which also reduces the need to mask unpleasant tastes.  Equinom uses electronic sensing systems such as e-tongue and e-nose for high-throughput analysis of off flavors, which helps top quality and accelerate breeding.

Equinom’s strategic ingredient design is disrupting the entire food production system, uprooting previously entrenched limitations and delivering seeds for source ingredients that are setting the functional, financial and eco-friendly standards in the market.  (Equinom 10.09)

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8.15  Kanabo Joins Forces with CiiTECH to Launch Targeted Terpene Formulas

Kanabo partnered with UK canna-tech company CiiTECH to launch Israeli developed terpene formulas for use with the VapePod, Kanabo’s medical grade cannabis device.  Terpenes are aromatic compounds derived from naturally produced oils found in the resin glands of plants, known as trichomes.  Terpenes offer valuable medicinal benefits, alleviating the symptoms of a variety of disorders, in particular, acting as an effective analgesic and anti-inflammatory.  CiiTECH, a leading cannabis biotech company has collaborated with Kanabo to ensure that the company’s terpene formulas meet the highest standards required for the UK market.

The formulas have been designed specifically for use with the VapePod, Kanabo’s cutting-edge cannabis oil vaporization device that includes metered-dosing, allowing extremely accurate consumption.  The VapePod is the first-ever medically certified vaporization delivery system for cannabis oils.

Ness Ziona’s Kanabo Research, an R&D company based in Israel, creates innovative solutions for the medical cannabis industry. Kanabo focuses on building medically validated IP that includes delivery systems working in synergy with applications of patented formulations of cannabis oil.  (Kanabo Research 10.09)

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8.16  Tarsius Pharma Granted €2.4 Million by EU to Support First-in-human Clinical Trial for TRS01

Tarsius Pharma has been awarded a highly competitive HRIZON 2020 Grant from the European Commission worth €2.4 million (~$2.6 million).  TRS, the Tarsius bio-inspired technology, approaches inflammatory diseases from within the immune system.  Tarsius Pharma implements a patented, proprietary new molecule which was developed to re-engineer the immune system.  The TRS Platform Technology has the potential to effectively treat a broad array of autoimmune and inflammatory ocular diseases. Untreated, these diseases can have devastating effects, and may eventually lead to blindness.

Zikhron Yaakov’s Tarsius Pharma was established in 2016 and is focused on developing innovative therapeutic solutions to prevent blindness.  In addition to the EU grant, Tarsius is backed by Sun Pharmaceuticals, a global pharmaceutical company, as well as investments by private investors and family offices.  (Tarsius Pharma 16.09)

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8.17  Horizon 2020 Program Backs Filterlex’s Embolic Protection Device – CAPTIS

Filterlex Medical has been selected for the Phase 2 Horizon 2020 SME Instrument program.  Filterlex will receive a two-year grant valued at €2.1m that has been awarded through the prestigious Horizon 2020’s Phase 2 Small and Medium-sized Enterprise (SME) Instrument, which targets groundbreaking innovations with the potential to profoundly impact the EU economy and global healthcare.  According to the EU SME Instrument, the grant application process is highly competitive with 3.6% of the proposed applications selected for funding by multinational panels of technology, business and finance experts.

Filterlex develops the CAPTIS, a full-body embolic protection device to reduce the risk of stroke and other complications during catheter-based structural heart procedures.  During catheter-based, left-heart procedures, such as a Transcatheter Aortic Valve Replacement (TAVR), embolic particles are often released to the blood flow.  During this procedure, particles migration to the brain may cause a spectrum of neurological deficiencies, from cognitive impairment to debilitating stroke.  Emboli released to distal organs may result in acute kidney injury and ischemia.  The CAPTIS device is a next-generation, full-body embolic protection device, easily and intuitively deployed and retrieved.  The device is securely positioned in the aorta, protects its surface, while facilitating a seamless TAVR procedure.  The device’s distinctive, triple action design provides a full-body embolic protection by deflecting, capturing and removing embolic particles.  CAPTIS uniquely requires no additional arterial access and does not interfere with the procedure workflow.

Yokneam’s Filterlex Medical is a medical device startup in the cardiovascular field.  Filterlex develops a next generation embolic protection device (EPD) for reducing the risk of stroke and other complications during catheter-based left-heart procedures.  The device concept and unique structure were created out of deep understanding and knowledge of the unmet need and current products limitations.  The company’s founders have vast clinical knowledge and extensive experience in medical devices development, commercialization and marketing.  (Filterlex Medical 16.09)

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8.18  Canadian Hospital Specialties to Distribute Eitan Group’s Sapphire Infusion Systems in Canada

Eitan Group announced a distribution agreement with Canadian Hospital Specialties Ltd. (CHS), a national specialty distributor and manufacturer of medical and surgical products, to supply and support Eitan Group’s Sapphire infusion system hospital and alternate site customers across Canada.  Sapphire customers will receive immediate attention and support across Canada with CHS’s large, capable sales organization.  Eitan Group’s flagship Sapphire infusion systems are installed worldwide, with more than 100,000 devices in the market.  The robust infusion platform is lightweight with a small footprint, features an intuitive touch screen and is designed for ease-of-use, requiring minimal training for medical professionals.

Netanya’s Eitan Group is focused on infusion therapy and technologies, developing future-ready systems for hospital care and ambulatory settings, as well as wearable solutions for easy self-administration.  Eitan Group initially entered the infusion market in 2009, and a decade later, with data on over 18 million liters of infusions completed, now consists of three affiliate companies: Q Core Medical, Sorrel Medical and Avoset Health.  With a focus on innovating patient-centered care and safety, Eitan Group is reimagining infusion therapy with connected, software-based solutions.  (Eitan Group 16.09)

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8.19  SofWave Medical’s Low-divergence Ultrasound Technology Receives FDA Clearance

Sofwave Medical has received 510(k) clearance from the U.S. FDA for its Sofwave system.  The Sofwave device is indicated for use as a non-invasive aesthetic treatment to improve facial lines and wrinkles.  The 510(k) clearance was supported by a blinded study of 59 subjects, demonstrating the safety and performance of the Sofwave System for non-invasive treatment to improve facial lines and wrinkles.  According to investigators’ evaluation, 86% of the subjects demonstrated improvement in wrinkle appearance of at least one Elastosis Score (-1ES), while the blinded reviewers identified correctly the pre- and post-treatment photographs for 78% of the treated subjects.

Following FDA clearance, the company will launch marketing and sales activities in the United States.  For this purpose, the company has already established an office in the US, which will be the base for all sales, marketing, clinical and customer support activities for the US market.

Yokneam’s SofWave Medical implements a novel approach to wrinkle reduction using proprietary Fractional Ultrasound.  SofWave Medical’s breakthrough technology brings a new option to non-invasive aesthetic treatments, providing physicians with smart yet simple, effective and safe aesthetic solutions for their patients.  The company was founded in 2015 by a multidisciplinary team of engineers, physicists and experienced professionals in the aesthetics market.  (SofWave Medical 16.09)

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9:  ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1  Universal Electronics Selects SecuriThings for Cyber Security for Connected Devices

SecuriThings announced that it has delivered its Horizon solution to the leading IoT service provider, Scottsdale, Arizona’s Universal Electronics (UEI).  SecuriThings Horizon software-only solution provides UEI with 360-degree visibility and control over its managed IoT devices, detecting and mitigating cyber-attacks in real-time, while reducing operational costs.  SecuriThings and UEI have jointly delivered a case study that presents their breakthrough, data-driven approach to edge-to-edge IoT Security.

The cyber security blind spot of IoT providers over their managed devices generates concerns as the inherent vulnerability of IoT solutions turns them into prime targets for cyber-attacks such as brute force, IoT-specific malware, insider threats, IoT botnets, and more.  In fact, these connected devices, used for both consumer and commercial purposes, deployed across multiple home and enterprise networks, represent vulnerable entry points for hackers trying to reach critical assets and private data.

Ramat Gan’s SecuriThings is a leading IoT technology provider, solving the lack of visibility and control faced by enterprises and IoT service providers over their edge devices.  SecuriThings’ software-only solution, Horizon, uses AI-based technology to provide the ongoing cyber security posture and health status of each and every device.  With SecuriThings Horizon, organizations ensure their large-scale deployments of connected devices are always available and secure, all from a single pane of glass.  The company has established partnerships with world-leading global system integrators, device management systems and edge device vendors.  (SecuriThings 09.09)

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9.2  ISI and Balcony are Leading the Revolution in Situational Awareness on Demand

Or Yehuda’s ImageSat International (ISI), a leading end-to-end geospatial intelligence solutions company, is further expanding its presence in the geospatial data services market by establishing a collaboration with California’s Balcony.io, a location-based geo-communication platform.  The ‘Closeup’ solution, supported by BIRD Foundation, based on the ISI intelligence platform and capabilities and Balcony solution, proved itself in the last two years as a necessary intelligence tool for quick response in cases of disasters.

This partnership enables geo-data validation by seamlessly aggregating the power of high-resolution satellite imagery with the reach of smartphone users on the ground, providing a new level of insight into developing events.  The solution enables sending messages, alerts, or instructions, as well as receiving the necessary detailed ground-level info in the form of text, imagery, video, and live video precisely overlaid on the satellite imagery.  The collaboration proved to be fitting to dynamic reality through a quick follow-up on initial triggers by using a combination of high-resolution space imagery and a qualitative in-scene dimension provided by people on the ground.

The existing solution provides a real-time geographical snapshot for the first responders on the ground by incorporating advanced analytics based on artificial intelligence capabilities from deep learning and machine learning, along with extensive use of Big Data. ISI and Balcony’s innovative intelligence concept is based on the use of a cheap and ubiquitous sensor (smartphone) in sync with an observation satellite.  (ISI 09.09)

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9.3  SafeRide Technologies’ CAN Optimizer Unlocks Value of Connected Vehicle Data

SafeRide Technologies announced that CAN Optimizer, its ground-breaking machine learning-based data compression software for connected vehicles, has been validated by multiple leading OEMs and Tier-1 suppliers and is ready for production.  While uploading raw CAN data to the cloud can enable advanced data services, the process consumes a significant amount of costly bandwidth and storage.  Based on customer case studies, SafeRide’s CAN Optimizer dramatically decreases the bandwidth needed by providing a 96% reduction in data size.  CAN Optimizer provides a compression performance that is 6 times better than any other solution on the market.  The CAN Optimizer library was integrated and validated on several leading telematics chipsets, including the STMicroelectronics Telemaco3P, and consumed a fraction of the available processing power and memory of these devices.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security and unlock data driven services.  SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyber-attacks, and helps to improve operational efficiency, avoid financial damage, prevent reputation loss, and save lives.  (SafeRide Technologies 09.09)

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9.4  ColorChip Introduces Ultra-Compact RGB Pico-Projector for SmartGlasses Applications

ColorChip introduced a highly innovative, ultra-compact, efficient RGB Pico-Projector based on a patented PLC SystemOnGlass (SOG) platform, advancing the core-technology eco-system required for Tethered and Standalone AR/VR SmartGlasses, where stringent demands on power efficiency and compactness are paramount.  The Augmented and Virtual reality market (AR/VR) is poised to pass a potential market inflection point in 2020, particularity if Apple SmartGlasses are launched towards the end of the year.  AR/VR is set to introduce a dramatic forth wave of consumer technology where advances in mobile AR/VR hardware and software will enable Ironman-like tethered and standalone SmartGlasses to complement and gradually replace mobile phones, driving a market from 10’s of millions of users in 2021 to more than a billion users by 2022-2023.

To support this market, ColorChip introduces a breakthrough RGB Pico-Projector addressing the needs of ultra-compactness, device efficiency and cost effectiveness.  The projector integrates ColorChip’s ColorMux RGB Beam Combiner with a MEMS scanner.  The ColorMux RGB Beam Combiner is based on ColorChip’s proprietary and patented optical waveguides embedded in a glass Planar Lightwave Circuit (PLC) and SystemOnGlass (SOG) integration & assembly technology.  ColorChip’s glass PLC platform is superior to other mediums as it supports the full spectrum of light from visible to infrared, is inherently low loss enabling high brightness display and includes a true integrated beam combiner to enable a speckle-free, high resolution image.  ColorChip’s SOG integration technology enables high RGB laser coupling efficiencies and true power monitoring.  The result is an ultra-compact display solution that is highly efficient, requires low power consumption, provides a high quality image and is ready for high volume, cost sensitive applications.

Yokneam’s ColorChip, established in 2001, is a technology innovator in the field of photonic integrated hybrids whose vision is to leverage its fully owned, industrialized optics-based FAB dedicated to the production of PLC based SystemOnGlass optical engines, whose glass platform is the ideal medium for emerging high speed transceiver and AR/VR projector applications.  (ColorChip 05.09)

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9.5  Guardicore & Mellanox Deliver Agentless Micro-Segmentation in Data Centers

Guardicore has partnered with Mellanox Technologies to deliver the first agentless and high-performance, low latency micro-segmentation solution for high speed 10G-100G networks.  The solution leverages both the Guardicore Centra security platform and Mellanox BlueField SmartNIC solutions to provide customers with hardware-embedded micro-segmentation security.  This integration allows customers using BlueField SmartNICs to support micro-segmentation requirements for high speed networks or when other agent-based solutions cannot be used.  The new solution is fully integrated and managed centrally by Guardicore Centra.

The joint Guardicore-Mellanox solution addresses the challenges faced by enterprises seeking to gain visibility and to protect application workloads in high speed networks where it is not possible or practical to deploy and operate agents across their infrastructures, such as in cases of high frequency trading, multi-tenant hosting with cloud providers, or management of third-party appliances.  The solution runs on the Mellanox BlueField SmartNIC, considered a computer on its own, and not on the enterprise infrastructure.  It uses hardware offload to support high-speed and low-latency requirements.  Deploying Guardicore technology on BlueField provides protection without compromising either the host or the compliance regulations in any way.  Additionally, running the Guardicore solution integrated on BlueField delivers unmatched enforcement performance – allowing or blocking traffic at wire speed and without any impact to server performance.  The solution gives enterprises the freedom to deploy Guardicore on every workload in any environment and at any scale, including private, public and hybrid cloud instances.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications, unlocking system performance and improving data security.  Tel Aviv’s Guardicore is a data center and cloud security company that protects your organization’s core assets using flexible, quickly deployed, and easy to understand micro-segmentation controls.  Their solutions provide a simpler, faster way to guarantee persistent and consistent security — for any application, in any IT environment.  (GuardiCore 05.09)

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9.6  Otonomo is Collaborating with Microsoft to Transform the Driving Experience

Herzliya Pituah’s Otonomo has been exchanging ideas with Microsoft about the future of connected cars and announced that the company will be collaborating with Microsoft on its Microsoft Connected Vehicle Platform to expand the range of services available to automotive OEMs and to accelerate market adoption of such services and optimization solutions based on automotive data.  The Microsoft Connected Vehicle Platform combines advanced cloud and edge computing services with a strong partner network to empower automotive companies to build connected driving experiences.

Through the new collaboration with Microsoft, Otonomo enables OEMs to quickly and easily make their connected car data more valuable for more next-generation services.  Patented technology within the platform reshapes and enriches data that was designed for vehicle operations so that it can be more easily applied to other use cases, from personal services like subscription-based fueling or EV charging, to optimization solutions relying on aggregate, anonymous data, such as smart city applications and traffic management.

Security and privacy are the real must-haves for the connected vehicle ecosystem.  Otonomo takes driver protection to the next level with two key capabilities that will also integrate with the Microsoft Connected Vehicle Platform:  the Otonomo Consent Management Hub – which provides a simple to use, straightforward process for drivers to grant or revoke permission for specific services that consume personal automotive data, and the Otonomo Dynamic Anonymization Engine – which applies a sophisticated combination of anonymization techniques at a use-case level, so that aggregate connected car data can be used for more applications without compromising privacy  (Otonomo 11.09)

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9.7  Primis Introduces Closed Captions

Primis, The Video Discovery Platform has begun rolling out Closed Captions as a default option for playlists across the Primis network.  This product update is the latest in Primis’s initiative to maintain an unmatched, industry-leading user experience.  While the feature is relatively common on other video channels, like Facebook, YouTube, and Netflix, Primis is among the first to implement the feature on a video ad unit.  The Primis unit will be using AI and machine learning tech from the GCP (Google Cloud Platform) in order to integrate automated Speech-to-Text into its platform.  These capabilities will be free for partners that are promoting their own content through the Primis unit.  This action was taken in order to ensure that our partners maintain the high UX standards that they have come to expect from Primis.

Tel Aviv’s Primis leverages machine learning technology to serve consumers with video content they are most likely to engage with.  The discovery engine is applied in a fully customizable video unit designed to fit natively in all websites.  Their video solution helps publishers add new monetization opportunities and drive deeper engagement with consumers.  (Primis 10.09)

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9.8  Valens Unveils Ultra-High-Speed Automotive Chipset with 16Gbps Bandwidth

Valens has unveiled its latest automotive chipset – the VA608A.  The VA608A chipset provides the high-speed bandwidth and resilience required for the many applications in the connected and autonomous car, guaranteeing a flexible and future-proof architecture.  The chipset delivers data transmission speeds of up to 16Gbps and enables automakers to extend native PCIe as a long-distance in-vehicle connectivity technology – up to 15m/50ft.  The VA608A is also the first and only chipset to enable 2.5Gb Ethernet over a single Unshielded Twisted Pair (UTP) wire with near-zero latency.

With the VA608A, Valens is introducing an innovative concept for long-distance PCIe connectivity, enabling OEMs and Tier-1s to utilize a wide array of existing components without requiring a complete redesign of the vehicle’s architecture.  This leads to reduced costs and wiring complexity, and the ability to utilize more powerful technologies with increased speed and functionality.  Valens’ PCIe extension technology is designed for many use cases in the vehicle including telematics, multi-modem smart antennas (5G, WiFi, WiGig, BT, etc.), ECU-to-ECU connectivity, and shared storage/black box storage. It also significantly simplifies high-speed, low latency, power-efficient backbone architecture.

Hod HaSharon’s Valens Automotive, a division of Valens, was established in 2015 with the singular goal of delivering the world’s most advanced audio/visual chipset technology to the automotive world.  Valens HDBaseT Automotive chip technology enables unparalleled in-vehicle connectivity, converging audio & video, Ethernet, USB, controls, PCIe and power over a single wire.  Valens’ patented technology is used by the world’s largest audio/video component manufacturers, enabling the highest quality of connectivity without the limitations of legacy infrastructure.  (Valens 10.09)

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9.9  Octopai’s Automated Business Glossary Creates a Common Language Across Departments

Octopai announced the release of its Automated Business Glossary, which leverages machine learning to synthesize data across enterprises and provide one authoritative source for all business operations.  This new module expands upon Octopai’s metadata management automation platform, joining its well-known Data Discovery and Data Lineage modules.  Through automated collection of all data items and descriptions from physical, semantic, and presentation layers, Octopai automates the creation, management and refresh of business glossaries, keeping them up-to-date and completely eliminating the need for any manual work or implementation projects.  Octopai’s automated business glossary saves organizations considerable time, effort, and money, and prevent risks associated with inaccurate data such as violations of compliance acts, like GDPR and CCPA.

Rosh HaAyin’s Octopai automates metadata management and analysis, enabling organizations to quickly, easily and accurately find and understand their data for improved operations, data quality and data governance.  The company was recognized as a Gartner Cool Vendor for Data Science and Machine Learning in 2018 and their investors include North First Ventures, Gefen Capital and iAngels.  (Octopai 10.09)

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9.10  Ingram Micro Teams With ITsMine for AI Based Data Loss Prevention

ITsMine will distribute its AI-based data loss prevention solution on Ingram Micro’s Cloud Marketplace as a trusted vendor partner.  Ingram Micro, the world’s largest distributor of technology, will offer ITsMine’s revolutionary DLP technology to its vast network of MSPs and value-added resellers around the world.  By joining the Ingram Micro Cloud Marketplace, ITsMine gains access to the industry’s most robust cloud ecosystem, comprised of more than 200 of the leading SaaS and IaaS solutions, and reaching tens of thousands of technology partners around the world.  A finalist of Ingram Micro’s 2018 Comet Competition, ITsMine’s next generation DLP solution protects organizations from both internal and external threats automatically.  Even after data has been leaked and used, security departments will be immediately alerted with forensic details.

Jerusalem’s ITsMine enables corporations to stay protected from internal and external data threats.  Founded in 2017 by a team of cyber security architecture experts, hackers, entrepreneurs and experienced software developers, ITsMine’s mission is to protect organizational data proactively, seamlessly and automatically, all while improving corporate compliance.  ITsMine’s next generation DLP provides alerts and gives critical forensic information even after data exfiltration. It is easy to implement, transparent to employees and IT teams and requires no endpoint agents.  (ITsMine 10.09)

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9.11  Elbit Systems Introduces Vehicular Anti-Drone Protection and Neutralization System

Addressing the increasing demand for protection of vehicles and convoys against hostile drones, Haifa’s Elbit Systems is introducing ReDrone Vehicular Tactical System, a vehicular configuration of the Company’s operational anti-drone protection and neutralization system.

Based on the field proven and operational ReDrone system, ReDrone Vehicular Tactical System detects, identifies and neutralizes all types of drones (at any radio frequency) within a radius of several kilometers, providing any vehicle with a 360 degrees protection shield against hostile drones.  Suitable for on-the-move or stationary operations, in day and night and in all weather conditions, ReDrone Vehicular Tactical System is offered for all types of military and para-military vehicles.

Rapidly deployable, ReDrone Vehicular Tactical System works automatically or manually, with no setup or operator control required for the entire process.  Its open architecture enables a full data flow to the vehicular control system and an effective interface with command and control centers.  With the detection of a hostile drone, the ReDrone Vehicular Tactical System neutralizes all communications between the drone and its operator, including radio, video and GPS signals.  The system is also capable of separating a drone’s signals from its operator’s remote control signals in order to locate and track each of them separately.  (Elbit 11.09)

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10:  ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Rate Rises by 0.2% in August

Israel’s Consumer Price Index (CPI) rose by 0.2% in August, the Central Bureau of Statistics announced, slightly higher than the economists’ predictions.  In the past twelve months to the end of August, the index rose 0.8%, moving closer to the government’s 1%-3% annual inflation target range.  Fresh fruit and vegetables led the price rises last month, up 4.2% while culture and entertainment prices rose 2.6%. Clothing prices fell 1.5% last month and telecom prices fell 0.7%.  The housing price index fell after months of rises. Home prices in the June-July period fell 0.3% in comparison with May-June. However, home prices have risen 0.7% over the past year.  (CBS 15.09)

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10.2  Israel’s Economy Grew by 3.6% in First Half

According to the second estimate by Israel’s Central Bureau of Statistics, the economy grew by 3.6% on an annualized basis in the first half of 2019.  This compares with 2.8% in the second half of 2018 and 3.5% in the first half of 2018.  The half yearly growth figure is a better indicator of the state of Israel’s economy than the quarterly figures, which were greatly influenced by the tax hike on cars at the end of the first quarter.  Consequently, the economy grew at just 1% in the second quarter of 2019 and 4.6% in the first quarter, after rising 4.2% in the fourth quarter of 2018.  Private consumption expenditure fell by 1.1% in the second quarter of 2019 after rising 4.2% in the first quarter of 2019 and 5.4% in the fourth quarter of 2018.  (CBS 16.09)

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10.3  Foreign Exchange Reserves at the Bank of Israel in August 2019 Over $119 Billion

Israel’s foreign exchange reserves at the end of August 2019 stood at $119.8 billion, a decline of $171 million from their level at the end of the previous month.  The reserves represent 31.9% of GDP.  The decline was the result of a revaluation that lowered the reserves by approximately $15 million, as well as private sector transfers of approximately $3 million and government transfers to abroad totaling approximately $155 million.  In contrast, the decline was partly offset by foreign exchange purchases by the Bank of Israel totaling $2 million.  (BOI 05.09)

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10.4  Immigration to Israel Increases by 21% in 2019

The Central Bureau of Statistics announced that 20,506 new immigrants came to Israel in the first seven months of 2019, including the children of Israeli citizens living abroad and who already have Israeli citizenship.  This is 21% higher than the 15,965 immigrants who came to Israel in the corresponding period of 2018.  In all of 2018, 31,601 immigrants came to Israel, compared with 28,220 in 2017.  Israel’s population is also being boosted by a decrease in emigration.  The annual emigration rate in 2017, the Central Bureau of Statistics reports (the number of Israelis not returning from abroad for more than a year) fell to 14,300 – the smallest number since 2010.  (CBS 09.09)

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11:  IN DEPTH

11.1  JORDAN:  Ratings Affirmed At ‘B+/B’; Outlook Remains Stable

On 13 September, S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Jordan.  The outlook remains stable.  At the same time, we affirmed our ‘B+’ long-term foreign currency issue rating on the sovereign-guaranteed bond of senior unsecured debt issued by The Development and Investment Projects Fund of the Jordan Armed Forces.

Outlook

The stable outlook balances our expectation that, over the next 12 months, donor funding will continue to support the government’s financing needs and keep debt-servicing costs low, against the risk that the government will significantly increase spending to alleviate social and economic challenges.

We could lower our ratings on Jordan if we saw higher debt accumulation by the central government or state-owned enterprises (SOEs), such as National Electric Power Company (NEPCO).  We could also lower the ratings if funding sources became strained, for example if strong bilateral and multilateral donor support were to diminish.

We could raise the ratings if Jordan’s external imbalances narrowed, supported by a more diversified export base, and if foreign investment were to rebound markedly, boosting foreign exchange reserves.  We could also see ratings upside stem from the government’s fiscal and energy reforms if it manages to reduce net government debt levels faster than anticipated while maintaining low borrowing costs.

Rationale

The ratings on Jordan are constrained by the economy’s large external financing needs, which are driven by sizable current account deficits.  Ongoing pressures from regional conflicts have resulted in refugee inflows that have materially increased the population, while slowing the country’s per capita growth trajectory.

The ratings are supported by the authorities’ macro-fiscal reforms and measures taken to reduce losses at SOEs, including a comprehensive energy reform plan.  We project net general government debt will gradually decrease over the forecast horizon through 2022, partly supported by ongoing large purchases of government securities by the Social Security Investment Fund (SSIF).  We expect that further international assistance, particularly from the U.S. and the Gulf Cooperation Council (GCC: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), would be forthcoming if needed.  This continues to support our ratings on Jordan.

Institutional and economic profile: Economic expansion will gradually improve

-Social pressures remain high, and we anticipate the government will prioritize growth-related spending and slow the pace of fiscal reforms.

-We expect donors to continue to support Jordan through grants (albeit declining) and concessional funding to maintain political stability.

-We forecast real GDP growth to steadily improve to 3% by end-2022, supported by public and private investment and rising exports.

