On 17 December, Prime Minister and Minister of the Economy and Industry Benjamin Netanyahu signed the natural gas development agreement in the Neot Hovav Eco Industrial Park in the Negev, exactly one year after former Antitrust Authority director general Prof. Gilo revoked an agreement he had reached with Delek Group and Noble Energy. Netanyahu signed the gas agreement after the process of consultation with the Knesset Economics Affairs Committee concerning the invoking of Section 52 of the Restrictive Trade Practices Law was officially completed, even though the committee recommended that the section not be used. The agreement becomes effective, subject to a High Court of Justice hearing in February.

The proposed outline seeks to regulate the development, harvesting, and royalties from the Leviathan, Tamar, Tanin and Karish offshore fields, as well as any future natural gas finds. The Leviathan natural gas field, discovered in 2010 some 130 kilometers west of Haifa, holds an estimated 22 trillion cubic feet of natural gas. The field is the world’s largest offshore discovery of the past decade. Opponents of the new framework say it caters to the big tycoons by letting them use the gas mainly for export while selling the rest at an inflated price to the domestic market.

Responding to the critics of the gas plan, Netanyahu said, “The discussion has become demagogic. I decided to approve the gas plan, because we must not be dependent on a single gas platform, a single pipeline… We had to overcome all this demagogy.” Netanyahu said that European countries were interested in gas in Israel, without specifying the countries, adding, “This gas is environmentally clean, will lower the cost of living, and give us billions of shekels for our needs. I am finishing this speech and giving gas to Israel and its people.” (Globes 17.12)

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1.2 Steinitz Approves Gas Export Deal to Egypt

Energy Minister Steinitz approved the Tamar partners’ request to export gas to Dolphinus Holdings in Egypt, after Ministry of Energy Petroleum Commissioner Wurzburger consulted with Prime Minister Netanyahu. The agreement, valued at NIS 5 billion, accounts for the transfer of 5 BCM to industrial clients in Egypt over three years. The natural gas from the Tamar reservoir will flow to Ashkelon on Israel Natural Gas Lines’ system and Dolphinus will be responsible for its flow through the existing pipeline – operated by EMG – as reported by the partners when the deal was signed in March.

However, several obstacles may still delay the deal. First, the deal must be approved by the Egyptian government, which halted all talks with Israel on the import of gas after an international ruling required Egypt to pay Israel Electric Corporation compensation to the tune of $1.8 billion. Second, the deal must be approved by the operator EMG. Finally, the pipeline must be adapted to accommodate the flow of gas not only from Egypt to Israel, but from Israel to Egypt. (Globes 24.12)

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1.3 Albanian PM Praises Israel as Innovation Powerhouse

Albania would be well served by learning from the Israeli experience in a variety of fields, Albanian Prime Minister Edi Rama said on 21 December in a meeting with Prime Minister Benjamin Netanyahu. Rama arrived in Jerusalem for talks with Israeli officials. During his meeting with Netanyahu, the two signed bilateral agreements on medical cooperation and other matters. The two men also signed a declaration of friendship to mark 25 years of diplomatic relations.

Albanian Prime Minister Rama said that his country was interested in strengthening relations with Israel and in bilateral cooperation on security, cyber, water, energy and innovation. Rama noted that Albania would be pleased to learn from Israel’s successes in innovation and added that he would like to encourage Israeli businesspeople to invest in Albania.

Rama also met with Israeli Energy Minister Steinitz. Among the issues discussed was the export of Israeli natural gas to Albania and from there, using a planned pipeline, to Italy. Rama also visited the Yad Vashem Holocaust memorial museum. During the tour, representatives of both countries signed a memorandum of understanding to increase cooperation on Holocaust education in both countries. (IH 22.12)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Cornerstone Laid for China’s First Israeli University

The cornerstone for the Guangdong Technion Israel Institute of Technology (GTIIT) was laid in Shantou on 16 December. This is the first Israeli university in China. It will be operated by the University of Shantou. The groundbreaking ceremony was attended by thousands of guests including former Israeli President Peres and Hong Kong-based billionaire Li Ka-shing, who has made many investments in Israel. The first students will begin their courses in 2016. Li Ka-shing donated $130 million for the project through his foundation. (Globes 17.12)

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2.2 Israeli Algo-Commerce Company Feedvisor Raises $5 Million

Israeli algo-commerce company Feedvisor closed a $5 million financing round led by Australian venture capital firm Square Peg Capital. This latest investment follows the $6 million Series A funding in August 2014 and brings Feedvisor’s total capital raised to date to $13 million. The round also included participation from existing investors, JAL Ventures and Titanium Investments. The company will use this capital to continue accelerating growth and global business expansion, including opening offices in the US. The company’s customer base has grown by over 200% since its previous round of funding. Today, Feedvisor is used by hundreds of online retailers worldwide to manage over $1.5 billion in gross merchandise volume.

Tel Aviv-based Feedvisor was founded in 2011. Feedvisor has developed algo-commerce, using big data and machine learning algorithms to make business-critical decisions for online retailers, which enables online retailers to price dynamically without a need to continuously program complex pricing rules. Instead, Feedvisor’s machine learning algorithms automatically analyze market dynamics, changes in demand, and price perception, enabling accurate pricing decisions that eliminate human bias. (Feedvisor 21.12)

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2.3 NowForce Raises $4.5 Million in Series B Funding

NowForce has raised $4.5 million in a Series B round of funding led by Verint Systems, along with the participation of current investors Winnovation, Indigo Strategic Holding LP and Monet Venture Group Limited. NowForce offers personal safety applications, cloud-based computer aided dispatch and mobile response tools for campus security, private security, and public safety organizations, enabling reduced response times, full situational awareness, and enhanced communications.

Jerusalem’s NowForce offers comprehensive emergency response solutions for campus security, private security, and public safety organizations, enabling reduced response times, full situational awareness and enhanced communications. NowForce’s end-to-end solution closes the loop surrounding emergency response by giving citizens the tools to directly contact the command center and by giving the command center the tools to dispatch the closest, most qualified responders. The solution includes personal safety apps, cloud-based computer aided dispatch (CAD), and mobile response tools. (NowForce 15.12)

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2.4 Delta Galil & Columbia Sportswear Sign Licensing Agreement for Performance Underwear

Delta Galil Industries announced an exclusive global licensing agreement to develop, produce and distribute performance-based underwear collections for Columbia Sportswear. This represents a significant expansion into the performance underwear category by Columbia Sportswear, the flagship brand of the global leader in active outdoor apparel, footwear, accessories and equipment, Columbia Sportswear Company. Under the licensing agreement which is in effect through 2018, Delta Galil will produce a range of Columbia Sportswear products including a full collection of women’s sports bras and underwear, as well as men’s underwear. The first performance underwear collections for Columbia Sportswear will launch at the Outdoor Retailer Winter Market Expo in Salt Lake City, Utah, January 2016, with early previews beginning mid-December through the end of the year. The collections will be available for Fall 2016 at Columbia retail stores, outdoor specialty stores, sport specialty stores and better department stores worldwide. Delta Galil is also the exclusive global licensee of men’s and women’s socks for Columbia Sportswear.

Performance underwear products are engineered with specialized features, such as moisture management and anti-microbial properties, to meet the needs of consumers with active lifestyles.

Tel Aviv’s Delta Galil Industries is a global manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually strived to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; extensive lines of underwear for men; babywear, activewear, sleepwear, and leisurewear. (Delta Galil 21.12)

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2.5 CellSavers Raises $3 Million in Seed Funding from Sequoia Israel

On-demand smartphone repair service provider CellSavers has raised $3 million in seed funding from Sequoia Israel. Angel investor Robert Antokol (CEO, Playtika) also participated in the round. Along with the funding, Sequoia Israel partner Gili Raanan will join the CellSavers board. CellSavers is already active in several major cities across the U.S. and recently launched in San Francisco. This investment will help CellSavers enhance its technology-driven logistics and expand into other major U.S. cities in the billion dollar smartphone repair market.

CellSavers’ online booking process is seamless and quick, with predetermined prices and no surprises, expert assistance typically available within 30 minutes or less, premium parts and a lifetime warranty. The company has already repaired thousands of phones across the country, while providing industry standard-setting service that is consistently praised by consumers.

Tel Aviv’s CellSavers is the easiest, safest and most professional way for smartphone users to have their device repaired, all within the hour at their preferred location, such as home, office, café or gym. With customer satisfaction at its core, CellSavers’ expert phone technicians are extensively vetted and tested to ensure that every interaction ends with a delighted customer. (CellSavers 21.12)

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2.6 IAI Signs Chinese Civil Aviation Agreement

Israel Aerospace Industries has signed a strategic framework agreement to cooperate with the Shantou Municipal Government of China, the Guangdong Airport Authority (GAA) and other Chinese partners, to develop and expand the local civil aviation industry as a lever of economic growth in the municipality.

IAI is Israel’s largest aerospace and defense company and a globally recognized technology and innovation leader, specializing in developing and manufacturing advanced, state-of-the-art systems for air, space, sea, land, cyber and homeland security. Since 1953, the company has provided advanced technology solutions to government and commercial customers worldwide including: satellites, missiles, weapon systems and munitions, unmanned and robotic systems, radars, C4ISR and more. IAI also designs and manufactures business jets and aerostructures, performs overhaul and maintenance on commercial aircraft and converts passenger aircraft to refueling and cargo configurations. (IAI 23.12)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Taste for Variety and Health-Consciousness Driving Lebanese F&B Industry

Lebanon is endowed with many assets that allow for its food and drink industry to thrive. Lebanese consumers are liberal and have a taste for variety and novelty products and therefore can easily lure foreign companies into the Lebanese market. Moreover, Lebanon has a high proportion of skilled labor compared to other countries in the region. Lebanon’s climate also allows it to be one of the most agriculturally productive in the region. The drinks segment holds great potential for both sub-sectors of alcoholic drinks and soft drinks. The alcoholic segment, led by the wine-sub-sector, benefits from the local producers’ long history and reputation as well as the widespread Lebanese diaspora which creates export opportunities. As for the soft drinks segment it will reap the benefits of the rise in health consciousness amongst consumers. (Blom 19.12)

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3.2 Bahrain’s $100 Million Dragon City Mall Opens for Business

Bahrain’s Dragon City, a new Chinese-themed shopping mall hosting more than 500 companies, has opened for business. The mall, managed by the China Middle East Investment and Trade Promotion Centre (Chinamex), aims to raise the profile of Chinese products across the GCC, as well as aim to increase the number of regional visitors to the kingdom. The Bahrain Dragon City site includes a 50,000 sq. m. market, along with a warehouse facility, a leisure complex and restaurants which aims to strengthen family tourism, the statement added. Officials said the logistics and warehousing facilities will enable the Chinese companies present to take full advantage of Bahrain’s transport infrastructure, including the Bahrain International Airport and sea ports.

A large number of leading Chinese companies have already established facilities in Bahrain or are using the kingdom as their regional headquarters, including Huawei, Bank of China, China Harbour Engineering Company Ltd, China CommService and CPIC. (AB 28.12)

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3.3 Saudi’s ACWA Signs $400 Million Deal for Jordan Power Plant

Jordan’s state-owned National Electric Power Co. signed a $400 million contract with Saudi Arabia-based ACWA Power for construction of a 480 MW plant. The new facility will replace Jordan’s oldest plant, the Hussein Thermal Power Station in the Red Sea port of Aqaba. It will be completed by the end of 2019 and run primarily on natural gas as well as gasoline. The Hussein thermal station uses heavy fuel and gasoline and has a generating capacity of 198 MW. Jordan plans to add 600 MW of solar and wind power by 2016, Energy Minister Ibrahim Saif said on 14 September. Jordan awarded Enviromena Power Systems and TSK Group a contract to build a 100 MW solar plant. (AB 21.12)

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3.4 Yahoo to Close Last Arab State Middle East Office in Dubai

Yahoo will close its last Middle East office in Dubai next year, as the US internet giant looks to “streamline” its business. The 50 members of staff at the office in Internet City were informed of the decision to close the office in April 2016. The Dubai office, which is the company’s only Arab state operation following the closure of offices in Amman and Cairo, opened in 2009 when it acquired the Jordan-based Maktoob for $164 million, with a view to bolstering its presence in the region. The company employed as many 400 people at one point, before the Jordan and Egypt offices were closed in 2014. In January this year, Yahoo let go almost half of its staff in Dubai, but remained adamant about its future presence in the region.

The Yahoo Labs site in Haifa, founded in September of 2007, remains active. The research scientists and engineers in Haifa work closely with their Yahoo Israel sister engineering site in Tel Aviv. (AB 16.12)

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3.5 Abercrombie & Fitch Expands With First A&F Branded Store in the UAE

Abercrombie & Fitch Co. announced that its Abercrombie & Fitch brand will open its first store in the UAE at Dubai’s luxury shopping center, the Mall of Emirates, on 26 December 2015. The store is being opened pursuant to a joint venture between Abercrombie and Fitch and Majid Al Futtaim Fashion. The new location is the brand’s third store in the region, following the opening of two stores in Kuwait in early 2015. The Dubai opening marks several firsts for the brand, including a newly designed concept store featuring a stand-alone fragrance boutique and a carve-out for the abercrombie kids brand. The 18,000 square foot store is one of the largest Abercrombie & Fitch mall-based stores globally and features the brand’s signature style and inviting shopping environment.

Majid Al Futtaim Fashion is the fashion retailing arm of Majid Al Futtaim. It currently works with a number of leading fashion brands throughout the GCC & Levant region including Abercrombie & Fitch Co., Hollister, Juicy Couture, HOSS Intropia, Halston Heritage and Jane Norman. Majid Al Futtaim Fashion recently announced strategic partnerships with leading brands AllSaints, Maisons du Monde and lululemon athletica. Founded in 1992, Majid Al Futtaim is the leading shopping mall, retail and leisure pioneer across the Middle East and North Africa (MENA). (Abercrombie & Fitch 15.12)

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3.6 Hilton to Debut Hampton Hotel Brand in Saudi Arabia

Hilton Worldwide has announced the arrival of Hampton by Hilton to Saudi Arabia after the signing of a management agreement to open Hampton by Hilton Riyadh Olaya. The 154 guest-room hotel, which is owned by the FAS Hotels Group and will be operated by Hilton Worldwide, is expected to open in early 2018. Joining more than 2,000 Hampton by Hilton hotels operating across the world, Hampton by Hilton Riyadh Olaya will offer a breakfast area, living and working zones, juice bar, 24-hour fitness facility and a 55 square meter conference room. Strong development momentum for Hilton’s mid-market brands in the Middle East has seen this year’s announcement of the world’s largest Hampton by Hilton hotel which is currently under development in Dubai’s Al Qusais district. Upcoming openings in Saudi Arabia also include the luxury Conrad Makkah, expected to welcome guests in early 2016. (AB 16.12)

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3.7 UAE’s Lulu Plans $300 Million Investment in Egypt

UAE-based retail conglomerate Lulu Group has opened its first hypermarket in the Egyptian capital Cairo, the start of a $300 million investment in the North African country. The new store is located in Twin Plaza, opposite the Police Academy on the Zakir Hussein road extension in the 1st settlement of New Cairo. Spread over an area of 170,000 square feet, the new outlet is the group’s 119th hypermarket opening. The group is planning to invest $300 million opening 10 new hypermarkets in Egypt over the next 2 years, creating around 10,000 new jobs. Lulu Group currently has stores in the GCC and India plans to open 15 more hypermarkets over the next two years. (AB 20.12)

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3.8 Saudi’s SALIC Considers Purchasing Land in Sudan to Grow Fodder

Saudi Agriculture and Livestock Co (SALIC), an arm of the state-owned Public Investment Fund, is looking to buy land in Sudan to grow fodder. Saudi Arabia has been phasing out growth of crops due to their intense water usage which was depleting reserves in the desert kingdom. A cabinet statement this month said cultivation of green fodder would be stopped in the next three years. To support this and to maintain food supplies for its young and increasingly affluent population, Saudi Arabia embarked on a program last year to build agricultural operations abroad. SALIC has targeted investments in beef and eight key crops, including wheat, barley, corn and soybeans. (Reuters 26.12)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Environment Ministry Invests $3.5 Million to Fight Air Pollution

Israel’s Environmental Protection Ministry has announced that it will invest NIS 14 million ($3.5 million) in projects to encourage less use of private vehicles and greater use of public transportation and bicycles. The sum comes in addition to the NIS 6 million ($1.5 million) already transferred to local authorities in the past year to promote similar initiatives. According to the assessments, the investment will lead to less gasoline consumption, air pollution and traffic congestion, as well as shorter travel times to and from work.

Within the framework of the first phase of its plan for 2016, the ministry will provide support to local authorities to implement clean-air projects in the major cities, encourage people to ride bikes, and operate transportation services to and from employment hubs. The ministry will allocate funding to local authorities according to the size of their populations, yearly exhaust emissions from vehicles, and the quality of the plans submitted by the local authority to decrease air pollution. (IH 21.12)

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4.2 King Abdullah II Inaugurates Largest Utility Scale Wind Power Plant in Jordan

The first and largest utility scale wind power plant in Jordan, the Tafila Wind Farm, was inaugurated on 17 December under the patronage of King Abdullah II. The 117 MW wind farm is directly connected to the national grid and will produce 400 gigawatt-hours of electricity annually. The project is in line with a royal vision to diversify energy sources and promote greater reliance on renewable energy. The Tafila Wind Farm was developed in response to the 2010 renewable energy law, calling for around 10% of electricity to come from renewable sources by 2020. Jordan imports around 96% of its energy needs at a cost equivalent to 20% of the country’s GDP.

At JD85 per megawatt-hour, the wind turbines will produce electricity at less than half the cost of generation for conventional power sources. The project will save the government around $50 million every year, and will supply approximately 3.5% of the country’s annual electricity consumption. Jordan Wind Project Company (JWPC) is an international coalition that includes, InfraMed Infrastructure Fund (France), Masdar (UAE) and EP Global Energy (Cyprus). (Advvise 17.12)

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4.3 Jordan Has More Solar Energy Projects in Pipeline

Jordan will sign in Q1/16 deals under which international companies will build two solar-run power plants with a total capacity of 100 MW. Amman has awarded contracts to Greece-based Sunrise Photovoltaic Systems and Saudi Oger to each build a 50 MW solar plant. The signing of the agreements for the two power plants will take place after paperwork is completed. The projects are scheduled to be completed in 18 – 24 months. Work is also under way on an 80 MW wind plant that will be located in Maan; the wind plant will be completed in H2/16.

The entire ecosystem for renewable energy projects in Jordan is promising and encouraging as studies by energy authorities indicate that the Kingdom has more than 300 sunny days a year. In addition, wind speeds in the northern region reach as high as 7.5 meters per second and 11.5 meters per second in the eastern areas of the country. Jordan imports about 97% of its energy needs annually at about 18% of the gross domestic product. (JT 26.12)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanese Deflation at 3.9% in November 2015

According to the Central Administration of Statistics (CAS), consumer prices in Lebanon fell by 3.90% in November since the Consumer Price Index (CPI) declined from 100.50 in November 2014 to 96.60 in November 2015. On a year-to-date basis, consumer prices fell by 2.71% on account of subdued energy prices but also on account of a weaker euro, especially since around 40% of Lebanon’s imports come from Europe. The euro lost 13% since year start, going from €/$1.2098 in December to €/$1.0565 in November 2015. November’s deflation was mainly the result of to lower energy prices.

Due to global oversupply, the price of Brent crude oil slashed annually by a yearly 50.29% from $88.26per barrel in November 2014 to $43.87 per barrel in November 2015. This was reflected in Lebanon by the 10.70% y-o-y slump in the price of transportation, a component with a weight of 13.1% in the CPI. With cheaper oil, the price of water, electricity gas and other fuels (11.9% weight of CPI) also declined by 18.10% in November 2015. In addition, Health prices, with a weight of 7.8%, downturned by 6.82% yearly. The basket of food and non-alcoholic beverages is also responsible for November’s deflation, declining by 2.12% y-o-y and representing 20.6% of the CPI. In spite of lower energy and F&B prices, some baskets of goods and services witnessed price upturns in November. Education prices, with a weight of 5.9% in the CPI, rose by a yearly 1.52% while the prices of clothing and footwear, with a weight of 5.4% in the CPI, increased by 3.48%. (CAS 22.12)

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5.2 Number of Tourists to Lebanon Increased by 14.13% by November

Lebanon’s tourism sector improved to reach 1.39m tourists by November 2015, its highest level in 4 years. According to the Ministry of Tourism, the number of incomers by November 2015 surged by 14.13% from 1.22m recorded by November 2014. European visitors took 33.50% of the total, augmented by 14.23% y-o-y, to number 467,144. French tourists were the largest share of European tourists at 26%, up by a yearly 12.5% to 123,359. The number of incomers from Germany, the UK and Turkey also saw respective improvements of 11.17%, 16.24% and 35.68% y-o-y to 70,064, 52,203 and 19,254 during the first 11 months of the year.

The number of Arab tourists, constituting 31.64% of the total, displayed a yearly increase of 7.71%, to record 441,194 by November 2015. As for Iraqi incomers, their share was the largest among Arab tourists at 40%, and increasing by an annual 6.87% to 177,154, over the same period. A large part of Iraqi tourists are actually refugees that are granted a tourist visa. The number of Egyptian and Saudi visitors registered the most distinct increases going from 61,272 to 68,077 and from 41,281 to 44,030 respectively. The number of UAE incomers also progressed by 18.45% annually to 6,423 by November 2015. As for American travelers, accounting for the third major portion of the total at 18.92%, their number reached 242,634 in the first 11 months of 2015, a 17.40% y-o-y increase from the same period last year. In November alone, the number of tourists surged by 12.18% y-o-y to 99,952. The number of Arab, European, and American tourists all grew by 6.94%, 10.76%, and 17.20% to 36,443, 30,755 and 13,465, respectively compared to the same month last year. (MoT 19.12)

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5.3 Number of Lebanese Registered Cars Increased by 3.79% by November

According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars during the first 11 months of 2015 increased by 3.79% year-on-year (y-o-y) to 38,037 cars, which might be in line with decline in prices of new cars and new promotion due to competition. In fact, in November alone, the number of total newly registered cares surged by 24.83% to 3,303 from November of last year. Newly registered passenger cars grasped 94.44% of total registration while newly registered commercial cars constituted the remaining 5.57%. With that in mind, the slight progression on the sum of both came about from the annual 4% increase in newly passenger registered cars to 35,921 by November which was slightly offset by the 0.42% yearly decline to 2,117 in commercial ones.

There was a change in the market share of car importing-countries, due to the average 15% y-o-y depreciation of both the Japanese Yen and the Euro against the US dollar to Euro/Dollar 1.13315 and Dollar/Yen 121.445, respectively by end-November. For instance, Japanese cars were the most demanded cars in Lebanon in the first 11 months, with their share improving from 35.1% in 2014, to 39.87% this year. Meanwhile Korean cars lost their hold on the number one spot, going down from 39.49% to 32.85% in 2015. European cars maintained their third rank, however with a higher market share of 20.87%, compared to 18.90% in 2014. Kia held the largest market share of 18.24% of the total, followed by 16% for Toyota. Hyundai and Nissan respectively grasped shares of 14.47% and 10.48%. (Blominvest 19.12)

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5.4 Iraq Seeks to Reopen Oil Pipeline Through Saudi Arabia

Iraq is seeking to reopen its crude oil export pipeline through Saudi Arabia, shut in 1990. Saudi Arabia shut the pipeline in 1990, after Iraq’s invasion of Kuwait. The pipeline used to carry Iraqi crude to the Saudi terminal of Yanbu on the Red Sea. The pipeline was built in the 1980s, during the Iraq-Iran war, to diversify Iraq’s exports routes when the two countries were attacking each other’s tankers in the Arabian Gulf. (Reuters 24.12)

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►►Arabian Gulf

5.5 Gulf Arab Defense Spending Drops for First Time in Decade: Report

London-based global intelligence firm IHS said that low oil prices are eating into defense spending in the Gulf region, one of the world’s largest arms markets, with budgets trimmed for the first time in a decade this year and deeper cuts expected in 2016. Overall spending fell to $81.6 billion in 2015 from $86.7 billion last year, despite Gulf Arab military interventions in Yemen and Libya, arms supplies sent to Syrian rebels and air strikes against Islamic State in Syria. Military spending dropped in Saudi Arabia, Kuwait, Bahrain, Qatar and the United Arab Emirates, while Oman spent only slightly more.

Despite this year’s fall, spending on arms remains substantially higher than four years ago when it was ramped up in the wake of uprisings across the Arab world which alarmed the region’s conservative rulers. Gulf Arab states have also built up missile defenses against regional rival Iran.

Those security concerns, along with record oil revenues, had propelled the Middle East to become the fastest growing regional weapons market. Gulf spending surged in 2012, up to $71.9 billion from $59.1 billion in 2010. This year’s cuts come as part of a broad effort to rein in state spending as lower oil prices strain finances in the major oil-exporting countries. Oil prices trade now around $37 a barrel, down from a peak of $115 last year. Led by the Gulf trend, spending in the broader Middle East also dropped in 2015, but is likely to remain largely flat at $170 billion over the next two years. Saudi Arabia still spends the most on defense in the region, some $46.3 billion, accounting for more than half of the Gulf’s military budgets and making it the eighth-largest defense spender in the world, according to IHS. (AB 17.12)

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5.6 Kuwait Expects 2015-16 Budget Deficit of Nearly $20 Billion

Kuwait expects the actual 2015-16 budget deficit to be between $16.5 to $19.8 billion, the Finance Ministry Undersecretary Khalifa Hamada said, lower than original projection. Hamada also announced that Kuwait planned to unify corporate taxes on local and foreign companies at 10% and expected revenues from such a move to exceed 2 billion dinars a year. The official also said that Kuwait was still studying better management of fuel subsidies, but any changes would begin with petrol. He said that better management of fuel subsidies would earn the country 1 billion dinars in savings. (Reuters 16.12)

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5.7 Kuwait Mulling Free Trade Zones on Five Islands

Kuwait is considering establishing free trade zones on five of its islands, State Minister for Planning and Development Al Sabeeh said. The proposal would help the Gulf state diversify from oil. Kuwait is expected to record its first deficit in nearly two decades this financial year amid lower oil revenues, which account for about 90% of GDP. Al Sabeeh said the “comprehensive and multi-purpose” free trade zones “would act as an economic and cultural gateway for the northern Gulf region and Kuwait, and would support the Kuwaiti economy – thus raising its regional and international competitiveness,” Arab Times reported. The islands being considered are Boubyan, Failaka, Warba, Miskan and Awha, some of which lie close to the shores of Iraq and Iran. The government is already building a multi-billion dollar container harbor at Boubyan. The islands are also close to Kuwait’s planned Silk City project in Subbiya. Work is underway on a 25 km., $2.6 billion causeway linking the capital with Subbiya. If approved, the private sector would be asked to finance, execute and operate the free zones. (AB 20.12)

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5.8 Bahrain Cabinet Approves New Fuel Pricing System

Bahrain’s cabinet has approved a new pricing system for diesel and kerosene that is set to begin in January, according to state news agency BNA. The new pricing system is expected to result in a “gradual increase” in the cost of both fuels to domestic customers in the coming years, as Bahrain adjusts its prices to reflect expected rises in other Gulf Cooperation Council (GCC) states. The pricing system comes after a detailed study with the relevant authorities and parliamentary committees in the kingdom “tasked with looking at subsidies and growing government revenues”, said the statement. The decision will benefit Bahrain’s national economy and, at the same time, preserve the interest of citizens, the statement added. (BNA 28.12)

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5.9 Bahrain Says $32 Billion Projects Will Underpin Economic Growth

Infrastructure investment totaling $32 billion will underpin Bahrain’s long-term economic growth, according to Crown Prince Salman bin Hamad Al Khalifa, chairman of the Economic Development Board (EDB). He said the Gulf kingdom is implementing a comprehensive program of structural economic and fiscal reforms to further strengthen its long-term development. He added in a statement that the program is underpinned by three pillars – streamlining government expenditure, further redirecting government subsidies towards citizens, and a series of economic reforms and infrastructure projects worth more than $32 billion to increase investment and maintain growth. Diversification efforts have led to stable economic growth, which is forecast to reach 3.6% in 2015, and that the contribution of the financial services, manufacturing, and construction sectors now exceed that of the oil sector, which contributes only a fifth of GDP. (AB 19.12)

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5.10 Saudi Arabia Plans Spending Cuts, Revenue Push to Shrink 2016 Deficit

Saudi Arabia, its finances hit by low oil prices, announced plans to shrink a record state budget deficit with spending cuts, reforms to energy subsidies and a drive to raise revenues from taxes and privatization. The 2016 budget, released by the finance ministry on 28 December, marked the biggest shake-up to economic policy in the world’s top crude exporter for over a decade, and includes politically sensitive reforms from which authorities previously shied away.

The plan suggests the kingdom is not counting on a major recovery of oil prices any time soon but is instead preparing for a multi-year period of cheap oil. The IMF warned in October that Riyadh would run out of money within five years if it did not tighten its belt.

The government ran a deficit of 367 billion riyals ($97.9 billion) in 2015, or 15% of GDP, officials said. The 2016 budget plan aims to cut that to 326 billion riyals, reducing pressure on Riyadh to pay its bills by liquidating assets held abroad. Next year’s budget projects spending of 840 billion riyals, down from 975 billion riyals actually spent this year. The finance ministry said it would review government projects to make them more efficient and ensure they were necessary and affordable.

Revenues next year are forecast at 514 billion riyals, down from 608 billion riyals in 2015. The Brent oil price averaged about $54 a barrel this year but is now about $37. The success or failure of the budget plan will be key to maintaining the confidence of financial markets in Riyadh. The government plans to introduce a value-added tax in coordination with other countries in the region, and raise taxes on soft drinks and tobacco, the ministry said without giving a timeline. (Reuters 28.12)

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5.11 Saudi Arabia Raises Domestic Energy Prices

Saudi Arabia has raised domestic energy prices, including fuel prices. Domestic fuel, water and electricity prices are currently among the lowest in the world because of heavy state subsidies. Raising the prices would reduce pressure on the state budget and would be one of Saudi Arabia’s biggest economic reforms in many years. The world’s largest oil exporter has set the price of 95 octane gasoline at 0.90 riyals ($0.24) per liter, up from the current price of 0.60 riyals per liter. The kingdom has also raised prices for gas, diesel and kerosene.

Earlier, the government said it was hiking prices for fuels, water and electricity as well as gas feedstock used by industry, as part of subsidy reforms designed to help state finances cope with low oil prices. The price of methane was raised to $1.25 per million British thermal units and ethane to $1.75; previously, both were at $0.75, among the lowest in the world. (Reuters 28.12)

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5.12 Oman Said to Privatize Three State-Owned Firms In 2016

Oman plans to privatize three state-owned companies next year, Finance Minister Darwish Al Balushi said, declining to give further details. Gulf governments are expected to consider privatizing state assets as they seek to raise cash at a time of lower oil prices, which have hit their revenues. Oman posted a budget deficit of 2.68 billion rials ($6.97 billion) in the first eight months of this year, against a 205.7 million rial surplus a year earlier, because of lower oil export prices. (AB 19.12)

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►►North Africa

5.13 32.5 million Internet Users in Egypt by September 2015

In September 2015, the number of internet users in Egypt registered 32.5 million, according to a report from the Ministry of Communications issued in December. The report showed that mobile Internet accounted for the largest share of internet users. There were 25 million users in September 2015, a 5 million increase and a 23.1% growth rate compared to September 2014, when 20.3 million users were recorded. As for USB internet users, there are around 4 million users compared to 3.9 million in September 2014, marking a 2% increase. USB internet occupied second place in terms of the number of users.

Last September, mobile internet users recorded 26.8% of the total mobile phone users, compared to 21.4% recorded in September 2014, marking a 5.4% growth. According to the Ministry of Communications’ report, the number of ADSL internet users increased to 3.6 million in September 2015, compared to 2.9 million users in September 2014, marking a 22.1% increase. The report also showed that Greater Cairo acquired the largest share in the number of internet users, at 45%, while the Delta region came in second place at 27%. Alexandria and Matrouh both accounted for 12% of the total number of internet users, while Upper Egypt stood at only 10%, and the Suez Canal cities and the Red Sea governorate together accounted for 6%. (DNE 23.12)

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5.14 Morocco Ranks 62nd in List of Best Countries for Business

Morocco was ranked 62nd out of 144 countries in Forbes’ 2015 ranking list of the Best Countries for Business. Forbes ranked Morocco as the best destination to do business in North Africa, gaining 17 places compared to last year’s ranking. It came ahead of Tunisia, Mauritania, Algeria and Libya who ranked 82, 129, 137 and 142 respectively. On the Arab level, Morocco ranked fourth, only behind the UAE, Qatar and Jordan, who ranked 40th, 48th and 60th respectively. Morocco ranked in the third position in Africa, preceded by Mauritius (37th) and South Africa (47th). The ranking highlighted that Morocco demonstrated a remarkable advance in terms of Monetary Freedom (22nd) and Trade Freedom (73rd).

Despite the progressive achievements and high ranking compared to the African and Arab countries, Morocco is invited to do many efforts regarding other indexes. The country ranked 98th in Innovation, 98th in Personal Freedom, 92nd in Investor Protection, 78th in Technology, and 72nd in the index of Corruption. Morocco performed average regarding Red Tape (38th), Tax Burden (54th), Market Performance (62nd) and Property Rights (62nd).

In the World Bank’s 2016 Doing Business report, released last October, Morocco ranked 75th in the overall ranking, moving up five places from last year’s ranking thanks to the reforms implemented by the country to improve the business environment. (MWN 16.12)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkish Consumer Confidence Drops 4.6% in December

Turkey’s consumer confidence index dropped to 73.58 in December from 77.15 in November, the Turkish Statistics Institute (TurkStat) said on 21 December. The index hit a six-and-a-half year low of 58.52 in September but has since recovered. It still indicates a pessimistic outlook, however, and would need to rise above 100 to indicate optimism. (TurkStat 21.12)

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6.2 Greece’s Jobless Rate Drops To 24% in Third Quarter

Greece’s jobless rate fell to 24% in the third quarter from 24.6% in the April-to-June period, data from ELSTAT showed on 17 December. The highest unemployment rate was recorded in Q1/14, at 27.8%. About 73.7% of Greece’s 1.16 million jobless are long-term unemployed, meaning they have been out of work for at least 12 months. Athens has already published monthly unemployment figures through September, which differ from quarterly data because they are based on different samples. Quarterly figures are not seasonally adjusted.

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The debt crisis and austerity imposed by the EU/IMF lenders in exchange for Greece’s bailouts have wiped out about a quarter of the country’s economic output, driving the jobless rate to record highs. Greece’s economy contracted by 0.9% quarterly pace in the third quarter as capital controls to shore up banks weighed down on investment, exports and consumer spending. The €173 billion economy is expected to shrink by 0.7% in 2016. (ELSTAT 17.12)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Immigration to Israel Reaches a 12 Year High

More than 30,000 new immigrants (olim) came to Israel in 2015, the highest immigration figure since 2003 and 10% more than 2014, the Jewish Agency for Israel and Ministry of Immigrant Absorption announced. Some 7,900 immigrants arrived from France in 2015, a record figure from that country, and up 10% from last year. The ongoing terror attacks in that country have made it the largest contributor to immigration for the second successive year.

The fighting between Ukraine and Russia also boosted immigration, where 7,000 immigrants reached Israel from Ukraine in 2015, up 15% from 2014 and 6,600 immigrants arrived from Russia, up 40% from 2014. Immigration from North America fell slightly to 3,768 in 2015 from 3,871 in 2014. Half of new immigrants were under the age of 30 in 2015. (Various 29.12)

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*REGIONAL:

7.2 Libya’s Rival Parliaments Sign Unity Government Deal

On 17 December, rival Libyan politicians signed a unity government agreement despite opposition on both sides, in what the United Nations described as a “first step” towards ending the crisis. A group of lawmakers from Libya’s rival parliaments, as well as other political figures, inked the UN-sponsored accord in the Moroccan resort of Skhirat. But even within the two legislatures the deal has caused deep divisions.

The heads of both parliaments have warned that the agreement has no legitimacy and the politicians signing the agreement represented only themselves. UN envoy Martin Kobler acknowledged that much remained to be done to end the turmoil. The signing follows a gathering in Rome of a US- and Italian-led group of world powers and regional players that called on the two sides to lay down their arms and back a new unity government. The country has been mired in chaos since the 2011 overthrow and killing of long-time dictator Gadhafi. (AFP 17.12)

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7.3 Morocco Among Most Politically Stable Countries in the World

Morocco is among the most politically stable countries in the world, according to Global Risk Map 2016, published on 14 December. According to the RiskMap report, Morocco is the only country in North Africa to be ranked in the category of low political and security risk countries. Algeria, Mauritania and Egypt are classified between medium and high risk, while Tunisia is listed among countries with high political and security risk. In the Middle East, Iraq, Syria and Yemen are considered as counties with extreme risk. In the Gulf region, the United Arab Emirates, Qatar and Oman are among the countries with low political risk. Saudi Arabia is ranked among countries with medium risk.

According to the report, the level of political stability in Morocco is similar to most Western countries, such as the United States, France, Spain, the UK, Canada, Sweden, etc. According to the British Foreign Office classification of 2015, Morocco has ranked high among the list of “safest countries in the world”, alongside European and North American nations. In November, a new note released by the French Ministry of Foreign Affairs said that Morocco is the safest country in North Africa. (MWN 16.12)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 ApiFix Makes Children’s Scoliosis Surgery Minimally Invasive

ApiFix is helping the parents of children from Australia, Canada and the US who have Adolescent Idiopathic Scoliosis (AIS) to identify spine surgeons in Europe and Israel who have adopted the ApiFix system to treat AIS. ApiFix is approved for sale in Europe and Israel. A clinical study of The ApiFix System was published this year in the peer-reviewed medical journal Scoliosis, which concluded that “there are many drawbacks to the current gold standard of AIS surgery, which are almost nonexistent with the use of ApiFix.”

Misgav’s ApiFix is a commercial-stage company that has developed the CE-marked ApiFix System — a non-fusion minimally invasive treatment alternative for Adolescent Idiopathic Scoliosis (AIS). Scoliosis surgery is the most invasive procedure in spine. The average procedure fuses 10 vertebrae together using 20 screws, resulting in significant and permanent loss of spine mobility. (ApiFix 17.12)

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8.2 Orcam Opens European HQ Following Visit by London Mayor

Meeting London Mayor Boris Johnson in Jerusalem in November helped convince wearable device maker OrCam Technologies to establish its European headquarters in the capital. On 30 November, OrCam opened the doors to its first office in Europe. Dr. Yonatan Wexler, OrCam’s VP for R&D, attended the UKTI event, where Boris Johnson tried on the device.

Jerusalem’s OrCam is the creator of the world’s first wearable device to help people who are visually impaired or blind. It is currently in a pre-launch phase in the UK and will be available across Britain from January. OrCam’s cutting edge technology interprets visual information through a smart camera placed on a pair of glasses and connected to a pocket-sized computer. With a point of a finger, it instantly recognizes text, products and people. It then relays that information to the wearer discreetly via a small personal speaker. (OrCam Technologies 17.12)

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8.3 U.S. Department of Veterans Affairs Issues Coverage Policy for ReWalk Robotics Systems

ReWalk Robotics announced that the U.S. Department of Veterans Affairs (VA) has issued a national policy for the evaluation, training and procurement of ReWalk Personal exoskeleton systems for all qualifying veterans across the United States. The VA policy, which is exclusive to ReWalk Robotics exoskeleton systems, is the first national coverage policy in the United States for qualifying individuals who have suffered spinal cord injury (SCI). The comprehensive policy put forth by the VA provides veterans with spinal cord injury access to referral and evaluation at all designated ReWalk Training Centers across the country. Veterans who meet the physical criteria for ReWalk will be referred for training on the use of the device. Successful candidates will then be eligible to obtain a ReWalk Personal system.

Yokneam’s ReWalk Robotics develops, manufactures and markets wearable robotic exoskeletons for individuals with spinal cord injury. Their mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies.

ReWalk is the only FDA cleared exoskeleton system in the U.S., with clearances for both personal use at home and in the community, as well as for the rehabilitation setting. ReWalk Personal 6.0 is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with spinal cord injury to stand upright and walk. The system provides user-initiated mobility through the integration of a wearable brace support, a computer-based control system and motion sensors. (ReWalk 17.12)

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8.4 Can-Fite’s CF101 Granted Patent in Japan for Intraocular Pressure Drug

Can-Fite BioPharma announced that the Japan Patent Office has granted the company a patent for its lead drug candidate CF101 for the reduction of intraocular pressure (IOP) in a patent titled, “A3 adenosine receptor agonists for the reduction of intraocular pressure.” CF101 is an A3 adenosine receptor (A3AR) agonist that binds to A3AR, which is known to be over-expressed in inflammatory cells. Can-Fite has been granted a similar patent in the U.S. for IOP and has pending applications in other key global markets. Can-Fite’s subsidiary OphthaliX is currently conducting a Phase II trial of CF101 for the treatment of glaucoma in Europe and Israel. Patient enrollment has been completed and top line results are expected in mid-2016.

CF101, an A3 adenosine receptor (A3AR) agonist, is a novel, first in class small molecule orally bioavailable drug which binds with high affinity and selectivity to the A3AR, which is known to be over-expressed in inflammatory cells. The drug acts as a neuro-protective agent and prevents apoptosis of retinal ganglion cells.

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 CF101 drug candidate is currently under advanced clinical development, preparing to enter Phase III trials for two indications, rheumatoid arthritis and psoriasis. Can-Fite’s liver cancer drug CF102 is in Phase II trials for patients with advanced liver cancer and is being investigated as a potential treatment for non-alcoholic steatohepatitis (NASH). (Can-Fite 17.12)

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8.5 BiondVax Patent for its Universal Flu Vaccine in Israel Approved

iondVax Pharmaceuticals announced that its patent application in Israel on the Multimeric Multi-Epitope Polypeptide Influenza Vaccines (a universal flu vaccine), was accepted. This patent application belongs to the main family of patents of BiondVax for vaccination against influenza in humans, and specifically vaccines that confer long-lasting protection against multiple and differing flu strains. The Israeli Intellectual Property Office accepted BiondVax’s claims for M-001 (BiondVax’s universal flu vaccine) and similar polypeptides. Patent protection has already been granted in a number of other countries, namely the United States, Europe, Japan, Hong Kong, Australia, China, Russia, Mexico and Korea.

Ness Ziona’s BiondVax is an innovative biopharmaceutical company developing a universal flu vaccine, designed to provide multi-season and multi-strain protection against most human influenza virus strains, including both seasonal and pandemic flu strains. BiondVax’s technology utilizes a unique, proprietary combination of conserved and common peptides from influenza virus proteins to activate both arms of the immune system for a cross-protecting and long-lasting effect. (BiondVax 21.12)

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8.6 Bio Light’s IOPtiMate System Receives Regulatory Approval in Canada

Bio Light Israeli Life Sciences Investments announced that its IOPtiMate system for the treatment of glaucoma has been approved by the Canadian Medical Devices Bureau, allowing the Company to commercialize the surgical system in Canada. The IOPtiMate surgical system enables a non-penetrating, CO2 laser-assisted procedure known as CLASS (CO2 Laser-Assisted Sclerotomy Surgery) to reduce elevated intraocular pressure. CLASS is an automated, easy to perform procedure which requires only a short learning curve and provides a safer and more precise alternative to the complex and risky glaucoma surgeries that are currently available.

Bio Light is primarily marketing the IOPtiMate system to leading physicians and medical centers in Asia and Europe, which has resulted in first sales of the system in Hong Kong, Poland, Hungary, Romania, Peru and Portugal, with distribution agreements under negotiation in additional countries. The Company also recently signed a joint-financing agreement in November 2015 with two Asia-based venture capital firms to further support the global commercialization of the IOPtiMate system, as well as to initiate a regulatory approval pathway process for it with the U.S. FDA. With a Canadian license now in place, Bio Light plans to initiate commercial activity in Canada through a local distributer.

Tel Aviv’s Bio Light address ophthalmic significant unmet medical needs with a pipeline of products and product candidates, which are in various commercial and clinical stages, including: IOPtiMate, a laser-based non-invasive surgical treatment for glaucoma; TeaRx, a diagnostic solution that provides a multi-parameter analysis of tear film in order to identify one or more underlying causes of dry eye syndrome; Eye-D, an in-office insertable platform that provides for controlled release of ophthalmic medications over time and OphRx’s lyotropic liquid crystals, or LLC, a non-invasive drug delivery technology administered through eye drops as an alternative to current ocular delivery modalities. (Bio Light 21.12)

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8.7 Kamada’s Human Rabies Immune Globulin Meets Primary Endpoint

Kamada reported that the pivotal Phase 2/3 clinical trial with the Company’s human rabies immune globulin (IgG or KamRAB or KedRAB) therapy as a post-exposure treatment for rabies successfully met the trial’s primary endpoint of non-inferiority when measured against an IgG reference product. The Company expects to file a Biologics License Application (BLA) with the U.S. FDA in mid-2016. KamRAB is the brand name for Kamada’s human rabies immune globulin currently marketed for this indication in 10 countries worldwide. Kamada has a strategic agreement with Kedrion S.p.A for the clinical development and marketing of its IgG product, which will be branded as KedRAB in the U.S., subject to receiving marketing approval from the FDA.

Ness Ziona’s Kamada is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived Immune globulins. AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. The Company’s flagship product is Glassia, the first and only liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. FDA. (Kamada 23.12)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Simgo’s Virtual SIM Could Cut Roaming Charges By 90%

Have you ever returned from a vacation to a phone bill that cost more than your plane ticket? Now, you don’t have to pay for roaming anymore. Simgo, an Ra’anana startup, has come up with an innovative solution that allows your phone to choose the cheapest local service and data carrier when traveling to 100 countries around the world. Simgo simply replaces the SIM card inside your smartphone with a clip-on case that connects to its cloud-based system. The software selects the best local virtual SIM card in the “cloud” and uses it to place the call – using your original phone number.

The price of the clip-on case is currently $120, and users also pay a small daily fee that’s 50-90% lower than typical roaming charges, according to Simgo. The case is currently available only for select Samsung Galaxy and iPhone devices. The startup has already signed several contracts with cellular service providers in order to provide service around the globe. Currently, Simgo is attracting new customers by offering a pay-as-you-go plan, which can be monitored through a mobile app that keeps track of usage, and warns when you are about to pass your preset limit.

In the near future, Simgo plans to expand its offering into Wi-Fi services on local and international buses. Adding Wi-Fi services enables Simgo to automatically switch between providers while their customers are traveling across borders. Since Simgo’s clip-on case is limited to Samsung and iPhone devices at this time, the company is developing a new solution called Simgo Inside. It will allow smartphone manufacturers to embed the virtual SIM hardware inside their products and charge extra for the roaming service. (Simgo 19.12)

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9.2 NICE Wins TMC 2015 Customer Experience Innovation Award

NICE Systems has received a TMC 2015 Customer Experience Innovation Award, demonstrating the company’s exceptional contributions to the industry. The 2015 Customer Experience Innovation Award recognizes best-in-class companies setting the standard in delivering exceptional customer experiences and is presented by TMC’s CUSTOMER magazine. NICE won the award for its groundbreaking Customer Engagement Analytics (CEA) solution powered by state-of-the-art Big Data technology. NICE CEA enables businesses to uncover business insights by analyzing, identifying, quantifying and monitoring what was said, written and done during customer interactions, across all channels.

Combining data from transactions, interactions, agents’ desktop activity, and customer feedback, NICE CEA generates a complete view of the customer journey, both for individual customers and customers at large. By dynamically mapping the entire customer journey, NICE CEA helps organizations understand how their customers interact with them, identify journey bottlenecks and pitfalls, reduce customer effort and optimize the customer experience.

Ra’anana’s NICE Systems (NASDAQ: NICE) is the worldwide leading provider of enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE solutions help the world’s largest organizations deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 80 of the Fortune 100 companies, are using NICE solutions. (NICE Systems 17.12)

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9.3 SC Magazine Recognizes LightCyber as 2015 Security Industry “Innovator”

LightCyber, a leading provider of Active Breach Detection solutions, was recognized as a 2015 Innovator by SC Magazine, as well as one of ten “Coolest Security Startups” by CRN magazine. SC Magazine identified LightCyber as being one of two companies it selected as a 2015 Innovator in the category of “Perimeter Defense.” SC Magazine recognized the LightCyber Magna platform as a worthy response to the changing demands in the security industry.

LightCyber assumes that intrusions occur and that misuse of corporate credentials cannot be comprehensively prevented. These recognitions from SC Magazine and CRN validate the need for organizations to proactively deploy infrastructure, such as the Magna platform, that identifies these attackers before their compromise objective is complete.

Ramat Gan’s LightCyber is a leading provider of Active Breach Detection solutions that accurately detect active cyber attacks that have circumvented traditional threat prevention systems. The LightCyber Magna platform is the first security product to simultaneously profile both network traffic and endpoint state in order to accurately detect compromised user accounts and devices early in the attack lifecycle, and to enable security operators to remediate breaches and stop attacks before real damage is done. (LightCyber 16.12)

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9.4 Nano Dimension Receives $1.13 Million from Israel’s Chief Scientist

Nano Dimension announced that Nano Dimension Technologies, a fully owned subsidiary of Nano Dimension, has received grant approval to support the Company’s development of a 3D PCB printer from the Israeli Office of the Chief Scientist at the Ministry of Economy. The grant supports a development budget up to $1.13m. This is the second consecutive year that the company has received funding from the Office of the Chief Scientist (OCS). This grant approval bears testimony to the company successfully meeting development targets set forth to-date. The grant will support the Company’s core R&D project, the development of a unique 3D printer designed to print multilayer electronic circuit boards (PCBs) for any product containing electronic circuits.

Ness Ziona’s Nano Dimension, founded in 2012, focuses on development of advanced 3D printed electronics systems. Nano Dimension’s unique products combine three advanced technologies: 3D inkjet, 3D software and nanomaterials. The company’s primary products include the first 3D printer dedicated to printing multi-layer PCBs (printed circuit boards) and advanced nanotechnology-based conductive and dielectric inks. (Nano Dimension 23.12)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Enjoys Record Balance Of Payments Surplus

Plunging oil and coal prices pushed Israel’s balance of payments surplus up to an all-time record NIS 3.8 billion in the third quarter, according to a review published on 19 December by Ministry of Finance chief economist Yoel Naveh. The large surplus is generating pressure in the direction of appreciation of the shekel, thereby countering the effect of the Bank of Israel’s monetary policy of retaining a negligible interest rate, despite the recent interest rate hike by the US Federal Reserve.

Inflation expectations in Israel are still falling while the US Federal Reserve is raising its interest rate, according to figures published today by the Bank of Israel. The figures, based on forecasts by leading analysts, show expectations of a 0.5% rise in the Consumer Price Index over the next 12 months, compared with last month’s 0.7% projection. The drop in inflation expectations is consistent with the Consumer Price Index, which fell 0.4% in November, thereby putting the inflation rate for the past 12 months at -1%.

Naveh announced that the 5.1% ratio of balance of payments to GDP in the third quarter was the highest since the first quarter of 2010. He attributed the surplus to exports of goods and a drop in imports. The surplus of exports over imports reached NIS 2.5 billion in the third quarter, a historically high level. (Globes 20.12)

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10.2 Bank of Israel Cuts 2016 Growth Forecast

The Bank of Israel Research Department has revised its growth forecast for 2016 downwards, from 3.3% in its previous forecast in September to 2.8%. The factors contributing to the downward revision of the growth forecast include the lower growth forecasts for global trade and imports by OECD countries and the downward revision of assessments regarding the level of activity in H2/15. Growth in 2015 is estimated at 2.4%, slightly down from the September forecast.

Exports (excluding diamonds and startups) declined by about 2% in 2015, compared with an increase in global trade indices this year. The relative weakness of exports in 2015 was partly the result of temporary factors, and that exports are forecast to recover in 2016 and will increase at a rate similar to the expected growth rate of imports to OECD countries.

In 2017, the growth rate of global trade is expected to increase, which will support improvements in Israeli exports. A relatively high rate of growth is expected in Israeli exports in 2017 due to the exports of a large company. GDP is expected to grow by 3.1% in 2017.

Inflation in 2016 is projected at 0.6% and the Research Department now sees the bank’s interest rate remaining at 0.1% in the first three quarters of 2016 and beginning to rise only in the fourth quarter. (Globes 28.12)

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10.3 Israeli Exports Drop By 7% in 2015

The Israel Export Institute announced on 29 December that Israel’s diamond exports fell 25% in 2015, exports of goods were down 7.5%, and exports of services dipped 3%. Israeli exports totaled $45.7 billion in 2015, down 7%, compared with 2014. The Export Institute predicts a 2% rise in exports in 2016. An analysis of the data shows a continuation of the downtrend in exports that began in 2012. Exports of both goods and services fell, and the only positive point was high-tech exports, which rose against the general trend.

In a breakdown by geographic region, Israel exports to the European Union totaled $13.6 billion in 2015, compared with $15.3 billion in 2014, and accounted for 30% of Israeli exports. According to the Export Institute, the dollar value of exports to this destination was affected last year by declines in the euro-dollar exchange rate and plummeting global oil prices. The Export Institute stressed that exports of chemicals and refined oil products account for one quarter of all goods exported to this trading bloc, and were greatly affected by oil prices on global markets.

Israel’s next largest export destination in 2015 was Asia with a total of $11.4 billion, amounting to 25% of Israeli exports. A substantial proportion of the rise in exports to Asia can be attributed to US chip giant Intel, which does its manufacturing in Israel, among other places. Economists said that accelerated exports of components, mainly to China and Vietnam, strongly affected exports to Asia.

Israeli exports to the US were up slightly to $10.8 billion. Exports to Africa, on the other hand, fell from $1.3 billion in 2014 to $1 billion in 2015. Exports to Latin America were also down, totaling $1.8 billion, 28% less than in 2014. The Export Institute attributes the steep decline in exports to the continent to a 20% slide in exports to Brazil, which is suffering from a prolonged economic crisis; the steep devaluation of the local currency; and a similar decrease in exports to Mexico. (IEI 29.12)

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10.4 Israel Ranked 18th in UN Human Development Index

Israel was ranked No. 18 on this year’s Human Development Index, a United Nations tool that measures world economies. The index uses a number of parameters to rank the quality of life in various countries. This year, Israel came out ahead of Japan (20), Belgium (21), France (22), Austria (23), Finland (24), Slovenia (25), Spain (26) and Italy (27). The country that earned the top ranking for its quality of life was Norway, followed by Australia, Switzerland, Denmark, Holland, Germany, Ireland, the U.S., Canada, New Zealand, and Singapore.

Many of the countries ranked below Israel have a GDP per capita that is higher than Israel’s. According to the index, for example, the GDP per capita in Israel stands at $30,600, compared to Belgium, with $41,200. However, GDP per capita is only part of the equation. The index also examines the number of years of education, the number of infant mortalities during birth and the number of years of education predicted for children of the next generation.

The countries ranked last on the index were Nigeria, followed by other African countries like Eritrea (186), Chad (185) and Burundi (184). Most Middle East nations were not given high rankings, with Egypt (108), Jordan (80) and Lebanon (67). (Various 17.12)

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11: IN DEPTH

11.1 EGYPT: Fitch Affirms Egypt at ‘B'; Outlook Stable

Fitch Ratings, on 18 December, affirmed Egypt’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘B’ with a Stable Outlook. The issue ratings on Egypt’s senior unsecured foreign and local currency bonds have also been affirmed at ‘B’. The Country Ceiling has been affirmed at ‘B’ and the Short-term foreign currency IDR at ‘B’.

Key Rating Drivers

Egypt’s ratings balance a high fiscal deficit and debt/GDP ratio, low foreign reserves coverage of imports and recent volatile political history, with low external debt and progress in implementing a wide-ranging economic reform program.

Front-loaded fiscal consolidation cut the deficit excluding grants to a preliminary 12.5% of GDP in FY15 (to end June) from 17.6% of GDP in FY14. Further deficit reduction is anticipated in FY16, with various new measures implemented and restraint in public sector pay awards. However, the introduction of VAT, the largest single revenue-raising measure, has been delayed. Fitch expects fiscal consolidation throughout the forecast period, but with savings partially offset by higher social spending and spending commitments in the new constitution the deficit is forecast to remain high.

Moderate deficit reduction and stronger nominal GDP growth are forecast to put the debt/GDP ratio on a downward trend, ending a multi-year deterioration. Nonetheless, debt/GDP is around double the peer median, at an estimated 93.7% at end FY15 and is only expected to fall by around 5% by end-FY17. Domestic banks, including the Central Bank, account for the bulk of deficit financing.

Reserves have declined to less than three months of current external payments and foreign exchange rationing continues. Prospects for the balance of payments have been set back by a shock to the tourism industry and, although declining, unmet demand for foreign exchange remains significant. FDI has increased and is expected to rise and some multilateral support is arriving. Fitch believes an IMF program is within reach if required by the authorities. There is a lack of clarity on exchange rate policy, but Fitch assumes that further devaluation of the pound is inevitable, regardless of any additional bilateral support.

Gross external debt has been rising, but it remains below peers at an estimated 17.5% of GDP at end-2015. Net external debt is just 3.4% of GDP. The bulk of external debt is on a concessional basis and service indicators are stronger than peers. Egypt also has market access, issuing its first Eurobond since 2010 in June 2015, raising $1.5b. The rating is supported by the absence of a recent history of debt restructuring.

Economic momentum has slowed recently, due to shortages of foreign exchange and the impact of fiscal consolidation. However, energy shortages are being addressed and public and private investment is rising. Fitch assumes that growth will be weaker in FY16 and will average around 4% over 2016 and 2017. Inflation is above peers and is forecast to remain near 10%, with structural rigidities aggravated by exchange rate deprecation.

A new parliament starts its term in late December, following elections that formally completed the political transition. Supporters of the president appear to dominate the parliament, which is constitutionally mandated with significant powers. Voter turnout was around 30%, reflecting a mixture of voter fatigue and disaffection in some quarters. Nonetheless, the regime of President Sisi retains broad consent and in Fitch’s view, political stability has improved under his rule. However, serious insecurity incidents have occurred in the Sinai and remain a risk factor. World Bank governance indicators have deteriorated in recent years and are below peers.

Rating Sensitivities

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the rating are currently balanced. The main factors that could lead to a positive rating action, individually or collectively, are:

– A track record of progress on fiscal consolidation leading to a decline in debt/GDP.
– Improved economic growth supported by reforms to the business environment that lead to increased investment and employment.

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

– Failure to anchor the fiscal deficit on a downward trend or an unwinding of recent fiscal consolidation measures.
– Prolonged strains on the balance of payments and an inadequate policy response.
– Serious and sustained insecurity incidents that undermine economic activity.

Key Assumptions

Fitch assumes local banks remain willing and able to finance the deficit.

The political environment is assumed to be more stable than in 2011-13, although sporadic and at times serious attacks on security forces are assumed to continue and underlying political tensions will remain.

Fitch forecasts that Brent crude will average $55/b in 2015 and 2016, before rising to $65/b in 2017. (Fitch 18.12)

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11.2 EGYPT: Struggles for Egypt’s Tourism Sector

Mustansir Barma wrote in on 17 December in Sada that given the importance of tourism for jobs and foreign currency, Egyptian authorities are struggling to reinvigorate the sector in the wake of the attack on a Russian airliner.

The 31 October downing of Russian Metrojet Flight 9268 over Sinai claimed all 224 lives on board, dealing another blow to Egyptian officials who have been trying to convince the world that Egypt is safe and open for both business and tourism. Most of the victims were Russian tourists returning home from their sun-and-sea holiday, a form of tourism that makes up 80% of the sector in Egypt. Russians make up one-third of visitors to Egypt and the blanket ban imposed by the Russian government on all flights between Russia and Egypt in the wake of the crash has devastated the tourism sector. Given the importance of tourism in the wider Egyptian economy for jobs and foreign currency, authorities are struggling to find new approaches to boost the sustainability of the sector.

Egypt’s tourism sector peaked at 13.8 million visitors in the fiscal year (FY) ending June 2010, before the 2011 uprising. The low point was in FY 2013–14, when fewer than 8 million tourists visited Egypt and revenues were half pre-uprising levels. The 2014–15 fiscal year saw a rebound to 11.6 million tourists, indicating the tourism sector was on track for a significant recovery. However, reactions to the plane bombing all but brought tourism to a halt again. Latest official estimates expect tourist arrivals to drop to 9 million in the current fiscal year.

Since the Islamic State claimed responsibility for the bombing, questions have been raised about Egypt’s control over security in Sinai. Russia and the West agree that a bomb caused the crash and even though Egypt’s preliminary investigation ruled out foul play, the county is taking a cautious approach and is planning to put in place better security measures at its airports. Still, several countries, including the United Kingdom and Germany, issued travel warnings against transit through Sharm el-Sheikh airport soon after the Russian airliner was brought down, setting off a string of cancellations for Egypt-bound travel. The quagmire for Egyptian authorities was compounded on 7 December, when the Russian airline announced that it would claim compensation from Egypt.

Egypt is no stranger to attacks against tourists. In February 2014, a tourist bus was bombed in Sinai, killing two South Koreans. In September 2015, eight Mexican tourists were killed when the Egyptian military mistook their tourist convoy for militants. Popular tourist destinations like Sharm el-Sheikh and Luxor have been sites of several attacks over the years. In addition, a series of attacks in Cairo this year, including the assassination of public prosecutor Hisham Barakat in June, have also presented a challenge to security forces.

This is being felt in tourism’s large contributions to employment and foreign currency reserves. One in eight workers in Egypt is directly or indirectly engaged in tourism, which generates 11% of the GDP. In a country where unemployment has been hovering around 13% for the past couple years, the loss of tourism jobs will deal a heavy blow to a government that has prioritized tackling unemployment.

Furthermore, tourism revenues are a large source of much-needed foreign currency. Tourism receipts halved from $9.8 billion in FY 2012–13 to $5.1 billion in 2013–14, representing 12.7% and 7.5% of foreign currency earnings respectively. The 2014–15 fiscal year saw an improvement to $7.4 billion. However, revenue recovery has stalled since then, with the third quarter of 2015 showing a 15% decline compared to the same period the previous year. A steeper drop is expected as the industry reels in the aftermath of the Russian plane disaster. In September, Minister of Tourism Hisham Zazou set a 2016 revenue target of $10 billion, a figure that will likely be revised downwards in light of the crash.

Along with remittances, foreign direct investment, exports, and Suez Canal receipts, tourism is one of Egypt’s largest sources of foreign currency. As the Central Bank struggles to maintain Egypt’s ability to import strategic goods such as energy and wheat while defending the Egyptian pound and guarding against inflation, steady sources of hard currency are needed. While gifts and loans from the Gulf have alleviated pressures on the Central Bank, Egypt’s tourism sector, if restored, would provide a more sustainable form of foreign currency.

One option to reinvigorate the sector is to diversify the sources of tourism. Together, Russian and British tourists to Egypt once numbered about 4 million per year and represented two-thirds of the arrivals to Sharm el-Sheikh. Already wary of putting all their eggs in one basket, especially as a weaker ruble led to a decline in Russian visitors, tourism officials launched the “Egypt is Close” media campaign in March in the hope of drawing more Arab tourists, who formed between 12 and 23% of visitors to Egypt. This is compared to Europeans who made up 60 to 70% of visitors, before the 2011 uprising. Just days before the Russian plane crash, Egypt was set to launch a broader campaign to explore new tourist markets. Authorities decided to postpone this initiative indefinitely in light of the tragedy.

Diversifying source markets for tourists not only hedges risk, it allows Egypt to attract new tourists who spend more and stay longer. Officials aimed for tourist expenditures of $81 per day this year compared to $74 last year, but expenditures per tourist have not risen because operators cut fees to attract more tourists. This is compounded by a weaker Egyptian pound, meaning fewer dollars spent. Rather than slashing prices to retain market share, tourism authorities can help operators consider new approaches, offering different products to encourage longer visits and deeper spending. Long-haul tourists, who tend to spend more, primarily come to Egypt from countries outside the Middle East and Europe looking for the once-in-a-lifetime cultural experience. Marketed appropriately, refreshing existing historical sites and exploring new ones spurs such cultural tourism.

Around 80% of Egypt’s visitors come for beach holidays and most of the rest come for antiquities and cultural tourism. But Egypt has a lot more to offer than these two areas. For example, the desert and the coast offer abundant opportunities for ecotourism. Several unique eco-lodges already exist but mainly host Egyptian residents. Egypt’s 27 protected areas, covering 15% of the country’s landmass, offer plenty of room to develop an ecotourism subsector. In addition, sea and river cruises such as ones between Cairo and Abu Simbel can be developed and upgraded. With 2,450 kilometers of coastline on the Mediterranean and Red Sea, 44 specialized ports, and an unparalleled array of historical attractions along the Nile, Egypt has the potential to become a hub for marine tourism. Finally, Egypt has great potential to develop medical and wellness tourism by marketing treatment with relaxation.

By looking outward at new markets and inward at harnessing Egypt’s tourism potential, the government will simultaneously tackle two major economic priorities: jobs and currency. At the same time, securing the country and working to prevent acts of terrorism are critical to prevent the sharp fluctuations that the Egyptian tourism sector has seen.

Mustansir Barma is an international economic and business policy analyst. He was previously Senior Economic Researcher at the American Chamber of Commerce in Egypt and currently does investment policy and promotion work for the World Bank. (Sada 17.12)

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11.3 TUNISIA: IMF Mission Statement at Conclusion of a Visit to Tunisia

A mission from the International Monetary Fund (IMF) visited Tunis during 9 – 18 December 2015 to review recent economic developments and progress on the Tunisian authorities’ economic reform agenda and learn about the reform priorities that underpin the authorities’ five-year economic vision. A Stand-By Arrangement in the amount of SDR 1.146 billion (about $1.61 billion, 400% of Tunisia’s quota), approved by the Executive Board on 7 June 2013 will expire on 31 December 2015. The authorities have expressed interest in a successor program.

The mission held productive discussions with senior government and central bank officials. It also met with representatives of the banking and private sectors, trade unions, parliamentarians, the donor community, and civil society. At the end of the discussions, the IMF issued the following statement:

“The mission commends the authorities’ efforts in preserving macroeconomic stability and the steps taken towards adopting policies necessary for generating higher and more inclusive growth in a difficult global and regional environment. The authorities have taken important steps in implementing their comprehensive structural reform agenda, including in the legislative front, tax, and bank recapitalization. But the economic outlook of the Tunisian economy remains challenging: economic activity has weakened under the impact of negative shocks, unemployment is stuck at high levels, external vulnerabilities persist, and critical structural reforms – notably in banking and fiscal areas – are still outstanding.

“Moving forcefully on reforms now is essential to accelerate growth and create jobs. The forthcoming five-year economic and development plan gives the authorities an opportunity to foster internal consensus and set priorities for comprehensive economic reforms. The IMF will remain engaged with the Tunisian authorities and stands ready to continue supporting their efforts to ensure macroeconomic stability and address structural vulnerabilities through economic policy advice, financial support, and technical assistance. Discussions about a new Fund arrangement are expected to be held over the coming weeks. (IMF 18.12)

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11.4 TUNISIA: Five Years On, Have Things Changed in Tunisia?

It’s been five years since Mohamed Bouazizi set himself on fire outside the municipal building in Sidi Bouzid, a small town in the heart of Tunisia. While his act had profound international repercussions at the time, some residents say little has changed in their town.

Christine Petré posted on 17 December in Al-Monitor that Tunisia’s economy and working conditions remain gloomy for vendors who sell their goods on the same street where Mohamed Bouazizi lit himself on fire in 2010 to protest the situation.

Fed up with a lack of economic opportunity and years of harassment by corrupt police, street vendor Bouazizi made a desperate cry for help on 17 December 2010, and died 18 days later in a hospital. His act led to protests that helped oust President Zine El Abidine Ben Ali, paving the way for an immediate and fairly peaceful democratic transition. It also helped inspire a whole region to stand up against dictatorships in the Arab Spring.

But for the vegetable sellers in Sidi Bouzid, little has changed for the better.

“We earned more before the revolution,” said Abdelassalam Bouazizi, a relative of Mohamed. They used to work side by side selling vegetables and fruit. In his opinion, the situation was better during Ben Ali’s administration. Then, at least, there were more customers and he had a higher income. Today, he earns just enough money for a day’s food.

A block down the road from Abdelassalam Bouazizi’s cart, Wahid Slimani has been selling vegetables for three years. He and his brother, who live in the village of Hiehriya, travel the 19 kilometers to Sidi Bouzid to sell peppers, potatoes and tomatoes. But customers are few these days, he said.

Slimani doesn’t approve of Bouazizi’s act because under Islam, suicide is considered a sin. He also is disappointed that despite the upheaval, not enough has changed. “We need another revolution,” he said.

Yet Slimani admits he was able to vote in the country’s first free and fair elections, which were held 23 and 26 October 2011, followed by the presidential vote on 23 November 2014. Voting is important, he said, a duty. He also notes that he can speak more freely now since Ben Ali was ousted.

To some, however, freedom of expression comes with dangers. Abdelassalam Bouazizi told Al-Monitor he wanted to talk about his relative, but hesitated. Looking around cautiously, he mumbled, “Not here, not now. Maybe later, in private.” There are too many eyes and ears at the market, he explained worriedly.

The past five years have seen little economic progress. Unemployment, a long-term problem, stands at slightly more than 15% now. It was 13.3% in 2009 and 14% in 2010, according to CIA World Factbook figures.

Hmaidia Mahjoub sells vegetables on the same street where Bouazizi spent his last moments before setting himself afire. Mahjoub said he used to have a good job with a Swiss construction company. He had a car and earned 1,500 dinars (about $742) a month. Today he is struggling to make ends meet, as the company left Tunisia at the time of the revolution. On a normal day he brings in $5 to $10, barely enough to cover his monthly rent of $150 and support his stay-at-home wife and two children.

“The economy hasn’t improved,” he said. Mahjoub has fewer customers. He said he sells roughly 5-10 pounds of vegetables per day, while before he could sell as many as 20 pounds. He must also pay about $1.50 a day to rent the vegetable cart. “Then there are the so-called taxes,” he said. The “taxes” are bribes to the police to let them stay where they are. They are not technically allowed to sell vegetables on the pavement, but there is no other place to go. Vendors who refuse to pay are harassed and have their scales or fruit confiscated, he explained. These are some of the same problems Bouazizi was facing when he set himself on fire.

Though the vegetable sellers’ situation seems gloomy, there could be a solution on the horizon. A market space is under construction, and vendors will be able to rent space and keep their business under a roof. Each vendor will need to pay a yet-undetermined fee in rent. Seller Lamin Saidi, who said he doesn’t expect to be charged much, is looking forward to moving. The space, funded by the European Union, should be finished in early February.

“It’s a good solution for the vendors,” said a passerby. The space will protect them from the sun and wind, he explained. However, it remains to be seen if the market space will protect sellers from the culture of corruption. (Al-Monitor 17.12)

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11.5 ALGERIA: Succession: Preparing For a Post-Bouteflika World

Vish Sakthivel wrote in TWI on 15 December that although Algerians are lukewarm to the prospect of a managed succession, they are even less willing to believe that true multiparty democracy could flourish in the current environment.

This is not a particularly happy time in Algerian politics. In the past two decades, the Algerian public has faced two realities: a civil war that threatened to shatter the state from its core and then relative calm under President Abdelaziz Bouteflika. The president, now in his late 70s, has ruled the nation since 1999. Following the Arab Spring in 2010, Bouteflika promised reforms to the Algerian political system that have yet to fully materialize. Global oil prices have plummeted and Algeria has had to balance its budget by introducing austerity measures. Now, the burden of unpopular economic policies and Bouteflika’s lingering health problems has led many to fear the return of political uncertainty.

The next few years may test Algeria’s political health, but there are signs that the nation can weather a period of uncertainty. Most telling is that, where decades ago, Algerians demanded democracy, they now hope for continuity. In pursuit of this, the Algerian polity may tolerate pseudo-democratic theatrics – as with Bouteflika’s unprecedented re-election to his fourth term – as it spells certainty and stability.

The End of Rentier Politics

Algeria’s current situation thus threatens to erode two central pillars of its normalcy: Bouteflika and oil profits that have subsidized life for ordinary Algerians. The government’s recent moves within the economy, presidency and army can be understood as an attempt to preserve these tenets of the Algerian social contract despite the significant challenges it faces in doing so.

First, knowing that Algerian subsidy programs are unsustainable due to falling oil prices, the government is raising taxes and prices on fuel, electricity, automobiles, medicine, telecommunications and transport gradually, hoping to soften the economic blow to average Algerians. Moreover, core subsidies like housing, education, and defense funding will remain untouched.

Second, the government is approaching Bouteflika’s succession with an eye to continuity and hopes to mitigate the risk of conflict around the appointment of Algeria’s next leader. Few have faith that Bouteflika’s health will hold until Algerian elections that are scheduled for 2019. Bouteflika has been in and out of hospitals since 2005, including a major hospitalization in France in 2013, and things carried on as usual despite his absence. It stands to reason that the president’s coterie is already preparing a successor from within the regime as a placeholder for when the president can no longer remain in power. Every detail of this succession will likely be managed from within.

Critically, a third pillar of state legitimacy – national security – has not wavered despite current troubles. Algeria’s powerful military-intelligence services are still central in maintaining the country’s security. Algeria’s murky high politics make it difficult to determine the exact relationship between the executive and the military, but recent trials and punishments against generals for corruption are steps toward improving the perception of military accountability and the perception of the civil state’s strength. These recent changes signal to the public that both centers of national power are invested in a managed civilian transition of power.

Notably absent in this managed change of hands will be a credible attempt to allow Algerians to participate in the process. In some countries, that might be cause for outrage. But Algerians, politically fatigued, are putting democracy on the backburner.

It is easy to see why Algerians may not be clamoring for drastic political change. They remember Algeria’s political unrest of the 1990s, after the military cancelled an Islamist electoral victory, giving way to an armed insurgency that killed hundreds of thousands. In more recent times, many saw echoes of Algeria’s past within the Arab Spring’s aftermath: Libya’s ongoing civil war has no end in sight. Tunisia, with its triumphs and Nobel Peace Prize-worthy efforts at birthing a democracy, has experienced unprecedented violence. In Syria, the stalled revolution has cost thousands their lives and has encouraged the spread of the Islamic State. Democracy may seem a worthwhile endeavor intellectually, but stability seems a safer bet.

Of course, austerity could change that calculation. If the financial measures fail to land as softly as planned, Algerians may indeed take to the streets. But if they do so, it will not be for a pie-in-the-sky objective: not for free and fair elections, greater decentralization, nor greater parliamentary power. It will be for their livelihoods.

In other words, although Algerian opposition parties warn of a repeat of the unrest seen throughout the 1990s and have called for democratic reforms, observers are skeptical. More likely is a continuation of the current system, in which opposition political parties are considered part of the theatrics: superficially challenging the deep state while being seen as largely co-opted. Meanwhile, the front these parties have formed – a coalition of Islamists, Berberists, Trotskyite parties and regime defectors – offers few if any viable alternatives to Algeria’s political status quo, as they lack internal ideological alignment and have contradictory political goals.

That few viable alternatives to the establishment exist undoubtedly contributes to Algeria’s wider political disillusionment. But for many, it also underscores the notion that political jockeying, democratization efforts, and reform movements are distractions from the more important need to address social and economic grievances. The idea that citizens prefer survival, stability, and comfort above democracy is not new, but the concept is still a hard one for U.S. sensibilities to stomach. Within Bouteflika’s Algeria, the widespread sense is “mwalfa kheir men talfa,” a rhyme in Algerian Arabic that more or less means “better the devil you know.” Algerian society is lukewarm to the prospect of a managed succession, and is even less willing to believe that true multi-party democracy could flourish instead. The risks are far too high, and the rewards too unlikely.

Vish Sakthivel, based in Algiers, is a PhD candidate at the University of Oxford and an adjunct fellow with The Washington Institute. (TWI 15.12)

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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 European clients.

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What’s News at EDI – January 2016

January 3, 2016, 7:39 am

≫ Next: Fortnightly, 13 January 2016

≪ Previous: Fortnightly, 30 December 2015

Delaware Secretary of State and Lawyers will Visit Israel in January

During the first week of January, Delaware Secretary of State, Jeffrey Bullock, will lead a 10 person delegation of lawyers in a visit to Israel to discuss changes in Delaware law as it relates to Israeli companies registered there. The group will meet with various law firms and will participate in an all-day session on January 7th sponsored by the Israel Bar Association for its membership to learn more about corporate legal developments in the state. EDI, in its role as representing Delaware in Israel, will coordinate and plan the visit.

Indiana Cyber Mission Planning Israel Visit in January

The Indiana Economic Development Corporation (IEDC) will lead a group of local companies involved in cyber-security who will visit Israel for the CyberTech Show in mid-January. The impetus of the visit came from an earlier visit to Indiana sponsored by SIBAT, the commercialization arm of Israel’s Ministry of Defense and they will host the major part of the mission. EDI, in its role as IEDC’s representative in Israel, will augment the programming.

Michigan Trade Mission Planned for January

Concomitant with the visit of Michigan Governor Rick Snyder to Israel in January, the Michigan Economic Development Corporation (MEDC) will bring a delegation of companies to Israel to participate in the CyberTech Show and to hold one-on-one meetings with Israeli firms. EDI has been engaged to plan and coordinate the visit.

Illinois to Exhibit at Arab Health in Dubai in January

EDI Trade Director Seth Vogelman will accompany 10 Illinois companies to the Arab Health 2016 conference and exhibition to be held in Dubai, UAE on 25-28 January. This will be the fourth year that the state, through the Illinois Department of Commerce and Economic Opportunity (DCEO), has sponsored a booth at Arab Health. EDI, in its role as the state’s regional trade and investment representative, is managing the effort and setting dozens of one-on-one meetings for Illinois companies to meet with potential business partners in the Gulf. Seth will help administer the booth and facilitate the meetings.

EDI Assisting Georgia Economic Development at Arab Health 2016

EDI will also be assisting the Georgia Department of Economic Development in arranging meetings for companies who will be exhibiting at Arab Health 2016. With significant commercial depth in the GCC countries, EDI is well positioned to provide this type of assistance to U.S. companies traveling to the region.

SelectUSA Event Scheduled for January 20^th in Tel Aviv

The U.S. Commercial Service in cooperation with the American State Offices Association will be hosting a SelectUSA event in Tel Aviv on January 20^th for Israeli companies considering opening a facility in the U.S. The event, comprised of a series of 30 minute one-on-one meetings with the 14 state representatives resident in Israel, is being coordinated by EDI in its role as Chair of the American State Offices Association.

IBG Members from 13 Countries Visited Israel in December

EDI’s colleagues from 13 countries who are members of the International Business Group (IBG) travelled to Israel during early December for strategy meetings and to interact with companies in Israel seeking market entry in these various countries. IBG is a 15 year old association of twenty business development consulting groups spread around the world. Representatives from Brazil, the US, Canada, South Africa, India, Australia, Singapore, South Korea, Germany, the Netherlands and Central Europe were in Israel for the event. In addition to the group strategy meetings, the delegates held over 400 one-on-one meetings in one day with Israeli companies interested in those markets. EDI, as a founding member of IBG, hosted and planned the event.

EDI VP Jonathan Sternberg Visited Hong Kong in December

EDI Vice President of Business Development Jonathan Sternberg, travelled to Hong Kong in mid-December for the annual meeting of Invest Hong Kong’s overseas representatives. EDI has been representing Invest Hong Kong in Israel for the past three years and, based on its successful performance, will have its role increased by 100% for 2016. Jonathan has been the Project Manager for this effort.

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Fortnightly, 13 January 2016

January 13, 2016, 6:47 am

≫ Next: Fortnightly, 27 January 2016

≪ Previous: What’s News at EDI – January 2016

13 January 2016
3 Shvat 5776
3 Rabi Al-Thani 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Knesset Gives Final Approval to Corporate Tax Cut
1.2  Israel Approves New Tax Incentives For Startup Investors
1.3  Minister of Finance Permits Duty-Free Vegetable Imports

2: ISRAEL MARKET & BUSINESS NEWS

2.1  BIRD Foundation to Invest $7.5 Million in 9 New Projects
2.2  Ninety Israeli Companies Attend Investor Conference in China
2.3  TopSpin Security Receives $7 Million Series A Funding
2.4  ZIM to Expand Its Refrigerated Container Fleet
2.5  Israel Aerospace Teams with India’s Premier Explosives
2.6  First F-35A “Adir” for Israel Taking Shape in Fort Worth, Texas

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Saudi Dairy Firm Pays $31 Million for California Plot to Grow Fodder
3.2  Saudi FDA Approves Gamma Medica’s Breast Imaging Solution
3.3  Varian ProBeam Proton Therapy Receives Saudi FDA Authorization
3.4  Ferro Further Strengthens Its Position in Turkish Market

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s First Bio-Waste Power Plant to Be Built

5: ARAB STATE DEVELOPMENTS

♦♦Arabian Gulf

5.1  Saudi Budget Marks End of Era for Lavish Arabian Gulf Handouts
5.2  UAE Signs MOU with China for Space Science Cooperation
5.3  Dubai’s Nine Month Non-Oil Foreign Trade Falls Slightly to $263 Billion
5.4  Oman Approves Spending Cuts & Tax Rises as Cheap Oil Bites
5.5  Saudi Arabia Plans to Introduce VAT in Two Years
5.6  Saudi Arabia Calls For Stricter Fast Food Rules to Combat Obesity Problem

♦♦North Africa

5.7 World Bank Expects Strong Libyan Recovery

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkish Inflation Hits 4 Year High
6.2  Turkey’s National Income Per Capita to Drop Below $10,000
6.3  Ankara Expects $1.2 Billion of Income From Recent Tax & Price Hikes
6.4  Turkish Military Announces Personnel Figures

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Statistics Show Jewish & Arab Israeli Fertility Rates Now Even

♦♦REGIONAL:

7.2 Non-Jordanians Constitute Third of Jordan’s Population
7.3 Moroccan Amazigh Push to Make Amazigh New Year a Public Holiday

8: ISRAEL LIFE SCIENCE NEWS

8.1  Phytech Closes Series A Round
8.2  Kamada Receives Positive Data from Alpha-1 Antitrypsin to Treat GvHD
8.3  Teva Launches Generic Ortho Tri-Cyclen Lo in the United States
8.4  Teva & Checkpoint Announce Agreement for Oral PARP Inhibitor
8.5  Psagot Winery is Challenging the Best Kosher Wines
8.6  BioLineRx Collaborateswith MSD to Investigate Pancreatic Cancer
8.7  BrainStorm’s NurOwn for ALS Treatment Published in JAMA Neurology
8.8  XTL Submits Protocol for Trial of hCDR1 in Lupus Treatment
8.9  V-Wave Announces $28 Million Series B Financing

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SuperCom Introduces Enhanced PureHealth Solution Suite
9.2  Locust-Inspired Robot for Reconnaissance and Rescue
9.3  SolarEdge’s StorEdge Solution is Now Internationally Available
9.4  LightCyber Expands Behavioral Attack Detection
9.5  SolidRun & nemetris GmbH Bring IoT Technology to Automotive Manufacturing

10: ISRAEL ECONOMIC STATISTICS

10.1  Impressive Reduction in Israel’s Debt-to-GDP Ratio
10.2  Israel’s Third Quarter Growth Rate Revised Down to 2%
10.3  Israeli Exports Drop By 7% During 2015
10.4  Tourism to Israel Declines By 3% in 2015
10.5  Record Israeli Car Deliveries During 2015

11: IN DEPTH

11.1  ISRAEL: Israeli VC 2015 Fund Raising Increases to $1.5 Billio
11.2  SAUDI ARABIA: Fitch Says Budget Looks Positive But Deficit Will Stay Large
11.3  SAUDI ARABIA: Is the Saudi Monarchy on Its Last Legs?
11.4  EGYPT: Will Saudi Agricultural Investments in Sudan Leave Egypt High and Dry?

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Knesset Gives Final Approval to Corporate Tax Cut

The Knesset has passed its second and third readings to legislation to reduce the corporate tax rate by 1.5% to 25%. The tax reduction amendment applies from 1 January 2016. The Israel Tax Authority said the reduction in corporate tax is aimed at strengthening and encouraging growth in Israeli industry, making the Israeli economy more competitive and attractive in relation to other markets around the world, and providing incentives for investment in local production. The Ministry of Finance sees the corporate tax rate reduction as complementing the reduction in the rate of VAT from 18% to 17% last October, part of a government policy of a reduction in direct taxation in an attempt to boost the rate of economic growth in Israel. (Globes 05.01)

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1.2 Israel Approves New Tax Incentives For Startup Investors

The Knesset Finance Committee approved an amendment to the Angel Law on 29 December, granting significant tax benefits to startup investors. Under the revised legislation, a new course will be added to the angel investor law which incentivizes investment in young startups to assure the angels of these benefits at the time of the investment. The changes further determined that startups from Israel’s periphery will be legally recognized as startups for five years, unlike those from the country’s center, which receive the designation for four years.

The revision was intended to maintain Israel’s comparative advantage in knowledge-intensive industries. The Office of the Chief Scientist within the Ministry of Economy and Industry claimed the tax incentives for startup investors will allow these companies to carve out a space in the market. (Globes 31.12)

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1.3 Minister of Finance Permits Duty-Free Vegetable Imports

On 6 January, Minister of Finance Kahlon signed an order permitting the importing of a variety of vegetables in the framework of a 60,000 ton customs duty exempt quota for vegetable imports. The purpose of the order, which was coordinated with the Ministry of Agriculture, is to do as much as possible to prevent an increase in fresh vegetable prices. The shortage of fresh agricultural produce resulting from extreme weather conditions has had a negative impact on domestic crops, and the order is aimed at preventing prices from soaring in the wake of burgeoning demand during holidays.

Under the order, potatoes, onions, carrots, horse radish, cabbage, lettuce, cucumbers, celery, tomatoes, parsley and peppers can be imported all year without paying customs duties. Imports under this quota will be allowed according to the crop conditions and consumption in the domestic market during the year. During the holiday periods (from 22 March until 5 May, and from 2 September until 2 November), imports of specific crops will be permitted (lettuce, cucumbers, celery, tomatoes, parsley, and peppers) will be allowed under the quota regardless of the supply in the domestic market. (Globes 06.01)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 BIRD Foundation to Invest $7.5 Million in 9 New Projects

During its meeting on 16 December 2015, held in Tel Aviv, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation approved $7.5 million in funding for nine new projects between U.S. and Israeli companies. In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of all projects to approximately $21 million.

The nine projects approved by the Board of Governors are in addition to the 926 projects which the BIRD Foundation has approved for funding during its 38 year history. To date, BIRD’s total investment in joint projects has been over $300 million, helping to generate direct and indirect sales of more than $10 billion. The projects approved include:

BDR Technologies (Ness Ziona, Israel) and MagBioSense (St. Louis, MO): Ultra-sensitive Point-of-Care device for rapid detection of biomarkers.
ECOncrete Tech (Tel Aviv, Israel) and Besser Company (Alpena, MI): Bio-enhanced drycast concrete products that mitigate climate.
Elbit Systems (Haifa, Israel) and Tyvak Nano-Satellite Systems (Irvine, CA): Small-sat search and rescue application.
Forrest Innovations (Caesarea, Israel) and U.S. Company: Solutions to control diseases in potatoes.
Groundwork BioAg (Lod, Israel) and Marrone Bio Innovations (Davis, CA): Biological stacked seed treatment.
Kramer Electronics (Jerusalem, Israel) and iRule (Detroit, MI): Distributed advanced commercial control solution.
Screenovate (Ra’anana, Israel) and U.S. Company: Wireless display project.
VocalZoom (Yokneam, Israel) and Vixar: (Plymouth, MN): VCSEL Module for sensing applications.
WSC Sports Technologies (Bnei Brak, Israel) and Krossover Intelligence (New York, NY): Custom highlights for amateur athletes.

The deadline for submission of Executive Summaries for the next BIRD cycle is 9 March 2016. Approval of projects will take place in June 2016.

The BIRD Foundation promotes collaboration between U.S. and Israeli companies in various technological fields for the purpose of joint product development. In addition to providing conditional grants of up to $1 million for approved projects, the Foundation assists by working with companies to identify potential strategic partners and facilitate introductions. (BIRDF 30.12)

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2.2 Ninety Israeli Companies Attend Investor Conference in China

An unprecedented 150 Israeli businessmen representing 90 companies left Israel to attend an investors’ conference in Beijing. As part of the efforts to persuade Chinese investors to expand their cooperation with Israeli companies, the Ministry of Economy and Industry has launched a new Mandarin Chinese language website explaining the business opportunities available and the business environment in Israel.

The two-day conference took place in Beijing with the participation of Minister of National Infrastructure, Energy, and Water Resources Steinitz, Ministry of Economy and Industry director general Lang and Ministry of Economy and Industry Division for Foreign Investment and Industrial Cooperation director Eger. The Israeli companies that took part in the conference include Mobileye, which deals in technologies for assisting drivers; Cortica, which deals in visual search technologies; Stratasys, which operates in the 3D printing sector; Water-Gen, a water sector company; and more.

The Ministry of Economy and Industry said that the effort to convince Chinese investors was part of the implementation of a 2013 cabinet resolution to strengthen economic cooperation between Israel and China. Figures from the Ministry of Economy and Industry show that Israel’s bilateral trade with China totaled $11 billion in 2014 and $8 billion in the first two quarters of 2015: $2 billion in exports to China and $5.8 billion in imports from China. (Globes 01.01)

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2.3 TopSpin Security Receives $7 Million Series A Funding

TopSpin Security has secured $7 million in Series A funding from a group of accomplished private investors who stand behind Israel’s most successful cyber security companies. The funding will help the company accelerate its sales efforts in key markets. Leading security investors have teamed up together to back up TopSpin Security as it accelerates its growth. Investors include Shlomo Kramer, Mickey Boodaei, Zohar Zisapel, and Rakesh Loonkar, who have founded and seeded cyber security successes including Check Point, Imperva, Trusteer, Palo Alto Networks, Aorato, Adallom, Lacoon, in addition to many others.

Herzliya’s TopSpin Security designs and markets DECOYnet, an advanced active cyber defense system that engages attackers once they have bypassed perimeter-based security solutions. Already in deployment and used by organizations across the United States, DECOYnet offers a unique combination of detection, deception and extensive traffic analysis and visibility, allowing organizations to receive an accurate view of how data flows in, out and within their networks; assess risks; and set preemptive measures for detecting and dealing with cyber threats. (TopSpin 04.01)

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2.4 ZIM to Expand Its Refrigerated Container Fleet

Haifa’s ZIM Integrated Shipping Services announced the expansion of its refrigerated container fleet in order to answer the demand for its innovative ZIMonitor service. Launched in early 2015, ZIMonitor allows customers to track, monitor and remotely control sensitive, high-value cargo stowed in refrigerated, or reefer, containers. Customers can opt to receive alerts regarding their shipment via text message or email, closely monitor their cargo’s status and intervene to prevent damages through ZIM’s 24/7 dedicated global response team. An order of approximately 1,900×40-Feet High-Cube refrigerated containers is planned to be deployed during 2016. The new advanced and environmentally friendly containers were specifically designed to accommodate the ZIMonitor service and received a special prefix: ZMOU.

ZIM has partnered with Teva Pharmaceutical Industries, a leading global pharmaceutical company, on a successful pilot of the ZIMonitor service that addressed Teva’s uncompromising commitment to the quality of its products and its dedication to meet the requirements of its customers. Upon the successful completion of the pilot, the ZIMonitor service quickly gained popularity among ZIM’s customer base. (ZIM 05.01)

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2.5 Israel Aerospace Teams with India’s Premier Explosives

Indian defense manufacturer Premier Explosives has signed a memorandum of understanding (MOU) with Israel Aerospace Industries for exploring potential business opportunities. Headquartered in Hyderabad, Premier Explosives designs, develops and manufactures solid propellants for Indian missiles such as the Akash and Astra. The company also operates a state-of-art chemical manufacturing facility of Indian Space Research Organisation (ISRO) at Sriharikota and a solid fuel complex of advanced systems laboratory at Jagdalpur.

This latest collaboration comes as Israel and India tighten cooperation on defense projects. These projects include: joint Israeli-Indian development of the Barak 8 defense missile for protecting offshore gas rigs; a joint venture between Israel’s Rafael Advanced Defense Systems and India’s Kalyani Group to produce missile systems, remotely controlled weapons positions and advanced systems for the protection of tanks and APCs; and cooperation between IAI and India’s Alpha Design Technologies on the production of mini-drones. (Globes 06.01)

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2.6 First F-35A “Adir” for Israel Taking Shape in Fort Worth, Texas

Lockheed Martin and the Israeli Ministry of Defense officials marked the beginning of the first F-35A “Adir” (meaning “mighty one” in Hebrew) manufactured for Israel in Fort Worth, Texas on 7 January.

The aircraft, designated as F-35A aircraft AS-1, officially began its mate process, where the four major components of the 5th Generation fighter aircraft are joined together in the Electronic Mate and Assembly Station to form the aircraft’s structure. AS-1 will continue its assembly here and is expected to roll out of the factory in June and be delivered to the Israeli Air Force (IAF) later this year.

Israel has contracted for 33 F-35A Adir Conventional Take Off and Landing (CTOL) aircraft through the U.S. government’s Foreign Military Sales program. Israel’s contribution to the F-35 program includes Israel Aerospace Industries F-35A wing production; Elbit Systems work on the Generation III helmet-mounted display system, which all F-35 pilots fleet-wide will wear; and Elbit Systems-Cyclone F-35 center fuselage composite components production. (Lockheed Martin 11.01)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Saudi Dairy Firm Pays $31 Million for California Plot to Grow Fodder

Saudi Arabia’s Almarai Co, the largest dairy company in the Arabian Gulf, has spent $31.8 million to buy land in California to supply its business with alfalfa hay. The 1,790 acres of land, acquired through Almarai’s Fondomonte California operation was financed through its own resources. Almarai, which already owns land in Arizona, said the purchase was part of efforts to secure high-quality hay from outside Saudi Arabia, in line with Saudi government policy.

Saudi Arabia is phasing out the growing of crops and fodder because of the strain such cultivation places on scarce water resources in the desert kingdom. The cultivation of green fodder will end in the next three years. Almarai’s costs will increase by 200 million riyals ($53 million) this year because of the ban on green fodder, with the amount rising each year until the company imports all its green fodder by 2019. (AB 10.01)

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3.2 Saudi FDA Approves Gamma Medica’s Breast Imaging Solution

Salem, New Hampshire’s Gamma Medica, a breast imaging medical device company, announced the Saudi Food and Drug Authority (SFDA) has issued a Medical Device Marketing Authorization (MDMA) for their LumaGEM breast imaging product. This MDMA allows Gamma Medica to market the LumaGEM using Molecular Breast Imaging (MBI) technology in the Kingdom of Saudi Arabia (KSA). Integrated Business Ventures Co. (IBV) based in Riyadh, Saudi Arabia is Gamma Medica’s Authorized Representative and strategic partner for the KSA and the Middle East markets.

According to the National Cancer Registry and leading cancer care centers, there are an estimated 8,000 to 12,000 new cases of breast cancer discovered each year in KSA. It has been reported that up to 60% of these cases are diagnosed at later symptomatic stages, which significantly reduces the five-year survival rate from over 90% at an early detection stage to about 22% in later symptomatic stages. According to the King Faisal Specialist Hospital and Research Center in Riyadh, breast cancer represents 24% of all cancer cases, making it the most common form of cancer in women in KSA. Coupled with the extreme shortages of radiologists, LumaGEM will likely reduce the clinical burden and enable more women to be screened. (Gamma Medica 08.01)

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3.3 Varian ProBeam Proton Therapy Receives Saudi FDA Authorization

Palo Alto, California’s Varian Medical Systems announced its ProBeam proton therapy system is the first such system to receive Saudi FDA medical devices marketing authorization. Varian Medical Systems focuses energy on saving lives by equipping the world with advanced technology for fighting cancer and for x-ray imaging. The company is the world’s leading manufacturer of medical devices and software for treating cancer and other medical conditions with radiation. The company provides comprehensive solutions for radiotherapy, radiosurgery, proton therapy and brachytherapy. The company supplies informatics software for managing comprehensive cancer clinics, radiotherapy centers and medical oncology practices. Varian is also a premier supplier of x-ray imaging components, including tubes, digital detectors, and image processing software and workstations for use in medical, scientific, and industrial settings, as well as for security and non-destructive testing. (Varian Medical Systems 11.01)

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3.4 Ferro Further Strengthens Its Position in Turkish Market

Cleveland, Ohio’s Ferro Corporation purchased 100% of the equity of privately held Istanbul-based Ferer Dis Ticaret Ve Kimyasallar Anonim Sirketi (Ferer) for approximately $9 million in cash, on a cash-free and debt-free basis, subject to working capital and other adjustments. The acquisition of Ferer is the third step Ferro has taken in the past 18 months to strengthen its position in the fast-growing Turkey market. In July 2014, Ferro acquired assets of a reseller of Ferro porcelain enamel products in Turkey, providing a commercial base for direct marketing and sales opportunities. In November 2015, Ferro completed the acquisition of Egypt-based tile coatings manufacturer Al Salomi for Frit and Glazes, adding production capacity to meet current and future demand in Turkey as well as other markets in the Middle East and North Africa. Now, the Ferer acquisition brings Ferro an operational presence in Turkey focused on the glass market. (Ferro Corporation 05.01)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s First Bio-Waste Power Plant to Be Built

Doral Energy and Kibbutz Lahav are to build a facility to generate energy from organic waste and animal waste, the first of its kind in Israel. The installation will be constructed on Kibbutz Lahav property and will accept the organic waste of nearby kibbutzim. The investment in the installation will cost NIS 15 million. The facility will first generate 0.63 MW to flow to the electric grid. Israel’s Public Utilities Authority (Electricity) set a rate of NIS 0.60 per kilowatt/hour, to be raised to NIS 1 per kilowatt/hour. Locally, there are 14 projects at varying stages to generate electricity from waste, but in the agricultural sector there are only 3 such projects. (Globes 31.12)

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5: ARAB STATE DEVELOPMENTS

►►Arabian Gulf

5.1 Saudi Budget Marks End of Era for Lavish Arabian Gulf Handouts

Arabian Gulf countries are introducing reforms to subsidies including energy in a bid to bolster under-pressure state finances. An austere state budget recently released by Saudi Arabia is likely to mark the end of an era for the Gulf’s lavish cradle-to-grave welfare systems, encouraging governments around the region to roll back costly handouts to their populations. Struggling to narrow a huge budget deficit created by low oil prices, Riyadh on 28 December announced government spending cuts, reforms to energy subsidies and a drive to raise revenues from taxes and privatization in 2016.

Gulf governments have tightened their belts in the past during periods of slumping oil prices. But the Saudi budget went further than usual by including steps that will directly hit the purchasing power of citizens – in particular, raising domestic gasoline, kerosene, water and electricity prices.

Because of Saudi Arabia’s role as the political leader of the Gulf Arab states and the biggest Arab economy, other Gulf governments are now expected to follow suit as they impose their own austerity programs in response to the prospect of years of shrunken oil and gas revenues.

Bigger changes are on the way. Governments in Bahrain, Kuwait, Qatar and Oman, which face financial squeezes of varying intensity, have all said they are conducting broad reviews of their subsidy systems, though they have not yet committed to specific reforms. Because of political sensitivities, governments are likely to move cautiously; Saudi officials stressed this week that they wanted to minimize the impact on the living standards of lower- and middle-income people. (Reuters 30.12)

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5.2 UAE Signs MOU with China for Space Science Cooperation

The UAE has signed a memorandum of understanding (MoU) with the People’s Republic of China concerning defining a framework for collaboration in studies and development in space science, as well as the peaceful exploration of outer space. The signing came during the visit of Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, to China. The visit aimed at exploring collaboration opportunities in various sectors including energy, space, financial services, commerce, transportation and education.

According to the new MoU, the UAE Space Agency and China National Space Agency will represent the two countries in exchanging information, studies and scientific data in the field of space exploration and peaceful exploitation. The data exchange will include scientific and research expertise, as well as training, capacity building, lectures, conferences and other space related domains. The MoU also covers collaboration in research and development of satellites for scientific, testing, remote sensing, and communications purposes. The collaboration will include services such as launching, follow up, control, as well as developing and controlling ground satellite systems. (bq 30.12)

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5.3 Dubai’s Nine Month Non-Oil Foreign Trade Falls Slightly to $263 Billion

Dubai’s non-oil foreign trade fell marginally to AED966 billion ($262.9 billion) during the first nine months of 2015, according to official data. Figures show that trade between January and September 2014 fell from AED988 billion during the same period last year. Dubai has managed to contain the impact of the instability of the global economic environment, marked by a decline in commodity prices and currency rates, to maintain a strong economic performance in 2015.

Imports had the biggest share of the overall trade with a value of AED597 billion while exports and re-exports totaled AED100 billion and AED269 billion respectively. From January to September 2015, direct trade contributed AED603 billion of Dubai’s total foreign trade value; while free zones contributed AED340 billion and customs warehouses AED23 billion. According to the figures, Dubai has seen a “substantial upsurge” in the total volume of goods imported, exported or re-exported via the emirate.

China was once again Dubai’s top trading partner worldwide, with a total bilateral trade value of AED132 billion in the first nine months of 2015, which represents a growth of 5.1% compared to the same period of 2014. India was the second biggest trading partner at AED74 billion, while the US came third with AED60 billion worth of trade. (WAM 02.01)

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5.4 Oman Approves Spending Cuts & Tax Rises as Cheap Oil Bites

Oman’s cabinet approved in principle spending cuts, tax rises and fuel subsidy reforms to cope with the damage to state finances from low oil prices. The most important of these actions include a reduction in government spending, and the development of non-oil revenues by raising tax rates on profits of corporations, reviewing and raising fees on some government services, and adjusting prices of petroleum products in line with global prices of these products starting from mid-January 2016.

Oman, a small oil exporter, has been hit hard by low oil prices; the government posted a budget deficit of 3.26 billion rials ($8.5 billion) in the first 10 months of this year, swinging from a 189.6 million rial surplus a year earlier. Recently, the Shura Council, a top advisory body to the government, voted to raise the 12% corporate tax rate to 15%. Expensive state subsidies keep Omani gasoline and other fuel prices among the lowest in the world. Oman and other Gulf states have been reluctant to cut fuel subsidies because that could be unpopular among the public and raise inflation. (Reuters 30.12)

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5.5 Saudi Arabia Plans to Introduce VAT in Two Years

Saudi Arabian finance minister Alassaf said the kingdom expects to introduce value-added tax in two years, aiming for a tax rate of around 5%. In its 2016 state budget announcement, the ministry said it planned to introduce VAT in coordination with other countries in the region. Younis Haji al-Khouri, undersecretary at the United Arab Emirates ministry of finance, told reporters in December that the target for introducing the tax in the region was three years. The IMF has suggested the UAE consider imposing VAT at a 5% rate. (Reuters 30.12)

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5.6 Saudi Arabia Calls For Stricter Fast Food Rules to Combat Obesity Problem

The Scientific and Educational Committee of the Saudi Diabetes and Endocrine Association (SDEA) has called for the introduction of 10 amendments to the ingredients and specifications of fast foods in the Kingdom. The World Health Organization (WHO) recently placed Saudi Arabia in third position, after Qatar and Kuwait, in its list of countries around the world with the highest rates of obesity. About 71% of deaths in the Saudi Kingdom are caused by diabetes, obesity and heart ailments. In addition, these diseases also cause disability.

The requested changes include the reduction of meat fats to 20% in all fast foods; chicken burgers to be made only after removing the skin and without added salt; reducing the fat content of cheese to 10-20%, using grilling and baking instead of frying; and offering salads with meals and fresh juices instead of sodas. The committee also called for a reduction in the use of hydrogenated fats and the inclusion of calorie counts on the packaging of fast food meals. The committee has also urged hotels introduce low-fat meals on their menus. (AB 09.01)

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►►North Africa

5.7 World Bank Expects Strong Libyan Recovery

The World Bank expects the Libyan economy to recover rapidly in 2016, growing by 35.7%, according its Global Economic Prospects report released on 6 January. This follows an estimated fall of 5.2% last year and of nearly 50% over the past three years. Growth rates of 27.6% and 8.4% are predicted for 2017 and 2018 respectively. This contrasts dramatically with the gloomy prediction from the Economist Intelligence Unit, which showed a further contraction in the economy. (World Bank 09.01)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkish Inflation Hits 4 Year High

Turkey’s consumer prices rose by an annualized 8.81% in December, the highest hike since December 2011 and nearly 1% higher than the central bank estimate of 7.9%, according to data released by Turkish Statistics Institute (TurkStat) on 4 January. The surge in inflation was led by food and clothing which roses by 10.87% and 8.99% respectively. Turkey’s central bank left interest rates unchanged on 22 December, a surprise move that put fresh pressure on the struggling lira and inflation. Analysts and investors have repeatedly called for a rate hike to rein in inflation and put a floor under the lira. (Zaman 05.01)

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6.2 Turkey’s National Income Per Capita to Drop Below $10,000

Turkey’s national income per capita has been forecasted to decrease below $10,000 for the next two years, projected to drop to $9,286 in 2015 and $9,364 in 2016 on the dollar-basis rather than purchasing power in the government’s new medium-term economic program. The national income per capita was $10,390 in 2014.

The government aims to increase this amount above the $10,000 threshold again by 2017, according to goals outlined in the medium-term economic program, which was released on 11 January. Ankara has renewed its program after a short period of time, as it had already announced another just ahead of the November elections in 2015.

According to the new program, the national income forecast was announced as $722 billion in 2015, as $736 billion in 2016, as $796 billion in 2017 and as $854 billion in 2018. The country’s national income was announced as $799 billion in 2014.

The government, however, revised its national income per capita from dollar terms to one that was income-based on purchasing power parity, after dramatic losses in the Turkish Lira’s value against the dollar during its prior program. With the change, the government’s national income per capita target rose to $19,506 from the previous target of $10,936, which was set on the dollar basis formula. If this change had not been made, the country’s national income per capita would have decreased below $10,000 during the last year as well, with a loss of around 25% in the lira’s value to the dollar.

Sharp effects of the rise in the dollar are quite visible in the new program, as the mentioned forecasts, which are based on the lira, are higher than the previous years, but lower on the dollar basis. (HDN 12.01)

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6.3 Ankara Expects $1.2 Billion of Income From Recent Tax & Price Hikes

The Turkish government hopes to gain around TL3.6 billion ($1.2 billion) of income from recent tax hikes in alcohol, cigarettes and mobile phones, and hikes in bridge and highway tolls. Around TL3 billion of income is expected from the tax hikes in alcohol and cigarettes, which came into effect 1 January, while an additional TL300 million of income is expected from the recent hike on special taxes for mobile phones.

The minimum fixed tax rate on tobacco products increased by 5.1% to TL4.42, while the fixed rate increased by 25% to TL 0.25 to mark the new year. The minimum fixed tax rate for beer has been increased by TL 0.18 to TL 1.03. The minimum fixed tax rate for two liters of raki has increased by TL 23 to TL 130.68. Price hikes have followed these tax raises in the country. Electricity prices also increased by 6.8% as of 1 January, just two days after the minimum wage saw a 30% increase. A special tax added to mobile phone sales has also been hiked up by 30% to TL 160. (HDN 05.01)

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6.4 Turkish Military Announces Personnel Figures

The Turkish General Staff has announced the number of its military and civil personnel on duty under the umbrella of the Turkish Army. According to the information, there were a total of 626,004 military and civil personnel working in the Turkish Army as of the beginning of 2016. There were a total of 358 generals and admirals in the army as well as 39,782 officers and 97,110 non-commissioned officers.

The Turkish Army was also home to 21,978 specialist gendarmes, 73,975 specialized sergeants and 8,611 contracted privates. The number of specialized personnel was given as 241,814. The army added that a total of 332,509 soldiers were currently under arms in barracks. The number of civil personnel in institutions linked to the General Staff was given as 51,681. (Dogan 05.01)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Statistics Show Jewish & Arab Israeli Fertility Rates Now Even

According to estimates by the Central Bureau of Statistics, as of 31 December, the population of Israel stood at 8.462 million people. An approximate 6.335 million people are Jews, making up 74.9% of the population. Non-Jewish Arabs make up 20.7%% of the population, with an estimated 1.757 million people. Another 370,000 Israeli citizens do not fall into either of these two groupings.

Israel’s population grew by 2% in 2015. Approximately 176,700 babies were born – 74% of them Jewish, 23% of them Arab and another 4.4% other. In addition to births, some 28,000 new olim arrived in Israel throughout the past year. Israel’s newest citizens arrived mainly from France with 25% of all total new immigrants, Ukraine with 24%, Russia with 23% and the United States with 9%.

The added that the fertility rates of Jewish and Arab women in Israel have leveled out over years. That statistic echoes similar findings earlier this year, which showed a steady decline in Muslim population growth in Israel. (CBS 31.12)

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*REGIONAL:

7.2 Non-Jordanians Constitute Third of Jordan’s Population

Initial results of the national census conducted in late November showed that of the Hashemite’s Kingdom’s 9.5 million residents, nearly one third are non-Jordanians. According to the results, the number of Jordanians is around 6.6 million, while the number of non-Jordanians who reside in the country is around 2.9 million, representing 30.6% of overall population, including Syrians, Egyptians and Iraqis. The results showed that Amman’s population more than doubled between 2004 and 2015, rising from 1.9 million to over 4 million, constituting around 42% of the Kingdom’s inhabitants. In regards to governorates, the results showed that Irbid came second with a population of 1.7 million, followed by Zarqa at 1.3 million. Official results of the national census will be revealed in February. (JT 12.01)

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7.3 Moroccan Amazigh Push to Make Amazigh New Year a Public Holiday

January twelfth marks the first day of year 2966, according to the Amazigh calendar. To gain recognition for this New Year, Amazigh have been orchestrating inclusive cultural festivities on the streets of Rabat. Although anthropologists say it is difficult to confirm the historical roots of the Amazigh New Year, known as Yennayer, the holiday’s roots have been linked back to 950 BCE. The New Year began as a celebration after Amazigh (Berber) King Chachnaq won the war against the Pharaohs, defeating Ramses III. Ever since, his descendants celebrate this historic victory annually.

But for the past few years, Amazigh have been attempting to claim a new victory with this holiday. In recent years, they have succeeded in making their Amazigh language the official language of the state along with Arabic in the 2011 Moroccan Constitution. Now, they are pushing for more recognition, trying to make their New Year a national public holiday.

Morocco has two New Year’s marked as public holidays. These include 1 January, according to the Gregorian calendar and the first day of the Islamic calendar, which changes every year depending on the moon. Most Moroccan citizens celebrate the Gregorian New Year, with media coverage focusing on 1 January festivities. Meanwhile, the Islamic calendar falls under the radar. The Amazigh New Year has fallen even further, being relegated as a cultural observation, although it is still an integral part of Berber identity. To many Amazigh, the New Year marks the reaffirmation of some important aspects of agrarian society. Last year, the youth wing of Amazigh Network for Citizenship (Azetta) launched a petition for the holiday. There has been no government response ever since. (MWN 11.01)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Phytech Closes Series A Round

Phytech announced the closing of an investment led by existing investors, Syngenta Ventures and Mitsui & Co Europe. Phytech’s PlantBeat technology is a simplified, alert-driven mobile platform which combines predictive algorithms and data analysis tools that integrate continuous crop health and supportive environmental data, distilled into real-time recommendations. Phytech is helping growers in their day-to-day farming decisions impacting both the quality and yield of their crops, while reducing water usage. Phytech’s technology is deployed by world leading growers in the U.S, Brazil, Australia and other markets and in a large variety of specialty crops and row crops, directly and through partnerships with global leading CP partners. The investment will fund the expansion of Phytech’s technology platform and support the company’s continuing commercialization globally.

Kibbutz Yad Mordechai’s Phytech is a leading Precision Ag analytics company, focused on helping farmers to optimize yields by transforming real-time plant data into actionable, yield-enhancing recommendations. Phytechs’ proprietary PlantBeat platform combines continuous plant monitoring hardware, spatial imaging, hyper-local climate information, agronomic modeling, data analysis and web and mobile software applications that help farmers improve profitability by making better informed in-season operating decisions. (Phytech 28.12)

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8.2 Kamada Receives Positive Data from Alpha-1 Antitrypsin to Treat GvHD

Kamada reported further positive interim results from a Phase 1/2 clinical trial of its proprietary alpha-1 antitrypsin (AAT) to treat steroid-refractory Graft Versus Host Disease (GvHD) which is being conducted in collaboration with Baxalta US and the Fred Hutchinson Cancer Research Center in Seattle.

The interim results showed that plasma AAT levels increased in both cohorts and remained stable for the duration of treatment. Treatment responses were evaluated as “peak” response and at Day 28. Eight of the twelve subjects showed an overall response to treatment, four of which were complete responses and four were partial responses.

Nass Ziona’s Kamada is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived Immune globulins. AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. The Company’s flagship product is Glassia, the first and only liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. FDA. (Kamada 06.01)

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8.3 Teva Launches Generic Ortho Tri-Cyclen Lo in the United States

Teva Pharmaceutical Industries announced the launch of a generic equivalent of Ortho Tri-Cyclen Lo (norgestimate/ethinyl estradiol) tablets in the United States. Teva’s Tri-Lo-Sprintec (norgestimate and ethinyl estradiol tablets, USP) is an oral contraceptive, available in a 28-day blister pack dispenser, used by women to prevent pregnancy. As a leading global pharmaceutical company, Teva is committed to care in women’s health with a portfolio including contraceptive products and other therapies.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 05.01)

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8.4 Teva & Checkpoint Announce Agreement for Oral PARP Inhibitor

Teva Pharmaceutical Industries and New York’s Checkpoint Therapeutics announced a license agreement in which Checkpoint will obtain the exclusive worldwide rights to develop and commercialize CEP-8983 and its small molecule prodrug, CEP-9722, an oral poly (ADP-ribose) polymerase (PARP) inhibitor in early clinical development for solid tumors. CEP-9722 is a novel, orally active, small molecule selective inhibitor of PARP-1 and PARP-2 enzymes that will be developed by Checkpoint as both a monotherapy and in combination with other anti-cancer agents, including Checkpoint’s novel immuno-oncology and checkpoint inhibitor antibodies currently in development.

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8.5 Psagot Winery is Challenging the Best Kosher Wines

It is less than a 20 minute drive from the center of Jerusalem, but yet Psagot Winery’s near 50 acre vineyards produces nearly 220,000 bottles of some of the world’s best kosher wines. The terrain, which is 900 meters above sea level, is what creates the amazing vintage that competes favorably with some of the best European wines. The venture began in 2003, producing a mere 3000 bottles; today they make 220,000. 60% of the wines are destined for export, most of it imported by Royal Wines.

Nearly $48 million of Israeli wines are exported to the US, a significant percentage by Royal. In 2012, both Psagot’s Cabernet Sauvignon and its Merlot received a 90+ rating from the prestigious Wine Enthusiast. More than 100,000 Psagot bottles are sold in the US. The Psagot wines feature a replica of an ancient coin found in the area on the face of the bottle, just another reminder that Psagot (literally translated as peaks) is about more than simply great wine. (KT 10.01)

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8.6 BioLineRx Collaborates with MSD to Investigate Pancreatic Cancer

BioLineRx announced a collaboration with MSD, known as Merck in the US and Canada, to support a Phase 2 study investigating BioLineRx’s BL-8040 in combination with KEYTRUDA (pembrolizumab), MSD’s anti-PD-1 therapy, in patients with metastatic pancreatic cancer. The study is an open-label, multicenter, single-arm trial designed to evaluate the safety and efficacy of this combination in patients with metastatic pancreatic adenocarcinoma.

BL-8040, BioLineRx’s lead oncology platform, is a CXCR4 antagonist that has been shown in several clinical trials to be a robust mobilizer of immune cells and to be effective at inducing direct tumor cell death. Additional findings in the field of immuno-oncology suggest that CXCR4 antagonists may be effective in inducing the migration of anti-tumor T cells into the tumor micro-environment. KEYTRUDA is a humanized monoclonal antibody that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. KEYTRUDA blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2, thereby activating T- lymphocytes, which may affect both tumor cells and healthy cells. The Phase 2 study will evaluate the clinical response, safety and tolerability of the combination of these therapies as well as multiple pharmacodynamic parameters, including the ability to improve infiltration of T cells into the tumor and their reactivity.

Jerusalem’s BioLineRx is a clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates. The Company in-licenses novel compounds primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization. (BioLineRx 12.01)

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8.7 BrainStorm’s NurOwn for ALS Treatment Published in JAMA Neurology

BrainStorm Cell Therapeutics announced the publication of a paper in the January 2016 edition of JAMA Neurology discussing the outcome of the first in man Phase 1/2 study and Phase 2 dose escalation study with NurOwn in ALS. The data provide indication of clinically meaningful benefit as reflected by a slower rate of disease progression in the period post treatment. There was also a positive trend on two novel biomarkers, rate of decline of muscle volume and of compound motor axon potential (CMAPs). These are the first published clinical data with stem cells that have been induced under culture conditions to produce NTFs, with the potential to achieve a neuroprotective effect in ALS and modify the course of disease.

NurOwn was found to be safe and well tolerated over the study follow up period in the twenty six patients treated across the two clinical trials. Most of the adverse events were mild and transient and there were no treatment related adverse events.

Petah Tikva’s BrainStorm Cell Therapeutics is a biotechnology company engaged in the development of first-of-its-kind adult stem cell therapies derived from autologous bone marrow cells for the treatment of neurodegenerative diseases. The Company holds the rights to develop and commercialize its NurOwn technology through an exclusive, worldwide licensing agreement with Ramot, the technology transfer company of Tel Aviv University. (BrainStorm 11.01)

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8.8 XTL Submits Protocol for Trial of hCDR1 in Lupus Treatment

XTL Biopharmaceuticals has submitted the full protocol for its advanced stage clinical trial of hCDR1 for the treatment of systemic lupus erythematosus (SLE) to Yeda Research and Development Company. XTL previously announced that it has submitted a Pre-IND meeting package to the US FDA and expects to receive written responses regarding its proposed clinical study in the coming weeks. A Phase 2b clinical trial of hCDR1 was previously completed and the compound has shown a favorable safety profile in over 400 patients and efficacy in at least one clinically relevant endpoint. Submission of this clinical trial protocol marks a milestone for XTL in its development of hCDR1, which the Company is developing under license from Yeda, the technology transfer arm of the world-renowned Weizmann Institute of Science.

Yeda Research and Development Company is the commercial arm of the Weizmann Institute of Science, one of the world’s leading multidisciplinary research institutions. Ra’anana’s XTL Biopharmaceuticals, a biopharmaceutical company, focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of unmet clinical needs with a focus on treatments for autoimmune diseases. (XTL 11.01)

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8.9 V-Wave Announces $28 Million Series B Financing

Caesarea’s V-Wave, a medical device company that is developing a proprietary implantable, interatrial shunt for the treatment of heart failure (HF), completed a Series B financing of $28m. New investors included Johnson & Johnson Innovation – JJDC Inc., TriVentures, Pura Vida Investments and BioStar Ventures. Also participating in the round are existing investors BRM Group, Pontifax and Edwards Lifesciences. The funds will support clinical evaluation and development, addition of senior management and manufacturing scale-up of V-Wave’s proprietary minimally invasive device for use in patients with chronic symptomatic HF. The shunt is implanted trans-venously and placed in the atrial septum where it remains. Within the shunt is a porcine tissue valve to assure only left to right shunting of blood and to reduce the probability of paradoxical embolus. The device regulates left atrial pressure (LAP) by shunting excess blood volume away from the left ventricle – the heart’s main pumping chamber. Elevated LAP is the direct cause of worsening symptoms and hospitalization in over 90% of HF patients. The Shunt is intended to relieve symptoms, improve quality of life, and to reduce the need for acute hospitalization due to worsening episodes of HF in patients who become symptomatic at minimal levels of activity. To date, more than thirty patients have been successfully treated. The V-Wave Unidirectional Shunt System is not available for sale in the United States or other countries. (V-Wave 11.01)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SuperCom Introduces Enhanced PureHealth Solution Suite

SuperCom announced that its M2M(IoT) division has launched its enhanced PureHealth Suite – a hybrid of products and applications which will be available for the HealthCare, Senior living and e-Hospitals sectors, starting January 2016.

The PureHealth Suite provides a wide array of solutions including: Staff Safety, Patient Safety, Patient and Staff Flow, Residence Safety, Wander Management and Asset/Inventory Management. These solutions are all aimed at improving efficiency and safety, in addition to providing valuable operational insights to healthcare and senior living facilities. PureHealth solutions are all accessed, managed, and controlled from SuperCom´s secure, cloud based software, creating an easy-to-use and cost effective platform that allows healthcare and senior living facilities to pick and choose the solutions they need, when they need them.

Since 1988, Herzliya’s SuperCom has been a leading global provider of traditional and digital identity solutions, providing advanced safety, identification and security solutions to governments and organizations, both private and public, throughout the world. Through its proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance and border control services, SuperCom has inspired governments and national agencies to design and issue secured Multi-ID documents and robust digital identity solutions to its citizens and visitors. (SuperCom 30.12)

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9.2 Locust-Inspired Robot for Reconnaissance and Rescue

Israeli researchers have built a locust-inspired robot that is just 5 inches (13 cm) long and weighs 23 grams, but despite its small size can jump 11 feet (3.35 m) high and cover a horizontal distance of 4.5 feet (1.37 m). This jump height is more than twice the height of similar-sized jumping robots and is 25 times higher than its own length. The robot could have applications in search-and-rescue missions, reconnaissance, and environmental monitoring in rough terrain.

The team of researchers that developed the miniature jumping robot is from Tel Aviv University and Ort Braude College, both in Israel, which inspired the name of the robot: TAUB (Tel Aviv University and Braude College).

As the researchers explained, the main reason why TAUB can jump so much higher than previous robots is because of its ability to store significantly more energy in the torsion springs in its “leg joints.” It does this by using a simple lever mechanism inspired by the way that the desert locust jumps by using its strong hind legs to catapult itself into the air. Instead of attempting to produce an exact imitation of the entire locust body and jumping procedure, the researchers focused on some of the specific biomechanical features of the locust’s highly successful jump mechanism.

The researchers are currently working on a gliding mechanism that will enable the robot to extend its jumping range, lower its landing impact, execute multiple steered jumps, and stabilize the robot while airborne. Stability is particularly important because when the robot’s center of mass deviates by even a few millimeters, the robot can roll in the air. Rolling makes it difficult to steer the robot, wastes energy and makes landing more complicated.

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9.3 SolarEdge’s StorEdge Solution is Now Internationally Available

Compatible with Tesla’s home battery, the Powerwall, StorEdge is a DC coupled storage solution that allows home owners to reduce electric bills and gain energy independence. With StorEdge, unused solar energy is stored in a battery and used when needed to maximize self-consumption and for power backup. StorEdge also supports Time-of-Use management, which promotes energy consumption when electric demand from the grid is low (off-peak rates) and lower consumption when demand is high (peak rates). The backup function allows homeowners to store solar energy and use it during electric outages. The solution is based on a single inverter that manages and monitors solar energy generation, consumption, and storage. With the complete SolarEdge DC optimized StorEdge system, homeowners benefit from higher generation, higher efficiency, simple design, enhanced safety, full monitoring, and easy maintenance.

Herzliya Pituah’s SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. (SolarEdge 12.01)

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9.4 LightCyber Expands Behavioral Attack Detection

LightCyber announced the general availability of a new release of its Magna platform for detecting attack behaviors within an enterprise network with significantly expanded User-oriented attack detection capabilities. The new User-based detection features complement the existing Network and Endpoint Device capabilities, resulting in the broadest behavioral anomaly detection platform in the industry with the highest alert accuracy and operational efficiency for security analysts. With this expanded analytical detection capability, the LightCyber Magna Behavioral Attack Detection platform now provides even broader security visibility use cases, including detection of malware, risky behaviors of internal users, insider attacks and targeted external attacks that could lead to data breaches and other kinds of damage.

Ramat Gan’s LightCyber is a leading provider of Behavioral Attack Detection solutions that provide accurate and efficient security visibility into attacks that have slipped through the cracks of traditional security controls. The LightCyber Magna platform is the first security product to integrated user, network and endpoint context to provide security visibility into a range of attack activity. Founded in 2012 and led by world-class cyber security experts, the company’s products have been successfully deployed by top-tier customers around the world in the financial, legal, telecom, government, media and technology sectors. (LightCyber 12.01)

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9.5 SolidRun & nemetris GmbH Bring IoT Technology to Automotive Manufacturing

SolidRun and Germany’s nemetris GmbH, a leading provider of Industry 4.0 manufacturing technologies, announced the deployment of SolidRun’s IoT gateway as part of nemetris’ Smart Industry Apps; an advanced manufacturing solution for automotive and discrete manufacturing. The solution integrates the CuBox, a miniature, 2-inch cube computer for the purpose of production line data collection and aggregation from automotive production floors.

Established in 2010, Tel Aviv’s SolidRun is a global leading developer and manufacturer of powerful energy efficient System on Modules (SOMs) and mini computers. SolidRun’s innovative embedded solutions are ARM processor architecture based and compact, and include comprehensive software packages, drivers and support for major operating systems. (SolidRun 12.01)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Impressive Reduction in Israel’s Debt-to-GDP Ratio

Israel’s ratio of public debt to GDP fell by no less than 1.8% in 2015, the Ministry of Finance reported on 12 January. Ministry of Finance Accountant General Abadi-Boiangiu published an initial estimate for the ratio of public and governmental debt to GDP for 2015. According to the estimate, a 64.9% public debt-to-GDP ratio, including the local authorities, is projected, 1.8% less than the ratio in the preceding year. An even steeper drop in the government debt-to-GDP ratio is projected: from 65.5% to 63.4%, a 2.2% decrease.

The debt-to-GDP ratio constitutes one of the main indicators of Israel’s economic soundness, and is a material consideration in determining its credit rating. The 2015 figures establish Israel as a country that has managed to lower its debt ratio more than any other Western country since 2008. The fall in the debt ratio is also expected to lower financing costs on the debt, which totaled NIS 38 billion in 2014, in the current budget, thereby freeing up money for spending by the civilian ministries.

This year’s decrease in the debt ratio is attributable to the lower-than-expected budget deficit (only 2.1%) and market factors, primarily the decrease in the Consumer Price Index (49% of the public debt is linked to this index), the lower interest rate on the debt, and the steep fall in the shekel-euro exchange rate. (Globes 12.01)

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10.2 Israel’s Third Quarter Growth Rate Revised Down to 2%

The Central Bureau of Statistics announced on 31 December that Israel’s annualized economic growth, excluding seasonal factors, totaled 2% for Q3/15. The previous growth estimate published for the quarter was 2.5%. GDP rose by annualized rates of 0.2% and 2.3% in the third and second quarters, respectively. The figures indicate that private consumption increased by an annualized 4.5 (2.4% per capita) during the first three quarters of 2015, compared with 3.7% in 2014. (CBS 31.01)

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10.3 Israeli Exports Drop By 7% During 2015

The Israel Export and International Cooperation Institute announced on 29 December that Israel’s diamond exports fell 25% in 2015, while exports of goods were down 7.5% and exports of services dipped 3%. Israeli exports totaled $45.7 billion in 2015, down 7%, compared with 2014. The Export Institute predicts a 2% rise in exports in 2016.

Israeli exports to the US rose slightly to $10.8 billion. Exports to Africa, on the other hand, fell from $1.3 billion in 2014 to $1 billion in 2015. Exports to Latin America were also down, totaling $1.8 billion, 28% less than in 2014. The Export Institute attributes the steep decline in exports to the continent to a 20% slide in exports to Brazil, which is suffering from a prolonged economic crisis; the steep devaluation of the local currency; and a similar decrease in exports to Mexico. (IEICI 29.12)

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10.4 Tourism to Israel Declines By 3% in 2015

Israel welcomed 3.1 million tourists from abroad in 2015, a 3% decrease from 2014, the Ministry of Tourism and Central Bureau of Statistics announced. Tourism sources feel that these figures were encouraging considering the shadow cast by Operation Protective Edge in the summer of 2014 and the upswing in terrorist attacks in the final four months of the year. Overseas tourists generated revenue of NIS 9.9 billion in 2015.

The largest number of tourists, 20% or 586,000 came from the US, followed by Russia and France. Some 77% of tourists spent time in Jerusalem and 69% visited Tel Aviv. The lower incoming tourism figures were balanced out by Israelis who spent 5.9 million overnight stays in Israeli hotels and guesthouses, up 8% from 2014. Israelis also traveled abroad more last year. There was a record 5.16 million Israeli exits abroad, up 13% compared with 4.55 million in 2014. (Various 03.01)

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10.5 Record Israeli Car Deliveries During 2015

A new record of 254,748 vehicle deliveries was set in Israel in 2015, up 6.2% from 2014, which was in itself a record year. An additional 4,834 vehicles were sold for use as taxis. Nevertheless, December was a weak month with only 9,793 new vehicles delivered, down 7% from 2014.

Korea’s two largest carmakers led the Israeli market in 2015. Kia finished in first place with 33,703 vehicles delivered, a 28% increase over 2014, followed by Hyundai with 31,250 vehicles delivered, down less than 1% from 2014. In third place, was Toyota with 29,280 deliveries, up 7% from 2014 and in fourth place was Mazda with 17,057 deliveries, down less than 1%. In fifth place was Mitsubishi with 16,121 deliveries, up 22% from 2014. (Globes 04.01)

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11: IN DEPTH

11.1 ISRAEL: Israeli VC 2015 Fund Raising Increases to $1.5 Billion

Israeli venture capital fundraising activity was prolific in 2015, opening the seventh Israeli venture capital cycle with 18 new venture capital funds in the 2015 vintage year, IVC Research Center – KPMG Somekh Chaikin reports. So far, fund-raising efforts reached $1.02 billion in 2015, with 13 funds and 43% of the capital from funds at first closing, which are expected to raise an additional nearly $500 million, to be added to the 2015 vintage year, up from $1.2 billion in 2014.

IVC research manager Marianna Shapira said, “In the venture capital world, a vintage year is the year the fund starts investing after making a first closing, and in many cases, funds continue raising capital in the following year to reach their targets. 2015 is the first vintage year in the seventh VC capital raising cycle in Israel, which already looks promising with a number of new players entering the local VC market and 13 VC funds at first closing expected to continue capital raising efforts throughout 2016. We believe they will reach their target amounts, which will bring in an additional $500 million dedicated to Israeli investments for 2015 vintage funds. Furthermore, the 2016 vintage is already on its way, with seven VC funds currently engaged in a capital raising process, targeting more than $1 billion in total.”

The seventh venture capital raising cycle that started early in 2015 – with 83North’s $204 million closing announcement – followed a successful sixth cycle between 2011 and 2014, concluding with a total of $3.6 billion raised by 61 funds. The sixth cycle had been the strongest one since the early 2000s, ending with $1.2 billion for vintage 2014 funds, the strongest vintage year in the past decade. The sixth cycle’s most evident trend was the increase in the number of micro-venture capital funds, with 33 micro funds raising capital during this period, more than three times the number of such funds in the previous two cycles.

2015 vintage was marked by the emergence of six new growth funds, an outstanding number of funds dedicated to growth stage companies. While it may be a bit early to tell, it seems this might be a new trend for the seventh cycle. The average 2015 vintage fund currently stands at $57 million and may increase to as much as $82 million when targets are reached by the funds still raising further capital.

KPMG Somekh Chaikin Technology group partner Ofer Sela points to another interesting trend: “Over the past year we’ve seen a change in the LP mix in Israeli VC funds. While Israeli institutional investors have expanded their involvement then what it had been in the past, they still leave the arena mostly to investors from the US, and increasingly, from China. We can also see Israeli high net worth individuals going into VC investments. We hope this changing trend will get even more institutional investors involved in the industry, either as LPs in funds or co-investors in financing deals.”

In 2015, four seasoned Israeli venture capital funds raised a cumulative 59% of the total fund capital, with more than $100 million each. 83North stood out with its quick closing of $204 million, a third fund for the team, but the first under the 83North rebranding of Greylock Israel. Pontifax’s fourth fund attracted a noticeable $150 million, in addition to another $40 million at first closing for the management company’s AgTech fund. Pitango Growth, which is dedicated to growth stage companies, followed with a first closing of $125 million out of a targeted $250 million. Vintage’s eighth fund closed $125 million for late stage investments, after having closed its $144 million seventh fund only a year earlier, of which 50% are allocated to investments in Israeli funds.

Sela added, “The local VC industry’s viability is affirmed by two complementary trends. On the one hand we see veteran Israeli VC funds last longer than the average ten years, choosing to reinvest some of their returns, effectively increasing available capital. On the other hand, the VC funding cycles shorten as successful 2014 vintage VCs intend to start raising new funds during the last quarter of 2016, allowing them rapid cycles of first investments.”

At the beginning of 2016, over $2 billion is available for investments by Israeli venture capital funds. Of this amount, a little over $500 million is earmarked for first investments. The remainder is reserved for follow-on investments. With nearly $1 billion expected to be raised in 2016, IVC and KPMG believe that more than $700 million may be available for first investments over the coming year. (IVC-KPMG 05.01)

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11.2 SAUDI ARABIA: Fitch Says Budget Looks Positive But Deficit Will Stay Large

Saudi Arabia’s 2016 budget contains significant reforms and follows notable expenditure restraint during the second half of 2015, but the fall in oil prices means that the deficit/GDP ratio will again be in double-digits, Fitch Ratings said on 5 January.

The 2016 budget outlines measures to rationalize expenditure, increase non-oil revenues, and improve the fiscal policy framework. Petrol and utility price hikes were announced, and subsidy reform will proceed “gradually over the next five years.” The authorities aim to slow the growth of recurring expenditure, especially wages, salaries and allowances. Privatizations are planned. Adopting a medium-term expenditure framework with a budget ceiling and creating a debt management office should strengthen management of the public finances.

The commitment to reform was shown on 28 December with a hike in petrol prices of 66% (91 octane) and 50% (95 octane). Water prices for industrial, government and large corporate users more than doubled and electricity, and gas and diesel prices were raised. The direct cost of subsidies to the budget is less than 2% of GDP, but indirect subsidies (i.e. foregone revenue from oil that could be sold on international markets) are large. Taxes on tobacco and soft drinks will be raised, and support for a GCC-wide value-added tax appears firmer.

The full impact on the deficit will depend on the pace and extent of implementation and the size of offsetting measures to allay the effect on low- and middle-income families.

Nevertheless, the magnitude of the oil price decline means that the 2016 budget forecasts total revenues of SR513.8b, down from an estimated SR608b last year. Budgeted spending at SR840b is below estimated actual spending for 2015 (SR975b), but this leaves a projected deficit of SR326.2b ($86.9b), around 13.5% of GDP. This is by far the largest fiscal deficit that the Saudi authorities have budgeted for, and suggests an oil price assumption in the low $40 p/b.

This would be a second successive double-digit budget deficit, after the Ministry of Finance said that the 2015 deficit was expected to reach SR367b, or 15% of GDP – the largest ever Saudi deficit, albeit below our forecast of 16.8%.

The lower-than-expected 2015 deficit mainly reflects measures to contain spending introduced during the year – including greater scrutiny of capex. Overspend was the lowest since 1999, with actual spending exceeding the budgeted level by 13.4% (compared with a 10-year average of 24%). Without the one-off cost of royal decrees after the accession of King Salman and additional military and security spending (likely due to the war in Yemen), spending would have been almost on budget.

The 2016 budget for the first time includes an unallocated contingency reserve worth 22% of budgeted spending to cover unforeseen expenditure. We assume that, without a significant rebound in oil prices, this will not be fully drawn down, making a further reduction in the gap between budgeted and actual spending plausible. It is unclear whether heightened tension with Iran will increase security costs.

Concrete deficit financing plans were not in the budget, but Fitch assumes these will remain a combination of drawing down government assets held at the central bank and debt issuance, potentially including international issuance. Net foreign assets held by the central bank fell by $96b over the first 11 months of 2015.

The fiscal policy response to lower oil prices and evolution of fiscal and external buffers are key to resolving the Negative Outlook on Saudi Arabia’s ‘AA’ sovereign rating. (Fitch 05.01)

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11.3 SAUDI ARABIA: Is the Saudi Monarchy on Its Last Legs?

David P. Goldman posted on the Middle East Forum on 3 January that the recent mass executions in Saudi Arabia suggest panic at the highest level of the monarchy. The action is without precedent, even by the grim standards of Saudi repression. In 1980, Riyadh killed 63 jihadists who had attacked the Grand Mosque of Mecca, but that was fresh after the event. Most of the 47 prisoners shot and beheaded on 2 January had sat in Saudi jails for a decade. The decision to kill the prominent Shia cleric Nimr al-Nimr, the most prominent spokesman for restive Saudi Shia Muslims in Eastern Province, betrays fear of subversion with Iranian sponsorship.

Why kill them all now? It is very hard to evaluate the scale of internal threats to the Saudi monarchy, but the broader context for its concern is clear: Saudi Arabia finds itself isolated, abandoned by its longstanding American ally, at odds with China, and pressured by Russia’s sudden preeminence in the region. The Saudi-backed Army of Conquest in Syria seems to be crumbling under Russian attack. The Saudi intervention in Yemen against Iran-backed Houthi rebels has gone poorly. Its Turkish ally-of-convenience is consumed by a low-level civil war. Nothing has gone right for Riyadh.

Worst of all, the collapse of Saudi oil revenues threatens to exhaust the kingdom’s $700 billion in financial reserves within five years, according to an October estimate by the International Monetary Fund. The House of Saud relies on subsidies to buy the loyalty of the vast majority of its subjects, and its reduced spending power is the biggest threat to its rule. At the end of 2015, Riyadh cut subsidies for water, electricity and gasoline. The timing of the executions may be more than coincidence: the royal family’s capacity to buy popular support is eroding just as its regional security policy has fallen apart.

For decades, Riyadh has presented itself as an ally of the West and a force for stability in the region, while providing financial support for Wahhabi fundamentalism around the world.

Saudi Arabia’s proxies in Syria are in trouble. Early in 2015, the Army of Conquest (Jaish al-Fateh), a coalition of al-Qaida and other Sunni Islamists backed by the Saudis, Turks and Qataris, had driven the Syrian army out of several key positions in Northwest Syria, threatening the Assad regime’s core Alawite heartland. The coalition began breaking up in November, however, and the Syrian Army recently retook several villages it had lost to the Army of Conquest. One of the Army of Conquest’s constituent militias, Failaq al-Sham, announced 3 January that it was leaving the coalition to defend Aleppo against regime forces reinforced by Russia.

Everything seems to have gone wrong at once for Riyadh. The only consolation the monarchy has under the circumstances is that its nemesis Iran also is suffering from the collapse of oil revenues and the attrition of war. Iran began withdrawing its Revolutionary Guard forces from Syria in December, largely due to high casualties. The high cost of maintaining the war effort as Iran’s finances implode also may have been a factor. Iran’s Lebanese Shia proxy, Hezbollah, has suffered extremely high casualties, virtually neutralizing its whole first echelon of combat troops. Russia has shown no interest in interfering with Israeli air strikes against Hezbollah.

The oil price collapse turns the competition between Saudi Arabia and Iran into a race to the bottom. But the monarchy’s panicked response to its many setbacks of the past several months raises a difficult question.

In the past, the West did what it could to prop up the Saudi royal family as a pillar of stability in the region, despite the Saudis’ support for jihadi terrorism. Soon the West may not be able to keep the House of Saud in power whether it wants to or not.

David P. Goldman is a senior fellow at the London Center for Policy Research and the Wax Family Fellow at the Middle East Forum. (MEF 03.01)

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11.4 EGYPT: Will Saudi Agricultural Investments in Sudan Leave Egypt High and Dry?

Saudi Arabia has been steadily boosting its agricultural investments in Sudan in recent years, raising concerns in Cairo that any increase in Sudan’s use of Nile River water will come at the expense of Egypt’s share.

Walaa Hussein posted on 6 January in Al-Monitor that Riyadh has been encouraging Saudi investors to pump more money into Sudan in conjunction with Sudan’s participation in the Saudi-led intervention against the Houthis in Yemen. Yet internal reports prepared by Egypt’s Water Resources and Irrigation Ministry, along with the Agriculture and Land Reclamation Ministry, confirm that Sudan is already using its entire allotment of Nile water, according to a government official briefed on the issue who spoke to Al-Monitor on condition of anonymity.

The investments, which include building dams on the Nile in Sudan, threaten Egypt’s water security, an Egyptian government source confirmed to Al-Monitor.

On 3 November, Saudi Arabia agreed to provide $1.7 billion to construct three dams in northern Sudan. The Kajbar, Dal and Al-Shiraik dams should be completed in five years. That amount comes in addition to $500 million Riyadh has provided for other water and electricity projects and the cultivation of a new 1 million acre area on the banks of the Atbara and Setit rivers in eastern Sudan.

The total amount of arable land in Sudan is estimated at almost 208 million acres, which is equivalent to 45% of the Arab world’s arable land, out of which only 30 million acres are being used. At the Summit of Arab Leaders in Sharm el-Sheikh, Egypt, in March 2015, Sudanese President Omar al-Bashir announced that Sudan had taken a series of measures to implement an initiative on Arab food security and was ready to receive Arab investments. The summit nearly coincided with the second Saudi-Sudanese investment forum in Riyadh in late February 2015, which confirmed the increase of Saudi investments in Sudan, currently pegged at more than $13 billion. Then at the Sudanese-United Arab Emirates forum in Abu Dhabi in May 2015, investment projects worth $16 billion were discussed. The UAE’s current investments in Sudan amount to $6 billion.

Water experts in Egypt have repeatedly warned against expanding agricultural areas in Sudan, saying it will be disastrous for Egypt. Moreover, the Egyptian government has faced a wave of opposition to its paradoxical announcement that Cairo will participate in agricultural projects in Sudan. Egyptian Water Minister Hossam el-Moghazy’s confirmed to Al-Monitor last year that Egypt’s agriculture projects in Sudan will depend on alternatives for the Nile water, be they groundwater or rainwater.

Former Egyptian Minister of Water Resources and Irrigation Mohamed Nasr Eldin Allam told Al-Monitor that Sudan is currently using its entire share of Nile water, although Khartoum has repeatedly claimed otherwise. He noted, “Before I left the ministry in 2011, I was supervising the establishment of a water scale to determine Sudan’s use of the Nile water. It showed that Sudan was using its total 18.5 billion cubic meter [almost 5 trillion gallon] share of the water, as stipulated in the Nile Water Agreement of 1959.” Allam stressed that any new agricultural investments in Sudan using Nile water would be deducted from Egypt’s share and would be a violation of that agreement.

Allam said Egypt must fast-track meetings of the Egyptian-Sudanese joint body tasked with Nile water management, “express Cairo’s fears regarding those new investments and make things perfectly clear with Sudan.” He warned that the Sudanese investment plan that is currently on the table and involves Saudi Arabia, some Gulf states, Iran and Turkey confirms that Sudan needs much more than its current share of water, but the plan is unclear about where the water will come from.

Allam said it will be no easy matter for Egypt to arrange discussions with the Arab investors — most notably Saudi Arabia — to guarantee an alternative water source and to take into account Egypt’s share. He added, “Sudan may consider it an act hostile to development on its soil, and we need to talk to Sudan directly before resorting to such a step.”

Haitham Awad, head of the Irrigation and Water Hydraulics Department at Alexandria University, told Al-Monitor, “Sudan has the right to develop its territory and improve the people’s standard of living, while taking into account Egypt’s right to the water. The plan focusing on the new dams, which is on the table, will undoubtedly increase its water consumption. In addition, the evaporated water [from the new dams] will cause the amount of water reaching Egypt to decrease, which poses a threat to Cairo’s share of water.”

Awad added, “Any expansion of Sudan’s agricultural areas by 10,000 [acres], without taking into account its share of the water, will cause the destruction of 7,000 [acres] of agricultural land in Egypt.” He said, “Talk about the possibility of resorting to groundwater for agriculture in Sudan is illogical” because of the cost of drilling wells. Awad criticized Cairo’s policies that encourage Egyptian agricultural investment in Sudan. He said, “Any extra use of the water in Sudan will be at the expense of the Egyptian share.”