Several external shocks – including the disruption of Egyptian gas supplies and the Syrian conflict, which led to the closure of key export routes to Iraq and Syria – have strained Jordan’s policymaking and public finances.  Large refugee inflows, resulting in a population increase of 50% since 2011, and security concerns have also weighed on public resources.  In particular, rising military, medical, and education costs have eroded Jordan’s fiscal position and increased public debt levels, as well as heightened its dependence on donor support.

Given the challenging environment, we expect that risks to Jordan’s public finances will persist.  The Extended Fund Facility program from the International Monetary Fund continues to provide a fiscal policy anchor.  We anticipate, however, that the pace of central government fiscal consolidation will decelerate, with greater emphasis on growth-enhancing measures and employment creation.  Renewed protests against fiscal reforms, similar to those in mid-2018, are possible, but our base case is that they will not be widespread enough to result in social upheaval. In our view, centralized decision-making clouds the visibility on future policy responses.  Policy predictability is further affected given Jordan’s changing demographics and the rising desire for greater political participation among sections of the population.

We expect international support for Jordan to remain strong.  Jordan is one of the most politically stable countries in the region, and maintaining this relative stability is an important foreign policy objective for the U.S. and the GCC.  The U.S. has committed to providing economic and military aid of at least $1.275 billion (about 3% of the 2019 GDP) annually over 2018-2022.  Exceptionally, the U.S. Congress approved a higher disbursement of $1.52 billion in 2018 and 2019.  The GCC also stepped in following the protests in June 2018, and GCC countries (excluding Qatar) pledged an aid package of $2.5 billion over five years in the form of deposits and project finance.  Qatar has promised to provide $500 million, as well as jobs for around 10,000 Jordanians in Qatar.

In addition, Jordan benefits from concessional lending from bilateral partners and multilateral agencies, which have been important sources of financing for the twin fiscal and external deficits.  During the London Initiative Conference in February 2019, several donor partners made funding pledges exceeding $5 billion.  Furthermore, the U.S. had guaranteed Eurobonds issued by Jordan over 2013-2016 of $3.75 billion, of which the first bond of $1.00 billion matured in June 2019.  Jordan has upcoming guaranteed Eurobond redemptions of $1.25 billion in 2020 and $1.00 billion in 2022.  It is unclear to what extent the U.S. will guarantee future issuance by the Jordanian government.

We project that real GDP growth will increase over the next four years, to 3.0% in 2022 from 2.2% in 2019.  The government, led by Prime Minister Omar Razzaz, has outlined an ambitious growth plan to improve competitiveness, foreign investment, and exports.  We expect key growth drivers to be public and private investment into priority sectors such as energy, water, and transport; rising exports of goods and services to Iraq and the EU (given easing conditions of the rules-of-origin agreement in late 2018); and tourism.  In February 2019, Jordan and Iraq signed several agreements, including the restoration of customs exemptions on several Jordanian goods, the export of Iraqi oil to Jordan at concessional rates, a door-to-door freight transport agreement, and the establishment of a joint industrial free economic zone at the border.

Regional and domestic political developments have significantly affected foreign investment, especially in 2018, while weakened macroeconomic activity in the GCC also reduced remittances.  The Syrian conflict has abated but security risks remain elevated.  At the same time, the unemployment rate is still high at about 19%.

Jordan’s economic growth has not kept up with the rapid rise in its population.  Factoring in our growth forecasts through 2022, the 10-year weighted-average annual real GDP per capita growth will likely be approximately negative 0.9%, lagging peers at similar income levels.  However, population growth has slowed since the closing of the borders with Syria in June 2016.  We do not see a material risk of large Syrian refugee inflows following the border reopening, but we also do not anticipate a substantial number of refugees returning to Syria at this time.

Flexibility and performance profile: Net general government debt levels will gradually decline

-Implementation of the government’s energy reforms could be key to reducing energy costs and stabilizing SOE debt.

-We project the government will rely more on external concessional loans to fund budget deficits as grants continue to decline.

-External financing needs will remain high at around 160% of current account receipts and usable reserves over 2019-2022.

Jordan’s general government fiscal position reflects deficits at the central government level averaging close to 3% of GDP over 2015-2018, which are offset by surpluses at the Social Security Corporation (SSC) of a similar magnitude, resulting in overall general government deficits of almost zero.  We include the accounts of SSC and local governments in the general government’s, as per our sovereign criteria.

Weak economic environment and social pressures delayed some fiscal reforms during 2018, including amendments to the income tax law and increases in general sales taxes (GSTs).  While the reported central government deficit inched down to 2.4% of GDP in 2018, from 2.6% in 2017, there was significant off-budget spending of about 1.0% of GDP last year.  We expect the central government’s deficit will decline to 2.4% in 2022 from an estimated 2.7% of GDP in 2019.

We anticipate that the pace of fiscal measures will be slower than over 2015-2017, and we expect central government debt will remain broadly stable through 2022.  We understand that the government does not plan to raise GSTs, but rather focus on strengthening tax administration and reducing tax evasion.  We expect fiscal gains of about 0.5% of GDP will accrue this year from the implementation of the new income tax law passed in December 2018, which lowers the personal tax exemption threshold and broadens the tax base.  This, combined with recent measures such as the removal of tax exemptions on hybrid and electric cars, will partly offset an expected increase in spending and decline in budget grants.

The government’s energy sector roadmap could be key to improving public finances and reducing energy import costs in the medium term.  Key elements of the energy plan include: (1) gradual shift from liquefied natural gas to cheaper natural gas from Egypt and the Leviathan field in Israel from 2020 and renewable energy; (2) expanding and developing new electricity grids to neighbors including the Palestinian Authority and Iraq, increasing export income; (3) revision of NEPCO’s tariff mechanism (under study) that would better reflect its cost structure; and (4) potential debt reprofiling of NEPCO’s debt through donor funds.

The weak performance of NEPCO and Water Authority of Jordan (WAJ) in recent years has created significant financial costs for the government.  Despite implementing an automatic tariff adjustment mechanism linked to global oil prices, NEPCO continued to suffer operating losses in 2018 and during April-June 2019.  At the same time, higher electricity tariffs worsened WAJ’s overall deficit (including temporary arrears).  The Ministry of Finance (MoF) has centralized WAJ’s debt-servicing and capital expenditure to reduce its interest costs.  The MoF also directly services about half of NEPCO’s debt payments.  We include the government-guaranteed debt of NEPCO and WAJ of around 11% of GDP in 2018 in our government debt stock calculations.

We note that the surpluses at the SSC have supported strong growth of assets in its investment arm, the SSIF, which allows them to continue increasing their holdings of government securities.  The SSIF held around 18% of total public debt in 2018, from about 11% in 2013.  Net general government, after adjusting the central government’s deposits and SSIF liquid assets, is much lower at about 63% of GDP, compared with gross public debt of 94% in 2018.  We continue to view the SSIF as a voluntary source of domestic funding, as there is also appetite from domestic banks to buy government securities.  However, our view could change if we saw a rapidly increasing accumulation of SSIF’s exposure to the government.

We anticipate that the government will also raise more external debt, primarily on a concessional basis, over 2019-2022 to meet its funding needs and simultaneously attempt to lengthen its debt maturity profile.  Although borrowing costs remain low as a result of past concessional borrowing, new debt issuances could cause interest costs to rise.  The $1 billion U.S.-guaranteed Eurobond that matured in June 2019 carried a coupon rate of 1.95% and was refinanced through a World Bank funding facility of $725 million at 4% (with guarantees from the U.K. and Saudi Arabia) and the rest through a U.S.-dollar issuance to domestic banks at market rates.  We expect debt-servicing costs will gradually increase to about 10.2% of total revenue by 2022.

Although Jordan’s current account deficit decreased markedly in 2018, a halving of foreign direct investment (FDI) inflows led to a continued decline in foreign exchange reserves.  Total foreign exchange reserves have declined by about $2.2 billion between 2016 and 2018 because of high external financing needs, lower financial account inflows, and rising deposit dollarization.  Deposits from GCC countries into the Central Bank of Jordan (CBJ) of $1.2 billion in 2018 did not offset this decline.  However, we expect foreign currency reserves will improve somewhat from 2019, mainly on the back of higher FDI and debt inflows.

We forecast that gradually declining current account deficits from 2019 will stabilize external financing needs at an average of 160% of current account receipts and usable reserves over 2019-2022.  We expect current account receipts will benefit from rising exports to Iraq and tourism revenue as the regional security environment stabilizes.  We do not anticipate material upside to exports in the near term from the reopening of the Nassib border with Syria in October 2018, because political relations remain strained.

The Jordanian dinar’s peg to the U.S. dollar supports price stability, although it also limits the central bank’s room for policy maneuver.  The CBJ follows the U.S. Federal Reserve in hiking interest rates to maintain competiveness of the Jordanian dinar, and it reduced all policy rates by 25 basis points in August.  We expect inflation to slow to 1.5%-3.0% over the next four years after peaking at 4.5% in 2018, supported by lower energy costs.

While domestic private credit growth has slowed since 2017 on the back of rising interest rates and subdued economic activity, we note that it has exceeded nominal GDP growth in recent years.  The CBJ continues to provide subsidized rates of 1.75% in Amman and 1.00% outside Amman for lending to key economic sectors including industry, tourism, agriculture and renewable energy.  We see risks to the banking system from a potential deterioration in asset quality due to high lending concentrations to cyclical sectors, mostly construction and real estate.  Nonetheless, banks remain adequately capitalized.  (S&P 13.09)

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11.2  SAUDI ARABIA:  Saudi Arabia has a New Energy Minister – What it Means for Oil

Saudi Arabia’s King Salman Bin Abdulaziz named his son Prince Abdulaziz as the country’s energy minister, replacing Khalid Al-Falih, who led three years of active OPEC diplomacy to forge a global alliance with producers such as Russia to limit production in order to prop up prices.

Who is the new minister in charge?

Prince Abdulaziz served as deputy petroleum minister for a dozen years and most recently as minister of state for energy since 2017.  He is an older half-brother of the influential Crown Prince Mohammed bin Salman, though the pair aren’t believed to be close and are quite far apart in age.  Prince Abdulaziz’s years in the ministry prepare him for the top role.

He has been a member of Saudi Arabia’s delegation to the Organization of Petroleum Exporting Countries and is a regular participant at the group’s meetings on production policy.  He has a reputation for diligence and an ability to bridge differences between Saudi ministers and those of other members of the organization.  He was instrumental in managing oil affairs during the 1990 Gulf War and the secret talks with Mexico and Venezuela that led to output cuts which helped raise prices during that decade.

Promoting an oil policy that boosts prices to a level that can sustain government spending – a price some $25 a barrel higher than it is now – may be the top priority for the new energy minister.  That task is even more urgent as the Crown Prince drives a reform plan to revamp the economy and forge new industries to wean the country off its reliance on oil.  Higher prices would also support a richer valuation for the planned sale of a stake in state oil producer Saudi Aramco.

“From a policy perspective, we don’t see a significant change,” Majd Dola, portfolio manager at First Abu Dhabi Bank PJSC, said on Bloomberg TV.  “Maybe fresh blood might bring some new tactic to the table in terms of negotiations, but it’s not a surprise that the kingdom is trying to control the oil price, trying to push it higher.”

How the appointment changes things

Prince Abdulaziz’s promotion concentrates the kingdom’s levers of oil policy-making directly in the hands of the royal family.  While the Saudi king always had final say on decisions of government strategy, civil servants had headed the oil ministry since its founding six decades ago.

The Crown Prince heads a committee overseeing Saudi Aramco.  The energy minister had served as chairman at the producer, formally known as Saudi Arabian Oil Co., until Al-Falih recently had the role stripped from him.  Yasir Al-Rumayyan, the head of the sovereign wealth fund and an ally of the Crown Prince, took the role.

Those changes give the Al-Saud family direct oversight over both the company’s activities and the country’s oil policy.  Without a minister to take the fall for policy missteps, however, the responsibility for the outcome of oil strategy decisions will fall squarely on the royals.

What’s at Stake?

The most unforgivable failure for a Saudi energy minister is an inability to keep oil prices high enough to support government spending.  While the king didn’t give a reason for replacing Al-Falih in the Saudi Press Agency’s announcement of the decision, Brent crude at about $60 a barrel isn’t enough to fund the Saudi budget, which needs prices at $80 a barrel or more.

Saudi Arabia, OPEC’s de facto leader, brought non-members like Russia into the group’s plan to trim output.  While that worked at first, concerns over demand and the potential for looming economic hardship have halted oil’s ascent.

Al-Falih was the architect of the so-called OPEC+ policy, visiting frequently with his Russian counterpart Alexander Novak to bring some dozen other producers into the fold and to pressure countries to uphold their parts of the bargain.  Prince Abdulaziz will have to continue those relations to maintain the policy — or persuade others a change is needed.

Saudi Arabia’s Options

Saudi Arabia is unlikely to push for the coalition to make deeper cuts as this may fail to support oil prices for a number of reasons, mainly a potential increase in US shale production and the risk that other OPEC+ nations may be tempted to restore output, the Oxford Institute for Energy Studies said in a report.  OPEC may need to hold off on further market intervention and brace for “harder times” as the trade war and faltering demand cloud the economic outlook, it said.

Sanford C. Bernstein analysts including Neil Beveridge said OPEC needs to deepen current output cuts by 1 million barrels a day in 2020 to defend prices at $60 a barrel in the face of rising non-OPEC supply.  Inventories may start to build again from late September, and demand growth is seen at 1.2 million barrels a day in 2020, which is set to be eclipsed by an increase in non-OPEC supply growth of 2.2 million barrels a day, they said.  (AB 08.09)

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11.3  TURKEY:  Crisis-Hit Turkey Suffers Erosion in Investments

Mustafa Sonmez posted in Al-Monitor on 8 September that Turkey’s gross domestic product shrank 1.5% year-on-year in the second quarter, according to official figures, with a dramatic decrease in investments standing out as a major driver of the contraction.  The decline in investments — both in the private and public sector — has been going on for 12 months, bearing heavily on joblessness.

It was the third quarter in a row that the Turkish economy has shrunk.  The trend is likely to continue for at least another quarter, as leading indicators point to ongoing contraction in the July-September period.  The Turkish Statistical Institute is scheduled to release the third-quarter figure on 2 December.

The contraction is even more striking in terms of dollars.  The Turkish economy was measured to be worth some $950 billion in 2013.  In the ensuing years, the Turkish lira slipped against the dollar and the economy’s worth fell to $789 billion in 2018.  In the first half of 2019, the figure stood at $722 billion on a year-on-year basis.  GDP per capita, meanwhile, was $8,800, down from $12,000 in 2014.  In other words, Turkey’s GDP and GDP per capita in terms of dollars have sharply declined — especially over the past two years — under the combined impact of a depreciating currency and the economic downtick.

In terms of production, the only sector that grew in the second quarter was agriculture, expanding by 3.4%.  In contrast, the industry contracted by about 3% and the construction sector by a staggering 12.5%, while the services sector shrank 0.3%.

The downturn in construction has clearly hit industrial branches that supply materials to builders.  Industrial production data show significant decreases in the outputs of manufacturers of cement, bricks, paint, glass, wood, iron and steel.  They are followed by manufacturers of durable goods such as cars, white appliances, furniture and electronics, which have been hit by shrinking domestic demand.

Looking at the spending side, one could observe that the second-quarter contraction was limited to 1.5% thanks to the positive impact of public spending and exports.  Public spending increased 3.4% from April to June, with net exports also contributing some growth.  Still, the decline in the households’ domestic demand and the huge decrease in investments were hard to offset, resulting in an overall contraction of 1.5%.

Investments in the second quarter fell nearly 23% from the same period last year, marking the worst quarter for investments in the past decade.  Moreover, it was the fourth quarter in a row that investments have fallen.  Cumulatively, this 12-month period saw a nearly 8% decrease in investments year-on-year.

The slump in construction investments was especially sharp.  With builders already grappling with unsold housing stocks, a spike in inflation and foreign exchange prices, followed by an increase in interest rates on the lira, further suppressed their investment appetite.  The inflation in construction materials prices had reached nearly 40% at one point before easing to 20%, and few could brave investing amid such price volatility, focusing instead on efforts to destock.

The industry faced similar predicaments, forcing domestic and foreign entrepreneurs alike to freeze any investment plans.  The steep declines in Turkey’s imports of investment goods and intermediate goods are the direct result of the suppressed appetite for investment.

In previous years, builders would borrow from abroad to launch new projects, but the fragility of the lira and unstable foreign currency prices have now deterred them from seeking external loans.  The private sector’s foreign exchange deficit is already more than $185 billion.

The shrinking domestic demand, especially for housing and durable goods, has been the most important factor discouraging investments.  Also, foreign creditors have been reluctant to issue investment loans, wary of Turkey’s risk premium.  The country’s credit default swaps — a key risk indicator — have been hovering in the region of 400 basis points, roughly double the risk premium of Turkey’s closest peer, South Africa.

The decline in investments is of direct concern to the jobless masses awaiting work opportunities.  The wait is likely to be long, both for the skilled and unskilled idle labor force.  As of May, the seasonally adjusted unemployment rate stood at 14% and the number of jobless reached nearly 4.5 million, increasing by 1.1 million over 12 months.  Of note, the figure denotes only those actively looking for jobs, excluding the jobless who have given up on the search.

Out of the 1.1 million who joined the army of jobless over a year, 870,000 are people who lost jobs, while the remaining are newcomers to the labor market who have not had the chance to start working.  Out of the 870,000 people who lost their jobs, 538,000 were from the construction sector, which was the first to plunge into crisis last year.  The industrial sector laid off 123,000 people, while another 307,000 lost jobs in the agricultural sector.

Reviving the investment climate requires a series of coherent economic steps as well as the restitution of confidence among local and foreign investors, especially politically, and the reduction of the country’s risk premium.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question.  (Al-Monitor 08.09)

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The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as Invest Hong Kong, the Canadian Province of Ontario and European clients.

EDI’s other services include customized business delegations, partner searches, business development, market feasibility studies and tailored research reports, as well as identification of potential joint ventures for commercial clients.  For more information on how we may better assist you, please visit our Web site at:  http:// www.atid-edi.com.

THE FORTNIGHTLY
A Review of Middle East Regional Economic & Cultural News & Developments
2 October 2019
3 Tishrei 5780
3 Safar 1441

Written & Edited by Seth J. Vogelman*

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Canada and Israel Revise their Free Trade Agreement
1.2 Tourism Ministry Provided Airlines with NIS 50 Million in Grants for New Routes to Israel
1.3 The Bank of Israel Approves the Establishment of a New Bank
1.4 Armenia to Open Embassy in Israel by 2020

2: ISRAEL MARKET & BUSINESS NEWS

2.1 Anacapa Partners Announces Investment in Dooblo
2.2 Datumate and Dorsch Group Announce Strategic Partnership
2.3 Cox Automotive Begins Israel Auto-Tech Operations
2.4 DustPhotonics Secures $25 Million in Series B Funding Led by Intel Capital
2.5 Foretellix Targets Increasingly Visible Gaps in ADAS and Autonomous Vehicle Safety
2.6 Fundbox Raises $326 Million to Expand First B2B Payments and Credit Network
2.7 Tipalti Raises $76 Million to Further Accelerate Its Leadership in Global Payables Automation
2.8 Cycode Raises $4.6 Million in Funding to Deliver Industry’s First Source Code Control
2.9 FruitSpec Closes $4 Million Investment for Its ‎Yield Estimation Solution
2.10 PICO Venture Partners Closes $80 Million Second Fund
2.11 EC Awards odix €2 Million to Deliver Ransomware Protection Technology to SMEs
2.12 Zion Oil & Gas Begins 3-D Seismic Acquisition in Israel
2.13 Tastewise Raises $5 Million Series A Funding Round from PeakBridge
2.14 Namogoo Named Dun & Bradstreet’s Most Desirable Startup to Work for in Israel
2.15 Duda Raises $25 Million to Provide Website-as-a-Service to Digital Agencies & SaaS Platforms

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Andersen Global Expands to Jordan
3.2 Accela Partners with Dubai’s SIRA to Launch Security Licensing & Regulation Technology
3.3 Dubai’s Retail Sector Undergoing a Major Transformation Due to e-Commerce
3.4 Dubai Camel Hospital Set to Expand Amid Rising Demand
3.5 MaxAB Closes Landmark $6.2 Million Seed Round
3.6 Dabchy Raises $300,000 in Seed Funding
‎3.7 temtem has Raised Algeria’s Largest Series A Funding with $4 Million

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Endangered Turtles Bred in Captivity in Israel Help Save Species
4.2 How Date Palms and Satellites Are Helping the UAE Fight Carbon Emissions

5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Inflation Rate at 2.77% by August 2019
5.2 Lebanon’s Trade Deficit Ended at $10.24 Billion by July 2019
5.3 Tell Group Aims to Facilitate Lebanon’s Infrastructure via New $100 Million Fund

►►Arabian Gulf

5.4 Qatar’s Banking System Stable as Infrastructure Spending Drives Economic ‎Growth
5.5 UAE Remittances Decline Due to Slow Down in Employment
5.6 Saudi Arabia’s $27 Billion Plan to Transform Tourism

►►North Africa

5.7 Egypt’s Planning Ministry Aims to Raise Workforce to 31.7 Million in FY 2019/20
5.8 Egypt’s Non-Petroleum Exports Increase as Imports Decrease

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 OECD Says Turkish Economy Contracting Less Than Previously Forecast
6.2 Turkey Lacks Skills to Compete in Today’s Global Economy
6.3 Turkey Turns to Crisis-Hit Car Industry in Attempt to Revive Economy
6.4 Cyprus 2020 Budget Projects 2.9% GDP Growth and Fiscal Surplus

7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 On Eve of Jewish New Year, Israel’s Population Exceeds 9 Million People
7.2 Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 8/9 October
7.3 Sukkot Holiday Celebrated

*REGIONAL:

7.4 Turkish Life Expectancy Rises to 78.3 Years

8: ISRAEL LIFE SCIENCE NEWS

8.1 Prilenia’s Pridopidine Chosen to Participate in the First ALS Platform Trial
8.2 Aidoc Releases Complete AI Package to Speed Identification and Treatment of Stroke
8.3 Strauss Group Reduces Sugar in Its Milk Chocolate by 30% with No Artificial Substitutes
8.4 Biogal-Galed Labs Launches CombCam Automated Reading Device for Kits
8.5 DarioHealth Wins U.S. Patent for Optical Transmission of Data Between Sensor & Smart Device
8.6 Biovo to Launch Innovative Anesthesia and Ventilation Platform
8.7 BGN Technologies Licenses Polymer for Targeted Cancer Therapy to Vaxil Bio
8.8 Solio Alfa Plus FDA-Cleared Radio Frequency Pain Relief Device Debuts in US ‎Market
8.9 Tarsius Pharma Announces FDA Acceptance of IND Application for TRS01
8.10 Body Vision Closing $20 Million in Series C Funding

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Odo Security Emerges from Stealth with Agentless Access Management Platform
9.2 Viz.ai Named Among Forbes Most Promising AI Companies in America
9.3 Waterfall Security Solutions Announces Release of V7 Software Platform
9.4 Advice Electronics’ New, Innovative High Density Laser Capacitor Charging Power Supply
9.5 Aniview’s Ad Server and SSP Are First to Support Sellers.JSON & SupplyChain Object
9.6 AudioCodes Introduces Meeting Insights
9.7 BigID Introduces Third-Party Data Sharing Privacy Compliance Capabilities Ahead of CCPA
9.8 US Defense Innovation Unit Selects D-Fend Solutions’ Counter Drone System
‎9.9 ECI’s Converged Interconnect Network Solution for Cable Operators

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Ranked 38th in the World for Economic Freedom
10.2 Israel’s Composite State of the Economy Index for August 2019 Rises by 0.2%
10.3 Unemployment in Israel Rose in August to 3.8%
10.4 New Mortgages in Israel Increase by 30% Since Start of 2019

11: IN DEPTH

11.1 LEBANON: Lebanon’s Budget Finally Ratified and Goes into Effect
11.2 LEBANON: A Closer Look into Lebanon’s Fixed Currency
11.3 SAUDI ARABIA: S&P Affirms ‘A-/A-2’ Ratings; Outlook Stable
11.4 EGYPT: Israel to Start Exporting Natural Gas to Egypt as Last Obstacle Is Removed
11.5 EGYPT: Ethiopia Again Rejects Egypt’s Vision for Renaissance Dam
11.6 EGYPT: Five Things to Know About Egypt’s Startup Ecosystem
11.7 ALGERIA: A Presidential Election Will Be Held on 12 December
11.8 TURKEY: IMF Staff Concluding Statement of the 2019 Article IV Mission
11.9 GREECE: Staff Concluding IMF Statement of the 2019 Article IV Mission
11.10 CYPRUS: IMF Staff Concluding Statement of the 2019 Article IV Mission
11.11 CYPRUS: Moody’s Changes Outlook on Cyprus’s Rating to Positive, Affirms Ba2 Rating

There are some challenges for the two countries to increase these numbers. On the Canadian side, Canada’s exports to the US in 2018 were $337 billion or 177 times that exported to Israel. Canadian firms, unlike their Israeli counterparts, focus first on the domestic market, then the US market and then overseas.

Israeli firms, if they are to grow to any substantial size must first think globally rather than domestically and that usually entails opening up a US office. Rarely does Canada come into the picture, but this has just started to change with the growth of Canada’s high tech sector. In 2017, the World Economic Forum voted Montreal, Vancouver and Toronto as three of the top 25 high tech cities of the world. Recently a number of Israeli high tech companies have listed their shares on the Toronto Venture Exchange, reflecting the change in how Israeli entrepreneurs and high tech companies view the Canadian capital markets and the growing importance of Canada’s innovation ecosystem. (Globes 19.09)

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1.2 Tourism Ministry Provided Airlines with NIS 50 Million in Grants for New Routes to Israel

Foreign airlines have received Ministry of Tourism grants totaling over NIS 50 million for operating routes from various destinations, starting in 2016. The grants are awarded to airlines for opening new routes to and from Israel when the ministry believes have potential for bringing tourists to Israel. The airlines receiving the grants at the end of the first year of their activity undertake to use the money for marketing measures and campaigns to encourage tourism to Israel.

Airlines receive €250,000 for a route per weekly flight for a year, meaning that an airline operating three new weekly flights gets €750,000 a year. Since one of the conditions for the grant is opening a new route that did not previously exist in Israeli aviation, the main beneficiaries from the grants are low-cost airlines beginning flights from less popular destinations, which are cheaper to operate, including lower airport fees charged by the Civil Aviation Authority of Israel.

Heading the list of the airlines receiving Ministry of Tourism grants since 2016 is Hungarian airline Wizz Air, which has received €3.3 million, over half of all the grants obtained by airlines. It received the grants for operating flights between Tel Aviv and Lublin (Poland); Kosice (Slovakia); Craiova, Timisoara, and Sibiu (Romania); and Debrecen (Hungary). Irish low-cost airline Ryanair has received €2.5 for operating flights between Ben Gurion Airport and Poznan, Wroclaw, and Gdansk (Poland) and Baden-Baden and Memmingen (Germany). Polish national airline LOT also receive grants for operating routes from Poland, including from Poznan, Lublin, Wroclaw, and Gdansk.

El Al also received a €1 million grant for starting new routes from Tel Aviv to Las Vegas and Miami. United Airlines won a grant for operating a new route between Tel Aviv and Washington. For three weekly flights on this route, the US airline received a €750,000 annual grant, as did South American airline LATAM for operating a three weekly flights from Tel Aviv to Sao Paolo (Brazil) and Santiago (Chile). Air India, which launched direct flights between Tel Aviv and Delhi in 2018, received a €750,000 grant. Chinese airlines have also received grants. Hainan Airlines received €750,000 for its three weekly flights to Shanghai in 2017-2018. Another Chinese airline to receive a grant is Sichuan Airlines, which inaugurated a Tel Aviv-Chengdu route a year ago and received €500,000 for two weekly flights. (Globes 18.09)

1.3 The Bank of Israel Approves the Establishment of a New Bank

The Bank of Israel notified ‎entrepreneurs Mr. Marius Nacht and Prof. Amnon Shashua, that the Banking Supervision ‎Department has completed the examination process, and that the Governor is prepared to grant ‎a license to the bank and a permit to control it. The process was carried out in consultation with ‎the Licensing Committee.‎

According to the business plan presented to the Banking Supervision ‎Department, the intent is to establish a digital bank, without branches, and to focus on providing ‎banking services to households, including providing credit, receipt of deposits, management of ‎bank account, and providing securities purchasing and sales services. ‎

The establishment of a new bank is possible due to a broad process in which the Banking ‎Supervision Department removed barriers and the Bank of Israel and Ministry of Finance led ‎joint initiatives, in accordance with the recommendations of the joint committee established to ‎increase competition in banking and financial services, which were supported by the ‎government and the Knesset. The process included a change in the process of granting a bank ‎license that will create a mechanism to ensure regulatory certainty for the entrepreneurs prior to ‎the completion of full operational preparations; close guidance of the entrepreneurs by the Supervisor of Banks to support the establishment of new ‎banks; lowering the initial capital requirements for establishing a bank and the capital ratios ‎‎(according to a risk-based approach); revising the Banking Supervision Department’s Proper ‎Conduct of Banking Business directive to enable the digital provision of all banking services; a ‎government decision to provide a government grant to an entity that establishes a computer ‎services center as automated infrastructure for new and existing banks and deposit and credit ‎unions; and the establishment of a credit data system to respond to information restrictions and ‎allow for the provision of credit under competitive conditions by banks and new players. ‎

The receipt of the control permit and bank license will enable the entrepreneurs to move forward ‎and complete the IT system, operational, and regulatory preparations required to launch the ‎bank’s operations, including signing an agreement with the technological system supplier that ‎won the State tender, TCS from the TATA Group, complete the hiring of the managerial staff ‎and the appointment of a Board of Directors, and more.‎

The new bank will be supervised by the Banking Supervision Department at the Bank of Israel in ‎order to ensure its stability and to protect the money deposited with it, similar to the supervision ‎over the other banks in Israel. Customers of the new bank will be able to make various payment ‎transactions, including via debit card, transfers, real-time transfers (Zahav), cash withdrawals ‎at ATMs, and so forth. (BoI 24.09)‎

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1.4 Armenia to Open Embassy in Israel by 2020

Armenia has announced that it will be opening an embassy in Israel. The two countries established formal diplomatic ties in 1992. According to an announcement from the Armenian Foreign Ministry, the embassy – which would be the 90th foreign embassy in Israel – will be located in Tel Aviv and opened “as quickly as possible,” sometime between the end of 2019 and the beginning of 2020. The decision reflects well on the closer bilateral diplomatic ties over the past year. (IH 20.09)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Anacapa Partners Announces Investment in Dooblo

San Mateo, California’s Anacapa Partners, a leading private equity firm focused on acquisitions in the lower middle market, completed a growth investment in Dooblo, a leader in mobile survey software, data collection and analysis solutions. Trail Mark Partners participated in the investment alongside Anacapa. Financial terms of the transaction were not disclosed. Anacapa Partners feels Dooblo’s SurveyToGo platform is the premier data collection tool in the research space.

Based in Kfar Sava, Dooblo provides innovative professional mobile survey software for the market research industry. Dooblo’s flagship product, SurveyToGo, eliminates 60% of the costs of traditional paper-based survey projects with 10x the quality of the collected data, and is utilized by market research firms in more than 100 countries worldwide. (Anacapa 18.09)

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2.2 Datumate and Dorsch Group Announce Strategic Partnership

Datumate and Frankfurt, Germany’s Dorsch Group have entered a strategic partnership, combining Datumate’s innovative construction data analytics platform DatuBIM with Dorsch Group’s industry-leading construction planning and consultancy services. The partnership will enable Dorsch to expand its digitalization services from planning to the entire construction lifecycle. DatuBIM provides digital monitoring and documentation of managerial and engineering construction processes and establishes a single, permanently updated source of digitized project assets from planning through execution and maintenance. As part of this strategic partnership Dorsch Group will sell, deliver and support DatuBIM services to customers in Germany, Austria and Switzerland, whether they undertake new infrastructure builds or rebuilds of existing infrastructure.

DatuBIM 2.0, is a non-intrusive, end-to-end service and collaboration platform that delivers automated construction data analytics within hours of data capture, as well as comparison against design plans and execution progress. As-built digital twins and automated multi-dimensional, customized analytics deliver valuable insights for optimizing, controlling and documenting processes, quality and budget. DatuBIM cloud-based software offers value to project owners, managers and contractors, and the full range of construction industry professionals.

Yokneam’s Datumate develops software and services that utilize big data analytics, machine learning, state-of-the-art computer vision, and drone and camera technologies. Our flagship services and products, DatuBIM and DatuSurvey, revolutionize traditional core processes like infrastructure construction project execution management and facilitate digitalization of the entire asset lifecycle from planning, through execution and maintenance. (Datumate 18.09)

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2.3 Cox Automotive Begins Israel Auto-Tech Operations

US vehicle trading and services giant Cox Automotive is launching Israeli auto-tech operations. The Atlanta-based company announced that it will expand its collaboration with Israeli startups and entrepreneurs, and in the first stage it has formed a partnership with DRIVE TLV, a Tel Aviv-based smart mobility innovation center.

The DRIVE TLV hub was founded in 2017 by Mayer Cars and Trucks and Dr. Tal Cohen, a serial entrepreneur investor and a long-time faculty member at Georgia Tech. DRIVE’s other partners include Hertz Rent a Car International, Israeli telematics company Ituran, NEC, Aptiv, Honda and Volvo Group. The partnership’s main goal is to facilitate collaboration between Cox Automotive and Israeli transportation innovators. DRIVE TLV is focused on supporting mobility startups and entrepreneurs of all stages, with its accelerator, prototyping lab and shared workspace that encourages networking and collaboration. Israel is home to more than 8,000 startups, and over 600 are focused on mobility and transportation-related solutions.

As a DRIVE partner, Cox Automotive will actively engage with startups by providing expertise, and rapid prototyping opportunities that may evolve into additional business relationships. These activities will enable startups to receive accelerated validation of their technology and business model and, in turn, allow Cox Automotive to gain cutting edge competitive advantage. (Globes 19.09)

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2.4 DustPhotonics Secures $25 Million in Series B Funding Led by Intel Capital

DustPhotonics announced a Series B investment of $25 million led by Intel Capital and joined by WRVI Capital. This series also includes a continued investment from veteran entrepreneur, Avigdor Willenz. This latest round will help fund DustPhotonics’ roadmap and expand its operations and global market presence. As data rates double with every successive generation, so does the complexity for meeting the demand of lower cost, lower power and higher reliability. Technology innovations, like AuraDP, provide a significant value differentiation enabling superior performance and sustainable 100, 400 and 800 Gb/s products.

Modiin’s DustPhotonics, founded in 2017, develops and manufactures pluggable optical modules and solutions for data center, enterprise and HPC applications. Its innovative products and technology, such as AuraDP, are targeted at enabling the next generation of optical modules and connectivity. (DustPhotonics 23.09)

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2.5 Foretellix Targets Increasingly Visible Gaps in ADAS and Autonomous Vehicle Safety

Foretellix has opened Measurable Scenario Description Language (M-SDL) to the ADAS and AV ecosystem and contributed the language concepts to the Association for Standardization of Automation and Measuring Systems (ASAM) standards committee. M -SDL is the first open language that addresses multiple shortcomings of today’s formats, languages, methods and metrics used to verify and validate vehicle safety. Foretellix also announced its M-SDL Partners Program, providing a mechanism for industry feedback and refinement of M-SDL. A partial list of members includes AVL List GmbH, Volvo Group, Unity Technologies, Horiba Mira Ltd, TÜV SÜD, Automotive Artificial Intelligence (AAI) GmbH, Metamoto Inc, Vector Zero Inc, Trustworthy Systems Lab of Bristol University and Advanced Mobility Institute of Florida Polytechnic University.

By opening and contributing M-SDL, tool vendors, suppliers and developers will be able to 1) use a common, human readable, high level language to simplify the capture, reuse and sharing of scenarios, 2) easily specify any mix of scenarios and operating conditions to identify previously unknown hazardous edge cases, and 3) monitor and measure the coverage of the autonomous functionality critical to prove AV safety, independent of tests and testing platforms.

Tel Aviv’s Foretellix’s mission is to enable ‘measurable safety’ of autonomous vehicles, enabled by a transition from ‘quantity of miles’ to ‘quality of coverage’. Foretellix was founded by a team of pioneers in measurable verification and validation, with a highly automated and proven coverage driven methodology broadly adopted in the semiconductor industry. They have adapted and tailored their approach for the safety verification and validation of autonomous vehicles. (Foretellix 23.09)

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2.6 Fundbox Raises $326 Million to Expand First B2B Payments and Credit Network

Fundbox has raised $176 million in growth equity funding for its Series C round. In addition, the ‎company also announced that it has secured a $150 million credit facility.‎ Fundbox will use these new investments to transform the B2B payments and credit experience ‎by making transactions simple, fast and transparent so businesses will have greater cash flow ‎predictability.‎

The Series C round was oversubscribed and includes a diverse range of leading institutional ‎investors, including Allianz X, Healthcare of Ontario Pension Plan (HOOPP), HarbourVest, ‎‎9Yards Capital, Hamilton Lane, SEB Private Equity (on behalf of clients), Cathay Innovation, ‎Synchrony, MUFG Innovation Partners Co., Recruit Strategic Partners, GMO Internet ‎Group, and Arbor Ventures, as well as participation from the major existing Fundbox investors ‎including Khosla Ventures, General Catalyst and Spark Capital Growth.‎

According to a recent Fundbox research study developed in partnership with PYMNTs, there is ‎an unprecedented $3.1 trillion owed to U.S. firms today, locked up in accounts receivables ‎‎“limbo.” Fundbox calls this massive out-of-reach pool of capital the “Net Terms Economy.” By ‎unlocking this capital with faster payment technologies, there is an opportunity to transform ‎millions of businesses that provide or rely on open credit terms to complete a business ‎transaction. This is why Fundbox has built the first two-sided payments and credit network designed ‎specifically to accelerate B2B commerce. With automated machine-learning risk decisions, ‎faster payments to sellers, and more flexible payment terms to the buyer, sellers can focus on ‎increasing average order volumes (AOV) while buyers have greater purchasing confidence and ‎repayment flexibility.‎

Tel Aviv’s Fundbox is a leading financial technology company focused on disrupting the $21 ‎trillion B2B commerce market by launching the world’s first B2B payments and credit network. ‎With Fundbox, sellers (of all sizes) can quickly increase average order volumes (AOV) and ‎improve close rates by offering more competitive net terms and payment plans to their SMB ‎buyers. With heavy investments in machine learning and the ability to quickly analyze ‎transactional data, Fundbox is reimagining B2B payments and credit products in new category-‎defining ways.‎ (Fundbox 24.09)

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2.7 Tipalti Raises $76 Million to Further Accelerate Its Leadership in Global Payables Automation

Tipalti has successfully raised an additional $76 million.‎ Led by Zeev Ventures, the D round also includes a follow-on investment from Group 11 (f.k.a. ‎SGVC) and participation from two new investors: 01 Advisors (a fund founded by Twitter’s ‎former CEO & COO) and Greenspring Associates. Tipalti will use this additional funding to ‎continue to set the pace for innovation in the payables automation space and solidify itself as ‎the leading solution for fast-growing and mid-sized companies across the globe. The company ‎will fuel its growth through increased developer, customer success, sales, and business ‎development headcount, marketing investments, while adding new offices in North America and ‎Europe. ‎

Herzliya’s Tipalti’s payables automation technology is aimed at fast-growing mid-market ‎companies, who have traditionally been underserved by banks. Leveling the playing field, the ‎solution provides them with the ability to scale efficiently and rapidly, accessing the services ‎that are otherwise only available to large enterprises. Tipalti streamlines and optimizes ‎businesses’ end-to-end global payables workflow, while giving these companies access to ‎cross border payments, currency conversion, and payments across a wide range of methods.‎ (Tipalti 24.09)

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2.8 Cycode Raises $4.6 Milliohttp://www.tipalti.com‎n in Funding to Deliver Industry’s First Source Code Control

Cycode announced $4.6 million in ‎seed funding. The round was led by YL Ventures with participation from security industry ‎leaders. Cycode’s mission is to protect source ‎code, the building blocks of an organization’s software, and the highly valuable intellectual ‎property (IP) contained in it, from the growing risk of theft, leakage and manipulation.‎

Cycode, the first solution to address certain security gaps, intends to set the industry standard in ‎source code protection. Cycode’s source code control, detection and response solution utilizes ‎the startup’s patent-pending Source Path Intelligence Engine to deliver rapid, comprehensive ‎and seamless visibility into an organization’s source code inventory. It quickly connects all of ‎the organization’s source code management systems (SCM) and code repositories, cataloging ‎source code inventory and the paths source code takes between users, devices and ‎repositories during development and distribution across the extended enterprise.‎

Tel Aviv’s Cycode, the industry’s first source code control, detection and response platform, utilizes its ‎unique Source Path Intelligence engine to seamlessly deliver comprehensive visibility into all of ‎an organization’s source code and automatically detect and respond to anomalies in access, ‎movement and usage. With Cycode, organizations are “Secured to The Source”; their security ‎teams can rapidly and dramatically reduce the risk of source code loss without impacting ‎developer access or productivity. (Cycode 24.09)

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2.9 FruitSpec Closes $4 Million Investment for Its ‎Yield Estimation Solution

Misgav’s FruitSpec, a portfolio company of The ‎Trendlines Group, has ‎completed an investment round of $4 million. Investors included AgVentures, a South African ‎agtech investment company and Hubei Forbon Technology Co. China.‎

Inaccurate fruit yield estimation from an early stage (especially in green fruit) remains a key ‎problem in the food chain. The ability to accurately estimate a fruit yield has a major impact on ‎key business decisions relating to crop maintenance/handling and sales projections. Currently, ‎yield estimations are mostly performed by farmers/workers using a visual “count” from the ‎sampling of a few trees. Until now, the main technological challenge in providing early season ‎fruit yield estimates is the inability to distinguish the green fruit from the green leaves in an ‎image. FruitSpec solves this problem with its patented hyperspectral and computer vision ‎algorithms, enabling the company to count the number of fruit and to estimate fruit sizes for ‎accurate early season fruit yield estimation. In all recent commercial operations and field trials, ‎FruitSpec demonstrated accuracy rates above 95% with its technology (at an impressive ‎average of 97.3%).‎

FruitSpec is positioned to have a major impact on the fruit yield estimation market, with a ‎calculated 47 million hectares (116 million acres) of fruit orchards globally1 standing to gain ‎from these developments. This translates to a $3 billion market potential for FruitSpec, ‎according to company estimates, FruitSpec seamlessly addresses a critical pain point within the fruit market value chain, and its ‎value proposition is easily grasped by industry players. FruitSpec’s solution is not merely an improvement to existing industry norms, but a total disruption of the inaccurate and ‎labor-intensive methods currently used. (FruitSpec 24.09)

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2.10 PICO Venture Partners Closes $80 Million Second Fund

Jerusalem’s PICO Venture Partners has closed its second fund with $80 million in capital commitments. PICO now manages $130 million across two funds. Founded in 2015, the firm invests in early-stage startups seeking to upend broken business models in sizable industries. Rather than focusing on specific sectors, it looks for values-based, execution-driven Israeli entrepreneurs who leverage technology to modernize processes and unlock greater efficiency in the marketplace. The firm believes that this sector-agnostic, business-centric approach is the key to successfully identifying and investing in startups with the greatest potential for growth.

PICO has invested in 15 portfolio companies to date including Vroom, the online platform for buying and selling refurbished, pre-owned cars. Recognizing the massive opportunity to transform the highly fragmented used car market, PICO led Vroom’s initial investment round and has continued to support the company in follow-on rounds. PICO also led the initial investment round in Spotinst, the cloud automation and optimization startup that has reached more than 1,500 enterprise customers across 52 countries in just three years. The young firm has other notable, fast-growing investments including Gloat, an AI-powered internal talent marketplace, and ChargeAfter, a multi-lender point-of-sale financing platform – both working with Fortune 500 customers.

More recently, PICO invested in Tastewise, an AI-powered food trends prediction and intelligence startup, and Ravin.AI, which combines computer vision and deep learning to detect and analyze vehicle damage via standard cameras. (PICO 26.09)

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2.11 EC Awards odix €2 Million to Deliver Ransomware Protection Technology to SMEs

odix recently secured a €2 million grant from the European Commission (EC) to bring their enterprise-grade cybersecurity technology to small to medium-sized enterprises (SMEs). The company was among the select ventures that were awarded funding as part of the EU’s Horizon 2020 SMEI research and innovation program.

odix focuses on file-based attack protection and offers next-generation solutions for disarming any malware including ransomware. Hackers and cybercriminals often disguise malware by embedding them in legitimate documents. Once an infected document is opened, the malware can then spread throughout an organization’s network and infrastructure. odix aims to bring their technology to a wider audience by partnering with managed security service providers (MSSPs) that serve SMEs. The company looks to leverage the cloud in order to offer its various tools as Software-as-a-Service, allowing SMEs to avail of these functionalities through affordable subscriptions.

odix’s core technology has already been successfully used by top enterprises and governments to protect their infrastructures. Despite the explosion of malware and ransomware outbreaks over the past years like Wannacry, Petya and GandCrab, none of odix’s users were compromised by these attacks. By awarding odix the Horizon 2020 grant, the EC shows that it trusts the company to enable SMEs in the region to be protected from rampant file-based cyberattacks.

Rosh HaAyin’s odix provides comprehensive infrastructure and network protection against file-based malware attacks. It is a privately-owned company with offices in Israel, the US, and Luxembourg. The company was founded by former officers in the Israel Defense Forces specializing in cybersecurity. Among its clients are top brands like GE, Varonis, EIC (European Investment Bank), Dominion Energy, BAE Systems and Dun and Bradstreet. (odix 25.09)

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2.12 Zion Oil & Gas Begins 3-D Seismic Acquisition in Israe

Zion Oil & Gas, announced the commencement of data acquisition for its Megiddo-Jezreel 3-D seismic program. Within the first week over 30 square kilometers of equipment has been deployed for the start of the largest onshore 3-D survey in Israel’s history. Zion’s seismic acquisition will cover 72-square kilometers within its Megiddo-Jezreel license. Zion Oil & Gas, a public company traded on NASDAQ (ZN), explores for oil and gas onshore in Israel on their 99,000-acre Megiddo-Jezreel license area. (Zion Oil & Gas 25.09)

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2.13 Tastewise Raises $5 Million Series A Funding Round from PeakBridge

Tastewise has raised $5 million in a Series A funding round led by PeakBridge, an investment firm specializing in FoodTech. Last year Pico Venture Partners provided Tastewise $1.5 million in seed funding, bringing the company’s total funding to $6.5 million to date. The Series A round will be used to further develop Tastewise’s AI technology, focused on understanding human interactions with food, such as the motivations behind why people select and prefer certain foods over others. By breaking down data to the specific functions that interest consumers, Tastewise not only knows what foods are trending, but why. With the platform expansion, Tastewise will further train its AI to comprehend the deep human motivation around food trends, with insights that will shape the future of the industry.

Tastewise gains actionable insights into real-life interactions with food by analyzing over 1 billion food photos shared every month together with the largest restaurant menu database available today (over 180,000 restaurants in the U.S.). The company already works with Fortune 500 food and beverage brands to pinpoint market opportunities and is primed to identify potential market gaps to fill for rising trends like virtual restaurants. Plans to expand the AI technology platform’s visual analysis of images will empower the platform to provide more proactive insights on emerging trends in the culinary industry.

Tel Aviv’s Tastewise brings the power of data to the art of food and beverage intelligence. The platform analyzes billions of food data points – including menus, home recipes and social media – to provide real-time insights for restaurants, hospitality groups, and food brands. Capturing food innovation in real time, Tastewise equips industry professionals to identify target segments and competitors, understand emerging trends, and determine which dishes or products should be served next. Tastewise 25.09)

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2.14 Namogoo Named Dun & Bradstreet’s Most Desirable Startup to Work for in Israel

Namogoo was ranked as the Best Startup to Work For in Israel by Dun & Bradstreet (D&B), topping the list of 10 other startup honorees. This is the first time that Dun and Bradstreet’s prestigious list has included a section for startups in addition to its annual list of Top 50 Companies to Work For in Israel. Namogoo’s client-side platform uses machine learning technology to prevent unauthorized ads injected into consumer browsers and devices from disrupting the online customer journey and redirecting them to other promotions. Leading global brands such as Tumi, Asics, Argos, and Dollar Shave Club, are using Namogoo’s solution to protect their customers’ online shopping experience from these disruptions and are increasing their conversion rate by 2-5%.

Over the past year, Namogoo grew its customer base by 150% and its platform is used by brands in over 38 countries, including a number of new verticals such as travel, insurance, and online marketplaces. To support its growing and diverse clientele, Namogoo’s offices are located in Herzliya, Israel, Boston, MA, and London, UK. While Namogoo’s unique technology has proven crucial for brands’ bottom lines, the company takes the most pride in the workplace environment it has created to nurture and grow employees.

Herzliya’s Namogoo is pioneering the field of Customer Journey Hijacking Prevention. Namogoo’s client-side technology enables online businesses to deliver a distraction-free customer journey by identifying and blocking unauthorized product ads injected into consumer web sessions that divert site visitors to competitors and hurt conversion rates. The world’s largest retailers rely on Namogoo to deliver a disruption-free customer experience and consistently increase eCommerce revenue. (Namogoo 25.09)

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2.15 Duda Raises $25 Million to Provide Website-as-a-Service to Digital Agencies & SaaS Platforms

Duda has raised a $25 million growth equity round from Susquehanna Growth Equity (SGE). This round brings the total amount raised to date to $50 million. The financing will be used to accelerate sales and marketing efforts and continue growing the R&D team based in Israel. Duda has developed highly-tailored tools that are integrated into its website building platform to enable professional website designers and digital agencies to increase efficiency and more effectively collaborate both internally and with their customers. Web professionals who have moved from WordPress to Duda report a 50% reduction in site build times. Additionally, Duda provides a white-label Website-as-a-Service solution for SaaS companies enabling them to offer website design capabilities deeply integrated with their technology for SMB customers. Duda is working with a number of leading SaaS companies across multiple industries, including hotel and property management, fashion and beauty, CRM and digital marketing.

Tel Aviv’s Duda is the leading web design platform for all companies that offer web design services to small businesses. The Company serves all types of customers, from freelance web professionals and digital agencies, to the largest hosting companies, SaaS platforms and online publishers in the world. Loaded with powerful team collaboration and client management tools, the Duda platform enables the building of feature-rich, responsive websites at scale. Every Duda website is automatically optimized for Google PageSpeed and great out-of-the-box SEO. (Duda 25.09)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Andersen Global Expands to Jordan

San Francisco’s Andersen Global continues to strengthen its presence in the Middle East with the announcement that Jordan-based Zalloum & Laswi has become a full member firm of the international association and is adopting the name Andersen Tax & Legal. The firm had previously signed a collaboration agreement with Andersen Global last fall.

Established in 1993, Zalloum & Laswi’s nearly 20 professionals provide legal services for mid-to-large Jordanian corporations and foreign corporations in banking and finance, civil law, contracts, foreign investment, intellectual property rights, international trade and cross-border issues, corporate and commercial law, criminal law, litigation and dispute resolution, mergers & acquisitions and real estate. Andersen Global is an international association of legally separate, independent member firms comprised of tax and legal professionals around the world. (Andersen Global 01.10)

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3.2 Accela Partners with Dubai’s SIRA to Launch Security Licensing & Regulation Technology

San Ramon, California’s Accela, a leading provider of ‎cloud-based solutions for government, announced that Dubai’s Security Industry Regulatory ‎Agency (SIRA) has gone live with a new security regulation and licensing system powered by ‎Accela technology. The system will manage all licensing, inspection, and auditing for security ‎service providers to help create a safer city. In doing so, Dubai becomes among the first cities ‎in the world to regulate private security activities using modern technology.‎

SIRA’s new security solution helps address these emerging threats by streamlining licensing, ‎inspection, and auditing processes for all Security Service Providers in Dubai, including ‎security companies, equipment vendors, private security guards and businesses that require ‎security services. The new system will automate and fast-track previously manual processes, ‎improve accuracy, and reduce counter visits. SIRA’s system is fully integrated with all internal ‎and external approval entities across the UAE, including Smart Dubai, the Department of ‎Tourism and Commerce Marketing, Department of Economic Development, and Dubai ‎Municipality. By leveraging Accela’s technology, SIRA will help the Dubai government meet the ‎safety components of its 2021 vision and Smart Cities and Governments paperless initiative. ‎ (Accela 24.09)

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3.3 Dubai’s Retail Sector Undergoing a Major Transformation Due to e-Commerce

Dubai’s retail sector is undergoing a major transformation with the rise of e-commerce and evolving customer preferences shaping a new ‘retail logistics’ industry, according to JLL. The consultancy said in a new report that a wave of innovative new real estate solutions in the logistics sector are creating alternative investment opportunities. It said Dubai is well placed to leverage the retail industry’s rapidly changing dynamics including rising e-commerce, new disruptive technologies and evolving consumer tastes. Retailers are addressing the challenge of fulfilling increasing demand for online delivery while balancing an oversupply of traditional retail space, JLL said, adding that ‘omni channel retailing’ allows retailers to optimize their real estate portfolios and boost their performance.