Cairo has remained silent about the escalating boundary dispute with Sudan over the Hala’ib Triangle, as well as the Sudanese position favoring Ethiopia in the construction of the Grand Renaissance Dam, which violates the 1959 agreement. It will probably take the same approach to its concerns about the suggested increased agricultural investments in Sudan, particularly since the investors are Saudis and since Cairo is keen not to further complicate the current Egyptian-Saudi ties. (Al-Monitor 06.01)

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Fortnightly, 27 January 2016

January 27, 2016, 5:04 am

≫ Next: What’s News at EDI – February 2016

≪ Previous: Fortnightly, 13 January 2016

27 January 2016
17 Shvat 5776
17 Rabi Al-Thani 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Netanyahu Says Cyber Security is a Huge Economic Opportunity

2: ISRAEL MARKET & BUSINESS NEWS

2.1  imVision Completes $4 Million Series A Funding
2.2  Anagog Concludes Round A Funding from US & Chinese Investors
2.3  mPrest Raises $20 Million to Expand Industrial & Commercial IoT Solutions
2.4  IronScales Collects $1.5 Million in Seed Funding
2.5  GreenSQL Rebrands as HexaTier
2.6  Israel-Based Auto Supplier Selects Indiana for First North American Operations

3: REGIONAL PRIVATE SECTOR NEWS

3.1  U.S. Presence at Arab Health 2016 Is the Largest Ever
3.2  Arabian Gulf’s 2nd Bloomingdale’s Store to Open in Kuwait in 2017
3.3  GE Wins Close to $1 Billion Deal For Saudi Power Plant
3.4  PSA Peugeot Citroen Creates a New Automotive OpenLab in Morocco

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Jordan’s 10 Year Strategy to Increase Water Resources

5: ARAB STATE DEVELOPMENTS

5.1  Lebanese Consumer Prices Declined by 3.75% in 2015
5.2  Lebanon’s Trade Deficit Tightened by 15.94% to $13.29 Billion
5.3  Tourist Spending in Lebanon Rose by 2% in 2015

♦♦Arabian Gulf

5.4  Oil Producing Nations Forecasting to Sell $240 Billion in Assets This Year
5.5  German Exports to the Arabian Gulf Soar Despite Oil Price Slump
5.6  Kuwait’s Emir Urges Budget Cuts as Oil Revenues Decline
5.7  Kuwait Planning $100 Billion New Sovereign Wealth Fund
5.8  Bahrain Cancels Pay Rise Plan for Government Workers
5.9  Saudi Arabia Presents Plan to Move Beyond Oil
5.10  Saudi Arabia’s Economy Set to Grow at Slowest Rate Since 2002

♦♦North Africa

5.11 Suez Canal Revenues Fall to $408.4 Million in November
5.12 King Mohammed VI Launches Smart Video-Surveillance System in Casablanca

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  World Bank Raises Growth Estimation for Turkey
6.2  Report: Turkey Ranked 36th Most Innovative Country
6.3  Ankara Accuses Pakistan of Stalling Free Trade Deal
6.4  Russian Crisis Results in Losses of Over $11 Billion for Turkey
6.5  Greek Households’ Disposable Income Fell €1 Billion in Third Quarter

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Israel Sets New Winter Electricity Use Record
7.2 New Israeli Bill Allows Ordinary Citizens to Submit Legislation

♦♦REGIONAL:

7.3 Tobruk Rejects UN-backed Unity Government
7.4 Greek Mayor Signs Country’s First Gay Partnership Contract

8: ISRAEL LIFE SCIENCE NEWS

8.1  Rosetta Receives US Patent Allowance for Gene Signature Use with Kidney Tumors
8.2  XTL’s Encouraging Feedback from FDA on Lupus Drug hCDR1
8.3  BioLineRx Medical Device Classification in Europe for Celiac Treatment Confirmed

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SolarEdge’s StorEdge Solution is Now Internationally Available
9.2 Battery Challenge Confirms Lucid’s PowerXtend Technology Advantage
9.3 VocalZoom & China’s iFLYTEK Agree to Test Performance in Noisy Environments

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s CPI Falls 0.1% in December
10.2 Israel Wine Exports Up 6% in 2015

11: IN DEPTH

11.1  ISRAEL: Funding for Israeli High-Tech Hits All-Time High
11.2  SAUDI ARABIA: Fitch Applauds Plan to Tackle Growing Budget Deficit
11.3  TURKEY: Dollar-Needy Turkey Tightens Foreign Currency Rules?
11.4  GREECE: Upgraded to ‘B-‘ From ‘CCC+’ On Reform Progress

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Netanyahu Says Cyber Security is a Huge Economic Opportunity

Prime Minister Benjamin Netanyahu opened the Cyber Tech Conference in Tel Aviv with remarks about the importance of the cyber industry. “There is great opportunity and a great challenge,” Netanyahu said at the beginning of his speech. “Technological progress is a blessing, but also a curse, and the biggest curse is that the Internet of Things is making everything vulnerable. Everything is a target for a cyber-attack and when I say everything, I mean everything – from our bank accounts to national security. Even the way we conduct elections in Israel is vulnerable.

“We cannot grow, therefore, unless we have cyber security. It is essential for the defense of both individuals and the nation, which at the same time creates a huge economic opportunity. In the past, I said that I wanted Israel to be one of the world’s five major cyber powers, and I think that we have attained this goal. I do not believe, however, that we should settle for being number four or number five.

“When I talk about cyber security, I am referring to the national aspect and the industrial aspect, meaning how to provide security solutions at the national level, and how to provide security solutions to the rest of the world. There is a contradiction between these two goals, because one of the important things for us is Israel’s defense secrets. Still, I understand that in this market, as long as we do not cooperate, especially with other countries, there will be no growth, and I am an apostle of growth…A large proportion of the existing cyber technologies began in Israel, and the world recognizes this. The fact that this conference is taking place in Israel and you are attending it is proof of that. I want Israel to become a cyber power, and at the same time a catalyst for worldwide cyber capabilities.” (Globes 26.01)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 imVision Completes $4 Million Series A Funding

imVision announced completion of $4M series A funding round with the participation of Chinese CE Ventures, Pitango Venture Capital – one of the largest Venture Capital firms in Israel and other investors. imVision’s product addresses a major cyber security and operational risks in a fast growing Telco cloud market by securing the telco services (which are considered as mission critical services) running over cloud or hybrid environment. The company intends to use the funding to strengthen the company’s Correlative Behavioral Analysis (C-BA) system and to develop the company’s business with worldwide networking providers.

Ramat Gan’s imVision is a cyber security startup company that operates in NFV/SDN environments. The company quickly became a market leader for anomaly detection and isolation solutions. These were based on unique Correlative Behavioral Analysis (C-BA) algorithms that specialize in service awareness across the entire network. (imVision 25.01)

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2.2 Anagog Concludes Round A Funding from US & Chinese Investors

Anagog announced the successful completion of its Round A investment. The lead investor in round A is California’s GigOptix, a lead designer, developer, and global supplier of a broad range of analog, digital, and mixed signal components to enable high-speed information streaming over the telecom networks, datacom infrastructure, and consumer electronics links. Other investors include a professional Chinese investor who is the founding partner of Ivy Capital, a leading Chinese VC fund. Existing shareholders also took part in this round, expressing their trust in the Company’s execution plan.

The Anagog mobility status SDK allows detection of a user’s real-time mobility status with an ultra-low battery consumption. The Anagog SDK can tell for example if the user is currently walking, driving, at home or at work. It can detect automatically when and where he parked his car, if he is riding a bus, enters or exits a predefined zone, and more. Such mobility status detection enables the best context-aware applications and services and drastically improves the user’s experience.

Israel’s Anagog was founded to develop and perfect the mobility status algorithms that allows for advanced on-phone machine learning capabilities for best user experience with ultra-low battery consumption and with a high level of privacy protection. The company have filed 12 patents to date and is currently developing a set of additional related advanced technologies and services. (Anagog 25.01)

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2.3 mPrest Raises $20 Million to Expand Industrial & Commercial IoT Solutions

Petah Tikva’s mPrest has raised a $20 million Series A round of funding. The round was led by GE Ventures, the venture arm of GE, and OurCrowd, one of the world’s leading equity crowdfunding platforms. mPrest will use the investment to expand its international presence in the industrial and commercial markets and rapidly scale to meet the soaring needs of the IoT world. mPrest delivers leading-edge software for “connecting the dots” across multiple complex systems of any scale, from a single facility to a multinational corporation. mPrest’s groundbreaking, generic software platform enables organizations to connect any sensor at any time with unparalleled flexibility. Organizations receive real-time situational awareness and can optimize operations automatically.

mPrest is an established player in the monitoring and control software industry serving essential sectors, including defense and security bodies, electric and water utilities, smart cities and buildings, fleet management companies and other large organizations around the world. For the past six years, mPrest has been a strategic partner with Rafael Advanced Defense Systems to supply the command and control system for the renowned Iron Dome air-defense system, as well as many other large projects. (mPrest 25.01)

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2.4 IronScales Collects $1.5 Million in Seed Funding

IronScales, developers of the cyber security industry’s first ever employee-based intrusion prevention system with an automated phishing-mitigation response, closed a seed round of funding. The $1.5 million round is led by RDSeed, an investment arm of Rafael Development Corporation (RDC). IronScales’ comprehensive crowd-wisdom-based phishing-mitigation solution helps protect enterprises from cyber-crimes whereby criminals attempt to deceive employees into revealing sensitive information such as usernames and passwords so they can then install spyware, remote-access Trojan horse attacks or ransomware. The IronScales solution is currently in use by dozens of customers in the financial sector, as well as security and telecom companies. IronScales will use the seed money for ongoing product development and the expansion of its operations in Europe and the U.S.

More than 90% of successful cyber-attacks on companies and organizations involve sophisticated, employee-targeted spear-phishing (according to Trend Micro), and damages can range from the theft of sensitive information to ransom demands. The IronScales training program uses a “gamified” and interactive approach, simulating real-world email phishing attacks, and helping prepare employees for actual attacks. Those who fail to spot the mock attack will receive on-the-spot quick, fun, interactive training. IronScales dramatically increases employee awareness and mitigation of malicious emails and has already made a significant impact for existing customers, reducing employee click rates of malicious email and mitigating actual phishing attacks. In many of today’s most widely publicized phishing attacks of prominent global corporations, IronScales’ training, automatic detection and mitigation solution could have prevented the damage caused by spear-phishing attacks.

Ra’anana’s IronScales, founded in 2013, pushes the cyber security envelope, going beyond detection with a crowd wisdom-based phishing training and mitigation solution. IronScales was initially launched in the 8200 Entrepreneurship and Innovation Support Program (EISP), a prestigious incubator and mentoring program for early stage ventures, founded by alumni of the Israel Defense Forces’ elite Intelligence Technology unit. (IronScales 19.01)

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2.5 GreenSQL Rebrands as HexaTier

HexaTier (formerly GreenSQL) announced its official relaunch at the Cybertech conference in Tel Aviv, Israel, unveiling its new company name, brand and positioning. The company rebranding reflects a new focus: providing enterprises with database security and compliance in the cloud. HexaTier builds on the patented Database Reverse Proxy technology and market traction of GreenSQL, which burst on the scene six years ago with groundbreaking database security and compliance solutions for SMBs. HexaTier is pioneering an easily deployed cloud solution for database security, finally removing the barrier for any enterprise to make the move to the cloud with confidence. With a sweeping security lineup, the company offers the world’s first unified database security platform that protects hosted databases and DBaaS from both internal and external attacks, while ensuring compliance with regulatory requirements.

Established in 2010, Tel Aviv’s HexaTier (formerly GreenSQL) sets the industry standard for cloud-hosted database security and compliance with its unified solution that provides database security, dynamic data masking, database activity monitoring (DAM) and discovery of sensitive data. Utilizing purpose-built, patented Database Reverse Proxy technology, the company protects against both internal and external security threats. (HexaTier 25.01)

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2.6 Israel-Based Auto Supplier Selects Indiana for First North American Operations

Indiana Secretary of Commerce Smith joined Omen USA, a manufacturer of aluminum parts for the automotive industry, at the company’s Israeli headquarters to announce its plans to locate its first North American production facility in Richmond, Indiana, creating up to 100 new jobs by 2019. Omen USA, a subsidiary of the Israel-based Omen Casting Group, will initially invest $16 million to renovate and equip a 76,000-square-foot facility in Richmond, with plans to begin operations by the end of the year and invest an additional $7 million into the facility by 2021. The global high pressure die casting company, which directly employs more than 240 associates at facilities in Israel, Portugal and Russia, will manufacture aluminum parts for drivelines, steering components and oil pumps at its new Indiana facility, which will be installed in cars for American and German automotive manufacturers.

Omen USA’s announcement comes as a delegation of Hoosier economic development and technology leaders attend the Cybertech 2016 conference in Tel Aviv, the second largest cyber security-focused conference in the world. As part of the conference, the Indiana delegation is meeting with government and business leaders to discuss opportunities to strengthen the rising cultural and economic relationship between Indiana and Israel. This includes meetings with chief executives at Israel-based tech companies, as well as meetings with Israeli government officials at the Office of the Chief Scientist and SIBAT, which coordinates Israel’s export of defense-related production and related matters. Atid, EDI is Indiana’s investment representative in Israel and was instrumental in bringing the project to the attention of the state and seeing it through to conclusion. (IEDC 26.01)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 U.S. Presence at Arab Health 2016 Is the Largest Ever

When Arab Health 2016, the world’s second largest healthcare congress and exhibition, opened on 25 January at the Dubai International Convention and Exhibition Centre, the United States had its largest presence ever at this annual trade event. With more than 320 exhibitors, the size of the U.S. contingent is an indicator of how important the region is to the U.S. healthcare business, and how interested the region is in working with U.S. companies to build a world-class model for healthcare in the UAE.

The centerpiece of the U.S. effort is the 38,000 square foot U.S. International Pavilion, a destination for buyers looking for an efficient way to meet a critical mass of U.S. suppliers, and an on-site business hub for U.S. exhibitors looking to maximize their exposure and impact at the event.

More than 250 of the American companies participating in Arab Health are exhibiting in the U.S. International Pavilion — 75 of them for the first time in the U.A.E. They range from publicly traded stalwarts to privately held small-and-medium-sized enterprises, all looking to initiate or strengthen international partnerships.

More than 10 U.S. hospital and clinical groups are exhibiting, continuing a trend to exchange medical knowledge and expertise with their counterparts in the U.A.E. toward the goal of improving patient care in both countries. Medical device manufacturers are promoting a wide range of equipment to be specified into hospitals, clinics and treatment facilities. Over-the-counter suppliers are leveraging their contracts with big U.S. retailers to secure shelf space with overseas chains. State economic development groups are promoting state-based suppliers, as well as the opportunity for overseas healthcare providers to operate in their states.

Companies from Illinois, Pennsylvania, Delaware and Georgia were assisted in their efforts at Arab Health by Atid, EDI, which serves as the local trade presence for many of these states in the Middle East region. (Kallman 20.01)

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3.2 Arabian Gulf’s 2nd Bloomingdale’s Store to Open in Kuwait in 2017

Dubai’s Al Tayer Group will open a Bloomingdale’s department store in Kuwait in Spring 2017, marking its third project in the region as part of its partnership with Macy’s. The store will be the second location outside the US for the popular American brand, following the opening of Bloomingdale’s The Dubai Mall in 2010 and in advance of the opening at Bloomingdale’s Al Maryah Central in Abu Dhabi in 2018. The three-level clothing, beauty and accessories store, spanning over 93,000 square feet, will anchor Kuwait’s 360 MALL, which opened in 2009.

Al Tayer Group announced in 2014 Abu Dhabi’s Al Maryah Central will also be the location for the first Macy’s department store outside the US and will open, along with the UAE’s second Bloomingdale’s store, in 2018. (Bloomingdale’s 20.01)

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3.3 GE Wins Close to $1 Billion Deal For Saudi Power Plant

US giant GE has been awarded a contract valued at nearly $1 billion for the engineering, construction and provision of gas turbine services for Saudi Electricity Company’s Waad Al Shamal combined cycle power plant. Scheduled for completion in 48 months, the plant will support the phosphate mining operations in the kingdom, in turn driving industrialization and job creation for Saudi nationals. GE will deliver the turnkey power plant, supplying four advanced GE 7F.05 heavy duty gas turbines and a GE steam turbine, and featuring solar innovation technology. The 1,390 MW combined cycle plant will be able to provide the equivalent power needed to supply more than 500,000 Saudi homes.

One of the gas turbines will be assembled fully at the GE Manufacturing Technology Centre in Dammam, underlining GE’s commitment to localization. The remaining gas turbines will be produced at GE’s manufacturing plants in the US. More than 550 GE turbines currently generate over half of Saudi Arabia’s electricity, and the company’s advanced technology supports the production of 180 million liters of clean water daily, delivered to the country’s most remote locations. (GE 16.01)

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3.4 PSA Peugeot Citroen Creates a New Automotive OpenLab in Morocco

As part of its Open Innovation strategy and in line with its commitment to staying on the leading edge of automotive research, PSA Peugeot Citroen is strengthening its ties with top post-graduate schools and universities by creating an OpenLab in Africa.

On 25 January, PSA Peugeot Citroen entered into an agreement with five Moroccan universities, two US universities with campuses in Morocco, one locally-based Ecole Centrale engineering school and a technology transfer center at the International University of Rabat. The agreement was signed at a ceremony attended by Morocco’s Minister of Higher Education and Scientific Research, and the French Ambassador to Morocco. The new OpenLab, dubbed “Sustainable Mobility for Africa”, will engage in a four-year research program to explore sustainable mobility systems with three core focuses: the electric vehicle of the future, renewable energy and the logistics of the future. The program will leverage PSA Peugeot Citroen’s scientific and professional expertise, the expertise of the partner universities, and a number of technological platforms which will be made available to researchers in Morocco. (PSA Peugeot Citroen 25.01)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Jordan’s 10 Year Strategy to Increase Water Resources

The Jordanian Cabinet on 17 January reviewed a new national water strategy that will cost the Kingdom JD5.3 billion over the next 10 years. The 2016-2025 water strategy will entail implementing several projects to secure additional water resources, as Jordan is the world’s second water-poorest country. The national strategy also seeks to reduce the cost of producing one cubic meter of water from JD1.9 to JD1.4. Currently, one cubic meter of water is sold to consumers at JD1 and this price will not change. Water consumption in the country increased by 20% due to the influx of Syrian refugees and this strategy will provide the Kingdom with new water resources expected to amount to 178 million cubic meters (mcm). Water loss due to technical reasons and theft will also be reduced from 50% to 30%, under the plan. (JT 17.01)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanese Consumer Prices Declined by 3.75% In 2015

Deflationary pressures succeeded to end 2015 with a decline in consumer prices by 3.75% compared to an inflation of 1.86% in 2014, according to data released by the Lebanese Central Administration of Statistics (CAS). The slump in commodity prices during 2015, the depreciation of the euro, and the economic slowdown were the major factors behind the decline in prices last year. In December alone, consumer prices fell by 3.4% y-o-y as the Consumer Price Index (CPI) declined from 99.29 in December 2014 to 95.92 in December 2015. Despite that the prices of food and non-alcoholic beverages (20.6% of the CPI) barely changed, December’s deflation was mainly the result of lower energy prices. In fact, the price of Brent crude oil slashed by a yearly 44.85% from $54.18 per barrel in December 2014 to $36.56 per barrel in December 2015. This was reflected by the 7.66% y-o-y slump in the prices of transportation, a component with a weight of 13.1% in the index.

With cheaper oil, the price of water, electricity gas and other fuels (11.9% weight of CPI) also declined by 17.57% in December 2015. In addition, health prices constituting 7.8% of the CPI, downturned by 7.19% yearly. Food and non-alcoholic beverages, which represented 20.6% of the CPI, declined by a yearly 0.64%. In contrast, education prices, with a weight of 5.9% in the CPI, rose by a yearly 1.52%, while the prices of clothing and footwear, with a weight of 5.4% in the CPI, increased by 0.24%. (CAS 25.01)

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5.2 Lebanon’s Trade Deficit Tightened by 15.94% to $13.29 Billion

The prominent trends of both the depreciating Euro and falling international oil prices are the main factors behind the tightening of Lebanon’s trade deficit since the start of the year. Lebanon’s trade deficit contracted by 15.94% year-on-year (y-o-y) by November, to record $13.29B due to a 15.08% decrease in overall imports outpacing the 10.65% decline in total exports. Total imports, in the first 11 months of the year, amounted to $16.00B compared to $18.85B during the same period last year.

The three major product categories that were imported to Lebanon by November were mineral products (17.16% share of total imports), machinery and electrical instruments (11.74%) and chemical or related industries (11.07%). The yearly change in the value of imported mineral products displayed a substantial drop of 39.84% from November 2014 to $2.75B. This decline goes hand in hand with the average yearly 45% decrease in the price of international oil by November. In addition, the value of machinery and electrical instruments imported went down by 5.73% y-o-y by November to $1.88B.

Total worth of chemical products entering Lebanon also dropped by an annual 3.72% to $1.77B, while volume steadied at a level of 430,000 tons. The latter decline was possibly associated with a decline in the overall price of chemical products. Notably, the three major countries that Lebanon imported goods from were China, Italy and Germany with respective weights of 11.77%, 7.30% and 6.94%. Similarly, total exports fell yearly from $2.72B by November 2014 to $3.04B by November 2015. Specifically, the value of exported prepared foodstuffs, beverages, and tobacco (16.37% share of total exports) experienced a yearly detraction of 4.52% by November despite the 13.78% rise in exported volume to 344,758 tons.

It seems that the Lebanese fast moving consumer goods’ (FMCGs) market is following the global bearish price trend of over-the-counter commodities. Furthermore, exported pearls, precious stones, and metals, constituting 14.99% of total exports, went down by 24.62% y-o-y by November.

In terms of the major destinations of the Lebanese exports, Saudi Arabia, United Arab Emirates and Iraq grasped corresponding weights of 11.97%, 10.61% and 7.40%. In November alone, the trade deficit broadened from $1.14B to $1.32B in November. Total exports declined by 10.60% from November 2014 to $221,796M this year. In parallel, overall imports increased by 10.52% to $1.54B.

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5.3 Tourist Spending in Lebanon Rose by 2% in 2015

According to Global Blue, tourist spending in Lebanon increased by a yearly 2% in 2015. According to the Ministry of Tourism, the total number of tourist arrivals amounted to 1.39 million by November, the highest since 2012. The largest bulk of tourist spending is accounted for by Saudi Arabian visitors with a share of 15% of the total, followed by 14% for the UAE, 6% for each Kuwait and Egypt tourists and 4% for Syria. Tourist spending by Saudi Arabian visitors increased by 5% compared to last year, while spending by UAE tourists recorded a double-digit growth of 12%. Tourist spending from Jordan, Qatar and the US rose by a yearly 14%, 21% and 18%, respectively. However, spending from Kuwait, Egypt and Syrian nationals dropped by 16%, 4% and 23%, respectively. In 2015, fashion and clothing was the category that captured most of the tourist spending with a share of 71% in the total followed by 16% for watches and jewelry. Spending on fashion and clothing edged up by a mere 1% while spending on watches and jewelry grew by 15%. Beirut was where 81% of tourist expenditures took place while 12% were disbursed in Mount Lebanon. In Beirut, tourist spending rose by 2% while it decreased by 6% in Mount Lebanon. (MoT 16.01)

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►►Arabian Gulf

5.4 Oil Producing Nations Forecasting to Sell $240 Billion in Assets This Year

Oil-producing countries will sell $240 billion of international assets this year, mostly stocks and bonds, in an attempt to hold together budgets blown apart by the slump in oil prices, according to estimates from JP Morgan. That sum will come from running down their foreign exchange reserves and Sovereign Wealth Fund holdings. They will also raise some $20 billion by selling government bonds of their own to help cover a current account shortfall of $260 billion, the US bank predicts. These countries will sell holdings of US Treasuries and other bonds worth about $110 billion plus $75 billion of equity investments, up from $45 billion and $10 billion last year. The remaining funds will come from liquidating other assets such as cash, real estate and private equity.

These estimates are based on the price of Brent crude oil averaging $31 a barrel this year, sharply down from $53 from last year, which would see producer countries’ oil revenues plummet by $300 billion to $440 billion. Brent has tumbled 22% so far this month to a 12-year low of $27.67 thanks to a slowing demand growth and bumper supply. The slump has rocked global world markets and hit the finances and markets of oil producers especially hard. Saudi Arabia, the world’s largest oil exporter, could face a budget deficit approaching 20% of GDP, according to some estimates. (Reuters 18.01)

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5.5 German Exports to the Arabian Gulf Soar Despite Oil Price Slump

German exports to major oil producers are soaring despite the slump in oil prices to their lowest for more than a decade, countering worries that weaker demand from Gulf countries was slowing growth in Europe’s largest economy. German exports to Saudi Arabia jumped by 13% to €9.1 billion ($9.94 billion) from January to November in 2015 compared with the same period in the previous year. Exports to the United Arab Emirates soared by about 30% to some €13 billion in the same period, topping the record €11.4 billion reached in 2014 as a whole.

The German economy grew by 1.7% in 2015, its strongest rate of expansion for four years, mainly driven by robust increases in private and public consumption. Trade contributed only 0.2% due to an economic slowdown in China and other emerging markets. (Reuters 20.01)

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5.6 Kuwait’s Emir Urges Budget Cuts as Oil Revenues Decline

Kuwait’s emir has called for better management of spending and for budget cuts to cope with declining revenues due to lower oil prices, in the second such call by the head of state since October. The remarks by Sheikh Sabah Al Ahmed Al Sabah, at a meeting with newspaper editors, appeared part of a drive to prepare the ground for politically difficult economic measures such as cuts in energy and food price subsidies, which could occur next year. He added that any such measures must ensure that the basic needs of Kuwaitis were addressed. The chief executive of state energy conglomerate Kuwait Petroleum Corp. said that Kuwait was considering several options for energy subsidy reforms but any possible rise in domestic prices would not affect citizens’ livelihoods.

Kuwait’s parliament last July approved a state budget for the current fiscal year that began on 1 April that envisages a deficit of 8.18 billion dinars ($27.0 billion) – nearly half total spending – because of low oil prices. The budget assumed an average oil price of $45 a barrel. Brent crude was trading at $27.75 on 20 January. In October, Sheikh Sabah urged the cabinet and parliament to cut state spending in response to slumping oil prices, warning that any delay would increase the damage to the government’s finances. (Reuters 20.01)

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5.7 Kuwait Planning $100 Billion New Sovereign Wealth Fund

Kuwait is planning a new state-owned fund to manage as much as $100 billion in local assets with the goal of selling them to private investors in five to seven years. The new sovereign wealth fund will include local assets managed by Kuwait Investment Authority, which has been burdened by its domestic mandate and will focus more on its international portfolio. Stakes in local companies, as well as power and water projects, will be included in the new fund.

Energy-exporting countries that amassed large financial reserves over a decade-long oil boom are exacerbating a collapse in asset prices by selling off holdings to meet their obligations. Such nations are also shifting investment strategies with an eye on boosting returns. Kuwait’s plan to privatize utilities while removing domestic energy subsidies is intended to make its power and water assets more profitable for the fund and attractive to potential investors. Saudi Arabia plans to set up a sovereign wealth fund to manage part of its oil fortune and diversify its investments. (Bloomberg 24.01)

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5.8 Bahrain Cancels Pay Rise Plan for Government Workers

Bahrain has delayed plans to award government workers a pay rise of 15%, due to a tightening of government expenditure in response to declining oil revenues. The Shoura Council on 17 January voted to delay the pay rise for public sector workers for another 12 months. The move came as it was revealed the kingdom’s deficit for this year and next year could rise by up to two thirds to BD5 billion ($13.2 billion), as a result of the fall in oil prices. The concerns appeared genuine as Brent oil traded near $28 a barrel as it extended declines after international sanctions on Iran were lifted, paving the way for increased exports from the OPEC producer amid a global glut. (Bloomberg 20.01)

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5.9 Saudi Arabia Presents Plan to Move Beyond Oil

Saudi Arabia outlined ambitious plans on 25 January to move into industries ranging from information technology to health care and tourism, as it sought to convince international investors it can cope with an era of cheap oil. Top Saudi officials said they would reduce the kingdom’s dependence on oil and public sector employment. Growth and job creation would shift to the private sector, with state spending helping to jump-start industries in the initial stage. Under the reforms, parts of the national health care system would be converted into independent commercial companies.

The momentum has increased since King Salman took the throne in January last year and created a powerful Council of Economic and Development Affairs chaired by his son, Prince Mohammed bin Salman. The government is believed to have hired hundreds of Western consultants to work on the plans. (Reuters 25.01)

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5.10 Saudi Arabia’s Economy Set to Grow at Slowest Rate Since 2002

Saudi Arabia’s economy is set to grow this year at the slowest pace since 2002 as the oil-price plunge drains the kingdom’s finances, according to projections released by the IMF and HSBC Holdings on 19 January.

Economic growth in the world’s largest oil exporter will slow to 1.2%, the IMF said in an update to its World Economic Outlook. That’s still more optimistic than HSBC, which expects the biggest Arab economy to expand 0.8%. Growth was 3.4% in 2015. The prolonged oil slump saddled Saudi Arabia with a budget deficit of about $98 billion last year, pushing officials to cut spending, consider an international sovereign bond sale and cut energy subsidies. The price of Brent crude has fallen by more than 40% since October, when the IMF last released forecasts for the kingdom and said growth would be 2.2% this year.

The fundamentals “seem to point to a low-for-long scenario for oil,” Maury Obtsfeld, director of the IMF’s research department. “With Iranian oil coming online, with the resilience in the shale extraction industry in the US, the possibility of shale extraction elsewhere, it’s hard to see oil going back to the $100 a barrel level anytime soon,” he said.

Saudi Arabia relied on oil for 73% of its revenue last year, a level of dependence the government is keen to reduce. Among other measures, it’s considering new forms of taxation and privatizing state assets, including an initial public offering for Saudi Arabian Oil Co, Deputy Crown Prince Mohammed bin Salman told The Economist this month. “However, even allowing for significant reductions in outlays this year, we expect weak oil prices to leave Saudi Arabia with a budget deficit of well over 10% of GDP, suggesting the Kingdom faces multiple years of spending cuts and austerity as it seeks to rebalance public finances,” HSBC economists wrote in a report. (Bloomberg 19.01)

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►►North Africa

5.11 Suez Canal Revenues Fall to $408.4 Million in November

The navigation traffic data for November 2015 issued by the Suez Canal Authority revealed a decline in revenues for the third consecutive month since the inauguration of the New Suez Canal on 6 August. Revenues during November recorded $408.4m, compared to $448.8m and $449.2m during the months of September and October respectively. Revenues also fell at the rate of 7.7% when compared to November 2014, which witnessed revenues of $442.8m. A total of 1,401 ships crossed the canal in November, with a total of 80.292m metric tons of cargo, compared to 1,458 ships with a total of 80.961m metric tons during the same month in 2014.

In addition to the impact of declining numbers and size of ships on the revenue, the financial method adopted for the estimation of revenue also significantly contributed to the declining revenues, given the decline in currency prices adopted in the calculation of revenue against the dollar. The canal’s revenues are calculated according to what is known as the Special Drawing Rights (SDR) adopted by the World Bank. The SDR measures the averages of four currencies under one umbrella: the dollar, yen, euro, and sterling pound.

In November, the value of the SDR unit recorded 1.3826 against the dollar, compared to 1.4671 during the same month in 2014. The Suez Canal relies on this mechanism to hedge against any dramatic depreciation of currencies, whereby the SDR mechanism can cope with currency devaluations. (SCA 18.01)

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5.12 King Mohammed VI Launches Smart Video-Surveillance System in Casablanca

King Mohammed VI launched in Casablanca a project to develop a smart video surveillance system to guarantee security of public spaces and promote good traffic control. The MAD 460 million project is the first of its kind in the kingdom and is part of the efforts aimed at guaranteeing the safety of people and property, reducing the crime rate, regulating traffic flow and protecting public facilities. This system, which provides for setting 760 CCTV cameras and 220 km of optical fibers, developing two central stations and 22 mobile stations, will integrate tramway cameras and other existing cameras (airport, ports of Casablanca and Mohammedia, supermarkets and banks).

Jointly funded by the Interior Ministry and the city of Casablanca, this project will, through smart techniques, guarantee traffic regulation, automatic incident detection, the timely mobilization of security forces and identification of objects, persons and suspicious vehicles. It will also contribute to the location of stolen vehicles, the calculation of the flow rate, the automatic tracking of mobile objects, the dynamic management of cartography, besides the constitution of a facial recognition database. (MAP 25.01)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 World Bank Raises Growth Estimation for Turkey

The World Bank said on 18 January it believes Turkey’s economy grew 4.2% in 2015 after strong third-quarter growth helped offset election uncertainty, according to its economic brief. The bank had earlier estimated that Turkey would grow by 3.2% in 2015. The fall in the value of the lira against foreign currencies helped stoke inflation, the bank also said.

Turkey’s gross domestic product (GDP) rose by 3.4% year-on-year in the first nine months of 2015 and the next announcement to reveal the annual growth rate will be made on 31 March. The WB expects private consumption to continue to be the main driver of growth, thanks to the 30% rise in the minimum wage. However, the lagged effect of currency depreciation and elevated inflation will be restraining private consumption growth to the rates observed in 2015. As part of a pre-election promise, the government increased the net base wage by TL 300 and assumed 40% of its cost, leaving the greater part of the burden to employers. (Zaman 18.01)

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6.2 Report: Turkey Ranked 36th Most Innovative Country

Turkey is the 36th most innovative country in the world, according to the recently released Bloomberg Innovation Index. With a score of 60.92, Turkey ranked 36 out of 84 countries in the 2016 index, retaining its position from 2015 after it had moved up a spot in 2014. The ranking began with over 200 economies, from which those that did not report data for at least six of seven categories measured were eliminated, trimming the list to 84, said Bloomberg in reporting the results of this year’s index.

Bloomberg bases its methodology on seven criteria: research and development (R&D), manufacturing value-added, productivity, high-tech density, tertiary efficiency, researcher concentration and patent activity.

Turkey took the highest grade in manufacturing with the high value-added criterion, but ranked worst in researcher concentration at 44. Six of the top 10 economies hail from Europe, and three from Asia. In the world of ideas, South Korea is king, according to the index. Germany, Sweden, Japan and Switzerland rounded out the top five in the 2016 Bloomberg Innovation Index, which scored economies using factors including research and development spending and concentration of high-tech public companies.

Singapore and Finland followed these countries, and the world’s largest economy, the United States, was eighth in the rankings. Denmark and France rounded out the top 10. Israel followed these countries at number 11. (HDN 25.01)

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6.3 Ankara Accuses Pakistan of Stalling Free Trade Deal

A Turkish government official has accused Islamabad of moving slowly on a free trade deal, while admitting that the additional taxes imposed on Pakistani textile and ready-to-wear products have resulted in halving the trade volume between the two countries. Briefing lawmakers in Parliament recently, the acting Turkish deputy undersecretary at the Ministry of Economy said the meetings on an expected free trade agreement (FTA) were delayed because of foot dragging on the Pakistani side. He also acknowledged that the additional import taxes of 20 to 30% on textile and ready-to-wear products, respectively, have slashed Turkey’s trade volume with Pakistan considerably.

He explained that after the taxes imposed by Turkey in September 2011, trade volume dropped from $1 billion to half a billion in the first 10 months of 2015. Pakistan’s exports to Turkey, $873 million in 2011, fell to $230 million last year. Although the additional taxes did not single out Pakistan, the result was devastating for Pakistan-Turkey bilateral trade volume because other countries that Turkey has free trade agreements with are exempt from this new measure. The European Union, which has a customs union with Turkey, was also exempt. The FTA is expected to cover all goods and services. (Zaman 18.01)

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6.4 Russian Crisis Results in Losses of Over $11 Billion for Turkey

The economic effect of sanctions imposed on Turkish goods following Turkey’s downing of a Russian plane in its airspace late last year is likely to surpass $11 billion this year, according to a report by the Turkish Social, Economic and Political Research Foundation. The shooting down of the jet in late November bore instant repercussions for the Ankara – Moscow relationship and President Putin responded harshly with a number of economic measures against Turkey that are expected to result in major losses.

The bulk of these losses will come from food exports, as well as the tourism, construction, housing and retail sectors. A full 28.5% of the country’s fruit, vegetable and white meat exports go to Russia, accounting for around $1 billion, according to the report. Construction projects overseen by Turkish contractors have been canceled, while tour operators are bracing for major losses from one of the sector’s major markets. Sanctions imposed against Turkish food products went into effect on 1 January.

While Russia’s imports from Turkey only accounted for 2% of its import total, Turkey’s exports to Russia amounted to 10.5% of its total exports. Previously having clinched $3.85 billion in projects in Russia in 2014, the Turkish construction sector faces losing out on as much as $3.5 billion, according to the report. In 2015, 10% of homes purchased in Turkey by foreigners were bought by Russians. The “suitcase trade,” based around Russian wholesale purchases of Turkish textile products, cleared the $7.44 billion mark between January and October 2014, while that figure dropped 34% to $4.9 billion last year, and is likely to careen even further in 2016. Russia accounts for Turkey’s fourth largest source of capital inflow in terms of countries after Spain, the United States and the Netherlands, spiking between 2012 and 2015. (Zaman 25.01)

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6.5 Greek Households’ Disposable Income Fell €1 Billion in Third Quarter

Greek households suffered a €1 billion drop in their disposable incomes in Q3/15 compared to the same period a year earlier, according to figures released by the Hellenic Statistical Authority (ELSTAT). ELSTAT announced that the income households and nonprofit organizations had left after paying their obligations amounted to €30.4 billion in the July-September 2015 period, compared with €31.4 billion in Q3/14, meaning an annual decline of 3.3%. ELSTAT data also showed that households’ consumer expenditure fell 1.9% year-on-year in Q3 to amount to €31 billion, from €31.7 billion in Q3/14.

The saving rate of households – i.e. the ratio of gross savings to the gross disposable income – amounted to -2.1% in summer 2015, compared with -0.7% in the same period in 2014. The imports of goods and services also dropped in the third quarter to €11.2 billion, from €15.8 billion a year earlier, mainly due to the capital controls, which were introduced by the government on 28 June. Exports were reduced by € 2.9 billion in Q3 to €16.8 billion, taking the external trade balance to a surplus of €5.5 billion, up €1.7 billion. (Various 26.01)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel Sets New Winter Electricity Use Record

On Monday evening, 25 January, Israelis marked a new record for electricity consumption in winter – 12,200 MW, up 2.3% from last year. The cold weather led Israelis to reach a new winter record for electricity consumption on Monday at 18:45 – 12,200 megawatt – breaking the previous mark by 2.3%. The all-time record was reached in the summer of 2015 – 12,905 MW. Last January, the winter consumption record registered at 11,934 MW.

The Israel Electric Corporation conducted preparations to assure a steady supply of electricity during the wintry weather that hit the region. However, IEC officials reiterate the electric power grid is never at a state of “zero faults” and that it is vulnerable to weather-related damages and extreme changes in consumption. The company said its ground crews were reinforced – to assure each fault is handled immediately – but that outage times depended on the nature of the incidents and on locating the source of the problem. (Globes 26.01)

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7.2 New Israeli Bill Allows Ordinary Citizens to Submit Legislation

Israeli MKs Hilik Bar (Zionist Union) and Yoav Kisch (Likud) submitted an unusual bill on 18 January that, if passed, would allow ordinary citizens to present their own law proposals directly to the Knesset. Bar and Kisch said that they had spent the past few months formulating the “121st MK Law” along with Knesset Speaker Yuli Edelstein, who welcomed the proposal. According to the proposal, any bill submitted by a minimum of 50,000 eligible voters would automatically skip a preliminary reading and go directly to a first reading before a Knesset committee.

In accordance with consultations from legal and political science experts, it was decided that citizens would not be allowed to submit bills on matters of security and defense, the Basic Laws, clemency for criminals, taxation policies and the national budget. However, the public would be allowed a direct say on social issues and matters of market regulation, law enforcement, education, transportation and environment protection. In order to prevent forgeries, the bill stipulates strict standards for collecting signatures. Any citizen seeking to sign a civilian bill will be required to provide, in addition to his or her name, their identification card number and a written or digital signature. (Various 21.01)

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*REGIONAL:

7.3 Tobruk Rejects UN-backed Unity Government

Libya’s internationally recognized House of Representatives (HoR) in Tobruk has rejected the UN-brokered Government of National Accord (GNA). Of 104 members attending the session, 89 voted against backing the government, and the Tunis-based Presidential Council now has 10 days to propose a new and smaller cabinet. Since 2014, Libya has had two competing parliaments and governments, one based in Tripoli and the other in the east. Both are backed by loose alliances of armed groups and former rebels who helped topple Muammar Gaddafi in 2011. Eastern lawmakers said the proposed 32-member government had been rejected because it included too many posts.

In a second vote, the Tobruk parliament approved the UN-mediated agreement that sets out a political transition for Libya and under which the Presidential Council operates. However, lawmakers rejected a clause that transfers power over the armed forces to the prime minister. Representatives from both sides of Libya’s political divide signed the UN-backed plan in Morocco in December, but the agreement has faced stiff opposition from many members of the two parliaments and from factions on the ground. (Various 26.01)

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7.4 Greek Mayor Signs Country’s First Gay Partnership Contract

On 25 January, Athens Mayor Giorgos Kaminis became the first Greek official to sign a same-sex civil partnership agreement, following the recent approval of legislation granting homosexual couples almost equal rights to their heterosexual counterparts. Late last month, Athens passed a bill extending the cohabitation rights of gay couples. The bill, which passed with the support of opposition MPs but without the full backing of SYRIZA’s right-wing coalition partner Independent Greeks, grants same-sex couples the option of having civil partnerships, which would offer them full marriage rights but not necessarily the right to adopt children. (ekathimerini 26.01)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Rosetta Receives US Patent Allowance for Gene Signature Use with Kidney Tumors

Rosetta Genomics announced that the United States Patent and Trademark Office (USPTO) has granted a patent allowance for patent application No. 14/168,981, relating to “Gene Expression Signature for Classification of Kidney Tumors.” The allowed patent claims a method for distinguishing four different types of kidney cancer: oncocytoma, clear cell renal cell carcinoma (RCC), papillary RCC, and chromophobe RCC in a human subject with renal cancer, through the expression profile of 29 microRNAs, and particularly hsa-miR-139-5p, detected by real time polymerase chain reaction (RT-PCR). This U.S. patent allowance complements the intellectual property protection for Rosetta’s kidney cancer test, which is covered in U.S. patent 9,068,232, granted in July of 2015. The patent is owned jointly with Tel Hashomer Medical Research, the technology transfer company of the Chaim Sheba Medical Center in Israel.

Rehovot’s Rosetta is integrating groundbreaking diagnostic platforms to accelerate the implementation of precision medicine in clinical routine. Pioneers in the microRNA biomarkers space, Rosetta has combined bioinformatics and innovative laboratory processes to develop and commercialize a full range of molecular diagnostic tests. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. (Rosetta Genomics 25.01)

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8.2 XTL’s Encouraging Feedback from FDA on Lupus Drug hCDR1

Ra’anana’s XTL Biopharmaceuticals, a clinical-stage biopharmaceutical company developing its lead product for the treatment of lupus, received written guidance from the U.S. FDA in response to a pre-investigational new drug (IND) meeting package regarding its upcoming IND filing for its drug candidate, hCDR1. Based on the FDA’s response, XTL plans to file its IND, and in the coming quarters initiate a global clinical trial for hCDR1 in the treatment of systemic lupus erythematosus (SLE) in the U.S., Europe and Israel.

The FDA provided encouraging guidance on several key aspects of XTL’s proposed clinical trial including: the primary efficacy endpoint to be based on the BILAG index, a measure of lupus disease activity which was the secondary efficacy endpoint in a prior Phase 2 study of hCDR1; the appropriate patient population; and total number of patients required to prove safety for a new drug application (NDA) for marketing approval. The FDA recommended that the trial be a Phase 2 study. The FDA has also provided additional guidance on other aspects of the trial design, which XTL intends to review with its Clinical Advisory Board as it finalizes the study protocol including doses and study duration. (XTL Biopharmaceuticals 25.01)

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8.3 BioLineRx Medical Device Classification in Europe for Celiac Treatment Confirmed

BioLineRx received confirmation from the European Notified Body regarding the classification of BL-7010, a novel polymer for the treatment of celiac disease, as a Class IIb medical device in the European Union.

BL-7010 is a novel, non-absorbable, orally available co-polymer intended for the treatment of celiac disease. It has a high affinity for gliadins, the immunogenic proteins present in gluten that cause celiac disease. By sequestering gliadins, BL-7010 effectively masks them from enzymatic degradation and prevents the formation of immunogenic peptides that trigger the immune system. This significantly reduces the immune response triggered by gluten. BL-7010 is excreted with gliadin from the digestive tract and is not absorbed into the blood. The safety and efficacy of BL-7010 have been demonstrated in a number of pre-clinical studies.

Modi’in’s BioLineRx is a clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates. The Company in-licenses novel compounds primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization. (BioLineRx 25.01)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SolarEdge’s StorEdge Solution is Now Internationally Available

SolarEdge Technologies announced the immediate international availability of its StorEdge solution. At the end of 2015, the company already completed a number of StorEdge installations in select locations around the world. Compatible with Tesla’s home battery, the Powerwall, StorEdge is a DC coupled storage solution that allows home owners to reduce electric bills and gain energy independence. With StorEdge, unused solar energy is stored in a battery and used when needed to maximize self-consumption and for power backup. StorEdge also supports Time-of-Use management, which promotes energy consumption when electric demand from the grid is low (off-peak rates) and lower consumption when demand is high (peak rates). The backup function allows homeowners to store solar energy and use it during electric outages.

The solution is based on a single inverter that manages and monitors solar energy generation, consumption, and storage. With the complete SolarEdge DC optimized StorEdge system, homeowners benefit from higher generation, higher efficiency, simple design, enhanced safety, full monitoring, and easy maintenance.

Herzliya Pituach’s SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. (SolarEdge 12.01)

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9.2 Battery Challenge Confirms Lucid’s PowerXtend Technology Advantage

In a 10 January Flagship Smartphones Battery Life Challenge in China, the Meizu PRO5 with PowerXtend was the last device running after all other screens went dark. The PRO5 is the first device to integrate PowerXtend version 3.5, the latest version of the product that introduces the groundbreaking, patented, ICE power saving engine.

The test was conducted live in front of one hundred referees and tens of thousands online viewers. All test devices were operated under the same conditions, playing the classic mobile phone game “Need for Speed”. To ensure test consistency, brand new devices were set to flight mode, screen brightness of 150nits, sound muted and battery charged 100%. The Nexus 6P with a 3,450 mAh battery was the first to shut down after 3 hours 29 minutes of intensive gaming. The Huawei Mate8, equipped with a 4,000 mAh battery gave up after 6 hours 11 minutes and at 6 hours 48 minutes the iPhone 6s Plus left the game after its 2750 mAh battery ran dead. The Meizu PRO5, with Lucid’s PowerXtend integrated, outlasted all other devices with a whopping 7 hours 4 minutes battery life. This result is even more impressive, considering that the device packs a 3,050 mAh battery, the lowest capacity amongst all Android devices tested.

Lucid’s PowerXtend has become the de-facto standard for Android mobile power saving software and the Meizu PRO5 is the first smartphone model to support the newest PowerXtend version 3.5. The new version introduces the ICE, a groundbreaking power saving engine based on patented technology. ICE sets a new standard for the user experience, enabling longer playing time and lower device heat.

Netanya’s Lucidlogix Technologies provides software for power saving solutions, satisfying the growing demand for performance and mobility. Benefiting from Lucid’s core graphics technologies, Lucid’s proprietary algorithms and software solutions dramatically improves mobile performance for Android devices. (Lucidlogix 18.01)

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9.3 VocalZoom & China’s iFLYTEK Agree to Test Performance in Noisy Environments

VocalZoom, a leading supplier of Human-to-Machine Communication (HMC) optical sensors that enable a more natural, personalized and secure voice-control experience, signed an agreement with China’s iFLYTEK to combine and test the performance of VocalZoom’s optical HMC sensor with iFLYTEK’s Voice Cloud intelligent speech technology platform, China’s most widely deployed solution with hundreds of millions of users. Initial results show that the ASR performance of iFLYTEK’s platform can be improved an average of 50%, and even more in noisy environments, by adding VocalZoom sensors to user headsets and automotive infotainment solutions.

The key for human-to-machine interactions using virtual assistants and automotive voice control is whether the machine did what it was told, quickly and accurately enough to satisfy the user. Even with the latest noise reduction algorithms, today’s acoustic microphones can’t achieve adequate voice isolation for this level of control, especially in noisy environments. The VocalZoom multifunction HMC sensor overcomes this problem by gathering additional data generated during speech as facial skin vibrates around the mouth, lips, cheeks and throat. By integrating the VocalZoom optical HMC sensor into a voice-control solution and focusing it on these areas, facial vibrations can be acquired, measured and converted to an isolated, near-perfect reference signal with which the system can operate – regardless of noise levels.

Yokneam Elite’s VocalZoom supplies Human-to-Machine Communication (HMC) sensors for delivering a natural, personalized and secure voice-controlled user experience in today’s increasingly mobile and interconnected world. The sensors enable accurate and reliable voice control and biometrics authentication in any environment, regardless of noise. Applications include mobile secure payments, headsets and wearables, mobile phones, access control, smart home solutions, and hands-free automotive voice control. (VocalZoom 25.01)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s CPI Falls 0.1% in December

The Central Bureau of Statistics announced that Israel’s Consumer Price Index (CPI) fell 0.1% in December, falling a surprising 0.4% in November. In 2015, the CPI fell 1%, the second successive year of negative inflation, after the CPI fell 0.2% in 2014. This is well below the government’s inflation target range of between 1% and 3%. Outstanding price falls in December included fresh fruit and vegetables (16.9%), culture and entertainment (1.5%), and food (0.4%). Outstanding price rises in December included clothing and footwear (6.2%), and housing costs (0.4%). (CBS 15.01)

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10.2 Israel Wine Exports Up 6% in 2015

Israel’s wine exports grew 6% to $39 million in 2015, the Israel Export and International Cooperation Institute announced. The Export Institute added that despite last year’s larger export volume, the money value of exports actually slipped 3% in 2015, due to the weakness of the euro. An analysis by the wine industry shows that most of the increase in Israel’s exports of wine and other alcoholic beverages was to Asia; the wine sector’s exports to Asia rose 16% to $2.6 million, while exports to North America grew 8% to $25 million. Exports to the European Union were down 18% to $10 million, which the Export Institute attributed to the euro crisis.

Israel has 300 wineries, 60 of which are commercial. Most of Israel’s wineries are boutique and garage wineries small businesses producing a few thousands of bottles a year. The local wine market’s annual turnover is NIS 1 billion, with exports totaling 40 million bottles a year, plus 10 million more bottles of grape juice. 20% of output is for export. (IEICI 26.01)

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11: IN DEPTH

11.1 ISRAEL: Funding for Israeli High-Tech Hits All-Time High

According to figures released on 25 January by IVC Research Center and KPMG, 2015 was a record year for fund raising by Israel’s high tech industry. Israeli tech companies raised $4.43 billion last year in 708 deals. The amount and the number of deals are both all-time highs. The amount raised is 30% above the previous high, recorded in 2014, when 690 deals totaled $3.42 billion.

The average deal peaked as well, at $6.3 million in 2015, compared with the previous year’s $5 million average round and a $4 million average in the past ten years.

The fourth quarter of 2015 was especially successful, in fact the best ever. Israeli start-ups raised an aggregate $1.2 billion in the quarter, 11% more than in the third quarter, and 10% more than in the fourth quarter of 2014.

VC-backed deals accounted for 72% of capital raised in 2015, with an outstanding $3.2 billion closed in 397 deals, or only 56% of deals. The past three years have seen consistent 30% annual growth in capital raising in VC-backed deals. The compilers of the report comment, “It seems the increase in VC-backed capital raising is therefore mostly explained by the increase in the size of the average financing round where VC funds participated. The average VC-backed deal in 2015 reached nearly $8 million, an unprecedented record, well above the $5.9 million average in 2014 and much higher than the $4.4 million average VC-backed deal in 2013.”

Ofer Sela, partner at KPMG Somekh Chaikin’s Technology Group, warns that the slowdown in investment in the rest of the world will catch up with Israel. “In the last quarter of 2015, the trend Israel ran contrary to that of the rest of the world. While global markets were affected by the slowdown in the Chinese stock market, an unstable global economy and the interest rate hike in the US, Israel remained untouched by this global wariness. We expect the Israeli market to slow down if the bear market persists. The general current sentiment in the Israeli market is that ‘winter is coming’,” Sela said.

IVC Research Center CEO Koby Simana said, “As of the second quarter of 2014 and throughout the past year, we have repeatedly pointed to the uptrend in the number of large deals and their sizes. We’ve seen growth stage companies raising substantial capital to boost their growth rates and grab larger market shares. The trend was largely fueled by the influx of capital from foreign investors, and a shift in market trends may indeed cause a slowdown on that front.

“However, there’s still room for Israeli high-tech companies to find both organic and non-organic growth, and materialize their full potential. We’ve seen in the past year a 25% hike in the number of Israeli growth stage companies, and the numbers keep growing. At the same time, there’s an increase in the capital dedicated to growth investments by late stage and growth focused VC funds, which are expected to continue investing even if the market slows, or even capitalize on the slight decline in valuations that a possible slowdown may cause.”

Israeli venture capital funds accelerated their activity in 2015, investing $653 million, which compares with $568 million in 2014. Their share in the total amount of capital raised, however, continues to fall, reaching a low of 15% in 2015, compared with 17% in 2014 and a 30% average share in the past ten years. Israeli VC funds placed a total of $236 million in first investments, which accounted for 36% of their total placements, up from 30% in 2014 and 2013.

In the breakdown by sector, in 2015, 181 software companies led all capital raising with $1.3 billion or 29%% of the total capital. They were followed closely by Internet companies, with 172 deals raising just under $1.3 billion. The life science sector followed, with 22% of the total capital raised in 2015. (Globes 25.01)

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11.2 SAUDI ARABIA: Fitch Applauds Plan to Tackle Growing Budget Deficit

Saudi Arabia’s 2016 budget is committed to significant reforms but the fall in oil prices means that the deficit/GDP ratio will again be in double-digits, according to Fitch Ratings. Fitch announced that the kingdom’s 2016 budget outlines measures to rationalize expenditure, increase non-oil revenues, and improve the fiscal policy framework.

Petrol and utility price hikes have been announced, and subsidy reform will proceed gradually over the next five years, Fitch said. It added that the authorities aim to slow the growth of recurring expenditure, especially wages, salaries and allowances while privatizations are also planned.

“Adopting a medium-term expenditure framework with a budget ceiling and creating a debt management office should strengthen management of the public finances,” Fitch said.

The commitment to reform was shown on 28 December with major hikes in petrol prices while water prices for industrial, government and large corporate users more than doubled and electricity, and gas and diesel prices were raised. Fitch added: “The direct cost of subsidies to the budget is less than 2% of GDP, but indirect subsidies are large. Taxes on tobacco and soft drinks will be raised, and support for a GCC-wide value-added tax appears firmer.”

The agency said the full impact on the deficit will depend on the pace and extent of implementation and the size of offsetting measures to allay the effect on low- and middle-income families.

The magnitude of the oil price decline means that the 2016 budget forecasts total revenues of SR513.8b, with a projected deficit of SR326.2b ($86.9b), around 13.5% of GDP.

The 2016 budget for the first time includes an unallocated contingency reserve worth 22% of budgeted spending to cover unforeseen expenditure. “We assume that, without a significant rebound in oil prices, this will not be fully drawn down, making a further reduction in the gap between budgeted and actual spending plausible. It is unclear whether heightened tension with Iran will increase security costs,” said Fitch.

Concrete deficit financing plans were not in the budget, but Fitch said it assumes these will remain a combination of drawing down government assets held at the central bank and debt issuance, potentially including international issuance. (Fitch 15.01)

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11.3 TURKEY: Dollar-Needy Turkey Tightens Foreign Currency Rules

Zilfikar Dogan posted on 14 January in Al-Monitor that, desperate to stop the flight of foreign money, the Turkish government has tightened rules on how cash can be taken out of the country.

Unable to stop the economic hemorrhage sparked by the flight of foreign investors and money, Turkey’s government has tightened the country’s 26-year liberal foreign exchange rules. Travelers exiting Turkey are now required to make declarations of cash and credit cards or face sanctions on charges of money laundering and smuggling.

The flight of foreign investors and foreign capital from Turkey gathered speed in late 2014. Last year, it accelerated further amid increasing economic and political risks and controversial government moves, including the seizure of private companies, among them media outlets, through an increasingly politicized judiciary and the use of supervisory bodies as a tool to bully business people. Investor confidence was further shaken by a protracted election process — an inconclusive vote 7 July followed by snap polls 1 November— coupled with the resumption of armed conflict with Kurdish militants, deadly terrorist attacks and heavy-handed security crackdowns.

After the Justice and Development Party (AKP) reclaimed its parliamentary majority 1 November, optimists argued that the continuation of one-party government, as opposed to the coalition the 7 June result had dictated, would restore both political and economic stability. This, however, did not happen. The Istanbul Stock Exchange saw net foreign sales of a staggering $1.13 billion in November and $640 million in December. In the last week of December alone, foreign investors sold $195 million worth of stock shares and Turkish treasury bonds. The Fed’s rate hike also stoked the flight of and demand for foreign currency, while further weakening the Turkish lira.

After 7 June, ordinary Turkish citizens, too, began to increasingly shift from the lira to the dollar, seeking to protect themselves against the depreciation of the national currency. All these factors forced the government to make some serious amendments in the foreign currency regime in late December.

Only a little more than half a year earlier, in April 2015, the Customs Ministry had issued a controversial circular in a bid to lure foreign currency to Turkey. The circular stipulated that travelers would no longer be forced to declare the foreign cash they bring to Turkey at customs, and that any suspicious voluntary declarations would be referred not to prosecutors but to the Finance Ministry’s Financial Crimes Investigation Board (MASAK). The amendment sparked criticism and raised questions: Was Turkey becoming a haven for illicit money? How would the financing of terrorism be controlled at a time when Turkey was already under fire for harboring jihadi in Syria? The government, however, ignored the criticism and refused to back down.

Yet, little foreign currency flew in, while the flight of foreign capital continued and Turks increasingly turned to the dollar. According to the Central Bank’s balance of payments report for the third quarter of 2015, announced 5 January, the bank’s foreign exchange reserves dropped by $1.1 billion to $119.6 billion despite the inflow of $7.8 billion from “unknown sources.”

Alarmed by its failure to reverse the trend, the government took a fresh step on 30 December, amending Decree No. 32 on the protection of the value of Turkish currency, enacted in 1989 as a milestone step liberalizing the foreign exchange market in Turkey. Until 1989, foreign currency transactions and the gold trade were the subject of tight control under the 1930 Law on the Protection of the Value of Turkish Currency, which considered the possession of foreign currency a crime and punished it with jail. The 1989 reform — a legacy of then-Prime Minister Turgut Ozal — came as a revolution liberalizing the Turkish economy and integrating it with global markets. The foreign exchange market was liberalized, Turkish citizens were allowed to open foreign currency and gold accounts in banks, exchange offices were allowed to operate alongside banks, and the draconian restrictions on carrying foreign currency while entering or exiting Turkey were removed. The rules of declaration at customs were also relaxed.

Under the 30 December amendment, travelers exiting Turkey with cash of more than 25,000 lira ($8,263) or more than €10,000 euros or an equivalent sum of foreign currency are now obliged to declare the money to customs at airports and border crossings. A newly added provision says that in cases where the money is not declared, or incorrect or misleading declarations are made, the money in question will be taken by customs and considered suspicious. Customs officials will then notify MASAK and refer the case also to prosecutors on charges of trafficking.

The amendment covers also “documents enabling payment in Turkish lira,” which means that credit cards with a limit of more than TL 25,000 are also up for declaration.

In sum, the government — scrambling to halt the foreign currency flight — has taken a step away from the 26-year liberal foreign exchange regime toward a tight, control-dominated system, where those who fail to make the required declarations or declare incorrect or misleading sums can face charges of money laundering and trafficking.

The amendment is likely to affect mostly business people, investors and exporters, who will be now lining up at airports to fill in declarations amid the threat of sanctions inspired from the economic laws of the 1930s. (Al-Monitor 14.01)

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11.4 GREECE: Upgraded to ‘B-‘ From ‘CCC+’ On Reform Progress

Overview

*Since last summer, the Greek government has recapitalized the country’s systemic banks, and put into place budgetary consolidation measures.

*Despite multiple shocks, the economy has proved more resilient than we had previously expected.

*By the end of March, despite differences between the government and its creditors, we expect Greece to meet the conditionality attached to its €86 billion financial support program, opening the way for discussions on official debt relief.

*As a consequence, we are raising our long-term sovereign credit rating on Greece to ‘B-‘ from ‘CCC+’.

*The stable outlook reflects our opinion that risks to the ratings are balanced.

Rating Action

On 22 January 2016, Standard & Poor’s Ratings Services raised its long-term foreign and local currency sovereign credit ratings on the Hellenic Republic (Greece) to ‘B-‘ from ‘CCC+’. The outlook is stable. At the same time, we raised the short-term foreign and local currency sovereign credit ratings to ‘B’ from ‘C’.

Rationale

The upgrade reflects our assessment that the Greek government is broadly complying with the terms of its €86 billion financial support program financed by Eurozone member states via the European Stability Mechanism (ESM). In particular, by the end of March we expect a compromise to be reached on pension reform that will balance the government’s preference to raise social security contributions and consolidate the separate pension funds into a single system, with creditors’ and the IMF’s focus on spending cuts to narrow an unsustainably high pension deficit, currently estimated at 9% of GDP. An impending agreement on pension reform, leading to the successful conclusion of the first review of the program, would raise the possibility of additional relief on the official portion of Greece’s general government debt (which makes up 88% of all general government medium- and long- term liabilities, including Eurosystem holdings of Greek tradeable bonds).

In the face of two general elections, a referendum, the imposition of capital controls, and further tax increases, the Greek economy contracted only slightly last year (-0.3% is our 2015 GDP forecast), with investment declining by a much larger 12%. In particular, consumption was surprisingly resilient during 2015 with car sales up 13.5% year-on-year. This was partly because, in the run up to capital controls, households hedged themselves by frontloading purchases of consumer durables. Ministry of Labor data also indicates that there was net private sector job growth for 2015 as a whole, reinforcing expectations that unemployment has finally peaked in Greece, albeit at the highest level in the EU (24.5% in October 2015).

Our prognosis for the Greek economy is for one more year of essentially flat growth, followed by a more robust recovery. We see three key drags on GDP this year. First, despite last autumn’s successful recapitalization exercise, we anticipate that, throughout 2016, Greek financial institutions will remain focused on cleaning up their balance sheets rather than lending to the private sector; nonperforming loans (NPLs; European Banking Authority definition) at Greek banks are at an estimated 46% of total loans, implying high levels of financial distress among Greek corporates and households.

Second, under Greece’s current (and third) official loan program, the government is committed to increasing public savings this year, which will directly subtract from GDP. Further fiscal tightening will be challenging to implement, not least because of the precarious state of the health care and educational systems after seven consecutive years of spending cuts.

Third, the carry-over from last year’s GDP growth creates a notable negative statistical effect for this year. We also expect that some of last year’s exceptional consumer behavior will reverse during 2016. At the same time, some positive effects could contribute to a stronger-than-anticipated recovery this year. Further declines in oil prices during 2016 will support consumption. Financing arrangements under the program include plans to pay down an estimated 3% of GDP of arrears to the private sector, which firms are likely to use to clear their own wage arrears to employees, who may spend it. On top of this, Greece’s tourism sector, which saw record arrivals in 2015, is well positioned to benefit during 2016 from a weak euro and rising security risks in key competitors.

Since August of last year, there has been progress on most of the program milestones. The Greek government has partly relaxed capital controls by liberalizing foreign exchange spot transactions and derivatives trading and raising limits on transfers abroad. The introduction of capital controls last year seems to have had the unintended positive benefit of encouraging the use of debit-card and other non-cash forms of payment, apparently reducing the size of the informal economy. Also during 2015, the government passed important legislation facilitating NPL sales and workouts, including the controversial lifting of a moratorium on home repossessions. Lastly, the VAT regime has been simplified.

Last October, the ECB’s banking supervisor estimated a stress scenario capital shortfall in Greece’s four large systemic banks of €14.4 billion (8.2% of GDP). By the end of 2015, banks had raised 60% of this shortfall from private investors via a combination of new equity, and bail-ins of junior creditors – together totaling €9.0 billion (5.1% of GDP). As a consequence, the general government only had to assume €5.4 billion (3.1% of GDP) of the cost of supporting two of the four banks versus the program assumption of nearly five times that amount. Any estimates of the long-term financial cost to the state of this exercise, however, should also reflect the ensuing dilution of the government’s banking stakes given the low equity component (the 25%/75% common equity to contingent convertible bonds split) in the recapitalization contribution by the Hellenic Financial Stability Fund. There is also a possibility that the banking system, including smaller financial institutions, could eventually require capital support. Nevertheless, in our opinion, the recapitalization exercise has contributed to Greece’s financial stability while considerably lowering the risk that further financial sector contingent liabilities will crystallize on the government’s balance sheet.

To understand the 2015 accounting for public debt, it is important to recognize that last year’s return of €10.9 billion in recapitalization notes (issued under Greece’s second program) to the European Financial Stability Fund actually means that overall government support of the financial sector in 2015 made a net negative contribution to general government debt of an estimated €5.5 billion, equivalent to 3.1% of GDP. This, plus the consumption of most remaining general government cash reserves, led to a very small increase in gross general government debt last year of just under €2 billion, we estimate. Net general government debt increased more significantly, from 172.1% of GDP at end-2014, to an estimated 181.4% by end-2015. We project that net general government debt will increase significantly again this year to 187.4% of GDP, mainly because we project no nominal GDP growth this year, but also because the government plans to make just over 3% of GDP (€5.5 billion) in arrears payments, as well as to finance a deficit of just under 3% of GDP. From 2017, however, we project sizeable annual declines in net general government debt to GDP, on the assumption that the economy starts to grow and re-inflate again, and that the primary fiscal position improves.

We are forecasting a primary surplus of 0.4% of GDP this year (versus the 0.5% target), increasing to close to 2% by 2019. This is, however, substantially below the program target of 3.5% by 2018. One risk to fiscal targets this year is last year’s Council of State decision declaring that pension cuts introduced in 2012 were unconstitutional.

Merchandise export performance has generally been positive since late 2010, but from a low base (merchandise exports account for just 15% of GDP). Reflecting lower volume imports, the fall in energy prices and a 9% year-on-year increase in tourist arrivals, we estimate that last year’s current account shifted into surplus. This would be the first current account surplus (under BPM6 methodology) for Greece since the mid-seventies. We expect Greece’s current account will shift back into deficit as demand recovers over the next few years, though oil prices, should they remain at current levels, could improve the current account position this year by as much as 2% of GDP. We note that, over the last half decade, Greece’s capital account has averaged a surplus of 1.5%-2.0% of GDP, and that €35 billion (20% of GDP) is available to Greece between 2014 – 2020 through EU funds, on top of substantial remaining EU grants under the 2007-2013 envelope. For this reason, we anticipate the capital account to remain substantially in surplus over the forecast horizon.

Greece’s external debt levels are also far higher than European averages especially as a percentage of current account receipts (an indicator of capacity to service foreign debt).

Given the current Greek government’s busy reform agenda, and its narrow majority of three seats, the prospect of implementing long-term reforms such as to the judicial system and public administration seems low. Nevertheless, our baseline expectation remains that, regardless of what government is in power, Greece will largely comply with the terms of the Eurogroup support program. We take this view as we don’t believe the alternative would be viable for Greece’s financial stability; the banking system continues to depend on Eurosystem support of €107.5 billion or 61% of GDP (€68.9 billion of which was Emergency Liquidity Assistance) as of end-December 2015.

We expect any re-profiling of Greece’s official debt to come in the form of interest rate deferrals, and maturity extensions. At 16.5 years, Greece already has the longest dated debt stock of all rated sovereigns; while, at an estimated 1.9%, the general government’s effective borrowing cost (measured on an accruals basis; on a cash basis it is even lower) is already considerably lower than most peers. In light of these low annual maturities and very low interest rates, Greek government debt levels are affordable, in our opinion, and we reflect that in our final credit rating on Greece. At the same time, in the absence of meaningful front-loaded reductions in Greece’s net general government debt to GDP ratios, we think the possibility of Greece re-accessing commercial markets toward the end of the third program at similarly long maturities and low interest rates remains low. However, political constraints in creditor countries appear likely to rule out write-downs of Greece’s official liabilities that might make earlier re-entry into commercial markets at affordable terms viable. This means, more realistically, that whether or not Greece can bring down its net general government debt level of 187% of GDP (the government’s projection for end-2016) quickly will ultimately depend on whether the economy recovers rapidly in both real and nominal terms. According to our projections at optimistic nominal GDP growth rates of 5%, with an annual primary surplus of 2% of GDP and at current borrowing costs, it will still be another 13 years before net general government debt falls below 100% of GDP, assuming privatization receipts over the period of €20 billion.

Should the first review be completed successfully, we anticipate that the small amount of Greek government bonds still in the market are likely to become eligible for QE purchases by the Bank of Greece. In addition, a potential decision by the ECB to reinstate its waiver on the eligibility of Greek sovereign and sovereign guaranteed bank collateral for ECB (rather than costlier Bank of Greece Emergency Liquidity Assistance) financing would benefit the profitability of Greece’s highly challenged banking system. We, however, anticipate an only gradual lifting of the capital controls still in place, including withdrawal limits on household deposits.

Outlook

The stable outlook indicates our view that, over the next 12 months, risks to our ‘B-‘ rating are balanced.

We could consider an upgrade if we saw stronger growth performance, and measureable progress in the reduction of the still-high NPL levels in Greece’s banking system, alongside the lifting of capital controls including deposit withdrawal limits, which would be a strong indication of a recovery of confidence in financial stability and hence growth. We could also consider raising the rating on the back of an unexpected write-down of Greece’s level of net general government debt, which, at a projected 187.4% of GDP by end-2016 (excluding guaranteed debt outside of the general government perimeter), is one of the highest public debt levels of all rated sovereigns.

On the other hand, we could lower the ratings on Greece if the new government cannot implement the reforms it has agreed to in the Memorandum of Understanding between itself and the ESM. Prolonged implementation problems with the ESM program could eventually lead to a general default on the government’s debt. (S&P 23.01)

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What’s News at EDI – February 2016

February 1, 2016, 8:11 am

≫ Next: Fortnightly, 10 February 2016

≪ Previous: Fortnightly, 27 January 2016

EDI Chosen to Represent Ontario in Israel

EDI was recently awarded a contract to represent the trade and investment interests in Israel of Canada’s Province of Ontario. The work will be split between assisting Canadian companies to find export opportunities in the region, discover innovation opportunities of mutual interest and assist Israeli companies seeking a foothold in Canada to locate in Ontario. Ontario is the first Canadian province to open a representative office in Israel. The contract began on January 1^st.

Delaware Secretary of State and Local Lawyers Visit Israel in January

During the first week of January, Delaware’s Secretary of State, Jeffrey Bullock, lead a 10 person delegation of lawyers to Israel to discuss changes in Delaware law as it relates to Israeli companies registered there. The group met with various law firms and on January 7^th participated in an all-day session sponsored by the Israel Bar Association for its membership to learn more about corporate legal developments in the state. EDI, in its role as representing Delaware in Israel, coordinated and planned the visit.

Indiana Cyber Mission Visited Israel in January

The Indiana Economic Development Corporation (IEDC) lead a group of local companies and state officials involved in cyber-security to Israel for the CyberTech Show in mid-January. The impetus of the visit came from an earlier visit to Indiana sponsored by SIBAT, the commercialization arm of Israel’s Ministry of Defense and they hosted the major part of the mission. A highlight of the visit was the announcement by Israel’s Omen High Pressure Die Casting of Kibbutz Hatzor-Ashdod that they are placing their U.S. manufacturing facility in Richmond, Indiana. The new, 70,000 sq. ft. operation will service the company’s automotive clients throughout the Midwest. EDI, in its role as IEDC’s representative in Israel was responsible for bringing the opportunity to Indiana’s attention.

Michigan Cyber Mission Visits Israel in January

At the end of January, the Michigan Economic Development Corporation (MEDC) brought a delegation of cyber security companies to Israel to meet potential business partners and to participate, as well, in the CyberTech Show in Israel. EDI was engaged to make B2B appointments for the three companies that participated in the visit.

Illinois Exhibits at Arab Health in Dubai in January

Illinois brought 10 local companies to the Arab Health 2016 conference and exhibition which took place in Dubai, UAE in January. This was the fourth year that the state has taken a pavilion at Arab Health. EDI, in its role as the state’s regional trade and investment representative, managed the effort and set over 75 one-on-one B2B appointments for Illinois companies to meet with potential business partners in the Gulf.

EDI Assists Georgia Economic Development at Arab Health 2016

EDI also assisted the Georgia Department of Economic Development in making appointments for some of their companies who exhibited at Arab Health 2016 in Dubai in January. EDI has significant commercial depth in the GCC countries and is well positioned to provide this type of assistance to U.S. companies traveling to the region.

Select USA Event Scheduled Held January 20^th in Tel Aviv

The U.S. Commercial Service, in cooperation with the American State Offices Association, hosted a Select USA event in Tel Aviv on January 20^th for Israeli companies considering opening a facility in the U.S. The event, a series of 20 minute one-on-one meetings with the 14 state representatives resident in Israel, was coordinated by EDI in its role as Chair of the American State Offices Association. During the day, over 250 one-on-one meetings were scheduled for the state representatives. The U.S. Deputy Chief of Mission in Israel, William Grant, brought greetings to the participants on behalf of the U.S. Embassy in Tel Aviv.

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Fortnightly, 10 February 2016

February 10, 2016, 6:21 am

≫ Next: THE START-UP NATION CHANGES DIRECTION

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10 February 2016
1 Adar I 5776
19 Jumada Al-Awwal 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Moshe Kahlon Considers Additional Tax Cuts
1.2  Israel, Cyprus & Greece Set Up Gas Export Committee
1.3  Government Approves Massive Budget to Integrate Ethiopians
1.4  Police Seek To Bolster Presence in Arab Sector

2: ISRAEL MARKET & BUSINESS NEWS

2.1  ‘Nano-superpower’ Israel Shows off its Tech in Tel Aviv
2.2  Israeli Startups Raise Over $550 Million in January
2.3  SaaS Startup Memeni Raises $2.5 Million
2.4  Israel Marks Progress in 2015 Corruption Index
2.5  Skybox Security Gets $96 Million Investment from Providence Equity
2.6  Burger King Re-Launches in Tel Aviv
2.7  Nexense Raises $3 Million
2.8  Seebo Raises $8.5 Million Funding Round to Make IoT Simple
2.9  Via Surgical Closes $6 Million Investment Led by Benslie Investment Group

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Omnicell’s First Robotic Dispensing System Installation in the Middle East
3.2  VPS Healthcare & CHOP Enter Into Strategic Alliance
3.3  Lockheed Martin & AEC Open New Sniper ATP Support Center in Saudi Arabia
3.4  Boeing Delivers First 787 Dreamliner to Saudia
3.5  The Melting Pot Expands To Saudi Arabia With First Restaurant
3.6  Bombardier Aims to Produce 80 High-Speed Trains for Turkey

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israeli Ingenuity Helps Third-World Countries Produce Water From Thin Air

5: ARAB STATE DEVELOPMENTS

5.1  Lebanese Consumer Prices Declined by 3.75% in 2015
5.2  Lebanon’s Trade Deficit Down by 12.04% at the End of 2015
5.3  Number of Tourists to Lebanon Reaches a 4 Year High in 2015

♦♦Arabian Gulf

5.4  Kuwait Sees Budget Deficit Jumping by 50% in 2016-17
5.5  UAE Plans to Trim Ministries & Outsource Most Government Services
5.6  Etihad Rail Suspends Tendering Process for Phase 2 of UAE Rail Network
5.7  Slowdown Leads to Exodus of Western Law Firms from Abu Dhabi
5.8  Oman Considers Tax on Fast Food & Fizzy Drinks
5.9  Oman Bans Domestic Workers from African Countries

♦♦North Africa

5.10  Egypt’s Central Bank Receives $900 Million from China Under Financing Deal
5.11  Egypt PM Says VAT Bill to go to Parliament This Month
5.12  Morocco 2015 Article IV IMF Consultation
5.13  Morocco’s Unemployment Rate Drops to 9.7% in 2015

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Annual Inflation Nears Double Digits in Turkey
6.2  Turkey Saw Sharp Drop in Visitors from Russia & Europe in 2015
6.3  Cyprus Cancels Leviathan Tender

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Majority of Ultra-Orthodox Men Now Working

♦♦REGIONAL:

7.2 Turkey’s Population Rises By More Than One Million in a Year

8: ISRAEL LIFE SCIENCE NEWS

8.1  Study Shows Health Improvements Following ReWalk Exoskeleton Use
8.2  Teva & Eagle Announce Commercial Availability of BENDEKA Injection
8.3  Adicet Bio Acquires Applied Immune Technologies
8.4  Teva & AbCellera Agree to Discover Rare Monoclonal Antibodies

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Russia’s DataFort Uses Allot Communications Solutions for Cloud Visibility
9.2  Gigamon Deploys LightCyber Magna to Detect Network Attacks
9.3  CyberArk Delivers Cloud-Based Privileged Account Security to the Endpoint
9.4  SuperCom $2.5 Million Agreement for IoT PureLock Suite in South America

10: ISRAEL ECONOMIC STATISTICS

10.1  OECD Says Quality of Life in Israel Among World’s Highest
10.2  Israeli Hoteliers Report 11% Drop in 2015 Stays
10.3  Car Deliveries in Israel Hit New Record in January

11: IN DEPTH

11.1  ISRAEL: S&P ‘A+/A-1′ Ratings Affirmed On Economic Resilience
11.2  ISRAEL: Private Equity Investment Rises 3% in 2015
11.3  ISRAEL: Asian Nations Push Courtship of Israeli Tech Companies
11.4  UAE: Fitch Affirms Abu Dhabi at ‘AA'; Outlook Stable
11.5  LIBYA: Libya’s Political Stalemate
11.6  TURKEY: Concluding Statement of the IMF 2016 Article IV Mission

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Moshe Kahlon Considers Additional Tax Cuts

Despite Israel’s revenues surplus, Finance Minister Kahlon will wait a few more months before deciding on tax cuts. The possibility of tax cuts is likely to put Kahlon on a collision course with economists at the Bank of Israel and Governor Karnit Flug who think that taxes should be raised. With this difference of opinion in mind, Ministry of Finance officials criticized their Bank of Israel colleagues saying, “Those calling for taxes to be raised are the same people that called for taxes to be raised in 2015 and claimed that the deficit would be 3.4%, when in fact the year actually ended with a deficit of 2.1%. The Bank of Israel admitted on 9 February in its monetary policy report that it underestimated government revenues by NIS 6 billion in its 2015 forecast.

Tax collection in January totaled a record NIS 27.4 billion, 8% more than in January last year and NIS 1.9 billion above forecasts. As a result the Ministry of Finance had a NIS 3.9 billion surplus and the deficit over the past 12 months is 2.2%. (Globes 08.02)

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1.2 Israel, Cyprus & Greece Set Up Gas Export Committee

On 27 January, the Ministers of Energy of Israel, Cyprus and Greece announced the formation of a joint committee to consider cooperation in exports of Israeli and Cypriot gas by way of Greece. The directors general of the Ministries of Energy of the three countries will head the committee. At a trilateral meeting, Greece, Cyprus, and Israel decided to establish the committee to consider different ways of exporting Israeli and Cypriot gas to Europe. One way under consideration is construction of a direct pipeline from the gas fields in Israeli and Cypriot waters to Greece, from where gas can be exported to the European Union. (Globes 28.01)

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1.3 Government Approves Massive Budget to Integrate Ethiopians

The Israeli government authorized a four-year program for ensuring better quality employment for Israelis of Ethiopian origin. The plan, coordinated by the Ministry of Economy and Industry, was approved on 19 January and will be allocated a budget of NIS 55 million ($14 million) intended to stimulate an increase in salary and employment rates among thousands of Ethiopians. The initiative was created following a government resolution in February 2014 designed to extract from the government a new policy for advancing integration of Israeli citizens of Ethiopian descent.

In July 2015, the government adopted an additional resolution which authorized the acceptance of the program’s cornerstones. These include guidance for better employment, providing vouchers for vocational training, the launch of a dedicated enterprise fund and tracking for job placements for academics. Employers will also be encouraged to employ those of Ethiopian origin with higher salary packages which will be subsidized by 1%. Overall, the initiative aims to integrate 3,600 Ethiopians into the workforce over four years. The plan stemmed from government’s need to implement a wide scale mission to facilitate the maximum integration of Ethiopians into the Israeli society. (TPF 31.01)

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1.4 Police Seek To Bolster Presence in Arab Sector

The Israel Police seeks to bolster its presence in the Arab sector by enlisting 1,350 additional policemen and setting up 10 new police stations nationwide. The cost of the plan, which is part of an overall government plan to increase governance in the Arab sector, is estimated at NIS 800 million ($200 million). A special ministerial committee headed by Immigrant Absorption Minister Elkin and Tourism Minister Levin will oversee the plan’s implementation. Increased presence on the ground is part of the police’s plan to streamline law enforcement efforts in the Arab sector, especially concerning construction law.

The ministerial committee is also scheduled to discuss the appropriation of NIS 10 billion ($2.5 billion) in the Arab sector’s development. As part of the government’s plan, the Interior Ministry’s Planning Administration will complete its outline for Arab authorities’ new zoning and construction plans within two years. Arab authorities found to be in gross violation of constructions laws will not be eligible for additional development budgets. As part of the Arab sector’s development plan, local Arab authorities will be required to formulate ways to eradicate illegal construction in their jurisdiction, including specific enforcement goals, which the police would have to approve. (YH 04.02)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 ‘Nano-superpower’ Israel Shows off its Tech in Tel Aviv

In preparation for the upcoming 22 – 23 February NanoIsrael 2016 event, it was announced that over the past nine years, Israeli nanotechnology researchers have filed 1,590 patents (769 granted so far), published 12,392 scholarly articles on the subject, and had 129 nano-success stories, which include establishing start-ups, selling ideas or technology to multinationals, licensing a patent, etc. Israeli nanotech innovations are part of some of the world’s biggest most innovative pharmaceutical, water filtration, diagnostic, energy, security – even hair coloring – technologies and products. Currently, there are over 1,600 ongoing research programs between Israeli universities and local or international companies studying the application of nanotech research conducted here to a slew of industrial, infrastructure, and information technology issues.

A good example: Israeli energy tech firm 3GSolar, which is using nanotechnology to develop integrated photovoltaic energy cells that will allow consumer devices to recharge themselves not in the sun, but with ordinary lighting – including electric lighting – indoors, thus eliminating a need for batteries altogether.

There are currently 1,995 PhD graduates from the six universities in Israel that offer a doctorate in nanotechnology, in addition to 2,908 graduates with masters degrees – besides the several hundred already in school. The Technion’s Russell Berrie Nanotechnology Institute (RBNI), for example, includes over 110 faculty members and some 300 graduate students and postdoctoral fellows – making it one of the largest academic programs in Israel, and among the largest nanotechnology centers in Europe and the US. (Various 02.02)

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2.2 Israeli Startups Raise Over $550 Million in January

Globes is keeping track of the unprecedented amount of money being raised by Israeli startups in 2016. Over the month, Israeli startups have raised an astonishing $556.4 million. IVC reported earlier that Israeli tech companies raised a record $4.43 billion in 2015, 30% more than in 2014. Clearly at the current rate of financing rounds being closed, 2016 will be another record year.

Over the last in January alone, 9 startups have raised $148 million led by ForeScout Technologies, which raised $76 million. Monitoring control company mPrest raised $20 million, as did cyber security company Fireglass, while change conversion company TravelersBox raised $10 million. Other startups raising money included Internet of Things company Seebo ($8.5 million), mobile security company Nubo ($7 million), cyber security company imVision ($4 million) and SaaS company Memeni $2.5 million.

In the first three weeks of January, three startups each raised $50 million: DevOps developer JFrog, data recovery and protection company Zerto and business intelligence and analytics company SiSense. Other major financing rounds included fintech invoice factoring startup BlueVine, which raised $40 million, and flash storage company Elastifile, which raised $35 million, and clouds solution company GigaSpaces raised $20 million. In addition, chip startup MultiPhy raised $17 million, and IoT developer Neura raised $11 million.

In the field of healthcare, chronic heart treatment device developer V-Wave raised $28 million and bone regeneration company CartiHeal raised $15 million. Both these investments were led by Johnson & Johnson. Ultrasound developer Insightec raised $22 million, and catheter developer Pi-Cardia raised $10 million. Only 17% of money raised by startups was in biomed with Internet-of-Things, cyber security, and cloud computing the hot topics in the IT sector. (Globes 28.01)

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2.3 SaaS Startup Memeni Raises $2.5 Million

Tel Aviv’s SaaS startup Memeni has raised $2.5 million in seed funding from prominent angel investors. Memeni has developed a platform for brands to create their own customizable online communities. The company is launching its white-label SaaS solution, giving brands the ability to own a peer-to-peer community, under their own domain. Memeni’s SaaS solution enables brands to quickly launch custom online communities at affordable prices, where members can enjoy exclusive content and opportunities, and brands gain access to a captive audience. Memeni provides a site for a brand’s audience to come together and collaborate on issues important to them. Unlike large social platforms, with Memeni brands and organizations own their social pages and are not limited to a ‘like’ or a ‘retweet’. Memeni lets brands create deeper and more meaningful engagements that will lead to new customers and higher revenues. (Memeni 26.01)

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2.4 Israel Marks Progress in 2015 Corruption Index

Israel marked an improvement in the 2015 Corruption Perception Index published on 27 January by Transparency International. Israel received a mark of 61, placing it in 32nd place out of 168 countries. This was five spots higher than the previous year. The index ranks countries based on how corruption is perceived to exist among public officials and politicians. It uses a scale of 0 (very corrupt) to 100 (very clean). This year, Denmark topped the list with a score of 91, followed by Finland, Sweden and New Zealand.

Israel was ranked third out of 19 African and Middle Eastern countries, after Qatar and the United Arab Emirates. Iraq, Libya and Sudan were ranked the lowest in the region. (TI 27.01)

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2.5 Skybox Security Gets $96 Million Investment from Providence Equity

Skybox Security received a $96 million investment from Providence Strategic Growth (PSG), the growth equity affiliate of Providence Equity Partners, a global private equity firm with $45 billion in assets under management. Despite billions of dollars spent annually on cybersecurity tools and services, the time required to resolve a cyberattack continues to increase. The Skybox Security Suite solves these problems by integrating with more than 90 networking and security tools in use by enterprises today. The Suite utilizes advanced analytics, such as modelling and simulation, to extract relevant and actionable intelligence from the silos of data created by those tools, giving security leaders the most comprehensive view of their attack surface and the insight needed to quickly make informed decisions about where to direct security resources.

In four years, Skybox has grown its acquisition rate of new customers by 220% and revenue by 221%. In 2015, the company increased year-over-year sales by 55%, fueled by a 59% increase in deals valued more than $100,000 and a 165% increase in deals valued more than $500,000.

Herzliya’s Skybox arms security leaders with a powerful set of integrated security solutions that give unprecedented visibility of the attack surface and key Indicators of Exposure (IOEs) such as exploitable attack vectors, hot spots of vulnerabilities, network security misconfigurations and non-compliant firewalls. By extracting actionable intelligence from data using modeling and simulation, Skybox gives leaders the insight needed to quickly make decisions about how to best address threat exposures that put their organization at risk, increasing operational efficiency by as much as 90%. (Skybox 03.02)

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2.6 Burger King Re-Launches in Tel Aviv

After a six-year absence, one of the most recognizable fast food brands in the world is making its Israeli comeback. The first branch of the re-launch was opened this week on Ibn Gavirol Street in Tel Aviv – the first of five to be opened in February. The other branches will open later in the month, one in Beer Sheva and three in Tel Aviv (in Ramat Hachayal, the Azrieli Center Mall and Dizengoff Center). Burger King Israel is backed by Pierre Besnainou, who holds 75% of the Israeli operation, together with Steve Benchimol. The two have a third partner who holds 25% of the shares. According to the investors’ plan, the re-launch will expand to 10 branches within a year, at a total investment of $12 million – the figure which the partners committed to Burger King Corporation to invest.

The long-term development plan for the chain calls for expansion to up to 50 branches within five years, with all outlets under the direct ownership of Burger King Israel. There is no plan for expanding by franchising. (Globes 02.02)

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2.7 Nexense Raises $3 Million

Yavne’s Nexense is raising $3 million at a company value of $30 million. The company, which operates in the wearable computer segment, is developing a system for the treatment of snoring and sleep apnea. The product, which is worn as a chest strap or wristwatch, monitors various physical parameters during sleep. One investor in the company is General Electric with an 8% stake. The company hopes to hold an IPO in early 2017.

Nexense’s product has already obtained CE marketing certification in Europe. The company says it has already sold 1,000 units of its product in Europe and Israel, and adds that the money raised will be used to develop the next generation of the product. When the product detects snoring or sleep apnea, it vibrates and helps the patient resume breathing or stop snoring, without waking him. According to the company, the product caused a dramatic improvement in sleep among patients using it continuously. Nexense believes that the sleep disorder market amounts to $10 billion a year. (Globes 31.01)

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2.8 Seebo Raises $8.5 Million Funding Round to Make IoT Simple

Tel Aviv’s Seebo closed a $8.5 million Series A financing round bringing the total raised to date to $14 million. The funding was led by Carmel Ventures, a member of the Viola Group, with participation from existing investors, including TPY Capital. Seebo provides companies with end-to-end tools and technology for the development, production and post launch needs of smart products, enabling product teams to expedite their go-to-market timeline while significantly lowering product lifetime costs. The company is currently working with numerous companies across a range of industries, including toy and children’s products, health and wellness, sports equipment, furniture and electronics, travel equipment, baby products and fashion. Most product companies won’t want the headache, expense and commitment of building IoT development and runtime capabilities from scratch. Seebo’s platform is aimed at helping these companies solve the question of how to build and support connected products, allowing them to keep doing only what they do best. (Seebo 02.02)

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2.9 Via Surgical Closes $6 Million Investment Led by Benslie Investment Group

Via Surgical has secured a $6 million investment led by Benslie investment group. The addition of Benslie Investment group to their highly experienced team validates the opportunity to advance patient care with the FasTouch Deployable Suture Fixation System. Their investment will greatly support the increasing clinical demand for improved fixation through development and commercialization efforts in 2016. FasTouch, a novel fixation technology is the first with the potential to provide a comprehensive fixation solution in hernia repair. The lockable sutures are designed to significantly minimize foreign body material, providing the first and only light-weight hernia fixation system.”

Amirim’s Via Surgical provides next-generation fixation technology. Realizing that many hernia repairs make use of multiple means for mesh fixation – anchor/helical hernia tacks, manually applied transfascial sutures – Via Surgical has developed its FasTouch system to provide deployable suture fixation that is strong and consistent, yet easily and rapidly deployed for hernia repair. (Via Surgical 08.02)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Omnicell’s First Robotic Dispensing System Installation in the Middle East

Mountain View, California’s Omnicell, a leading provider of medication and supply management solutions and analytics software for health care facilities, is installing its first robotic dispensing system in the Middle East after winning a contract and expanding its current relationship with Hamad Medical Cooperation in Qatar. Hamad Medical Cooperation and Omnicell expect the Omnicell robotic dispensing system to be fully operational at The General Hospital, the country’s main hospital, in February. The decision to install an Omnicell robotic dispensing system was a natural step in the continuum of care for Hamad Medical Cooperation, which already uses Omnicell automation systems and other solutions in some of their other health care facilities.

Omnicell was selected over other vendors by Hamad Medical Corporation due to its speed in delivery of patient medication packs, the flexibility in configurations to meet the needs of the outpatient pharmacy and the strong regional support for the Omnicell product lines. (Omnicell 27.01)

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3.2 VPS Healthcare & CHOP Enter Into Strategic Alliance

The UAE’s VPS Healthcare, one of the fastest growing integrated healthcare service providers in the Middle East, Europe and India, and The Children’s Hospital of Philadelphia (CHOP), one of the largest, oldest and most-respected children’s hospitals in the world, officially unveiled their strategic alliance. The announcement was made during the Arab Health Congress in Dubai.

This is the first of several joint initiatives emanating from the memorandum of understanding (MOU) signed last October in which both organizations committed to establishing standards of excellence for pediatric care at VPS hospitals and clinics. The move will offer families close-to-home access to world-class pediatric care. The alliance also ensures that any VPS pediatric patients who need more specialized treatment will have seamless access to CHOP’s main hospital in Philadelphia.

VPS plans to set up a state-of-the art facility – scheduled to open in 2017 – that marks a significant step forward in offering the most advanced medical care to the children of the United Arab Emirates and across the Middle East. VPS and CHOP, which is one of the top-ranked hospitals for children in the U.S., will conduct a gap analysis of the current state of pediatric care in order to institute specific steps in enhancing local training, technology and treatments to provide world-class patient care in the UAE. (VPS 27.01)

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3.3 Lockheed Martin & AEC Open New Sniper ATP Support Center in Saudi Arabia

Lockheed Martin and Advanced Electronics Company (AEC) recently celebrated the opening of the Sniper Advanced Targeting Pod (ATP) Expanded Repair Capability center in Saudi Arabia. This marks the start of operations at the first Sniper ATP support center located outside the United States. The Sniper ATP Expanded Repair Capability center provides sustainment support for Sniper ATPs. Due to its in-Kingdom location, the center helps expedite repair times, improving fleet readiness. It also generates in-Kingdom employment opportunities and expands the local manufacturing base.

Lockheed Martin and AEC established the Sniper ATP Expanded Repair Capability in cooperation with the Saudi Arabia Economic Offset Program. The center is part of an existing offset agreement between the Saudi Arabia Economic Offset Committee and Lockheed Martin. Lockheed Martin and AEC have previously collaborated on various defense products and systems that led to the transfer of technology to the Kingdom of Saudi Arabia.

Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that – with the addition of Sikorsky – employs approximately 126,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. (Lockheed Martin 28.01)

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3.4 Boeing Delivers First 787 Dreamliner to Saudia

Boeing and Saudia, Saudi Arabia’s national airline, celebrated the triple delivery of three Boeing 787-9 Dreamliners and a 777-300ER (Extended Range). The airline ordered eight 787-9s in 2010. Saudia is no stranger to such large deliveries. In December 1999, Boeing delivered three 777s to Saudia. The airline will now have 48 Boeing airplanes in its fleet that currently include 777-200ERs, 777-300ERs and 747-400s. Over the last 55 years, Saudia has taken delivery of over 130 Boeing airplanes including 707s, 737s, MD-11Fs, DC-9s and MD90s. More than 60 customers – including Saudia – from around the world have placed orders for more than 1,000 airplanes, making the 787 Dreamliner the fastest selling twin-aisle airplane in Boeing history. (Boeing 02.02)

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3.5 The Melting Pot Expands To Saudi Arabia With First Restaurant

Tampa, Florida’s The Melting Pot Restaurants, the world’s premier fondue restaurant and a leading polished casual dining franchise, announced its first restaurant in Saudi Arabia has opened in Riyadh. In addition to Riyadh, The Melting Pot has five international locations open and 15 others in development across the globe.

The Melting Pot in Riyadh is located on Prince Mohammed bin Abdul-Aziz Street, nicknamed Thalia Street in Riyadh – a street known for its dining, fashion and retail offerings. Featuring four distinct courses with menu items dipped into heated fondue pots at the center of each table, The Melting Pot’s concept fits well with the hip, modern setting and eclectic community.

Mira Foods is the franchisee responsible for debuting The Melting Pot in Saudi Arabia. With approximately seven years of combined foodservice and franchising experience, the franchise group also owns four other restaurants, including two Noodle House franchises. As part of the franchise agreement, Mira Foods will develop an additional four Melting Pot restaurants in Saudi Arabia over the next few years. The group is currently considering sites in Jeddah and Riyadh to develop their second location, which is slated to open by the end of the year. (The Melting Pot 03.02)

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3.6 Bombardier Aims to Produce 80 High-Speed Trains for Turkey

Bombardier aims to produce 80 high-speed trains for Turkey’s state railway TCDD in a tender together with local partner Bozankaya. Bombardier executive Furio Rossi made the comment at a news conference in Ankara. Bombardier will make a $100 million technology transfer investment in Turkey’s high-speed rail project. Turkey has said it plans to buy 106 high-speed train sets as it expands its high-speed rail network across the country. Murat Bozankaya, head of the Bozankaya Group, said that onward sales to third countries were also planned. He said Bozankaya planned to produce 172 underground train sets for Bangkok along with Germany’s Siemens. The tender for the Bangkok metro is expected to take place before the end of the year. (Zaman 09.02)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israeli Ingenuity Helps Third-World Countries Produce Water From Thin Air

A former IDF Special Forces company commander set about creating technology which would ensure that soldiers are never short of clean water and that the water supply is never delayed. Rishon LeZion’s Water-Gen, founded in 2009, developed revolutionary technology designed for the military which can produce clean water out of thin air by extracting water from the ambient air humidity. The technology is now being supplied to the Israeli, British, French and American armies.

Following the successes of the technology, the company set about bringing the appliance to the civilians in third world countries. The GENNY, as the civilian version of the appliance is called, is now used in India, Africa, Central America and China. Since water in these countries is too impure for consumption, many people have to buy bottles of water which are not always affordable. The GENNY system can produce 20 liters per day for people who simply cannot drink from the pipes because the water is impure. In 2014, Water-Gen was ranked 21st in the World’s 50 Most Innovative Companies in Fast Company magazine, with Google receiving the top spot. (Ynetnews 22.01)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanese Consumer Prices Declined by 3.75% in 2015

Deflationary pressures succeeded to end 2015 with a decline in consumer prices by 3.75% compared to an inflation of 1.86% in 2014, according to data released by Lebanon’s Central Administration of Statistics (CAS). The slump in commodity prices during 2015, the depreciation of the euro, and the economic slowdown were the major factors behind the decline in prices last year.

In December alone, consumer prices in Lebanon fell by 3.40% y-o-y as the Consumer Price Index (CPI) declined from 99.29 in December 2014 to 95.92 in December 2015. Despite that the prices of food and non-alcoholic beverages (20.6% of the CPI) barely changed, December’s deflation was mainly the result of lower energy prices. With cheaper oil, the price of water, electricity gas and other fuels (11.9% weight of CPI) also declined by 17.57% in December 2015. In addition, health prices constituting 7.8% of the CPI, downturned by 7.19% yearly. Food and non-alcoholic beverages, which represented 20.6% of the CPI, declined by an annual 0.64%. In contrast, education prices, with a weight of 5.9% in the CPI, rose by a yearly 1.52%, while the prices of clothing and footwear, with a weight of 5.4% in the CPI, increased by 0.24%. (CAS 31.01)

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5.2 Lebanon’s Trade Deficit Down by 12.04% at the End of 2015

The trade deficit in Lebanon contracted by 12.04% (year on year) y-o-y by the end of December 2015, to register $15.12B due to a 11.83% decline in total imports outpacing the 10.75% fall in total exports. This decrease is largely affected by the international low prices of oil and the weak euro. Removing mineral products, trade deficit tightened by 5.13% to $11.71B.

Total imports decreased by 11.83% to $18.07B by the end of 2015 compared to $20.49B in 2014. However, the volume of imports increased 1.6% yearly to 15.70M tons in 2015, which might be due to the increased population taking refuge in Lebanon. The three major product categories that were imported to Lebanon by December 2015 were mineral products (19.03% share of total imports), “machinery and electrical instruments” (11.03% share of total imports) and “products of the chemical or allied industries” (10.76% share of total imports). Notably, the three major countries that Lebanon imported goods from were China, Italy and Germany with respective weights of 11.48%, 7.10% and 6.77%.

By the same token, total exports fell yearly from $3.31B by December 2014 to $2.95B, with a 13.21% decrease in volume to 1.94M tons by the end of 2015. This might be linked to the disruptions of some major trade routes in the face of Lebanese exports. In details, the exported “prepared foodstuffs, beverages, and tobacco” lead Lebanese exports with 16.35% share of total exports, followed by the “machinery and electrical instruments” and “products of the chemical or allied industries”, with respective market shares of 14.02% and 13.92%. In terms of main Lebanese exports destinations, Saudi Arabia, UAE and Iraq are on the top of the list, grasping corresponding weights of 12.08%, 10.59% and 7.61%. (BLOM 06.02)

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5.3 Number of Tourists to Lebanon Reaches a 4 Year High in 2015

Lebanon’s tourism sector improved by the end 2015, as the number of arrivals surged by 12% to reach 1.52m tourists. The number of European visitors (33.29% of the total) reached 505,264. French tourists, constituting the largest share of European tourists at 27%, went up by a yearly 11.16% to 134,181 visitors. The number of tourists from Germany, the UK and Turkey also saw respective improvements of 10.05%, 15.11% and 30.39% y-o-y to 74,823, 56,608 and 21,027 in 2015.

The number of Arab tourists (31.67% of the total) displayed a yearly increase of 4.32%, to record 480,723 by December 2015. Iraqis had the largest share at 40%, with their number increasing by an annual 1.28% to 191,578, over the same period. It is notable that a large part of Iraqi tourists are actually refugees relocating to Lebanon due to the heightening security developments in their home country. The number of Egyptian visitors improved by 9.17% from 69,179 to 75,524 while that of the Jordanians increased by 5.61% from 73,822 to 77,960. The number of Saudi incomers also progressed by 4.46% annually to 47,831 by December 2015. American travelers accounted for 17.4% of the total, their numbers reaching 264,041 by the end of 2015, a 17.55% y-o-y increase from the same period last year. (Blom 27.01)

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►►Arabian Gulf

5.4 Kuwait Sees Budget Deficit Jumping by 50% in 2016-17

Kuwait’s finance ministry said on 28 January that the country’s 2016-17 draft budget forecasts a deficit of 12.2 billion dinar ($40.2 billion), nearly 50% higher than the previous year, due to falling crude prices. The ministry said that expected revenues will be 7.4 billion dinars while expenditures are expected to be 18.9 billion dinars, a drop of 1.6% from a year earlier. The deficit for the fiscal year, which runs from 1 April to end of March, includes 0.7 billion dinars contribution to the Generations Fund, a nest egg for when oil supplies diminish or the economy suffers other shocks.

Kuwait’s emir, Sheikh Sabah al-Ahmed al-Sabah, recently called for budget cuts and better management of spending to cope with declining revenues due to lower oil prices. The ministry said revenues would cover only 71% of state salaries and associated costs, which are estimated at 10.4 billion dinars. The budget provides for 2.9 billion dinars for state subsidies, while capital expenditures are set at 3.3 billion dinars or 17% of budget.

The 2015-16 state budget, which was approved by parliament last July, envisaged a deficit of 8.18 billion dinars ($27.0 billion) – nearly half of total spending. (Reuters 29.1)

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5.5 UAE Plans to Trim Ministries & Outsource Most Government Services

The UAE plans to outsource most government tasks to the private sector and cut the number of ministries, Prime Minister Sheikh Mohammed bin Rashid al-Maktoum said on 8 February. The announcement comes as energy-rich Gulf Arab states have been hit by low oil prices, encouraging them to streamline institutions and attract more foreign investment. He announced the formation of a single education ministry, abolishing the ministry of higher education, and fused several other state bodies into related ministries. No time frame was given for the changes. Gulf Arab oil exporters have for years subsidized food, fuel, electricity and water, keeping prices very low in an effort to maintain social order, though the UAE economy is less reliant than some of its neighbors on oil revenue. (AB 08.02)

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5.6 Etihad Rail Suspends Tendering Process for Phase 2 of UAE Rail Network

Etihad Rail, the developer and operator of the UAE’s $11 billion national rail network, confirmed that it has suspended the tendering process for Stage Two of the project. All bidders have been informed in writing. It added that it has suspended the Stage Two tender process while it reviews the most appropriate options for the timing and delivery of this phase of the project. The decision will have no impact on Stage One operations.

The UAE government has begun to slow some spending and review construction plans in some areas as low oil prices hit state finances. Stage Two involves the construction of the rail network in the Abu Dhabi Emirate by connecting to the Saudi border at Ghweifat and the Omani border at Al Ain, and by connecting vital areas such as Mussaffah, Khalifa Port and Jebel Ali Port in Dubai.

Etihad Rail commenced commercial operations on Stage One of the rail network, which links Shah and Habshan to the port of Ruwais, after official safety authorizations were granted by the Federal Transport Authority in December 2015. (AB 26.01)

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5.7 Slowdown Leads to Exodus of Western Law Firms from Abu Dhabi

London-based Simmons & Simmons is the latest in a wave of Western law firms to shut their offices in Abu Dhabi in the last year as low oil prices put a damper on business. It follows US-based law firms Latham & Watkins and Baker Botts, as well as London and Sydney co-headquartered Herbert Smith Freehills (HSF) in announcing plans to close offices in Abu Dhabi over the past 12 months. Many international law firms had piled into the capital in the past five years, hoping to bag lucrative contracts linked to the government, in particular the energy sector and the launch of a new financial free zone. The retreat underscores growing pressure on international law firms for billable hours, prompting a review of their need to have a presence in the capital.

Simmons & Simmons, which decided to close its Abu Dhabi office after a review, said in an emailed statement it would serve its clients through its office in Dubai, moving its Abu Dhabi-based partners to Dubai or London. Abu Dhabi has cut back or slowed spending on non-essential projects and has lifted subsidies on petrol to ease finances as state revenues decline due to cheap oil. Abu Dhabi is more reliant on the energy sector and government contracts, whereas Dubai has a more diversified economy propelled by a larger private sector. HSF said it closed its Abu Dhabi office in the middle of last year and transferred its five resident lawyers to its offices in Dubai or Doha. Latham & Watkins said in March 2015 it was closing its Abu Dhabi and Doha offices, consolidating the Abu Dhabi office with its office in Dubai. Baker Botts said it closed its Abu Dhabi office in January 2015. (Reuters 02.02)

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5.8 Oman Considers Tax on Fast Food & Fizzy Drinks

Unhealthy products such as fast food, soft drinks and cigarettes could be taxed in Oman under plans unveiled by the minister of health. Dr Ahmed Mohammed Al Saidi said Oman must impose tougher sanctions on unhealthy items. The minister was reportedly speaking in response to news of a dramatic rise in lung cancer victims in the sultanate. The Public Authority for Consumer Protection has already banned electronic cigarettes and electronic shisha from the shelves in an attempt to improve public health. Last November, GCC governments agreed to impose a unified 100% tax on tobacco and related products. (AB 02.02)

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5.9 Oman Bans Domestic Workers from African Countries

Oman has stopped issuing visas to domestic workers from Ethiopia, Kenya, Senegal, Guinea and Cameroon. It was reported that the decision was taken to stop the spread of disease from African countries to Oman, and curb criminal activity in the sultanate. The decision took effect on 31 January. However, the new rule does not apply to workers from these countries who are already living in Oman. They can renew their contracts as normal. (AB 02.02)

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►►North Africa

5.10 Egypt’s Central Bank Receives $900 Million from China Under Financing Deal

Egypt’s central bank has received $900 million from the China Development Bank under a $1 billion financing agreement signed in January, Central Bank Governor Tarek Amer said. The $900 million will raise Egypt’s dollar reserves to around $17.4 billion.

Egypt, which relies heavily on imports, has been facing a foreign exchange crisis since a popular uprising in 2011 toppled autocrat Hosni Mubarak and drove away tourists and investors, both major sources of hard currency. Reserves held at the central bank tumbled to around $16.48 billion in January from around $36 billion before the uprising. Investment and aid deals worth billions of dollars were signed on 21 January during a visit to Egypt by China’s President XI Jinping. (AB 09.02)

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5.11 Egypt PM Says VAT Bill to go to Parliament This Month

Egyptian Prime Minister Sherif Ismail said the government expects to present a long-awaited value added tax (VAT) bill to parliament at the end of February. Ismail told reporters on the sidelines of a conference in Dubai that he expected the law to be passed by parliament later this year. (DNE 09.02)

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5.12 Morocco 2015 Article IV IMF Consultation

The IMF observed that Morocco’s macro-economic situation continues to improve. Growth is recovering and should reach 4.7% in 2015, but non-agricultural activity remains sluggish. Inflation remains low. The authorities appear to be on track to meet the 2015 public deficit target of 4.3% of GDP. The external position continues to improve, benefiting from lower oil prices, the current account deficit will narrow to about 1.5% of GDP in 2015 and international reserves will exceed 110% of the Fund’s Assessing Reserve Adequacy (ARA) metric. Poverty rates, unemployment and inequalities have declined, but much remains to be done to reduce structural unemployment, increase labor force participation rates, and secure higher and more inclusive growth. Reforms have slowed down somewhat, especially pension reform and the new central bank law. The 2015 FSAP assessed that banks are well capitalized and profitable, and benefit from stable funding. (IMF 08.02)

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5.13 Morocco’s Unemployment Rate Drops to 9.7% in 2015

Morocco’s unemployment rate slightly dropped from 9.9% in 2014 to 9.7% in 2015, according to the High Commissioner for Planning (HCP). The unemployed labor force decreased by 1.6% from 1,167,000 unemployed in 2014 to 1,148,000 in 2015, HCP pointed out, adding that the overall rate of unemployment decreased by 19,000 people at the national level. The same source noted that the unemployment rate dropped from 14.8% to 14.6% in urban areas and from 4.2% to 4.1 in rural areas. However, unemployment increased among young graduates aged 15-24 by 0.7 points. (MWN 09.02)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Annual Inflation Nears Double Digits in Turkey

The inflation rate in Turkey rose by 1.82% in January, triggered by persistently high food costs and tax hikes, especially on alcoholic beverages and tobacco products, lifting the annual inflation rate to 9.58%, close to double digit levels and the highest since May 2014. According to data released by the Turkish Statistics Agency (TUIK), the highest monthly increase was 9.6% in alcoholic beverages and tobacco products in January. The indices rose for food and non-alcoholic beverages by 4.28%, for miscellaneous goods and services by 2.71%, for health by 2.42% and for recreation and culture by 2.09%. The only monthly fall was in clothing and footwear with 6.71%. The government increased special taxes on cigarettes and alcoholic drinks at the beginning of the year. Electricity prices were also increased by 6.8% as of 1 January. (TUIK 03.02)

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6.2 Turkey Saw Sharp Drop in Visitors from Russia & Europe in 2015

Turkey saw a dramatic decline in the number of foreign visitors from Europe and Russia in 2015, though the total number of foreign arrivals saw only a slight drop of around 1.61% compared to 2014, according to data released by the Tourism Ministry on 28 January. A total of 36.2 million foreign people visited the country in 2015, according to the data. Overall, foreign arrivals declined by around 7.3% to 1.46 million in December 2015 compared to the same month of 2014.

The number of Russian visitors to Turkey decreased to 3.65 million in 2015 from around 4.5 million in 2014, amid Russia’s economic troubles. The decline accelerated after the diplomatic crisis between Russia and Turkey erupted on 24 November 2015, with the number of Russian tourists visiting Turkey decreasing by around 46.9% to 25,485 in December 2015 compared to the same month of 2014.

Despite the drop, the Russian market remained the second largest source of foreign arrivals for Turkey, with over 10% of the total. The leading source of arrivals was Germany, which took around 15.5% of the total with around 5.6 million visitors, while the U.K. was third with a 7% share of the total. According to sector representatives, escalating security concerns played a big role in explaining the drop in visitors from Europe.

The number of arrivals from Saudi Arabia rose by 31% to around 450,000 in 2015 compared to 2014. Arrivals from Bahrain also saw an increase of 34% to around 32,500 in the same period. There was also a sharp increase in arrivals from China, with the number of Chinese visitors increasing by 57% to over 313,000 in 2015 compared to the previous year. An increase of 20% was also seen in the Israeli market, with around 224,500 arrivals from Israel in 2015 compared to 2014.

Tourism revenue is very important for Turkey, accounting for around 4.5% of the country’s $800-billion economy and playing a crucial role in closing its multi-billion-dollar current account gap. (HDN 28.01)

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6.3 Cyprus Cancels Leviathan Tender

The Cypriot Natural Gas Public Company (DEFA) has been unable to reach any agreement to buy gas from the Leviathan field. The Leviathan partners notified the Tel Aviv Stock Exchange (TASE) on 9 February that the Cypriot Natural Gas Public Company (DEFA) had cancelled its gas supply tender from the leviathan gas field. The Leviathan partners reported that they were unable to reach agreement with the Cypriot government on the terms for the tender for supplying gas. The partners also reported that they are still talking to the Cypriot government about supplying gas from Cyprus’s Aphrodite field. Noble and Delek’s units also own most of the Aphrodite field. The Cypriot tender was for the supply of 0.7-0.95 billion cubic meters (BCM) of gas in 2017-25 (at the latest). (Globes 09.02)

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7: GENERAL NEWS AND INTEREST

ISRAEL:

7.1 Majority of Ultra-Orthodox Men Now Working

The Central Bureau of Statistics announced that over 50% of ultra-Orthodox men are participating in the workforce for the first time in recorded Israeli history. The new numbers marked a continuation of a 12-year trend. In 1995, male ultra-Orthodox participation in the workforce reached 48% and seemed to be on the rise, but then the trend reversed, dipping as low as 36% in 2003. In that same year, then-finance minister Benjamin Netanyahu implemented a series of welfare cutbacks designed to promote participation in the Israeli workforce. Since then numbers have been steadily on the rise, and have finally passed 50% among male Haredim. The data indicates that Haredi women have an even more impressive presence in the workforce, with 73% of them working. This compares to workforce participation among the general Jewish population of 80%. (CBS 04.02)

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REGIONAL:

7.2 Turkey’s Population Rises By More Than One Million in a Year

Turkey’s population rose by over 1 million people in 2015 compared to the previous year, officially reaching 78,741,053, according to statistics released by the Turkish Statistical Institute (TUIK). The data showed that 39.5 million people (50.2% of the total) were males, while 39.2 million people (49.8% of the total) were females. As a result, Turkey’s annual population growth rate increased to 13.4 per thousand in 2015, up from 13.3 per thousand in 2014. Meanwhile, the proportion of Turks living in urban areas, which was 91.8% in 2014, increased to 92.1% in 2015.

In addition, the median age of Turkey’s population rose again, from 30.7 in 2014 to 31 in 2015. The median age was 30.4 for males and 31.6 for females in 2015. According to the TUIK data, the proportion of Turkish citizens in the “15-64 working age group” was 67.8% in 2015, a total of 53.36 million people. The proportion of children aged 0-14 dropped to 24%, or 18.9 million people. The proportion of the people aged 65 and over increased to 8.2%, or 6.5 million people. (TUIK 28.01)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Study Shows Health Improvements Following ReWalk Exoskeleton Use

ReWalk Robotics announced the publication of a first-of-its-kind case study in the peer-reviewed journal Spinal Cord Series and Cases published by the International Spinal Cord Society (ISCOS) demonstrating that use of the ReWalk robotic exoskeleton resulted in significant improvements in the quality of life for an individual with spinal cord injury. The case study studied the impact on ambulation ability as well as several quality of life measures as part of the SF-36 questionnaire, a 36-item, patient-reported survey of patient health. Following six months of ReWalk use in the rehabilitation setting, the subject was able to walk independently with limited supervision and demonstrated significant improvements in several quality of life measurements including: mobility, risk of falling, motor skills and control of bladder and bowel functions.

The case study also reported no complications such as falls, skin injuries or technical problems, supplementing the existing body of clinical literature demonstrating the safety of the ReWalk robotic exoskeleton.

Yokneam’s ReWalk Robotics develops, manufactures and markets wearable robotic exoskeletons for individuals with spinal cord injury. Their mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies. (ReWalk 27.01)

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8.2 Teva & Eagle Announce Commercial Availability of BENDEKA Injection

Teva Pharmaceutical Industries and Eagle Pharmaceuticals, announced the commercial availability of BENDEKA (bendamustine hydrochloride) injection, a liquid, low-volume (50 mL) and short-time 10-minute infusion formulation of bendamustine. BENDEKA is approved for the treatment of patients with chronic lymphocytic leukemia (CLL) and for the treatment of patients with indolent B-cell non-Hodgkin lymphoma (NHL) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Efficacy in CLL relative to first-line therapies other than chlorambucil has not been established.

Under a February 2015 exclusive license agreement for BENDEKA, Teva is responsible for all U.S. commercial activities for the product including promotion and distribution.

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8.3 Adicet Bio Acquires Applied Immune Technologies

Menlo Park, California’s Adicet Bio, a biopharmaceutical company focused on the development of next-generation cell immunotherapies, announced the acquisition of Applied Immune Technologies (AIT), an Israel-based company that develops immunotherapies directed to the intracellular proteome. The financing was led by OrbiMed and also included Novartis Venture Fund and Pontifax.

These significant financial resources will allow Adicet to progress its universal immune cell therapy (uICT) platform technology and related products and advance AIT’s programs and product pipeline. AIT’s technologies, capabilities and intellectual property highly complement those of Adicet and position the combined company to become a leader in next-generation immunotherapy products for cancer and other indications.

Haifa’s AIT specializes in generating and developing T-Cell Receptor-Like (TCRL) antibodies with high affinity and specificity to disease-specific intracellular peptides presented on the cell surface by the major histocompatibility complex (MHC). AIT also established Epitarget, a proprietary technology to identify and validate novel disease-specific peptide targets. AIT technology is based on work by Prof. Yoram Reiter, a world leader in the research of immunotherapies directed to the intracellular proteome. AIT will continue its operations in Israel as Adicet’s wholly-owned subsidiary. (Adicet 26.01)

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8.4 Teva & AbCellera Agree to Discover Rare Monoclonal Antibodies

Teva Pharmaceutical Industries and Vancouver, British Columbia’s AbCellera have entered into a collaborative research agreement whereby AbCellera will apply its high-throughput single cell antibody platform for the discovery of rare monoclonal antibodies. Under the terms of the agreement, AbCellera will receive an upfront payment, research payments, and is eligible to receive undisclosed downstream milestones associated with the development and approval of therapeutic antibodies.

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Russia’s DataFort Uses Allot Communications Solutions for Cloud Visibility

Allot Communications announced that IBS DataFort, a leading Russian cloud service provider, is using the Allot Service Gateway and Allot Service Protector for real-time network traffic management and analysis and distributed denial of service (DDoS) protection. The Allot solution monitors and filters network traffic, allowing for greater application visibility, as well as quicker and more effective security threat mitigation. IBS DataFort chose Allot’s solution for its scalability, advanced traffic management and self-provisioning capabilities, which deliver greater network visibility and control for enhanced application performance. This approach allows IBS DataFort to offer customers better quality of service as well as effective and comprehensive protection against increasingly sophisticated and targeted DDoS attacks threatening to bring business productivity to a halt.

Hod HaSharon’s Allot Communications is a leading provider of security and monetization solutions that enable service providers to protect and personalize the digital experience. Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks, enabling service providers to get closer to their customers, safeguard network assets and users, and accelerate time-to-revenue for value-added services. (Allot 27.01)

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9.2 Gigamon Deploys LightCyber Magna to Detect Network Attacks

LightCyber announced that Santa Clara’s Gigamon has selected and deployed the LightCyber Magna platform for security event visibility and detection of targeted and insider attacks, risky behavior and malware that has evaded preventative security. The Magna platform utilizes continuous behavior-based profiling, rather than technical artifacts, and machine learning to accurately and efficiently detect active cyber-attacks before damage is done. Magna is the only solution to combine full network deep packet inspection with an agentless endpoint interrogation technology.

Magna uses behavioral profiling to learn what is normal on the network and endpoints, and thereby detect anomalous attacker behaviors that are by-necessity required to perpetrate a successful breach or conduct malevolent goals, including command and control, reconnaissance, lateral movement and data exfiltration. These behaviors can be identified early to reduce attacker dwell time and curtail the activity. At the same time, Magna can identify harmful activity from insiders – rogue or unaware employees or contractors – that is either intentionally malicious or unknowingly dangerous. Magna presents a small number of actionable alerts with supporting contextual and investigative details to greatly enhance the efficiency of the Gigamon security operations team in their detection and remediation operations.

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9.3 CyberArk Delivers Cloud-Based Privileged Account Security to the Endpoint

CyberArk announced new capabilities for CyberArk Viewfinity that deliver privileged account security to the endpoint. With CyberArk Viewfinity v5.5, customers can benefit from an enhanced, single privilege management and application control solution to reduce the attack surface while being able to block the progression of malware-based attacks, and balance business user productivity and enterprise security.

Following the acquisition of Viewfinity in Q4/15, CyberArk Viewfinity is now available as part of the CyberArk Privileged Account Security Solution. With this release, customers can gain greater privilege management and application control features in an on-premises or software-as-a-service (SaaS)-based offering. New integration with the CyberArk Shared Technology Platform enables all privileged audit logs to be stored and reviewed centrally, as well as new flexible, customizable reporting capabilities.

Petah Tikva’s CyberArk is the only security company focused on eliminating the most advanced cyber threats; those that use insider privileges to attack the heart of the enterprise. Dedicated to stopping attacks before they stop business, CyberArk proactively secures against cyber threats before attacks can escalate and do irreparable damage. (CyberArk 02.02)

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9.4 SuperCom $2.5 Million Agreement for IoT PureLock Suite in South America

SuperCom announced that its M2M(IoT) division has signed a $2.5 million agreement to deliver its PureLock suite – a hybrid of products and applications for the tracking and monitoring of assets customized for the Transportation and Cargo/Freight management sector. The agreement is with a large Cargo Management organization in South America to deliver PureLock solutions for Cargo tracking and monitoring in various locations and transportation routes throughout the continent, with significant potential to increase the quantity and value represented in the original agreement.

The PureLock Suite is a best-of-breed Electronic Seal and Cargo Tracking and Monitoring platform. SuperCom has leveraged its existing technology base to introduce innovative features such as secure cloud technologies, mobile/GPS applications, locker tamper and customizable alerts, high performance analytics, secure real time location and extremely long battery life. The PureLock Suite provides Transportation and Cargo Management organizations a complete end-to-end electronic monitoring solution to keep track of assets, which is accurate, reliable and flexible.

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10: ISRAEL ECONOMIC STATISTICS

10.1 OECD Says Quality of Life in Israel Among World’s Highest

Israel is enjoying relatively high economic growth compared to other nations, according to the biannual report by the Organization for Economic Development and Cooperation (OECD). The report says that Israel’s employment rate is high and increasing, and that per capita income, which stands at an average of $35,000 per year, approaches the per capita income of most advanced countries. Moreover, the report says that the quality of life in Israel is among the highest enjoyed by OECD member nations. It rated Israel third in quality of life among advanced nations, after Japan and Switzerland.

Israel is better prepared that other OECD nations to deal with an aging population, but public expenditure on pensions is low, according to the report, which also said that Israel’s banking and finance sector demonstrated impressive stability.

Along with the praise, the report noted that not all sectors of Israel’s population were integrated into the workforce, and some sectors had a low employment rate. Israel’s poverty rate was one of the highest among OECD nations, with 21% of the population living below the poverty line – more than Mexico, Turkey or Chile. In the mid-1990s, only 14% of Israel’s population lived below the poverty line. According to the report, not only were more people in Israel impoverished, the gap between the wealthy and the poor in Israel had increased in recent years. (OECD 31.01)

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10.2 Israeli Hoteliers Report 11% Drop in 2015 Stays

The Israel Hotel Association announced that the crisis in the Israeli tourism industry is ongoing; 2015 ended with an 11% decline in foreign tourist stays compared to 2014. There was also a 16% decline compared to 2013, which was a peak year. The figures show that the number of foreign tourist stays stood at just 8.2 million, with 13.5 million stays by Israelis (a rise of 4% compared to 2014). The overall calculation of stays in hotels shows a decline of 2% compared to 2014 and a 4% decline compared to 2013. It should be mentioned that the number of hotel rooms in Israel increased by 1% in 2015, compared to 2014, and 4% when compared to 2013. The IHA statistics also do not take into account tourists stays that occur in places other than hotels (such as rented apartments, with family and friends, etc.). (IHA 25.01)

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10.3 Car Deliveries in Israel Hit New Record in January

January saw a record in new car deliveries in Israel: more than 36,000 new vehicles with an aggregate value of NIS 3.25 billion, including taxes, were delivered to private and business customers. The previous record in January 2015 was 34,000 deliveries. The deliveries are attributable to the new model effect, which leads many private and business customers to postpone their new vehicle purchases over the past three months of the year until January and February. In December 2015, for example, deliveries were very low – in the vicinity of 10,000 units.

The auto sector, however, believes that the importers’ real orders backlog has grown substantially, and that the exceptional orders will persist into February and March, due to the waiting lists for some models, delivery of which will reach Israel only next month. Like last year, deliveries of models in the luxury and premium car classes were outstandingly high – more than 5,000 units. (Globes 02.02)

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11: IN DEPTH

11.1 ISRAEL: S&P ‘A+/A-1′ Ratings Affirmed On Economic Resilience

On 5 February, Standard & Poor’s Ratings Services affirmed its ‘A+/A-1′ long- and short-term foreign and local currency sovereign credit ratings on the State of Israel. The outlook is stable.

Rationale

The ratings are supported by Israel’s prosperous and diverse economy, strong external balance sheet, and flexible monetary framework. The ratings are constrained by Israel’s high debt and interest burden and significant security and geopolitical risks.

With per capita GDP at an estimated $37,000 in 2015, the economy is prosperous and well diversified, with high value-added manufacturing and service sectors. This is underpinned by high expenditure in research and development, amounting to 4.2% of GDP in 2013, the highest among member countries of the Organization for Economic Co-operation and Development (OECD). The information and communication sector has a 9.8% share of gross value added (GVA) and scientific and technical activities have 2.8%. We assume Israel’s economy will grow at an average rate of about 2.5% in 2016-2019, despite risks of slower world trade and increasing volatility in the international capital market. We expect the key drivers of this growth will be robust private consumption, continued corporate investment activity, and healthy service exports. In per capita terms, this equates to growth of around 1% per year, reflecting robust population growth.

The March 2015 general elections resulted in a right-wing government coalition with 61 of 120 seats in Israel’s parliament, the Knesset. It was not until November 2015 that the Knesset passed the biannual budget for 2015 and 2016. As a provisional budget was in place for most of 2015, meaning only one-twelfth of the 2014 budget could be spent per month, we estimate the general government deficit to be around 2.2% of GDP in 2015. Despite the political and fiscal concessions made to form a new coalition government, we expect the general government deficit will remain below 3% in the coming years. Fiscal policy is moderately expansionary in 2016–additional spending commitments in the 2015/2016 budget include reversing the cuts in entitlements to child allowances and increasing resources in health and education to reduce waiting time and class sizes. On the revenue side, cuts to VAT and corporate tax are also likely to widen fiscal deficits. Should there be an increase in defense spending, we expect the government to cut civilian spending to offset the increase.

Subtracting liquid assets (mostly in the form of deposits at the central bank) from gross government debt, we estimate that net general government debt remained at below 64% of GDP at the end of 2015. Even without taking into account possible land sales and privatization proceeds, which could reduce government financing needs, we expect the net debt ratio will stabilize at below 65% of GDP in 2016-2019.

As a result of Israel’s strong export performance and sustained current account surpluses, its external balance sheet is strong and its net creditor position versus the rest of the world continues to grow. We forecast that its liquid external assets will outstrip its gross external debt over the next three years. This dynamic is also lowering the country’s gross external financing needs, indicating low dependency on external financing.

We also consider Israel’s monetary policy flexibility to be a credit strength. The Bank of Israel (BoI, the central bank) has become increasingly interventionist, over and above its commitment to purchase foreign currencies to offset the impact of domestic natural gas production on the balance of payments. We view the exchange rate regime as a managed float, which somewhat hampers monetary policy flexibility.

In addition to making frequent interventions in the foreign exchange market, the BoI has eased its stance on monetary policy, countering the strength of the Israeli new shekel in order to maintain the competitiveness of Israeli exports. It lowered its policy rate to a historical low of 0.1% in March 2015, but the shekel continued to appreciate against Israel’s key trading partners. Over the course of 2015, the shekel weakened by 0.3% against the dollar, but strengthened by about 7.3% against the currencies of Israel’s main trading partners, in terms of the nominal effective exchange rate.

One of the key challenges to monetary policy continues to be Israel’s rising house prices. After years of relative stability, real house prices have increased by around 69% since the end of 2007 and the International Monetary Fund (IMF) assesses that the house prices in Israel are currently overvalued by 30%. The BoI’s earlier attempt to dampen the housing market by raising interest rates yielded little, only pushing up the foreign exchange rate of the shekel significantly. The new government has implemented a comprehensive set of measures to address supply-side issues, including freeing up more land for development, changing the tendering criteria, and speeding up administrative processes for construction permissions. Given the capacity constraints in the construction industry, the time needed to build houses, and continued growth in demand, we do not expect the government measures to fully address the supply shortage in the near term.

The tightening of macro-prudential measures has reduced systemic risks to Israel’s banking industry, but any abrupt correction in house prices could still have other negative economic effects. We expect that the Knesset will pass general legislation to establish a formal Financial Stability Committee, as recommended by the IMF to enhance policy co-ordination, by the end of 2016.

Overall, institutional and governance structures in Israel are generally effective, with a satisfactory degree of transparency and accountability. However, we consider that the persistent territorial dispute with the Palestinians threatens political stability and weighs on policy predictability.

The ratings remain constrained by geopolitical risks. Repeated violent clashes with the Palestinians not only inflict social and economic costs, but also risk reactions by the international community. On the northern border, the conflict in Syria and Iraq, as well as instability in the Sinai region, pose medium-term security risks. Any significant armed conflict could have a negative impact on the ratings if it significantly deterred investment, weakened the economy’s growth potential, or strained fiscal flexibility. We do not expect the nuclear deal between Iran and the international community to have a material direct impact on the ratings on Israel, given the continued regional tensions.

Outlook

The stable outlook on Israel reflects our opinion that the government will maintain prudent macroeconomic policies and ensure the stabilization of government debt over 2016-2019, despite higher spending concessions agreed by the coalition. We also expect the impact of security risks on the Israeli economy will continue to be contained.

We could consider raising our ratings if fiscal consolidation exceeds our expectations, resulting in a significantly lower net debt burden or interest costs, or if there is marked progress in defusing external security risks.

Conversely, we could lower the ratings if the economic growth outlook were to weaken substantially, due to an abrupt correction in the housing market or unaddressed structural weaknesses. A downgrade would also become more likely if the government yields to pressures for more social or security spending and allows deficits to widen and government debt to increase significantly above our current expectations. Moreover, if a perceived loss of international support were to further isolate the Israeli economy, we could lower the ratings. (S&P 05.02)

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11.2 ISRAEL: Private Equity Investment Rises 3% in 2015

The Israeli private equity industry saw 90 investments $3.4 billion in 2015, up 3% from $3.3 billion in 2014, but 3% below the $3.5 billion record amount invested in private equity deals in 2012, according to the latest IVC Shibolet Private Equity Survey by IVC Research Center and Shibolet & Co. Law Firm. The number of private equity deals in 2015, however, was the highest ever – up 13% from the previous record of 80 deals closed in 2014.

In the fourth quarter of 2015, 20 Israeli private equity deals totaled $841 million, 13% above the past 5-year average of $747 million. The number of private equity deals in the fourth quarter, however, was the same as in the preceding quarter and the corresponding quarter. The most prominent deal in the fourth quarter of 2015 was the $300 million investment in Bioenergy Infrastructure Group, followed by the $180 million buyout of Diamonds Direct, a jewelry company, by Blackstone Group.

Israeli private equity funds intensified their activity throughout 2015, spending $902 million, or 27% of total investment up19% from the $760 million they invested in 2014, and up 42% from $636 million invested in 2013. The three largest private equity deals in 2015 accounted for 23% of their total investments: the two buyouts by FIMI Opportunity Funds– Hadera Paper ($97 million) and Polyram ($59 million), and the $50 million straight equity investment in Bioenergy Infrastructure Group, a UK biomass power company, by HeliosEnergy.

Foreign private equity funds accounted for the majority of Israeli private equity investments in 2015 with $2.2 billion or 64% of the total capital – 9% down from $2.4 billion invested by foreign private equity funds in 2014, the record to date. The top five deals in 2015, were worth more than $150 million each. The two largest deals were both in the second quarter of 2015 – Lumenis’ $510 million buyout by XIO Group and ClickSoftware’s $438 million buyout by Francisco Partners. These two deals alone accounted for 28% of total private equity proceeds in 2015.

Shibolet & Co. partner Omer Ben-Zvi said, “The number of Israeli private equity deals and their total dollar amount in 2015 compared to previous recent years show a stable growth of this market. An interesting sector to be noticed in the private equity arena is life science technologies which produced 15 deals in the amount of $626 million in 2015, compared to 11 deals at $59 million in 2014. We see more mature companies like Lumenis growing and entering that arena. On the other hand, in the Internet sector we saw a decrease in the total amount in PE deals, from $1.2 billion in 2014 to $307 million in 2015 with the same number of deals.”

A total of 48 technology deals generated $2 billion, or 58% of the total private equity investments in 2015. The amount was 5% below the $2.1 billion (63%) invested in 49 technology deals in 2014. The software and life sciences sectors led private equity investments with 22% and 19%, respectively, partially due to the Lumenis and ClickSoftware deals.

Straight equity transactions show a continuing uptrend featuring them as the favored investment mechanism for private equity funds, with 65 deals in 2015, compared to 62 deals closed in 2014, 48 in 2013 and only 22 in 2012. The volume of capital invested in companies directly also increased to $1.4 billion invested in 2015, 42% of total private equity investments, and up 16% from the previous record of $1.2 billion (36% of total) in 2012.

Israeli Private Equity Investors

IVC research manager Marianna Shapira said, “The current uptrend in the Israeli private equity market was fortified in 2015 with 11 funds having raised approximately $1.5 billion throughout the passing year. Moreover, we are tracking 28 active Israeli private equity management companies managing a total of nearly $9 billion, and more than ten new funds are currently in the process of capital raising, expected to raise up to $1 billion by the end of the year. We therefore expect private equity activity in 2016 to remain dynamic.”

Shapira notes that a large part of the projected activity will focus on growth stage investments: “Many of the funds currently active, and some of the ones presently in the process of raising capital are dedicated to late stage investments, including funds focused on growth stage companies, as well as distress situations, turnarounds and debt funds. Inspecting the funds currently in process, it seems cleantech, life science, communication, media and real estate are the sectors most likely to attract investments during 2016,” she said.

Ben-Zvi added, “Looking at the number of new growth funds raising capital and the over subscription for Israeli PE funds we have seen, we believe that the positive trend in the Israeli private equity market is likely to continue. However, one has to remember that the private equity market is affected by global changes, so recent developments, such as the ones in the Asian capital markets, are likely to have an impact on the Israeli private equity market as well.” (IVC 04.02)

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11.3 ISRAEL: Asian Nations Push Courtship of Israeli Tech Companies

On 28 January, Dennis Mitzner posted in TechCrunch that China and Japan are forging deeper ties with Israel’s burgeoning tech industry.

While China has been active in the Israeli market for some time, Japan, too, has launched a series of efforts to court the Israeli tech scene. The signs of warming ties between Israel and Japan can perhaps be traced to 2014 when Rakuten, the largest e-commerce platform in Japan acquired Israel-based messaging app provider Viber Media for $900 million.

However, late January has been particularly significant for Japanese-Israeli relations. On 26 January, Sony announced its intention to acquire Israel-based Altair Semiconductor for $212 million and during the same week, Honda — eyeing Israel’s vehicle intelligence technologies, apps and software — flew in a group of executives and engineers from Japan and North America to attend the equity crowdfunding platform OurCrowd’s annual summit in Jerusalem. “We believe that partnering together with entrepreneurs, startups, developers and academic institutions will help us develop truly transformational new products,” said Nick Sugimoto, Sr. Program Director at Honda Silicon Valley Lab.

Japan’s presence was also notable at Cybertech 2016 in Tel Aviv where the country was looking to forge closer ties with Israeli cybersecurity companies and technology ahead of the 2020 Tokyo Olympics. “Over the past year, there has been a noted increase in the interest of Japanese companies in Israel in a variety of fields, evidenced by the arrival of Japanese companies to Israel and their willingness to host Israeli companies in Japan”, Amit Lang, Director General of the Israeli Ministry of Economy, said in a press release when Israel opened a trade office in the country.

In Singapore and China, Israeli tech know-how is a known quantity, but Japan and countries like Indonesia are only just waking up to the potential partnership opportunities with Israeli tech companies.

“In the past couple of years we have noticed an ever-growing presence of Asian and Far-East countries in Israeli events and conventions. Singapore has always had a presence here and recently we have seen Japanese investors and corporations setting up shop here and well as of course Chinese,” says Yaron Carni from Maverick VC. “We had a delegation from Indonesia, one of the world’s fastest growing populations, last year as well. I think that a lot of that is attributed to Israeli ministry of Trade and its economic attachés.”

Although China and Israel established diplomatic relations only in 1992, the two countries have in excess of $10 billion in trade since the beginning of last year.

“The floodgates have opened in a significant way. Chinese investors will increase their allocation to Israeli VC funds and into a growing a number of tech companies,” says Jeremy Lustman, partner at DLA Piper and head of the firm’s Israel Country Group. “Japan has also opened up, as has Korea and Singapore – each with company reps on the ground in Israel. Australia is also making a major play this year into Israeli tech and I think that will add to the broader pan-Asian appeal.”

China is already investing in Israeli venture capital funds, including Pitango, JVP, Vertex and others. “China has a keen appreciation for the world class technology being developed in Israel across a wide spectrum, including cyber, iOT, fintech, agtech, and medtech, to name just a few. The Chinese are experts at taking these technologies to the mass market in China and elsewhere around the globe. It’s a huge win/win,” says Lou Kerner form Excellerate and managing partner of The Israel Syndicate on AngelList.

Technology investment from China into Israel is growing by 50% annually and is expected to grow.

“The Chinese are looking for unique technology that goes beyond their traditional copycat style to stay competitive,” says Sephi Shapira, chief executive officer of MassiveImpact International, a mobile advertising company with offices in Tel Aviv and Taiwan. “I believe that they are looking for technology to help with user experience, big data, anything to take the product they built for the Chinese market and make it work externally.” (TechCrunch 28.01)

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11.4 UAE: Fitch Affirms Abu Dhabi at ‘AA'; Outlook Stable

On 02 February, Fitch Ratings has affirmed Abu Dhabi’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘AA’ with Stable Outlooks. The issue ratings on Abu Dhabi’s senior unsecured foreign currency bonds have also been affirmed at ‘AA’. The Short-term foreign currency IDR has been affirmed at ‘F1+’ and the UAE Country Ceiling at ‘AA+'; this Ceiling applies to Abu Dhabi and Ras al Khaimah.

Key Rating Drivers

Abu Dhabi’s key credit strengths are its exceptionally strong fiscal and external metrics and high GDP per capita, balanced by high dependence on hydrocarbons, a relatively weak policy framework, and weak data availability compared with peers. Sovereign net foreign assets were an estimated 222% of GDP at end-2015, and debt was 1.7%, all of it external. Erosion of these buffers will be slower than in other Fitch-rated oil exporters, due to a low fiscal break-even oil price of $54/b. Consequently, the emirate has time to adjust its public finances to an expected 41% drop in oil revenue between 2014 and 2016.

The 2015 budget deficit widened to 13.2% of GDP from 7.2% of GDP in 2014. These numbers exclude the dividend paid by the Abu Dhabi National Oil Company (ADNOC) but include estimated investment income of 5.3% of GDP. The widening deficit reflected a drop in oil and natural gas income to 17% of GDP from 26.6% of GDP, compensated somewhat by reductions in non-current spending. Under our baseline oil price assumptions, we expect the general government deficit to decline to 11.6% of GDP in 2016 and 5.3% of GDP in 2017. The 2016 budget is still under discussion but we expect further reductions in non-current expenditure.

The drop in oil revenues has accelerated reform efforts at the UAE level, and these benefit Abu Dhabi as the largest contributor to the federal budget. The UAE removed transport fuel subsidies in August 2015 and its energy minister announced the intention to remove remaining subsidies for electricity and gas. Water tariffs have been introduced for UAE nationals in Abu Dhabi and increased by between two and five times for expatriates, depending on consumption levels. Electricity tariffs were increased by between 30% and 100%. The government estimates that it could raise significant non-oil revenue by increasing charges for goods and services provided by the public sector.

The debt of government-related and state-owned enterprises (GREs and SOEs) peaked at AED277b (30% of GDP) in 2012 and had fallen to AED246b by H1/15, reflecting the authorities’ commitment to containing indebtedness. We expect GRE and SOE debt to continue to fall as the Department of Finance exercises greater control over their capital spending and debt issuance plans. Explicit contingent liabilities are clearly delineated and are not material compared with Abu Dhabi’s assets.

We expect the government to finance its 2016 and 2017 deficits through a combination of transfers from the Abu Dhabi Investment Authority (ADIA), the dividend from ADNOC, issuance of bonds and some further draw-down of general government deposits. Fitch expects ADIA assets to fall to $475b at end-2016 from an estimated $502b at end-2014 as outflows outpace investment returns. However, we expect ADIA assets to rise again in 2017, when the ADNOC dividend should be sufficient to cover the budget deficit. Government deposits in UAE banks fell 16% to AED 158b over 2015, but remain substantial at around 11% of GDP. The overall level of liquidity in the banking sector is still high.

The Abu Dhabi Department of Finance has intensified consultations with the central bank and commercial banks on local debt issuance. The timing and size of bond issuance remains uncertain, but we assume issuance of AED40b of bonds in the local market in 2016 and a further AED60b in 2017, effectively replacing the AED100b in certificates of deposit issued by the central bank and held by local banks. This would help stem depletion of ADIA assets, which are likely to have a higher expected rate of return than Abu Dhabi debt. Local issuance could also help develop the domestic financial market and pave the way for future issuance by domestic entities, including SOEs and GREs. Foreign-currency issuance is also being considered.

We estimate that real GDP rose 5.4% in 2015 on the back of a 6.8% rise in oil production volumes. Oil production is expected to rise 2% in 2016 and 2017, partially reflecting ADNOC’s plans to increase capacity to 3.8m b/d by 2018. We estimate that non-hydrocarbon growth slowed to 4% in 2015 from 6% in 2014, and we expect it to dip to 3.5% in 2016 as the negative effects of lower oil prices, lower banking sector liquidity and government retrenchment affect confidence and demand in the private sector. Nevertheless, investment will continue to be a driver of growth.

Structural indicators are mixed relative to peers. GDP per capita is above the ‘AA’ median. Governance and business environment scores have improved in recent years and are significantly above those of other GCC countries but below the ‘AA’ median. Fitch considers geopolitical risks to be elevated compared with rating category peers.

Major gaps in the availability of data remain despite recent improvements. In particular, standard international investment position and balance of payments data are unavailable, and there is less information on the sovereign balance sheet than in peers. Data shortcomings reflect a weak economic policy framework, particularly at the federal level. Authorities have few options for absorbing shocks beyond resorting to fiscal and external buffers.

Rating Sensitivities

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

-A sustained period of oil prices sharply lower than Fitch expects, leading to rapid erosion of fiscal and external buffers.

-Spill-over from a regional geopolitical shock that impacts economic, social or political stability.

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

-Strengthening of economic policymaking institutions and greater availability of key data.

-Reduction of the economy’s dependence on oil.

Key Assumptions

Fitch forecasts Brent crude to average $ 45/b in 2016 and $55/b in 2017.

Fitch assumes that regional geopolitical conflicts will not impact directly on Abu Dhabi or on its ability to trade and that the domestic political scene will remain stable.