Portfolio optimization is driving demand for more and better quality warehousing as retailers seek to satisfy changing business models to meet the needs of their growing consumer base. Many retailers are finding themselves with excess stock within stores but a shortage of quality warehousing. It is estimated that at least 50% of recent demand for warehouse space across the UAE comes from the retail sector.

JLL noted that the boom of online retail is increasing demand for warehousing space and logistics solutions that meet today’s fast paced customer demands, adding that retailers are now investing across the full supply chain, not just traditional physical spaces.

Dubai has traditionally adopted a ‘build it and they will come’ philosophy – a strategy that has grown the city into the modern metropolis it is today. In the current era of uncertainty a new strategy of ‘come and you can build it’ is emerging, creating an opportunity for these players. According to JLL, increased private sector participation will also be a key driver for success of the retail logistics industry. (AB 25.09)

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3.4 Dubai Camel Hospital Set to Expand Amid Rising Demand

Dubai Camel Hospital, the world’s first camel hospital, is set to expand its capacity by an ‎additional 50% in response to massive demand for its services. The veterinary hospital said it has firmed up plans to enlarge its facilities to be able to treat over ‎‎30 camels simultaneously. It currently has capacity for 22.‎

The camel hospital opened its doors in 2017 to meet the demand in the UAE for an advanced ‎medical facility dedicated to treating camels. Since its inception, the hospital has attracted the ‎interest of not only local owners but also camel breeders from across the world.‎ The hospital’s customized equipment was adapted from equestrian medical equipment to ‎accommodate camel treatment and the facility is also equipped with a mini-race track to ‎rehabilitate camels after their medical procedures.‎ The hospital also aims to contribute significantly to the research and development of camel ‎medicine as part of enhancing the global body of therapeutic knowledge related to the desert ‎animal.‎

In recent years, camel dairy farming has also evolved as an alternative to traditional dairy ‎farming in the region and is projected to become a $661 million market by 2024. Camels are also reared to participate in camel beauty pageants, which have evolved into a ‎multi-million dollar sport thanks largely to government-sponsored festivals focused on the ‎nation’s heritage and culture. (AB 23.09)‎

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3.5 MaxAB Closes Landmark $6.2 Million Seed Round

Cairo’s MaxAB, an Egyptian B2B e-commerce marketplace that connects informal food and grocery retailers with suppliers via an easy-to-use app, has secured seed funding of $6.2 million, one of the largest ever seed rounds raised by a MENA start-up. The round was co-led by Beco Capital, 4DX Ventures and Endure Capital, with participation from 500 Startups, Outlierz Ventures and other local investors. With this injection of capital, the company expects to reach 50% of Egypt’s population within the next two years before expanding across different markets.

The 270 strong MaxAB team has built a stock list of over 600 products (including groceries, beverages, dairy, confectionery and non-food products). Using technology to close the gap between traditional retailers [over 400,000 in Egypt] and FMCGs, the start-up leverages technology to connect brands to retailers via its Android app. It is working to automate and simplify Egypt’s $45 billion FMCG food retail market and has recorded 50% month-on-month growth, with 9,000 activated retailers on the platform already. Brands using MaxAB have access to real-time demand monitoring and business intelligence tools, which improve end-to-end supply chain control, and better forecasting. Retailers in remote and under-served areas will have access to a wide variety of products, the convenience of ordering stock online in addition to second day deliveries not to mention the added benefit of access to credit facilities. (MaxAB 25.09)

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3.6 Dabchy Raises $300,000 in Seed Funding

Dabchy, a Tunis-based peer-to-peer (P2P) fashion marketplace, has raised $300,000 in a seed ‎round led by 500 Startups and joined by Flat6Labs, Vision Ventures, Daal Venture Capital and ‎a group of angel investors. ‎ Dabchy is an online platform that facilitates its users to sell both pre-used and new clothes ‎online at low cost.‎

Founded in 2016, Dabchy now has a ‎community of over 400,000 users in Tunisia, Morocco and Algeria, who use its web and mobile-‎based platform to buy and sell new (unused lying in one’s wardrobe), self-made, pre-owned ‎‎(used) clothes and accessories for women and kids. Dabchy’s Android app has been ‎downloaded over 100,000 times.‎ Dabchy has already begun celebrating its achievements as a leading product. In 2019, Dabchy ‎was the first Tunisian and African startup to join the European Fashion Tech Incubator,Look ‎forward by Showroomprivé in Paris. The company also participated in the second cohort of ‎Womentum, a women in tech accelerator by Womena in partnership with Standard Chartered.‎

In 2018, Dabchy.com was listed among the first 100 top African and Arab promising startups by ‎IFC- International Finance Corporation and the World Economic Forum. In 2017, Dabchy joined ‎the first acceleration cycle of Flat6labs, Tunis. Following the program, the company also ‎launched Dabchy Kids that year. ‎ For the three venture capitalist firms, 500 Startups, Vision VC and Daal VC, Dabchy is their first ‎investment in a Tunisian startup.‎ (Dabchy 23.09)

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3.7 temtem has Raised Algeria’s Largest Series A Funding with $4 Million

temtem, the Algiers-based ride-hailing and transportation company, has raised Algeria’s largest Series A funding with $4 million from Tell Venture Automotive and private investors. temtem will use the capital to accelerate growth and launch new products and services starting in 2019. A year after its seed round, temtem proves once again that it is able to convince investors and chose Tell Venture Automotive and private investors. This new fundraising round confirms temtem’s competitive position, the relevance of its strategy, and investor confidence in its strong growth potential.

With this new capital, temtem, whose services cater to both consumers and corporates, will lunch two new innovative services centered around improving the daily lives of Algerians. Since its inception in 2018, more than 200,000 clients have used temtem with a loyalty that demonstrates the quality of the client experience. A few hundred corporate clients have also trusted temtem with improving the transportation experience of their employees to which temtem provides a full range of product such as private chauffeurs, delivery services, motorcycle ride-hailing, etc.

Temtem’s data science team specifically focuses on modeling the use of its users with the goal of ever-improving the customer experience and to more precisely pinpoint market needs in order to better match them by the end of the year. At the same time, temtem will strengthen its collaboration with strategic partners in the telecommunications and audiovisual industry. The goal is to democratize a unique service, already acclaimed by customers looking for a daily service with the best quality and at the best price. A new round of fundraising has already begun by Tell Venture Automotive to support growth in Algeria as well as in the African continent during 2020. (temtem 25.09)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Endangered Turtles Bred in Captivity in Israel Help Save Species

On a Mediterranean beach in central Israel, a newly-hatched baby turtles fumble along the sand, making their way to the sea for the very first time. These hatchlings, some 60 released into the wild recently, is part of a unique conservation program run by the Israeli Sea Turtle Rescue Center. The center is based at Moshav Mikhmoret, some 35 kilometers north of Tel Aviv.

Green turtles are endangered worldwide, the World Wildlife Fund says. Among other hazards, they are threatened by hunting, human encroachment on the beaches where they nest, and pollution of their feeding grounds offshore. According to the rescue center, only about 20 female green turtles nest along Israel’s Mediterranean coast during a breeding season that usually lasts from May until August. To help the turtle population, nature authorities have declared some beaches nature reserves and with the rescue center have been relocating threatened turtle nests to safe hatcheries since the 1980s.

In 2002, the rescue center went a step further and began recruiting turtles for a special breeding stock that would one day help populate the sea with their offspring, in one of the world’s only such conservation programs. The mating squad began to reach sexual maturity a few years ago and this year managed to breed, with about 200 baby turtles are expected to hatch by the end of the breeding season. (Reuters 29.09)

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4.2 How Date Palms and Satellites Are Helping the UAE Fight Carbon Emissions

Satellite imagery is proving crucial in helping the environment by estimating the amount of carbon sequestration in data palms, according to researchers at the United Arab Emirates University. The major project, due to complete at the end of next year, has so far revealed that date palm trees in the UAE can capture up to 15.8 tons of carbon emissions per hectare per year. This space technology contributes to helping decision-makers find out how to balance carbon emissions through planting more date palm trees. The UAE is among the top countries in the Arab region and the world in terms of number of date palm trees, reaching about 15-16 million trees planted in Abu Dhabi alone. (AB 28.09)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Inflation Rate at 2.77% by August 2019

Lebanon’s average consumer prices rose by an annual 2.77% by august 2019 compared to an annual uptick of 6.29% recorded by August 2018 according to the Central Administration of Statistics (CAS). The rise in prices over the period came on the back of yearly rises registered across all components of the consumer price index (CPI), except Transportation and Health. The breakdown of the CPI revealed that the average costs of Housing and utilities (including: water, electricity, gas and other fuels) which grasped a combined 28.4% of the CPI, climbed by an annual 2.25% by August 2019. In fact, average Owner-occupied rental costs (constituting 13.6% of the category) grew by an annual 2.48%. In turn, the average prices of water, electricity, gas and other fuels (11.8% of housing & utilities) recorded a yearly uptick of 1.78% over the same period. Moreover, the average prices for Food and non-alcoholic beverages (20% of the CPI) and Education costs (6.6% of CPI) registered yearly upticks of 4.31% and 5.13%, respectively, by August 2019. As for the average prices of Clothing and Footwear (5.2% of the CPI), they also rose by 14.26% year-on-year (y-o-y) by August 2019. Meanwhile, average consumer prices of Health (7.7% of the CPI) and Transportation (13.1% of the CPI) recorded the respective downticks of 0.73 % y-o-y and 1% y-o-y. The latter slipped mainly due to the decline in average oil prices which slipped by an annual 8.16% to $65.87/barrel by July 2019. (CAS 23.09)

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5.2 Lebanon’s Trade Deficit Ended at $10.24 Billion by July 2019

Lebanon’s trade deficit widened in the first 7 months of the year to reach $10.24B, up by 0.98% ‎compared to the same period in 2018. Regardless of the promising progress in exports, which ‎grew by a yearly 19.20% to $2.09B, the wider deficit came as a result of a 3.67% yearly ‎increase in the value of imports to $12.33B noting that Mineral products and Vegetable ‎products are the only 2 categories to witness an increase in its imported value. In terms of ‎value, Mineral products were the leading imports to Lebanon by June 2019, grasping a 34.59% ‎stake of total imported goods. Products of the chemical or allied industries followed, ‎constituting 10.11% of the total, while machinery and electrical instruments grasped 8.87% of ‎the total. Specifically, Lebanon imported $4.27B worth of Mineral Products, compared to a value ‎of 2.59B in the same period last year. The net weight of imported mineral fuels, oils and ‎their products is still increasing since the start of the year and witnessed a yearly rise from ‎‎4,034,926 tons by July 2018 to reach 7,634,537 tons by July 2019. Meanwhile, the value of ‎‎chemical or allied industries recorded a decrease of 6.28% y-o-y to settle at $1.25B and that of ‎‎machinery and electrical instruments also declined by 12.20% over the same period to $1.09B. ‎

In terms of top trade partners, Lebanon primarily imported from US, China, and Russia with ‎shares of 9.33%, 8.46% and 7.70%, respectively, by July 2019. As for exports, the top category ‎of products exported from Lebanon were pearls, precious stones and metals, which grasped a ‎share of 34.91% of total exports, followed by a share of 10.81% for prepared foodstuffs, ‎beverage and tobacco and 10.40% for Products of the chemical or allied industries over the ‎same period. In details, the value of pearls, precious stones & metals surged from 428.30M ‎by July 2018 to reach $731.41M by July 2019. As for the value of Prepared foodstuffs; ‎beverages, tobacco, it declined by 5.60% y-o-y to $226.50M. Meanwhile, the value of Products ‎of the chemical or allied industries recorded an increase of 8.39% year-on-year to $217.87M. In ‎the first 7 months of 2019, Switzerland followed by the UAE and Saudi Arabia were Lebanon’s top ‎three export destinations, respectively constituting 22.55%, 12.21% and 6.64% of total exports.‎

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5.3 Tell Group Aims to Facilitate Lebanon’s Infrastructure via New $100 Million Fund

Private equity firm Tell Group has closed its first Lebanon infrastructure fund. The company hopes to raise $100 million worth of funds. The fund, known as the Tell Lebanon Infrastructure Fund, is the first Lebanese fund specifically targeting infrastructure opportunities in Lebanon. Currently, the group is focusing on raising funds worth $1 billion for the infrastructure development of Lebanon. However, the group has not yet revealed the amount that has been invested.

Apart from the fund, foreign governments and donors have also shown concern about the crippling infrastructure of Lebanon. To improve the conditions, they pledged an amount of $11 billion last year in Paris on the condition that the reforms will be carried out by the Lebanese government itself. The amount will be used for Lebanon’s 12-year infrastructure investment program.

The work by the Tell Fund has already started and initially it has identified 5 to 6 sectors that need to be revamped, which include energy, telecommunications and waste management. In the later stages, it plans to focus on sectors such as tourism, water, solid waste, transport and electricity. According to the group, institutions and governments from around the globe have committed to the fund. These include more than 25 family offices, individuals and institutions from Lebanon, Europe and the Gulf Cooperation Council. Beirut has decided to follow suit after struggling to improve its slow growth and a weak infrastructure of the city. It has announced a capital investment program worth $20 billion that will focus on more than 280 projects around the city. (MAGNiTT 19.09)

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►►Arabian Gulf

5.4 Qatar’s Banking System Stable As Infrastructure Spending Drives Economic ‎Growth

The outlook for Qatar’s banking system remains stable as continued spending on the country’s ‎infrastructure projects will drive modest economic growth and support lending, Moody’s ‎Investors Service said in a report.‎ Higher oil prices have improved government finances and supported spending on ‎infrastructure, including preparations for the 2022 FIFA World Cup. Qatari banks’ sound profitability, capital and liquidity should stay ‎broadly stable, even as problem loans increase slightly because of continued challenges in the ‎construction, contracting and real estate sectors.‎

Moody’s expects problem loans to increase to 2.4% of total loans by June 2020 from 2.1% at ‎the end of 2018, while Qatar’s real GDP rises 2.1% in 2019 and 2.2% in 2020, driven mainly by ‎growth in the non-hydrocarbon sector of the economy. The banks’ return on assets will remain broadly stable at around 1.5% going into 2020. Moody’s ‎expects pressure on interest margins to moderate because liquidity pressures have eased and ‎the global trend of rising interest rates has reversed. Additionally, the banks have re-priced their ‎loan books at higher interest rates. Loan-loss provisioning needs will also stabilize and banks ‎will continue to contain costs. (Moody’s 24.09)

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5.5 UAE Remittances Decline Due to Slow Down in Employment

Remittances from the UAE fell nearly 8% in the first-half of 2019 as both quarters ‎saw a decline due to a slowdown in employment. Central Bank data revealed that remittances fell from Dh87.92 billion in H1/18 to Dh80.96 ‎billion in the corresponding period this year. First-quarter remittances fell from Dh43.5 billion to ‎Dh38.4 billion while second-quarter saw remittance declining from Dh44.42 billion to Dh42.55 ‎billion.‎ A total of Dh33.046 billion thereof were transferred through money exchange companies and the ‎rest from the banks operating in the country.‎

The highest destination country for outward personal remittances during April-June 2019 was ‎India at 37.2%. This high share is in accordance with the significant share of expats from ‎India working in the UAE.‎ According to the latest UAE population statistics published by the Global Media Insight, 59.5% of the expat population in the UAE originate from South Asian countries, and expats from ‎India account for 27.5% of the total expat population in the UAE.‎ Among the major markets, remittances to India accounted for Dh15.8 billion of the total, followed ‎by Dh4.4 billion or 10.5% to Pakistan, Dh3 billion to Philippines, Dh2.7 billion to Egypt, ‎Dh1.6 billion to the UK and Dh1.57 billion to Bangladesh. (KT 24.09)

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5.6 Saudi Arabia’s $27 Billion Plan to Transform Tourism

Saudi Arabia’s General Investment Authority (SAGIA) and the Saudi Commission for Tourism and National Heritage (SCTH) announced on 27 September a number of agreements with regional and international investors totaling about SR100 billion ($27 billion). Agreements signed by SAGIA include one worth SR37.5 billion with Triple 5 which plans to develop a series of mixed-use tourism, hospitality and entertainment destinations across the kingdom and another with Majid Al Futtaim worth SR20 billion for a mixed-use shopping and entertainment destination which will create 12,000 jobs and feature the region’s largest indoor ski slope and snow park. Saudi Arabia expects to increase international and domestic visits to 100 million a year by 2030, attracting significant foreign and domestic investment and creating a million jobs. By 2030, the aim is for tourism to contribute up to 10% towards Saudi Arabia’s GDP, compared to just 3% today.

Other agreements were signed with Oyo Rooms (SR4 billion) to purchase 10 or more upper-budget level and luxury hotel properties across the Saudi Arabia, a SR1.5 billion joint venture with Nenking Group/Ajlan Brothers to build a landmark lifestyle destination in Riyadh, and a deal with FTG Development to build a hotel, waterpark and retail development in Qiddiya; a 1,500 room hotel in NEOM City and a hotel situated between Jeddah and Makkah. Other SAGIA agreements were signed with Kerten Hospitality to develop a portfolio of mixed-use projects and Tetrapylon to coordinate with leading tour operators across North America, Europe and Asia to profile Saudi Arabia as a must visit global tourist destination.

Agreements facilitated by SCTH include two with Al Khozama concerning the Mayasem Project and the Harbour Project in Jeddah, along with other investment plans plus another with Diriyah Gate Development Authority to establish a 27-hole golf course at Wadi Safar and a 40 room hotel in Al Bujairi, overlooking the Wadi Hanifah Valley and At-Turaif UNESCO World Heritage Site. National carrier Saudia agreed four MoUs while organizations have made investment commitments collectively valued at SR36.25 billion, including Alshaya Group, Shomoul, Radisson, Alrajhi Investment and Seera Group. (AB 27.09)

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►►North Africa

5.7 Egypt’s Planning Ministry Aims to Raise Workforce to 31.7 Million in FY 2019/20

Egypt’s Ministry of Planning, Monitoring and Administrative Reform announced the sustainable development plan’s second year objectives for Egypt’s labor force and unemployment rates in fiscal year 2019/20. Minister of Planning El-Saeed said on that the country’s workforce is expected to reach 31.7 million people during FY 2019/20, compared to 30.9 million in FY 2018/19, a 2.6% increase. The minister added that the plan, which targets a growth rate of 3.2%, involves measures to encourage heavy-labor projects to decrease unemployment rates. These include increasing funding from the Micro, Small & Medium Enterprise Development Agency to EGP 5.6 billion by the end of FY 2019/2020, compared to EGP 5 billion in FY 2018/2019, an increase of 12%.

El-Saeed said that SMEs are expected to provide around 376,000 job opportunities during FY 2019/2020, compared to 342,000 job opportunities in FY 2018/2019, rising by 9.9%. The plan also involves adopting incentive programs to encourage the informal sector to merge into the formal one. El-Saeed added that the plan aims to activate the role of the non-banking financial sector in providing micro-financing, in addition to providing leasing and finance services for SMEs and boosting mechanisms that help spread the entrepreneurial culture and support exports. (Ahram 22.09)

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5.8 Egypt’s Non-Petroleum Exports Increase as Imports Decrease

Egypt’s non-petroleum exports increased by 3% during the past eight months in comparison to the same period the year before, stated the report on non-petroleum foreign trade indices published by the Egyptian General Organisation for Export and Import Control on 25 September.

Non-petroleum exports recorded $17.65 billion during the first eight months of 2019, up from $16.612 billion during the same period in 2018. The rise resulted in a decrease of $80 million in the trade balance deficit during the mentioned period. Three export sectors achieved notable growth, including food products, with exports in this sector increasing by 8%, recording $2.3 billion, up from $1.888 billion during the same period of 2018.

Exports of the agricultural crops sector also increased by eight%, recording $1.763 billion in the same period, up from $1.626 billion, while exports of the garments sector were raised by six%, recording $1.105 billion, up from $1.43 billion. The Ministry of Trade and Industry aims to reduce imports that have a domestic parallel, and substitute imported products for domestically produced one. The plan has worked thus far: six sectors have witnessed a notable decrease in their exports during the past eight months.

Imports in the furniture sector have decreased by 61% in the past eight months, recording $345 million, down from $883 million during the same period of 2018. Imports of books and artistic works also decreased by 24%, reaching $19 million, down from $25 million in 2018. Construction material imports decreased by 11%, recording $6.17 billion, down from $6.799 billion. Likewise, chemical products imports fell by 4%, reaching $5.48 billion, down from $5.706 billion. Leather products imports declined by 3%, reaching $114 million, down from $118 million. Food products imports decreased by 1%, reaching $3.727 billion, down from $3.747 billion.

Five countries received 34% of Egypt’s exports. These are the US with exports worth $1.462 billion, the UAE $1.26 billion, Saudi Arabia $1.156 billion, Turkey $1.93 billion and Italy $896 million. Five countries exported to the Egyptian market 41.5% of its imports. These are China with imports worth $7.196 billion, the US $3.39 billion, Germany $2.451 billion, Italy $2.267 billion and Russia $1.889 billion. (Al-Ahram 25.09)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 OECD Says Turkish Economy Contracting Less Than Previously Forecast

Turkey’s economy is expected to contract by 0.3% this year, the Organization for Economic Cooperation and Development (OECD) said in its latest global economic outlook. The OECD had previously forecast a 2.6% contraction for Turkey in a similar report in May. It left its prediction for next year unchanged at growth of 1.6%.

Turkey’s economy is recovering from a currency crisis last year that caused a recession in the second half of 2018. The country posted positive quarter-on-quarter economic growth in the first half of this year, but annual growth remains negative. The OECD said that monetary policy easing would likely help economic activity in Turkey pick up modestly next year, provided local and global economic confidence is maintained. But it warned the Turkish authorities that stimulus had its limits. (Ahval 19.09)

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6.2 Turkey Lacks Skills to Compete in Today’s Global Economy

Turkey appears woefully unprepared for the technological age, as its citizens grossly under-perform in crucial tech-related skills and more than half fail to complete high school. The Organization for Economic Co-operation and Development’s (OECD) most recent Survey of Adult Skills measured proficiency in key information-processing abilities, including literacy, numeracy and problem solving in technology-rich environments in 32 countries. Surveyed from April 2014 to March 2015, Turkish nationals scored significantly lower in these skills than people with the same level of education in other countries.

The mean literacy and numeracy scores in Turkey are more than 40 points lower than the international average, according to the OECD, while nearly 80% of 55 to 65-year-olds and more than 50% of 25 to 34-year-olds have not completed secondary education. Some 40% of Turkish adults lack basic information and communications technology skills, while 38% have no prior experience with computers, or lack basic computer skills. Turkey has the third lowest average score in literacy and numeracy among the 32 countries surveyed.

The Turkish government in recent years has repeatedly said that increasing the competitiveness of the country in new technologies and information economy was a priority. But many complain about the poor quality of the education system, particularly in state schools. The Turkish Statistical Institute’s June 2019 figures show that 26% of the population is neither in education or employment.

Since it came to power in 2002, Turkey’s ruling Justice and Development Party (AKP) has concentrated efforts in increasing the percentage of the population with tertiary education and has achieved its target to have at least one university in every province in the country. In 2010, Turkey had 95 state and 54 private universities. As of 2019, the number of state universities has increased to 129, while the number of private universities has risen to 73. The number of students in four-year university programs is 4.4 million, according to the latest official figures. (Ahval 19.09)

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6.3 Turkey Turns to Crisis-Hit Car Industry in Attempt to Revive Economy

Turkey’s government turned from the construction sector to the car industry as it sought to revive economic growth and help out crisis-hit businesses with cheap loans. State-run banks announced on 26 September that they were slashing interest rates on loans used to purchase domestically-produced cars to less than half the annual inflation rate. Turkey is seeking to lift the economy out of a deep downturn brought on by a currency crisis that peaked in August last year. The IMF said recently that it expected the economy to grow by 0.25% in 2019.

Ziraat Bank, Halkbank and Vakifbank will offer borrowers interest rates of between 0.49% and 0.69% monthly on loans of between 50,000 liras ($8,800) and 120,000 liras over as many as five years, according to a joint statement by the banks. The offer is being made in conjunction with manufacturers.

Sales of cars and light commercial vehicles have slumped by an annual 46% to 239,317 units in the first eight months of this year, according to data published by the Automotive Distributors’ Association (ODD). Earlier, Kibar Holding, which is the producer and seller of Hyundai cars in Turkey, called on the government to introduce swift measures, including tax cuts, to help revive the industry.

The decision by Turkey’s largest state-run banks follows similar measures announced last month for mortgage lending. The three lenders started to provide borrowers with mortgages at interest rates of 0.99% monthly, cutting the rates by about one third. Turkeys’ economic downturn has left the construction industry with a huge stock of unsold homes. The IMF and ratings agencies have warned the government that short-term unorthodox measures to boost lending growth in Turkey risks more financial instability. Instead, they have called on the government to implement structural reforms. (Ahval 26.09)

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6.4 Cyprus 2020 Budget Projects 2.9% GDP Growth and Fiscal Surplus

Cyprus’ 2020 state budget forecasts slower GDP economic growth of 2.9% next year and a fiscal surplus of 2.7%. Due to the state of government finances, Finance Minister Harris Georgiades said there was no need for tax hikes or any other financial burdens. But he did concede there was a significant increase in health expenditures as result of the implementation of the national health system (GHS) and the operation of the State Health Services Organisation OKYPY. Georgiades said the budget forecasts a growth rate of 2.9% which would lead to conditions of full employment. Government revenues are estimated to reach €10 billion while expenditure is estimated at €9.4 billion.

Inflation is projected to stand at 1.2%, while the unemployment rate is expected to drop to around 6%. Public debt to GDP ratio is predicted to fall to 91.1% as a result of an early repayment of debt to the International Monetary Fund scheduled for 2020. He said the budget enables the implementation of the government’s program, with €1 billion worth of projects underway, while it foresees investments in e-governance and digital transformation worth €250 million. The budget also provides expenditures for new policies such as the establishment of an investment fund to finance new innovative enterprises as well as the establishment of a Deputy Ministry for Innovation and Digital Policy. (FM 19.09)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 On Eve of Jewish New Year, Israel’s Population Exceeds 9 Million People

Israel’s population stands at 9,092,000 people on the eve of the Jewish New Year of 5780, according to the Central Bureau of Statistics annual report. The population count has grown by 184,000, or 2.1%, since last year and is expected to reach 10 million by 2024 and 20 million by 2065. Over the year, 196,000 babies were born, 50,000 people died and 38,000 people immigrated to Israel.