No major change is expected in ADIA’s investment policy or in its relationship with and use by the Emirate of Abu Dhabi. (Fitch 02.02)

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11.5 LIBYA: Libya’s Political Stalemate

Mattia Toaldo wrote in Sada on 3 February that despite apparent progress toward a power-sharing agreement, Libya’s governing bodies still face problems of neutrality and representation that will hamper their ability to govern effectively.

The Libyan political process is effectively stuck. The few recent steps toward a power-sharing agreement are unlikely to accomplish its main goal of giving Libya a single government again. In the meantime, the Islamic State is escalating its presence in Libya, stirring up alarm in Western capitals and creating momentum for a new international intervention in the country, albeit on a more limited scale than the one to dislodge Muammar al-Qaddafi.

In Spring 2014, the situation in Libya devolved into armed confrontation between the two broad components of the anti-Qaddafi uprising: those who had worked with Qaddafi but then had switched sides and those, mostly of Islamist tendencies, who considered themselves to be the “true revolutionaries” looking to build a new state from scratch, starting with the security sector. These two sides are represented respectively by General Khalifa Haftar with his “Operation Dignity” and the Tobruk-based House of Representatives on the one side and “Libya Dawn” and the Tripoli-based “Government of National Salvation” on the other.

Since September 2014, the West has tried to push the two reluctant factions and their regional sponsors into a power-sharing agreement to be brokered by a Special UN envoy, first Bernardino Leon, then Martin Kobler as of November 2015. This process culminated with the signing of the Libyan Political Agreement (LPA) in Skhirat, Morocco on 17 December 2015. The LPA transformed Tripoli’s resurrected General National Congress (GNC), now representing what is left of Libya Dawn, into the consultative State Council, and made Tobruk’s House of Representatives (HoR) the sole legislative authority, with the power to grant a vote of confidence to the new government. The functions of head of state are exercised by the new Tunis-based Presidency Council, which is now composed of nine people representing all factions.

On 28 January, more than a month after LPA was signed in Skhirat, the HoR, under the control of Dignity though theoretically representing all of Libya, at last decided to approve the agreement, but without clause 8. Clause 8, one of the final provisions of the agreement, transfers all military powers to the Presidency Council, who will then decide on new military appointments within 50 days. In essence, this means resetting the military leadership of the country – and more importantly, the position currently held by General Haftar as head of the armed forces. The exclusion of clause 8 puts the whole agreement at risk, as almost none of the other factions are ready to accept an agreement that leaves the general in his current position. This means that unless a dramatic change is made, the implementation of the LPA is at a dead end. Even if the Government of National Agreement (GNA) is formed under these circumstances, it is unlikely to move peacefully to Tripoli.

The HoR’s vote on the LPA demonstrated that as long as the process is based exclusively on consolidating the two parliaments into one bicameral legislature it will suffer from several flaws. First, as long as the HoR is located in Tobruk, in Haftar’s fiefdom, it will hardly take a stance that jeopardizes his position. This gives him disproportionate leverage over the whole process, considering that among his enemies are those who control Tripoli and Misrata, as well as the Petroleum Facilities Guard in eastern Libya and most military commanders in Benghazi. The GNC, for its part, is now controlled by a minority of hardliners. Libya Dawn does not exist anymore as a coalition and this effectively leaves Misrata and other important players out of the diarchy created under the LPA.

Finally, the legal basis of the two parliaments is shaky. The GNC is a resurrected parliament with many MPs that have been brought in to replace original members without new elections. A verdict by the Constitutional Court on 6 November 2014 repealed the constitutional amendment that had allowed for elections for members the HoR, whose mandate expired on 20 October 2015 – and it is unclear what its plenum is given that dozens of MPs have been boycotting it for more than a year now.

The coming weeks, the outside world could be faced with a paradoxical situation: the HoR could approve a new list of ministers for the Government of National Agreement while implementing the LPA without clause 8. The international community would probably recognize this government while saying that further negotiations would be needed on the LPA. In fact, the GNA would not be able to move to Tripoli anytime soon and would become another government sitting in Tobruk that does not control the state. Alternatively, Libya could continue to have three governments, none of which is governing the country.

In the meantime, the Islamic State escalated its activities with a 7 January terrorist attack in Zliten that killed dozens and an offensive against oil installations in the east in the same week. This boosted the argument in Western capitals that even though any intervention against the Islamic State in Libya should come upon request of the Libyan government, in the absence of such, urgent action should still be taken against the group. The Islamic State in Libya, as elsewhere, has thrived in ungoverned spaces. Unless there is a political agreement that reduces the number of those spaces and governs them, a military intervention is unlikely to change the picture.

The stalemate of the political reconciliation process can be avoided by reforming the process itself. To that end, the HoR could be moved to a more neutral location so it can be recognized as the only legislative authority that includes all factions. Second, a more inclusive consultative body could discuss the way forward on the LPA. This Shura could include representatives of the municipalities from tribes and of the hukama (local wise men) important to Libya’s social structure. But these reforms would require political courage and strategic patience from the West—both of which are lacking at the moment.

Mattia Toaldo is a Policy Fellow at the European Council on Foreign Relations. (Sada 03.02)

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11.6 TURKEY: Concluding Statement of the IMF 2016 Article IV Mission

An IMF team visited Turkey between 20 January and 1 February 2016 for the annual evaluation of the economy as part of the regular consultations under Article IV of the IMF’s Articles of Agreement.

Growth last year was stronger than expected, and the current account deficit fell. Domestic demand is expected to continue to drive growth this year, owing to the higher minimum wage, lower oil prices, and supportive monetary and fiscal policies. External financing needs will remain high, however, while weak capital inflows will put pressure on reserves and inflation will remain above target and increasing. In the short run, tighter fiscal and monetary policies can help address vulnerabilities. A longer term solution will require progress with the authorities’ ambitious structural reform agenda to boost potential growth and domestic saving.

Outlook and Risks

The economy is estimated to have grown by 3.8% last year, driven by domestic demand. Despite political uncertainty, unfavorable geopolitical developments, and a sharp weakening of the lira, private consumption was resilient. Monetary tightening was insufficient to reduce inflationary pressures, amid sharp lira depreciation. Weak external demand depressed exports growth, but as imports also decreased on the back of cheaper oil, the current account deficit moderated significantly to an estimated 4.4% of GDP.

Strong growth is set to continue in 2016, but with higher inflation. The 30% increase in the minimum wage will raise consumption by an estimated ½ to 1% of GDP this year. In addition, the recent further decline in oil prices, and the insufficiently tight monetary stance will also be supportive. GDP growth is expected to be between 3.5% and 4% this year and inflation to exceed the authorities’ 5% target once again by a wide margin.

The smaller current account deficit is welcome, but external imbalances persist. Much of the improvement can be traced to lower oil prices, and the non-energy balance has barely changed. The economy’s external position remains moderately weaker than the level consistent with medium-term fundamentals. The current domestic demand-based growth does not help rebalancing and the low private saving rate, if unaddressed, will perpetuate accumulation of external imbalances. Moreover, financing of the deficit remains a concern, with some of it coming from reserves. In addition, net errors & omissions are playing an increasing role in the balance of payments.

Although the economy has shown resilience in the face of large exchange rate depreciations and capital outflows, buffers have decreased. The large foreign currency debt of the nonfinancial corporate sector and the dependence of banks on foreign financing expose Turkey to the risk of accelerating capital outflows. While fiscal buffers remain strong, policy space to react to shocks has decreased over time, as international reserves have declined somewhat, and the negative international investment position remains large. The main avenue to diminish vulnerabilities is through limiting external imbalances.

The Policy Agenda

The main challenges facing policymakers are to reduce the external imbalance and to boost the potential growth rate of the economy. In the short run, a reduction of external imbalances can be achieved through tighter fiscal and monetary stances. Macro-prudential policies may also have a further role to play, but are not a substitute for these macroeconomic policies. If such policies are implemented, slower domestic demand and increased savings would lower external imbalances. This would provide a window of opportunity to implement far-reaching structural reforms to raise the private sector saving rate and potential output, delivering stronger and more sustainable long-term growth.

Monetary and Fiscal Policies

A tighter fiscal stance would contribute to reducing external imbalances and lowering inflation. With public debt at 32% of GDP, debt sustainability is not a concern. To help alleviate some of the increasing pressure on monetary policy in combating inflation, fiscal policy consolidation could be slightly more ambitious than envisaged in the MTP. On the expenditure side, the consolidation should focus on current spending, including containing the public sector wage bill, rather than reducing capital spending. There is also scope to raise revenues, including through reducing informality and broadening the tax base.

A stronger public sector budget position would create additional policy space to react to shocks. Private sector balance sheets have become more stretched in recent years. In addition, the increasing use of guarantees and PPPs to finance investment entails contingent liabilities that may materialize during a downturn. Their rapid growth requires stronger central oversight, approval and disclosure. A more comprehensive overview of the public sector fiscal position, transactions and risks, could also be supported by enhancing the coverage of fiscal reporting, including on pension and PPP liabilities, and publishing a fiscal risk statement.

A tighter monetary policy stance is needed to bring inflation back to the 5-percent target in the medium term. Inflation remains well above target and has started to increase recently. As a consequence, inflation expectations have remained unanchored. The real policy rate should be increased into decisively positive territory. This would also alleviate the depreciation pressure on the lira.

The monetary policy framework needs to be improved to strengthen the effectiveness of monetary policy. Narrowing the interest rate band and providing all liquidity demanded by the market at a single policy rate will provide a clear signal on the policy stance and strengthen the monetary transmission mechanism.

Reserves should also be boosted. Given the improvement in the current account balance, the CBRT should embark on policies to increase its net reserves. Interventions should be restricted to periods of disorderly market conditions.

Financial Sector Policies

Banks remain adequately capitalized. While on a long-term declining trend, capital adequacy ratios remain above regulatory minima and are mostly based on high-quality capital. Still, the gradual introduction of Basel III may increase the need for banks to raise capital in an environment of decreasing profitability. Nonperforming loans are low and well provisioned. However, banks remain very reliant on external wholesale funding. In tandem, foreign currency exposures in the economy remains high, as the non-financial sector’s net open foreign exchange position stands at $174 billion.

Macro-prudential policies have lengthened the maturities of banks’ wholesale FX external financing, adding some resilience. Longer maturities imply lower annual rollover, and thus lower external financing needs. Increasing the remuneration differential between TL and FX required reserves could help to slow overall FX wholesale borrowing. Prudential policies should be adjusted to reflect increased risks associated with foreign exchange lending. The recent adjustment of consumer loan risk weights that will take effect in April should be reviewed if consumer credit growth rebounds too sharply. Other macro-prudential measures focused on overall indebtedness would also be useful.

Structural Reforms

The authorities’ appropriately ambitious structural reform agenda is central to the goal of successful economic rebalancing. Specifically, reforms aimed at increasing funding of the private pension and the severance pay systems could significantly raise the private saving rate. Addressing the lack of flexibility in the labor market and further developing local capital markets would boost growth and improve competitiveness. The authorities’ reform plans should be implemented swiftly and fully.

The increase in the minimum wage could bring potential benefits, but also poses challenges. While the higher wage may improve income distribution and provide a short-term economic boost, it has consequences for labor markets, competitiveness, and the fiscal balance. In the context of rigid labor markets, efforts to improve labor market flexibility would help avoid a surge in informal sector employment, and would diminish the negative consequences of higher wages for competitiveness.

The mission welcomes the initiative to integrate refugees. Turkey’s refugee population of more than 2 million is among the highest in the world. While a safe return of refugees to their home countries is always desirable, efforts should be made to help integration in the meantime. In this respect, Turkey is enacting legislation to allow registered refugees to work. This is an important step in effective integration. (IMF 02.02)

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THE START-UP NATION CHANGES DIRECTION

February 18, 2016, 6:22 am

≫ Next: Fortnightly, 24 February 2016

≪ Previous: Fortnightly, 10 February 2016

Israel, since the beginning of the high-tech revolution in the early 90s, has rightly earned the title of “Start-Up Nation” given that it is one of the top five centers of technical creativity in the world. I say the top five because rankings vary but clearly outside of the United States, Israel has more start-ups in absolute terms than any country in the world, bar none. With approximately 3,000 of them extant at any given moment, most other country’s stats pale by comparison.

But, of late, there has been a perceptible change in the makeup of the technology coming out of Israel. That change can be described as a switch from developing products to developing features and enhancements.

For example, in the past the things for which Israel was famous and which everyone acknowledged as transformational products included:

*SanDisk’s flash drive that enables people to store tens of gigabytes of data on a USB-accessible key.

*Computer chips that allowed Intel to dramatically increase the storage and operational capabilities of laptops without increasing the heat output of the processor.

*Development of the stent that allows patients with clogged arteries to have them opened and kept open permanently.

*Mobileye’s collision avoidance technology (using sophisticated vision algorithms) that ‘interprets’ a scene in real-time and provides drivers with an immediate evaluation based on its analysis. Automakers are now adopting this technology into their rapidly expanding safety feature applications known as Advanced Driver Assistance Systems (ADAS).

These are just a few examples of the tech product development that went on for years in Israel and contributed to Israel’s start-up nation reputation.

But lately, as we meet young startups seeking funding and strategic partners, we are noticing that the focus has turned to developing features and enhancements rather than specific products. Some current examples:

*SCREEMO helps retailers to engage with their customers in real-time and to create a call to action by using fun, engaging games that run on digital screens and attract customers to interact using their smartphones. This enables retailers to drive up sales, create a social buzz or promote their products and services.

*Rail Safe has developed an infra-red based technology that provides locomotive engineers with the ability to “see” up to two kilometers down the track, even in the dark and independent of any negative weather conditions such as rain, snow, sandstorms, and fog. For example, the technology would have averted the head-on collision of two commuter trains in Germany last week that killed so many people.

*TriDiNetworks has developed an innovative cloud based platform for wireless M2M (Machine-to-Machine) and IoT (Internet of Things) networks. The platform enables unprecedented low total cost of ownership and quick ROI based on patented algorithms, methods, tools and products. It is applicable for lighting and HVAC control, smart meters, home automation, smart appliances and wearable devices.

In each of these cases the developers have created a feature or enhancement that makes current activities either safer, more efficient or more profitable.

For those who worry about whether Israel as start-up nation is at risk of losing its “Mojo,” these new directions emanating from local techies clearly illustrate that the creative community here is well ahead of the curve and fully understands where the new opportunities are in technological development. This response augurs well in favor of Israel’s continued superiority as the start-up nation.

Sherwin Pomerantz

President

Sherwin Pomerantz is president of Atid-EDI Ltd., an economic development consulting firm with 24 years’ experience in assisting overseas companies and public entities in their export promotion and foreign direct investment attraction efforts.

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Fortnightly, 24 February 2016

February 24, 2016, 6:38 am

≫ Next: What’s News at EDI – March 2016

≪ Previous: THE START-UP NATION CHANGES DIRECTION

24 February 2016
15 Adar I 5776
15 Jumada Al-Awwal 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Jerusalem to Abolish Agricultural Production Controls
1.2  FATF Grants Israel Observer Status
1.3  MK Litzman: ‘Life-Saving Medicines Must Enter Healthcare Plan’
1.4  Plan To Lower Hotel Prices Passes First Knesset Reading
1.5  US Foreign Military Funding Talks Key to Israeli Tanker Plan
1.6  Bill Seeks to Let All Employees Refuse to Work on the Sabbath

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Year of the Monkey Rings in First Israel-China Equity Fund
2.2  Finance Ministry Says Hi-Tech No Longer Israel’s Main Growth Engine
2.3  Titanium Investments Unveils $50 Million Israel VC Fund
2.4  Cannabics Pharmaceuticals to Raise $4 Million
2.5  YouAppi Closes $13.1 Million Series B Round for Expansion into Asia
2.6  Israel’s Siemplify Raises $4 Million
2.7  Mellanox Technologies Completes Acquisition of EZchip

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Qatar Airways Threatens to Cancel Pratt & Whitney Engine Order
3.2  Emirates Chief Hails ‘Historic’ Deal with LA Dodgers Baseball Team
3.3  Chinese Officials Asked Aramco to Dual List in Hong Kong
3.4  Morocco Okays Opening of First IKEA Store
3.5  Redknee to Support Turk Telekom with the Launch of New Services

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Solar Tower in Desert Promotes Israel’s Renewable Energy Drive
4.2 SolarEdge Surpasses 10 Million Shipped Power Optimizers

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Consumer Prices Continues to Drop in the First Month of 2016
5.2  US Signs Law to Increase Military Support to Jordan
5.3  Construction of Jordan’s First Shale Power Plant to Start in June
5.4  Germany to Lend Iraq $566 Million

♦♦Arabian Gulf

5.5  Qatar Tourism Receipts Forecasted to Grow to $7.2 Billion by 2025
5.6  WhatsApp Voice Call Not Banned By Saudi Regulator
5.7  Saudi & Russia Agree to Oil Output Freeze
5.8  Saudi Arabia Suspends $3 Billion Lebanese Army Aid Deal

♦♦North Africa

5.9  Egypt’s Dollar Crisis Continues
5.10  Egypt’s Central Bank Widens Exceptions On Import Restrictions
5.11  EU-Tunisia Commission Proposes Further €500 Million in Assistance
5.12  Nearly One-Third of Moroccans Are Illiterate

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Greece Back In Deflation, January Consumer Prices Drop 0.1%

7: GENERAL NEWS AND INTEREST

7.1  Lebanon Justice Minister Resigns Over Hezbollah Domination
7.2  UAE’s Sheikh Mohammed Unveils New Cabinet
7.3  Libya’s Revised Unity Government Announced

8: ISRAEL LIFE SCIENCE NEWS

8.1  Breakthrough Israeli Cancer Treatment Praised Worldwide
8.2  Israel & California Sign Unique Biotechnology Deal
8.3  BioLight Files Registration Statement for Proposed IPO in the US
8.4  BioLight Reports Positive Results for TeaRx Multi-Assay Test for Dry Eye Syndrome
8.5  Hospitech Respiration Gets Clearance for AnapnoGuard System
8.6  Rosetta Genomics Gets New York State’s Approval for Thyroid Cancer Diagnostic Assay

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 IAI Unveils New Civil Aviation Cyber Security Solutions
9.2  IAI’s New UAV Mission Operational & Intelligence Center
9.3  IAI’s Newest Members in its Loitering Munitions Family
9.4  NICE Workforce Management Reduces Costs and Increases Productivity
9.5  Indiana University & Beeper Group Collaborate on C2 solutions
9.6  Thirty Five Billion Chips Analyzed in 2015 Via Optimal+ Big Data Highway
9.7  VocalZoom & Cobalt Partner on Near-Perfect Speech Recognition Solutions
9.8  Allot to integrate Network Data insights into Oracle Communications Analytics
9.9  IAI Receives Additional F-35 Lightning II Contract to Produce 40 Wing Sets
9.10  Opgal Announces NDTherm NDT Based on Thermal Imaging
9.11  Altair IoT-based Low-cost Water Quality Monitoring & Contamination Detection
9.12  WakingApp Launches ENTiTi Creator
9.13  CommuniTake Technologies Announces IntactPhone

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Rate Fell by 0.5% in January
10.2  Israel’s Economy Grew at 3.3% in Fourth Quarter
10.3  Deloitte Says Israel 7th in World for Defense Spending

11: IN DEPTH

11.1  ISRAEL: Netanyahu Fights for Israel’s Energy Future
11.2  ISRAEL: ‘A+/A-1’ Ratings Affirmed On Economic Resilience; Outlook Stable
11.3  GCC: Moody’s Says Fuel Subsidy Reforms Offer Only Modest Fiscal Space
11.4  KUWAIT: Ratings Affirmed at ‘AA/A-1+’ Despite Lower Oil Price Assumptions
11.5  QATAR: Qatar Ratings Affirmed At ‘AA/A-1+’; Outlook Stable
11.6  OMAN: Sultanate Ratings Lowered To ‘BBB-/A-3’; Outlook Stable
11.7  SAUDI ARABIA: Ratings Lowered To ‘A-/A-2’; Outlook Stable
11.8  EGYPT: Egypt and China Following Xi’s Visit
11.9  EGYPT: How Egypt Plans to Boost Its Stock Exchange
11.10  EGYPT: How Heavy Metal Music is Causing a Stir in Egypt
11.11  MAURITANIA: IMF Staff Completes 2016 Article IV Mission to Mauritania

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Jerusalem to Abolish Agricultural Production Controls

Globes reported that the Ministry of Agriculture and the Ministry of Finance intend to abolish production quotas on eggs, poultry and milk. The matter has been discussed between the ministries as part of the general plan to reduce the cost of living in Israel. In return, the government will compensate the farmers directly, in a similar fashion to the subsidies given to farmers in Europe. Over the years, wholesalers have claimed that the agricultural marketing boards were to a large extent responsible for the high cost of living, and that they provide cover for coordination between farmers and growers, and behave as a cartel.

The plan under discussion is revolutionary. Under it, the boards that currently operate by virtue of the law will be abolished, the most important ones being the Israel Dairy Board, the Egg and Poultry Board and the Israel Plants Production and Marketing Board. These three boards have statutory powers. The other boards that operate within a legal framework, but that do not have statutory powers, will also be abolished. So, for example, the Israel Wine and Grapes Board, the Israel Ground Nuts Production and Marketing Board, the Israel Cotton Board, and the Israel Honey Production and Marketing Board, will also be abolished. The basis of the boards’ activity in the past has been the concept that a planned agricultural economy should be managed so as to ensure regular supply of agricultural produce to consumers on the one hand and on the other hand to prevent dumping on the market. In practice, these closed markets have become one of the causes of the high cost of living in Israel.

The idea behind the measures planned by the Ministry of Agriculture and the Ministry of Finance is a general opening up of the market and the removal of all barriers with the aim of boosting competition and bringing the cost of living down. (Globes 22.02)

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1.2 FATF Grants Israel Observer Status

The Financial Action Task Force (FATF) on money laundering has announced that Israel will join the organization as an observer starting June 2016. The admission marks a significant step in the application process for joining the prestigious group, which sets the global rules for combating money laundering and terror financing. Joining the organization will allow Israel to participate in shaping global policy and position it as one of the leading countries in the international fight against money laundering and terror financing. The announcement will also support the Israeli economy by providing the country an unofficial stamp of approval for its financial sector – which will improve ties between Israel and other countries involved in the financial and legal battle.

The FATF is an international taskforce established in 1989 by the G7 countries. It leads the fight against money laundering and terror financing on a national and international level by setting standards for countries. The countries that do not meet the standards are included in a “blacklist”. The organization comprises 34 countries and two regional groups. Israel has been conducting a diplomatic campaign since 2012 to join the group, in close cooperation with the Ministry of Foreign Affairs and Ministry of Finance. In 2014, the organization decided – in an unusual step – to allow a limited number of countries into its ranks; after an intense selection process, it agreed to consider Israel as a candidate. (Globes 22.02)

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1.3 MK Litzman: ‘Life-Saving Medicines Must Enter Healthcare Plan’

Health Minister MK Rabbi Yaakov Litzman (United Torah Judaism) told the Knesset Health Committee on 22 February that he intended to institute a change in regulation by including life-saving medicines in Supplementary Healthcare Services (SHS). Litzman noted that current SHS plans cover 76% of the population. He said “The majority will be covered. The rest are half rich and half poor. The rich have private insurance at their disposal, but the poor cannot buy SHS plans. I will make sure they receive life-saving drugs as if they have a SHS. I am willing to include that in the law,” stated the Health Minister. Litzman intends to bring a bill changing the law on prescriptions to the Ministerial Law Committee for approval for legislation in the coming weeks. (Arutz Sheva 22.02)

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1.4 Plan To Lower Hotel Prices Passes First Knesset Reading

On 22 February the Knesset plenum approved the first reading of a plan by Tourism Minister Levin to lower the prices of vacation accommodations in Israel. Under the plan, hotels would be classified as national infrastructure and the National Infrastructure Committee would streamline approval for the construction of new hotels. Moreover, independent local planning committees will be able to approve increases of up to 20% in the allocation for apartment hotels, a move which is expected to lower the risk for the project investor. Levin’s plan is also expected to make the planning process for hotel construction more efficient, dramatically increase the number of hotels rooms available and eventually bring down vacation prices by some 20%. According to estimates, within approximately five years Israel would gain about 15,000 hotel rooms. The bill will now be presented to the Knesset Interior and Environmental Protection Committees for discussion and debate prior to undergoing a second and third reading in the Knesset. (Various 22.02)

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1.5 US Foreign Military Funding Talks Key to Israeli Tanker Plan

Decisions about whether Israel will select Boeing’s KC-46A tanker and ask for additional Lockheed Martin F-35s will depend on the result of current negotiations about the size of the US Foreign Military Funding (FMF) package that the nation will receive over the next 10 years. Within the next few months, the allies are expected to agree the draft of a memorandum of understanding covering US funding to Israel’s military. Sources indicate that the Obama administration is likely to increase the FMF package by up to $1 billion for the decade to be covered in the new accord, which would set its contribution at about $4.1 billion a year.

With sufficient funding, the Israeli air force could select the KC-46A – which is now in advanced testing for the US Air Force and also on order for Japan – and abandon an alternative plan to purchase converted 767s. The acquisition of additional F-35I Adir fighters is also a priority for the Israeli air force, which later this year will take delivery of its first of example out of a total currently requested of 33. (FlightGlobal 15.02)

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1.6 Bill Seeks to Let All Employees Refuse to Work on the Sabbath

The Ministerial Committee for Legislation is discussing a bill that would prohibit employers from compelling secular employees to work on Shabbat. The bill is an effort to allow all employees, rather than only religiously observant ones, to refuse work on Shabbat, which is mandated by law as a weekly day of rest. Under the bill, employees who do not observe Shabbat or dietary restriction laws in accordance with Jewish custom would not be treated differently than those who do observe. They will not risk losing their jobs or being rejected from a potential job on the basis of refusing to work on Shabbat. The bill states that all employees should be allowed “to refuse to work on their day of rest — for Jewish people, to refuse to work on Shabbat, even if the employee is a traditional Jew who does not observe Shabbat according to Jewish law.” (IH 21.02)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Year of the Monkey Rings in First Israel-China Equity Fund

Israel 21C reported that the ever-growing China-Israel bond just got $200 million stronger via investors in the Catalyst CEL Fund, the first dedicated Israel-China private equity fund. Catalyst CEL is a partnership between Tel Aviv-based multi-fund firm Catalyst Private Equity and China Everbright Limited (CEL) of Hong Kong.

At its first closing in April 2014, Catalyst CEL Fund invested in Lamina Technologies, an Israeli-founded, Swiss-based maker of sub-micron, precision metal-cutting tools. In January 2015 it announced an investment in a cutting-edge 3D printing company. Investments will not be limited to Israeli companies already operating in China, however. More than half of the $200 million pot is made up of investments from China.

The traffic flows in both directions. At the beginning of January 2016, 150 corporate leaders from 85 Israeli companies met with potential Chinese investors during a two-day event in Beijing organized by the Israeli Ministry of Economy and Industry. Catalyst CEL is planned to be active through2026. (Israel 21C 11.2)

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2.2 Finance Ministry Says Hi-Tech No Longer Israel’s Main Growth Engine

A survey published on 14 February by the Ministry of Finance finds that high-tech is no longer Israel’s major economic growth engine. The report says, “In the years following the last global crisis (in 2008), there was a significant slowdown in the sector (high-tech) and it ceased being the growth engine of the economy. Since 2010, the rate of growth of the sector is only half the overall rate of growth in the economy and the sector stopped growing as a proportion of total exports. The most major challenge facing the sector is the supply of skilled human resources due to the relative size of Israel’s high-tech sector (compared with other developing fields).”

The survey notes that there are 283,000 salaried employees in Israel’s high-tech sector, representing 12% of the overall salaried workforce. High-tech contributes 9% of Israel’s GDP and is responsible for 40% of exports.

The Ministry of Finance says that after the impressive growth in Israel’s high-tech job market in the 1990’s, “The stagnation in employment figures in recent years raises question marks about the future of the sector. The rapid growth of salaries in the high-tech sector backs up the assessment that the stagnation in employment reflects limitations on the supply side, in other words a lack of skilled manpower. In recent years, there has been rapid growth in salaries compared with the US, which is harming the attractiveness of expanding operations in Israel for foreign companies.”

The Ministry of Finance says that the main reason for the lack of skilled employees is the fall in the number of computer science graduates and the rise on the number of college graduates in other disciplines. The survey notes that this trend is typical of the entire OECD but is more marked in Israel. The survey says that the lack of skilled employees is not the only problem blighting Israeli high-tech. The Ministry of Finance also observes that Israel’s status as a leader in innovation is being eroded and that in 2013 South Korea displaced Israel as the world’s top country in terms of R&D expenditure as a percentage of GDP. (Globes 14.02)

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2.3 Titanium Investments Unveils $50 Million Israel VC Fund

Russia’s Titanium Investments has unveiled its $50 million fund for investing in Israeli startups. Close to half the sum has already been invested. Titanium said that it has been investing under the radar for a few months now and is now publicly announcing the scope of its investments for the first time. In its early stages Titanium was focused on investments in Russia, but has since expanded its scope, investing mainly in Israeli startups since November 2014. The company is now looking to invest in additional companies as well as to increase its existing investments in its portfolio companies. Titanium’s portfolio companies are valued at over $350 million, and Titanium Investments holds stakes from 3% to 17% in each company. Titanium not only supports its portfolio companies with the initial investment, but also continues to increases support in those companies over time, taking part in each and every funding round of performing portfolio companies, from seed to exit. (Globes 16.02)

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2.4 Cannabics Pharmaceuticals to Raise $4 Million

Israeli company Cannabics Pharmaceuticals, which develops cannabis-based treatments, is planning a $4 million private placement. The company is currently conducting a roadshow for investors in Israel, the US, and Europe, accompanied by the investment banking division of the Aloni Haft group. The offering is slated for closure in the coming month.

Cannabics was founded in 2012 by Israeli scientists doing research in cancer and molecular biology. The company was merged into a US stock exchange shell in 2014, and is currently traded over the counter in the US. The company’s share price hit its peak in July 2014 with an $80 million market cap, but like other shares in this field, has since lost ground, and the company’s market cap is now only $4.5 million. Turnovers in the share are small, in view of the fact that the founders hold large stakes in the company. Cannabics’s product is a delayed release pill designed to improve the quality of life of cancer patients at an advanced stage of the disease, which is already being marketed in Colorado in the US. The company is also developing a technological system for evaluating biopsies using the active ingredient in cannabis; this system can help doctors realize the optimal treatment for a patient (personalized medicine). (Globes 15.02)

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2.5 YouAppi Closes $13.1 Million Series B Round for Expansion into Asia

YouAppi raised a $13.1 million Series B funding round. The following investors are participating in this round: Hawk Ventures, Global Brain, Click Ventures, Digital Future, Emery Capital, Altair Capital, and existing investors Glilot Capital Partners, 2B Angels and Flint Capital. This funding round marks a more than 300% increase from the last funding round secured by YouAppi, driven by the scale of reaching 1.5 billion global mobile profiles accessing 3,500 mobile apps and sites – including The New York Times, Pandora, EA, Orbitz, Zynga, Yandex, Wayfair, and Viber – in 200 countries via 100 billion impressions monthly. Attaining these metrics was made possible by the company’s mobile customer acquisition technology and teams in San Francisco and New York in the US, and China, India, Israel, Singapore, Germany and the UK.

Since 2012, YouAppi has been combining the power of machine learning with proprietary predictive algorithms, enabling the world’s leading apps to find the right customers at the right conversion price across countries and verticals, based on post-install event analytics. The company’s OneRun Platform conducts real-time multi variant analysis to understand the KPIs for each app. This is facilitated by the ongoing management of campaigns that deliver mobile app recommendations while analyzing over 250 terabytes of data daily. YouAppi drives customer acquisition via 15,000 campaigns for 450 leading advertisers, offering one single point to streamline mobile media buying.

Ra’anana’s YouAppi is a fully managed solution for premium mobile brands, providing one single point to streamline their mobile media buying. YouAppi’s OneRun platform combines the power of machine learning with our proprietary predictive algorithms, and cohort technology, to analyze the mobile content consumption patterns of over 1.5B users, converting data into profitable users. (YouAppi 17.02)

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2.6 Israel’s Siemplify Raises $4 Million

Tel Aviv’s cyber security startup Siemplify has raised $4 million. The investors include 83North Venture Capital (formerly Greylock IL) and angel investors David Strohm (Partner, Greylock Partners), Alex Pinchev (Rackspace president Global Sales and Marketing), Alex Daly, (former ArcSight founder and CEO), Tom Kilroy (EVP Intel), and Moti Gutman (Matrix CEO). Siemplify has come out of stealth on 20 February with its security operations platform to employ the same advanced cybersecurity methodologies used by leading military intelligence organizations. The platform automatically correlates security alerts, identifies and prioritizes incidents, and graphically depicts the complete threat chain, setting new standards for time-to-insight and time-to-remediate. The platform acts as a central hub linking an organization’s existing security, threat intelligence and risk management tools, including Splunk and popular SIEMs, effectively improving the return on those investments. (Globes 18.02)

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2.7 Mellanox Technologies Completes Acquisition of EZchip

Mellanox Technologies completed the acquisition of EZchip, a leader in high-performance processing solutions for carrier and data center networks, at a total purchase price of approximately $811 million (approximately $606 million net of cash). Each outstanding share of EZchip ordinary shares shall be deemed to have been transferred to Mellanox, entitling the holder thereof to receive $25.50 in cash without interest and less any applicable withholding taxes. Following the merger, EZchip shares ceased to be traded on the NASDAQ and Tel-Aviv Stock Exchanges.

The EZchip acquisition is a further step in Mellanox’s strategy to become the leading broad-line supplier of intelligent interconnect solutions for the data center. The combined company will deliver diverse and robust solutions, enabling customers to meet growing demands of data-intensive applications used in high-performance computing, Web 2.0, cloud, network security, data center, enterprise, telecom, database, financial services and storage environments.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet intelligent interconnect solutions and services for servers and storage. Mellanox intelligent interconnect and processing solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 23.02)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Qatar Airways Threatens to Cancel Pratt & Whitney Engine Order

Qatar Airways threatened to cancel an order for Pratt & Whitney engines for a fleet of Airbus narrow-body jets, saying the newly developed power plants had “a lot of problems”. The Gulf airline has ordered 50 A320neo-family aircraft and was originally due to take the first delivery in December, but rejected the jet due to what it called an engine problem and the first jet went last month to Lufthansa instead. Pratt & Whitney competes with CFM International, co-owned by General Electric and France’s Safran, to supply engines for the narrow body Airbus jet family. Pratt & Whitney has acknowledged teething problems on the engine but says they do not affect its 15% fuel savings. (Reuters 16.02)

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3.2 Emirates Chief Hails ‘Historic’ Deal with LA Dodgers Baseball Team

On 20 February, Emirates Airline announced a new sponsorship deal with the Los Angeles Dodgers. The Dubai-based airline said it will be the Official Airline Sponsor of the Dodgers in a deal to mark its entry into the world of baseball. As part of the agreement, Emirates will have home plate and foul pole signage and will open a new Emirates Lounge, a 70 person hospitality space. In addition, Emirates will feature in-game activations, occasional ceremonial first pitches and fan appreciation activities. To extend the partnership, the Dodgers will be sponsoring the Dubai Little League All Star Travel Teams, which will now go by the name the Dubai Dodgers. The new partnership with the Los Angeles Dodgers continues Emirates’ momentum in the realm of sport, with the airline having made its mark on football as a sponsor of some of the world’s premier teams including AC Milan, Real Madrid, Arsenal, Olympiacos FC, Hamburg, and Paris Saint-Germain. In the US, Emirates is also the main sponsor of the New York Cosmos, the US Rugby Team and the San Francisco Symphony. (AB 22.02)

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3.3 Chinese Officials Asked Aramco to Dual List in Hong Kong

Chinese officials have approached Saudi Aramco in an attempt to persuade the world’s largest oil company to dual list on both the Saudi and Hong Kong exchanges. Bloomberg quoted unnamed sources as saying that the proposal was suggested in exchange for anchor investments from Chinese funds. The approach was made earlier this year, though no decision had been made. Saudi Deputy Crown Prince Mohammed bin Salman said earlier that Riyadh might sell shares in Aramco as part of a privatization drive. In January, Aramco said it was considering either listing its entire business, or some of its units. The company has not clarified where it plans to list, nor has it appointed financial advisers. (AB 14.02)

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3.4 Morocco Okays Opening of First IKEA Store

Moroccan authorities approved the opening of the first IKEA store in Morocco. The decision was made by the local authorities of Mohammedia, 30 km south of Casablanca. The opening of the Swedish retail giant was delayed for several months. The store was scheduled to open on 29 September 2015, but tensions that developed between the Swedish and the Moroccan governments pushed Rabat to block its opening. As a reaction to the Swedish government’s alleged decision to recognize the self-proclaimed Saharawi Arab Democratic Republic (SADR), Moroccan authorities said that IKEA was denied the authorization to open its five stores in Morocco, because “it [lacked] conformity permits.”

The IKEA store in Zenata is the first of five stores the Swedish company intends to establish in Morocco. The furniture giant has reportedly invested €40 million in its new 26,000 square meter plant that will create 1,400 jobs, including 400 direct jobs. The decision to allow IKEA to open its stores in Morocco comes after the relations between Morocco and Sweden returned to normal following the decision of the Swedish government to refrain from recognizing the so-called SADR. (MWN 11.02)

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3.5 Redknee to Support Turk Telekom with the Launch of New Services

Toronto’s Redknee Solutions, a leading provider of real-time monetization and subscriber management software, announced the signing of a new multi-year expansion of services contract, including licenses, support and other consulting services, with Turk Telekom, a leading mobile operator in Turkey with over 17 million subscribers. With signing of this new contract, Turk Telekom will further strengthen its relationship with Redknee and leverage its real-time monetization and subscriber management software to support the impending launch of new LTE services in the coming months.

For Turk Telekom, it is an exciting time in the Turkish telecommunications market with the company set to be among the very first providers of LTE services in the country. The introduction of LTE services is widely expected to fuel the introduction of new products and services in the Turkish market and lead to stronger penetration of mobile devices and technologies across Turkey to take advantage of the technology. (Redknee Solutions 22.02)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Solar Tower in Desert Promotes Israel’s Renewable Energy Drive

In a vast expanse of open desert in southern Israel, a 240 meter tower is taking shape that its builders hope will help make solar energy much more cost effective. The tower, being built by Israel-based Megalim Solar Power, whose shareholders include General Electric, will be taller than other solar towers, enabling it to generate up to 121 MW of power. Due to be completed late next year at a cost of $773 million, the facility will provide around 1% of Israel’s electricity under an agreement with the Israeli government, which aims for 10% of the country’s energy needs to be provided by renewables by 2020.

Megalim’s tower in the Negev desert, which stands out for miles around, is surrounded by 50,000 computer-controlled mirrors, to project the sun’s rays. They are bigger than in previous projects and controlled over a dedicated Wi-Fi network, rather than with expensive cables used in the past. The tower is privately funded but when completed the Israeli government has guaranteed to buy the power from it at an above-market price. (Various 16.02)

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4.2 SolarEdge Surpasses 10 Million Shipped Power Optimizers

SolarEdge Technologies announced that it has shipped its 10 millionth power optimizer. With systems installed in more than 90 countries, SolarEdge reached its 10 millionth shipped power optimizer in 10 years following its founding and after only 6 years of commercial shipments. Close to 5 million power optimizers were shipped globally, solely in 2015. To celebrate, SolarEdge is labeling 10 prize-winning power optimizers, all signed by the company’s founders, in its global shipments. Each recipient of a prize-winning power optimizer will be entitled to receive $10,000 cash.

Herzliya Pituah’s SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters, storage solutions, and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. (SolarEdge 09.02)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Consumer Prices Continues to Drop in the First Month of 2016

According to the Central Administration of Statistics (CAS), the Consumer Price Index (CPI) continued to show signs of deflation in the first month of the year. The CPI dropped from 97.13 points in January 2015 to 94.45 points by the end of January 2016, recording a 2.76% year-on-year (y-o-y) decrease. This fall is attributed to the continuing deterioration of oil quotes and the depreciation of Euro during the last year. In terms of the CPI’s components, “food and non-alcoholic beverages” prices (20.6% of CPI) downturned by 0.73% y-o-y in January 2016. Moreover, “transportation” (13.1% of CPI) and “water, electricity, gas & other fuels” (11.9% of CPI), saw annual declines of 3.12% and 15.67%, respectively. The “Health” (7.8% of CPI) sub-index posted a yearly drop of 6.31% in January 2016,while “communication” (4.6% of CPI) and “Clothing and Footwear” (5.4% of CPI), posting respective y-o-y falls of 0.77% and 2.59% over the same period. However, “education” sub-index, constituting 5.9% of the CPI, increased annually by 1.52% in January 2016. In addition, “restaurant & hotels” (2.6% of CPI) prices went up by 2.12% y-o-y, which might be due to an improving tourist activity during the first month of the year. (CAS 23.02)

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5.2 US Signs Law to Increase Military Support to Jordan

The US finalized a law that will allow the administration to increase military support to Jordan to $450 million this year. In 2015, the US provided Jordan with $385 million in foreign military financing support to Jordan, which is an $85 million increase over 2014. The law, according to a version available online on US government websites, stipulates that the US will help the Kingdom in its response to the Syrian refugee crisis; to provide necessary assistance to alleviate the domestic burden to provide basic needs for the assimilated Syrian refugees; to cooperate with Jordan to combat the terrorist threat of Daesh (IS) or other terrorist organizations; and to help secure the border between Jordan and its neighbors Syria and Iraq. (JT 21.02)

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5.3 Construction of Jordan’s First Shale Power Plant to Start in June

The construction of a $2.2 billion power plant, Jordan’s first to be fueled by oil shale, is set to start in June. The Attarat Power Company (APCO) is in the process of securing the remaining finance needed for starting construction on the facility, Minister of Energy and Mineral Resources Ibrahim Saif told The Jordan Times. APCO is a wholly owned subsidiary of Enefit Jordan BV, which is itself owned by Enefit (Estonia’s Eesti Energia AS), Malaysia’s YTL Power International Berhad and Jordan’s Near East Investments Limited. In January, the consortium signed a $1.6 billion agreement for the funding of Jordan’s first oil shale-fired power plant, which will be built in the Attarat area with a total capacity of 470 MW. The agreement was concluded between the conglomerate and the Bank of China and the Industrial and Commercial Bank of China. The plant is expected to be operational in 2019. The initial financing agreement was signed when King Abdullah visited China last year. According to official figures, Jordan has vast reserves of oil shale estimated at more than 70 billion tonnes. (JT 16.02)

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5.4 Germany to Lend Iraq $566 Million

Germany has agreed to lend €500 million ($566 million) to Iraq to help rebuild the country’s infrastructure. At a meeting with Iraqi Prime Minister Haider al-Abadi in Berlin, Chancellor Angela Merkel said Germany also wants to help with the demining of cities and towns in Iraq so that the country’s 3 million internally displaced people (IDPs) can return to their homes. (Deutsche Welle 12.02)

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►►Arabian Gulf

5.5 Qatar Tourism Receipts Forecasted to Grow to $7.2 Billion by 2025

Qatar’s tourism receipts are forecast to grow to $7.2 billion by 2025 as the Gulf state looks to diversify its economy away from oil and gas over the next decade. The country’s tourism sector is set to grow annually by 4.7% after travel and tourism is estimated to have contributed $4.6 billion for 2015, a rise of 7.3% over the previous year.

Qatar’s tourism industry is building momentum as it enters the second half of the decade, with an ambitious target of four million visitors by 2020, supported by $40-45 billion worth of sector investment under the country’s National Tourism Sector Strategy 2030 plan. Reports suggest the addition of 11 new hotel properties with a total of 1,400 rooms to the market in 2015 as part of its commitment to reach 50,000 additional rooms by the 2022, when it will host the FIFA World Cup. Official statistics tally current hotel room capacity at 17,900 keys, 84% of which is four and five-star accommodation. (AB 17.02)

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5.6 WhatsApp Voice Call Not Banned By Saudi Regulator

The decision to ban WhatsApp voice call in Saudi Arabia was taken by the WhatsApp company, revealed the Communications and Information Technology Commission (CITC). The CITC, the Kingdom’s telecom regulator, said that the voice call service is not available in many countries, including some GCC states, because its company fails to comply with the countries’ regulations. The statement was made following media coverage regarding the halt of the WhatsApp voice call in the Kingdom.

The CITC stated its desire to provide the public with the latest the communications technology, but only if they are in line with Saudi’s rules and regulations. The WhatsApp voice call was first blocked in March last year after telecom companies complained it was causing them big losses. It was blocked again earlier this year but suddenly resumed. (AB 10.02)

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5.7 Saudi & Russia Agree to Oil Output Freeze

Russia and Saudi Arabia agreed on 16 February to freeze output levels but said the deal was contingent on other producers joining in – a major sticking point with Iran absent from the talks and determined to raise production. The Saudi, Russian, Qatari and Venezuelan oil ministers announced the proposal after a previously undisclosed meeting in Doha. It could become the first joint OPEC and non-OPEC deal in 15 years, aimed at tackling a growing oversupply of crude and helping prices recover from their lowest in over a decade. Saudi Oil Minister Ali al-Naimi said freezing production at January levels – near record highs – was an adequate measure and he hoped other producers would adopt the plan. OPEC member Iran, Saudi Arabia’s regional arch rival, has pledged to steeply increase output in the coming months as it looks to regain market share lost after years of international sanctions, which were lifted in January following a deal with world powers over its nuclear program. (AB 16.02)

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5.8 Saudi Arabia Suspends $3 Billion Lebanese Army Aid Deal

Saudi Arabia has suspended a $3 billion aid package for the Lebanese army to buy French arms, in what an official described as a response to Beirut’s failure to condemn attacks on the kingdom’s missions in Iran. Saudi Arabia has also cancelled the remainder of $1 billion in aid it had earmarked for Lebanon’s internal security service. Saudi Arabia pledged the aid package for the Lebanese army in 2013 in what then-Lebanese President Michel Suleiman called the largest grant ever to the country’s armed forces. The first shipment of French weapons and military equipment had already been delivered to Lebanon in April last year under the Saudi-funded deal to bolster the Lebanese army’s fight against Islamist militants encroaching from neighboring Syria. (Reuters 19.02)

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►►North Africa

5.9 Egypt’s Dollar Crisis Continues

Egypt’s dollar crisis is persisting despite a series of government measures aimed at strengthening the pound. Reports that the government has drawn up its draft 2016-2017 budget at an exchange rate of LE8.25 against the dollar, instead of the current official rate of LE7.83, have fueled speculation that it might officially devalue the value of the pound soon. However, a recent statement from a Ministry of Finance spokesman said that it is normal, when drafting the budget, to take into account several possible exchange rate assumptions and to then revise these during the drafting process.

Predictions of a possible devaluation of the Egyptian pound against the dollar are based on the scarcity of dollars on the local market amid high demand, which led the dollar to trade on the unofficial (or black) market at a record high of LE9 in early February. The current official price of the dollar is LE7.83, and the CBE allows exchange bureaus to sell it for up to LE0.10 (10 piasters) more than the official value.

Dollar cash deposits have been blamed, along with other factors, for the country’s shortage of foreign currency reserves, which fell to $16.4 billion in December 2015 compared to $36 billion in 2010 before Egypt’s period of political turmoil and economic hardship. Dollars are not available to cover all local demand, which is why the black market has raised the exchange rate for the dollar.

The drop is backed by a decline in demand from importers as a result of the recent presidential decree to increase customs tariffs on a wide range of imported goods. The decision was among measures announced made by the authorities to ease pressure on the country’s foreign reserves by reducing spending on imports. Another decision was taken in January to ban imports of products labelled by the government as “non-essential”, starting in February, with the aim of decreasing the imports bill and easing pressure on the pound. Egyptian imports amounted to $61 billion in fiscal year 2014-2015, while exports stood at $22 billion in the same period, putting the trade deficit at $39 billion. (Al Ahram 09.02)

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5.10 Egypt’s Central Bank Widens Exceptions On Import Restrictions

On 22 February, Egypt’s central bank excluded manufacturing inputs, spare parts and computers from a measure requiring importers to provide 100% cash deposits at banks on their letters of credit. The central bank raised in December the requirement from 50% in an attempt to boost domestic production against foreign competition and shore up limited resources of the hard currency. Imports of medicines, input materials for pharmaceuticals and babies’ milk were excluded from the decision. The blow to Egypt’s main sources of foreign currency — tourism and foreign direct investments — following the uprising in 2011, has starved Egypt of hard currency. As importers sought foreign currency from a growing black market, pressuring the value of the pound, the central bank has taken measures to control the market. (Ahram Online 23.02)

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5.11 EU-Tunisia Commission Proposes Further €500 Million in Assistance

The European Commission is ready to further assist Tunisia in overcoming its economic difficulties and achieving more sustainable growth. Following a request by Tunisia, the Commission has proposed additional macro-financial assistance to Tunisia of up to €500 million. This assistance will take the form of medium-term loans at favorable financing conditions.

The proposal for additional assistance is part of a wider effort by the EU to help Tunisia overcome the severe economic difficulties it has faced since its economic and political transition process began. Terrorist attacks in 2015 worsened the situation further by affecting key economic sectors such as tourism and transport. This macro-financial assistance program complements the significant EU development assistance which Tunisia already receives in the framework of the European Neighbourhood Policy through the European Neighbourhood Instrument (ENI) and other EU external financial instruments. This assistance amounts to more than €1 billion in grants provided to Tunisia since the 2011 revolution, supporting for instance socio-economic development and job creation the democratic transition process, as well as sectorial assistance, for instance to support its olive oil production.

The EU macro-financial assistance program will help to cover Tunisia’s external financing needs in 2016 and 2017, while supporting reform measures aimed at achieving a more sustainable balance of payments and budgetary situation, improving the investment climate, and fostering economic integration and regulatory convergence with the EU. The ultimate aim is to help Tunisia lay the conditions for sustainable, inclusive and employment-generating economic growth. (EU 12.02)

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5.12 Nearly One-Third of Moroccans Are Illiterate

A new report shows that 32% of Moroccans are illiterate. In response, Prime Minister Benkirane called for an increase in the level of institutional coordination in order to succeed in the fight against illiteracy. Chairing the Board of Directors of the National Agency Against Illiteracy (ANLCA), Benkirane noted that the illiteracy rate remains high in Morocco, despite progress. According to the Prime Minister, illiteracy “constitutes an obstacle that hinders the economic growth of our country and prevents us from taking advantage of real opportunities that can improve indicators of economic growth.” Benkirane noted that anti-illiteracy programs reached approximately 747,000 people during the 2014-2015 administrative year, an increase of 20% compared to the previous year. ANLCA’s projects aim to reduce the illiteracy rate to less than 5% by 2024, both by eradicating illiteracy among young people 15 to 24 years old and by improving the skills of the illiterate or semi-illiterate workforce. (MWN 23.02)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Greece Back In Deflation, January Consumer Prices Drop 0.1%

Greece’s annual EU-harmonized inflation rate turned negative in January after the first positive reading in the previous month that halted 33 straight months of deflation, data from the country’s statistics service showed on 17 February. January’s -0.1% was below market expectations. The data showed the headline consumer price index fell 0.7% year-on-year in January, with the annual pace of deflation accelerating from the previous month. Consumer prices were led lower by apparel and footwear, durable goods and housing costs due to the fall in heating oil costs. For years an inflation outlier in the eurozone, Greece had been in deflation mode for the last two and a half years as wage and pension cuts and a protracted recession took a heavy toll on Greek households’ income. (Reuters 17.02)

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7: GENERAL NEWS AND INTEREST

7.1 Lebanon Justice Minister Resigns Over Hezbollah Domination

Lebanon’s Justice Minister Rifi, a fierce opponent of the country’s powerful Hezbollah movement, said he was resigning over the group’s “domination” of the government. Rifi’s decision comes two days after Saudi Arabia announced it was suspending $3 billion in aid to Lebanon’s army in protest over “hostile” positions it said were inspired by Hezbollah. Rifi accused Hezbollah of being responsible for the political crisis in Lebanon that has left the country without a president for the last 21 months. And he said the Iranian-backed party was “destroying Lebanon’s relations with the kingdom of Saudi Arabia”.

Lebanon’s political scene is deeply divided, with the government split roughly between a bloc led by Hezbollah and another headed by former prime minister Saad Hariri, to which Rifi belongs. Hezbollah is a close ally of the Syrian regime and is backed by Tehran, while Hariri’s bloc is close to Iran’s regional rival Saudi Arabia, and is supported by Western powers including Washington. The schism has been exacerbated by the war in neighboring Syria, with Hezbollah sending fighters to bolster President Assad against an uprising that is supported by Saudi Arabia and Hariri’s political bloc. (AFP 21.02)

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7.2 UAE’s Sheikh Mohammed Unveils New Cabinet

UAE Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum has approved a new cabinet following a major recent government reshuffle. He announced the appointments on his official Twitter feed on 10 February. Under the changes, three new ministerial roles have been created. The new post of Minister of State for Tolerance has been handed to Lubna bint Khalid Al Qasimi, who was previously Minister of International Cooperation and Development. Ohood Al Roumi has been awarded the new post of Minister of State for Happiness, responsible for “channeling policies and plans to achieve a happier society”. Also, 22-year-old Shamma Al Mazrouei has been appointed the new Minister of State for Youth Affairs. She has degrees from Oxford University and the University of New York. Al Mazrouei will chair the National Youth Council, providing a public voice for young people. As part of the ministerial shake-up the ministries of education and higher education have been merged – although two separate ministers will oversee each area. Under the changes, the UAE plans to outsource “most government services” to the private sector. (WAM 11.02)

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7.3 Libya’s Revised Unity Government Announced

Libya’s Presidential Council named a revised cabinet for a unity government late on 14 February. The list comprises 13 ministers and five ministers of state, reduced significantly from the 32 member government previously proposed. Two of the council’s nine members refused for a second time to put their signatures to the proposed government. Prime Minister-designate Fayez Seraj told reporters that the latest appointments took into account “experience, competence, geographical distribution, the political spectrum and the components of Libyan society“. (Reuters 15.02)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Breakthrough Israeli Cancer Treatment Praised Worldwide

A breakthrough cancer study in which patients suffering from a form of leukemia saw their diseases go into remission after they were treated with genetically modified T-cells has deep roots in Israel. One of the first in the world to work on the innovative adaptive immunotherapy technique to treat cancer, which was recently hailed worldwide as a potentially “extraordinary” development, was Weizmann Institute’s Prof. Zelig Eshhar.

In an article in the journal Science Translational Medicine, a team at the University of Pennsylvania’s Abramson Cancer Center and the Perelman School of Medicine reported that 27 out of 29 patients with an advanced blood cancer saw their cancers go into remission or disappear altogether when they received genetically modified T-cells that were equipped with synthetic molecules called chimeric antigen receptors, or CARs. Those T-cells were able to target and destroy the tumor cells – specifically the ones that were responsible for the acute lymphoblastic leukemia the patients were suffering from. According to officials at the Fred Hutchinson Cancer Research Center, where the research was carried out, patients in the trial – some of whom were told in 2013 they had barely a few months to live – not only survived, but now, after the therapy, “have no sign of the disease.”

The therapy involves extracting T-cells – the white blood cells that fight foreign or abnormal cells, including cancerous ones. Under normal circumstances, T-cells try to fight cancerous cells – but because the body has been weakened by the cancer, the response is usually not strong enough to prevent the spread of cancer. In addition, cancer cells are genetically programmed to evade T-cells. (ToI 21.02)

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8.2 Israel & California Sign Unique Biotechnology Deal

On 9 February, Science, Technology and Space Minister Akunis signed the first agreement of its kind between his ministry and the California Institute for Regenerative Medicine in the field of biotechnology, with an emphasis on stem cell research. The agreement was facilitated by the Israeli-American Council, which encourages cooperation between the United States and Israel. The agreement will deepen the partnership between Israel and California, bringing together the most talented scientists to push the boundaries of stem cell research and advance medical breakthroughs in the treatment of diseases ranging from cancer and diabetes, to Alzheimer’s and HIV-AIDS. (IH 10.02)

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8.3 BioLight Files Registration Statement for Proposed IPO in the US

BioLight Life Sciences has publicly filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission (SEC) relating to a proposed initial public offering. The number of the securities to be offered and the price range for the proposed offering have not yet been determined. BioLight has applied to list its ordinary shares on the NASDAQ Capital Market under the ticker symbol “BOLT.” Feltl and Company, Inc. and Rodman & Renshaw, a unit of H.C. Wainwright & Co., are acting as joint book-running managers in the offering. The offering will be made only by means of a prospectus.

Tel Aviv’s BioLight offers ophthalmic products and a pipeline of product candidates include IOPtiMate, a laser-based non-invasive surgical treatment for glaucoma; TeaRx, a point-of-care multi-parameter diagnostic test for dry eye syndrome; Eye-D, a controlled release drug-delivery insert platform and OphRx’s lyotropic liquid crystals, or LLC, a non-invasive topical drug delivery technology administered through eye drops as an alternative to current ocular delivery modalities. BioLight has also invested in biomedical innovations in cancer diagnostics, including proprietary tests that are designated for bladder, cervical, multiple myeloma and other cancers. (BioLight 10.02)

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8.4 BioLight Reports Positive Results for TeaRx Multi-Assay Test for Dry Eye Syndrome

BioLight Israeli Life Sciences Investments announced the completion of a successful U.S. clinical study that was designed to assess the effectiveness of its TeaRx multi-assay test in evaluating tears’ components of healthy subjects as well as of patients suffering from dry eye syndrome (DES). This prospective study, conducted by Ora, enrolled 74 subjects in the U.S. All study subjects were evaluated using a composite of four established benchmark tests for the assessment of DES, used in previous U.S. FDA regulatory approval processes for other DES products, to define and distinguish populations of healthy subjects from those with different grades of DES. Study subjects were also evaluated using TeaRx’s assays. The selected combination of TeaRx’s assays and the subjects’ demographics data were used to build predictive statistical model as a mean to determine the combination assays which provides the best TeaRx multi-assay test diagnostic power.

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8.5 Hospitech Respiration Gets Clearance for AnapnoGuard System

Hospitech Respiration announced US FDA clearance of a 510(k) pre-market notification for the AnapnoGuard 100 System. AnapnoGuard 100 system is intended for airway management by oral/nasal intubation while providing continuous endotracheal cuff pressure control using non-invasive measurement and monitoring of carbon dioxide concentration in the subglottic space and evacuation of secretions from above the endotracheal tube’s cuff. The AnapnoGuard System provides respiratory therapists a new therapeutic approach based on a proprietary system for continuous, closed loop control of trachea sealing and endotracheal cuff pressure. Over 400 patients at 7 clinical sites in 3 countries have been successfully treated with the AnapnoGuard System under clinical trials or standard-of-care use. AnapnoGuard is currently CE2 cleared.

Petah Tikva’s Hospitech Respiration is an innovative, privately held medical device company that has developed a multi-product platform of airway management solutions aimed at reducing complications arising from mechanical ventilation and reducing hospitalization costs associated with mechanically ventilated patients. The need for mechanical ventilation is the primary reason for admission to the Intensive Care Units (ICU) with more than 100 million3 patients intubated annually. (Hospitech 22.02)

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8.6 Rosetta Genomics Gets New York State’s Approval for Thyroid Cancer Diagnostic Assay

Rosetta Genomics announced conditional approval status for RosettaGX Reveal, its novel microRNA classifier for the diagnosis of indeterminate thyroid Fine Needle Aspirate (FNA) smears from the New York State Department of Health (NYSDOH) under the Company’s Molecular Oncology permit. RosettaGX Reveal is the only molecular test in the thyroid market that has been validated in a multicenter, international, blinded study using convenient, routinely prepared cytology slides. The assay is CLIA certified, but New York requires an additional license from the NYSDOH for CLIA-certified tests to be offered to patients in the state. With this conditional approval, RosettaGX Reveal is now available in all 50 states. In making the assay available pending final approval, the NYSDOH requires the Company to provide any additional information that it may request within 60 business days.

Rehovot’s Rosetta develops and commercializes a full range of microRNA-based and other molecular diagnostics. Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. (Rosetta Genomics 18.02)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 IAI Unveils New Civil Aviation Cyber Security Solutions

Israel Aerospace Industries (IAI) unveiled new Civil Aviation Cyber Security solutions aimed at securing the full range of cyber threats including ground, air traffic, avionics and other on-board systems. Building on its decades of expertise in the domains of civil aviation coupled with state of the art technologies in the cyber domain, IAI offers a unified, state of the art cyber protection suite for the civil aviation industry, including IT networks, Mission Critical Systems (MCS) and Industrial Control Systems (ICS). IAI’s holistic approach views the civil aviation cyber environment as an eco-system including airports, airlines, aircraft manufacturers, and the aircraft itself. It includes a forensics suite, comprising state-of-the art cyber forensics capabilities, alongside a state of the art, dedicated Cyber Simulation Lab, capabilities for simulated penetration testing and the option for an in-house forensic laboratory.

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9.2 IAI’s New UAV Mission Operational & Intelligence Center

Israel Aerospace Industries (IAI) revealed a new UAV Mission Operational and Intelligence Center (MOIC). The new center allows efficient command and control of advanced and challenging UAV missions. Instead of using separate platforms for each UAV, the MOIC uses numerous platforms and payloads in order to enable improved real-time operation of a fleet of UAVs. MOIC’s modular layout is based on mission operation cells including upper commander cell, exploitation center, C2 cell, full trainer SATCOM facility, support facility, and data storage center. The all-inclusive headquarter generates an efficient mission flow which includes planning, commanding, controlling and monitoring mission performance, interpreting offline and online payload data, archiving raw and processed information and reporting to high command. This mission flow provides a full operational picture of UAV’s, and maximizes the fleet throughput by allocating assets according to operational priorities, enhances coordination of UAV fleet and manned platforms, improves safety, protects ground assets and saves manpower and resources by centralizing and automatizing operations and maintenance.

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9.3 IAI’s Newest Members in its Loitering Munitions Family

Israel Aerospace Industries (IAI) unveiled at the Singapore Airshow the newest members in its Loitering Munitions (LM) family. The first member in the extended family is the Harpy NG (New Generation), which is designed to counter the newer types of air defense radar threats that have evolved since the introduction into service of its former version. The totally revamped model introduces two major changes: a. Improvement, as well as extension of the covered frequency band to much lower frequencies, to deal with all types of air defense radars, while still building on the extensive capabilities of the former generation Harpy. b. Packaging the new Anti-Radiation (AR) Seeker in the more advanced airframe of its stablemate – the HAROP. This repackaging enables better flying characteristics – including longer loiter time, extended range, higher altitude as well as commonality in maintenance and training.

An additional new member in IAI’s family of LM’s is the Green Dragon, a tactical, low-cost LM designed to provide small ground units and special operations units with significant situational awareness and firepower in a compact envelope. Green Dragon is a silent, all electric LM with up to two hours of loitering time, during which its operator can collect visual intelligence of surrounding areas up to a range of 40 km.

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9.4 NICE Workforce Management Reduces Costs and Increases Productivity

NICE Systems announced that Oi Telecom Group has achieved a significant cost reduction, higher productivity and increased agent occupancy with NICE Workforce Management (WFM) and consulting services. A series of NICE WFM workshops on best practices was held in early January 2015 at Brasil Telecom Call Center (BRTCC), the outsourcer that is part of the Oi Telecom Group. As a result, the BRTCC staff planning team was redesigned both in functionality and processes, leading to reductions of 23% in agent management staff and 2% in FTEs in contact center agents. These employees were then reassigned to other areas of the organization, improving the value of their contribution at different points of the customer relationship chain.

Oi Telecom Group, which has been using NICE WFM and recording solutions since 2005, wanted to increase call center occupancy, reduce the time spent on generating and reviewing scheduling plans, improve productivity and integrate to both SmartSync and Genesys. With the help of NICE’s consulting services, Oi attained these goals.

Ra’anana’s NICE Systems is the worldwide leading provider of enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE solutions help the world’s largest organizations deliver better customer service, ensure compliance, combat fraud and safeguard citizens. (NICE 17.02)

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9.5 Indiana University & Beeper Group Collaborate on C2 solutions

Indiana University of Pennsylvania (IUP) Research Institute has partnered with Beeper Israel in order to co-develop and market next generation integrated Command and Control and Communications systems for the domestic emergency management market. The cooperation will include: integrating Beeper’s Broadband Wireless Network communications solutions with IUP’s Command and Control (C2) software suite, joint development of a next generation Command and Control system for U.S. responders and municipalities and integration of Beeper’s public alert systems with IUP C2 products.

IUP Research Institute is an affiliate of Indiana University of Pennsylvania and has been involved in providing National Guard units with C2 capabilities for CBRNE (Chemical, Biological, Radiological, Nuclear and High Explosives) forces operating in the U.S. Homeland for over a decade. Beeper Israel is an industry leader in the communications field, providing multiple emergency management communications solutions including public information alert systems to the Government of Israel and the Israel Defense Forces. (IUP 17.02)

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9.6 Thirty Five Billion Chips Analyzed in 2015 Via Optimal+ Big Data Highway

The semiconductor industry celebrated a milestone as Optimal+, a global big data analytics provider, announced that it analyzed more than 35 billion semiconductor devices on behalf of its customers in 2015, a 50% increase from 2014. These 35 billion units represent the largest centralized repository of manufacturing data ever collected and analyzed in the semiconductor industry. Optimal+ brings unprecedented visibility into the global manufacturing operations of its customers, enabling actionable insights that drive timely business decisions on quality management, and increase yield and productivity.

For the past decade, Optimal+ has been aggregating and analyzing data on semiconductor devices used in tens of thousands of products from cell phones to automotive ECUs. This has resulted in the accumulation of unmatched operational knowledge and has led to the development of scores of automated rules used within semiconductor manufacturing operations that contribute to significant quality improvements and fewer defective chips shipped for use in next-generation devices.

The company’s big data solutions provide a historical record or “manufacturing DNA” for every chip that is analyzed, providing valuable insights that can be used to determine the root cause of problems in field failures and for preventing future RMAs – a growing concern for semiconductor companies that are tasked by their customers to significantly reduce their DPPM (defective parts per million) rate.

Holon’s Optimal+ is a global provider of manufacturing intelligence software solutions, enabling semiconductor and electronics companies to seamlessly aggregate, organize and act upon the global manufacturing and test data they generate across their internal and external supply chains to measurably improve yield, quality and productivity. The company’s real-time, Big Data analytics solutions are deployed in virtually every major foundry and OSAT currently serving the semiconductor ecosystem, processing tens of billions of chips every year on behalf of its customers and ushering in an era of unprecedented supply chain visibility that translates into strong and measurable ROI. (Optimal+ 16.02)

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9.7 VocalZoom & Cobalt Partner on Near-Perfect Speech Recognition Solutions

VocalZoom announced that it will be collaborating with Tyngsborough, Massachusetts’s Cobalt Speech & Language to deliver a disruptive new, end-to-end solution for voice control in the connected car, head-mounted devices and access control applications. The two companies have signed an agreement to combine VocalZoom’s optical HMC voice sensor technology with Cobalt’s speech recognition engine, creating a comprehensive voice-control development platform for products that deliver near-perfect performance even in noisy environments with other people speaking in the background.

Traditional solutions use one, two or an array of acoustic microphones with noise reduction technology, but performance is generally unsatisfactory and the industry has struggled to achieve even single-digit percentage improvements. Today’s systems can’t provide clean enough, isolated speaker input that machines can understand. In contrast, products that incorporate VocalZoom’s HMC optical sensor are able to acquire and measure facial vibrations during speech, and combine this additional data with the output from acoustic microphones to create an isolated, near-perfect reference signal – regardless of noise levels. VocalZoom and Cobalt have conducted tests under noisy conditions that show an almost 60% improvement for Cobalt’s speech recognition engine with the VocalZoom sensor, using the industry’s most widely adopted architecture featuring an acoustic microphone and noise reduction technology.

Yokneam Illit’s VocalZoom supplies Human-to-Machine Communication (HMC) sensors for delivering a, natural, personalized and secure voice-controlled user experience in today’s increasingly mobile and interconnected world. The sensors enable accurate and reliable voice control and biometrics authentication in any environment, regardless of noise. Applications including mobile secure payments, headsets and wearables, mobile phones, access control, smart home solutions, and hands-free automotive voice control. (VocalZoom 16.02)

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9.8 Allot to integrate Network Data insights into Oracle Communications Analytics

Allot Communications has been working with Oracle to serve as a network data source for Oracle’s new Oracle Communications Analytics suite of products. By combining Allot’s Smart Data Source and Oracle’s big data methodologies and analytics tools, communication service providers (CSPs) will be able to leverage and monetize their data by correlating network, service and customer information.

Allot Smart Data Source, delivered with Oracle’s Communication Analytics, enables CSPs to answer their network inquiries in a simple and cost-effective manner without the need to export heaps of data records for analysis. This is achieved by employing a holistic, consolidated and actionable approach which leads to fast time to value for big data projects. Oracle and Allot can provide CSPs with the powerful ability to capture granular network data and gain greater application visibility into web activity, including location, device details and more for use cases.

Hod HaSharon’s Allot Communications is a leading provider of security and monetization solutions that enable service providers to protect and personalize the digital experience. Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks enabling service providers to get closer to their customers; to safeguard network assets and users; and to accelerate time-to-revenue for value-added services. (Allot 17.02)

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9.9 IAI Receives Additional F-35 Lightning II Contract to Produce 40 Wing Sets

Israel Aerospace Industries (IAI) received an additional contract from Lockheed Martin to produce 40 wing sets for the F-35 Lightning II multi-role stealth fighter aircraft. IAI is scheduled to produce more than 800 pairs of F-35 wings, with a potential value of $2.5 billion, during the next 10-15 years. Since starting production in 2015, IAI has produced six wing sets and is expected to deliver a total of 12 sets during the first half of 2016. Following execution of the initial contract in 2014, IAI inaugurated a state-of-the-art automated F-35 wing production line, investing in the required advanced systems and technologies to meet the aircraft’s innovative design. Production is extremely accurate and ensures protection of the environment during all stages of the production process. The jets wing’s upper and lower skins are made of composite materials, developed especially for the F-35. The wing production center at IAI’s Lahav Division is renowned for its extensive experience and knowledge in producing wings for the F-16 and T-38 aircraft, as well as aero structure assemblies for other aircraft and customers.

IAI – Israel Aerospace Industries – is Israel’s largest aerospace and defense company and a globally recognized technology and innovation leader, specializing in developing and manufacturing advanced, state-of-the-art systems for air, space, sea, land, cyber and homeland security. (IAI 15.02)

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9.10 Opgal Announces NDTherm NDT Based on Thermal Imaging

Following several years of R&D and after successfully testing a large number of parts and building a global distribution network, Opgal is officially announcing general availability of NDTherm – its Non-Destructive Testing (NDT) solution based on thermal imaging. Using active thermography and unique algorithms, NDTherm enables fast, safe, contact-free, cost effective, easy to use, real-time inspection of parts. It detects deep flaws in various composite materials and structures such as CFRP, sandwich structures, hybrids and porous materials. NDTherm can be applied on small or large surfaces, including cases where access is only possible from one side of the structure.

The portable system, NDTherm NT is positioned for in-service applications and enables regular maintenance and efficient damage assessment. Suitable for a one-man operation, this compact system allows easy transportation and quick deployment in the field. Designed for production lines or testing environments, NDTherm FX offers enhanced image output to enable intuitive and accurate assessments, as well as built-in reporting capabilities. NDTherm AU is a customized system with a variety of testing capabilities for automatically inspecting large parts and complex shapes.