Today’s Israeli society is made up of 74.2% Jews, 21% Arabs and 4% who are classed as others. Some 43% of Jews living in Israel describe themselves as non-religious or secular while 22.1% claim to be traditional or slightly religious. Of those calling themselves religious, 12.8% say they are traditional, 11.3% call themselves religious and only 10.1% say they are ultra-Orthodox.

Israelis are generally satisfied with life, with 88.9% reporting they are pleased with their situation. However, 36.1% claim they are unhappy with their economic circumstances: 29.9% said they were unable to pay their bills last year, while almost 25% said they had given up medicine or medical treatment and even hot meals due to a lack of funds.

Life expectancy for men in Israel is 80.9 years, while Israeli woman on average live to the age of 84.9 – among the highest life expectancies in the world. Cancer is the leading cause of death for around one quarter of Israelis (25.2%), followed by cardiac disease (14.8%). Statistics also show that one in seven Israelis (14.1%) suffer from severe disability.

When it comes to assets and property, 66.5% of Israelis own their own homes and of that number, more than half are paying a mortgage. Israeli households spend 24.2% of their total income on housing expenses, 20.2% on public and private transportation, including car insurance and gas, and 16.9% on food. Almost every Israeli (97.3%) owns at least one mobile phone and 78% of households own a computer and 83.7% of Israelis use the internet. (CBS 27.09)

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7.2 Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 8/9 October

On the evening of 8 October and until after sunset on 9 October, Israel and world Jewry ‎will observe Yom Kippur, or the Day of Atonement. The holiest day on the Jewish calendar, ‎falling on the tenth of Tishri, it is a day marked by fasting, prayer and penitence for one’s sins ‎against their fellow man and G-d. Yom Kippur atones only for sins between man and G-d, not ‎for sins against another person. To atone for sins against another person, you must first seek ‎reconciliation with that person, righting the wrongs you committed against them if possible. ‎That must all be done before Yom Kippur.‎

Yom Kippur is a complete Sabbath; no work can be performed on that day. It is a complete, 25-‎hour fast beginning before sunset on the evening before Yom Kippur and ending after nightfall ‎on the day of Yom Kippur. The Talmud also specifies additional restrictions that are less well-‎known: washing and bathing, anointing one’s body (with cosmetics, deodorants, etc.), wearing ‎leather shoes and engaging in sexual relations are all prohibited on Yom Kippur. As always, ‎any of these restrictions can be lifted where a threat to life or health is involved. In fact, ‎children under the age of nine and women in childbirth (from the time labor begins until three ‎days after birth) are not permitted to fast, even if they want to. It is customary to wear white on ‎the holiday, which symbolizes purity and calls to mind the promise that our sins shall be made ‎as white as snow. The day long fast is widely observed even among Israel’s secular public and ‎most of the country’s Jewish population attend all or part of the day’s synagogue services. The ‎fast is concluded with a shofar blast and rejoicing. ‎

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7.3 Sukkot Holiday Celebrated

The Jewish festival of Sukkot begins at sunset on Sunday, 13 October until nightfall on 20 October (in Israel). The festival ends on day later outside of Israel. The holiday begins on the Hebrew date of 15 Tishrei, the fifth day after Yom Kippur. The word “Sukkot” means “booths” and refers to the temporary dwellings that Jews are commanded to live in during this holiday. The commandment to “dwell” in a sukkah can be fulfilled by simply eating all of one’s meals there or by actually living in the sukkah as much as possible, including sleeping in it. The holiday commemorates the forty-year period during which the children of Israel were wandering in the desert, living in temporary shelters. There are intermediate days during the week, which begins and ends with a holiday, referred to as Chol Ha-Mo’ed.

Another observance related to Sukkot involves what are known as the Four Species (arba minim in Hebrew) or the lulav and etrog. Jews are commanded to take these four plants and use them to “rejoice before the L-rd.” The four species in question are an etrog (a citrus fruit native to Israel), a palm branch (in Hebrew, lulav), two willow branches (arava) and three myrtle branches (hadas).The six branches are bound together and referred to collectively as the lulav. The etrog is held separately. With these four species in hand, one recites a blessing and waves the species in all six directions (east, south, west, north, up and down, symbolizing the fact that G-d is everywhere).

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*REGIONAL:

7.4 Turkish Life Expectancy Rises to 78.3 Years

Average life expectancy at birth for a Turkish citizen increased to 78.3 years in the 2016-2018 ‎period, the Turkish Statistics Institute (TÜİK) announced on 24 September. The statistics authority had calculated the average life expectancy for 2015-2017 as 78 years. TÜİK added that Turkish women live longer than men by 5.4 years on average. The institute said life expectancy at birth was 75.6 years for men and 81 years for women ‎versus 75.3 years and 80.8 years in the 2015-2017 period.‎

‎The average remaining life expectancy at age ‎‎30 was 49.8 years (47.3 years for men and 52.3 years for women) and at age 50 was 30.7 years ‎‎(28.4 years for men and 32.9 years for women).‎ In Turkey for 65-year-olds, the average remaining life span was 17.9 years in the 2016-2018 ‎years – 16 years for males and 19.2 years for females.”‎

According to the address-based population system, Turkey’s population was 82 million as of ‎end-2018. The annual population growth rate increased to 14.7 per thousand in 2018 up from 12.4 per ‎thousand in 2017. The proportion of the population residing in province and district centers decreased to 92.3% in 2018 from 92.5% in 2017, according to the latest statistics TÜİK announced in ‎February.‎ (TÜİK 24.09)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Prilenia’s Pridopidine Chosen to Participate in the First ALS Platform Trial

Prilenia announced that Pridopidine, its lead compound, has been selected as the first of three potential new treatments to be included in the launch of the first ever platform trial in amyotrophic lateral sclerosis (ALS). Two additional compounds were chosen to join the trial at a later stage. Pridopidine was chosen by an independent review committee out of 30 competing investigational treatments based on human genetic data, efficacy in preclinical models, favorable safety profile and readiness of drug supply. Pridopidine is a highly selective S1R agonist, and this mechanism has already been shown to provide some benefit in ALS patients.

The HEALEY ALS Platform Trial will be the second clinical trial initiated by Prilenia. Earlier this year, Prilenia launched a phase 2 clinical trial in the US to evaluate the safety and efficacy of Pridopidine in treating Levodopa Induced Dyskinesia in patients with Parkinson’s Disease. Partial financial support to initiate these first treatments is made possible thanks to the generosity of the Healey family and friends and the AMG Charitable foundation along with partners at TackleALS.

Herzliya’s Prilenia is a clinical stage biotech startup founded in 2018 with the purpose of improving the lives of patients and their families by developing treatments for neurodegenerative and neurodevelopmental disorders. Pridopidine a first-in-class drug candidate with an established safety profile and therapeutic potential in several neurodegenerative diseases affecting adults and children. Pridopidine is a highly selective S1R agonist, shown to exert neuroprotective effects in numerous models of neurodegenerative disorders mediated via the S1R. S1R validation as a therapeutic target for ALS is demonstrated in animal models and in humans.

Pridopidine is also the first drug to show a statistically significant effect on maintenance of functional capacity in early HD, as measured by Total Functional Capacity (TFC). Pridopidine was acquired by Prilenia from Teva in 2018 and is currently in Phase 2 clinical development for the treatment of patients with Parkinson’s Disease suffering from Levodopa Induced Dyskinesia (PD-LID). In addition to the Healey platform trial in ALS, Prilenia is planning to initiate a phase 3 trial in Huntington Disease in the near future. (Prilenia 18.09)

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8.2 Aidoc Releases Complete AI Package to Speed Identification and Treatment of Stroke

Aidoc released its complete AI package for the identification and triage of stroke in CT scans. The CE-marked solution flags and prioritizes vascular occlusions which result in both ischemic and hemorrhagic strokes, cementing the company’s lead in regulatory clearances for deep learning solutions in radiology and continuing its mission to make AI standard of care. The stroke package, comprising the new CE-marked Large-Vessel Occlusion AI module and Aidoc’s already FDA-cleared and CE-marked intracranial hemorrhage AI module reduces ‘door-to-needle’ time for patients suffering from stroke, improving outcomes and saving lives.

Aidoc’s complete stroke package ensures that both ischemic and hemorrhagic stroke sufferers are prioritized in worklists immediately. The ‘always-on’ technology analyzes patient scans continuously in the background providing a substantial impact on time to treatment so that a specialist stroke team can act promptly. This prioritization is already showing value in academic facilities as well as smaller institutions, where fast detection means patients can be taken to a stroke center in time to save their lives.

An early leader in AI healthcare, Tel Aviv’s Aidoc was one of Time Magazine’s 50 Genius Companies of 2018 and its founders were recognized in Forbes’ “30 under 30” list. The company’s solutions reduce turnaround time and increase quality and efficiency by flagging acute anomalies in real-time. Aidoc’s healthcare-grade deep learning algorithms benefit from large quantities of data, making their solutions the most comprehensive in the field, and enabling them to provide diagnostic aid to the broadest set of pathologies. (Aidoc 19.09)

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8.3 Strauss Group Reduces Sugar in Its Milk Chocolate by 30% with No Artificial Substitutes

After two years of research and development at Strauss Group labs in Nazareth Elite, Israel, led by the company chocolate technology team, Strauss was the first to bring the good news to the consumer: a refined sweet milk chocolate bar with 30% less sugar. The sugar is replaced by two main components: dietary fiber (17%) and ground tiger nut flour (5%). Finding the unique raw materials and developing an exact recipe enabled us to retain the sweet taste while preserving the chocolate’s creamy texture.

The tiger nut tuber is a natural source of sweetness. It has its roots in Spain and is integrated into the local food culture of the country, as well as in South America and the eastern states. Rich in vitamins and minerals and non-water-soluble dietary fiber, the tuber contains fats similar to olive oil. It also has a high content of resistant probiotic starch serving as food and a substrate to gut-friendly bacteria. The tuber has a slightly sweet taste, hence in a complex development process it was found to be a source of sweetness that could significantly reduce sugar while preserving the familiar taste of chocolate.

Petah Tikva’s Strauss Group is a branded, multi-category and innovative food and beverage group. The group is an international corporation with a strong home base in Israel, where it is the second-largest food and beverage group. Overall, Strauss operates 30 production sites in over 20 countries around the world, including Brazil – where it is the largest coffee player; and the U.S. – where it leads the category of refrigerated fresh dips and spreads, including hummus. Strauss has strategic and financial collaborations with leading global players such as Danone, PepsiCo, Haier and Virgin. (Strauss Group 19.09)

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8.4 Biogal-Galed Labs Launches CombCam Automated Reading Device for Kits

Biogal Galed Labs announced the commercialization of the new CombCam, an automated reading device for Biogal’s VacciCheck and ImmunoComb kits. This will make the interpretation of VacciCheck and ImmunoComb easier, less cumbersome, faster, digitalized and more accurate. Biogal’s CombCam is a user friendly, add-on technology that interprets VacciCheck and ImmunoComb test results. CombCam makes this interpretation easier, less cumbersome, faster, digitalized and more accurate. This, will greatly assist veterinarians in the vet clinic/ vet lab setting. Biogal’s CombCam is a user friendly, add-on technology that interprets VacciCheck and ImmunoComb test results. CombCam makes this interpretation easier, less cumbersome, faster, digitalized and more accurate. This, will greatly assist veterinarians in the vet clinic/ vet lab setting.

Kibbutz Galed’s Biogal was established in 1986. Biogal’s various veterinary diagnostic products are available in over 35 countries. Biogal developed the patented ImmunoComb, VacciCheck and PCRun technologies for the detection of pet infectious diseases. (Biogal Galed Labs 18.09)

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8.5 DarioHealth Wins U.S. Patent for Optical Transmission of Data Between Sensor & Smart Device

DarioHealth Corp. has received a notice of allowance from the U.S. Patent and Trademark Office titled “Systems and Methods for Enabling Optical Transmission of Data Between a Sensor and a Smart Device.” The patent will allow Dario to develop paired smartphone devices that can collect and analyze real-time medical data and provide immediate and highly detailed, personalized data reports to the user. Once collected, this data can be shared with healthcare providers through the DarioEngage platform to facilitate digital health interventions based on the data analysis.

DarioHealth’s digital therapeutics solutions are unique in that they capture and analyze members’ real-time, clinical data using a member’s smartphone and allow for full access and connectivity to that data at any time throughout the day, along with personalized daily and weekly health data reports. This provides Dario members a fully personalized, integrated and exceptionally convenient platform to manage their health throughout the day, and facilitates a heightened user experience, increased user engagement and improved clinical health outcomes. As the future of healthcare becomes increasingly digitized and focused on empowering individuals to take control of their personal health, DarioHealth believes smartphones will serve as the primary conduit for health interventions and chronic condition management.

Caesarea’s DarioHealth Corp. is a leading, global digital therapeutics company revolutionizing the way people with chronic conditions manage their health. By delivering evidence-based interventions that are driven by data, high-quality software and coaching, we empower individuals to make healthy adjustments to their daily lifestyle choices to improve their overall health. Our cross-functional team operates at the intersection of life sciences, behavioral science and software technology to deliver highly engaging therapeutic interventions. Dario is one of the highest-rated diabetes solutions in the market, and its user-centric MyDario mobile app is loved by thousands of consumers around the globe. (DarioHealth 18.09)

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8.6 Biovo to Launch Innovative Anesthesia and Ventilation Platform

Biovo Technologies will launch its novel HyperForm product line in November. HyperForm – a breakthrough platform of disposable anesthesia and ventilation devices, brings a significant improvement in patient safety over existing solutions, based on a new approach to sealing cuff design and material properties for all laryngeal masks, tracheostomy tubes and tracheal tubes. HyperForm game-changing technology overcomes the main problems related to the sealing cuff element that plague current products, while maintaining a very competitive price. It follows Biovo’s successful Closed Suction System product (now named CleanSweep®), which was acquired by Teleflex and the newly launched Cuffix – first of its kind disposable cuff pressure regulator for tracheal and tracheostomy tube cuff device and B-Care – an innovative and economical oral care kit for effective and comfortable oral care of ventilated ICU patients.

Rosh HaAyin’s Biovo is a medical device company specializing in the development and commercialization of medical devices for the treatment of unmet clinical needs in Intensive Care, Operating Rooms and Anesthesia markets. It is part of the Airway Medix S.A. group, which its shares are traded on the Warsaw Stock Exchange. (Biovo Technologies 23.09)

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8.7 BGN Technologies Licenses Polymer for Targeted Cancer Therapy to Vaxil Bio

BGN Technologies, the technology transfer company of Ben-Gurion University (BGU) of the Negev in Beer Sheva, has entered into an exclusive worldwide license agreement with Vaxil Bio for the development and commercialization of targeted cancer therapy. The technology features a new E-selectin targeted polymer for the inhibition of tumor growth and metastatic spread of cancer.

The BGU researchers developed a new synthetic polymer that can target E-selectin with high affinity for delivering drugs to tumors and metastatic sites. Using primary and metastatic models of cancer, this approach showed promising therapeutic results, enhancing drug accumulation in tumors, decreasing significantly the rate of tumor growth in preclinical trials, and dramatically prolonging the survival of mice with melanoma lung metastases.

Another promising application involves the use of this E-selectin-binding polymer, without drug cargos, to interfere with E-selectin-mediated interactions, thus blocking leukocyte and cancer cells recruitment to inflamed and cancerous tissues. This approach was shown to reduce colonization of circulating cancer cells in the lungs and was also shown to inhibit leukocytes recruitment and inflammation in animal models of liver injury and atherosclerosis.

BGN Technologies is the technology company of Ben-Gurion University, Israel. The company brings technological innovations from the lab to the market and fosters research collaborations and entrepreneurship among researchers and students. To date, BGN Technologies has established over 100 startup companies in the fields of biotech, hi-tech, and cleantech as well as initiating leading technology hubs, incubators, and accelerators.

Ness Ziona’s Vaxil Bio is an immunotherapy biotech company focused on a novel approach to targeting prominent cancer markers. Its lead product Immucin is a MUC1 signal peptide-derived product, wholly owned by Vaxil and protected by a series of patents in all major territories around the globe. As recently presented by the company, the mode of action by which Immucin exerts its unique immunological and clinical activity, is believed to be via its distinctive characteristics as a neoantigen. (BGN Technologies 23.09)

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8.8 Solio Alfa Plus FDA-Cleared Radio Frequency Pain Relief Device Debuts in US ‎Market

Solio ‎announced the launch of its signature pain-relief device, Alfa Plus, into the American ‎marketplace after recently securing FDA clearance. Solio Alfa Plus is the first pain management ‎device ever cleared by the FDA that specifically treats pain using a tripart combination of Radio ‎Frequency (RF), Infrared (IR), and Low Level Laser Therapy (LLLT) technologies. The Solio ‎Alfa Plus is designed for home use.‎

Manufactured in Israel, Alfa Plus completed three years of research and development at The Hillel Yaffe Medical Center. ‎The study evaluated Alfa Plus technology together with a trigger-point treatment on over 100 ‎patients who suffered from chronic lower back pain. The results were excellent, with more than ‎‎90% of patients reporting significant relief from pain after treatment.‎

Although RF technology is already used in advanced medical clinics, Alfa Plus focuses on safe ‎and effective pain relief technologies that can be used directly in the home. Older devices used ‎only temporary relief measures like TENS and soft laser LLLTs. Solio’s expert team used ‎clinical studies and consultation with pain management professionals to confirm the ‎effectiveness of the Alfa Plus treatment.‎ The simple-to-use, advanced design is placed directly on the site of pain, allowing four RF ‎diodes to noninvasively penetrate the skin with deep heating. This increases blood circulation ‎and accelerates tissue regeneration, while reducing inflammation, muscle aches, stiffness and ‎pain. Alfa Plus stimulates the body’s natural healing mechanisms, coaxing the body into healing ‎itself.‎

Experts in engineering and the bio-med fields, Herzliya’s DMT is the maker of Solio ‎products. Solio designers have created some of the most widely used energy-based ‎technologies and platforms in use by medical professionals. Solio specializes in a wide range of ‎high-end professional technologies packed in small, user-friendly affordable devices intended ‎for home use. The Solio Beauty line offers a range of technologies for permanent hair ‎removal, facial skin rejuvenation, skin cleansing, microdermabrasion and anti-aging, skin ‎tightening and cellulite reduction for the body. (DMT 24.09)‎

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8.9 Tarsius Pharma Announces FDA Acceptance of IND Application for TRS01‎

Tarsius Pharma announced the ‎acceptance of its Investigational New Drug (IND) application for TRS01 by the U.S. FDA. The company is developing TRS, a breakthrough, bio-inspired platform technology for the ‎treatment of blinding ocular diseases. TRS was developed to ‘re-engineer’ the immune system, ‎and approaches inflammatory diseases from within the system. This IND acceptance will enable ‎Tarsius to initiate enrollment in its planned Phase I/II clinical trial of TRS01.‎

The planned study is a multi-center, randomized, placebo-controlled dose-ranging study in ‎patients with ocular inflammation following cataract surgery. This study is designed to ‎determine the safety profile of TRS01, the recommended dose, and preliminary evaluation of the ‎potential effect of TRS01 in ocular inflammation.‎ Ocular inflammatory diseases impose a significant medical and economic burden on society, ‎affecting hundreds of million people worldwide and posing severe risks of vision loss and ‎blindness.‎ The TRS Platform Technology has the potential to effectively treat a broad array of autoimmune ‎and inflammatory ocular diseases. Untreated, these diseases can have devastating effects, and ‎may eventually lead to blindness.‎

Zichron Yaakov’s Tarsius Pharma was established in 2016 and is focused on developing ‎innovative therapeutic solutions to prevent blindness. Tarsius is backed by Sun ‎Pharmaceuticals, a global pharmaceutical company, as well as investments by private investors ‎and family offices. This project has received funding from the European Union’s Horizon 2020 ‎research and innovation program under grant agreement No. 879598. ‎(Tarsius Pharma 24.09)

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8.10 Body Vision Closing $20 Million in Series C Funding

Body Vision Medical has closed $20 million in Series C funding. The proceeds will be used to streamline commercialization and manufacturing activities for Body Vision’s LungVision 2.0 Platform, which features AI Tomography, fused imaging, cloud-based machine learning and multi-modality image registration. The LungVision 2.0 Platform received FDA clearance in May 2019. The LungVision Platform is designed to enable the pulmonologist with easy and instant access to advanced technological capabilities within their regular procedure room. Seamlessly integrated into the standard procedure flow, the LungVision Platform offers continuous support throughout all phases of a Navigation Bronchoscopy procedure. This platform includes precise tomographic tool-in-lesion confirmation and guided biopsy sampling. Body Vision Medical is uniquely equipped to provide both the physician and hospital with highly desired benefits through continuous delivery of cost-effective medical procedures.

Ramat HaSharon’s Body Vision Medical is a software and medical device company specializing in augmented real-time fusion imaging, artificial intelligence and intra-body navigation. The company was founded in 2014 to address the contemporary unfulfilled clinical need of early lung cancer diagnostics and treatment. (BVM 25.09)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Odo Security Emerges from Stealth with Agentless Access Management Platform

Odo Security unveiled an agentless, cloud-native platform that allows IT and DevOps engineers to easily manage secure access to any application, server, database and environment located on-premises or in the cloud. Unlike competing products that only support web access, Odo is unique in its ability to also support SSH, RDP and database access which is a game-changer for DevOps teams. In addition, OdoAccess provides full visibility into all user activity, can be set-up in less than three minutes and eliminates the administration burdens associated with VPNs.

Odo’s zero trust architecture moves access decisions from the network perimeter to individual devices, users, and applications where business-driven security policies and access controls are best enforced. Every access attempt is treated as suspect until authenticated and authorized. Users only have access to those resources they have been authorized to see. In a single click, IT and DevOps engineers can ensure that the right people have access to the right resources at the right time, all while giving users frictionless access and maintaining total visibility on all user activity.

Tel Aviv’s Odo enables organizations to simplify, secure and scale remote access across multi-cloud and on-premises infrastructures. Odo’s agentless, zero trust access solution removes the need for VPNs and enables IT and DevOps engineers to easily manage secure access to any application, server, database, and environment, eliminating network layer access and providing full visibility on all user activity. Odo has raised $5 million in seed funding from TLV Partners and Magma Venture Partners. (OdoSecurity 18.09)

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9.2 Viz.ai Named Among Forbes Most Promising AI Companies in America

Viz.ai was recognized in the inaugural Forbes AI list as one of America’s 50 Most Promising Artificial Intelligence Companies. Viz.ai uses Artificial Intelligence (AI) to synchronize stroke care, thereby reducing time to treatment and expanding patient access to life-saving care. The Forbes AI list highlights the most promising private companies that are applying artificial intelligence to solve problems in innovative ways. As the emerging leader in applied Artificial Intelligence for healthcare, Viz.ai focuses on ensuring the right patient sees the right doctor at the right time.

Tel Aviv’s Viz.ai is the leader in applied artificial intelligence in healthcare. Viz.ai’s mission is to fundamentally improve how healthcare is delivered in the world, through intelligent software that promises to reduce time to treatment and improve access to care. Viz.ai’s flagship product, Viz LVO, leverages advanced deep learning to communicate time-sensitive information about suspected stroke patients straight to a specialist who can intervene and treat.

In February 2018, the U.S. FDA granted a De Novo clearance for Viz LVO, the first-ever computer-aided triage and notification software. Viz.ai announced its second FDA clearance for Viz CTP through the 510(k) pathway, offering healthcare providers an important tool for automated cerebral perfusion image analysis. (Viz.ai 17.09)

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9.3 Waterfall Security Solutions Announces Release of V7 Software Platform

Waterfall Security Solutions announced the release of Version 7 of the software platform for the Waterfall Unidirectional Security Gateway and related family of hardware and software products. The V7 software platform is the foundation of software components used in Waterfall suite of hardware-enforced security products, including the Waterfall Unidirectional Gateways, Unidirectional CloudConnect, BlackBox, FLIP and Secure Bypass products.

Waterfall’s products lead the world for securing the perimeters of industrial control system networks. Customers can be confident that deploying Waterfall products means that customer control systems will be protected to best-in-class standards – Waterfall’s patented family of unidirectional products secure OT perimeters in a wide range of industries, supporting a wide range of communications paradigms. Waterfall products ensure visibility into and disciplined control of operations networks for industrial enterprises.

Rosh HaAyin’s Waterfall Security Solutions is the global leader in industrial cybersecurity technology. Waterfall products, based on its innovative unidirectional security gateway technology, represent an evolutionary alternative to firewalls. The company’s growing list of customers includes national infrastructures, power plants, nuclear plants, off and on shore oil and gas facilities, refineries, manufacturing plants, utility companies, and many more. Deployed throughout North America, Europe, the Middle East and Asia, Waterfall products support the widest range of leading industrial remote monitoring platforms, applications, databases and protocols in the market. (Waterfall 19.09)

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9.4 Advice Electronics’ New, Innovative High Density Laser Capacitor Charging Power Supply

Advice Electronics has announced the release of a new LCH3000-XXX series of capacitor charging power supplies. The LCH3000-XXX series is a new generation of high voltage pulsed power supplies based on Advice’s innovative QCP (Quasi Constant Power) technology providing up to 3,000J/Sec in the range of 400V- 1.2KV using the traditional standard size 12.7″ x 5.7″ x 4.1″ (32.2 x 14.5 x 10.4 cm). This size has previously been limited in the marketplace to 2,000J/Sec maximum.

Advice Electronics is developing a complete new line of compact, reliable and competitive capacitor chargers with power levels ranging from 1KW to 9KW and output voltages up to 1.6KV. Standard and custom versions will allow medical, aesthetic, research, industrial and precision laser applications enabling laser manufacturers using flash lamps a greater design flexibility by upgrading their existing laser products without the need for mechanical modifications.

Kfar Saba’s Advice Electronics is a global developer, manufacturer and distributor of Power and Energy products. With over 31 years in the market Advice products range include UPS, power supplies, lithium batteries, solar systems and telecom products. The company maintains R&D, engineering, production, distribution and service departments with offices in 3 continents. (Advice Electronics 19.09)

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9.5 Aniview’s Ad Server and SSP Are First to Support Sellers.JSON & SupplyChain Object

Aniview has finalized development to fully support and comply with the IAB tech lab’s latest initiatives, making it the first of its kind to do so. In April 2019, the IAB Tech Lab released two new technical specifications aimed at increasing brand safety and transparency as well as enhancing trust between partners within the AdTech ecosystem. Sellers.JSON and the OpenRTB Supply Chain object come as a package and are designed to give more confidence to both buyers and sellers.