Karmiel’s Opgal Optronic Industries is a leading global provider of innovative infrared imaging systems and advanced vision and surveillance solutions. Using state-of-the-art thermal and other imaging technologies, Opgal leverages advanced electro-optics and image processing expertise to create high performance, versatile visualization products. Founded more than 30 years ago, Opgal is a major supplier to leading contractors and integrators, as well as corporate and professional customers in over 60 countries. (Opgal 22.02)

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9.11 Altair IoT-based Low-cost Water Quality Monitoring & Contamination Detection

Hod HaSharon’s Altair Semiconductor, a leading provider of LTE chipsets, announced its FourGee-1160 CAT-1 LTE chipset is providing communication and up to ten years of battery life for Ericsson’s low-cost water quality monitoring demo at Mobile World Congress. The demonstration is based on the Chattahoochee Riverkeeper project in the United States, an initiative dedicated to protecting and preserving the Chattahoochee River Basin. Ericsson and Altair are showing how the Internet of Things can provide solutions that make the world more sustainable. Altair’s CAT-1 FourGee-1160 chipset extends the battery life of idle devices, when compared to other LTE modules. An LTE-only option offers low current to improve device battery drain, crucial with an application like river monitoring. This characteristic, plus Altair’s ability to price its chipsets lower than the competition, helps bring IoT applications to reality. (Altair 22.02)

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9.12 WakingApp Launches ENTiTi Creator

WakingApp announced the release of a public version of its ENTiTi Creator for PC and Mac. Prior to this announcement, businesses and content creators had to have the right technical background to develop interactive and advanced VR and AR content. The ENTiTi Creator has bridged the gap to construct and distribute quality content, by eliminating technical issues and breaking down the walls for a whole new class of VR creators. ENTiTi Creator enables anyone with no prior programming experience to create advanced interactive VR and AR content once and immediately make it viewable on leading smartphones, HMD like Google Cardboard, light Mobile VR devices such as Zeiss VR One, FreeFly VR, and soon Samsung Gear VR, and the upcoming PC-based Oculus Rift and HTC Vive. For artists, studios, agencies and SMBs, ENTiTi Creator provides a fast, easy way to create advanced interactive content, allowing resources to focus more on creativity than technical issues.

Tel Aviv’s WakingApp‘s powerful cloud-based ENTiTi platform enables any company or individual to create interactive virtual and augmented reality content without any developer skills. All content is instantly made available on the ENTiTi app, and integrates with mobile devices, leading smart glasses and peripherals. WakingApp’s mission is to build and grow the VR & AR ecosystems by providing the tools for anyone to create interactive and advanced content, and enabling the use of cutting-edge technology such as viewers, cameras, head mounts, controllers, and depth sensors. (WakingApp 22.02)

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9.13 CommuniTake Technologies Announces IntactPhone

CommuniTake Technologies addresses current telecomm challenges with the introduction of the Intact Mobile Security platform. CommuniTake’s game-changing platform introduces a mobile device that is totally shielded from the ground up, designed to protect the most confidential communications. The IntactPhone technical specifications include Octa-core CPU, 5.5″ Full HD ultra-bright display and 3GB RAM. The Intact Mobile Security platform can be deployed by two methods: A corporate-owned personally-enabled device that constitutes the three-way defense through the hardened device, the proprietary operating system and the application level defense, or a BYOD approach consisting of the application level defense – encrypted communications, central command center, crowd analysis, and remote control.

Yokneam’s CommuniTake crafts security, care and management solutions to provide people and businesses with better, more secure mobile device use. CommuniTake delivers a natively-integrated mobility platform that unifies hardened devices, a security-rich mobile operating system, encrypted communications, smart command center, Omni-channel support and remote control technology. (CommuniTake 23.02)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Inflation Rate Fell by 0.5% in January

Israel’s Consumer Price Index (CPI) fell 0.5% in January, the Central Bureau of Statistics announced, following a 0.1% decline in December and 0.4% in November. Over the past 12 months, the CPI fell 0.6%. This is well below the government’s inflation target range of between 1% and 3%. Outstanding price falls in January included public transport (1.7%), fuel prices (3.8%), clothing (5.7%) and communications (0.7%). Outstanding price rises in January included municipal taxes (1.2%), and tomatoes (5.9%). At the same time, the Central Bureau of Statistics published the apartment prices index for December, which rose 0.7%, reflecting an 8% rise in home prices in 2015. (CBS 15.02)

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10.2 Israel’s Economy Grew at 3.3% in Fourth Quarter

The Israeli economy grew by 3.3% in the fourth quarter of 2015 on an annualized basis, the Central Bureau of Statistics announced, after growing 2.5% in the third quarter, and 0.4% in the second quarter. The fourth quarter figure was stronger than expected. The CBS also revised its overall growth figure for 2015 upwards to 2.6%, from its initial estimate of 2.3%. In H2/15, the Israeli economy grew 2.2% after rising 2.9% in H1/15 and 2.6% in H2/14. The rise in the GDP in H2/15 is reflected in a 5.2% rise in public consumption and a 3% rise in private consumption. Exports of goods and services rose 2.2% and investments in fixed assets were up 0.9%. Imports of goods and services rose 5.2% in the second half of 2015 and per capita spending on durable consumer products rose 3.9%, on an annualized basis, after falling 11.2% in the first half of 2015 and rising 21.6% in the corresponding period of 2014. (CBS 16.02)

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10.3 Deloitte Says Israel 7th in World for Defense Spending

According to Deloitte, Israel spent 5.2% of its GDP on defense in 2014. The firm sees an upturn in global defense spending in 2016. Israel’s defense expenditures in 2014 were 5.2% of the country’s GDP, making Israel 7th in the world for military expenditure as a percentage of GDP. Oman topped the list (11.6%), followed by Saudi Arabia (10.4%), and South Sudan (9.3%). Israel was 17th in military spending in absolute terms. Its military expenditure totaled $15.9 billion in 2014. The list of 25 countries with the largest defense expenditures was led by the US; the superpower spent $610 billion on defense 40% of the total expenditures worldwide. In distant second place was China, which spent $216.4 billion. Russia was an even more distant third, with$84.5 billion. (Globes 21.02)

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11: IN DEPTH

11.1 ISRAEL: Netanyahu Fights for Israel’s Energy Future

Simon Henderson posted in TWI on 11 February 2016 that even with the low price of oil and natural gas, there are ample business and policy reasons for exploiting Israel’s reserves quickly, so Netanyahu is pushing ahead despite ongoing political constraints.

Israel is on the cusp of moving forward on its next stage of the development of its natural gas resources deep beneath the seabed in the eastern Mediterranean. Prime Minister Benjamin Netanyahu, meanwhile, is due to testify before the Israeli Supreme Court on why he is pushing through a so-called “gas framework” against political and legal opposition.

The arguments are complicated. Houston-based Noble Energy, which leads the consortia that have discovered all the gas in Israel’s exclusive economic zone (EEZ), wants to know that its operations are not going to continue to be a political football in Israel before it starts work on developing the huge Leviathan field.

Noble Energy has already invested $2.5 billion in Israel, supplying gas from the now-depleted Mari-B field off Ashkelon and now from the much larger Tamar field, which came on stream in 2013. Gas from the Tamar field currently produces more than half of Israel’s electricity. The proportion will rise when the field is further developed. That development, along with bringing Leviathan on stream, will cost an estimated $6 billion. Small wonder that Noble wants to be confident of the regulatory environment before going ahead.

Opposition within Israel ranges from the claims that the price being charged is too high – even though it compares favorably with prices in Europe and Asia – and concern about the impact on the environment. Public opinion is also against Noble’s local partners, principally the Delek group of companies, which will profit from the deal. Such is the challenge facing Mr. Netanyahu, a one-time management consultant who no doubt understands the economic logic of moving forward quickly to take full advantage of Israel’s energy good fortune.

With the planned extra production, Israel will have enough natural gas for export (There may also be oil to be discovered, if geological evidence proves accurate). Already later this year a small amount of gas is due to start flowing to two Jordanian industrial plants near the Dead Sea. Plans are also being discussed for Israeli gas to supply Jordan’s main electricity power network, as well as a pipeline to Egypt, either for local domestic use or for conversion into liquefied natural gas (LNG), which can then be exported anywhere in the world on specially-built tankers.

Other options include gas exports to Cyprus, in whose water Noble has found another gas field, or even undersea gas pipelines to Turkey and/or Greece. There is also a possibility that spare Israeli electricity could be sent via seabed cable to Greece.

All these technical possibilities are pushing against political constraints. Last month the leaders of Israel, Cyprus and Greece met to sign cooperation accords. Israel promptly signaled to Turkey that its cooperation with Greece was not a barrier to also sending gas via pipeline to Turkey. On the Palestinian front, there is also the option to develop a field offshore Gaza, which makes no commercial sense unless its molecules are mixed with those of Israel gas.

Apart from the political good sense of regional cooperation, Israel’s natural gas also boosts its energy security, a clichéd term of various meanings, the best of which is probably the sense of giving Israel options. Instead of relying on dirty heavy fuel oil or diesel for its power plants, Israel can use cheaper, and cleaner, natural gas. At least one major power plant will still use coal, with special filters on its chimneys to minimize the environmental impact. Commercially, by using its own gas, Israel saves on foreign exchange and also boosts its revenues by taxing Noble and its Israel partners.

Politics can make matters more complicated, especially in Israel. The uncertainty of the Middle East, especially the future of Syria, whose own waters may also contain viable gas deposits, may prove at least a partial insurmountable barrier. But even with the low price of oil and natural gas, technically and in business terms, the exploitation of Israel’s reserves makes sound sense.

Simon Henderson is the Baker Fellow and director of the Gulf and Energy Policy Program at The Washington Institute. (TWI 11.02)

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11.2 ISRAEL: ‘A+/A-1’ Ratings Affirmed On Economic Resilience; Outlook Stable

On 5 February 2016, Standard & Poor’s Ratings Services affirmed its ‘A+/A-1’ long- and short-term foreign and local currency sovereign credit ratings on the State of Israel. The outlook is stable.

Rationale

The March 2015 general elections resulted in a right-wing government coalition with 61 of 120 seats in Israel’s parliament, the Knesset. It was not until November 2015 that the Knesset passed the biannual budget for 2015 and 2016. As a provisional budget was in place for most of 2015, meaning only one-twelfth of the 2014 budget could be spent per month, we estimate the general government deficit to be around 2.2% of GDP in 2015. Despite the political and fiscal concessions made to form a new coalition government, we expect the general government deficit will remain below 3% in the coming years. Fiscal policy is moderately expansionary in 2016 – additional spending commitments in the 2015/2016 budget include reversing the cuts in entitlements to child allowances and increasing resources in health and education to reduce waiting time and class sizes. On the revenue side, cuts to VAT and corporate tax are also likely to widen fiscal deficits. Should there be an increase in defense spending, we expect the government to cut civilian spending to offset the increase.

Outlook

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11.3 GCC: Moody’s Says Fuel Subsidy Reforms Offer Only Modest Fiscal Space

While fuel subsidy reforms in members of the Gulf Cooperation Council (GCC) will help address pressure from low oil prices on public finances, these measures alone will not be enough to bring the governments’ budgets back into surplus, says Moody’s Investors Service in a report published on 16 February.

Moody’s reported that “recent moves to reforms subsidies signal political willingness to address the damaging effect of low oil prices on budgets. However, they fall short of the scale of economic and fiscal reform required to achieve budget balance,” says Mathias Angonin, an analyst at Moody’s. “While the GCC governments’ balance sheets remain solid on a consolidated basis, we anticipate a sharp deterioration in the governments’ net asset position as a consequence of the decline in oil prices.”

According to the rating agency, the GCC’s savings from increased fuel prices will likely be small – an average of 0.5% of GDP across GCC countries in 2016. Even if governments opt to link fuel price hikes to global oil prices, the gains would be much lower than the expected fiscal deficit of 12.4% across the GCC, says Moody’s. This is based on Moody’s forecast of oil prices remaining at around USD33 per barrel in 2016, having fallen by 67% from 2014 levels and 32% from 2015 levels.

However, the price hikes will also lead to efficiency gains, reducing distortions caused by artificially low prices, says the rating agency, noting that domestic oil consumption has been growing at an average of 6.7% annually over the last five years in Kuwait, Qatar, Saudi Arabia and the UAE. In addition, Moody’s notes that GCC governments are looking to cut other current spending and, in the medium term, increasing revenue streams.

Some of these measures may face stronger resistance in Bahrain, Oman and Saudi Arabia, where per capita incomes on average are lower – and hence purchasing power impact higher – than in Qatar, Kuwait and the UAE, according to Moody’s. (Moody’s 16.02)

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11.4 KUWAIT: Ratings Affirmed at ‘AA/A-1+’ Despite Lower Oil Price Assumptions

On 12 February 2016, Standard & Poor’s Ratings Services affirmed its ‘AA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on Kuwait. The outlook is stable.

Rationale

In mid-January 2016, Standard & Poor’s materially lowered its oil price assumptions for the period 2016-2019. Prices for crude oil in spot and futures markets are some 70% below mid-2014 levels, when prices began to slide. When we last reviewed Kuwait, in August 2015, we expected Brent oil prices to average $55 per barrel (/bbl) in 2016 and $65/bbl in 2016-2019. We now assume an average Brent oil price of $40/bbl in 2016 and $46/bbl in 2016-2019. Consequently, we have also revised our forecasts for Kuwait’s macroeconomic indicators, including GDP per capita, fiscal position, and current account.

Kuwait Crude (KEC) trades at about a $5 discount to Brent. Kuwait derives about 60% of GDP, more than 90% of exports, and over 80% of fiscal receipts from hydrocarbon products. Kuwait has very large oil reserves, estimated at about 105 billion barrels or 8.4% of global oil reserves.

The sharp fall in oil prices over the past year and a half has significantly affected Kuwait’s fiscal and, to a lesser extent, its current account (flow) positions as well as its wealth levels, measured by GDP per capita. Nevertheless, our ratings on Kuwait remain unchanged as they continue to be supported by the sovereign’s very high levels of accumulated wealth and very strong external and fiscal asset (stock) positions. The Kuwaiti government, via the Kuwait Investment Authority (KIA), has accumulated substantial assets through oil and gas production over the years; Kuwait has saved its oil wealth in what we consider to be a prudent manner. The government’s large net asset position, which we estimate at over four times GDP at the end of 2016, is a significant ratings’ strength providing a substantial buffer to lower oil prices. Nevertheless, the ratings are constrained by political risk and a very heavy reliance on oil, as well as by regional geopolitical tensions.

The general government budget has averaged a surplus of around 25% of GDP since 2001, if we include investment income from funds held by the KIA. When we include income from its vast investments and transfers to the KIA’s Reserve Fund for Future Generations (RFFG; the KIA’s long term savings fund for future generations invested abroad) in our forecasts, the Kuwaiti government will continue to run surpluses of around 8% of GDP for the budget years 2016-2019, despite the low oil prices. Excluding transfers and investment income, we forecast that on average Kuwait will run single-digit fiscal deficits between fiscal years 2015/16 and 2018/19 (April-March).

Kuwait had increased its annual contributions to the RFFG from 10% to 25% of total revenues in the last two fiscal years including in fiscal 2014/15, because higher oil prices had produced very strong revenues. Now that oil prices are sharply lower, transfers to the fund from 2015/16 onward have reverted back to 10%. The fund will still continue to grow on reinvested earnings and the continued, albeit lower, contributions. Disclosure about the size and structure of the fund and KIA’s assets is limited but we estimate them at about $535 billion at end-2015.

Our base-case scenario assumes that, despite the sharp fall in the oil price and the risk of OPEC cuts to production, Kuwaiti oil output will remain at above 2.8 million barrels per day until 2019. Production is also likely to increase if Kuwait’s planned investment in the sector comes to fruition.

Strong oil exports led to current account surpluses averaging more than 33% of GDP in 2009-2015. We forecast these surpluses will fall to an average of 11% in 2016-2019. Given the government’s policy of investing a large portion of its surplus abroad, we estimate Kuwait had a net external asset position of more than 500% of current account receipts (CARs) in 2015. We believe that external assets will continue to rise in nominal terms – owing to ongoing external surpluses and reinvestment–but we note a significant denominator effect on the ratio due to a sharply declined denominator (CARs). At the same time, we project that gross external financing needs will remain relatively low, averaging around 80% of CARs plus usable reserves in the next four years.

We estimate real GDP growth to average about 2.4% in 2016-2019, but GDP per capita growth to remain stagnant, partly because of high population growth to an extent linked to the growth in numbers of expatriates.

Kuwait’s exchange rate is pegged to an undisclosed basket of currencies, with a likely bias to the U.S. dollar, which constrains its monetary flexibility. We view its monetary flexibility as limited although we acknowledge that the exchange rate regime is consistent with Kuwait’s reliance on U.S. dollar-based oil revenues and that Kuwait has sufficient resources to manage the peg. Kuwait’s financial system remains fairly stable, in our view; its banks operate in a reasonably strong regulatory environment and have healthy capital levels. We forecast credit growth to slow slightly.

Geopolitical tensions remain, with the IS terrorist group in Iraq and Syria, as well as the ongoing war in Yemen, posing a potential threat to the wider region and Kuwait. In June 2015, an IS militant detonated a bomb that killed 27 people at a Shia mosque in Kuwait City; the first terrorist attack on Kuwaiti soil since the First Gulf War. Nevertheless, it did not have wider repercussions and relations between the Sunni majority and Shia minority remain reasonably good.

Domestically, the political system is dominated by a powerful government and vocal parliament (albeit with limited authority over ministerial decisions), which have clashed on many occasions and will continue to disagree on many issues. Kuwait held its third parliamentary election in 18 months in July 2013 and, owing to the boycott of the election by several opposition groups, a more government-friendly parliament was elected. Unlike the previous administration, it is more cooperative with the executive and this has led to more progress on long-planned projects. The next parliamentary elections are due in July 2017. We have factored Kuwait’s political and geopolitical framework into the current rating.

Outlook

The stable outlook reflects our expectation that Kuwait’s fiscal and external positions will remain strong, backed by a significant stock of financial assets. We expect these strengths to offset risks related to the current low oil price, Kuwait’s undiversified oil economy, and what we assess as a vocal and unpredictable political system, in addition to geopolitical tensions in the region.

We could lower the ratings if a continued fall in oil prices or slow growth were to undermine Kuwait’s wealth levels, measured by GDP per capita, if Kuwait’s domestic political stability were to significantly deteriorate, or if geopolitical risks were to escalate.

We could raise the ratings if political reforms were to enhance institutional effectiveness and improve long-term economic diversification, and if geopolitical risks fade significantly, and prospects for the oil sector improve. (S&P 12.02)

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11.5 QATAR: Qatar Ratings Affirmed At ‘AA/A-1+’; Outlook Stable

On 17 February 2016, Standard & Poor’s Ratings Services affirmed its ‘AA’ long-term and ‘A-1+’ short-term foreign and local currency sovereign credit ratings on the State of Qatar. The outlook is stable. We also affirmed the ‘AA’ long-term issue ratings on the bonds issued by Qatari Diar Finance Q.S.C. and SoQ Sukuk A Q.S.C.

Rationale

In mid-January 2016, Standard & Poor’s materially lowered its hydrocarbon price assumptions for 2016-2019. Our affirmation of our ratings on Qatar reflects our view that Qatar’s large net asset position will help it weather the lower hydrocarbon price environment.

Qatar is a wealthy economy. The country holds the third-largest proven natural gas reserves in the world, and is the largest exporter of liquefied natural gas (LNG). We expect Qatar’s reserves to provide many decades of production at the current levels. Its small citizenry enjoys one of the highest GDP per capita among our rated sovereigns, estimated at $62,000 in 2016. The hydrocarbon sector creates about 55% of Qatar’s GDP, 90% of government revenues (oil and gas taxes and royalties, plus dividends from Qatar Petroleum) and 85% of exports. We view Qatar’s economy as undiversified.

Qatar’s economy has grown by about 5.5% annually over the last four years, but we expect this to slow to about 4.0% during 2016-2019. The hydrocarbon sector will likely continue to stagnate. The moratorium on new projects in Qatar’s North Field will continue and will only be reviewed once gas prices begin to recover in the medium term, in our view. Non-oil growth, on the other hand, should remain buoyant, thanks to spending under a $125 billion infrastructure investment program and supported by the growing population.

We note the government’s efforts to diversify the economy, while maintaining its strategic position in the global natural gas market. In our view, medium-to long-term challenges to Qatar’s competitive position in the liquefied natural gas (LNG) market are likely to come from new shale production, Russia’s gas pipeline to China, and increased pressure to delink LNG contracts from the price of oil.

Nevertheless, Qatar has one of the lowest costs of production – $1.60 to $2.00 per million British Thermal Units – and is a profitable producer of LNG. Its strategy has been to diversify into all major markets, adjusting the mix of destinations and contract types according to market needs. Moreover, the majority of its gas exports are under long-term contracts, which provides some certainty regarding the volumes sold. We expect that Qatar will maintain its cost advantage over many new projects in other countries. In January 2016, the renegotiation of Qatar and RasGas’ (Qatar’s second-biggest LNG producer) contract with Petronet LNG (India’s biggest gas importer) at a discount of almost 50% indicates an increasingly much more competitive environment for natural gas and LNG sellers over the medium term. Existing LNG buyers committed to long-term contracts and other potential buyers may try to renegotiate or achieve similar commercial terms amid an environment of persistently low prices.

We assume that Qatar’s oil production will decline as output from maturing fields contracts. We expect an average annual decline in crude oil production of about 5% over 2015-2018. We project largely flat gas output (LNG and natural gas), given Qatar’s moratorium on new investments in the sector, while condensate volumes will likely increase by about 5% per year over the same period.

Amid falling oil and gas prices, the government’s public investment program has led to a deterioration of the fiscal balance, beginning in 2014. We expect the general government balance to fall into a deficit of 4.1% of GDP on average in 2016-2019, after many years of surpluses. Our outlook assumes that the sharp drop in oil revenues is less likely to be offset by cuts in current spending; capital spending will continue to slightly increase as infrastructure projects advance. We also project a decline in hydrocarbon income, namely the financial transfers from Qatar Petroleum to the budget, which come to the government budget with a three-to-six month lag.

Nevertheless, we think upcoming budgets could include further measures to contain current expenditures in light of low hydrocarbon prices. The Qatari government has just implemented new measures that will help the fiscal situation over time, such as cuts in gasoline, water wastage and utility subsidies. The government also intends to rationalize and outsource part of its operations and to award more projects to the private sector, though whether the desired level of private sector participation can be achieved remains to be seen, in our view.

In the context of lower hydrocarbon revenues and increasing capital spending, the government is prioritizing existing projects by channeling funding to the most important and most strategic investments. The government’s investment program focuses on infrastructure, education, and health, and we expect the majority of these projects to be completed ahead of the 2022 FIFA World Cup, which Qatar is hosting.

Alongside government investments funded through the budget, public-enterprise and private-sector spending on the national development strategy is likely to be largely funded by borrowing from domestic financial institutions. This may cause banks’ net external liability positions to widen and their loan-to-deposit ratios to rise, as we expect deposit growth in the Qatari banking system to gradually decelerate due to low oil prices. The ratio of domestic credit to total deposits in the Qatari banking system was 103% as of November 2015, substantially up from 93% at end-2014. Public sector deposits represented about 38.7% of the resident deposit base in November 2015, down from 44.0% at year-end 2014.

We project Qatar’s external surpluses to worsen substantially in the medium term as export receipts fall sharply in 2016, while import demand remains strong. The transfers and income accounts of the current account will remain in deficit, the former due to remittance outflows as a result of the expatriate population and the latter due to payments to the foreign firms that partner with Qatari companies in the oil and gas industry.

Qatar’s net external asset position will remain strong at about 265% of current account receipts in 2016-2019. Qatar has accumulated considerable foreign assets over the past decade, as a result of developing its natural resources. We forecast that the general government net asset position will also stay robust, estimated at about 125% of GDP in 2015.

Domestic political and social stability prevails, despite what we view as only gradual political modernization and a highly centralized decision-making process. In our view, the country’s public institutions are still relatively undeveloped compared with those of most ‘AA’ rated sovereigns. Executive power remains in the hands of the Emir. In our view, the predictability of future policy responses is tempered by weak political institutions, although in our base case we assume that policy will continue to focus on prudent development of the hydrocarbon sector, alongside further economic diversification. In addition, material data gaps exist and transparency is limited, by international standards. In particular, the government neither discloses nor reports earnings on its fiscal assets.

In our view, the fixed exchange rate of the Qatari riyal to the U.S. dollar leads to limited monetary flexibility, and we expect the currency peg to be maintained. Qatar’s real effective exchange rate has appreciated at 17% since early 2014. In our view, this represents a deterioration in international competitiveness of the country’s modest tradable sector and a dampening of non-oil GDP growth, absent any offsetting factors such as improved efficiency or technological capacity. Liquidity conditions in the Qatari banking system and banks’ borrowing costs are expected to further tighten amid falling public deposits, coupled with a modest increase in loans and future increases in U.S. interest rates.

Outlook

The stable outlook reflects our view that Qatar’s economy will remain resilient, supported by solid macroeconomic fundamentals, although we anticipate continued institutional weaknesses and only a moderate increase in hydrocarbon prices over the next two years.

We could lower the ratings on Qatar if developments in hydrocarbon production and prices, or in the banking sector, were to significantly weaken the country’s external or fiscal positions; for example, if the government’s gross liquid assets fall significantly below 100% of GDP, by our estimates.

We could raise the ratings on Qatar if we saw domestic institutions mature faster than expected, alongside significant improvements in transparency regarding government assets and external data quality. (S&P 17.02)

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11.6 OMAN: Sultanate Ratings Lowered To ‘BBB-/A-3’; Outlook Stable

On 17 February 2016, Standard & Poor’s Ratings Services lowered its long- and short-term foreign and local currency sovereign credit ratings on the Sultanate of Oman to ‘BBB-/A-3’ from ‘BBB+/A-2’. The outlook is stable. At the same time, we revised our transfer and convertibility (T&C) assessment on Oman to ‘BBB’ from ‘A-‘.

Rationale

In mid-January 2016, Standard & Poor’s materially lowered its oil price assumptions for the period 2016-2019. Prices for crude oil in spot and futures markets are about 70% below mid-2014 levels, when prices began to slide. When we last reviewed Oman, we expected Brent oil prices to average $55 per barrel (/bbl) in 2016 and to gradually recover to $70/bbl in 2018 and beyond. We now assume an average Brent oil price of $40/bbl in 2016 and $50/bbl by 2018.

We do not expect the 16 February 2016 agreement between oil ministers from Qatar, Russia, Saudi Arabia and Venezuela to freeze output at the levels reported in January will have a material impact on our oil price assumptions. We note that the first market reaction to this news was a further decline in oil prices. On the supply side, we note that the freeze would take place at already record high levels of output for Russia and Saudi Arabia. We also note that the agreement is conditional on other producers freezing production. On the demand side, we see China’s economic slowdown and debt load as a continuing top global risk. Our long-term oil price assumptions will continue to be informed by our view of the marginal cost of oil production.

In November 2015, we said we could lower the ratings on Oman if it appeared we had underestimated the likely negative impact of lower oil prices on the economy. We now project a more material deterioration in Oman’s economic and fiscal outlook. We have therefore lowered our long-term ratings on Oman to ‘BBB-‘.

In Oman, the hydrocarbon sector accounted for just under half of GDP in 2014, slightly over half of exports, and three-quarters of government revenues. However, the hydrocarbon sector’s contribution to the economy fell to about 35% of GDP over the first half of 2015 following the pronounced decline in oil prices. Given the country’s high dependence on this commodity, we have revised our forecasts for economic growth and the fiscal and external positions to incorporate the lower expected oil prices. Since our review last November, we have reduced our real GDP growth forecasts for Oman over 2016/19 to an average of 1.4% a year from about 3.0%, while our GDP per capita estimate for 2016 has fallen to $14,600 compared with the $16,300 we had expected at our last review. We expect only a slow recovery to about $16,000 in 2019 (compared with over $20,000 in 2011-2014). We anticipate that the GDP deflator will remain negative in 2016 (-7%), compared with -20% in 2015. Our forecasts for the change in general government debt (which is our preferred fiscal metric because in most cases it is more comprehensive than the reported headline deficit) have also increased to about 5% of GDP compared with about 3% in November. Furthermore, we now anticipate larger current account deficits, equivalent to 20% of GDP in 2016, compared with 12% of GDP at our November review.

We expect the contribution of domestic demand to real GDP growth to remain weak in 2016/19 but for our assumed modest increase in oil prices to result in a more positive contribution from net exports. We estimate trend growth in real GDP per capita at negative 1%, which is well below most economies at similar levels of development. We expect slow progress on the government’s Omanization program – a training program for Omani citizens aimed at easing dependency on foreign labor – due to a skills mismatch between many Omani workers in the private sector; the more attractive pay and conditions that Omanis enjoy working in the public sector.

We estimate Oman’s budget deficit at 13% of GDP in 2016, in line with the government’s own budget forecast. This compares with a deficit of close to 18% of GDP in 2015. Oman increased its oil output to a record high of 358 million barrels of oil in 2015, a 4% increase on the previous year, with exports rising by 5.5% to 308 million barrels. However, this increase failed to effectively mitigate the negative ramifications from lower oil prices, with government oil revenues falling by about 40%. Our general government balance forecasts include an estimate of the government investment returns.

In 2016, the government has indicated it plans to reduce spending, including subsidy expenditures, raise corporate taxes from 12% to 16%, and increase fees for government services. Spending is budgeted to fall 11% compared with the 2015 outturn, with the largest cuts expected to come from “other” expenditures such as that on vehicle, travel, and hospitality expenses, followed by cuts to spending on civil ministries and investment. Total revenues are budgeted to fall 4%, as we expect the oil price to decline in 2016 compared with 2015. We understand that the 2016 budget is based on an oil price assumption of about $45/bbl compared with $75/bbl in 2015. Oman’s 2016-2020 five-year plan aims to increase the role of the private sector, and the government has suggested that it could privatize some entities in 2016. A value-added tax to be imposed across the Gulf Cooperation Council (GCC) could be in place by 2018, which would further support Omani government revenues. Our 2016/19 general government deficit estimates are in line with those of the five-year plan.

We think that the government has relatively limited room for spending cuts, given that nearly 50% of spending relates to public sector wages and subsidies and exemptions, which are typically difficult to reduce, although we note that some progress has been made with regard to subsidy reduction. The Omani government has committed to increasing non-hydrocarbon-related tax revenues over the medium term. As a result, we expect the general government deficit will average 11% of GDP in 2016/19. We assume that deficit financing will result in an annual average increase in Oman’s government debt of about 5% of GDP a year over 2016-2019. We also estimate that the government’s net asset position will fall from 61% of GDP in 2015 to 13% in 2019.

Sizable oil receipts in past years have helped maintain Oman’s strong external position. However, lower oil prices lead us to forecast a current account deficit in 2016 of about 20% of GDP, compared with 14% of GDP in 2015. We expect the current account deficit will remain in double digits until 2019. Notwithstanding the related external borrowing and decline in foreign currency reserves, Oman’s external position–as measured by liquid external assets minus external debt – will remain a rating strength. However, we expect it will deteriorate, to a debtor position of 25% of current account receipts (CARs) in 2019 from a creditor position of about 60% in 2015. Meanwhile, we expect the country’s gross external financing requirements will rise to 130% of CARs and usable reserves in 2019 from 116% in 2015.

The transmission of monetary policy is constrained by an underdeveloped local capital market, although we expect to see some growth in local debt and sukuk issuance over the next four years. Nevertheless, we expect the peg to be maintained over the medium term. We estimate reserve coverage (including government external liquid assets) at 52% of the monetary base and six months of current account payments in 2019. Rules of thumb for the adequacy of reserve coverage in relation to these measures are 20% and three months, respectively. We also consider the more qualitative aspects of the GCC currency arrangements. At a time of already significant change and regional geopolitical instability, politically conservative regimes such as the GCC are unlikely to decide to increase uncertainty about their economic stability by amending this fundamental macroeconomic policy. We expect these concerns will out-weigh the potential economic benefits of de-pegging.

Under the rule of Sultan Qaboos bin Said Al Said, the country has undergone a remarkable improvement in human development. Oman now ranks in the 70th percentile of countries in the United Nations Development Program’s Human Development Index. Although this advancement stems largely from the advent of high hydrocarbon revenues during the sultan’s reign, we think it also results from effective policymaking. However, the sultan exercises absolute power in governance and decision-making, which poses risks to the effectiveness and predictability of policymaking.

We understand that the sultan remains popular, but the eventual process of succession remains untested, as the country lacks recent experience in smooth transitions of power. Although we expect the succession process will be smooth, without any radical policy shifts, we do not rule out the possibility that Oman could experience a disruptive period of uncertainty if the royal family does not quickly agree on a successor. We do not anticipate that the conflict in neighboring Yemen will affect Oman’s creditworthiness, because it appears unlikely to spill over into Oman, which has remained neutral in the conflict.

Outlook

The stable outlook reflects our expectation that the government will be able to take effective remedial action that would prevent Oman’s fiscal and external positions from deteriorating beyond our current expectations.

We could lower the ratings if we were to expect the annual change in government debt as a share of GDP would remain on an upward trend after 2017, or if the economy’s net external asset position were to weaken at a faster pace. We could also lower the ratings if we see signs that succession risks have risen and are likely to disrupt governance standards or institutional functioning.

We could consider an upgrade if the foundations of economic growth strengthen, therefore raising per capita income levels, or if our forecasts for Oman’s fiscal and external positions improve substantially compared to our current assumptions. (S&P 17.02)

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11.7 SAUDI ARABIA: Ratings Lowered To ‘A-/A-2’; Outlook Stable

On 17 February 2016, Standard & Poor’s Ratings Services lowered its unsolicited long- and short-term foreign- and local-currency sovereign credit ratings on the Kingdom of Saudi Arabia to ‘A-/A-2’ from ‘A+/A-1’. The outlook is stable.

At the same time, we revised downward our transfer and convertibility (T&C) assessment on Saudi Arabia to ‘A’ from ‘AA-‘.

Rationale

In mid-January 2016, Standard & Poor’s lowered its oil price assumptions for average Brent by about $20 per barrel (/bbl) over 2016-2019. We now assume $40/bbl in 2016, with a gradual increase to $50/bbl in 2018 and beyond. Current prices for crude oil in spot and futures markets are about 70% below mid-2014 levels, when prices began to slide. When we last reviewed Saudi Arabia, we expected Brent oil prices to average $55/bbl in 2016 and $70/bbl by 2018.

We do not expect the agreement on 16 February 2016 between oil ministers from Qatar, Russia, Saudi Arabia and Venezuela to freeze oil output at the levels reported in January to have a material impact on our oil price assumptions. The first market reaction to this news was a further decline in oil prices. On the supply side, we note that the freeze would take place at already record high levels of output for Russia and Saudi Arabia. In addition, we understand the agreement is conditional on other producers also freezing production. We view such a change in policy direction as unlikely in Iran and Iraq. On the demand side, we see China’s economic slowdown and debt load as a continuing top global risk. Our long-term oil price assumptions will continue to be informed by our view of the marginal cost of oil production.

In October 2015, we stated that we could lower the ratings on Saudi Arabia if the government did not achieve a sizable and sustained reduction in the general government deficit. In our view, and in light of our updated oil price assumptions, the general government deficit will likely average about 9% of GDP in 2016-2019, approximately 2% of GDP higher than our October projections. We have also increased our forecasts for the annual change in general government debt (which is our preferred fiscal metric because in most cases it is more comprehensive than the reported headline deficit) to about 7% of GDP. We take into account the measures included in the government’s 2016 budget. We acknowledge both upside potential and downside risk to these forecasts. Upside potential principally stems from oil prices, while we see downside risk principally in the scale of the fiscal consolidation and the broader impact it will likely have on the economy. We note in particular the rising challenge the government faces in reversing the marked deterioration in Saudi Arabia’s fiscal balance.

The government has budgeted for a central government deficit of about 13% of GDP in 2016 compared with 15% in 2015, with revenues falling by 16% and expenditures by 14%, compared with the 2015 outturn. This modest deficit adjustment reflects the government’s desire to support economic growth, in our view.

We believe the budget to be based on an oil price of about $45/bbl. The government has established a support provision line within the budget of Saudi Arabian riyal (SAR) 183 billion (8% of GDP or $49 billion equivalent), which it could use to redirect capital and operating expenditures to both ongoing and new projects and to meet any emerging expenditure needs. We expect the government’s fiscal consolidation plan will likely include postponing some capital spending projects, increasing non-oil revenues, and controlling current expenditures. The government has embarked on a program of subsidy reform, with fuel, water and electricity prices set to rise gradually over the next five years. As a result, we understand it will reduce subsidies that amounted to about 8% of GDP in 2015. Concurrently, through increased utility tariffs, we expect to see stronger profitability at government-related entities, in turn resulting in higher dividends for the government.

On the revenue side, we understand that the imposition of taxes on undeveloped plots of land in urban areas to encourage their development is at an advanced stage. The government may also look at imposing value-added tax. However, we think this is likely to be a medium-term project, in line with discussions already under way with other members of the Gulf Cooperation Council customs union (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates).

Oil major Saudi Aramco has also confirmed that it has been studying various options to allow broad public participation in its equity through the listing in the capital markets of part of its shares or a bundle of its downstream subsidiaries. The timing of implementation of this proposal remains unclear and we have not factored it into our projections. In our view, given the strategic importance of Saudi Aramco and the perceived reluctance of the company to reveal geological, operational, or financial specifics in the past, we see an IPO of the company as less likely than the listing of its downstream subsidiaries. If these plans come to fruition, the related receipts could provide significant support to the government budget.

Although Saudi Arabia’s fiscal profile has weakened on a flow basis, on a stock basis it remains strong, in our view. Net general government assets (that is, the excess of liquid fiscal financial assets over government debt) peaked at 124% of GDP in 2015, partly due to the estimated 13% decline in nominal GDP. We forecast that the government’s net asset position could decrease to 79% of GDP in 2019. Consequently, Saudi Arabia is entering a period of adverse terms of trade from a strong position.

Over the next three years, we expect Saudi Arabia will finance its deficits, combining drawing down of fiscal assets and issuing debt. For the purposes of calculating the annual change in government debt, we have assumed an even split between asset draw-downs and debt issuance, implying an average increase of about 7% of GDP in nominal gross general government debt per year. Such a split would also imply that Saudi Arabia would report gross liquid financial assets of 110% of GDP by 2019, versus 129% at year-end 2016. These fiscal assets include the central government’s deposits and reserves on the liabilities side of the balance sheet of the Saudi Arabian Monetary Agency (SAMA, the central bank), government institutions’ deposits, and an estimate of investment income. We also include an estimate of government pension funds’ liquid assets.

In Saudi Arabia, the hydrocarbon sector accounted for about 28% of nominal GDP in 2015 by our estimate, down from 42% in 2014 due to the sharp fall in oil prices. Before the drop, the sector represented about 80% of exports and three-quarters of government revenues. Given the kingdom’s high dependence on hydrocarbons, we have revised downward our forecasts for economic growth and fiscal and external positions to incorporate the lower expected oil prices. Since our October 2015 review, we have reduced our real GDP growth forecasts for 2016-2019 to an average of 2% a year from about 3%, while our GDP per capita estimate for 2016 is $18,900, down from $21,300. We anticipate that the GDP deflator will remain negative in 2016, at minus 8%, compared with minus 16% in 2015, alongside population growth of about 2%.

We estimate that trend growth in real per capita GDP, which we measure using 10-year weighted-average growth, will amount to about 0.5% during 2010-2019, which is below that of peers that have similar GDP per capita.

Furthermore, we now anticipate larger current account deficits, equivalent to 14% of GDP in 2016, compared with 6% of GDP in our October review. Saudi Arabia’s external accounts mirror, in many ways, its fiscal accounts. Like the fiscal accounts, they shift based on prices of hydrocarbons. Similar to its fiscal position, Saudi Arabia maintains strong external buffers. We expect Saudi Arabia’s liquid external assets, net of external debt, will average about 270% of current account receipts (CARs) over 2016-2019. The kingdom’s gross external financing needs are slightly above 40% of the sum of usable reserves and CARs over 2016-2019, suggesting very strong external liquidity.

King Salman acceded to the throne in January 2015. He is the sixth son of King Abdulaziz Al-Saud, who established the kingdom in 1932. In April, King Salman named his nephew, interior minister Mohammed bin Nayef as crown prince, first in line to the throne. The king has also named his son, Mohammed bin Salman, the defense minister, to the position of deputy crown prince and consequently second in line to the throne.

We analyze Saudi Arabia as an absolute monarchy in which decision-making resides with the king and the ruling family. In our view, the opacity of decision-making and reconciling intra-family issues around succession reduce the predictability, timeliness, and effectiveness of the kingdom’s economic policy choices. Two new councils, the Council for Political and Security Affairs and the Council for Economic and Development Affairs, have been created to form government policy more efficiently. Power is devolved to the crown prince and deputy crown prince, who respectively head these two bodies. The king approves the decisions of the councils. Broader institutional checks and balances are still at incipient stages of development.

Given the Saudi riyal’s peg to the U.S. dollar, we view monetary policy flexibility as limited. The long-standing currency peg helps to anchor the population’s inflation expectations, but binds Saudi Arabia’s monetary policy to that of the U.S. Federal Reserve. We expect that the peg will be maintained over the next few years. At a time of already significant change and regional geopolitical instability, politically conservative regimes such as those in the GCC are unlikely to increase uncertainty about their economic stability by amending this fundamental macroeconomic policy.

Consequently, the riyal’s real effective exchange rate has appreciated by 16% since early 2014 and stands approximately 40% over the December 2007 level, according to Bruegel data. The riyal’s long-term real effective appreciation since 2007 has been the most pronounced among all GCC sovereigns. In our view, this indicates an ongoing deterioration of international competitiveness of the country’s modest tradables sector, which is likely to dampen non-oil GDP growth, absent any offsetting factors such as improved efficiency or technological capacity. We estimate reserve coverage (including government external liquid assets) at a very high 115% of the monetary base and 22 months of current account payments in 2019.

Notwithstanding Saudi Arabia’s limited monetary flexibility, we regard the Saudi financial system as strong. We classify the banking sector of Saudi Arabia in group ‘2’ under our Banking Industry Country Risk Assessment methodology, with ‘1’ indicating the lowest risk and ’10’ the highest.

Outlook

The stable outlook reflects our expectation that the Saudi Arabian authorities will take steps to prevent any further deterioration in the government’s fiscal position beyond our current expectations.

We could lower our ratings on Saudi Arabia if we observed further deterioration of public finances beyond our current expectations that could lead to a drop of liquid government financial assets to below 100% of GDP. The ratings could also come under pressure if we observed a significant increase in domestic or regional political and economic instability.

We could raise the ratings if Saudi Arabia’s economic growth prospects improved markedly beyond our current assumptions. (S&P 17.02)

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11.8 EGYPT: Egypt and China Following Xi’s Visit

Ofir Winter, Assaf Orion and Galia Lavi wrote in INSS Insight No. 795 on 11 February that in the course of the visit by Chinese President Xi Jinping to Egypt on 20-22 January 2016, Egypt and China announced a five-year, multi-sector cooperation agreement. This agreement injected substance into the “comprehensive strategic partnership” formed during President Abdel Fattah el-Sisi’s trips to China in 2014 and 2015. For Egypt, China constitutes an optimal strategic partner, as deeper ties serve its economic-security agenda. The cooperation with China suits Egypt’s desire to forge a sovereign foreign policy that proceeds on the basis of purely Egyptian interests and is not bound to international and regional axes. Israel views in a favorable light any Egyptian-Chinese cooperation that will improve the economic-security reality in Egypt and contribute to stabilization of the current regime. Furthermore, an Egyptian foreign policy that lends less weight to historical collective intra-Arab inhibitions may open up new horizons for both Israel and Egypt. This can foster expanded bilateral cooperative ventures, and perhaps trilateral ones – with China – as well, based on shared economic interests.

The visit to Egypt was a highlight of Xi’s tour of the region, which began in Saudi Arabia and ended in Iran. From China’s perspective, this tour represented an attempt to strengthen Beijing’s clout in the Middle East, expand its economic activity, and reinforce its political standing at a time of regional views of the diminished United States’ apparent involvement in the Middle East, which has opened the theater to search new sources of strategic support. The tour reflected China’s increasing concern regarding the threat posed by the Islamic State and its desire both to keep the threat far from its borders and join in the struggle against terrorism. This threat is fed primarily by the possible return to China of the thousands of Sunni Muslim volunteers from the isolationist Uyghur movement in the Xinjiang region, who left China to fight with the Islamic State in Syria and in Iraq. China views Egypt as a partner in the war against terrorism, given Egypt’s struggle against Wilayat Sinaa’ (the so called Islamic State province in the Sinai Peninsula), its role within the traditional Sunni camp and its regional and international stature as a non-permanent member of the Security Council.

While for China the closer ties with Egypt bolster its longstanding policy in Africa, for Egypt, the “comprehensive strategic partnership” with China constitutes an interesting development from its traditional foreign policy. Under Mubarak, Cairo served as an anchor in the regional US-oriented Sunni axis; under el-Sisi, however, Cairo has cultivated a policy that varies its sources of strategic support. Notwithstanding its relations with Washington, Egypt is tightening its relations with Russia and China – two powers that challenge America’s international hegemony. Egypt also balances its relationships with Turkey and Qatar – often tense due to these states’ support of the Muslim Brotherhood – yet has no qualms about confronting them, even in face of Washington’s endorsement (reflected, for example, in its opposition to the ceasefire arrangement between Israel and Hamas that Ankara and Doha proposed during Operation Protective Edge). Egypt even refuses to modify its policy to cater to the interests of Saudi Arabia, despite the fact that in recent years Riyadh has granted it generous and critical economic assistance. In recent months, the disputes between Egypt and Saudi Arabia have focused on a series of key regional issues, chief among them the Russian involvement in the war in Syria, the attitude toward Iran, and the civil war in Yemen.

Economic Implications

For Egypt, China constitutes an optimal strategic partner, as deeper ties serve its economic-security agenda. The cooperation with China suits Egypt’s desire to forge a sovereign foreign policy that proceeds on the basis of purely Egyptian interests and is not bound to international and regional axes. While the US aid brings with it expectations of democratic reforms, and reliance on Saudi Arabia incurs a defined regional orientation, cooperation with China is free of restrictions on Egyptian domestic and foreign policy. Just as the Chinese President moved easily among rival countries such as Saudi Arabia and Iran, so his Egyptian counterpart seeks maximum room to maneuver in order to extricate Egypt from its current economic crisis and security instability. It is no wonder that China was lauded by Ahmed El-Sayed al-Naggar, chairman of the Board of Directors of the Egyptian national daily newspaper al-Ahram, for creating a model for “international economic relations based on peaceful cooperation and exchanges of benefits without inclination towards hegemony of one country over others.”

Indeed, concrete economic interests are the primary considerations in the burgeoning relations between Egypt and China. China sees great potential in the Egyptian market of nearly 90 million consumers for increasing the volume of its exports, particularly in face of increasing production surpluses. Furthermore, the Suez Canal is an essential trade route for China, including in the framework of the One Belt One Road (OBOR) vision that aims to bridge China, Europe and Africa through infrastructure, transportation, and communications.

For its part, Egypt is endeavoring to position itself as an attractive target for Chinese investments in industrial sectors, minerals, agriculture, fishing, tourism, and the automobile and shipbuilding industries. Chinese capital is crucial for Egypt’s economic growth and for creating jobs for the millions of unemployed, who are a threat to the regime’s stability. Among the declared achievements of Xi’s visit are the launch of 15 projects involving 100 Chinese companies, Chinese investments of $15 billion and 21 signed memoranda of understandings for cooperative ventures in the fields of electricity, trade, civil aviation, science and technology, communications and aerospace. China also undertook to provide $180 million in assistance to Egypt, which is suffering from a severe shortage of foreign currency reserves, as well as two loans totaling $1.7 billion, to strengthen small and medium-sized industries. The test of these declared agreements will of course be in their implementation.

The Chinese President’s visit allowed the Egyptian regime to announce economic achievements at a highly symbolic time – on the eve of the fifth anniversary of the “January 25 Revolution.” This year, the festive date was marred by concern about a renewed outbreak of protests and demonstrations against the regime, due to the young generation’s growing frustration with the political and economic situation in Egypt. An article in al-Ahram alleged that the Egyptian-Chinese summit extricated Egypt from “a foreign plot intended to instigate a civil war on Egyptian streets” on the anniversary of the revolution. Although this allegation sounds somewhat exaggerated, the fruits of the Chinese visit offered President el-Sisi a golden opportunity to instill hope for a better future among Egypt’s citizens and strengthen the legitimacy of his regime.

The Israeli Angle

For Israel, the deepening ties between Egypt and China have several potential implications. On the negative side, the Chinese President is liable to forge closer ties to Egypt and Arab countries by paying in “Israeli currency,” as it did in past decades. In an open letter to the Egyptian public as well as during his visit to the Arab League headquarters, Xi conveyed China’s unconditional support for “the establishment of an independent Palestinian state with full sovereignty based on the 1967 borders, with its capital in East Jerusalem.” Another disturbing issue relates to Egypt’s weakening affiliation with the United States, in favor of other sources of support.

On the positive side, Israel views in a favorable light any Egyptian-Chinese cooperation that will improve the economic-security reality in Egypt and contribute to stabilization of the country and the current regime. Furthermore, Egypt’s willingness to forge an independent foreign policy that focuses on its own national interests and lends less weight to historical collective intra-Arab inhibitions may open up new horizons for both Israel and Egypt. This can foster expanded bilateral cooperative ventures, and perhaps trilateral ones – with China – as well, based on shared economic interests.

Finally, the new partnership between Egypt and China constitutes a reminder of the dynamism that characterizes the current Middle East. Thus, for example, players in Israel advocating the advancement of the peace process with the Palestinians within the scope of regional architecture should review the viability of the traditional regional alliances, considering the emergence of new strategic alliances that do not adhere to the familiar regional paradigms. Even if these strategic alliances are not necessarily formed at the expense of old ones, they might be able to shape regional diplomacy that is multi-layered, complex, and more diverse. Egypt is still a key member of the Sunni axis with ties to the United States, even if this axis is shakier than in the past. Insofar, Egypt is maintaining this affiliation in tandem with its ties to countries such as Russia and China; in the future, given certain economic and security interests, it is quite possible that Egypt will form additional relations that might challenge a pro-Western affiliation. (INSS 11.02)

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11.9 EGYPT: How Egypt Plans to Boost Its Stock Exchange

In an effort to shore up its economy, Egypt plans to list shares of some government-owned banks and companies on its ailing stock exchange. The Egyptian government’s decision to sell shares of some state-owned banks and companies is drawing both praise and criticism.

Rami Galal posted in Al-Monitor on 11 February that Alaa Youssef, spokesman for the Egyptian presidency, announced on 19 January that shares in “successful” state-owned companies and banks will be listed. The statement followed a meeting between President Abdel Fattah al-Sisi, the prime minister, the governor of the Central Bank, and the ministers of industry and finance to discuss “the decline of the Egyptian stock market indexes.”

The stock exchange lost $5.6 billion in value in just the first 19 days of 2016.

The Egyptian state owns three of the country’s largest banks either fully or partially, including the National Bank of Egypt and Banque Misr, along with a large number of companies — most notably Arab Contractors and ENPPI, an engineering firm serving the petrochemical and petroleum industries.

The presidency’s announcement was welcomed by investors but raised concerns among those who oppose the privatization of the public sector. Salah El Din Fehmi, head of the economics department at Al-Azhar University, commented on the issue, stating that the presidency took this step in an attempt to develop these successful companies and banks, attract new investments and create a community partnership between the state and individuals.

Speaking to Al-Monitor, Fehmi stressed the term “successful,” pointing out that loss-making companies will not be listed. Fehmi said this decision reflects the presidency’s foresight, as loss-making banks and companies need financial and administrative restructuring to be fit for privatization, adding that “those who sell firms in the red reap nothing but crumbs.”

Ambassador Gamal Bayoumi, secretary-general of the Union of Arab Investors, said the decision comes in an attempt to open up new horizons for financing and to expand the portfolios of these banks and companies, which would increase their competitiveness and reduce the burden of the state budget. Bayoumi told Al-Monitor that anti-privatization has become for some a matter of principle without consideration of the pros and cons or the changes in the economy. He noted that in many countries — including the United States, which is the world’s largest economy — the government does not own any banks.

He thinks the state should get rid of loss-making companies even if this requires the state to pay investors, which is what Germany did when East Germany was annexed. He added that some of those companies have employees who get entitlements whether they do their jobs or not, which is a waste of the state’s material resources. Such companies will continue to incur losses unless the private sector takes over and implements a “reward and punishment” system that ensures the companies’ financial positions will improve. Bayoumi stressed that those who claim that the privatization process is subject to corruption are crazy, because such deals are monitored by the Central Auditing Organization, the State Council and several control bodies.

In the same vein, former Minister of Finance Fayad Abdel Menhem said markets become more active with the expansion of traded merchandise, and when new merchandise is introduced in the form of shares, especially in an attractive sector such as banking, this would lead to a boom in the economic sector.

Every economic policy has its pros and cons, he noted. On the bright side, the state will be sending a message to the world pointing out that Egypt promotes a free economy and that the stock market will be refreshed by bringing losses to a halt, increasing the level of financing and attracting investments. The negative aspect, however, is that the state will be giving up on social responsibility.

For his part, former Minister of Social Solidarity Gouda Abdel Khalek said the decision is vague and does not specify whether the shares will be listed as a percentage of the capital or in the companies’ market value.

The announcement didn’t provide enough information to evaluate the presidency’s decision. When the decision takes effect, there will be objections, which will lead — as did the Civil Service Law — to a state of confusion for both the state and citizens.

Abdel Khalek said that giving away parts of public property to the private sector means partial privatization, and that listing banks and companies in the exchange is currently extremely dangerous, especially in Egypt where the trading activity and investors cannot be controlled. This allows Israeli-affiliated companies to infiltrate the heart of the Egyptian economy, which poses a threat to Egyptian national security, he told Al-Monitor.

Abdel Khalek also pointed out that this decision represents a major shift in economic policy, which calls for a clarification by the presidency regarding its repercussions, the responsibility of each party as well as what is expected from the decision. The decision is more political than economic, because the money belongs to the people and the constitution forces the president to protect public funds, he said. On the bright side, he added, stockholders will be able to question companies’ management decisions and will have access to financial statements, which creates a level of transparency.

Abdel Khalek wondered whether the proceeds will go to the public treasury to cope with the budget deficit or serve to increase the companies’ capital and therefore help with their development and restructuring, which would increase their production capacity. This was the Chinese experience with privatization, he said.

Stock exchange expert and Acumen Securities & Brokerage Chairman Osama Mourad said privatization requires a paradigm shift, development and a change in the type of administration. Instead of bearing social responsibility, companies placed on the stock exchange become economic institutions that seek profit, which promotes competitiveness and ends the state’s quasi-monopoly on economic activity.

Mourad told Al-Monitor that proceeds from the sale of those companies should go to the public treasury to cut the budget deficit, and that the talk about development and restructuring should not be considered, because as long as these companies are managed in the same way, the increase in capital will go down the drain. This is what was seen in the development of Egyptian Iron & Steel Co. When the state owns economic institutions, this sends bad signals to investors, since no sane investor would compete with the state. (Al Monitor 11.02)

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11.10 EGYPT: How Heavy Metal Music is Causing a Stir in Egypt

The loud music, frenzied dancing and powerful sounds of a metal rock concert create an atmosphere that can be scary to some in Egypt — especially since it sometimes results in police raids and accusations of devil worship.

Ahmed Fouad posted in Al Monitor on 18 February that a concert in Cairo scheduled for later this month has revived a decades-long controversy over heavy metal music and accusations of devil worship. So brace yourselves.

Nader Sadek, an Egyptian metal music performer, said that a Masters of the Middle East concert was held on 20 February at Amoun Hotel in Giza featuring four famous metal bands: Inquisition (United States), Perversion (United Arab Emirates), Smouldering in Forgotten (Bahrain) and Al-Azif (Egypt).

Inquisition, in particular, has raised a lot of eyebrows. While Al-Monitor could not find any statements by the band members asserting that they are actual Satanists, the band’s frontman, Dagon, said in an interview with the Isolation Grind blog in 2011 that “Black Metal is very satanic.” “It is individualism, elitism, rebellion against unnecessary control, pride with a cause. Everything that [the Christian Bible] tells us about ‘the devil’ is in essence what Black Metal is, but through sound waves. Forget [for] one moment about Christianity in general and think of Satanism as the negative pole.”

Mohammed Mamdouh, a guitarist and singer in the band Salasel, has been organizing metal concerts in Egypt since the 1990s. He told the Egyptian O News Agency (ONA) in January that controversy arose back then when one metal concert organizer in Alexandria accused another one in Cairo of including satanic rituals in his concert. The complaint caused panic in the community; some musicians and fans were arrested and some metal concerts were banned, which in turn aroused the ire of metal music fans, and then concerts resumed.

The Manassah website said that metal music started to be linked to Satanism after an article titled “Satanism club in Heliopolis” was published in 1996 by Rose al-Yousef newspaper. This was followed by a series of articles on the topic with such colorful headlines as “Satanism slogans on the walls of Mansheya El-Bakry,” “The desecration of the tombs of the Commonwealth” and “Satanist prayers in the desert of Saqqara.” Manassah said those articles clearly sought to instigate wrath against listeners and performers of metal music.

That they did; Egypt’s news website Dotmsr said in a March article that the first time an Egyptian youth was arrested on charges of Satanism was in 1996. Dotmsr said in 1997 an Egyptian police officer was suspicious about his son’s behavior and found out the youth had joined a group performing rituals such as playing and dancing to heavy metal music. The officer feared they might be Satanists and arrested the group. The most famous such case in Egypt’s history happened that same year, when 86 young men and women were arrested for allegedly worshipping Satan at the abandoned Baron Palace.

While security services said they had proof the young people performed rituals worshipping Satan, those arrested denied it. Some authors and journalists began to sympathize with them, saying the matter was only treated prominently in the press so it would be discussed in the community, not so it would be turned into a crime.

Manassah criticized the Egyptian media for deliberately connecting metal music to Satanism, perhaps at the directives of security services or because journalists were not well-informed about this genre of music. Back then, metal concerts definitely caused panic in Egypt. One journalist at Rose al-Yousef wrote that Egyptian security forces had prevented 35 metal bands from entering Egypt. Hamdiya Hamdi, anchor of the al-Alam Youghanni show, told Rose al-Yousef in 1997 that the genre would lead to hearing loss, was irritating with nonsensical lyrics and was a blind imitation of the West.

Fast-forward to August 2012 when talk was revived about the suspected connection between metal music and Satanism. Ismail Wishahi, a member of the Freedom and Justice Party, the political arm of the Muslim Brotherhood, charged that El Sawy Culture Wheel, a well-known cultural center in Egypt, held a metal music concert for Satanists. The case was dismissed following an investigation.

Mahmoud Kbeish, a law professor at Cairo University, told Al-Monitor that it is not surprising that the state security services and judiciary reject satanic rituals. According to him, the latter are not related to freedom of belief — which is guaranteed by law — but rather involve contempt for other religions.

As Inquisition was at the 20 February concert, metal bands Salasel and Enrage refused to perform. Salasel’s Mamdouh told ONA in January that the concert could be a reason for new confrontation between metal musicians and security services and the community and could result in distorting the image of this music more than in the past. This is the very reason the Egyptian Rock & Metal Scene Facebook page called on 13 January for boycotting the concert.

Mahmoud Kamel, a music critic, believes there is no connection between metal music and Satanism. He said all arts include a certain degree of extremism and should not be judged based on the practices of some extremists.

Ahmed Fouad is an Egyptian journalist working as newsroom assistant manager for Al-Shorouk. He specializes in coverage of Islamists and analysis of the political situation in Egypt. (Al-Monitor 18.02)

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11.11 MAURITANIA: IMF Staff Completes 2016 Article IV Mission to Mauritania

An International Monetary Fund (IMF) team visited Nouakchott from 8 to 22 February 2016 to review recent economic developments and outlook in the context of the annual Article IV Consultation.

“Following several years of strong economic performance, Mauritania is facing a severe terms-of-trade shock due to the decline in iron ore prices that has weakened its economic performance and outlook. The authorities responded initially with counter-cyclical policies using external and fiscal buffers accumulated in the boom years. As it became apparent that the shock was more persistent than originally envisaged, the authorities started to adjust policies in 2015 by allowing for a more flexible exchange rate and adopting fiscal measures to strengthen revenues.

“The decline in global iron ore prices has substantially lowered export and fiscal mining revenues. With iron ore prices expected to remain low over the medium term, external and fiscal vulnerabilities have risen.

“Economic growth slowed during 2015. The IMF team estimates real GDP growth at around 2%, from 6.6% achieved in 2014, due in part to lower iron production. Non-extractive GDP growth is estimated to have moderated to 3.1% in 2015 from 6.6% in 2014. Annual average CPI inflation eased to around 0.5% in 2015, reflecting lower global food prices and the evolution of the exchange rate. The external current account deficit, which benefitted from lower oil prices, is estimated at 19% of GDP in 2015. On account of lower mining revenues, the overall fiscal deficit (excluding grants) widened to 5.6% of non-extractive GDP, from 4.1% in 2014, despite higher revenues associated with domestic oil revenues and authorities’ proactive measures to control current spending. As a result of fiscal and external trends; public and publicly guaranteed debt is estimated at 93% of GDP at end-2015. The economic slowdown has also affected the financial sector. The banking system remains well-capitalized and liquid, but liquidity is declining and the sector remains vulnerable to shocks.

“With the prudent economic policies followed by the authorities, real GDP growth is projected to recover to 4.2% in 2016 supported by a rebound in mining production. Economic activity in the non-extractive sector is expected to remain subdued, with growth slowing marginally to 2.9% in 2016. Inflation is expected to rise to around 3.6%. The current account deficit will improve to 15% of GDP and the fiscal deficit is expected to narrow to 3% of non-extractive GDP, on account of the implementation of revenue measures and spending restraint. The medium-term outlook remains dependent on iron and oil prices, the authorities’ policy response and the resilience of the financial sector.

“Looking ahead, the deteriorating outlook and heightened global uncertainty call for an ambitious adjustment to support the external position and public finances, and to promote economic diversification and more inclusive growth. This would require accelerating foreign exchange market reforms conducive to higher exchange rate flexibility, and promoting economic diversification and private sector development through reforms that improve competitiveness, trade, and access to credit and foreign exchange. On the fiscal front, in order to place the public debt on a downward trend, fiscal policy should aim at higher non-extractive revenues through a broader tax base that promotes fair taxation; restraint in current expenditures; and an investment envelope that is consistent with medium-term fiscal sustainability. Reforms to strengthen the fiscal framework, including through a new organic budget law, would support the process of fiscal consolidation.

“Preserving financial stability in the context of lower economic growth is also needed for the financial sector to support stronger economic diversification and private sector development over the medium term. Together with adequate macroeconomic policies and a strengthened monetary policy framework, stronger prudential and supervisory frameworks will reduce structural weaknesses and support financial stability. The Central Bank of Mauritania continues to strengthen its regulatory framework and supervision capacity to support the continued development and stability of the financial system.

“Mauritania can achieve its medium term goals of becoming more prosperous, more diversified and less dependent on commodity cycles despite the uncertain global economic environment. Implementing policies in this direction would require close policy coordination. Strengthening policy formulation, transparency and governance will reduce uncertainties, help anchor expectations and enhance the credibility of macroeconomic policies.

“The mission met with the Prime Minister, Mr. Yahya Ould Hademine; the Central Bank Governor, Mr. Abdel Aziz Ould Dahi; the Minister of Economy and Finance Mr. El Moctar Ould Djay; the Minister of Petroleum, Energy and Mining, Mr. Mohamed Salem Ould Bechir; the Minister of Fisheries and Maritime Economy, Mr. Nani Ould Chrougha; and other senior officials. The team also held discussions with representatives of the civil society and the private sector, and development partners. (IMF 22.02)

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What’s News at EDI – March 2016

March 5, 2016, 1:09 pm

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Visit of Ontario Premier Wynne Slated for May

Ontario Premier Kathleen Wynne will head a delegation to Israel in May. At the time, she will be accompanied by provincial officials, representatives of Ontario’s life science community, academic institutions and companies seeking to build a stronger commercial relationship between Israel and Ontario. EDI represents the trade, innovation and investment interests of Ontario in Israel.

Germany’s Miele to Visit Israel in March

German appliance manufacturer Miele will be in Israel in March to meet potential importers and distributors for their home appliance line. The company has identified significant potential in the Israel market for their products. EDI in cooperation with trAIDe GmbH in Germany is handling the visit and has identified the potential partners.

Oklahoma State University Delegation to Visit

A delegation from Oklahoma State University will be in Israel in March to investigate academic cooperation possibilities with Israeli universities. EDI’s Trade Director, Seth Vogelman, will address the group while they are in Israel. EDI represents the regional trade and investment interests of the Oklahoma Department of Commerce.

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Fortnightly, 9 March 2016

March 9, 2016, 10:59 am

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9 March 2016
29 Adar I 5776
29 Jumada Al-Awwal 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Prime Minister Netanyahu Calls for Free Market Reforms
1.2  Housing Cabinet Approves 5 Foreign Building Companies for Israel Work
1.3  Israel and EU Working on New Cooperation Framework

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Israel’s Natural Gas Potential Triple Initial Calculations
2.2  Cyber-Security Startup Ensilo Passes $21 Million in Funding
2.3  Nano Satellite Company SkyFi Raises $3 Million
2.4  Team8 Builds World’s Strongest Cybersecurity Syndicate
2.5  Oracle to Acquire Ravello Systems
2.6  DBmaestro Raises $3 Million in Series A Funding
2.7  RR Media to Merge with SES Platform Services
2.8  AppCard Raises $20 Million
2.9  Cisco Buys Leaba Semiconductor for $320 Million
2.10  Papa John’s International Opens First Store in Israel
2.11 Deep Optics Raises $4 Million in Funding to Revolutionize Multifocal Market
2.12  PSI Establishes Permanent Operation in Israel

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Arab Middle East IT Spending Forecast to Hit Nearly $213 Billion in 2016
3.2  Jordanian & Chinese Firms to Set Up $1.3 Billion Fertilizer Project
3.3  Karl Lagerfeld Opens Concept Store in Kuwait City
3.4  Dubai & Shenzhen Sign Agreement on Innovation
3.5  Hibernia Networks Extends Service Reach into Middle East
3.6  UL & SASO to Promote Safety Standards and Enhance Market Access
3.7  Grandstream Products Now Available from Baud Telecom in Saudi Arabia
3.8  Calgary Scientific & Limantepe Offer Web & Mobile Diagnosis in Turkey

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Drought of 1998-2012 in Middle East Was the Worst in 900 Years

5: ARAB STATE DEVELOPMENTS

5.1  Fourth Quarter MENA Review and Outlook
5.2  Lebanon’s Balance of Trade Narrowed During 2015
5.3  Lebanon’s Trade Deficit Stood at $1.31 Billion in January 2016

♦♦Arabian Gulf

5.4  Kuwait Says it is Planning a 25% Cut in State Spending
5.5  Qatar’s Trade Surplus Falls by 58.1% in a Year
5.6  Sheikh Mohammed Approves UAE Infrastructure Projects Worth $1.9 Billion
5.7  Saudi Inflation Jumps to New High on Gasoline Price Hike
5.8  Saudi Arabia’s Labor Force Grows at Slowest Pace Since 1999

♦♦North Africa

5.9  Egypt’s Parliament Approves Defense Loan Agreement with France
5.10  Egyptian Defense Industry Report 2016 – 2020 Issued
5.11  Egyptian Tourism Declines 46% in January As Russians Stay Away
5.12  Egypt & Japan Sign Several Agreements on Projects Worth $17 Billion

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkish Inflation Slows to 3-Month Low on Lower Food Prices
6.2  IMF Revises Turkey’s Growth Forecast for 2016
6.3  Hotel Occupancy Rates in Turkey Drop Below 50% Amid Tourist Squeeze

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Israel Holds its First Transgender Beauty Contest

♦♦REGIONAL:

7.2 UAE Decides to Extend Compulsory Military Service to 12 Months
7.3 Moroccan Minister Presents Toughened Draft Law to Fight Sexual Harassment

8: ISRAEL LIFE SCIENCE NEWS

8.1  Avraham Pharma Raises $4 Million
8.2  Rosetta Genomics Launches Three New Product Offerings
8.3  Medasense Biometrics Raises $8 Million Investment in Series B Financing
8.4  Deep Instinct Patents to Implement Deep Learning in Cybersecurity
8.5  Teva Completes Acquisition of Rimsa
8.6  Insuline Medical Signs Non-Binding MOU to Distribute InsuPad in Brazil

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 OriginGPS’ New Module Adds Multi-GNSS to the World’s Smallest Footprint
9.2  Mellanox Partners with Nutanix to Deliver Effortless Enterprise Infrastructure
9.3  HexaTier Launches Solution for Database Security and Compliance in the Cloud
9.4  Israel’s Elencon Teams with Alstom
9.5  SolarEdge Launches Commercial Inverter Solution in Japan
9.6  Mellanox Delivers Next Generation Network Processor to Key Telco Customers
9.7  AudioCodes VoIPerfect Evolves Voice Over WAN Into Quality HD Voice
9.8  RSA Goes Live with Sapiens Reinsurance

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Foreign Exchange Reserves Hit New Record
10.2 Average Salaries in Israel Increased During 2015

11: IN DEPTH

11.1  LEBANON: S&P’s ‘B-/B’ Ratings Affirmed; Outlook Remains Negative
11.2  LEBANON: Ending the Year in Stagnation
11.3  QATAR: Tarnished by Cheap Oil
11.4  SAUDI ARABIA: Dealing with a Record Fiscal Deficit
11.5  EGYPT: Heading Towards Serious Challenges, Despite Continuous Efforts
11.6  EGYPT: Is Egypt Doing Enough to Counter Widespread Sexual Harassment?
11.7  IRAN: Iran’s Long Road to Reintegrating With the World Financial System
11.8  TURKEY: What Fading Oil Fortunes Means for Turkey’s Businesses

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Prime Minister Netanyahu Calls for Free Market Reforms

On 6 March, at the beginning of the weekly cabinet meeting, Prime Minister Netanyahu took aim at government intervention in the economy. The Prime Minister blamed overregulation and state interference in the economy for Israel’s failure to attract outside investment and the relatively modest pace of economic growth. He cited that Israel has excessive regulation, excessive bureaucracy and excessive legislation; the combination of which causes Israel to be less and less competitive, less attractive to foreign investors. Netanyahu pledged to make deregulation a primary focus of his government in hopes that it will spur economic growth.

Netanyahu’s distinctly market-oriented talk signals a possible return to the neo-liberal economic policies he pursued as Finance Minister from 2003-2005. The fiscal reforms implemented during his tenure are largely credited with bringing the Israeli economy out of a recession and kicking off more than a decade of growth. (INN 06.03)

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1.2 Housing Cabinet Approves 5 Foreign Building Companies for Israel Work

The Israeli government decided to allow up to six international construction companies to operate in Israel for 5 years. Despite sharp opposition by Israeli contractors and developers, the housing cabinet approved on 7 March a decision to allow foreign construction companies to operate in Israel. The plan was advanced by Minister of Finance Kahlon and will be modeled after an existing agreement with Turkish construction company Yilmazlar. Under the plan, the foreign firms will not operate independently in Israel, but rather crews will be brought from abroad to work as subcontractors for the domestic companies.

According to the decision, a pool of six foreign firms with experience in the residential construction sector and solid finances will be selected by tender. The pool will operate over five years, during which the foreign firms will be allowed to bring up to 1,000 employees from abroad for wet works projects. It further calls for the application of Israeli law on the foreign firms including labor laws for employers of foreign employees in order to assure the rights of the foreign workforce and the quality of the work. (Globes 08.03)

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1.3 Israel and EU Working on New Cooperation Framework

The EU is discussing a new framework agreement with Israel that will replace the existing 2004 agreement. The new agreement will redefine the implementation of cooperation between Israel and the EU in a range of areas, such as industry, trade, energy, the environment, agriculture, economic questions, as well as on the political level. Prime Minister Netanyahu, who is also serving as Minister of Foreign Affairs, will travel to Brussels to meet High Representative of the European Union for Foreign Affairs and Security Policy Mogherini. The trip is expected to take place by the middle of 2016 and will be the first occasion on which an Israeli foreign minister has visited the EU headquarters since the 1990s. (Globes 28.02)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israel’s Natural Gas Potential Triple Initial Calculations

The Energy Ministry has tripled its estimate of the volume of still-undiscovered natural gas in Israeli waters. Energy Minister Yuval Steinitz, presented to international energy companies the new assessment of a potential 2,100 billion cubic meters (BCMs) of natural gas, in contrast to the 680 BCMs that the Tzemach Committee relied on to examine the government’s policy regarding the natural gas market. The Tamar and Leviathan gas fields have already yielded 750-950 BCM of natural gas.