As a leading Video Ad Server within the AdTech Ecosystem, Aniview’s approach seeks to help its customers comply with these two initiatives by helping them create and completely managing the entire Supply.JSON file. In addition to that, it has already finalized development to add support in all the different types of integrations (VAST, OpenRTB and/or Prebid.js) for the SupplyChain object, initially intended just for RTB. As a Video SSP, www.aniview.com already supports the Sellers.JSON and SupplyChain object with all of their demand partners and with 100% coverage. This move makes Aniview the first of its kind to provide full support for these new mechanisms.

Established in 2013, Herzliya’s Aniview provides advanced video solutions to publishers, publisher networks, advertisers and advertising platforms on a global basis. Its patented technology can support desktop, mobile and VOD/OTT inventory types and currently serves over 10 billion monthly impressions. Aniview’s innovative technology deploys best in class capabilities to enable engaging, high performance media and advertising delivery. (AniView 19.09)

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9.6 AudioCodes Introduces Meeting Insights

AudioCodes announced Meeting Insights, an enterprise solution that is designed to easily capture, organize and share corporate meeting content assets using AudioCodes state-of-the-art Voice.AI technology. Meeting Insights leverages years of VoIP leadership and enterprise market presence to power a new age of advanced voice analytics and meeting-generated insights. Capturing information from multiple sources spanning both in-room and remote participants connected from multiple locations, Meeting Insights seamlessly delivers multi-modal and real-time access to key meeting moments, decisions taken and resulting action items. The result is a robust solution that holds crucial information that would otherwise be lost.

Common organizational use-cases of Meeting Insights include team collaboration sessions, training classes, recruitment interviews and sales reviews. With the solution currently in beta stage, these use-cases together with user feedback will serve as a basis for the general availability of Meeting Insights as a Software-as-a-Service (SaaS) offering.

Lod’s AudioCodes is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world. (AudioCodes 23.09)

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9.7 BigID Introduces Third-Party Data Sharing Privacy Compliance Capabilities Ahead of CCPA

BigID announced data-driven Third-Party Data Sharing privacy ‎compliance capabilities to help enterprises further automate and operationalize requirements ‎around third party data sharing under regulations like the California Consumer Privacy Act (CCPA). The new privacy compliance feature integrates with BigID’s native data at rest and ‎data in motion scanning capabilities.‎

The documentation of third party data sharing is required under CCPA to maintain data ‎transparency; in particular, CCPA requires that organizations report on the categories and ‎attributes shared with third parties as well as distinguish between data transferred for business ‎purposes and the transfer of data for a sale. The CCPA furthers extends the right for California ‎consumers to “Opt-Out” of the sale of their data, and to facilitate these “Do Not Sell” requests. ‎While many organizations have explicit contractual provisions in place to cover data sharing ‎relationships, the validation of third party data flows is still largely done manually, creating ‎challenges for monitoring and reporting on data sharing at scale.‎

Based in New York and Tel Aviv, BigID uses advanced machine learning and identity ‎intelligence to help enterprises better protect their customer and employee data at petabyte ‎scale. Using BigID, enterprises can better safeguard and assure the privacy of their most ‎sensitive data, reducing breach risk and enabling compliance with emerging data protection ‎regulations like the EU’s General Data Protection Regulation and California Consumer Privacy ‎Act. BigID has raised $96 million in funding since its founding in 2016 from Bessemer Venture ‎Partners, SAP.io Fund, Comcast Ventures, Boldstart Ventures, Scale Venture Partners, ‎Salesforce Ventures and ClearSky. (BigID 24.09)

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9.8 US Defense Innovation Unit Selects D-Fend Solutions’ Counter Drone System
‎
D-Fend Solutions announced that in August 2019, during Black Dart 2019, the Defense ‎Innovation Unit (DIU) selected the EnforceAir c-UAS platform of D-Fend Solutions. EnforceAir c-‎UAS is an advanced autonomous system that automatically and passively detects, locates and ‎identifies rogue drones as well as mitigates risk by taking control over them and landing them ‎safely at a pre-defined safe zone.‎

The Defense Innovation Unit (DIU) supported the Department of Defense (DOD) in evaluating ‎component technology during Black Dart 2019, a joint interagency demonstration focused on ‎rapid development and implementation of Counter-Unmanned Aircraft Systems (C-UAS) ‎technology from readily-available commercial and governmental products.‎

Founded in 2017, Ra’anana’s D-Fend Solutions is ‎the leading provider of counter-drone solutions for urban environments in the most challenging ‎scenarios. The company has recently secured a $28M funding led by Claridge Israel with ‎participation by current shareholder, Vertex Israel. (D-Fend Solutions 24.09)

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9.9 ECI’s Converged Interconnect Network Solution for Cable Operators

ECI announced the availability of its Converged Interconnect Network (CIN) solution for cable operators. ECI’s solution is the first step in the transition to a distributed access architecture (DAA), enabling the consolidation of multiple service types (e.g. cable, broadband and business services) onto multi-service transport platforms. This consolidation streamlines operations, dramatically reduces costs, and improves customer experience. Equally important, the ECI solution provides a future-ready aggregation solution on which cable operators can launch new, high value services, including 5G backhaul.

The ECI solution makes use of the company’s Neptune multi-service product line to provide a unified packet aggregation network. The Neptune product line includes a range of multi-service platforms that can be deployed across the network, from a street cabinet to the head-end office. ECI’s unique Elastic MPLS combines support for IP/MPLS, MPLS-TP and Ethernet on the same platform and enables the stitching between these domains, as required. Elastic MPLS also allows for smooth migration of existing services while supporting new service types in the future. The platforms come with flexible, high capacity (nx100G), long-range interfaces which permit a reduction in the number of core nodes and sites.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical industries, and data center operators. With the advent of 5G, IoT, and smart everything, traffic demands are increasing dramatically, and network operators must make smart choices as they evolve their infrastructure. ECI’s Elastic Services Platform leverages our programmable packet and optical networking solutions, along with our service-driven software suite and virtualization capabilities, to provide a robust yet flexible solution for any application. (ECI 25.09)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Ranked 38th in the World for Economic Freedom

Israel is ranked 38 in terms of economic freedom among 162 countries and territories nationwide, a drop of one place since the last report was issued, according to the Economic Freedom of the World: 2019 Annual Report by the Jerusalem Institute for Market Studies, in conjunction with the Fraser Institute of Canada. The rankings gave Israel a score of 7.53 out of 10 for economic freedom, which was lower than the average score in OECD countries. The nations that earned the top rankings for economic freedom were Hong Kong and Singapore, followed by New Zealand, Switzerland, the US, Ireland, Britain, Canada, Australia, and Mauritius. The nations whose economic freedom was ranked lowest included Iraq, Egypt, Syria, the Democratic Republic of Congo, Sudan, Libya and Venezuela.

For sound money, Israel scored 9.38. The more problematic areas were in government size, a category in which Israel was ranked 82nd, with a score of 6.47. However, since 1980, Israel has steadily improved in that category, when the economy was almost entirely controlled by the government and Israel received a particularly low ranking of 2.33. In 2015, Israel was given a score of 6.31. In the legal system and property rights category, Israel was scored 6.2. For regulation, Israel was ranked 62nd. Israel performed worst when it came to the labor market, where it was ranked 121 on the list. (IH 20.09)

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10.2 Israel’s Composite State of the Economy Index for August 2019 Rises by 0.2%

The Bank of Israel’s Composite State of the Economy Index for August increased by 0.23%. The Index’s rate of increase has returned to reflecting growth at the long-term pace, after fluctuations in the first quarter of the year due to vehicle purchases being brought forward to the first quarter at the expense of the second quarter.

The Index for August was positively affected by increases in goods exports and in the import of manufacturing inputs in August, and by an increase in the industrial production index in July. In contrast, a decline in imports of consumer goods in August, a decline in the services revenue index in July, and a decline in building starts in the second quarter moderated the Composite Index’s rate of growth. The Index for previous months was revised slightly upward due to revisions in service export data for April and May, and improvement in most recent data that have a positive effect on the long-term growth rate of the index. (BoI 23.09)

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10.3 Unemployment in Israel Rose in August to 3.8%

The unemployment rate in Israel among those age 15 or higher rose from 3.7% in July to 3.8% in August, according to the Central Bureau of Statistics. The unemployment rate among men fell from 3.5% in July to 3.4% in August, but the unemployment rate among women rose from 3.9% in July to 4.2% in August. Employment in August was 0.2% higher than in the preceding month. The number of full-time employees (working 35 or more hours a week) fell by 34,000, a 1.1% decrease, while the number of part-time employees (working less than 35 hours a week), increased by 25,000, a 2.9% increase.

The proportion of participation in the labor force rose from 63.1% in July to 63.2% in August. The proportion of participation among men fell from 67.4% in July to 67.3% in August, while the proportion of participation among women rose from 59.0% in July to 59.2% in August. The employment rate (the proportion of those age 15 or higher who work) in August 2019 was 60.8%, the employment rate among men was 65.0%, and the employment rate among women was 56.7%. All three of these figures are unchanged from July. (CBS 19.09)

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10.4 New Mortgages in Israel Increase by 30% Since Start of 2019

Although the number of new mortgages in Israel dropped by 10% in August 2019, the total amount of new mortgages issued since January 2019 increased to a record NIS 45 billion ($13 billion), a jump of 30%, according to a report by the Bank of Israel. The report attributed the rise in the amount of new mortgages to an increased number of new mortgages taken out under the government-subsidized Mehir Lemishtaken (“Move-In Price”) program for first-time homebuyers. Under the terms of Mehir Lemishtaken, buyers are allowed to take out a mortgage for up to 90% of the price of an apartment valued up to NIS 1.3 million ($370,000), in contrast to a minimum down payment of 25% required to take out a mortgage under general terms. The Finance Ministry launched the 90% mortgage terms in 2018, hoping to help new homebuyers, especially young families, find a solution to surging property values. Near-zero interest rates have made housing a top investment in Israel. Israel’s home prices have more than doubled in the past decade to an average of about NIS 1.5 million ($430,000). (IH 26.09)

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11: IN DEPTH

11.1 LEBANON: Lebanon’s Budget Finally Ratified and Goes into Effect
BLOM Bank noted that seven months after the constitutional deadline, the Lebanese Parliament ratified the 2019 Budget Law on 19 July 2019. The law, in its first draft, was approved by the Council of Ministers (CoM) after 20 ministerial sessions, and forwarded to the Finance and Budget Committee (FBC) on 1 July. Of the initial 99 articles, the FBC amended 45, deleted seven, and added four. In addition, the Ministry of Finance amended 13 articles and added one. The Parliament then voted on the revised draft, amending another 18 articles, deleting two, and adding two. The final version of the law was published in the official gazette on 31 July.

In terms of spending, the budget expenditure stood at $15.4 billion, compared to $16 billion in 2018. In addition, $1.7 billion were allocated as treasury advances to Electricité du Liban (EdL), compared to $1.4 billion in 2018.

The Parliament cut the Council of Ministers’ draft budget by $156 million, the bulk of which, $148 million, targeted the presidency of the CoM. The Council for Development and Reconstruction’s (CDR) budget was reduced by $141 million (the FBC had proposed deeper cuts, reaching $191 million, of which $50 million were revoked by Parliament), whereas the Higher Council for Privatization and PPP and Higher Relief Commission had a combined budget reduction of $7 million.

The budgets of the Ministries of Economy, Energy and Water, and Finance were reduced by $8 million, $3 million and $0.3 million, respectively. However, the Parliament increased the budgets of the Ministries of Public Health and that of Interior and Municipalities by $2 million and $0.7 million, respectively. The parliament also rejected the CoM’s proposed reduction of former MPs’ retirement salaries.

The approved budget revenues are projected to be $155 million lower than those estimated by the CoM’s draft. This reduction is primarily due to a 2% decrease in the estimated tax revenue, with a 3% decrease in the revenue from the tax on income, profits and capital gains, and an 8% decrease in the revenue from fees on international trade. Projected total revenues hence are expected to stand at $12.5 billion. The Parliament also imposed a $33.3/KVA tax on private generator operators. The law decreased the rate of the CoM’s proposed reductions on the pensions of army veterans from 3% to 1.5%. Also, the proposed fee on imported goods was increased from 2% to 3%, however it was set to only target VAT liable goods, excluding fuel and raw materials.

Conclusions

This budget failed to further lower the deficit reflected in the CoM draft, decreasing it by a negligible $0.85 million. The fiscal deficit to GDP ratio stands at 7.6% according to the government’s estimates, although this number is seen as overly ambitious by multiple sources.

In light of a dire fiscal situation caused by excessive spending on public salaries, transfers to EdL, and rising debt servicing costs, the Lebanese government is attempting to curb its burdening deficit, and hence adopted austerity measures in its 2019 budget law. However, the law failed to introduce any structural reform measures. The budget cuts to CDR also cast doubts on the government’s ability to implement the ambitious CEDRE projects. Moreover, contrary to the reforms promised at CEDRE, the government has so far failed to implement the electricity plan, causing an increase in treasury advances to EdL.

The Lebanese Parliament approved a budget law for the running year that includes austerity measures aimed to solidify the financial position of the treasury. The budget law is a key element of the reform program that the government promised to implement in order to unlock the funds pledged by donors at CEDRE. (BLOM 19.09)

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11.2 LEBANON: A Closer Look into Lebanon’s Fixed Currency

Sam Brennan posted on 24 September in Al-Monitor that Lebanon’s fixed exchange rate has been a pillar of stability for two decades. However, poor economic conditions threaten its sustainability.

Lebanon declared an economic emergency on 2 September following a downgrade from two of the three major credit rating agencies and slowed GDP growth — 0% according to the credit rating agency Fitch. These precarious economic conditions have raised concern over the country’s ability to maintain one of its most successful monetary policies: the fixed exchange rate between the Lebanese pound and US dollar.

In 1980, the exchange rate was around 3 Lebanese pounds to 1 dollar. In just over a decade, this increased to over 2,500 pounds to 1 dollar. This rapid change in the exchange rate deterred investors.

This economic instability was in large part due to the Lebanese Civil War, which began in 1975. But by the mid-1990s, the conflict was de-escalating and reconstruction was a priority. However, the government struggled to attract investors due to currency inflation. One answer to this was a currency peg, fixing 1,507.5 pounds to 1 dollar by 1997.

Simon Neaime, professor of economics and finance at the American University of Beirut, explained to Al-Monitor, “It was done to signal that your investments that come in will have the same purchasing power or the same value when you get it out.” He added that it also gave local banks the confidence to loan the government the capital it needed for reconstruction.

The burden of keeping the Lebanese pound and the dollar equal fell on Lebanon’s central bank, Banque du Liban, which used its foreign currency reserves to defend the peg. This largely manifested through Banque du Liban buying government debt and instituting high interest rates designed to incentivize people to deposit their money in the country. A side effect of this was that local banks could make money through favorable interest rates and buying up government debt as opposed to investing in productive industries.

Toby Iles, director of Middle East Africa Sovereigns for Fitch, told Al-Monitor, “The negative [here] is partly that banks can make [a] profit by buying government debt, while the healthier thing would be for banks to lend to the economy which goes into productive sectors, which would mean the economy is less out of balance.” However, as long as money flowed into Lebanon, Banque du Liban’s reserves were high, government debt was bought and the peg was stable, but, as Neaime noted, “The story lately has changed.”

Currently, the reserves — excluding gold and other assets — are declining, with some predicting that without reforms, the reserves can only cover another year. According to Fitch, the reserves have dropped nearly $3 billion since the end of 2018, leaving $29.1 billion in June 2019, and will decline $3 billion each year in 2020 and 2021. Iles explained, “How high do reserves need to be to maintain confidence? There are a number of indicators to analyze, but it is kind of an unanswerable question.” He added, “The thing that concerns us most recently is that you have had this pressure on bank deposits and reserves and yet there hasn’t been a singular big crisis or event.”

Previously, when Lebanon went through an economic crisis, there was a singular event that shook confidence — be it the assassination of Prime Minister Rafik Hariri in 2005 or the 2006 Hezbollah war. Currently, the situation is a death from a thousand cuts: the resignation of Prime Minister Saad Hariri in 2017; the stalled government formation last year, which lasted nine months; delay in the 2019 budget; sanctions on Hezbollah; escalation with Israel; and the conflict in neighboring Syria. The accumulation of these issues has led to a lack of confidence in Lebanon’s stability and seen foreign investments and remittances drop off. In a country that imports more than it exports, these capital inflows were a major avenue for Lebanon to equalize its balance of payments and keep its reserves high.

Lebanese inside the country have also been shaken by poor economic conditions, reducing their deposits in local banks and converting them into dollars, which is seen as more stable, resulting in a rise in dollarization.

To solve this, interest rates — particularly on government debts — rise to keep money in the country by providing better returns. However, this has contributed to government debt — the majority of which is held by the central and local banks — as an expense taking up 47% of state revenues, according to Fitch.

But this is a catch-22, with the government spending and Banque du Liban dipping into their reserves to ensure money stays in the country, while a major reason why money is leaving the country is because Lebanon is spending too much and reserves are declining. Neaime said, “The high interest the government is paying is affecting the deficit because it is government expenditure and it is increasing the debt.” Banque du Liban has engaged in financial engineering previously to keep the exchange rate fixed and could do something similar again. However, Neaime said, “I think they have used most of their tricks, I don’t think they have much left.”

However, Marwan Mikhael, head of research at BLOMINVEST, the investment arm of one of Lebanon’s largest banks, told Al-Monitor that this “vicious cycle” could, with the right measures, be turned into a “virtuous cycle.” Part of this requires the government to reduce the gap between their spending and revenues through reforms — which Mikhael said was occurring behind the scenes for the state-owned electricity provider, Electricite du Liban, which costs the state up to $2 billion a year.

However, Lebanon will also need to secure capital inflows, which could be delivered in the short to medium term through the $11 billion worth of soft loans offered at the CEDRE Conference, and even the prospects of oil and gas. Then confidence would recover and the situation could improve. However, Neaime said it is a “race against time,” even though very few in Lebanon want the peg to go.

Iles said, “I don’t think Lebanon would want to pursue a policy of changing [the peg], the central bank would really want to hang on to it. There are good reasons for that; in the near term, coming off the peg won’t have any immediate positives, but it would have a lot of negatives.” He added that they would include “an effect on GDP per capita, living standards, government debt would be higher, the banking sector would face issues across their balance sheet and there would probably be a big recession.”

Sam Brennan is a Beirut-based freelance journalist who writes on culture, technology and politics. (Al-Monitor 24.09)

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11.3 SAUDI ARABIA: S&P Affirms ‘A-/A-2’ Ratings; Outlook Stable

On 27 September, S&P Global Ratings affirmed its ‘A-/A-2’ unsolicited long-and short-term foreign and local currency sovereign credit ratings on Saudi Arabia. The outlook is stable.

Outlook

The stable outlook reflects our expectation that Saudi Arabian oil production facilities that were hit in the 14 September attacks will be swiftly repaired. The stable outlook also reflects our view that Saudi Arabia will maintain a pace of moderate economic growth and retain strong government and external balance sheets (net asset-stock positions) over the next two years, despite sizable fiscal deficits and heightened regional tensions.

We could raise the ratings if Saudi Arabia’s economic growth prospects improve beyond our current expectations, for example, as a result of a sustained and significant pick-up in oil prices and volume demand, possibly tied to the end of U.S.-China trade tensions and a rebound of the global economy. We could also raise the rating should authorities improve the transparency of accounting for general government assets.

We could lower our ratings if we observed a sustained rise in geopolitical or domestic political instability that posed a significant and continued threat to the oil sector, or if we observed fiscal weakening beyond our expectations, or a sharp deterioration in the sovereign’s external position. An unexpected materialization of contingent liabilities could also place additional pressure on the ratings.

Rationale

The ratings on Saudi Arabia are supported by its strong external and fiscal net asset stock positions. The ratings are constrained by high geopolitical risks, sizable fiscal deficits and the limited transparency of its institutional framework and the reporting of government assets.

Decision-making structures are highly centralized and, in our view, relatively opaque. However, we do not expect any major deviation from the recent domestic policy course of planned economic diversification, “Saudization” (replacing expatriates with Saudis) of the workforce, and gradual socioeconomic liberalization, especially with regard to attempting to increase female participation in the workforce.

We expect that the government will continue to try to maintain a balance between spending to support the economy (given relatively low oil prices) and still attempting to contain overall fiscal deficits. Our fiscal expectations have weakened following the attacks on oil facilities, and because of lower expected oil production volumes tied to the extension of the December 2018 OPEC-plus-Russia agreement to March 2020.

Mounting tensions with Iran and Yemenite Houthi militia will constrain the ratings, although we expect Iran and Saudi Arabia to shy away from a full-fledged direct military confrontation. Despite some rhetoric to the contrary, we expect that the U.S. will remain reluctant to engage in military action that might involve U.S. ground troops, preferring to stick to its “maximum pressure” policy of severe sanctions and diplomacy with Iran. Nevertheless, the U.S. will remain the ultimate guarantor of Saudi Arabian security vis-à-vis Iran. In our view, any retaliatory military action following the attacks will likely be surgical and limited in scope, and will not lead to a full-fledged direct military confrontation.

In the aftermath of the attacks on key oil facilities we expect Saudi Arabia to redouble its efforts to secure key oil production and processing facilities, increase storage capacity, and enhance attempts to develop Red Sea export routes that would help avoid the volatile Arabian Gulf. We expect that it will expedite plans to expand the East-West pipeline to the Red Sea port of Yanbu to an estimated 7.3 million barrels per day from its current output of about 5 million, thereby permitting oil exports to circumvent the volatile Strait of Hormuz.

Institutional and Economic Profile: An era of reform brings both risks and opportunities

• The economic impact of the 14 September attacks on Abqaiq and Khurais is likely to be contained.
• The Saudi government has articulated an ambitious strategy to reduce the economy’s dependency on oil and imported labor, and to transform the domestic education and job market.
• Policy decision-making is centralized, with limited institutional checks and balances.

The attack on national oil company Saudi Aramco’s oil facilities in Abqaiq and Khurais led to an immediate drop in Saudi crude oil production of 5.7 million barrels per day. This amounted to more than one-half of Saudi’s average 2019 daily production and about 5% of global production. Nevertheless, given the aggressive repair schedule, we expect Saudi Arabian oil production will rebound quickly.

The attacks also interrupted the production of about two billion cubic feet of daily associated gas, which has affected the petrochemical business in particular. Natural gas liquids are a vital feedstock to a significant part of Saudi Arabia’s petrochemical and manufacturing industry. In our view, growth of the industry will be constrained in the short term, but will also rebound quickly.

We expect that the key parameters of Saudi Arabia’s institutional framework will remain broadly steady through 2022. Decision-making on future policy reform is likely to remain centralized. Recent moves to appoint the Crown Prince’s half-brother as energy minister is a change to the longstanding policy of appointing a non-royal as energy minister, and points to increased policy centralization of key parts of the economy under the monarchy.

We anticipate that the government will continue to strive to rebalance the economy and its public finances away from a reliance on crude production, while attempting to reduce its reliance on expatriate labor. The government is implementing a series of reforms that include social measures aimed at increasing labor participation (particularly of women), improving levels of educational attainment, and raising the private sector’s role in the economy.

Given that oil production makes up a significant portion of Saudi Arabia’s GDP, our growth forecast for the country continues to be highly sensitive to assumptions of OPEC production targets and prices. The OPEC-plus-Russia deal currently runs to end-March 2020, after which it is likely that Saudi Arabia will try to get the deal extended and continue with its current policy of limiting supply to support the global oil price market.

We expect real GDP will contract by about 0.4% this year, driven mainly by a fall in oil production tied to the OPEC deal and the attacks. We expect it to rebound to 2.3% on average over 2020-2022. There are some positive signs in high-frequency private-sector data and we expect moderate credit growth.

We anticipate that public investment will remain high under ongoing expenditure plans, the goals of which are to support the non-oil economy and private-sector demand. Our GDP per capita estimate is about $23,100 in 2019, but we expect that, on a trend basis, growth will remain lower than that of several peers, at 0.6%. The country will partly fund its ambitious economic reform program using the large fiscal and external buffers that it amassed during the pre-2015 era of twin balance of payments and budgetary surpluses, as well as through privatizations, including a planned IPO of Saudi Aramco shares.

Official labor force statistics show the number of non-Saudi employees has declined by about 1.9 million since 2017. This implies that the government’s stated policy of Saudization of the workforce may be working, but possibly also that job prospects in the economy have deteriorated.

Flexibility and Performance Profile: Strong external and fiscal positions from a stock perspective, despite ongoing fiscal pressures

We expect wide fiscal deficits over the next three years, due to relatively low oil price assumptions and high fiscal expenditure, despite improved non-oil revenue collection.
Our estimate of the kingdom’s strong net asset (stock) position on both its fiscal and external balances is a key support for the rating.
While we forecast a high level of foreign currency reserves, a continued increase in external debt could somewhat moderate Saudi Arabia’s strong external stock position.

Lower oil price assumptions, as well as the government’s somewhat expansionary fiscal stance, have weighed on previous plans to consolidate the fiscal deficit and reach a balanced budget by 2023. Outlays on development projects associated with vision realization programs will also drive capital spending. We expect Brent oil prices will average about $64 per barrel in 2019, $60 in 2020, and $55 per barrel in 2021 and beyond. Due to the temporary outage following the recent attacks on oil infrastructure, and the OPEC cuts, production will reduce to around 9.5 million barrels per day (mbpd) on average over 2019, before gradually increasing to 10.5 mbpd by 2022. In comparison, Saudi Arabia produced about 10.3 mbpd last year at a price of about $69 per barrel. As a consequence of the attacks, oil prices may benefit from a new “risk” premium of about $1 – $3 per barrel.

We estimate the central government deficit will stand at 8.1% of GDP in 2019 and average close to 7.6% of GDP over 2020 to 2022. Fiscal reforms to widen the tax net away from oil are yielding some results, with 2018 non-oil revenues increasing by approximately 35% over 2017.

We take the view that the central government deficit is financed 30% by asset drawdowns and 70% by debt issuance. This split implies that Saudi Arabia would report gross debt of about 37% of GDP by 2022, from 16% in 2018. Our general government balance consolidates the central government and the social security system and it also includes the share of drawdowns of investment income from government assets. We forecast general government deficits to stand at 4.8% in 2019 and average 3.9% in 2020-2022.

Although Saudi Arabia has been running deficits on a flow basis in recent years, we believe it has remained strong on a stock basis, owing to strong accumulation in past years when oil prices were high. We expect net general government assets (the excess of liquid fiscal financial assets over government debt) will average about 65% of GDP between 2019 and 2022. These fiscal assets include the central government’s deposits at the Saudi Arabian Monetary Authority (SAMA), key government institutions’ deposits, and an estimate of investment income. We also include in our calculation an estimate of government pension funds’ liquid assets, including those of the Public Investment Fund (PIF).

In addition to the budget, the government has plans for domestic capital expenditure led by the PIF, the National Development Fund (NDF), and other investment funds. If productively deployed, this could help maintain growth potential through our ratings horizon. Investment plans could also be supported by funds raised from the planned IPO of a stake in Saudi Aramco. Plans are moving ahead and estimated valuations for Saudi Aramco vary between $1 trillion and $2 trillion. Recent moves to appoint the PIF governor as chairman of Saudi Aramco implies that the IPO is likely to go ahead fairly soon, with funds likely to be transferred to PIF. PIF has grown rapidly in size and importance over recent years, with the full support of the monarchy.

The purchase of SABIC by Saudi Aramco, as well as a sizable investment in India’s Reliance Group, represent a continued push by Saudi Aramco and the country to try and move further into midstream oil businesses, such as refining and petrochemicals, as part of the country’s moves to diversify the economy away from upstream crude production.

We continue to view Saudi Arabia’s external position as a strength and estimate that current account surpluses will average 4.3% of GDP through 2022. We expect that Saudi Arabia’s liquid external assets, net of external debt, will average about 168% of current account payments over 2019-2022. Gross external financing needs will likely remain at about 42% of the sum of usable reserves and current account receipts over the same period, suggesting ample external liquidity. We expect usable reserves will remain high over the forecast period, covering about 19 months of imports. In our calculation of usable reserves, we subtract the monetary base from gross foreign currency reserves for sovereigns that have a long-standing fixed peg with another currency (because the reserve coverage of the base is critical to maintaining confidence in the exchange-rate link).

Monetary policy is both stabilized by, and constrained by the fixed exchange rate: it helps to anchor the population’s inflation expectations, but largely requires Saudi Arabia to follow movements in the U.S. federal funds rate (even when they may not be entirely appropriate for Saudi Arabian economic conditions). We expect that the peg will be maintained throughout the forecast period and beyond. (S&P 27.09)

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11.4 EGYPT: Israel to Start Exporting Natural Gas to Egypt as Last Obstacle Is Removed

Menna A. Farouk reported on 25 September in Al-Monitor that an agreement was recently signed allowing the Egyptian Eastern Mediterranean Gas company to use the Eurasia-Israel pipeline, which would allow the resumption of natural gas exports to Egypt.

Israel will start exporting natural gas to Egypt after Eastern Mediterranean Gas (EMG) and Israel’s Europe Asia Pipeline Co. said on 8 September that they had signed an agreement allowing the former to use a second terminal to export natural gas to Egypt.

According to oil experts and economists, the deal has removed the last obstacle to the start of gas exports from Israel to Egypt. On 19 February 2018, Israel’s Delek Drilling company and Texas-based Noble Energy announced the signing of a 10-year contract worth $15 billion with the Egyptian Dolphinus Holdings company to export natural gas to Egypt. The two companies decided in September 2018 to buy stakes in EMG’s pipeline to facilitate the deal.

“Israel was finding a major obstacle in providing an offshore pipeline to supply gas produced from Israeli offshore fields of Tamar and Leviathan to the Egyptian grid. After signing the agreement, EMG’s pipeline would be used to link the Israeli city of Ashkelon to el-Arish in Egypt’s Sinai Peninsula,” Ahmed el-Shami, professor of feasibility studies at Ain Shams University, told Al-Monitor. Shami said that in spite of the fact the deal is between private companies, the Egyptian government will indirectly benefit from it and the deal will increase state revenues.

The economist explained that Israeli gas is cheap compared to imported liquefied gas, and that alleviates the burden on the Egyptian government in providing gas to the industrial sector as well as helps the government supply national projects already underway with energy and meet local demand. “The Egyptian government already makes gains indirectly from the private companies that purchase gas — whether it is from Israel or any other country. That is because the government collects fees in return for using the national network of gases and incomes of using Egyptian liquefaction stations,” he added.

Shami also said that what is most important is the fact that the agreement supports Egypt’s strategy to become a regional center for the gas industry and gas exports to the world. “Egypt will use Israeli gas and treat it in its liquefaction stations for re-export to Europe. That would be a game-changer for Egypt,” he said.

Tharwat Ragheb, professor of petroleum and energy engineering at the British University in Cairo, also said that the agreement was very beneficial for Egypt, as it has helped to settle an international arbitration case against Egypt as a result of halting gas exports to Israel in 2012.

In light of the decision of the International Criminal Court on 4 December 2015 against the Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding Company (EGAS), the Israel Electricity Authority was entitled to receive damages estimated at $1.7 billion in addition to the amount of interest, as Egypt has stopped gas exports to Israel due to unrest following the January 25 Revolution in 2011, according to the Ministry of Petroleum. Egypt signed a deal with Israel in 2005 in which it agreed to sell $2.5 billion worth of gas to Israel.

Ragheb said that the General Petroleum Corporation and EGAS reached a “friendly agreement” to resolve the dispute with Israel, and the two Egyptian entities managed to settle and reduce the amount of the ruling issued in favor of the Israel Electricity Authority to an amount of $500 million. “That was a remarkable achievement. Egypt used that agreement as a pressuring card in order to get a settlement of its gas dispute with Israel,” he told Al-Monitor.

Ragheb added that Egypt’s gas agreement with Israel also goes in line with the country’s plan to be a gas exporter to Europe, which seeks to wean off of Russian oil. “Although the agreement stirs public confusion and worry on the backdrop of historical conflict with Israel, boosting gas cooperation with Israel will be of great benefit to Egypt at the local and regional levels,” he added.

Since 2014, Egypt has been ramping up its efforts in order to put an end to energy shortages and become an oil and gas exporter again after it turned into an importer following the January 25 Revolution.

In a statement on 30 June, the Egyptian Ministry of Petroleum said that the country’s natural gas production reached unprecedented levels, standing at about 6.8 billion cubic feet per day. Egypt consumes 6.6 billion cubic feet of natural gas per day, according to the same ministry data. The statement also highlighted that Egypt achieved self-sufficiency in locally produced natural gas by the end of September last year due to a gradual increase in domestic gas production as a result of the completion and development of new phases of four major fields in the Mediterranean Sea. “This has rationalized the use of foreign exchange directed at imports and reducing the import bill which is a burden on the state budget,” the statement added.

The ministry also said that a total of 31 projects in this field have been implemented over the past five years with investments worth $21.4 billion and a total production rate of 6.9 billion cubic feet of gas.

Menna A. Farouk, a journalist and an editor at The Egyptian Gazette, writes about social, political and cultural issues, including press freedom, immigration and religious reforms among other topics. (Al-Monitor 25.09)

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11.5 EGYPT: Ethiopia Again Rejects Egypt’s Vision for Renaissance Dam

Ayah Aman reported in Al-Monitor on 24 September that after more than a year of stalled negotiations between Egypt and Ethiopia on the Grand ‎Ethiopian Renaissance Dam, Egypt’s diplomatic moves at the regional and international levels ‎seem to have led nowhere.‎

Egypt has initiated several international diplomatic moves expressing its deep ‎concern about what it says is Ethiopia’s stalling and failure to reach a comprehensive ‎agreement on filling and operating the Grand Ethiopian Renaissance Dam (GERD), which it ‎sees as a threat to its water supply.‎ This comes after a year and four months’ lull in negotiations, since Ethiopian Prime Minister ‎Abiy Ahmed visited Cairo in June 2018 and repeated after President Abdel Fattah al-Sisi the ‎famous oath, “I swear to God, we will not cause any harm to Egypt’s Nile water.”‎

Technical, political and security negotiation rounds have been taking place for more than four ‎years now, since the presidents of Egypt, Sudan and Ethiopia signed the Declaration of ‎Principles in March 2015. At the time, the declaration was seen as a breakthrough in the crisis, ‎which continues to go unresolved. Since then, Sisi has made many statements seeking to allay ‎the Egyptian public’s fears about the dam. In January 2018, he announced the crisis with ‎Ethiopia was over and said there were several paths to a solution.‎

Yet just this month, on 14 September, his statements at the annual National Youth Conference were ‎alarming. Speaking of the dam construction that started in 2011, Sisi said Egypt has been ‎‎“paying since 2011 for one mistake … a price we’ve paid and will continue to pay.” He asserted, ‎‎“Dams would not have been built on the River Nile … was it not for 2011,” in reference to the ‎January 2011 Revolution.‎

Responding to a question concerning the dam at the “Ask the President” session held on the ‎sidelines of the Youth Conference, Sisi recalled the Iraqi water shortage after the fall of the Iraqi ‎state. He said, “Iraq in 1990 received 100 billion cubic meters (bcm) of water, but now it only ‎receives 30 bcm.”‎

In early September, Egypt had launched official diplomatic efforts with other countries.‎ Foreign Minister Sameh Shoukry briefed foreign ministers attending a 10 September Arab League ‎meeting in Cairo on the difficulties marring the dam negotiations. He said Ethiopia has been ‎inflexible recently and has even attempted to manipulate the situation. Arab League Secretary-‎General Ahmed Aboul Gheit said at a press conference that day that the Arab ministers had ‎expressed solidarity in protecting Egypt’s water supply, which they agree is an integral part of ‎overall Arab security.‎

As well, during a 12 September meeting with ambassadors of European countries to Cairo, Egyptian ‎Deputy Foreign Minister for African Affairs Ambassador Hamdi Loza briefed them on the latest ‎developments regarding the dam and stressed Egypt’s uneasiness over the extended length of ‎negotiations. A statement by the ministry after the meeting said Ethiopia has demonstrated “an ‎insistence to impose a unilateral vision while disregarding the interests of others’ interests and ‎without giving due diligence to avoiding damages to two estuary countries, especially Egypt, ‎which depends on the Nile as the lifeblood of the Egyptian people.”‎ After a round of technical negotiations on 15-16 September with Sudan in Cairo, Ethiopia and Egypt ‎remain at odds.‎

Despite Egypt’s diplomatic mobilization ahead of the meeting, Ethiopia did not respond to any ‎diplomatic pressure to approve or even discuss the Egyptian vision. Egypt had proposed filling ‎the dam’s reservoir within seven years and releasing 40 bcm of Nile water annually to ‎downstream countries.‎

Ethiopian Minister of Water and Energy Seleshi Bekele voiced his country’s rejection of Egypt’s ‎requests. Ethiopian news website Addis Standard cited a classified document outlining ‎Ethiopia’s rebuke of Egypt’s proposals. The Egyptian vision would “prolong the filling of GERD ‎indefinitely” and “compensate for the Egyptian water deficit by serving as a second backup ‎reservoir to High Aswan Dam,” according to the document. Egypt’s plan would mean the dam ‎wouldn’t “deliver its economic return to Ethiopia … [and would] infringe on Ethiopia’s ‎sovereignty.”‎ The document added, “Ethiopia [would] forfeit its rights to equitable and reasonable utilization of ‎the Blue Nile water resources.”‎

Shoukry summarized Egypt’s position in dealing with the dam crisis by not yielding to the de ‎facto policy that Ethiopia has been imposing since 2011. In remarks at a press conference Sept. ‎‎15, he said, “The will of one party will not be imposed by creating a concrete situation that is not ‎being dealt with within the framework of consultation and understanding.” Days later, Shoukry spoke about the dam in an exclusive, wide-ranging interview on 21 September with ‎Al-Monitor at the United Nations in New York, where he emphasized the “life and death” nature ‎of the negotiations. “I don’t think anybody would agree that the Ethiopian development should ‎come at the expense of the lives of Egyptians,” he said.‎

A diplomatic official familiar with the Renaissance Dam negotiations told Al-Monitor in a ‎telephone interview, “The continued stumbling of the negotiations and the failure of commitment ‎or implementation of any of the items of the agreements reached in the previous meetings at the ‎political, technical and security levels have become a source of grave concern. It’s not easy, ‎but the Egyptian negotiators have offered many solutions and middle ground visions to achieve ‎the best interest of all parties by filling the dam reservoir in a way that doesn’t harm Egypt and ‎benefits Ethiopia.”‎

The official, who spoke on condition of anonymity given the sensitivity of this topic, added, ‎‎“Egypt [gave up] many of its demands so as not to disrupt the course of negotiations, such as ‎the World Bank intervention, which Ethiopia had rejected. Cairo has been dealing in good faith ‎with all proposed visions and solutions, but the continued Ethiopian refusal, without offering any ‎realistic alternative that reduces the risk of damages caused by the dam filling and operation, ‎makes it difficult for negotiators to work [and] is a mere waste of time.”‎ The source went on, “Egypt will knock on all doors and use all international and regional ‎diplomatic methods to guide the Ethiopian side to find a serious and comprehensive agreement ‎on the filling, operation and management of the dam to safeguard the interests of the three ‎parties (Egypt, Sudan and Ethiopia) and make the dam damage tolerable.”‎

Regarding the preliminary results of Egypt’s international efforts, the source sees a strong ‎understanding and support at the Arab and European levels for Egypt’s concerns. “Egypt will ‎take other measures in other international forums, including the United Nations General ‎Assembly meetings,” said the source.‎ The water ministers of the three countries will meet again on 4-5 October to again discuss terms of the ‎agreement on filling and operating the dam.‎

Ayah Aman is an Egyptian journalist for Al-Shorouk specializing in Africa and the Nile Basin, ‎Turkey and Iran and Egyptian social issues. (Al-Monitor 24.09)

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11.6 EGYPT: Five Things to Know About Egypt’s Startup Ecosystem

Egypt is the fastest growing startup ecosystem in the Arab Middle East and North Africa region, according to a report published in 2018 by MAGNiTT, bagging 22% of all deals last year, second only to the United Arab Emirates. The country has also seen a significant spike in the number of venture capital companies, international funds, incubators, and accelerators over the last couple of years, which, along with government initiatives, have made Egypt an attractive hub for startups in the region.

“Egypt is seeing a second wave of entrepreneurs and investors that are more mature and experienced. The population is also starting to embrace technology for everyday activities and we see that large but young tech firms are a great source of talent and inspiration,” Ziad Mokhtar, managing partner at Algebra Ventures was quoted by the Magnitt report as saying.

Following are 5 things to know about this up-and-coming young entrant in the global startup space:

Almost Unicorns: Egypt is still a relatively new startup hub, and while it does not have any unicorns to its name yet, several promising companies are on their way to the $1 billion club.

Swvl, an app that allows customers to book rides on buses and vans in their network, tops the list with a total of $80.5 million raised over four funding rounds so far, according to data aggregator Crunchbase.

Vezeeta, a healthtech platform which allows patients to book doctors on the app, with $23.5 million raised over five funding rounds so far, according to Crunchbase, is next in line. The company closed it latest funding from a series C round in December 2018. Instabug, Yaoota, Basharsoft, and Halan are some others on the list.

Incubators on the Rise: Flat6Labs is the most prominent accelerator in Egypt, and was the only one in the country up until a few years ago. EdVentures, the corporate VC arm of Nahdet Misr, one of the leading publishing groups of Egypt, is one of the main players in the education startup sector. Sawari, Algebra and Endure Capital are other private VCs.

Falak is a government run accelerator that invests in early-stage startups, and was established to give the startup industry in the country a much-needed shot in the arm.

Government Efforts to Scale the Industry: The Egyptian Ministry of Investment and International Cooperation has a number of different startup programs and networks that helps founders develop their entrepreneurial skills and companies navigate regulations. The initiative by the ministry, called ‘Fekratek Sherkate’ administers these programs, including Falak.

Bedaya, founded by Egypt’s General Authority for Investment and Free Zones, is an incubator that offers funding as well as office space, networking opportunities and manufacturing zones to startups. The incubator’s ‘Bedaya Fund’ provides financing opportunities for startups in the food, agricultural, manufacturing, services, and information technology sectors.

TIEC, or Technology Innovation and Entrepreneurship Center is another government incubator that funds startups in the information and communication technology sector, as part of the government plan to develop the country’s communication infrastructure.

Tech Leads the Way: Technology is the hottest startup sector in Egypt, with the country poised to lead the way for tech innovation in the Arab Middle East and Africa, a Business Insider report earlier this year said. However, issues with the country’s economy, which has been struggling in the wake of the Arab Spring crises, the ouster of leader Hosni Mubarak, a generally weaker currency versus the U.S. dollar and complex bureaucracy make it hard for startups to operate efficiently. Several companies have been forced to relocate to Germany, Dubai, China or the Cayman Islands in order to take some of the pressure off.

Bootcamps and Events Make Connecting Easier: Events give startups an important opportunity to network, connect and learn from experts and investors around the world. Egypt has several annual events that help put regional startups on the global map – RiseUp Summit – biggest in the country, Vested, and the Techne Summit, held in Alexandria, are some of the must-attend gatherings.

Techne Summit, in fact, returns for its fifth edition in Alexandria, Egypt, at the end of the week, with topics of discussion ranging from health tech, e-commerce, and fintech, to retail, marketing and media technology, among others.

The event, held on 28 – 30 September, featured the launch of a network comprising angel investors from across the Mediterranean region, called ‘Mediterranean Business Angel Investment Network’, or Med Angels. Investors from France, Greece, Tunisia, Morocco, Egypt, Lebanon, Slovenia, Croatia, among others, are already a part of the network, which aims to “facilitate cross border investing among participating member networks.” The Med Angels platform claims it will help connect more than 100 networks with nearly 10,000 angel investors, across 24 countries.

The 2019 event features several satellite events, or side events, such as air yoga, educational sessions on social media management, Cloud services management etc., at various locations in Alexandria. Techne Summit kickstarted in Egypt in 2015, and, as of 2018, had hosted over 6,000 participants, 130 speakers, 230 startups, and 80 investors from more than 25 countries. (Entrepreneur 24.09)

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11.7 ALGERIA: A Presidential Election Will Be Held on 12 December

Dalia Ghanem posted in Carnegie-Mellon’s Diwan that a presidential election was announced, to be held on 12 December.

What Happened?

On 15 September, Algeria’s interim president, Abdelkader Bensalah, announced that a presidential election would be held on 12 December. The presidential election has already been canceled twice this year, on 18 April and 4 July. The announcement came less than two weeks after Army Chief of Staff General Ahmad Gaid Salah had promised that the election date would be known by mid-September, proving again that it is the military leadership that calls the shots in Algeria. The military is trying to impose a quick fix to the political crisis that has been shaking the country since the departure of former president Abdelaziz Bouteflika.

Why Does It Matter?

For months Algerians have been demonstrating against Algeria’s political elite and the system in place. The imposition of a new election date is viewed by many people as an effort by the military leadership to impose a president who will effectively be its pawn.

There are serious hurdles to holding elections on 12 December. For instance, it is difficult to foresee how security conditions will be in three months if Algerians continue to demonstrate and the military chooses to continue implementing coercive measures to end the popular contestation movement. The security forces are already cracking down on activists and opposition figures, and are escalating their efforts. At the same time many mayors and judges are refusing to organize the election in their districts. As a result, the presidential election is likely to be neither free nor fair.

Moreover, the current constitution has been massively rejected by the popular movement and protestors want the document to be rewritten before any election takes place. The military leadership, in turn, has crafted electoral reforms to accelerate the election – reforms passed by the government and parliament against the will of protesters. Steps have even been taken to lower the number of signatures required for individuals to stand as candidates, from 60,000 to 50,000.

What Are the Implications for the Future?

There is no sign that Algeria’s opposition and civil society will accept the results should an election be held. The country’s political and military leadership is facing a severe legitimacy crisis, so that trying to push through an election without taking popular demands into consideration is almost certainly not going to resolve the crisis.

Algerian elections tend to hinder democracy, rather than the opposite. That is because they are characterized by the absence of any real transition. Instead, they give the political system a facelift and create an opportunity for this system – now widely rejected by many Algerians – to regenerate itself. For Algerians today, the ballot box is not synonymous with democracy but with the perpetuation of a political order that is undemocratic. By orchestrating a presidential election, the military is stifling the desire for genuine change in the country, and the consequences of doing so may have far-reaching implications for Algeria’s stability. (Diwan 16.09)

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11.8 TURKEY: IMF Staff Concluding Statement of the 2019 Article IV Mission

On 23 September 2019, the IMF issued a Concluding Statement which describes the preliminary findings of IMF staff at the end of an official staff visit to Turkey.

Growth has rebounded, aided by policy stimulus and favorable market conditions, following the sharp lira depreciation and associated recession in late-2018. The lira has recovered and the current account has seen a remarkable adjustment. Turkey remains susceptible to external and domestic risks, however, and prospects for strong, sustainable, medium-term growth look challenging without further reforms. Current positive market sentiment provides a good opportunity to enact a set of reforms that would address vulnerabilities, strengthen policy credibility, and set the economy on a higher and more sustainable growth path. Against this backdrop, we look forward to the forthcoming New Economic Program (NEP), which should clearly diagnose the challenges facing the economy and outline a comprehensive set of policies to address them.

Background—Growth and Imbalances

1. Turkey achieved strong growth in recent decades, but at the same time imbalances increased. Initially, broad-based macroeconomic and structural reforms supported growth, poverty reduction, and income convergence with advanced economies. As reforms waned, however, growth became increasingly dependent on externally-funded credit and demand stimulus. As a result, Turkey entered 2018 with an economy running above potential and a large current account deficit, largely financed by debt-creating flows.
2. These imbalances contributed to last year’s sharp lira depreciation and associated recession. Negative sentiment towards EMs and adverse geopolitical developments ultimately triggered sizeable lira depreciation in August 2018. The exchange rate shock and a necessary, but belated, monetary policy reaction were accompanied by a recession in the second half of the year and a sharp increase in unemployment.

Recent Developments – Stimulus and Recovery

1. Growth has since resumed, aided by policy stimulus. Buoyed by expansionary fiscal policy, rapid state bank credit provision, a strong contribution of net exports and more favorable market sentiment, the economy registered positive growth in the first half of 2019. Staff now expects growth to be positive this year – about ¼% – despite the large negative carryover effects from last year’s recession.
2. The lira has recovered as market pressures have abated. Import compression and a strong tourism season have led to a remarkable current account adjustment, and only a small deficit is expected this year. This, combined with improved market sentiment and geopolitical developments, have taken pressure off the lira.
3. This set the stage for a steep decline in inflation. High real policy rates, lira stability, favorable base effects, and resulting lower inflation have allowed the CBRT to cut policy rates. While inflation could fall to single digits over the coming months, staff expects end-year inflation of below 14%.

Outlook—Challenges Remain

1. The current calm appears fragile. Reserves remain low, and private sector FX debt and external financing needs high. Non-financial corporate balance sheets have been stressed by lira depreciation, higher interest rates, and lower growth. Banks report adequate capitalization and moderate NPLs, but loan restructuring has increased and staff expects the lagged effect of the recession and the weaker lira to continue to put strains on asset quality. High dollarization reflects, among other things, weaker domestic sentiment and state bank funding needs. While public debt is low – a key strength for Turkey – the fiscal deficit has increased and uncertainty over the possible scale of contingent liabilities and potential debt rollover pressures limit available fiscal space.
2. Prospects for strong sustainable growth have weakened and risks remain on the downside. Despite the recent turnaround, without consistent implementation of a comprehensive package of reforms, medium-term growth is likely to remain subdued given balance sheet strains. Risks include a deterioration in sentiment towards emerging markets, possible policy implementation risks, and adverse domestic or geopolitical developments.

Policies – Securing Stronger and More Resilient Growth

1. The main policy challenge is to move from a short-run growth focus to securing stronger and more resilient growth over the medium term. This could be achieved through a five-pronged policy response:

• tight monetary policy to boost central bank credibility, underpin the lira, durably lower inflation, and strengthen reserves;

• steps to bolster medium-term fiscal strength;

• a comprehensive third party assessment of bank assets and new stress tests, with follow-up measures, as needed, to further strengthen confidence in banks;

• additional steps, building on existing reforms, to strengthen the insolvency and corporate restructuring framework; and

• focused structural reforms to support productivity growth and increase economic resilience.

• Although these reforms may come with short-term output tradeoffs, the growth payoffs over the medium- and longer-term are likely to be large, and downside risks would also be significantly contained.

Monetary Policy: Strengthening Credibility

1. Durably lowering inflation remains the most important challenge for monetary policy, and is the best way to permanently lower interest rates. The central bank continues to work to enhance its credibility, including by seeking to strengthen its communications. Nevertheless, in staff’s view, the CBRT easing cycle has been too aggressive given still-high inflation expectations and the need to mitigate macro-financial risks. Monetary policy should keep rates on hold until there is a durable downturn in inflation and inflation expectations. This would also underpin the lira, allow reserves to be rebuilt, and support de-dollarization.
2. Clearer monetary and intervention policy would further boost credibility. Notwithstanding progress in simplifying the monetary policy framework, reducing the many instruments and rates through which liquidity is provided would further clarify the policy stance. A transparent framework for pre-announced FX purchases – with these being the sole preserve of the CBRT – should be implemented at the appropriate time. As volatility subsides, remaining measures that aimed at containing excessive volatility in capital flows should be phased out.

Fiscal Policy: Preserving the Anchor

1. Fiscal policy—a longstanding strength for Turkey—should remain a key anchor. The recent fiscal stimulus has helped the economy recover and we welcome the unwinding of some of the measures taken given recent economic strength. In staff’s view, a neutral fiscal stance next year would still support growth, allowing automatic stabilizers to work, but further discretionary stimulus should be avoided to contain financing needs and preserve fiscal space.
2. Measures of about 1½% of GDP over the medium term would help stabilize the debt burden around current, commendably low, levels. Persistent gaps have opened up between primary spending and tax revenues, which could undermine Turkey’s traditionally strong debt dynamics. Revenue mobilization measures could include broadening the tax base and enhancing revenue efficiency by raising and unifying reduced VAT rates. Personal income tax could also benefit from reforms. On spending, removing backward-looking public wage indexation, rationalizing subsidies and transfers, and better targeting social assistance would also help.
3. Fiscal structural reforms would support consolidation. Staff welcomes the authorities’ efforts to strengthen oversight and management of PPPs, including through plans to publish a monitoring report and introduce a new PPP law. It would be important for the legislation to ensure that such partnerships are fully integrated with the overall budgetary process, including their authorization and appraisal. Consistent budget execution and a thorough monitoring of fiscal risks, including publication of a fiscal risk statement, would further strengthen fiscal credibility.
4. Further monitoring of extra budgetary institutions would also be welcome. The scope and role of extra-budgetary and other non-central government entities and institutions need to be carefully defined and monitored, with the maximum degree of transparency and a strong governance framework. In this regard, the investment mandate of the recently-established Turkey Wealth Fund (TWF) risks fragmenting management of public spending outside of the budgetary process. The TWF’s governance structure could also be refined to limit potential conflicts of interest.