The ministry based its new assessment on a report prepared by French consulting firm BeicipFranlab. It found that the seabed has four relevant layers that potentially contain geological structures that could contain gas. According to the report, the potential amount of petroleum is estimated at 6.6 billion barrels.

BeicipFranlab believes that the territorial waters of Israel have four layers with the potential for finding oil or gas deposits. It estimates that the deeper layer, where the Tamar and Leviathan fields were found, has the potential for about 480 BCM of natural gas, while shallower layers could contain about 1,640 BCM of gas. This assessment is based on a re-examination of existing seismic maps and new models. The numbers are based on an estimate believed to have a likelihood of 50%. (Various 25.02)

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2.2 Cyber-Security Startup Ensilo Passes $21 Million in Funding

enSilo, a leading provider of a real-time data protection platform focusing on preventing data tampering and exfiltration, closed the second tranche of its Series A financing, raising a total of $19 million for the round and $21 million in total funding. The second tranche of $9 million was led by Rembrandt Venture Partners with previous investors Carmel Ventures and Lightspeed Venture Partners participating.

enSilo has experienced rapid growth since its founding 18 months ago, with tens of deployments in the US. The new funding will be used to expand sales and marketing, and improve customer experience in support of the rapidly growing demand for the company’s products and services. enSilo’s real-time data protection platform is currently in use by a number of Fortune 100 companies along with leading defense contractors and payment solutions worldwide.

enSilo delivers a real-time data protection platform against advanced targeted attacks by preventing threat actors from establishing outbound malicious connections. With enSilo, organizations can continue running their businesses’ operations securely and without interruption, even during the investigation and remediation of attacks. (enSilo 25.02)

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2.3 Nano Satellite Company SkyFi Raises $3 Million

Israeli startup SkyFi (formerly known as NSL Comm) has raised $3 million from Jerusalem Venture Partners (JVP) and Liberty Israel Venture Fund, a subsidiary of Liberty Media Corporation. This is the company’s first fund raising round. SkyFi has developed a nano satellite with a flexible sub-reflector which it aims to use to provide Internet access from everywhere on the planet.

SkyFi’s innovation revolves around a flexible sub-reflector that compensates for any reflector shape imperfections. This does away with expensive, poor performing satellites by enabling a nano satellite to be sent into space with a 55cm diameter antenna folded up, greatly reducing launch load and costs. Once in orbit, the satellite’s antenna expands and the proprietary flexible sub-reflector enhances transmitting precision and power by as much as 500x. Putting 60 such satellites into space using SkyFi technology would bring internet connectivity to the entire globe and would be less expensive than the current cost of putting one satellite into space. Members of the SkyFi team have filed over 20 patents combined, and have worked at Israeli Aerospace Industries, RaySat Broadcasting and Gilat Satellite Network, among others. (Globes 25.02)

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2.4 Team8 Builds World’s Strongest Cybersecurity Syndicate

Team8 announced a $23 million strategic round of funding. With the completion of the strategic round, Team8 further strengthens its relationship with market leaders and design partners who work closely with Team8 in its company-creation process. The funding adds AT&T, Accenture, Nokia, Mitsui, and Temasek to Team8’s existing investors Cisco, Alcatel-Lucent, Bessemer Venture Partners, Marker LLC and Eric Schmidt’s Innovation Endeavors to create the world’s strongest cybersecurity syndicate. Quantum Strategic Partners also participated in the round.

Team8 does not invest in cybersecurity companies, they create them. At Team8’s core is a research group with intimate knowledge of both offensive and defensive aspects of cybersecurity. By leveraging its research group, access to the best cyber talent, and a global network that gives Team8 companies access to customers, partners and key influencers, Team8 has reinvented the entire company-creation process. The result: a cyber innovation platform uniquely engineered to create category-leading cybersecurity companies that tackle the biggest problems in cybersecurity and help organizations reclaim the advantage over attackers. Team8’s strategic investors work closely with its research group throughout the company-creation process.

Since its launch in February 2015, Team8 launched illusive networks and is on pace to launch two more companies in 2016. illusive networks, a market leader in deception technology, recently announced a $22 million B Round of funding, led by NEA and including participation from Citi Ventures. illusive networks counts Fortune 100 companies in the financial, insurance, retail, technology and healthcare sectors among its customers. Over the past year, Team8 has also helped recruit over 120 new hires to its portfolio companies. Team8 plans to recruit an additional 150 people in 2016.

Tel Aviv’s Team8 is Israel’s most prestigious cybersecurity company-creation platform, focused on developing disruptive technologies and building category-leading companies that challenge the biggest problems in cybersecurity today. (Team8 25.02)

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2.5 Oracle to Acquire Ravello Systems

On 22 February 2016, Oracle signed an agreement to acquire Ravello Systems for an estimated sum close to $500 million. All Ravello employees will be joining Oracle as part of Oracle Public Cloud. Ravello’s team will join Oracle’s new development center in Israel, which will focus on cloud computing. This development center will also be part of Oracle’s existing Israeli R&D center, which was established after they purchased Demantra in 2006. Since its founding in 2011, Ravello had raised $54 in total funding from Qualcomm Ventures, Sequoia Capital, SanDisk Ventures, Norwest Venture Partners, Bessemer Venture Partners and Vintage Investment Partners.

Ravello’s unique solution provides new ways for developers to test their applications seamlessly while in the public cloud. In the past, it was not feasible to test various deployments in the public cloud because it required various modifications to the applications’ code so that they could run correctly within a public cloud infrastructure, which was also a costly process. With Ravello’s technology, companies can deploy applications in the cloud without changing any code. Ravello, which is headquartered in Palo Alto, operates an R&D center in Ra’anana and employs more than 60 people. (Various 28.02)

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2.6 DBmaestro Raises $3 Million in Series A Funding

DBmaestro, the pioneer and leading provider of DevOps for Database solutions, raised $3 million in Series A funding from a number of venture capital firms including StageOne Ventures, lool Ventures and iAngels. The financing will be used to grow DBmaestro’s global sales and marketing and to seal its place as the leading database automation solution. The funding round came after a banner year for the company. In 2015, DBmaestro tripled their subscription revenue and signed many high-profile brands, including Barclays, Bank of the West, Allianz and VISA. These achievements were driven by the success of their flagship product, TeamWork, which enables agile development, Continuous Integration, and Delivery for the Database.

DBmaestro’s DevOps for Database solution offers a comprehensive approach to the database development life cycle, providing enterprises need to deliver changes faster. DBmaestro has been at the forefront of Continuous Delivery for the database, with a solution which brings innovative methods for safe database automation and ultimately reduces costs in development and deployment. Subsequently, it was named to the 2015 SD Times 100 for its Innovation in the Database and was also recognized as a prominent vendor of the DevOps tools market in Technavio’s Global DevOps Tools Market 2015-2019 report published in August 2015. (DBmaestro 28.02)

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2.7 RR Media to Merge with SES Platform Services

RR Media has agreed to be acquired by Germany’s SES and will merge its activities with SES Platform Services (SES PS) to form a new world-leading provider of media solutions. SES will acquire a 100% ownership of RR Media, paying $13.291 per share, or a 52% premium to the closing price of the Company’s shares on 25 February 2016. This corresponds to an Enterprise Value of $242 million. The acquisition of RR Media by SES S.A. has been approved by the Boards of Directors of both companies, and is subject, among others, to regulatory approvals and the approval by the general meeting of shareholders of RR Media, which are expected to be completed in the second or third quarter of 2016. Once the transaction is completed, RR Media and SES PS will join forces to create a new, stand-alone world-leading media services provider. The new organization will offer full continuity and enhanced service to SES PS and RR Media’s existing customers.

Airport City’s RR Media works in partnership with the world’s leading media players to transform content into valuable media assets. RR Media’s complete ecosystem of digital media services maximize the potential of media and entertainment content, covering four main areas: smart global content distribution network with an optimized combination of satellite, fiber and the internet; content management and channel origination; sports, news & live events; and online video services. RR Media provides scalable, converged digital media services to more than 1,000 broadcasters, content owners, sports leagues and right holders. (RR Media 26.02)

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2.8 AppCard Raises $20 Million

Appcard, which has developed a marketing and loyalty platform for small and medium sized retailers, has raised $20 million in Series B funding. PLDT Capital, the investment arm of Philippine Long Distance Telephone Company and Alexander Rittweger, founder of Loyalty Partner, led the round. Existing investors: Founders Fund (Peter Thiel), Innovation Endeavors (Eric Schmidt) and Jerry Yang also participated. Headquartered in New York and with its development center in Ramat HaSharon, AppCard empowers thousands of retailers to market directly to their customers in a personalized way. The technology combines item-level smart data capture with artificial intelligence to automate marketing. After developing and optimizing the product to cater to specific retail verticals, AppCard released its latest version in the second half of last year and generated explosive growth. The new funding is intended to fuel that and further develop the technology. (Globes 26.02)

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2.9 Cisco Buys Leaba Semiconductor for $320 Million

Cisco Systems announced on 2 March that it plans to acquire Israel’s Leaba Semiconductor, a designer of networking chips, for $320 million in cash plus additional incentives to retain employees. This is Cisco’s 12th acquisition in Israel, the most recent one being that of Ra’anana-based self-optimization network software company Intucell for $475 million in 2013. Caesarea’s Leaba Semiconductor is a fabless semiconductor company operating in stealth mode to provide innovative solutions for significant infrastructure challenges. Leaba is backed by blue-chip investors and led by seasoned entrepreneurs and prominent technology experts. Leaba is assembling one of the best teams of engineering. (Various 02.03)

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2.10 Papa John’s International Opens First Store in Israel

Louisville, Kentucky’s Papa John’s Pizza continues its global growth as the third largest pizza delivery company in the world by opening its first store in Israel. Everyone in Tel Aviv will now be able to experience why better ingredients really do make a better pizza. Papa John’s opened its first international store 18 years ago, and now has over 4800 restaurants in over 40 countries. Papa John’s will be opening soon in Spain, and Papa John’s International continues to look for potential franchisees around the globe. (Papa John’s 01.02)

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2.11 Deep Optics Raises $4 Million in Funding to Revolutionize Multifocal Market

Deep Optics has raised $4 million in a Series A funding round to fuel the development of its electronic lens and glasses system. The round includes strategic investor Essilor, the world leader in ophthalmic optics, Taiwan-based Atomics 14 Ventures and several private investors, including Saar Wilf, Deep Optics’ Chairman and first investor. Deep Optics brings a technological breakthrough to the multi-billion dollar multifocal market, aiming to provide alternative progressive glasses and new ophthalmic applications with electronic dynamic focal technologies based on its proprietary and patent-pending liquid crystal lenses. The Company was named the most promising start-up at the sixth annual Israel Machine Vision Conference and Exhibition (IMVC) in 2015.

Deep Optics is also exploring additional applications for its adaptive electronic lens technology. Two notable applications are AR (Augmented Reality) and VR (Virtual Reality) systems, which are likely to benefit from the addition of adaptive optics to future models.

Petah Tikva’s Deep Optics is the inventor and pioneer of Omnifocals, dynamic focal eyeglasses based on its proprietary and patent-pending Liquid Crystal lens technology. The glasses are designed to allow the two billion people requiring multifocal vision correction to see the world naturally and seamlessly. The founding team has extensive expertise in the design of electro optical systems and integration into consumer electronics products. (Deep Optics 02.03)

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2.12 PSI Establishes Permanent Operation in Israel

Zug, Switzerland’s PSI CRO, a global full-service contract research organization, announced the establishment of its permanent operation in Israel. PSI has worked in Israel on behalf of pharmaceutical and biotech sponsors for a number of years already. They have gained vast experience in the areas of oncology, hematology, hemophilia, infectious diseases, CNS and other therapeutic areas. The impressive potential of the region to facilitate patient enrollment prompted PSI to think about establishing a permanent operational base in the region. PSI is a privately-owned, full-service contract research organization (CRO), operating globally. PSI’s reputation on the market place is that of a no-nonsense CRO, capable of saving pharmaceutical sponsors millions of development dollars by consistently meeting clinical trial timelines. (PSI CRO 08.03)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Arab Middle East IT Spending Forecast to Hit Nearly $213 Billion in 2016

Arab Middle East IT spending is projected to reach $212.9 billion in 2016, a 3.7% increase from 2015, according to the latest forecast by Gartner. With devices representing close to 19% of total IT spending in the region, tablets and PCs are showing good momentum in the forecast period, the company said. It added that tables and PC sales are forecast to reach nearly $8 billion in 2016, and surpass $10 billion in 2018. Mobile phone sales will grow from slightly above $30 billion in 2016 to nearly $37 billion in 2019. With IT services doubling software expenditures in 2016, business IT services will represent 84% of the total services segment. The data center segment market is forecast for relatively flat growth in 2016. This segment includes external network equipment, external controller-based storage, servers and unified communications. (AB 01.03)

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3.2 Jordanian & Chinese Firms to Set Up $1.3 Billion Fertilizer Project

The national Jordanian Phosphate Mines Company and Chinese companies have set up a project to construct a JD1 billion ($1.3 billion) venture on fertilizers in the southern city of Aqaba. Jordanian Phosphate Mines Company and China’s Chongqing Minmetal and Machinery Import and Export Co. (CMMC) signed an agreement to build the industrial complex, with the first phase of the project to be at the cost of $350 million. Officials in Amman hope the new project would breathe life into the struggling company and the fertilizers produced by the industrial complex will be exported to several markets across the world. Thousands of jobs would also be created from the project, helping to absorb numbers of unemployed among the rapidly growing population. (AMMONNEWS 25.02)

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3.3 Karl Lagerfeld Opens Concept Store in Kuwait City

Fashion designer Karl Lagerfeld has opened its first concept store in Kuwait City as part of the phase 2 expansion of The Avenues Mall. The Kuwait store is the latest for the fashion brand in the Gulf after Abu Dhabi, Doha, Dubai and Jeddah. The Karl Lagerfeld Avenues Mall store showcases the brand’s women’s collections including ready-to-wear, footwear, bags, watches, fragrances, eyewear and an exclusive selection of limited-edition novelty items. The concept shop also doubles as a virtual window to the designer himself as shoppers are invited to use Karl iPads to view the latest collections and news. Since opening in 2007, The Avenues Mall is considered to be one of the largest malls in the world and is home to more than 800 stores spread throughout its seven districts. Last year, the German fashion designer launched its first Middle Eastern concept store in Doha, Qatar. (AB 05.03)

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3.4 Dubai & Shenzhen Sign Agreement on Innovation

The Dubai Museum of the Future Foundation and Shenzhen Foundation for International Exchange and Cooperation have agreed on a strategic partnership to exchange talent and ideas. The two cities have signed an MoU which will focus on innovations in areas including robotics, the Internet of Things and other services directly related to the economy and people’s lives. The partnership will focus on the exchange of innovative ideas and prototypes between Shenzhen and Dubai. This will include a talent exchange, hackathons, investment proposals, and start-up networking. Shenzhen in Southern China is one of the world’s most creative manufacturing centers. Over the past ten years, it has become a powerhouse of creativity, innovation and design. The city is currently home to many of China’s most innovative companies, including DJI Robotics, the maker of bestselling commercial drones; the AI and search giant Baidu; and BGI, the world’s largest genetic research facility. (Various 23.02)

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3.5 Hibernia Networks Extends Service Reach into Middle East

Dublin, Ireland’s Hibernia Networks, a leading provider of global telecommunications solutions, announces that it has established a Point of Presence (PoP) in Dubai, UAE. The new PoP enables customers to benefit from Hibernia Networks’ comprehensive suite of data and media services, as well as industry leading low latency connectivity solutions linking Dubai to other major financial and media centers in Europe, North America and Asia. The new PoP is located in one of Dubai’s major telecom hubs, enabling seamless cross-connects to other networks extending into the Middle East and the rest of the world. The Ethernet-based connectivity service leverages the unmatched latency performance of the Hibernia Express cable across the Atlantic, which connects Europe and North America. Hibernia Networks owns and operates a global network connecting North America, Europe and Asia, serving 89 markets and spanning 25 countries. (Hibernia Networks 01.03)

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3.6 UL & SASO to Promote Safety Standards and Enhance Market Access

UL and the Saudi Arabian Standards Organization (SASO) announced an agreement to promote the use of UL Standards for Safety in the ongoing development of national safety standards in Saudi Arabia via formalized consulting, communication and information exchange protocols. The agreement provides SASO with full access to all UL standards, and encourages the translation, use, and adoption of UL standards within Saudi Arabia. In addition, the agreement encourages cooperation and collaboration by UL and SASO on standards development efforts. UL and SASO had previously signed a standards agreement, but the agreement had lapsed in recent years. Signing the new agreement allows the efforts outlined in the previous agreement to continue, and encourages increased cooperation between the two bodies. SASO is accredited as the national standards writing organization in Saudi Arabia, and has begun the process of adopting UL standards for use within the country. (UL 08.03)

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3.7 Grandstream Products Now Available from Baud Telecom in Saudi Arabia

Boston’s Grandstream Networks, connecting the world since 2002 with award-winning SIP unified communication solutions, and Baud Telecom, Saudi Arabia’s leading provider of integrated solutions, jointly announced a new distribution partnership. Baud Telecom will now stock and distribute Grandstream’s complete line of IP phones, voice/video conferencing solutions, IP PBXs, VoIP gateways, analog telephone Adapters (ATAs) and IP video surveillance products. Resellers, installers and integrators throughout the kingdom of Saudi Arabia now have a local source for purchasing Grandstream’s powerful SIP unified communications products.

Baud Telecom has been serving resellers, installers and integrators throughout Saudi Arabia for over 40 years and has the experience, knowledge and expertise to back it up. They offer the largest data network within Saudi Arabia and have established office and warehouse locations in Jeddah, Riyadh and Khobar to allow them to best serve their customer base. The partnership between Grandstream and Baud Telecom brings a portfolio of state-of-the-art unified communication solutions to Saudi Arabia to help users of legacy system to experience the benefits, cost-savings and simplicity of IP communications. (Grandstream 08.03)

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3.8 Calgary Scientific & Limantepe Offer Web & Mobile Diagnosis in Turkey

Alberta’s Calgary Scientific, a company known for creating innovative technology for the medical industry and beyond, announced that they have partnered with Limantepe Technology & Life who will distribute their ResolutionMD enterprise image-viewer in Turkey. ResolutionMD medical imaging software is now registered with the Turkish Ministry of Health for diagnosis using both web and mobile devices. This certification enables medical practitioners in Turkey to provide a higher standard of care by gaining quick, secure mobile access to diagnostic images with their web, iOS or Android devices. Obtaining registration from the Turkish Ministry of Health means that ResolutionMD is the only accredited mobile enterprise image-viewer in Turkey. The registration follows ResolutionMD’s FDA Class II clearance in the US and CE marking for Europe. (Calgary Scientific 08.03)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Drought of 1998-2012 in Middle East Was the Worst in 900 Years

According to a recent NASA study, a 14-year dry spell in the Middle East between 1998 and 2012 was the worst drought in the past 900 years. NASA’s researchers examined records of rings of trees in several Mediterranean countries to determine patterns of dry and wet years across a span of 900 years. They concluded that the years from 1998 to 2012 were drier than any other period and that the drought was likely caused by humans.

Researchers used records of tree rings in Northern Africa, Greece, Lebanon, Jordan, Syria and Turkey, and combined the data with records from Spain, southern France and Italy to examine patterns of drought across time in the region. They studied rings of trees, both living and dead, sampled from all over the region. Rings in the trunks of trees represent years. Thin rings indicate dry years; thick rings show years when water was abundant. The research supported other studies indicating human causes of extreme climate events. (AP 05.03)

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5: ARAB STATE DEVELOPMENTS

5.1 Fourth Quarter MENA Review and Outlook

Investors’ confidence in the economic outlook of MENA countries did not improve in the last quarter of 2015. The geo-political risks of the region that kept on aggravating and the worsening oil prices remained the key elements driving the macroeconomic performance of the MENA countries. Besides their continuous efforts to diversify away from oil, fiscal consolidation was the only getaway of most oil exporting countries to ease the spillovers of the fading oil revenues solution. While Saudi Arabia revealed a slower economic growth in 2015 coupled to a wider fiscal deficit, Qatar posted in 2015 its first negative fiscal balance since 2000. In the United Arab Emirates (UAE), the economic slowdown also became more pronounced with the Emirates recording their first fiscal deficit since 2009. When it comes to oil importers, the intensifying security and political situations of the region ruined any possibility of economic rebound from the slowing oil prices. While Jordan did its best to cope with local and international pressures, only the trade sector benefited from lower international commodity prices. As for Lebanon, the release of the abducted Lebanese soldiers and the optimistic political talks about a potential breakthrough in the presidential dilemma did not have any notable impact on the economic performance. The structural fiscal and external deficits persisted in Q4/15 despite shy improvements in tourism and stock markets. The negative repercussions of the continuing terrorist attacks on Egypt’s economy became more pronounced between October and December 2015, mainly on fiscal, external and tourism sectors. (BLOM 04.03)

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5.2 Lebanon’s Balance of Trade Narrowed During 2015

The Lebanese trade deficit has been narrowing during the past two years, resulting from a faster decline in the value of imports than exports. In 2015, Lebanon recorded a trade deficit of $15.12B, compared to a higher deficit of $17.19B in 2014. The 12.04% narrowing of deficit was mainly caused by the bearish oil and gold trends and the depreciation of the currencies of Lebanon’s major trading partners against the US Dollar, which benefited the pegged Lebanese Pound. Trade deficit represented 27.79% of 2015’s GDP, compared to a higher share of 34.35% in 2014. Exports covered 16.34% of imports in 2015, compared to 16.14% in the previous year.

Looking at total imports, their value plunged 11.83% yearly to $18.08B in 2015, however with a 1.60% growth in volume to 15.70M tons. The main reason behind the drop in value is the depreciating Euro and Yen, making imports from the European Union and Japan relatively cheaper to the Lebanese residents. Moreover, many European goods became exempted from custom fees in accordance with the European Mediterranean Association Agreement and European Free Trade Association (EFTA) agreement, effective beginning of March 2015. In parallel, the decline in crude oil prices also led to the decline in the value of imports. It is worth mentioning that the increase in volume might be associated with the increase in the number of refugees fleeing their country in wartime and the improvement in real income as Lebanon recorded an average deflation rate of 3.75% during 2015. (BLOM 02.03)

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5.3 Lebanon’s Trade Deficit Stood at $1.31 Billion in January 2016

Lebanon’s trade deficit for the first month of 2016 stood at $1.31B, widening from the $1.09B registered in the same month last year. Total imports grew by 11.5% year-on-year (y-o-y) to $1.49B while exports slumped by 25.83% y-o-y to $185.6M. The top imported goods to Lebanon were mineral products (25%), followed by 10.4% for chemicals and allied industries and 9.64% for machinery and electrical instruments. The value of imported mineral products increased from $218.15M in January 2015 to $372.73M in January 2016 and their volume rose from 514,554 tons to 788,067 tons over the same period. Meanwhile, the value of products of the chemical and allied industries and that of machinery and electrical instruments dropped by a yearly 1.8% and 4.1% to reach $155.56M and $144.14M in January, respectively.

In January, the top three import destinations were China, the US and Italy with shares of 12.9%, 6.8% and 6.4%, respectively. The top exported products from Lebanon were prepared foodstuffs, beverages and tobacco with a share of 18% in the total followed by shares of 14.84% for pearls precious stones and metals and of 12.87% for machinery and electrical instruments. All top exported items fell in January: The value of prepared foodstuffs, beverages and tobacco, pearls precious stones and metals, and machinery and electrical instruments registered yearly drops of 3%, 44% and 16% to reach $33.52M, $27.55M and $23.88M, respectively. In January, the top three export destinations were Saudi Arabia, the UAE and South Africa with shares of 11.77%, 1.14% and 9.48%, respectively. (CAB 04.03)

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►►Arabian Gulf

5.4 Kuwait Says it is Planning a 25% Cut in State Spending

Kuwait’s government has revealed plans to cut state expenditure by 25% in the state budget. The plans were discussed in a recent meeting between the government and the National Assembly’s financial and economic affairs committee, though the parties did not agree on a final decision. The head of the committee, MP Faisal Al-Shaye, said the government expects to save up to $4 billion (KD 1.2 billion) by reducing subsidies and raising prices of petrol and electricity. However, Al-Shaye said lawmakers have proposed excluding Kuwaitis from the price hikes. As part of the proposal, citizens with driving licenses will be compensated through coupons based on a monthly consumption of 220 liters per citizen. Kuwait’s government revealed that the squandering in electricity consumption is estimated to be 30%. It said consumption categories have been proposed to cut wastage. (AB 01.03)

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5.5 Qatar’s Trade Surplus Falls by 58.1% in a Year

Qatar has reported a 58.1% drop in its foreign trade surplus in the 12 months to January 2016. Data from the Ministry of Development Planning and Statistics show the trade surplus as of January 2016 was QR7.3 billion ($2 billion). This represents a decrease of QR10.1 billion ($2.77 billion), or 58.1%, when compared to January 2015. This represents a decrease of 17.8% when compared to the previous month (December 2015).

The country’s total exports dropped 33.6% year on year to QR17.94 billion ($4.9 billion) – a month-on-month drop of 9.4%. Of that, total domestic products exports shrank 33.2% year-on-year to QR17.4 billion ($4.7 billion) as of January 2016 – representing a 9.2% drop from the previous month. Qatar’s crude exports dropped the most at 44.1% to QR1.66 billion, the figures showed, while petroleum gases plummeted by 40.3% to QR11.62 billion ($3.1 billion) and non-crude by 25.1% to QR680 million ($186 million). Petroleum gases and other hydrocarbons accounted for 66.78% of total exports of domestic products compared to 74.69% the previous year, the figures showed. (AB 29.02)

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5.6 Sheikh Mohammed Approves UAE Infrastructure Projects Worth $1.9 Billion

Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Vice President and Prime Minister and Ruler of Dubai, approved projects for the Ministry of Infrastructure Development worth AED7 billion ($1.9 billion). The projects include approvals for housing aid, the building of new residential complexes, roads, schools, health centers and government buildings across parts of the UAE. AED5 billion have been allocated until 2021 for citizen accommodation projects that will benefit 42,000 people over the next five years. Sheikh Mohammed also visited a number of road projects on the East Coast and approved an additional AED1.5 billion for the ministry’s projects. (AB 29.02)

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5.7 Saudi Inflation Jumps to New High on Gasoline Price Hike

Saudi Arabia’s Central Department of Statistics announced that inflation jumped to 4.3% in January, its highest level since September 2012 following a hike in gasoline prices in December. The government raised the price of 95 octane gasoline to 0.90 riyal ($0.24) per liter from 0.60 riyal in late December as part of austerity measures in the 2016 state budget. Prices for utilities were also hiked. As a result, transport costs surged 12.6% from a year earlier in January. Prices of housing and utilities climbed 8.3% while food and beverage prices rose 1.3%, according to the figures cited by Reuters. The jump in inflation rate comes as growth of Saudi Arabia’s non-oil private sector eased in January, continuing the trend seen through much of the latter part of 2015. (AB 23.02)

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5.8 Saudi Arabia’s Labor Force Grows at Slowest Pace Since 1999

Saudi Arabia’s labor force grew by 46,000 during 2015, its slowest pace since records began in 1999, according to Jadwa Investment’s latest update on the labor market in Saudi Arabia. It also showed that Saudization rates within the private sector fell for the first time since 2011. The unemployment rate fell slightly from 11.7% in 2014 to 11.5% in 2015. During 2015, total net employment in the Gulf kingdom saw a rise of 417,000, compared with 339,000 in 2014, but of these positions, 368,000 (or 88%) went to non-Saudis.

Jadwa said private sector net employment of Saudis fell for the first time since labor market reforms began in 2011, with nearly all sectors within the private economy seeing negative changes to their Saudization rates. Public sector net employment of Saudis rose by 93,000, compared to a 103,000 rise in 2014, the report said, adding that the Saudi female unemployment rate rose to 33.8% in 2015 despite a fall in their participation rates. (AB 05.03)

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►►North Africa

5.9 Egypt’s Parliament Approves Defense Loan Agreement with France

Egypt’s new parliament voted overwhelmingly in favor of a defense loan agreement with France, aiming to boost the powers of the former country’s armed forces. A parliamentary report explained that the agreement is between Egypt’s defense ministry and a number of French banks led by Credit Agricole for Companies and Investment. The banks will provide a cash loan of €3.376 billion, representing 60% of the value of French military equipment that will be delivered to Egypt. The total value of this equipment is estimated at €5.626 billion, with Egypt to pay the remaining 40%. The loan will be guaranteed by Egypt’s finance ministry. (DNE 02.03)

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5.10 Egyptian Defense Industry Report 2016 – 2020 Issued

Research and Markets announced the addition of the “Future of the Egyptian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020” report to their offering. The Egyptian defense market will be driven by threats from Ethiopia, modernization of the armed forces, maritime security and the ongoing volatile political scenario. In addition, the capital expenditure allocation is anticipated to average 16.8% of the total defense budget during 2016-2020 and defense equipment procurements are expected to be in the areas of fighters and multi-role aircraft, diesel electrical submarines and corvettes.

During 2011-2015, Egyptian defense expenditure registered a growth rate of 6.11%, increasing from $4.4 billion in 2011 to $5.6 billion in 2015. Lack of transparency, corruption, political uncertainty and internal instability impose challenges for the Egyptian defense market. Demand for equipment is mainly expected to revolve around fighters and multi-role aircraft, diesel electric submarines and corvettes during 2016-2020. (R&M 01.03)

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5.11 Egyptian Tourism Declines 46% in January As Russians Stay Away

Egypt’s tourism sector continued to falter in January, as the number of tourists visiting Egypt dropped by 46.3% year-on-year, according to state statistics agency CAPMAS. CAPMAS figures show that 363,500 foreign tourists visited Egypt during the month, spending a total of 2.6 million nights in the country – a 62.5% decline from January 2015. Tourist figures have plunged since the October Russian Metrojet plane crash in Sharm el-Sheikh that killed all 224 passengers on board. In that month, tourists numbered 909,400 according to the Central Bank – more than a 60% drop in three months. CAPMAS attributes the decline to the almost complete absence of Russian tourists, citing a 99% decline in the number of nights Russians spent in Egypt. Flights from Russia to Egypt have been suspended since the crash. The disaster has also prompted visitors from other regions to stay away – tourist figures from Western Europe declined by 35.2%, while the number of Middle Eastern visitors declined by 28.6%. (CAPMAS 07.03)

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5.12 Egypt & Japan Sign Several Agreements on Projects Worth $17 Billion

Egypt and Japan have signed several agreements and memorandums of understanding on the sidelines of the tenth meeting of the Egypt-Japan Business Council in Tokyo. Three bilateral agreements were signed in the fields of generating thermal energy, manufacturing electrical generators in Marsa Matrouh and establishing a thermal energy station west of Marsa Matrouh. Fifteen memoranda of understanding were signed on the Matrouh thermal energy station, operation and maintenance of electricity generating stations of Egypt’s Electricity Ministry, electricity generation project in Qena province at capacity of 1,300 MW, generating electricity through the thermal electricity station in Sidi Shebeib area at a capacity of 2,000 MW, renting semi-submersible rigs and developing the Suez Canal zone. The memoranda were also signed in fields of comprehensive strategic partnership between Egypt and the Japan Bank for International Cooperation. Japanese Prime Minister Abe said that Egyptian projects are worth about $17.7 billion in electricity and other sectors. (Al-Masry Al-Youm 02.03)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkish Inflation Slows to 3-Month Low on Lower Food Prices

Turkey’s consumer price index rose 8.78% year-on-year in February, the Turkish Statistics Institute (TurkStat) said on 3 march. This was the weakest figure since November, when the index hit 8.10%. In January, annual consumer price inflation had jumped to 9.58%, hitting its highest level since May 2014 on the back of surging food, drinks and tobacco prices. The data also showed domestic producer prices fell 0.20% on the month, for an annual rise of 4.47%. The data triggered slight gains in the lira. The lira firmed to 2.9210 against the dollar from 2.9310 before the data was released. High inflation is a major worry for policy makers in Ankara and Turkey’s central bank left key interest rates unchanged for the 12th month running last month. (TurkStat 03.03)

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6.2 IMF Revises Turkey’s Growth Forecast for 2016

The International Monetary Fund (IMF) has upgraded its 2016 growth forecast for Turkey by 0.3 points in a report released on 24 February, noting a weakening global recovery, with the world economy “highly vulnerable” to adverse shocks. In its “Global Prospects and Policy Challenges,” the IMF forecasted Turkey to grow by 3.2% in 2016, up 0.3 points compared to its previous forecast. Growth in Turkey was also revised down to 3.6% from 3.7% in 2017 in the report. The global recovery has weakened further amid increasing financial turbulence and falling asset prices, warned the IMF in the report.

“Activity softened towards the end of 2015 and the valuation of risky assets has dropped sharply, especially in advanced economies, increasing the likelihood of a further weakening of the outlook. Growth in advanced economies is modest already under the baseline, as low demand in some countries and a broad-based weakening of potential growth continue to hold back the recovery,” said the report. Adding to these headwinds are concerns about the global impact of China’s transition to more balanced growth, along with signs of distress in other large emerging markets, including from falling commodity prices, according to the report. Finally, shocks related to geopolitical conflicts, terrorism, refugees, and global epidemics loom over some countries and regions, and, if left unchecked, could have significant spillover impacts on global economic activity, warned the IMF. (IMF 24.02)

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6.3 Hotel Occupancy Rates in Turkey Drop Below 50% Amid Tourist Squeeze

Turkey’s hotel occupancy rates plunged below 50% in the first month of this year, the Turkish Touristic Hotels and Investors Association said. The drop in Turkey, amid a number of coinciding challenges to the country’s tourism sector, marked the sharpest drop in hotel occupancy rates in Europe. Hotel occupancy rates decreased by 6.2% to 47.6% in January compared to the same month of 2015. Hotels in Istanbul were worst hit, with hotel occupancy rates in Turkey’s largest city declining by 11% to 48.7% in January compared to the same month of 2015. Istanbul was also the city that saw the second biggest plunge in hotel occupancy rates in Europe.

While average daily room prices were €102.4 in January 2015, they were €97.1 in January 2016. Average revenue per available room also decreased from 15.6% in January to €47.3 compared to the same month of 2015.

The number of foreign arrivals from Russia to Turkey declined significantly in the first month of 2016 amid rising political tension between Ankara and Moscow. The overall number of foreign arrivals dropped by 6.44% to 1.17 million in January compared to the same month of 2015. In 2015 as a whole, Turkey’s tourism revenues fell by 8.3%, down to $31.46 billion, amid a large drop in the number of tourists from Russia and Europe. (HDN 08.03)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel Holds its First Transgender Beauty Contest

Nearly 30 transgender women strutted down the catwalk in skinny jeans, crop tops and stiletto heels at a Tel Aviv club on 3 March, vying for a chance to enter the first “Miss Trans Israel” beauty pageant. Tel Aviv has emerged as one of the world’s most gay-friendly travel destinations, standing in sharp contrast to most of the rest of the Middle East, where gays can face persecution. Among the contestants was Talleen Abu Hanna, a 21-year-old from a Catholic Arab family in the of Nazareth. She said she came to the audition because she wants to do something with her life.

Israel is generally tolerant toward gays and transgender people. Gays openly serve in Israel’s military, as does at least one openly transgender soldier. In 1998, a transgender singer, Dana International, won the popular Eurovision song contest. Finalists will compete at a pageant in May, and the winner will represent Israel at the Miss Trans Star International pageant to be held in Spain in August. (AP 04.03)

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*REGIONAL:

7.2 UAE Decides to Extend Compulsory Military Service to 12 Months

Compulsory national military service in the UAE is being extended to a minimum of 12 months from nine months, the National and Reserve Service Authority of the UAE Armed Forces General Command announced. The period of the service relates to national and reserve service for Emirati male and female 12th grade holders of a high secondary school certificate. Those who do not have a high school diploma serve for two years. A law implementing compulsory military service for Emirati men was first issued in June 2014, a move highlighting the Gulf state’s concern over turmoil in the region. (AB 07.03)

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7.3 Moroccan Minister Presents Toughened Draft Law to Fight Sexual Harassment

On International Women’s Day, Bassima Hakkaoui, Moroccan Minister of Solidarity Women, Family, and Social Development, announced a new second draft for an anti-sexual harassment law. Hakkaoui presented the draft to the general secretariat of the government on 8 March after the first draft proved to be highly controversial in feminist circles. During the presentation of the draft, Hakkaoui acknowledged that the previous version of the bill contained “limited measures” to protect women from the “worrying phenomenon” of sexual harassment “sweeping” the public spaces in the kingdom.

According to the text of the bill, day after day more women are becoming victims of sexual harassment in Morocco. The new bill legally redefines the spaces in which women can claim they have been sexually harassed. Sexual harassment includes unsolicited acts, statements, or signals of a sexual nature, which are delivered in person, online, or via telephone, the bill says. The draft includes tougher punishments for perpetrators as well. A person convicted of committing sexual assault could face a combination of jail time, ranging anywhere from one month to six months, and fines, between MAD 2,000 and MAD 10,000. Perpetrators of sexual violence could be charged with both punishments if they are found to be a coworker of the victim or are part of the country’s security forces, according to the text of the bill. (MWN 08.03)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Avraham Pharma Raises $4 Million

Avraham Pharmaceuticals has closed a financing round of $4 million. Investors in the round include Yissum Research Development Company Ltd., the technology transfer arm of the Hebrew University of Jerusalem, Pontifax, Clal Biotechnology Industries, Integra Holdings, Yissum’s biotech holdings company, the Technion Research and Development Foundation Ltd. (TRDF), and others. Avraham Pharmaceuticals will use the capital to complete the on-going Phase IIb study of its lead product, ladostigil, a novel molecule designed for the treatment of mild cognitive impairment (MCI) and early stages of Alzheimer’s disease, results of which are expected in Q3/16. The investment will also support activities in preparation for the next Phase 3 study of ladostigil. These include the establishment of a clinical advisory board which includes key opinion leaders in the fields of MCI and Alzheimer’s disease and a steering committee that will assist the Company in the design of the Phase 3 study. In addition, the capital will be used for preparations for a future pre-IND meeting with the FDA

Founded in 2010, Yavneh’s Avraham Pharmaceuticals is a privately held, emerging pharmaceutical company developing novel products for treatment and prevention of neurodegenerative disorders. Their lead product candidate, Ladostigil, was exclusively in-licensed from the Hebrew University and the Technion, and is in Phase 2 clinical studies for MCI. Ladostigil is a multifunctional compound that combines neuroprotective mechanisms: reducing oxidative stress and microglial activation, and inhibiting proinflamtory cytokines. Ladostigil provides a drug candidate that may have the potential to slow progression to Alzheimer’s Disease in patients diagnosed with MCI. (Various 25.02)

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8.2 Rosetta Genomics Launches Three New Product Offerings

Rosetta Genomics launched 3 high-value molecular diagnostic offerings in order to better serve current and prospective clients with a broader molecular test menu. HEME FISH, a portfolio of disease-specific diagnostic, prognostic and predictive test panels for the various hematologic malignancies, BRAF mutation analysis for lung cancer and NRAS mutation analysis for colon cancer are now available through the company’s Lake Forest, CA-based laboratory, which it acquired in 2015. These tests further expand the Company’s robust solid tumor service offering and provide clients with the ability to order Rosetta’s new molecular testing services for their liquid tumors.

HEME FISH encompasses multiple fluorescence in situ hybridization (FISH) tests for detection of amplifications or rearrangements of DNA in a number of hematologic cancers, such as leukemia, lymphomas and myelomas in order to form a diagnosis and/or to evaluate prognosis or remission of disease. Rosetta is expanding its portfolio in Hematology by leveraging years of experience and recognized competence in FISH test development.

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8.3 Medasense Biometrics Raises $8 Million Investment in Series B Financing

Medasense Biometrics announced the closing of an $8 million Series B financing round. The financing was led by Benslie International and joined by existing investors and a strategic investor – a leading global medical technology corporation. Medasense will use the new funding to accelerate commercialization of its flagship product PMD-200: An objective pain monitoring system for operating rooms and critical care, where patients under general anesthesia are unable to communicate their pain. The system consists of a non-invasive finger probe that records multiple pain-related physiological signals, and the PMD-200 monitor, which uses a composite algorithm to determine an individual’s real-time, pain level index – NoL.

Ramat Yishai’s Medasense Biometrics is a medical device company that has developed an innovative, platform technology that can objectively assess and monitor changes in a patient’s pain level by processing multiple physiological parameters affected by pain and by analgesic administration. Better assessment of pain can optimize pain management, improve patient outcomes, and reduce adverse events and associated costs. (Medasense Biometrics 02.03)

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8.4 Deep Instinct Patents to Implement Deep Learning in Cybersecurity

Deep Instinct announced that it has filed five patents covering the only technology that applies deep learning to cybersecurity. The extensive patent applications, which contain, in the aggregate, over 150 independent claims, cover the entire innovative body of knowledge achieved by Deep Instinct in deep learning and cybersecurity: both for currently commercially available products and for future planned products.

Deep learning is a novel branch of artificial intelligence. It is considered by many researchers in the field of computational intelligence to contain the most suitable family of algorithms for domains that require the ability to analyze vast and complex data, such as the data comprising files in cybersecurity. Deep Instinct is the first company applying deep learning to detect, in real-time, malware on endpoints, servers and mobile devices, focusing on zero days and APT attacks – areas where traditional cybersecurity practices lack the capacity to protect in real-time.

Tel Aviv’s Deep Instinct is the first company to apply deep learning to cybersecurity. Leveraging deep learning’s predictive capabilities, Deep Instinct’s on-device, proactive solution protects against zero-day threats and APT attacks with unmatched accuracy. Deep Instinct provides comprehensive defense that is designed to protect against the most evasive unknown malware in real-time, across an organization’s endpoints, servers, and mobile devices. Deep learning’s capabilities of identifying malware from any data source results in comprehensive protection on any device, any platform, and operating system. (Deep Instinct 01.03)

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8.5 Teva Completes Acquisition of Rimsa

Teva Pharmaceutical Industries has successfully completed the acquisition of Representaciones e Investigaciones Medicas (Rimsa), a leading pharmaceutical manufacturing and distribution company in Mexico, together with a portfolio of products and companies, intellectual property, assets and pharmaceutical patents in Latin America and Europe in a set of transactions for an aggregate of $2.3 billion. With the completion of the acquisition, Teva is now one of the leading pharmaceutical companies in Mexico, the second largest market in Latin America and one of the top five emerging markets globally. Rimsa has had annual growth, year-over-year of 10.6% since 2011. The company has an extensive portfolio of patent-protected products, including fixed-dose combination products which have fueled its growth.

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8.6 Insuline Medical Signs Non-Binding MOU to Distribute InsuPad in Brazil

Insuline Medical signed a non-binding Memorandum of Understanding (MOU) with Sterifarma do Brasil, for the distribution of the InsuPad in Brazil. The InsuPad’s ISTS technology induces increased and consistent local blood perfusion at the injection site, resulting in improved and consistent drug absorption. Use of the technology allows patients to achieve improved glycemic control with reduced risk of hypoglycemia.

Sterifarma has been engaged in the distribution of medical devices to clinics and hospitals for over 20 years and, according to the MOU, will retain exclusive marketing and sales rights of the InsuPad in Brazil, and will be responsible for obtaining the regulatory and reimbursement approvals necessary in the country, with the assistance of the company pertaining to the professional, medical and marketing aspects, as long as necessary. Insuline Medical is exploring additional collaboration opportunities with pharma and drug delivery companies in order to apply the ISTS technology to other subcutaneous delivered drugs, including long-acting insulin.

Petah Tikva’s Insuline Medical has developed technology and products to stabilize and improve the effectiveness of “meal time insulin,” given to diabetics by subcutaneous injection. The company has first and successfully applied the Injection Site Treatment and Stabilization technology (ISTS) to meal time insulin, using the InsuPad device, which has the CE, Canadian CE, Australian TGA and Israeli AMAR. In the US, the company agreed upon the 510K De novo with the FDA, subject to acceptable data about the product’s effect on insulin. (Insuline Medical 08.03)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 OriginGPS’ New Module Adds Multi-GNSS to the World’s Smallest Footprint

OriginGPS announced the launch of their new revolutionary Multi Micro Spider, boasting the world’s smallest footprint within a fully integrated and highly sensitive multi-GNSS module. The Multi Micro Spider is uniquely positioned for applications that require quick movement, minimal power consumption and ultra-small form factors, ranging from wearables to drones. Like its predecessor, the Multi Micro Hornet (ORG1510-MK), the Multi Micro Spider’s (ORG4033) module utilizes MediaTek’s MT3333 chip and its onboard flash memory to achieve a rapid update rate and positioning speed of up to 10Hz.

Utilizing MediaTek’s MT3333 chip, the Multi Micro Hornet extends the functionality of GPS and GNSS solutions in wearables, drones and Internet of Things devices, providing a highly integrated multi-GNSS solution that delivers the world’s smallest footprint, without sacrificing any of its superior power consumption, signal sensitivity and accuracy.

Airport City’s OriginGPS is a world-leading designer, manufacturer and supplier of miniaturized GNSS modules (Spider family), antenna modules (Hornet family) and antenna solutions. OriginGPS introduces unparalleled sensitivity and noise immunity by incorporating its proprietary Noise Free Zone technology for faster position fix and navigation stability even under challenging satellite signal conditions. (OriginGPS 23.02)

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9.2 Mellanox Partners with Nutanix to Deliver Effortless Enterprise Infrastructure

Mellanox Technologies has joined the Nutanix Elevate Technology Alliance Program to provide a simple to use and fully converged solution for compute, storage and networking to enterprise customers. The Mellanox SX1012 is a unique half rack width, top of rack 10/40 Gb/s Ethernet switch solution that provides network invisibility and has been validated as “Nutanix Ready for Networking” following functional and compatibility testing.

Mellanox provides the highest performance and most reliable Ethernet solutions, which deliver data faster to applications to unlock system performance. Mellanox Ethernet switches are simple to use and deliver predictable, high network performance for any workload. The Mellanox switches offer flexibility for various configurations of different scale, network speed, and high availability requirements, as well as the ability to scale from 10/25 Gb/s to 40/50/100 Gb/s. The Mellanox switch solutions include the NEO network orchestration and automation software platform to make the network invisible too. It makes the entire solution easy to deploy, even for people without a networking background.

The Nutanix Elevate Technology Alliance Program provides partners with technical resources, testing and documentation processes, marketing support, and sales enablement to develop comprehensive customer solutions. Nutanix Elevate Partners deliver validated solutions to market in the areas of Application Development, Applications and Operating Systems, Backup and Disaster Recovery, Desktop and Application Virtualization, Hybrid Cloud, Management and Operations, and Networking and Security.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet 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 and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software, cables and silicon that accelerate application runtime and maximize business results for a wide range of markets including high-performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. (Mellanox 24.02)

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9.3 HexaTier Launches Solution for Database Security and Compliance in the Cloud

HexaTier launched HexaTier 4.0. This solution includes new features that focus on enterprise needs for DBaaS adoption, while maintaining organizational policies and addressing the challenges and risks with database security and compliance. HexaTier’s software-based approach utilizes a patented Database Reverse Proxy technology, overcoming the limitations of competing solutions through its architecture-agnosticism, advanced management, and faster performance for securing cloud-hosted and DBaaS database instances.

Established in 2009, Tel Aviv’s HexaTier (formerly GreenSQL) sets the industry standard for database security and compliance in the cloud with its unified solution that provides database security, dynamic data masking, database activity monitoring (DAM) and discovery of sensitive data. Utilizing patented Database Reverse Proxy technology, the company protects against both internal and external threats. Leading investors are: JVP, Magma VC and Rhodium. HexaTier is the first to provide security for cloud-hosted databases and DBaaS platforms through a streamlined and simple solution. (HexaTier 24.02)

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9.4 Israel’s Elencon Teams with Alstom

Elencon Systems has signed a memorandum of understanding with French engineering company Alstom SA, a unit of General Electric (GE), with a view to a long-term collaboration agreement. Elencon, of the Gefen Investments group, has developed technology for managing energy consumption that can reduce the cost of cooling large buildings by 30%. So far, there have been several successful installations in Israel: at the HaSharon Hospital, the Holon Institute of Technology and the Crowne Plaza Hotel in the Azrieli towers in Tel Aviv. The average saving is NIS 200,000 ($51,000) annually, or NIS1,000,000 ($255,000) over five years. (Globes 28.02)

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9.5 SolarEdge Launches Commercial Inverter Solution in Japan

SolarEdge Technologies is launching its commercial inverter solution in Japan. The SolarEdge commercial solution consist of small and light-weight three-phase commercial inverters, sized 24.75kW and 33.3kW for both low and medium voltage connection, P600 and P700 power optimizers, and a cloud-based, module-level monitoring platform. By maximizing power harvesting from each module, enabling longer strings, enhanced safety, and lower O&M costs, the SolarEdge DC optimized inverter solution improves the lifetime value of commercial systems.

SolarEdge inverters have a standard 12 year warranty, extendable to 25 years, 25 year warranty for power optimizers, and its module-level monitoring is free for system lifetime. As part of its commercial solution, SolarEdge offers a wide variety of optional pre and post sales services to support the installation and help ensure lifetime profitability of a SolarEdge commercial system. The SolarEdge commercial solution also includes optional control & communications gateway (CCG) and environmental sensors.

Hod HaSharon’s SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters, storage solutions, and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. (SolarEdge 01.03)

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9.6 Mellanox Delivers Next Generation Network Processor to Key Telco Customers

Mellanox Technologies announced that its next generation network processor, the NPS-400, is now sampling and has been shipped to strategic customers. In addition Mellanox announced that China’s ZTE has selected NPS-400 for its new line cards design for carrier-grade router platforms. The NPS-400 is the most advanced network processor available today, capable of performing advanced deep packet processing for security and telecommunications applications at over 800Gb/s.

The NPS is architected to address the next generation of smart high-performance carrier and data center networks. It provides outstanding packet processing flexibility through C-based programming, a standard toolset, support of the Linux operating system, large code space, and a run-to-completion or pipeline programming style. A comprehensive library provides source code for a variety of applications to speed customer’s design cycle. The NPS features programmable CPU cores that are highly optimized for packet processing and leverage deep packet processing and applications experience, a market-proven traffic manager, hardware accelerators for security and DPI (Deep Packet Inspection) tailored for efficiency and performance, on-chip search engines including TCAM with scaling through algorithmic extension to external low-cost low-power DRAM memory and a multitude of network interfaces providing an aggregated bandwidth of 800-Gigabits per second including 10-, 40- and 100-Gigabit Ethernet, Interlaken and PCI Express interfaces.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyper-converged infrastructure. Mellanox intelligent interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance. (Mellanox 01.03)

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9.7 AudioCodes VoIPerfect Evolves Voice Over WAN Into Quality HD Voice

AudioCodes introduced its VoIPerfect solution for delivering resilient, quality-assured high-definition (HD) voice services over Wide Area Networks (WAN). Cloud-based communications are becoming increasingly popular among Unified Communications as a Service (UCaaS) and SIP trunk service providers and customers alike, as they offer significant cost savings and increased productivity. To meet customer demand for secure, reliable and high quality business communications, many cloud communication providers offer expensive dedicated WAN links that may have limited geographical coverage, take a long time to set up and may compromise the cost-effectiveness of the offered service compared to commodity broadband. However, reliance on unmanaged and public internet WAN connections leaves cloud-based offerings open to potential security, quality and reliability issues. By orchestrating AudioCodes access SBC, enterprise SBC, HD IP phones and the AudioCodes One Voice Operations Center management tools, VoIPerfect utilizes advanced voice processing and path optimization techniques to maintain high call quality even under adverse broadband network conditions by reducing the impact of impairments such as packet loss, jitter and delay. At the same time, VoIPerfect provides encryption and resiliency to ensure privacy and critical business communications continuity.

VoIPerfect employs HD voice efficient codecs, such as Opus and SILK, that reduce costly bandwidth of private connections between branches, headquarters and hosted UC datacenters, and multi-path load balancing (including the use of 3G and LTE connections) to ensure resilient connections for critical business communications.

Lod’s AudioCodes designs, develops and sells advanced Voice-over-IP and converged VoIP and Data networking products and applications to Service Providers and Enterprises. AudioCodes is a VoIP technology market leader, focused on converged VoIP and data communications, and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable. The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Routers, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers, Value Added Applications and Professional Services. (AudioCodes 02.03)

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9.8 RSA Goes Live with Sapiens Reinsurance

Sapiens International Corporation announced the successful go-live of Sapiens Reinsurance at Royal and Sun Alliance (RSA) – one of the world’s leading multi-national general insurance groups, serving customers in around 140 countries. Sapiens Reinsurance, a comprehensive reinsurance business management and accounting solution, is now managing a large part of RSA’s reinsurance arrangements. RSA has replaced several of its Legacy IT systems to improve management and control of its external and internal reinsurance, and provide comprehensive accounting management. With the enhanced functionality provided by Sapiens Reinsurance, RSA now benefits from a single repository for all information, with support for operational reporting, accounts management, risk and financial exposure. Sapiens and RSA are continuing to work together to develop management information to support business analytics, statutory reporting and compliance. Sapiens Reinsurance is also providing support for business process management via automated workflow activities and user-defined business rules with full audit trail for all transactions.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry, with a growing presence in the financial services sector. Sapiens offers core, end-to-end solutions to the global general insurance, property and casualty, life, pension and annuities, reinsurance and retirement markets, as well as business decision management software. The company has a track record of over 30 years in delivering superior software solutions to more than 190 financial services organizations. (Sapiens 02.03)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Foreign Exchange Reserves Hit New Record

Israel’s foreign exchange reserves at the end of February 2016 reached a record $90.618 billion, up $131 million from the end of January, and exceeding the previous record of $90.575 billion at the end of December 2015, the Bank of Israel announced. The increase came despite the fact that the Bank of Israel made no foreign currency purchases in February. The increase was the result of government transfers from abroad of about $283 million and an increase of about $8 million derived from private sector transactions. These were partly offset by a revaluation that decreased the reserves by about $160 million. (Globes 07.03)

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10.2 Average Salaries in Israel Increased During 2015

Israel’s average salary continued to rise in 2015 but at a slower pace than previously, the Central Bureau of Statistics announced on 7 March. The average salary rose 1.1% on an annualized basis in Q4/15, after rising 2.3% in Q3. At the end of 2015, the average salary in Israel was NIS 9,591, up 2.3% from the end of 2014. In fixed price terms, salaries rose even more in 2015, by 3%.

Among the highest salaries earners in 2015 were the 102,000 employees of banks and financial companies with an average salary of NIS 17,225. The 151,000 employees of government companies earned an average salary of NIS 17,225. The average salary of hospital employees including doctors and nurses was NIS 15,611 and the average salary of 2 million private sector employees was NIS 10,041. The average salary of government employees was NIS 13,245, while the average salary of local authority employees was NIS 8,236. The average salary in the NPO sector was NIS 8,282. (Globes 07.03)

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11: IN DEPTH

11.1 LEBANON: S&P’s ‘B-/B’ Ratings Affirmed; Outlook Remains Negative

On 4 March, Standard & Poor’s Ratings Services affirmed its ‘B-/B’ long-and short-term foreign and local currency sovereign credit ratings on the Republic of Lebanon. The outlook remains negative.

Rationale

The affirmation incorporates our assumption that Lebanese bank deposits will grow by at least 4% in 2016, or about 12% of GDP. Approximately two-thirds of Lebanese bank deposits are in foreign currency and nearly one-fourth is externally sourced. These flows of funds are critical sources of funding for the government’s 2016 gross borrowing requirement of about 26% of GDP and for the country’s 2016 gross external financing requirement of 88% of GDP (or 147%of current account receipts [CARs]).

In our analysis, the Lebanese government’s debt servicing capacity depends on the domestic financial sector’s willingness and ability to add to its holdings of government debt, which in turn relies on bank deposit inflows. Domestic banks support the government debt market in two ways. First, they buy Lebanese government debt directly. Banking system claims on the public sector account for about 20% of total banking system assets. This means bank creditors hold about one-half of total government debt. Second, Lebanese banks buy certificates of deposit issued by the Banque du Liban (BdL, the central bank), which in turn buys government debt. As of year-end 2015, BdL held 37% of the government’s outstanding treasury bills, which amounted to 23% of total government debt. Although we view the concentration of government financing from these sources as a structural weakness, at the current rating level these flows are an essential support.

Similarly, the financial system is key in meeting the country’s external financing requirement. Bank deposit inflows are largely sourced by remittances from the Lebanese diaspora. The banks induce the inflows by paying on average about 6% on Lebanese pound deposits and 3% on U.S. dollar deposits. Last year, the inflows covered net government debt issuance two times. We note as a consequence that banks’ external positions have deteriorated. We expect banks’ net external debtor positions will almost double in 2016 to $13 billion (41% of CARs), compared with $7 billion in 2013 and a net creditor position in 2010. Nonresident retail deposits constitute the bulk of banks’ external liabilities (about 83% as of year-end 2015), the rest being cross-border interbank deposits. To meet the 2016 gross external financing requirement, we expect banks and corporations will add to their external borrowings, and the government will return to the eurobond market. We also note that drawdowns on the BdL’s external reserves (nearly $32 billion at end-February, net of our estimate of bank reserve requirements on foreign currency deposits) could finance part of Lebanon’s 2016 $46 billion gross external financing requirement.

That said, there are risks to these inflows. Bank deposit growth slowed to about 5.2% annually at year-end 2015 from 11.5% at year-end 2010 since the start of Syria’s civil war and, to a lesser extent, with the economic slowdown in the Gulf Cooperation Council (GCC; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates).

Inflows are sensitive to swings in confidence. In February 2016, the government of Saudi Arabia announced its curtailment of its $4 billion grants for military procurement for Lebanon and the GCC states placed restrictions on their citizens’ travel to Lebanon. Still, these measures will likely have a softer impact on depositor confidence than the 2005 assassination of Prime Minister Rafik Hariri (prompting nearly $2 billion in withdrawals from the banking system) or the 2006 war with Israel (triggering about $3 billion in withdrawals). The withdrawals from these earlier, more perilous periods lasted a few weeks at most, were in the low-single-digit percentages of total bank deposits, and were more than compensated for by returning inflows.

We also see longer term constraints on Lebanon’s deposit and economic growth, largely stemming from the tough political landscape. We consider that policymaking in Lebanon is hampered by a divisive political environment organized along confessional lines. The presidency has been vacant since President Michel Sleiman’s term ended in May 2014. On 2 March 2016, the Lebanese parliament failed for the 36th consecutive time to elect a president.

The parliament itself is led by a national unity government comprising both the March 14 and March 8 political alliances. These alliances back opposing sides in the Syrian civil war. Absent a president, the parliament, whose term was due to end in June 2013, voted to extend its term for a second time in November 2014. The split political environment can thwart policymaking even on small matters, such as garbage collection. We note, though, that parliament passed some key laws at the end of 2015, such as legislation permitting the government to borrow in foreign currency in 2016.

We believe that Lebanese economic growth will remain weak as long as the domestic political standstill persists and the Syrian civil war does not conclude. The Syrian crisis is about to enter into its sixth year (without a resolution in sight) and we expect that Lebanon’s political, security and economic trajectories will remain entwined with its larger neighbor. We therefore anticipate that Lebanon’s traditional growth drivers -tourism, real estate and construction – will remain subdued, despite the current oil price decline. We project economic growth over 2015-2018 at 1.6% on average, down from the 2.6% estimated previously. We estimate per-capita GDP at $10,000 in 2016.

We expect that the current account will remain large but narrow to average about 18% of GDP in 2016-2019, due to a smaller import bill stemming from lower oil prices and weaker domestic economic activity. The strengthening U.S. dollar will also reduce the cost of imports from the eurozone, which accounts for about one-third of Lebanon’s imports. On the other hand, exports, tourism and net remittances will remain constrained because of the Syrian crisis. However, we note that sizable positive net errors and omissions suggest that the current account deficit could be overstated by as much as a factor of two.

We estimate Lebanon’s public and financial sector external assets will exceed the country’s external debt by an average 54% of CARs between 2016 and 2019, albeit on a declining trend. We estimate that gross external financing needs will average 117% of CARs plus usable reserves over the same period.

We expect general government deficit will widen to about 8.7% of GDP in 2016, compared with 6% in 2014. We note that government revenues in 2014 benefited from a onetime receipt of about 2% of GDP due to exceptionally higher telecom transfers. The deficit includes transfers to the electricity company Electricité du Liban (EdL), estimated at about 2% of GDP in 2015 compared with 4% of GDP in 2014, with EdL requiring less government support due to lower oil prices. The Syrian civil war and the flow of refugees to Lebanon continue to impose a heavy burden on Lebanon’s infrastructure. Registered refugees reached 1.1 million according to the UN High Commissioner for Refugees, but estimates range up to about 2 million, compared with an estimated population living in Lebanon of about 5.9 million according to the government.

In our view, public finances and fiscal flexibility will remain constrained by structural expenditure pressures, including transfers to EdL, as well as by high interest payments, which account for more than two-fifths of general government revenues. Still, without a fully functioning government, current expenditures were contained at about 23% of GDP in 2015, while capital expenditures were cut to 1% of GDP in the same year, notwithstanding Lebanon’s significant infrastructure needs. We expect that the already very high net general government debt will increase in the coming years, to 129% of GDP by 2019.

Lastly, in our view, there are substantial shortcomings and material gaps in the dissemination of macroeconomic data and reporting delays. Official national accounts data for 2013 are the latest available, and were published in December 2014. The availability and quality of official external data are also limited, in our opinion.

Outlook

The negative outlook reflects our view that the protracted political deadlock and increasing regional tensions could further impair the functioning of the Lebanese government and result in a further slowdown in banking sector deposit growth over the next 12 months.

We could lower our ratings on Lebanon if, over the next 12 months, deposit inflows significantly slowed or foreign-exchange reserves declined much further than we currently expect. If the domestic political gridlock escalated to something more destabilizing, we could also lower the ratings.

We could revise the outlook to stable if Lebanon’s policymaking framework became more predictable, supporting foreign capital inflows and the sustainability of the public finances. (S&P04.03)

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11.2 LEBANON: Ending the Year in Stagnation

Lebanon ended 2015 with disparate developments on the security and political fronts. Two suicide bombings alarmed the security situation in November. However, 2015 was wrapped with positive expectations after the release of the Lebanese soldiers taken hostage by Al Nusra Front and the positive political talks regarding a potential breakthrough in the 19-month presidential vacuum.

BLOMInvest added in their review of Lebanon in 2015 that the repercussions of the deteriorating regional and domestic conditions drove GDP growth down to a slight rate of 0.5% during 2015. Similarly, the BLOM Purchasing Managers’ Index remained below the 50 mark, at an average of 47.3 points in Q4 lower than the average 48.4 points recorded in Q3/15.

Falling oil prices and the depreciating European currency against the US dollar continued to pressure the Lebanese Consumer Price Index (CPI), which declined by 3.40% y-o-y to 95.92 in December 2015. Transportation prices and “water, electricity, gas and other fuels” sub-index dropped 7.66% and 17.57%, respectively, compared to December 2014.

Looking at the real-estate sector, total transactions (local and foreign) decreased 5.4 % annually to 82,790 worth $8.41B in 2015, of which 16.29% represent foreign demand. Specifically, 41,006 land transactions worth $2.55B were executed in 2015 compared with 48,115 deals worth $3.08B in 2014. On the other hand, 35,410 transactions on built units, worth $5.01B, were registered by the end of 2015, down from the 39,117 transactions, worth $5.53B carried out in 2014. Average value of land transactions decreased from $64,013 in 2014 to $62,186 in 2015, while that of built unit transactions went down from $141,485 to $136,258 in 2015.

Likewise, construction continued its plunge, with the number of permits falling 9.43% y-o-y to 15,092 by December 2015. Noting that permits are usually issued at least 6 months after applications are filed, the drop in construction activity was due to the ongoing slowdown in the whole economy.

As for tourism, the number of incomers reached a 4-year high, as the Lebanese security scene preserved its stability. According to the Ministry of Tourism, the number of tourist arrivals surged by a yearly 12.05% to 1.52 million in 2015. Global Blue’s Tourist Spending Report revealed that tourist spending in Lebanon grew 2% y-o-y in 2015. Accordingly, hotel occupancy progressed, with the average rate adding 5% to 56% by November. Average room rate and average room yield added 2% and 11.5% to $175 and $99, respectively.

Lebanon’s Balance of Payments (BoP) deficit widened from $1.41B in 2014 to $3.35B in 2015. The decline in capital inflows and Foreign Direct Investment (FDIs), as a result of the ongoing domestic developments and the regional upheavals, in addition to the substantial trade deficit are the main reasons behind the deficit in BoP. However, the trade deficit tightened by 12.04% y-o-y, to record $15.12B in 2015, mainly due to the bearish Euro and oil trends. Total imports dropped 11.83% slower than the 10.75% decline in total exports.

Fiscal deficit broadened 17.38% yearly to $2.61B in the first three quarters of 2015. Therefore primary surplus dropped to $672M compared to a higher primary surplus of $867B, during the same period of 2014. This was mainly driven by the 8.60% decline in total revenues exceeding the 2.86% drop in total expenditures. The drop in revenues resulted from the 1.43% decrease in revenues coming from taxes on income, profit, capital gains, and property, and a 6.15% plunge in VAT revenues. The plummet in VAT revenues was due to the decrease in the value of imports, as the Euro and Yen depreciated and fuel prices declined. The major decrease in expenditures was due to the 40.44% plummet in EdL transfers. The deficit led Gross Public Debt (GPD) to widen by 5.63% y-o-y to reach $70.30B end of December 2015.

On the monetary front, BDL’s total assets dropped slightly, by 0.79%, due to the 4.10% and 4.96% declines in foreign assets and gold reserves to $37.09B and $9.85B, respectively, by end of 2015. The drop in gold reserves resulted from the bearish gold trend. However, total assets at commercial banks grew by 5.86% yearly to $185.99B by December.

Positive political talks concerning filling the presidential vacuum spread positive vibes to investors. The Beirut Stock Exchange showed a small improvement in the last quarter of 215, where the BLOM Stock Index (BSI) gained a marginal 1.93% q-o-q, to end the year at 1,169.52 points. Trade volume decreased from 263,922 shares worth $2.61M, the previous quarter, to 231,158 shares worth $2.12M, in Q4/15. As for market capitalization, it broadened from $9.53B to $9.72B at the end of 2015, where 2.5M shares of Bank of Beirut preferred shares class “E” were delisted end of December 2015. (BLOM 04.03)

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11.3 QATAR: Tarnished by Cheap Oil

BLOMInvest reported that Qatar’s real GDP growth for Q3.15 stood at 3.8% year-on-year (y-o-y), led by the non-hydrocarbon sector. The Real Gross Value Added (GVA) of the non-mining and quarrying sector, with a 50.14% share of GDP, grew by 7.8%. This was mainly due to the increases seen in construction, social services and financial sectors. A new $1B sewage treatment plant has been built processing up to 245,000 cubic meters of sewage per day. This plant, which began running in December 2015, produces high-quality reclaimed water for reuse in irrigation purposes. Meanwhile, real GVA of the mining and quarrying sector, with a 49.86% share of GDP, showed a 0.1% yearly rise. Worth mentioning that the Qatari state oil company, Qatar Petroleum has reached a deal with Chevron to acquire 30% of its stake in offshore drilling areas in Morocco.

Inflation reached 2.7%, pushed up by the 3.4% and 3.1% price surges in “Housing, Water, Electricity & Gas” (21.89% weight) and “Transport” (14.59%). Moreover, “Recreation & Culture” sub-index added 1.6%.

On the suppliers’ side, the Producer Price Index (PPI), measuring the average selling prices domestic producers receive for their output, plummeted by 36.2% y-o-y in October, primarily due to the sharp decline in prices of crude oil and natural gas during 2015. The price of the Qatari Land Crude Oil (QLCO) and that of the Qatari Marine Crude Oil (QMCO) shed 44.4% and 46.9% y-o-y to $42.4/barrel and $39.5/barrel end of November 2015. Therefore, the “Mining” group, which represents 72.67% of the PPI plunged by 38.7%. The PPI “Manufacturing” subcomponent also showed yearly decline of 30.8%, while “Electricity and water” sub-index went down by 7.2%.

As for Qatar’s trade balance, it tightened by 52.72% y-o-y to a surplus of $39.72B by end October 2015, as a result of decreasing exports and increasing imports. Declining oil prices drove down the largest component of total exports, hydrocarbons, by 41.04%, inflicting a 38.82% y-o-y plunge in exports to $66.47B by October 2015. On the other hand, imports augmented by 8.62% y-o-y to $26.75B, where motor cars and other passenger vehicles were the top imported commodities, going up by a yearly 16.83%.

On the fiscal front, 2016 is expected to be marked by the first budget deficit in 15 years. After harmonizing the fiscal year with the calendar year starting January 2016, the ministry of finance projected the budget deficit to stand at $12.77B in 2016 compared with a surplus of $2B in 2015, mainly due to a decline in revenues. Revenues are expected to decline by 30.88% y-o-y to $42.86B, resulting from a 26.15% expected drop in the price of oil to $48 a barrel. Expenditures are also forecasted to decrease by 7.28% to $55.63B. The budget demonstrates the government’s keenness to continue the implementation of its sustainable development program which mainly targets projects in health, education, and infrastructure, in addition to projects related to the hosting of the World Cup in 2022. Worth noting that the government of Qatar will take a $5.5B loan, arranged by Bank of Tokyo-Mitsubishi UFJ, Mizuho, SMBC, Deutsche Bank, Barclays and Qatar National Bank.

Looking at the monetary sector, total assets at commercial banks grew by 9.26% since end of 2014 to $301.60B, by November 2015. Private sector credit broadened by 18.60% to $115B, while that of the public sector inched up 0.88% to $64.73B by November. Total deposits posted a 5.47% growth to $174.16B, due to the 7.46% and 33.45% increases in resident and non-resident private sector deposits that offset the 3.27% drop in public sector deposits. The governor of Qatar’s Central Bank stated that if necessary, authorities will use fiscal and money market operations to avert low oil and gas prices from causing a liquidity crunch in the banking sector. The oil and gas revenues plummet over the year and the borrowing of the Qatari government to fund an emerging budget deficit have caused money market rates to rise sharply. The 3-month Qatari interbank rate went up from 0.94% in November 2014 to 1.71% in November 2015. Thus the central bank stated that it will continue to actively manage liquidity to ensure a stable interest rate environment.

The Doha Stock Market Index (DSMI) slid by 9.03% q/q to 10,429.36 points end of 2015, pushed down by the plunge in oil prices. Trade during the last quarter of 2015 occurred at a lower volume of 326.02M shares worth $4.93B, compared to 358.05M shares worth $4.25B during Q3, 2015. It should be noted that Qatar is in talks with banks about a sovereign sukuk issue, first time since 2012, as the country returns to international debt markets to shore up state finances pressured by low energy prices.

As part of a defense agreement signed in 2014, Turkey will establish a military base in Qatar. Some 3,000 ground troops would be stationed at the base, as well as air and naval units, military instructors and special operations forces. The two countries have provided support for the Muslim Brotherhood in Egypt, backed rebels fighting to overthrow Syrian President Bashar al-Assad and raised the alarm about creeping Iranian influence in the region. (BLOM 04.03)

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11.4 SAUDI ARABIA: Dealing with a Record Fiscal Deficit

Saudi Arabia continued to be involved in the issues of its neighboring Middle Eastern countries, according to BLOMInvest. In December, the Kingdom decided on an $8 billion investment in Egypt, while Egypt is set on renewing a deal to import oil products from the Saudi Kingdom under favorable conditions for a period of five years.

The drop in oil prices had ramifications across the board for the Saudi economy. Real GDP growth slowed from 3.64% in 2014 to 3.35% in 2015. In nominal terms, the GDP dropped by a yearly 13.35% to $653.22 billion. With lower oil prices, some large projects were scaled down or even cancelled which translated into a decline in the value of fixed capital formation from $214.94 billion in 2014 to $213.31 billion in 2015.