Financial and Corporate Sector Policies: Stability and Rebalancing

1. Further steps to clean up bank and corporate balance sheets would support financial stability and stronger and more resilient growth over the medium term. Banks’ impairment and restructuring practices should be reviewed to support loan repayments in a durable and sustainable manner. We encourage the authorities to further pursue their efforts to strengthen the current resolution regime. To complement this, an early comprehensive third-party asset quality review (AQR) and ensuing stress tests, accompanied, to the extent needed, by further measures, would help shore up market confidence.
2. Actions to support credit growth should be limited. Efforts to expand lending, including through state banks and the CGF, should be limited and should also ensure that resulting credit is provided only to viable borrowers. In line with past application of macro-prudential measures, the authorities should stand ready to use such tools to rein in excessive and/or imprudent credit growth. The recent changes to incentivize private bank lending with reserve requirements should be revisited.
3. Additional efforts, building on existing reforms, to strengthen the insolvency regime and out-of-court restructuring would help release resources and restart productive lending. Staff welcomes ongoing efforts, including a comprehensive review of existing insolvency legislation, to better balance debtor and creditor rights. This, combined with tighter NPL classification and enforcement, would inform better pricing of NPLs and increase the attractiveness of out-of-court solutions and encourage more durable restructurings.

Structural Reforms: Boosting Productivity

1. Focused structural reforms would improve prospects for stronger sustainable growth and increase the economy’s resilience to shocks. Product market efficiency could be enhanced by simplifying business entry and exit, addressing barriers to competition and allowing automatic energy pricing adjustments. The quality of human capital could be raised by upgrading education and on-the-job training. Early childhood education and childcare could further increase female labor force participation. Labor market flexibility could be improved by eliminating backward-looking public wage indexation and aligning minimum wages with expected inflation and productivity. Severance pay could be reformed to encourage labor mobility.
2. Governance reforms could also help growth prospects. Improving regulatory predictability and simplifying administrative procedures would help the business environment and investment climate. Minimizing regulatory forbearance would enhance transparency. Improvements in governance could also magnify structural reform payoffs. (IMF 23.09)

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11.9 GREECE: Staff Concluding IMF Statement of the 2019 Article IV Mission

On 27 September, the IMF issued a concluding statement describing the preliminary findings of an official staff visit to Greece.

Greece’s new government inherited a tepid economic recovery, one weighed down by crisis legacies and across-the-board policy reversals since program exit that further raised fiscal, financial, and external vulnerabilities. While the government has made a promising start in unblocking structural reforms and privatizations and is advancing the clean-up of bank balance sheets, a stronger effort in all policy areas is urgently needed if Greece is to become competitive within the currency union, eliminate the debt overhang, and achieve more inclusive growth.

1. The new government is rightly prioritizing growth but faces an uphill battle. Per capita income remains below pre-Euro Area accession levels, reflecting significant crisis legacies (high public debt, high non-performing loans, over-indebted borrowers), low productivity, a dearth of investment, a weak payment culture and adverse demographics. Prospects were further dampened by what became a broad-based policy retreat following program exit in August 2018, with program-era reforms put on hold (e.g., fiscal structural reforms), canceled (e.g., the pre-legislated pension and personal income tax (PIT) reform packages), or reversed (e.g., key elements of the 2011-13 labor reforms and efforts to broaden the tax base and strengthen the payment culture).
2. Growth is expected to be around 2% in 2019 and 2020. Near-term growth is benefiting from a cyclical recovery and improved market and consumer sentiment, which should translate into higher investment. Still, with long-term growth projected at 0.9%, it will take another decade and a half for real per-capita incomes to reach pre-crisis levels. Public debt-to-GDP is projected to trend down over the next decade with relatively low liquidity risks in the medium-term, though long-term sustainability is not assured under realistic macro assumptions. Still-weak banks dampen growth prospects and pose significant fiscal and financial stability risks. These and other factors leave Greece vulnerable to a range of external and domestic shocks. Considering Greece’s cyclical position and desirable policies in the medium term, staff assesses there is a substantial overvaluation of the real effective exchange rate. In this context, the new government should use its political mandate and improving investor sentiment to deploy a full range of policy tools and overcome long-standing vested interests, aiming to push long-term growth meaningfully above current projections.
3. Fixing the banking sector, currently a misfiring engine of growth, is a top priority. The government’s goal of achieving single-digit non-performing exposures ratios by mid-2022 goes in the right direction and the proposed ‘Hercules’ asset protection scheme could provide significant support (though important details have yet to emerge). However, to fully restore asset quality, along with the quality and levels of bank capital, liquidity, and profitability, the new government should develop a more comprehensive, ambitious and well-coordinated strategy. These efforts should be primarily market-based, with any public support subject to a dynamic cost-benefit analysis, and supported by further improvements in the legal framework (e.g., more efficient judicial processes and modernization of the insolvency regime). Residential mortgage protection and ad hoc tax and social security installment schemes have prevented meaningful debt restructuring and undermined the payment culture and should be permanently phased out.
4. Reducing fiscal targets would support the economic and social recovery. The 2019 fiscal primary surplus is expected to be in line with Greece’s 3.5% of GDP commitment to European partners—though once again depending on growth-dampening under-execution of public investment. For 2020, staff recommends that the government and European partners build consensus around a lower primary balance path, given ample economic slack and critical unmet social spending and investment needs, and to accommodate spending that would create synergies with stepped-up structural reforms.
5. The fiscal policy mix should be rebalanced to strengthen growth and social inclusion. Plans to cut direct tax rates and strengthen compliance are welcome but more could be achieved by broadening the tax base. Greece remains near the EU bottom in terms of the share of workers paying personal income taxes and has one of the largest VAT compliance gaps. Relative to the rest of the EU, too much goes to pensions and the government wage bill, and too little to other social spending. To address critical needs, Greece should significantly scale up social spending (e.g., the means-tested guaranteed minimum income and public health) and investment. To free up fiscal space, pension benefits of existing retirees should be calculated in line with the new benefit formula (and the recent restoration of pre-crisis ‘pension bonuses’ should be reversed). Accelerating public financial management reforms will help better execute the public investment budget, enhance budget control, and strengthen risk management (including from ongoing court cases), while continued efforts are needed to strengthen the Independent Authority of Public Revenue and mobilize the Anti-Money Laundering framework to combat tax evasion.
6. The new government deserves credit for unblocking privatization and pushing through business deregulation and digitalization, but much of the needed structural transformation of the Greek economy still lies ahead. The economy remains over-regulated and dominated by small and medium-sized enterprises operating in an unwelcoming business climate, and Greece is at or near the bottom of the EA in many cross-country surveys. More is needed to de facto liberalize product markets and closed professions and strengthen competition.
7. The recent labor market proposals from the government deserve support, though more is needed to support higher employment, growth and competitiveness. Staff supports recent legislation to lift new restrictions on dismissals and the intention to limit unilateral appeals to arbitration. Plans to introduce an opt-out mechanism from collective bargaining go in the right direction but should aim at full restoration of the 2011-13 landmark labor reforms. Reducing non-wage costs, linking the adjustment of minimum wages to productivity growth, strengthening active labor market policies and removing bottlenecks to female labor force participation will be essential to address hysteresis, poverty (including in-work) and social exclusion. (IMF 27.09)

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11.10 CYPRUS: IMF Staff Concluding Statement of the 2019 Article IV Mission

On 26 September, the IMF issued a concluding statement concerning the preliminary findings of IMF staff at the end of an official staff to Cyprus.

Cyprus has made significant progress in recovering from the financial crisis. Real GDP has now surpassed its pre-crisis peak and the unemployment rate has declined rapidly coming close to the pre-crisis level. Large disposals of non-performing loans (NPL) have strengthened bank stability, and sizable fiscal surpluses have lowered risk premia and reduced financing risks.

Challenges remain however in sustaining the relatively robust growth momentum. Given still-high NPLs, recent efforts to undo key reform initiatives are undermining the hard-won gains in restoring macro-financial stability. Increasing external headwinds are slowing near-term growth, while a sizable debt overhang and weak productivity growth also hold back medium-term growth potential.

Policies should focus on reforms to secure financial stability and raise the growth potential of the economy. Priorities are to steadfastly implement the strengthened legal tools to lower NPLs and private debt and to build bank capital buffers; to reduce public debt by ensuring strict spending discipline and improving the efficiency of public spending; and to increase productivity through institutional reforms and the promotion of technology adoption.

Outlook and Risks

Cyprus has made significant strides in recovering from the financial crisis and in addressing its legacy challenges. With economic growth averaging about 4½ percent over the past three years, the pace of recovery in Cyprus has been more rapid than many other euro area post-crisis economies. The unemployment rate has declined although it is still above the pre-crisis level. Efforts to address high NPLs and banking system vulnerabilities also gained momentum. The disposal of large NPL portfolios, supported by a strengthened foreclosure and insolvency framework last year, and the resolution of Cyprus Cooperative Bank paved the way for a more consolidated and deleveraged banking system. GDP levels have now surpassed pre-crisis levels, while in the banking system, NPLs as a share of GDP have declined by nearly two-thirds from its post-crisis peak. Although public debt has spiked in the process, strict spending discipline and large fiscal surpluses have helped Cyprus to capitalize on favorable market conditions and reduce debt vulnerabilities.

While economic growth is gradually moderating, the near-term economic outlook remains favorable. Growth is expected to decelerate to around 3 percent in 2019–20 on weaker external demand, from nearly 4% last year. Investment is expected to remain strong, driven by housing and infrastructure construction projects that are primarily foreign financed, while robust labor market recovery and rising income continue to support private consumption. The current account deficit is expected to widen, reflecting slowing growth among trading partners and continued high construction-related imports. Over the medium term, growth is expected to slow to its long-run potential growth rate of around 2½%, as the transitory effect of the investment boom gradually dissipates.

Risks to the outlook are mainly on the downside. Delays in NPL resolution could negatively affect the capital position of banks and weigh on availability of credit. Realization of fiscal contingent liabilities could slow the pace of debt reduction, eroding confidence and raising risk premiums. The high level of external debt makes the economy vulnerable to interest rate and growth shocks. External risks from rising protectionist trade policies, a sharper-than-expected slowdown in euro area growth or a hard Brexit could affect tourism and shipping revenues and foreign direct investment (FDI) flows. A negative assessment on Anti-Money Laundering/Combating Financial Terrorism (AML/CFT) compliance risks could affect confidence and deter investments. On the upside, exploitation of offshore gas deposits and energy sector investments could boost growth over the longer term.

Important challenges remain in sustaining the growth momentum over the longer term. Private sector deleveraging has been lagging given ongoing challenges in debt workouts. The NPL ratio has declined from more than half of loans at end-2017 to less than one-third today but remains among the highest in Europe, and banks suffer from low profitability, constraining credit and investment growth. In this context, the amendments to the foreclosure framework, which were recently approved by the Parliament but have not entered into effect and are currently being reviewed by the Supreme Court, are a setback creating uncertainties for NPL reduction and deleveraging of the economy. Longer-term economic growth potential is hindered by weak productivity growth, reflecting financial sector weakness as well as broader institutional bottlenecks and a slow pace of technology diffusion. Policies should thus focus on reforms to secure financial stability and strengthen growth potential by enhancing efficiency and productivity.

Policy Priorities

Financial Sector Policy: Supporting Deleveraging and Strengthening Financial Sector

1.NPL resolution and sustainable debt workouts remain key priorities. Efforts should focus on ensuring a well-functioning NPL resolution toolkit through restructuring, foreclosure, and insolvency. To this end, the recent amendments to the legislation risk reducing the effectiveness of foreclosure as a credible threat against strategic default, thereby weakening prospects for collateral recovery and increasing the need for additional provisioning. Adequate supervisory oversight of durable restructuring is crucial. The finalization of the framework for electronic auctions and continued progress with complementary judiciary reforms aimed at reducing backlogs will also be key to improve collateral execution and incentives for debt workouts.

2.Strengthening of the supervisory and regulatory framework of credit acquiring companies (CACs) should continue. While progress has been made on multiple fronts, including staffing, on-site inspections and off-site monitoring, strengthening of data reporting and analysis will be crucial given that a sizable stock of NPLs is now held by CACs. It is also important to swiftly finalize the state-owned Cyprus Asset Management Company’s (CAMC) governance and operational structure, business strategic plan, and performance measurement framework, with an appropriate sunset clause and a clear mandate to maximize recovery, while balancing operational independence with public accountability and transparency.

3.Efforts should be made to address the moral hazard risks inherent in the Estia subsidy scheme. Close monitoring to prevent potential abuse of the scheme and timely reassessment of borrower eligibility will be needed, to ensure that taxpayers are not called on to subsidize individuals who are capable of servicing their mortgages. Any complementary schemes for vulnerable primary owners deemed unviable under Estia should ensure further burden sharing and be well-targeted with a full cost-benefit analysis undertaken to control fiscal and implementation costs.

4.More broadly, efforts to further improve bank profitability and capitalization are crucial. Narrowing interest margins and excess liquidity in a declining interest rate environment are creating pressures on profitability, which is being further weighed down by an inefficient cost structure with excess staffing levels and branch networks in the banking system. Banks should continue to maintain adequate provisions and capital buffers to insulate against potential further losses from NPL sales and workouts and reduce property holdings to targeted levels. Policies should encourage lowering of cost-to-income ratios through rationalization of operational costs, diversifying income sources, and undertaking of digitization solutions.

5.Macro-financial risks from the property market appear limited for now but warrant close monitoring. The segmented nature of the property market calls for close monitoring of sectoral developments, for example, to ensure that any overheating in the luxury segment is not fueled by domestic credit, or that concentration of future sales of repossessed collateral properties does not lead to fire-sales. Macro-prudential measures tailored to the market segment should be undertaken if warranted.

Fiscal Policy: Mitigating Risks to Debt Sustainability and Enhancing Efficiency

1.Fiscal performance is strong, but risks remain. Cyprus is projected to maintain large primary surpluses that will allow public debt to decline rapidly over the medium term. However, this outlook is subject to risks, including from court-mandated increases in the public wage bill reversing crisis-era measures, higher-than-expected spending under the newly introduced National Health System (NHS)—particularly from lagging competitiveness of the public health sector vis-à-vis the private sector—and contingent liabilities from public entities, as well as the Asset Protection Scheme and weak asset quality in the financial sector.

2.Spending should be firmly controlled to reduce risks to debt sustainability, while the composition of expenditure should seek to enhance efficiency. Expenditure growth should be capped by nominal medium-term output growth to keep debt firmly on a downward path. Prioritizing public spending to support structural reform efforts would help achieve faster and more inclusive medium-term growth. To this end, growth of the wage bill should be contained below that of nominal GDP, to create space for more productive expenditure. There is scope to improve the efficiency of education spending, including by reallocation towards investment in innovation and human capital. To contain risks from the NHS, strict monitoring and fine tuning of the regulatory framework for controlling incentives and costs of services, together with improving the competitiveness of the public health sector, will be important.

Structural Reforms: Improving Productivity and Strengthening Growth Potential

1.Productivity enhancing structural reforms are key for bolstering medium-term growth potential. While Cyprus has maintained its cost competitiveness, it suffers from low labor productivity growth and faces challenges to investment and economic efficiency. These include difficulties with access to finance, costly and lengthy judicial processes, inefficiency of government administration, low investment in new innovations and skills mismatches.

2.Policies to support greater market diversification, competition, and technology adoption are needed to enhance competitiveness. Greater investment in Information and Communications Technology infrastructure, intangibles such as science, technology, engineering and mathematics training, research and development innovation and easier access to finance are needed to facilitate technological diffusion. Given strong reliance on services exports, reducing remaining restrictions in implementing the EU Market Services Directive could facilitate competition and attract FDI. These reforms would enable greater market diversification, which would support faster economic growth and reduce volatility. Other competitiveness-enhancing policies could focus on strengthening business linkages and external connectivity to international markets.

3.Ongoing efforts to improve efficiency of the judiciary should continue, in order to better enforce commercial claims, support deleveraging and reduce the cost of doing business. The recent specialization of selected judges in financial litigation, the ongoing recruitment of additional judges, and work on establishing a court of appeals should be complemented by reforms of the rules for civil procedures, clearance of the backlog of cases and introduction of the e-justice system. Strengthening the institutional framework for the insolvency service and insolvency professionals is also important. Efforts are needed to create a more efficient system of issuing and transferring title deeds and accelerate the clearance of the backlog.

4.Efforts to reform public sector governance and efficiency should be renewed. Approval of pending legislation to reform the assessment of candidates for appointment and promotions and the structure of the civil service would facilitate greater mobility and enhance effectiveness. Legislative efforts to strengthen the governance and autonomy of the Central Bank of Cyprus should also be expedited. Successful implementation of local government reforms would streamline procedures and improve service delivery. Fiscal institutional measures for strengthening governance of state-owned enterprises, public financial management controls at the local government level and reforms in tax administration would help contain risks while improving public efficiency.

5.Ensuring that growth is inclusive is key to sustaining growth. While unemployment is rapidly declining, the share of youth not in employment, education or training and long-term unemployment remain high, partly reflecting skill mismatches. Programs focused on job retraining and improving linkages between educational and job opportunities would help reduce this gap. (IMF 26.09)

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11.11  CYPRUS:  Moody’s Changes Outlook on Cyprus’s Rating to Positive, Affirms Ba2 Rating

On 20 September, Moody’s Investors Service (Moody’s) changed the outlook on the Government of Cyprus’s Ba2 ratings to positive from stable.  Concurrently, Moody’s has affirmed the Ba2 long-term issuer and senior unsecured ratings, and the (P)Ba2 program ratings.  Cyprus’s short-term ratings have also been affirmed at Not Prime (NP) and (P)NP.

The change in outlook to positive from stable is driven by two factors:

1. Cyprus’s exposure to event risk continues to decline given ongoing improvements in bank asset quality; and

2. Cyprus’s fiscal strength is improving beyond previous expectations.

The affirmation of Cyprus’s Ba2 sovereign ratings balances the credit-supportive factors such as wealth, improved economic resilience, and a recent track record of fiscal outperformance against constraints such as institutions that are weaker than European peers, a lack of economic diversification, high debt across all sectors of the economy and still-high non-performing exposures (NPEs) in the banking system.

Cyprus’s long-term local- and foreign-currency bond and bank deposit country ceilings remain unchanged at A2.  Moody’s maintains a six-notch cap between the government bond rating and the bond and deposit ceilings. Its short-term foreign-currency bond and bank deposit country ceilings remain at P-1.

RATINGS RATIONALE

Rationale for Positive Outlook

First Driver:  Continued Reduction in Exposure to Event Risk Given Ongoing Improvements in Bank Asset Quality

The primary driver of the positive outlook is that Cyprus’s bank-related exposure to event risk continues to decline.  Policy action by the government and actions by the banks will likely lead to a further large reduction in NPEs over the coming 18 months.  NPEs reached 30.6% of gross loans in March 2019 (local operations only) having peaked at 49.8% in May 2016, and Moody’s expects that number to continue to fall, and quite possibly to halve, over the next 12-18 months.  These declines are being driven by two factors:

First, the Estia government support scheme was launched on 2 September; the closing date for applications is 15 November.  Estia aims to deal with the most difficult area of NPEs, namely mortgages that are backed by primary residences. Under the scheme, the government will pay a subsidy to eligible borrowers, which lowers their debt servicing costs by one-third.  Moreover, borrowers with negative equity will only have to repay an amount up to the market value of their residence; losses relating to falls in value relative to mortgages will be borne by the lender. Estia is expected to help restart payments on the more than €1.1 billion of nonperforming retail mortgage loans held primarily by two of the banks rated by Moody’s, Bank of Cyprus Public Company Limited (long-term deposit rating: B3 positive, baseline credit assessment: caa1) and Hellenic Bank Public Company (long-term deposit rating: B3 positive, baseline credit assessment: caa1).  These NPLs amounted to 11% of total NPEs in the banking sector as of March 2019.

Second, we expect that the banks will complete further major asset sales over the period.  The securitization and sale of problem loans have been facilitated by a new securitization law and by amendments to legislation governing the sale of loans.  Reform of the foreclosure framework has also supported disposal of assets by banks, though recent amendments passed by parliament would hinder that process somewhat; those amendments have been referred to the Supreme Court, which should make a decision later this year or early next year.

Second Driver: Ongoing Improvements Fiscal Strength Beyond Previous Expectations

Cyprus’s debt metrics are improving at a faster pace than we had previously anticipated and from a lower level.  The impact of the resolution of Cyprus Cooperative Bank (CCB, ratings withdrawn) had a less pronounced impact on the country’s debt burden last year, increasing the debt burden to only 102.5% vs Moody’s previous expectations of 107% of GDP. Since then, the government has returned to running large primary and fiscal surpluses, and we expect this trend to continue.

We now forecast that debt will fall to 97% of GDP this year and, due to sizeable primary surpluses and ongoing low funding costs, it will continue to fall by around 5% per annum, to around 75% by the end of 2023.  We also think that the resilience of the government’s balance sheet has improved: while Cyprus faces rising spending pressures coming from health care, public sector wages, and Estia, we believe that the debt burden will continue to decline, albeit at a slower pace, even were these pressures to increase expenditure levels.

Rationale for Affirmation of Ba2 Ratings

The factors supporting the affirmation of Cyprus’s Ba2 sovereign rating include the country’s small but wealthy economy, and improvements in its economic resilience in recent years.  It also incorporates the government’s track record of fiscal outperformance in the wake of the country’s banking crisis. Before the resolution of CCB, strong growth trends and primary surpluses generated positive debt trends that we expect will continue in the coming years.

However, Cyprus faces credit challenges arising from its small and relatively undiversified economy, as well as from high levels of government, non-financial corporate, and household debt.  Moreover, increasing spending pressures have the potential to weigh on fiscal prospects. Cyprus’s institutions are weaker than are those of its European peers. The still-large financial sector remains burdened by the second-highest NPE ratio in the European Union.

What Could Change the Rating—Up/Down

We would consider upgrading Cyprus’s sovereign rating if NPEs were indeed to continue to fall to levels substantially below 20%, reflecting a material improvement in the strength of the banking system and reducing contingent liability risk.  Greater clarity that the debt burden will continue to fall steadily to below 90% over the coming 1-2 years would also support upward pressure on the rating if accompanied by improvements in banking sector risk.

Conversely, while a downgrade is currently unlikely, as reflected by the positive outlook, the issuer’s credit profile could weaken if growth or fiscal policy decisions were to cause a reversal of the supportive fundamental debt trend.  Failure to bring down the stock of NPEs in the banking sector would also put downward pressure on the rating. (Moody’s 20.09)

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*  END  *

“Bring the World to Pennsylvania” Held in September

The Pennsylvania Office of International Business Development hosted all of their international trade representatives for a two-week road show in the state from September 12-23.  During those two weeks, the representatives visited all 10 of the state’s economic development regions and, in each location, meet one on one with local companies interested in exploring further international trade opportunities.  EDI’s Trade Director, Seth Vogelman, represented the company at the event.  EDI is now in its 23^rd year of representing the export promotion interests of the state in the Middle East.

Delaware Promotes Exports to the Middle East

During the week of September 5^th EDI’s Trade Director, Seth Vogelman, was in Delaware to meet with local companies interested in exploring export opportunities in the Middle East.  The visit also served as a recruiting vehicle for the state’s planned trade mission to Israel in March, 2020.  During that mission the Secretary of State’s Office will be in Israel as well to meet with law firms, given the large number of Israeli companies whose US operations are registered in Delaware.  EDI is now in its 22^nd year of representing the trade and corporate registration interests of the state in Israel and the Middle East.

Invest Hong Kong’s Jayne KC Chan Visits Israel in September

Jayne KC Chan, Head of StartMeUpHK, visited Israel in September and met with post-early stage tech companies considering Hong Kong as a location for their Asian headquarters.  Invest Hong Kong regularly sends their senior people to all of their overseas offices to support the work of the local representatives.  Atid EDI Ltd. represents the interest of Invest Hong Kong in Israel.

Invest Hong Kong to Exhibit at Israel-China Summit

As in 2018, Invest Hong Kong, the foreign direct investment attraction arm of the government there will have a booth at the Israel-China Summit.  The event will take place on October 31^st at the Avenue Event Space near Airport City outside Tel Aviv.  EDI has represented the investment attraction efforts of Hong Kong in Israel for the last seven years and will manage their presence at this event as well.

Ukraine Mission to Israel Schedule for Late November

The Ukraine Export Promotion Office will sponsor a mission of eight food sector companies to Israel at the end of November.  The companies will display their wares at Ukraine’s booth at ISRAFOOD 2019 in Tel Aviv, the annual international event for the food and hotel industry.  EDI, in its role as trade consultants to the EPO, will arrange B2B meetings for each of the companies and will physically administer the booth as well.   This is the fourth mission that EDI has handled for the EPO in the last 18 months with a sixth planned for Turkey in early 2020..

Cedar Park, Texas Delegation to Visit Israel    

In mid-November the Mayor, City Manager and Economic Development Director of Cedar Park, Texas, a suburb of Austin will be in Israel to meet local companies interested in exploring business opportunities in the state.  Ben White, the Director of Economic Development, was in Israel for the first time in March on a visit organized by EDI and determined that it was worth a return trip to pursue opportunities further.  This time the Mayor and City Manager will join him for a longer visit of five days.  EDI is organizing and accompanying this visit.

New Mexico Governor to Visit Israel

Michelle Lujan Grisham, the Governor of New Mexico will be in Israel the week of November 18^th as part of a Democratic Governor’s Mission which also includes the governors of Maine and Rhode Island.  During the visit, in addition to political and government related visits, Governor Grisham will meet with companies considering opening operations in the western U.S.  The governors will also be hosted at a special dinner on the 18^th sponsored by the Israel-America Chamber of Commerce (AMCHAM) in which EDI will participate as well.  EDI has represented the trade and investment interests of New Mexico in Israel for the last 15 years.

EDI to Conduct Kentucky Trade Webinar

On November 12^th, in cooperation with the Kentucky World Trade Center, EDI will conduct a webinar for local companies interested in exploring export opportunities in the Middle East.  It is expected that 30-40 local companies will participate.  The webinar emanates from visits that EDI made to Kentucky in June and November 2018 in an effort to make companies there aware of the opportunities in this region.

Illinois Agricultural Leadership Foundation (IALF) Coming to Israel

IALF will bring the 2020 graduating class of agricultural executives to Kenya and Israel in March 2020.  In preparation for that visit the professional leadership team will visit Israel in early November to do the pre-planning for that mission.  EDI has been engaged to handle both visits and plan the mission in cooperation with IALF.  EDI is also the Middle East regional trade and investment representative of the Illinois Department of Commerce.