The private sector also mirrored the impact of the oil price slump. The Emirates NBD Saudi Arabia PMI announced a lower average in the fourth quarter. The average PMI reading for Q4 recorded 55.5, two points lower than the 57.6 registered in the third quarter. This decline in PMI readings is reflecting the slow market conditions which have resulted in a weak expansion of new businesses in the country.

According to the Central Department of Statistics and Information in Saudi Arabia, the average annual inflation in 2015 registered 2.10%. In Q4 alone, the inflation recorded 2.44% in October and 2.28% in each of November and December. The most important components in the Consumer Price Index “Food and Beverages” and “Housing, water, electricity and gas” registered yearly increases of 1.6% and 3.5%, respectively. Rental inflation, reflecting the shortage of housing in the kingdom, also registered a yearly increase of 4.8% by the end of 2015. After being discussed for a long time, the Kingdom’s Council of Ministers finally approved a “white land” tax according to which an annual tax of 2.5% is to be paid on undeveloped land. The levied taxes are to be used to remedy the housing shortage in the Kingdom and to free-up unexploited lands which are currently used for speculation or as store of value.

As for the external front, weaker trade activity was registered in 2015. The imports and exports of goods and services declined by a yearly 8% and 39% to $234.55 billion and $217.73 billion respectively. Imports of petroleum products (including refined products and natural gas) recorded a double digit yearly slump of 44% to $157.96 billion in light of the fall in the price of Brent Crude from $57.33/barrel at the end of 2014 to $37.28/barrel at the end of 2015. Non-oil exports were also on the down with a 17.99% yearly decline to $47.48 billion in 2015.

In 2015, Saudi Arabia recorded a fiscal deficit of $98 billion. Revenues dropped by an annual 42% to $162 billion and expenditures exceeded the initial budget allocation by 13% to reach $229 billion. Oil revenues dropped by an annual 23% to $118.5 billion while non-oil revenues grew by a yearly 29% to $43.6 billion. Expenditures were pushed upwards by military spending and by the salaries increase for public sector employees once King Salman took over the throne. The war in Yemen is estimated to have cost the Kingdom $5.3 billion in 2015.

To finance the fiscal deficit Saudi Arabia tapped into its government deposits and issued $26 billion worth of bonds. Public debt therefore rose to around $38 billion or 5.8% of GDP, according to Deutsche Bank. The Kingdom also sought to slash expenses by cutting fuel subsidies from 0.6 SAR ($0.16) per liter to 0.9 SAR ($0.24) per liter, which in turn inflated fuel prices by 50%. The expected budget deficit for 2016 is expected to be lower at $87 billion as lower oil prices pull revenues down by 15% to $137 billion. Budget Spending is expected to drop to $224 billion after some projects were postponed, cancelled or reduced in size.

On the monetary front, the Central Bank has reduced its investments in foreign currencies as the financing of the fiscal deficit and the preservation of the riyal’s peg to the dollar are pressing issues at the moment. Foreign reserves at the Kingdom’s Central Bank remained ample in 2015 but registered a yearly drop of 16% to reach $616.42 billion in 2015. The Saudi Interbank Offer Rate declined from 0.9358 in 2014 to 0.8797 in 2015 as the market remains amply liquid. Moreover, loans to both the public and private sectors increased from $26.39 billion and $334.99 billion in 2014 to $33.33 billion and $334.99 billion in 2015. (BLOMInvest 03.03)

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11.5 EGYPT: Heading Towards Serious Challenges, Despite Continuous Efforts

BLOMInvest reported that it was a busy last quarter in 2015 for Egypt on all levels. The country completed parliamentary elections between October and December 2015, concluding the 3rd and final step of its political roadmap. Despite a low 28% turn-out, Egypt succeeded for the first time since 2012 in electing a new parliament, comprising 568 members. The security situation failed to improve in Q4/15 as terrorist attacks continued, mainly in Rafah, Giza and el Arish. Sinai witnessed by the end of October the quarter’s worst terrorist attack as the Islamic State claimed responsibility for the Russian plane crash (Metrojet Flight 9268), where all the 224 crew members and passengers died. In order to fight terrorism, Egypt continued its plan to create a buffer zone in the Sinai Peninsula. However this has raised global outrage in September as the process involved mass home demolitions forcing the eviction of nearly 3,200 families.

Despite the poor security conditions of the country, Egypt accomplished several achievements in Q4/15, including the selection of firms that will complete the impact studies related to the $3.37 billion Ethiopian Grand Renaissance Dam project with Ethiopia and Sudan. Another agricultural project was announced consisting of the expansion of Egypt’s farmland by 20% through the reclamation of 630,000 hectares in the Western Desert bordering Libya, sending the total space of available farmland to 3.99 million hectares.

On the economic front, the latest data showed yearly improvement in Egypt’s economic performance during the Fiscal Year (FY) 2014/15. In fact, real GDP stood at 4.2% in FY 2014/15 compared to a lower 2.2% in FY 2013/14. This was mainly attributed to the improvement of several sectors such as the manufacturing, tourism, construction and real estate activities, despite the continuous deterioration of the extractions sector. Similarly, the country’s non-oil manufacturing sector mimicked the expansion as the Purchasing Managers’ Index (PMI), rose from an average of 48.1 in FY 2013/14 to 50.1 in FY 2014/15. Accordingly, the increase of the index, above the 50 neutral-mark, signaled that Egypt’s business conditions showed progress in FY 2014/15 compared to the economic contraction in the previous year.

As imported inflation remained contained, inflation averaged 6.98% between October and December 2015 compared to 7.99% over the same period in 2014. This was mainly the result of the global weakening of commodity prices, the ongoing depreciation of the euro and the bearish trend of oil prices since mid-June 2014.

On another front, the government and the ECB reached a macroeconomic framework on 17 December that included 4 main pillars: implementing structural economic reforms to improve the challenging investment environment, narrowing the fiscal deficit to sustainable levels, containing inflation over the medium term and reducing trade deficit by empowering local production.

Externally, the bearish trend of oil prices failed to trigger down Egypt’s trade deficit and sequentially the current account, due to worsening services, receipts and payments during Q1 of FY 2015/16. This was heavily reflected on Egypt’s Balance of Payments (BoP) that turned negative in the first quarter of FY 2015/16 at $3.66b compared to the $410m surplus recorded during the same period a year earlier. The current account deficit more than doubled as it reached $3.98b in Q1 FY2014/15, up from $1.6b in FY2014/15. As for trade deficit, it stagnated at $10b following respective 26.4% and 10.4% y-o-y drops in total exports and imports.

Tourism in Egypt saw negative performance during 2015 mostly due to the worsening security situation, following several terrorist attacks on tourist locations. As a result, total travel receipts showed a 17.5% annual fall in Q1 2015/16 to $1.73b. The Russian airplane crash prompted Moscow and London to halt flights to Egypt, which heavily impacted the total number of incomers as European tourists constitute more than 70% of total tourists. In fact, the number of travelers stood at 8.89m in the first eleven months of 2015, recording a 2.3% yearly drop from the same period a year earlier. The improving number of tourists from all continents failed to offset the 6.4% yearly decrease in the number of European tourists by November 2015. Egypt’s official records also revealed a 9% yearly drop in the number of nights during the same period to 81,728.

However, the occupancy rates in Cairo 4 and 5-star hotels averaged 49% in 2015, compared to 37% in 2014. This is mainly due to the improving performance of tourism during the first half of the year which more than offset the deterioration in the second half of 2015. Similarly, the average room rate and the rooms’ yield posted respective increases of 19.6% and 57.6% y-o-y to $112 and $55.

As expected, the Central Bank of Egypt (CBE) renewed its boosting packages to support the sector’s performance, given its importance as major source of foreign exchange reserves, through the extension of the maturities of retail facilities for an additional 6 months without implying any late payment interests.

Egypt’s public finances deteriorated during the FY 2014/15 as reflected by the widening fiscal deficit and Gross Domestic Debt (GDD). The country’s fiscal deficit increased by a yearly 24.5% to settle at $40.26b by the end of June 2015 on rising fiscal revenues that were outpaced by bolstering expenditures. In reality, the Egyptian public inflows saw a 14.5% increase in FY 2014/15 to $68b, while the public expenses surged by 18.0% to $106.11b. As for the GDD, it edged up by 16.5% to reach $270.31b. Worth mentioning is that Egypt is expected to receive $3b from the World Bank over the coming 3 years to help the government in decreasing its budget deficit and maintaining its economic reforms’ program, of which $1b will be allocated by the end of 2015.

On the monetary front, the net international reserves at the CBE registered $16.45b by the end of December 2015 after dropping to $16.34b in September 2015. Despite the 7.3% yearly increase from December 2014’s level, the deterioration of Egypt’s net international reserves between September and December followed the repayment of $1.5B maturing US Dollar notes issued in 2005 (including the final coupon). As a result, the foreign reserves almost covered 3 months of imports in September, which pushed the ECB to devaluate in October the Egyptian pound for the 3rd time in 2015. In fact, the exchange rate reached EGP 7.83/USD by the end of December 2015 after hitting EGP8.02/USD by the end of October 2015, compared to a previous quote of EGP7.15/USD by the end of 2014. In October, CBE Governor Ramez submitted his resignation following waves of criticism related to an overvalued Egyptian pound negatively weighing on the country’s trade position. Egypt’s president appointed Tarek Amer as the new governor for the CBE, with his tenure to start in November 27, 2015.

In addition, the Monetary Policy Committee (MPC) raised in December the overnight deposit rate, overnight lending rate, and the rate of the CBE’s main operation by 50 bps to 9.25%, 10.25%, and 9.75%, respectively. Also, the CBE launched a stimulus program for Small and Medium Enterprises (SME) which consisted of encouraging banks to increase their lending to reach 20% of their portfolio in the next 4 years. As a matter of fact, credit facilities at the Egyptian commercial banks rose by 26.9% y-o-y in November to reach $100.04b, noting that 73% were disbursed in local currency. Total deposits also went up from $194.18b in November 2014 to $239.75b by the end of November 2015. Over the same period, local currency deposits, constituting 80.6% of the commercial banks’ total deposits, increased by 22.6% y-o-y to $193.28b compared to a faster 27.4% progress in Foreign Currency deposits to $46.47b. (BLOM 02.03)

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11.6 EGYPT: Is Egypt Doing Enough to Counter Widespread Sexual Harassment?

An Egyptian TV talk show host who slammed a sexual assault survivor, blaming her for provoking the attack by “dressing immodestly,” has been sentenced to one year in prison.

Shahira Amin posted in Al-Monitor on 7 March that although a number of recent developments offer hope to Egyptian women that efforts to combat sexual harassment are working, change is slow.

Reham Saeed’s conviction is a milestone ruling in a country where sexual harassment and assault is so commonplace that it has been described by rights groups as “endemic” and where, for decades, survivors have been stigmatized and blamed for provoking the assaults. Rights activists believe the recent court decision is the result of social media pressure after thousands of activists launched a relentless online campaign using Arabic hashtags that translate to #dieReham and #prosecuteRehamSaeed.

The outcry also prompted an advertising boycott and the subsequent suspension of the show by the management of the privately owned al-Nahar network.

The outpouring of anger came after Somaya Tarek had appeared on Saeed’s show to complain about an alleged sexual assault incident that had taken place in a Cairo mall in October and the police’s failure to arrest the attacker. Rather than condemn the incident and call for the attacker to be held accountable, Saeed instead suggested that the woman herself was to blame, asking her, “Do you think you were dressed appropriately?”

Much to the shock and dismay of viewers, Saeed also showed photos of the woman (allegedly stolen from Tarek’s cellphone by Saeed’s production team), including one of her in a bikini in an attempt to convince the public that the woman had brought trouble on herself because she had been wearing a sleeveless T-shirt.

Tarek’s decision to speak up about her ordeal marks a clear shift in women’s attitudes since the 2011 uprising — a far cry from the pre-revolution days when, for decades, women had accepted harassment as part of their daily lives. Since the uprising five years ago, more women have broken their silence, coming forward to report harassment and sexual assault incidents and to demand justice from the perpetrators of such attacks. According to a 2013 UN survey, 99.3% of Egyptian women had reported being sexually harassed.

“We are not sure whether there has actually been a surge in sexual assault incidents since the 2011 uprising or whether the rise is attributed to the fact that more women are reporting such incidents. It is probably a combination of both,” said Mona Eltahawy, a feminist author and journalist who has written a book titled “Headscarves and Hymens: Why the Middle East Needs a Sexual Revolution.” Eltahawy was assaulted by security forces during a protest in downtown Cairo’s Mohamed Mahmoud Street in November 2011 and was left with a broken arm and a dislocated wrist.

While sexual harassment has been rampant in Egypt for decades, there has been a surge in mob sexual assaults as well as a marked increase in the level of violence practiced against women since the 2011 uprising. Women’s rights groups have said they documented more than 250 cases of mass rapes and mob sexual assaults in the country between November 2012 and January 2014, the majority of them during protest rallies in Cairo’s iconic Tahrir Square. The shocking revelation came in a joint statement released by 29 women’s rights groups after a June 2014 rally to celebrate the inauguration of then newly elected President Abdel Fattah al-Sisi. More than 27 complaints of mass rapes and mob sexual assaults were filed with the police in a single day of violence. In their statement, the rights groups also criticized the government for not doing enough to curb such attacks. The assaults took place despite a heavy presence of volunteer rescue squads from nongovernmental organizations, such as Operation Anti-Sexual Harassment and Tahrir Bodyguard, that were patrolling the square.

Anti-harassment groups have mushroomed since the 2011 uprising because of the unparalleled scale of sexual assaults in the country. Those groups have stepped in to fill the vacuum left by the police, as the latter had often turned a blind eye to such crimes and have at times even been accused of harassing the sexual assault survivors who had gone to report the incidents.

Azza Kamel, the founder of “I Saw Harassment,” an Egyptian nonprofit organization fighting sexual harassment, believes the Tahrir assaults were “deliberate, systematic and organized and were meant to keep women out of the public space.” “We have seen such crimes repeated a number of times at protest rallies in the square during and after the 2011 uprising. Those were not isolated incidents, but were part of a continuing trend. Often, high-profile journalists and activists were targeted in those attacks,” she noted.

It was not until a graphic video of a young woman being sexually assaulted in the square during the June 2014 rally had gone viral on social media that the government was compelled to finally take action. Seven men were arrested in connection with the brutal assault. The uproar over the video also prompted Sisi to decree long-awaited legislation criminalizing sexual harassment. Those convicted under the law face up to five years in prison in addition to fines reaching up to 5,000 Egyptian pounds ($638).

The decree signaled there was political will to tackle the problem head on. However, a May 2015 report released by the International Federation for Human Rights shattered much of the optimism of rights advocates, dashing their hopes for quick progress. According to the report, security forces were themselves routinely using sexual harassment and abuse against political prisoners and detainees. While the report does not identify victims by name, it nonetheless paints a grim picture of widespread, systemic sexual violence against prisoners in the country.

“We fought long and hard to have legislation criminalizing sexual harassment and assault,” said Fatemah Khafagy, a gender expert and former ombudsman at the National Council for Women. “While the law has deterred many potential harassers, legislation is not enough. What Egypt really needs is a change in people’s attitudes, and that can only come through education and awareness campaigns.”

But change is happening, albeit slowly. The women are no longer tolerating such crimes and are speaking out. Youths are also raising public awareness through their engagement in dozens of grass-roots initiatives fighting sexual harassment. What remains is for men to realize the extent of the damage and pain they inflict on women they harass and assault. But first and foremost, the state has to come to terms with the magnitude and gravity of the problem, admitting that these are not isolated cases but a cancer that has spread from police stations and prison camps to university campuses and public transport. (Al Monitor 07.03)

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11.7 IRAN: Iran’s Long Road to Reintegrating With the World Financial System

Katherine Bauer wrote in the The Washington Institute Policy Watch 2575 on 29 February that the recent warning by the Financial Action Task Force to banks about dealings with Iran shows that the end of nuclear sanctions was only the start of a long process.

In its first public statement on Iran since sanctions relief went into effect following implementation of the nuclear deal last month, the Financial Action Task Force (FATF), whose thirty-seven members include Russia and China, in mid-February urged member states to warn their banks about the risks of doing business with Iran. Coming only a month after Iran received nuclear-related sanctions relief from the United Nations, United States and European Union, the statement underscores the risks for European and Asian banks in renewing financial ties with Iran.

Background

Established in 1989 by the G-7 (Canada, France, Germany, Italy, Japan, Britain and the United States), the FATF is the international standard-setting body for anti-money laundering and countering the financing of terrorism (AML/CFT). Members submit to peer reviews or “mutual evaluations” of their implementation of FATF standards, and jurisdictions that fail to address strategic AML/CFT deficiencies – whether FATF members or not – are publicly identified by the FATF in statements released following the group’s plenary meetings in February, June and October of each year. Iran has been the subject of such statements since 2008, when the FATF revised its processes for dealing with “high-risk and non-cooperative jurisdictions.” However, despite the January lifting of U.S. and EU nuclear-related sanctions on Iran, the consensus-driven intergovernmental organization did not revise the statement it has issued three times a year since calling for member states to impose countermeasures on Iran in February 2009. The statement again urged Iran to “immediately and effectively address its AML/CFT deficiencies,” noting that if Iran failed to do so, the FATF would consider calling on member states to strengthen countermeasures at its June 2016 meeting.

Implications for Banks

For foreign financial institutions considering renewed ties with Iranian banks, the FATF’s continuing designation of Iran as a high-risk jurisdiction and repeated call for countermeasures have real implications in terms of both illicit finance and regulatory risk. Relevant FATF standards, now being followed by member states in their fourth round of mutual evaluations, call on regulators to require banks to engage in enhanced due diligence when dealing with high-risk jurisdictions. These are time- and resource-intensive measures against which banks can be examined for compliance. Such measures can include obtaining additional information on the customer, beneficial owner, nature of the business relationship, and source or use of funds. Although designed to mitigate the risk to financial institutions of unwittingly processing illicit transactions, even such measures may not be sufficient for financial institutions when it comes to Iranian banks, which, according to the U.S. Department of Treasury, “willingly engage in deceptive practices to disguise illicit conduct.”

FATF standards also provide a range of risk-mitigating countermeasures regulators can pursue beyond enhanced due diligence, such as imposing additional reporting requirements for banks working with high-risk jurisdictions, prohibiting financial institutions from relying on third parties located in the concerned country to conduct elements of customer due diligence, and even limiting business relationships or financial transactions with an identified country.

In fact, the FATF call for countermeasures on Iran is referenced in the “findings” of Section 104 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) – the statutory basis for U.S. secondary sanctions on Iran. Although more than four hundred Iranian actors received relief from secondary sanctions as part of the nuclear deal through removal from U.S. sanctions lists, more than two hundred, including significant Iranian economic entities such as the Islamic Revolutionary Guard Corps (IRGC), remain listed and subject to secondary sanctions. The legislation, which first called for foreign financial institutions engaging in significant transactions with designated Iranian actors to be cut off from the U.S. financial system, cites the February 2010 meeting, at which the FATF urged member states to apply countermeasures to “protect the international financial system from the ongoing and substantial money laundering and terrorist financing risks emanating from Iran.” That language remains in the current FATF statement, even after implementation of the Iran deal.

The new FATF statement, which continued to press member states to “protect against correspondent relationships being used to bypass or evade counter-measures and risk-mitigation practices,” came only days after the Society for Worldwide Interbank Financial Telecommunication (SWIFT) confirmed Iranian banks had been reconnected to the secure financial-messaging platform after having been cut off by EU sanctions in March 2012. Even with messaging services restored, however, the FATF’s identification of Iran as a high-risk jurisdiction subject to FATF countermeasures will continue to complicate efforts by Iranian banks to reestablish ties upon which the majority of SWIFT messaging is predicated – those with correspondents. Although Iran has been given access to roughly $100 billion of its previously restricted funds held overseas, in order to use these funds to make purchases and otherwise engage in international trade, Iranian banks will have to reestablish correspondent relationships with banks in countries that are key trading partners. Banks’ foreign correspondents hold deposits in foreign currencies and act as a nonresident bank’s agent confirming letters of credit and completing other financial transactions on the correspondent’s behalf. Beyond the enhanced due diligence discussed above, the FATF recommendation related to correspondent banking calls on regulators to require banks, at the least, to gather sufficient information to assess the quality of the correspondent institution’s AML/CFT controls and the quality of its supervision, an area where Iranian banks remain deficient.

Next Steps

In its December 2015 Article IV report, part of a running assessment of a country’s economic and financial policies and developments, the International Monetary Fund recommended to Iran that “bolstering the AML/CFT framework would facilitate re-integration of the domestic financial system into the global economy, lower transaction costs, and reduce the size of the informal sector.” Iranian officials, including Central Bank administrators and the country’s executive director at the IMF, have acknowledged weaknesses in the Iranian banking system that could inhibit renewed foreign engagement and investment, saying that Iranian banks are “outdated” and face a legacy of “weak risk management and inadequate supervision.” Iranian regulators have taken limited steps over the past decade to improve their AML/CFT controls. In the FATF’s October 2008 statement, it credited Iran for adopting an Anti-Money Laundering Law, which was approved by the Majlis in January 2008, but noted the “lack of corresponding effort on CFT.” A 2012 draft CFT law that was approved by the parliament but remained pending with the Iranian judiciary did not meet international standards, according to the IMF. The IMF’s December report specifically urged Iranian authorities to adopt a law that properly criminalized terrorist financing and contained mechanisms for implementation of UN terrorism sanctions.

Recent Iranian official statements have committed to bolstering the AML/CFT regime, including by joining the Eurasian Group, an effective FATF sub-entity based in Moscow, and requesting an IMF assessment of its AML/CFT regime against FATF standards. These are the correct first steps for Iran in working with the FATF to improve its AML/CFT status. But it will be a long process, and there is little indication real work has begun. Despite confirmation by the FATF’s executive secretary to Agence France-Presse following the February plenary that Iran has “shown a willingness” to start cooperating, the recent statement did not acknowledge Iranian efforts to engage with the group as it has done in the past (February 2010).

What this all means is that sanctions relief and SWIFT readmission notwithstanding, significant impediments remain for those banks looking to reestablish financial ties with Iran. At a minimum, banks will continue to face illicit-finance and regulatory risks, both conditions of Iran’s own making.

Katherine Bauer is a senior fellow at The Washington Institute and a former official at the U.S. Treasury Department. (TWI 29.02)

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11.8 TURKEY: What Fading Oil Fortunes Means for Turkey’s Businesses

Are the resplendent days of the Gulf emirates coming to an end? According to international credit rating agencies and investment banks, the answer is yes. Standard & Poor’s has lowered Saudi Arabia’s credit rating twice in the last five months, and credit ratings for Bahrain and Oman are not any better. In November, Christine Lagarde, managing director of the International Monetary Fund, estimated that Gulf Cooperation Council (GCC) states’ export revenues for 2015 would be $275 billion less than for the preceding year due to low oil prices.

Ufuk Sanli posted on 24 February in Al-Monitor that Turkish businesspeople are losing sleep over oil-producing states’ deferrals of payments to international contractors and the possible loss of mega projects.

The Gulf emirates, which spent lavishly to appease their populations after the start of the Arab Spring, have been badly shaken by the decline in oil prices from $110 a barrel to $30 a barrel in the last year and a half. Gulf leaders first dipped into their central bank reserves to cover budget deficits resulting from their extravagant social assistance expenditures. When that wasn’t enough, they began selling off assets held by their national asset funds. According to the Kuwait Financial Center, the Gulf states ended 2015 with a deficit of $160 billion. This year’s deficit is forecast to be $159 billion.

Conventional wisdom holds that if oil prices continue their downward trend, in five years Gulf countries won’t be able to cover their budget deficits. In other words, they would all be on the edge of a financial cliff.

These daunting developments have compelled the Gulf emirates to begin acting more prudently, that is, to restrict public spending and raise taxes. They also began deferring payments to contractors involved in ongoing mega projects.

Turkish contractors working in the Gulf have been affected more than Western companies by the current crisis. The Gulf had come to be seen as a safe harbor for Turkish companies that lost billions of dollars because of tensions between Ankara and Moscow. This is why major economic troubles in the Gulf are causing Turkish businesspeople to lose as much sleep as people in the Gulf.

According to the Statistical Agency of Turkey, last year Turkish exports totaled $144 billion. The six GCC states – Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Qatar and Oman – spent $6 billion on Turkish goods, about 6.6% of all Turkish exports. A careful look at these figures reveals that in 2015, while Turkish exports shrank by 8.6% overall, exports to Gulf countries grew by 5.5%. In short, petrodollar-rich Arab countries contributed significantly to reducing Turkey’s economic losses under Justice and Development Party (AKP) rule.

Initial signs in 2016 suggest the continued loss of blood. According to figures released by the Turkish Exporters Assembly, an organization of Turkish businesses, in January 2016 overall exports declined 14.4% compared with the same period in 2015. While there were sharp falls in Turkey’s exports to the UAE, Kuwait, Qatar and Bahrain, exports to Saudi Arabia and Oman increased.

According to Finans Yatirim, a leading investment bank in Turkey, Turkish exports will fall to $137 billion by the end of this year. Further reductions in Turkish exports to Gulf countries could bring about an even higher decline in overall exports.

Turkish contractors, which are annually awarded some $25 billion in projects, not only contribute significantly to Turkey’s foreign exchange earnings, but also to employment. Contractors won tenders totaling $27 billion in 2014, but saw that amount fall to $19.4 billion in 2015. One of the major winners was Limak Holding, which won the tender for a new terminal at Kuwait international Airport that will cost $4.3 billion. It is the biggest single project a Turkish company has won alone. If Limak had not obtained the contract, the sector’s performance last year would have been its worst of the decade.

Mithat Yenigun, president of the Turkish Contractors Union, told Al-Monitor, “Developments in Russia, which leads the list of countries where we have projects, worry us.” Yenigun further said that in terms of companies operating in Russia, “Our Ministry of Economy and Russian employers are saying that the projects in progress will continue, but some projects awaiting approval will be suspended, and there is no likelihood of new projects in the near term.”

Yenigun expanded on his sector’s worries, stating, “The trend of low oil prices in oil-exporting countries like Algeria and Saudi Arabia also delay investments and cause difficulties in timely payments for projects.” Yenigun noted that there have been some delays in payments by oil-exporting countries and that some projects have been suspended.

Libya and Iraq are the main countries from which Turkish companies are experiencing problems receiving compensation, and there were fears that the situation would spill over to the Gulf countries. Sani Sener, CEO of TAV Holding, which last month won a $1.1 billion tender for an Omani airport, said their fears were justified. “This is the first time we have faced delays in payments for work done. That naturally affects us adversely,” he said.

Most relevant quarters feel that the burden of President Erdogan’s foreign policy is increasingly weighing on Turkish business by the day. Tensions with Russia and Iraq have significantly affected exports and tourism. Gulf countries once seen as an alternative market no longer look promising. Turkish businesspeople who closely follow developments in the Gulf economies can do little more than gloomily ponder. (Al-Monitor 24.02)

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Fortnightly, 23 March 2016

March 23, 2016, 7:30 am

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23 March 2016
13 Adar II 5776
14 Jumada Al-Akhir 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Plans End of Dairy & Egg Production Quotas in 2017
1.2 Netanyahu Publishes His Monthly Pay Slip

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Israel-Jordan Gas Pipeline to Begin Operating in 2017
2.2  Israel’s Natural Gas Potential Triple of Its Original Assessment
2.3  Alooma Raises $11.2 Million
2.4  Bombardier to Provide an Additional 60 Coaches to Israel Railways
2.5  Israeli Defense Companies See Decline in 2015 Domestic Sales
2.6  LTG Exam Platform Raises $5.3 Million

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Casablanca Finance City Announces Opening of Bank of China Office

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Jerusalem to Receive Med – Dead Sea Conduit Plan
4.2  BrightSource Launches Next Generation Solar Field Technologies
4.3  Eco Wave Power Aims for World Leadership in Wave Energy

5: ARAB STATE DEVELOPMENTS

5.1  MENA Oil Importers See Limited Growth As Political Challenges Persist
5.2  Deflation in Lebanon Averaged 2.85% by February 2016
5.3  Lebanon at Bottom of 2016 Energy Architecture Performance Index List
5.4  Amman’s 2015 Budget Deficit Rises by JD346 Million as Revenues Drop

♦♦Arabian Gulf

5.5  Some 19 Million Cars Expected on GCC Roads by 2020
5.6  Kuwait Cabinet Approves 10% Tax on Companies’ Profits
5.7  Abu Dhabi’s Non-Oil Foreign Trade Rises to $46 Billion in 2015
5.8  Saudi Inflation Edges Down in February from Record High
5.9  Saudi Policy-Making Body Approves Economic Reforms
5.10  Saudi Central Bank Governor Vows to Keep Dollar-Related Currency Peg

♦♦North Africa

5.11 Egypt’s Suez Canal Revenues Decline for 3rd Consecutive Month

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Only 30 Percent of Workers in Turkey are Female
6.2 Turkey & Pakistan Sign Free Trade Agreement Framework

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Israel & World Jewry Celebrate Purim Holiday

♦♦REGIONAL:

7.2 Sheikh Mohammed Approves UAE’s 100-Day Happiness Plan
7.3 Defacing Bank Notes Illegal, Warns Oman Central Bank

8: ISRAEL LIFE SCIENCE NEWS

8.1  Teva Receives EC Approval for the Allergan Generics Acquisition
8.2  Technion Says Herbal Remedies Can Be Extremely Harmful For Cancer Patients
8.3  Neteera Raises $2 Million
8.4  Teva Completes Generic Pulmicort Respules Portfolio with US Launch
8.5  Tel Aviv University Scientists Develop Bionic Heart
8.6  XTL Biopharmaceuticals Completes Phase 2 Trial Design for hCDR1 in Lupus Treatment
8.7  Insuline Medical Receive OCS Funding to Improve Long Acting Insulin Therapy
8.8  Teva Announces Launch of Generic Campral in the United States
8.9  Emerald Melanoma Diagnosis System Wins FDA Approval

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Silicom Receives New Design Win for Smart Cards from Cyber Security Customer
9.2  Mobli Media is Launching Galaxia – a Platform to Create Mini Social Networks
9.3  Sapiens Announces New ALIS Fast Track Proposition for the UK Protection Market
9.4  Magic Software Makes It Easier to Modernize & Mobilize Enterprise Applications
9.5  Mellanox Announces First 200Gb/s Silicon Photonics Devices
9.6  Articoolo Launches Technology for Unique, Human-Like Content Writing

10: ISRAEL ECONOMIC STATISTICS

10.1  February Sees Israel’s Inflation Rate Fall by 0.3%
10.2  Israeli Economy Grew by 2.5% in 2015
10.3  Ten Israeli Companies Account for 51% of Exports
10.4  Record Foreign Investment in Tel Aviv Stock Exchange

11: IN DEPTH

11.1  JORDAN: Jordan is Sliding Toward Insolvency
11.2  GCC: GCC Forecast to See Slowest Growth since 2008
11.3  EGYPT: Fitch Says Devaluation Positive, Economic Challenges Remain
11.4  TURKEY: After Seizing Zaman Newspaper, What’s Next for Turkey?

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Plans End of Dairy & Egg Production Quotas in 2017

The Ministry of Agriculture and Ministry of Finance plan to implement reforms of the agricultural sector by the start of 2017, or earlier. The ministries intend to approve a plan to end import taxes on all food products alongside the plan to end production quotas for eggs and milk.

A senior government source said that after a gradual implementation of the reform, all imported non-processed food will be exempted. This includes vegetables, fruits, fresh and frozen meat, frozen vegetables, poultry, dairy products, eggs, honey and olive oil. Based on a calculation by the Ministry of Agriculture, these reforms will save Israeli consumers NIS 2.6 billion, with the overall savings potentially reaching NIS 3.25 billion.

Paying Israeli farmers compensation for their losses will allow the reforms to proceed. The Ministry of Agriculture expects to conclude negotiations with the farmers, and conclude hearings with other groups, by the end of June. The ministry intends to present the plan for government approval in July, fast-track any necessary amendments to the legislation, and implement the reforms by 2017 or earlier. (Globes 10.03)

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1.2 Netanyahu Publishes His Monthly Pay Slip

People often wonder how much money the prime minister makes; on 15 March Benjamin Netanyahu answered that question by revealing his most recent pay slip on Twitter. The prime minister’s gross monthly salary stands at NIS 48,815 ($12,530). After taxes and expenses, Netanyahu actually takes in a much smaller amount – NIS 17,645 ($4,530). Some NIS 26,278 ($6,738) went toward income tax, social security and health insurance. According to the pay slip, Netanyahu’s salary also paid the telephone bill, while an especially large monthly sum of around NIS 12,000 ($3,077) was spent on the armored vehicle in which he travels.

Incidentally, this was not the first time that Netanyahu has revealed his salary. In 2011, his monthly salary after taxes was NIS 15,000 (around $3,850). The pay increase stems, among other things, from a decision made recently to update the salaries for Knesset members and ministers. Hours after the prime minister published his pay slip, Opposition Leader Isaac Herzog also revealed his salary. Herzog’s gross monthly salary stands at NIS 45,356 (around $11,645). After taxes and expenses, he takes home NIS 20,317 (around $5,215). (IH 16.03)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israel-Jordan Gas Pipeline to Begin Operating in 2017

The first natural gas pipeline from Israel to Jordan is scheduled to begin operating in 2017, Israel Natural Gas Lines CEO Tordjman announced. The pipeline, currently being constructed in the Sodom area by the Dead Sea, will supply gas from the Tamar reservoir to private customers in Jordan. A second pipeline to be built in the Beit Shean area is due to supply gas from the Leviathan reservoir to the Jordanian National Electric Power Company (NEPCO).

In February, the Tamar partners signed a letter of intent with private customers in Jordan to supply 1.8 BCM over 10 years. In September 2014, the Leviathan partners also signed a letter of intent to supply 45 BCM of gas to NEPCO over 15 years; the value of the contract is estimated at over $15 billion. The discussions of the gas plan in Israel, however, which have been taking place for a year, have stalled the negotiations between the two countries. (Globes 10.03)

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2.2 Israel’s Natural Gas Potential Triple of Its Original Assessment

Israel’s Energy Ministry has tripled its estimate of the volume of still-undiscovered natural gas in Israeli waters. Energy Minister Steinitz presented international energy companies with a new assessment of a potential 2,100 billion cubic meters (BCMs) of natural gas, in contrast to the 680 BCMs that the Tzemach Committee relied on to examine the government’s policy regarding the natural gas market. The Tamar and Leviathan gas fields have already yielded 750-950 BCM of natural gas. The ministry based its new assessment on a report prepared by French consulting firm BecipFranlab. It found that the seabed has four relevant layers that potentially contain geological structures that could contain gas. According to the report, the potential amount of petroleum is estimated at 6.6 billion barrels.

BecipFranlab believes that the territorial waters of Israel have four layers with the potential for finding oil or gas deposits. It estimates that the deeper layer, where the Tamar and Leviathan fields were found, has the potential for about 480 BCM of natural gas, while shallower layers could contain about 1,640 BCM of gas. This assessment is based on a re-examination of existing seismic maps and new models. (Ynet 24.02)

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2.3 Alooma Raises $11.2 Million

Tel Aviv’s Alooma has close a $11.2 million Series A financing round led by Lightspeed Venture Partners and Sequoia Capital, which also invested in the company’s seed round. Alooma, which provides a modern ETL platform for data engineers and scientists, has raised a total of $15 million to date. Alooma will use the funding to expand its sales and marketing team in the San Francisco Bay Area and to continue to strengthen its product. Alooma observes that more and more companies today are maturing out of basic “out-of-the-box” analytics tools as they try to leverage all of their data – from web and mobile applications to NoSql and relational databases to log files, 3rd party SaaS vendors and more. But building an integrated data platform internally is a complex challenge that requires hiring data scientists and data engineers, spending huge amounts of money and many tedious hours capturing, transforming and validating the data.

Alooma enables companies to build and run their own data platform as a service, greatly reducing the time and cost required to leverage disparate sources of data. Companies can act upon all of their data and gain unprecedented decision-making capabilities. Set up in minutes, Alooma lets companies connect all their data sources to their own AWS Redshift or other data warehouse and use Alooma’s Code Engine to clean, transform or enrich any event–all in real time. (Globes 14.03)

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2.4 Bombardier to Provide an Additional 60 Coaches to Israel Railways

Montréal’s Bombardier Transportation will provide an additional 60 BOMBARDIER TWINDEXX Vario double-deck coaches to Israel Railways (ISR). This call-off order is part of a framework agreement signed in October 2010 and is valued at approximately $120 million. As the Israeli public transportation market continues to grow, demand for additional capacity and more frequent service is increasing. In response, the government has planned over €7 billion in investments to upgrade its railway networks, opening up opportunities for a variety of mobility solutions. These additional double-deck trains, hauled by the new TRAXX AC electric locomotives ordered in 2015, will represent great strides in helping alleviate congestion in the nation. To further reduce reliance on private cars, Israel is also developing light rail vehicle and monorail systems for several lines. Deliveries for this call-off order are expected to take place between March 2017 and July 2018. (Bombardier 21.03)

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2.5 Israeli Defense Companies See Decline in 2015 Domestic Sales

Israel Ministry of Defense procurement from Israeli companies in 2015 totaled NIS 10.8 billion, the Ministry of Defense Procurement and Production Directorate announced. Of this amount, NIS 2.9 billion, 27% of last year’s defense procurement, was from companies operating in outlying areas and border communities.

Israel’s defense procurement fell in 2015, compared with 2014, when it totaled NIS 14 billion. The difference was attributed to intensive procurement from Israeli companies in 2014 to renew IDF stockpiles following Operation Protective Edge in the Gaza Strip. The absence of an approved state budget in 2015 also made orderly procurement difficult in that year. The Procurement and Production Directorate made 31,000 new orders from local companies and processed 282,000 invoices. Ministry of Defense orders from Israeli companies were directly responsible for 50,000 jobs, a fifth of them in outlying areas, areas of high national priority, and border communities in the north and south. (Globes 16.03)

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2.6 LTG Exam Platform Raises $5.3 Million

Tel Aviv startup LTG Exam Platform closed a $5.325 million Series A financing round earlier this month. The funding round was led by Square Peg Capital and other investors include Atlas Venture, Jamie McCourt, Edward and Mitch Roberts, Margot Lebenberg Carter, Brian Shin and Eric Dobkin. LTG Exam Platform develops mobile apps for standardized test preparation that are already used by a half million students worldwide.

The investment will allow LTG to invest in building out its senior management team and strategy in key areas such as product, engineering, user experience, branding, demand generation and distribution; increase the depth of its portfolio of popular, free consumer apps, which currently includes Prep4SAT, Prep4GMAT, and the recently launched Prep4GRE for iOS and Android; and to develop revenue streams through new products and services that enable universities, business schools and other institutions to meet their marketing and enrollment objectives.

Test preparation currently costs students and their families thousands of dollars each year. Classes can range from $200 to more than $1,500, while private tutors can cost even more. LTG provides a free alternative, untethered from the classroom or the tutor’s schedule. These apps arm students with the mobility they have come to expect in all facets of their lives. (Globes 21.03)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Casablanca Finance City Announces Opening of Bank of China Office

The Bank of China, one of the oldest Chinese financial institutions, announced the establishment of an African representative office in Morocco, operating under the Casablanca Finance City status. Bank of China’s office in Casablanca will carry out a threefold mission. On the one hand, it will accompany and support Chinese firms’ growth strategy in French-speaking Africa. On the other hand, it will offer its expertise, network and thorough understanding of the Chinese market to Moroccan and African companies wishing to build up business relationships with China. Finally and from a strategic point of view, the new undertaking will participate in funding bilateral trades between Africa and China.

Casablanca Financial City Authority (CFCA), a private limited company established in 2010 as a public-private partnership, is responsible by law for managing and promoting Casablanca Finance City (CFC). CFC is a regional economic and financial hub serving as a gateway to countries of North, West and Central Africa. (CFCA 15.03)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Jerusalem to Receive Med – Dead Sea Conduit Plan

Israel Electric Corporation, Mekorot National Water Company and a group of private developers will present a new plan to the cabinet in the coming months for an underground conduit for transporting water from the Mediterranean Sea to the Dead Sea. The plan is currently being reviewed by an inter-ministerial team headed by the Prime Minister’s Office director general. It is believed that Mekorot and IEC wish to be partners in both owning and carrying out the venture after it gains cabinet approval. The project, based on an underground conduit, is economically viable and will make a strategic contribution to the electricity and water sectors, in addition to saving the Dead Sea from drying up. The idea is centers on digging tunnels to transport water 100 kilometers from the Mediterranean Sea and a 1,500 MW underground hydroelectric power plant that will use the difference in water level between the Dead Sea and the Mediterranean to generate electricity.

The hydroelectric power plant has significant advantages for management of the national electrical system, because it is the only existing engineering solution for storing substantial quantities of electricity, with extremely short closing and opening times and the ability the generate a variety of capacities. It can be used by the electricity system administration for operational storage and flexible regulating at times of varying demand. The operational flexibility of a plant of this type and size can make it possible to substantially increase the amount of electricity produced from renewable energy, without jeopardizing the network’s stability. (Globes 20.03)

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4.2 BrightSource Launches Next Generation Solar Field Technologies

BrightSource Energy announced advanced solar field technologies currently being deployed at the 121 megawatt (MW) Ashalim Solar Thermal Power Station located in Israel’s Negev Desert. The fourth generation of BrightSource’s solar field technologies features improvements to the heliostats, solar field communications network and solar field control system. These technologies are designed to further optimize power production, reduce construction time and lower project costs. The company’s 392 MW Ivanpah Solar Electric Generating System, located in California’s Mojave Desert, is the world’s largest CSP tower project and is entering its third year of operation. The Ashalim project, which is now under construction, builds on the experience gained at Ivanpah. BrightSource’s technologies being deployed at Ashalim are designed to deliver performance improvements in all areas of solar field operations.

With fewer components and an easier assembly, new heliostats cost less and can be installed much faster. BrightSource’s latest design measures 4 x 5.2 meters, 25% larger compared to Ivanpah. Each heliostat consists of four flat, low-iron glass mirrors that provide maximum reflectivity for the life of the project. The new streamlined design maximizes the total reflective surface within the constraints of the mechanical drive systems and allowable wind load. Precision steel parts, including a torque tube, support arms and connectors, ensure rigidity and reliability in desert conditions for more than 25 years.

Jerusalem’s BrightSource Energy designs, develops and sells solar thermal power systems that deliver reliable clean energy to utilities and industrial companies. (BrightSource 21.03)

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4.3 Eco Wave Power Aims for World Leadership in Wave Energy

Tel Aviv’s Eco Wave Power completed the construction and entered the testing phase of its first commercial scale power plant in Gibraltar. It will soon hold an official press conference, with the participation of the Government of Gibraltar, for the start of operation of the Power Station in the Rock. EWP also received EU funding for its ambitious pioneering project in Gibraltar and simultaneously recognized by Acquisition International Magazine (AI Magazine) for Israel Energy & Resources Deal of the Year” for successfully closing its first fund-raising round led by Pirveli Ventures.

Eco Wave Power is the sole global inventor, owner and developer of the unique EWP wave energy devices. Their wave energy company designs, manufactures and operates the EWP wave energy convertors. They believe that their patented technology is clearly on target to become a world leader in the wave energy field. Eco Wave Power is the only wave energy company to ever win the Frost & Sullivan Product Innovation Award. According to Frost & Sullivan, “Eco Wave Power efficiently handles the prominent challenges prevailing in the field and offers an all-round solution for effective energy harvesting. (Eco Wave 22.03)

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5: ARAB STATE DEVELOPMENTS

5.1 MENA Oil Importers See Limited Growth As Political Challenges Persist

The positive impact of lower oil prices on oil-importing MENA sovereigns will be moderated by regional headwinds in 2016, says Moody’s Investors Service in a report published on 22 March. The rating agency’s report is an update to the markets and does not constitute a rating action. According to Moody’s, lower oil prices will lead to a re-balancing of oil importers’ external positions, although the magnitude will differ. Moreover, potentially lower remittances and grants from GCC countries could mitigate the growth benefits from lower oil prices.

Moody’s expects Lebanon, Jordan and Morocco to benefit the most from the lower oil prices, as their exposure to hydrocarbon imports is the largest, at around 20%-30% of total imports and 10-20% of nominal GDP. For those sovereigns, the rating agency projects that the lower energy bill will translate into a reduction of current account deficits by around 4-6%age points of GDP over 2013-16.

Moody’s also expects the effects of increases in US interest rates to be limited, owing to low external debt – with the exception of Tunisia – and low dependence on portfolio investments in the financing of their current account deficits. However, Moody’s notes that regional conflicts in Syria and in Libya and domestic security tensions will continue to subdue tourism revenues and investment activity in most countries. This, in turn, could keep unemployment and social tensions high. Regional conflicts also impose significant fiscal costs on refugee host countries, in particular Lebanon and Jordan, and increasingly Tunisia. (Moody’s 22.03)

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5.2 Deflation in Lebanon Averaged 2.85% by February 2016

Consumer prices maintained the downward trend during the first two months of 2016 as imported deflationary pressures are still weighing on the prices of Lebanese goods and services since 2015. In this context, the Consumer Price Index (CPI) dropped by an average of 2.85% y-o-y by February 2016. According to the Central Administration of Statistics (CAS), the CPI decreased by 2.94% y-o-y in February 2016 as the index dropped from 97.20 points in February 2015 to 94.35 points by the end of February 2016. The depreciation of the euro, the local and global economic slowdown and the great decline in oil prices were the primary reasons behind this deflation. In terms of CPI’s components, food and non-alcoholic beverages (20.6% of CPI) declined by 2.05% y-o-y in February 2016. Moreover, transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI), witnessed yearly drops of 4.83% and 16.54%, respectively. The other 2 sub-indices that waned were health (7.8% of CPI) and communication (4.6% of CPI), posting a 4.06% and 0.36% y-o-y declines, respectively. However, the education sub-index, constituting 5.9% of the CPI, augmented annually by 1.49% in February 2016. Furthermore, clothing and footwear (5.4% of CPI) and restaurants & hotels prices (2.6% of CPI) went up by 3.18% and 3.02% y-o-y, respectively. (CAS 22.03)

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5.3 Lebanon at Bottom of 2016 Energy Architecture Performance Index List

According to the World Economic Forum, Lebanon ranked 125th out of 126 countries in the global Energy Architecture Performance Index (EAPI). The index focuses on tracking specific indicators to measure the energy system performance in each country in 2016. These indicators include economic growth and development, environmental sustainability, energy access and security. Lebanon’s weak ranking could be partly due to the lack of diversification in the country’s energy sources and the frail share of renewable energy in total primary energy supply. Also, Lebanon’s old centralized energy infrastructure is not able to compete with global interconnected and technologically sophisticated energy systems. Globally, the top 10 rankings were dominated by OECD economies in 2016, highlighting the positive impact of economic development on their energy systems’ performance. Switzerland, Norway and Sweden were on the top of the list, whereas Yemen, Lebanon and Bahrain were the worst performers in 2016. It is worth noting that the ranking of regional neighboring countries went down during the past seven years, notably the UAE, Kuwait and Saudi Arabia that lost 7,3 and 9 places to rank 104th, 111th and 114th amongst listed countries, respectively. (BLOM 15.03)

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5.4 Amman’s 2015 Budget Deficit Rises by JD346 Million as Revenues Drop

Jordan’s state budget deficit for FY2015 reached JD929 million, or 3.4% of the projected size of the Kingdom’s economy, according to numbers released on 21 March by the Finance Ministry. The deficit was higher by JD346 million than the JD583.5 million registered in 2014, mainly due to around JD350 million drop in foreign grants from JD1.236 billion in 2014 to around JD886.2 million received last year, the ministry’s figures indicated. In its report, the Finance Ministry said that deficit ratio to the gross domestic product (GDP) in 2014 was 2.3%. The deficit before foreign grants would have been JD1.815 billion, 6.7% of the projected GDP in 2015, while in 2014 it would have been JD1.820 billion, or 7.2% of the GDP. Public revenues in 2015, including domestic and foreign grants, stood at around JD6.8 billion, compared to JD7.2 billion the year before, a drop of around JD471 million. Domestic revenues in 2015 dropped by JD122 million in 2015 to around JD5.909 billion from JD6.031 billion, the figures showed. Government spending in 2015 stood at JD7.724 billion, down by JD126.5 million from the year before when expenditure reached JD7.851 billion, the ministry report said. (JT 21.03)

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►►Arabian Gulf

5.5 Some 19 Million Cars Expected on GCC Roads by 2020

Passenger vehicle numbers in the Arabian Gulf region are estimated to increase at an average of 7.4% annually over the next four five years. A total of 19.1 million vehicles are expected to be on the region’s roads by 2020, up from 14.35 million in 2015. Despite a slight decline this year, vehicle sales in the GCC will stabilize in 2017, before a cumulative growth phase from 2017-2020 puts the region back on track as the Middle East and North Africa’s largest automotive market.

According to analysts Frost & Sullivan, Saudi Arabia will hold the lion’s share of cars on GCC roads, with 10.03 million vehicles by 2020 – 52.5% of the entire regional market. The UAE will have 3.53 million vehicles, an 18.5% share, while the rest of the region, which includes Kuwait, Oman, Qatar and Bahrain, will have 5.54 million vehicles – Kuwait being the largest followed by Oman and Qatar.

The average age of cars in the region will increase to eight years in 2020. By then, 0 – 3 year-old vehicles will contribute 27% of units in operation, while cars aged 10 years and older will dominate the market, holding a 31% share. Demand for spare parts – excluding tires and batteries – in the GCC alone will be worth $11.9 billion by 2020, up from an estimated $7.6 billion in 2015. (AB 15.03)

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5.6 Kuwait Cabinet Approves 10% Tax on Companies’ Profits

Kuwait’s cabinet has approved economic reforms including the introduction of a 10% tax on corporate profits to narrow a budget deficit caused by low oil prices, according to Finance Minister Anas al-Saleh. Saleh did not say when the tax would be imposed. However, it would mark a big shift in policy; at present, most Kuwaiti firms do not pay taxes on profits, though many foreign firms do.

All of the wealthy Gulf oil-exporting states are scrambling to cut their deficits by boosting non-oil revenues, but most are taking a different approach than Kuwait, focusing on the introduction of a value-added tax from 2018 rather than on taxing corporate earnings.

Saleh also said the cabinet had approved a “repricing” of some commodities and public services. He did not elaborate, but his comment appeared to refer to cuts in price subsidies for fuel, food and public utilities. Officials have previously said they are considering such cuts, but the issue is politically sensitive because it could directly affect the living standards of Kuwaitis. The subsidies cost the government billions of dollars annually.

The finance ministry projected in January that because of low oil prices, the government would run a deficit of 12.2 billion dinars ($40.7 billion) in the fiscal year starting on 1 April, nearly 50% higher than the deficit estimated for the current year, after government contributions to the sovereign wealth fund. Saleh also said that the government would seek to privatize state-owned assets including airports, ports and some facilities of national oil giant Kuwait Petroleum Corp. In a report to the cabinet, he outlined other reforms including allowing private citizens to own as much as 50% of public-private joint ventures, reforming the labor market and the civil service system, and making the public sector more efficient by linking pay to production. (KUNA 14.03)

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5.7 Abu Dhabi’s Non-Oil Foreign Trade Rises to $46 Billion in 2015

Abu Dhabi’s non-oil foreign trade reached AED169.11 billion ($46 billion) in 2015, up by 11% compared to the previous year. The value of imports through different customs points of the emirate stood at over AED119.3 billion, up by 10.5%, while exports totaled AED30.83 billion, an increase of 63%, and re-exports stood at AED18.9 billion, down by 25.3%. Last year, Standard & Poor’s said Abu Dhabi’s “exceptional” wealth has helped maintain its AA credit rating despite the fall in oil prices. S&P said it expects Abu Dhabi’s annual average fiscal deficit to fall to about 1.5% of GDP between 2015-2018. (AB 15.03)

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5.8 Saudi Inflation Edges Down in February from Record High

Saudi Arabia’s inflation edged down in February, after the rate hit its highest level since September 2012 in the previous month. The rate remained high historically in February following a hike in gasoline prices in December. Saudi Arabia’s Central Department of Statistics released the February consumer price data showing annual inflation at 4.2%, just 0.1% off its highest since the data series began in September 2012. The government raised the price of 95 octane gasoline to 0.90 riyal ($0.24) per liter from 0.60 riyal in late December as part of austerity measures in the 2016 state budget. Prices for utilities were also hiked. As a result, transport costs surged 12.7% from a year earlier in February. Prices of housing and utilities climbed 8.2% while food and beverage prices rose 1.3%. (CDS 21.03)

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5.9 Saudi Policy-Making Body Approves Economic Reforms

One of Saudi Arabia’s most influential economic policy-making bodies has approved 133 recommendations on improving the competitiveness of the kingdom’s economy, which will be announced within the next six months. The comments, by Abdullatif al-Othman, governor of the Saudi Arabian General Investment Authority (SAGIA), are the first time that an official of ministerial rank has talked about details of the National Transformation Plan (NTP) since it was first announced three months ago. NTP is a plan involving a number of significant reforms to the economy of the world’s top crude oil exporter to help it weather the impact of lower oil prices and diversify away from reliance on hydrocarbon revenues.

NTP is being overseen by the Council of Economic and Development Affairs (CEDA), headed by Deputy Crown Prince Mohammed bin Salman, and is expected to implement changes including privatizations of state assets and reductions of state subsidies when formally announced in the coming weeks. CEDA has approved about 133 recommendations to improve business competitiveness. These proposals are centered around eight main pillars of the private sector and will include measures on transparency and consistency of laws. (Reuters 22.03)

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5.10 Saudi Central Bank Governor Vows to Keep Dollar-Related Currency Peg

Saudi Arabian Monetary Agency (SAMA) Governor Fahad al-Mubarak said he was committed to maintaining monetary policy to keep the kingdom’s decades-long currency peg of 3.75 riyals per dollar. Currency speculators have put pressure on the riyal in recent months because of the impact of lower oil prices on Saudi Arabia’s fiscal balance, causing a projected large deficit this year. While Mubarak has previously pledged to maintain the riyal’s dollar peg, unbroken since 1986, SAMA did in January intervene by warning local commercial banks to avoid betting on a currency devaluation. In order to pay the government’s bills as its oil revenues shrink, SAMA has been drawing down its overseas assets at an annual rate of more than $100 billion, although it still has enough to support the riyal for several years. (Reuters 14.03)

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►►North Africa

5.11 Egypt’s Suez Canal Revenues Decline for 3rd Consecutive Month

Egypt’s Suez Canal revenues fell for the third consecutive month to record $401.4 million in February, official data from the canal’s authority showed. The revenues slowed from $411.8 million in January and $429 million in December last year amid claims that vessels are changing route to the Cape of Good Hope at the southern tip of Africa instead of the Suez Canal due to the drop in world oil prices. On an annual basis, the revenues saw an increase of 5.1% from February 2015 ($381.9 million), the statement added. Egypt’s vital waterway saw 1,300 vessels pass through last February, a year-on-year rise of 6.6%, said the authority. The canal is the fastest shipping route between Europe and Asia and is one of the country’s main sources of foreign currency. (Ahram 22.03)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Only 30 Percent of Workers in Turkey are Female

Some 30% of working people in Turkey are women, according to data from an annual income and life conditions survey released by the Turkish Statistics Institute (TÜİK). Some 53.9% of working women were employed on salaries or wages, the TÜİK data for 2014 showed, while another 29.2% were working in their families without any wages. Nearly 10% of women worked for themselves, while 6% of women were employed in casual works. Only 1.1% of them were employers. Working women in Turkey earned TL 1,654, roughly €513, per month on average. The highest wages were in the service sector with an average of TL1,723, while wages in the agricultural sector were at the bottom of the list with TL1,297. In the industrial sector women earned TL 1,404 on average.

The data also showed education level had a direct impact on earnings, as women without higher education earned less than TL1,000 per month, while university graduates earned some TL 2,419 per month. (AA 22.03)

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6.2 Turkey & Pakistan Sign Free Trade Agreement Framework

Turkey and Pakistan have paved the way for a new free trade deal, which has the potential to reduce barriers in bilateral trade and investment. Turkish Economy Minister Elitaş and Pakistani Commerce Minister Dastgir Khan signed the free trade agreement framework in the Pakistani capital of Islamabad on 22 March. The free trade agreement between the two countries was expected to be signed before the end of 2016. Elitaş discussed with Khan a number of ways to further enhance trade and economic cooperation between the two countries. Negotiations over the deal were launched by Turkish Prime Minister Davutoğlu and Pakistani Prime Minister Sharif during the latter’s visit to Turkey in October 2015.

Last year, bilateral trade was around $600 million, including $289 million in imports from Turkey. Turkey mainly exports telecommunication equipment, televisions, textiles and machinery, while imports from Pakistan include textile yarn, cotton fabrics, plastics and organic chemicals. (Anadolu Agency 23.03)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel & World Jewry Celebrate Purim Holiday

On 23/24 March, most of Israel and Jewry around the world will mark the holiday of Purim. Purim is one of the most joyous and fun holidays on the Jewish calendar. It commemorates a time when the Jewish people living in Persia were saved from extermination. The story of Purim is told in the Biblical book of Esther. The heroes of the story are Esther and her cousin Mordecai, who raised her as if she were his daughter. Esther was taken to the house of Ahasuerus, King of Persia, to become part of his harem. King Ahasuerus loved Esther more than his other women and made Esther queen, but the king did not know that Esther was a Jew, because Mordecai told her not to reveal her nationality. Haman, an arrogant, egotistical advisor to the king, hated Mordecai because Mordecai refused to bow down to Haman, so Haman plotted to destroy the Jewish people. Mordecai persuaded Esther to speak to the king on behalf of the Jewish people. Esther fasted for three days to prepare herself and then went into the king. She told him of Haman’s plot against her people. The Jewish people were saved and Haman was hanged on the gallows that had been prepared for Mordecai.

The Purim holiday is preceded by a minor fast, the Fast of Esther (23 March), which commemorates Esther’s three days of fasting in preparation for her meeting with the king. The primary commandment related to Purim is to hear the reading of the book of Esther. The book of Esther is commonly known as the megillah, which means scroll. It is customary to boo, hiss, stamp feet and rattle noisemakers whenever the name of Haman is mentioned in the service. The purpose of this custom is to “blot out the name of Haman.” Jews are also commanded to eat, drink and be merry. In addition, they are commanded to send out gifts of food or drink, and to make gifts to charity. The sending of gifts of food and drink is referred to as mishloach manot (lit. sending out portions). Purim is not subject to the Sabbath-like restrictions on work that some other holidays are; however, some sources indicate that Jews should not go about their ordinary business on Purim out of respect for the holiday. Purim is also celebrated a day later (24/25 March) in Jerusalem.

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*REGIONAL:

7.2 Sheikh Mohammed Approves UAE’s 100-Day Happiness Plan

The UAE has adopted a 100-day plan to boost happiness and positivity, as set out by the country’s newly appointed Minister for Happiness. Sheikh Mohammed bin Rashid Al Maktoum, Vice-President of the UAE and Ruler of Dubai, announced on Twitter that Minister Ohood Al Roumi’s strategy had been approved. The program will feature several initiatives spread across three areas: happiness in government policies, programs and services; promotion of positivity and happiness as a lifestyle in the community; and development of benchmarks and ways to measure happiness.

The program will emphasize transforming public service centers into ‘public happiness centers’ with ‘dedicated employees to ensure happiness of all clients’. A measurement method for happiness and positivity, a guide for customer happiness, and scientific and cultural publications are also part of the plan.

Minister of Happiness Al Roumi was appointed in February as a part of the biggest shake-up of the UAE government in its history. A Minister of Tolerance was also created for the first time, as well as a new Minister of Youth. (AB 09.03)

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7.3 Defacing Bank Notes Illegal, Warns Oman Central Bank

Oman’s central bank has issued a circular warning against the illegal practice of writing on bank notes, making “garlands” out of them or otherwise defacing their appearance, local media have reported. Some retail outlets have been manufacturing and selling garlands, wreaths and arches made of national currency bank notes, Central Bank of Oman said, while some members of the public have defiled notes by writing on them. Both practices are against the law and represent a defacement of national symbols. The bank also urged the public to respect and protect the national currency from “as it represents and contains national symbols.” (AB 13.03)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva Receives EC Approval for the Allergan Generics Acquisition

Teva Pharmaceutical Industries has received regulatory approval from the European Commission for its acquisition of Allergan plc’s global generics business. As part of the approval, Teva has agreed to the divestment of certain overlapping molecules in 24 European countries, other than the UK, Ireland and Iceland. In the UK and Ireland, Teva will divest a majority of the current Allergan Generic business. As required by the European Commission, the divested business will be capable of manufacturing and marketing generic medicines. The remainder of the Allergan Generics UK/Ireland business will be integrated with Teva’s operations in line with the global transaction. In Iceland, Teva will divest its generic business while retaining the Allergan Generics business. Teva continues to work closely with the FTC to obtain regulatory approval in the U.S.

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8.2 Technion Says Herbal Remedies Can Be Extremely Harmful For Cancer Patients

A new Technion-Israel Institute of Technology study shows that herbal remedies can be extremely harmful for cancer patients. The research, which focuses on cancer patients in the Middle East, is meant to help guide care providers when using herbal medicines for all patients the world over.

The study shows that nearly two-thirds of the herbal medicines used by cancer patients in the Middle East have potential health risks. Researchers show turmeric may increase the toxic effects of certain chemotherapies, while gingko biloba and green teas could increase the risks of bleeding in some cancer patients. Other herbs including black cumin and turmeric can alter the effectiveness of chemotherapy. In all, 29 of the 44 most popular herbal medicines used in 16 Middle Eastern countries (from Turkey to Tunisia) could pose one or more health risks to cancer patients in the region.

The findings come from a survey that asked more than 300 cancer care providers in the countries about the kinds of herbal medicines their patients were using. They found that 57% of the providers had patients who used at least one herbal remedy. Women and Muslim providers were more likely to report having patients who used the herbs. (NC 15.03)

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8.3 Neteera Raises $2 Million

Jerusalem’s Neteera, which has developed remote sensing technology of various human biological indicators using sweat, has completed its first round of funding, raising $2 million from private investors. Neteera’s novel technology is based on the detection of electromagnetic emissions from sweat ducts, enables reliable and speedy biometric identification, along with monitoring of other physiological parameters, such as, stress, fatigue, pain, alcohol influence, drug abuse detection, and medical diagnostics. These can be remotely monitored with a unique sub-terahertz (THz) imaging camera. (Globes 14.03)

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8.4 Teva Completes Generic Pulmicort Respules Portfolio with US Launch

Teva Pharmaceutical Industries announced the launch of the generic equivalent to Pulmicort Respules (budesonide inhalation suspension), 1 mg/2 mL, in the United States. Budesonide inhalation suspension is an inhaled corticosteroid medicine. It is a long-term maintenance medicine used to control and prevent asthma symptoms in children ages 12 months to 8 years. Budesonide inhalation suspension helps to reduce swelling and inflammation in the lungs, and also helps keep the airways open to reduce asthma symptoms. With the addition of this new strength of budesonide inhalation suspension, Teva now offers the complete family of all strengths including, 0.25 mg/2 mL, 0.5 mg/2 mL and 1 mg/2 mL.

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8.5 Tel Aviv University Scientists Develop Bionic Heart

In a significant breakthrough, researchers from Tel Aviv University’s Biotechnology Department, Materials Science and Engineering Department, and Center for Nanoscience and Nanotechnology say they have engineered a bionic heart. The heart, comprised of smart tissue transplanted into patients, will be able to monitor and regulate tissue function. The smart tissue will help the heart beat and intervene when it’s not functioning properly, and provide an exact and regular report to the patient and cardiologist. Additionally, electronic particles interwoven into the tissue will also know how and when to release anti-inflammatory drugs, all in real time. A cardiac patch, called a “cyborg heart patch,” made of heart muscle cells, biomaterial and nano-composite fibers that allow online monitoring of the engineered-tissue function, is part of a larger system that includes algorithms for managing heart failure. (Israel Hayom 15.03)

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8.6 XTL Biopharmaceuticals Completes Phase 2 Trial Design for hCDR1 in Lupus Treatment

XTL Biopharmaceuticals completed the clinical trial design for its upcoming Phase 2 study of hCDR1 in the treatment of systemic lupus erythematosus (SLE). The global study is planned to commence in 2016, following the Company’s investigational new drug (IND) filing with the U.S. Food and Drug Administration (FDA). The study, developed in consultation with XTL’s Clinical Advisory Board, is based on encouraging feedback received from the FDA in response to the Company’s pre-IND meeting package.

The planned global Phase 2 trial is a double-blind, placebo controlled 26 week study to evaluate the safety and efficacy of hCDR1 in the treatment of SLE. The study will include three arms. Two arms will treat subjects with a different hCDR1 weekly dose, one of which will be the 0.5 mg dose which was the most effective dose tested in the previous Phase 2 study, and the third arm will be placebo. The primary efficacy endpoint of the study will be the proportion of subjects achieving a favorable response at 26 weeks in at least one organ system. BILAG is a standard diagnostic measure of the severity of lupus in organ systems and the recommended measure for efficacy for our trial by the FDA. Data from a prior Phase 2 study clearly showed a statistically significant effect of a 0.5 mg dose of hCDR1 on the BILAG index.

Ra’anana’s XTL Biopharmaceuticals is a clinical-stage biotech company focused on the development of pharmaceutical products for the treatment of autoimmune diseases including lupus. The Company’s lead drug candidate, hCDR1, is a world-class clinical asset for the treatment of systemic lupus erythematosus (SLE). Treatments currently on the market for SLE are not effective enough for most patients and some have significant side effects. (XTL 21.03)

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8.7 Insuline Medical Receive OCS Funding to Improve Long Acting Insulin Therapy

Insuline Medical has received funding approval from Israel’s Office of the Chief Scientist for development of a product to improve long acting insulin therapy. The product is intended to control the release rate of the injected basal insulin from the sub-cutaneous drug depot site into the bloodstream by applying local manipulations, such as heating, cooling, etc., at the injection site. Insuline’s design-award winning product, initially developed for diabetics who inject meal-time insulin, have been proven to be safe and effective. Following a successful completion of this research program, the company intends to develop a new product to improve long-acting insulin therapy.

Petah Tikva’s Insuline Medical has developed technology and products to stabilize and improve the effectiveness of “mealtime insulin” therapy. The company has first and successfully applied the Injection Site Treatment and Stabilization technology (ISTS) to meal time insulin injections, using the InsuPad device. In the US the company is in discussions with the FDA, the device has the following regulatory approvals: CE, Canadian CE, Australian TGA and Israeli AMAR. (Insuline Medical 21.03)

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8.8 Teva Announces Launch of Generic Campral in the United States

Teva Pharmaceutical Industries announced the launch of the generic equivalent to CAMPRAL (acamprosate calcium) delayed-release tablets, 333 mg, in the United States. Acamprosate calcium delayed-release tablets are used for the maintenance of abstinence from alcohol in patients with alcohol dependence who are abstinent at the start of treatment. Treatment with acamprosate calcium delayed-release tablets helps maintain abstinence from alcohol only when used as part of a treatment program that includes counseling and support.

Teva continues its commitment to strengthening its generics business with continued investment in newer, higher-quality generic products. With over 375 generic medicines available, Teva has the largest portfolio of FDA-approved generic products on the market. Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 22.03)

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8.9 Emerald Melanoma Diagnosis System Wins FDA Approval

The system developed by Petah Tikva’s Emerald Medical Applications (formerly DermaCare), which is designed to diagnose melanoma, has been approved for marketing by the US FDA. Emerald’s market cap is $10 million, following its merger with US stock exchange shell Zaxis in July 2015. The company developed the DermaCare system, which uses image processing, data analysis, and artificial intelligence, for diagnosing and monitoring moles on a patient’s body. The system is designed to support the doctor by enabling him to detect changes in comparison with previous images of the patient’s skin. The system is aimed at early detection and shortening the diagnostic process. Because it is a software-based product, the FDA has classified it as low-risk, and there are relatively few regulatory requirements for it. Emerald says that its product is now available through a mobile devices app.

Figures published by the company indicate that it already has distribution agreements, and has begun marketing the system at hospitals in Italy, Sweden, Israel, Australia, and New Zealand. Emerald is also negotiating with distributors in North America, Europe, and Asia. (Globes 22.03)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Silicom Receives New Design Win for Smart Cards from Cyber Security Customer

Silicom received a significant new Design Win from an existing customer, a Tier-1 Cyber Security company, for three versions of Silicom Smart Cards to be deployed in a number of its advanced appliances. Silicom believes that sales generated from this Design Win will ramp up gradually to several million dollars per year. The framework of the Design Win includes both a development phase and a mass production phase. To date, the customer has submitted initial quantity orders for all three Smart Cards, each featuring an on-board network processor that enables higher application performance by off-loading host CPU tasks. Kfar Saba’s Silicom is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the performance and availability of networking appliances and other server-based systems. (Silicom 09.03)

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9.2 Mobli Media is Launching Galaxia – a Platform to Create Mini Social Networks

Galaxia, a new social app on iOS, presents a new approach for online behavior. Galaxia embraces the notion that our online identity needs a platform to hold all the unique aspects of our personality. The app is built to enable people to share content and meet people using whatever persona they like, and to easily move from persona to persona as they explore the multiple world of content in the app. Users have complete control over their personas and each persona is kept completely private and separate from any other.

Galaxia is built to provide users the ability to create “Worlds” in which they can post and discuss any subject of interest. Users can join any public world, share their content or create new worlds where they can set their own rules such as deciding whether the world will be private or public, and whether the world will be free or users will need to pay an entrance fee to join. Each world provides a stream of content, ranging from text, to photos, videos, and live broadcasting.

With offices in New York, Tel Aviv, and Kiev, Mobli Media, the technology company that created Galaxia and other unique products leveraging crowd based activities, was founded in 2011. Mobli Media has raised over $80 million for the company’s different social platforms. (Mobli Media 22.03)

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9.3 Sapiens Announces New ALIS Fast Track Proposition for the UK Protection Market

Sapiens International Corporation announced a new Sapiens ALIS Fast Track (“Fast Track”) proposition. Fast Track is an agile, pre-configured offering from the company’s XCelent Award-winning Sapiens ALIS software suite. It supports the complete policy lifecycle across a wide variety of life, pension and investment products. With the new Fast Track, insurers can accelerate implementation and achieve cost savings, in the cloud or on premise. Implemented faster than traditional platforms, Fast Track supports the rapid deployment of new products, using best-of-breed product templates for quick configuration. Deployed in only several months, the platform is scalable, cost-effective and can be deployed in the cloud (delivered as a service) or on premise to best match a company’s target operating model and fit the business case for new digital initiatives.

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9.4 Magic Software Makes It Easier to Modernize & Mobilize Enterprise Applications

Magic Software Enterprises announced the latest version of its rapid multi-channel application development platform, Magic xpa 3.1. Designed to simplify app modernization, accelerate enterprise mobile app development and maximize end user adoption, this latest release includes end user customization capabilities, an enhanced UI, and a new Upgrade Manager. The metadata-based Magic xpa Application Platform provides an easy-to-use, highly-productive and cost-effective development and deployment environment that lets organizations and ISVs quickly create multi-channel mobile and desktop business apps. The Magic xpa Application Platform is part of Magic’s End-to-End Enterprise Mobility Solution, which also includes Magic xpi Integration Platform, Magic Mobile Device Management and Magic Mobile Professional Services. Magic End-to-End Enterprise Mobility Solution provides organizations with a holistic and cost-effective solution for the rapid creation and deployment of secure, enterprise-grade mobile business apps.

Or Yehuda’s Magic Software Enterprises empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data. (Magic 22.03)

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9.5 Mellanox Announces First 200Gb/s Silicon Photonics Devices

Mellanox Technologies announced a demonstration of 50Gb/s silicon photonics optical modulators and detectors at the Optical Fiber Communication (OFC) conference. The demonstrated devices are the key component in 200Gb/s and 400Gb/s LinkX cables and transceivers. This demonstration is an important milestone toward providing end-to-end solutions for HDR 200Gb/s InfiniBand and Ethernet interconnect infrastructure. Mellanox plans to offer 50Gb/s and 200Gb/s Direct Attach Copper cables (DACs); copper splitter cables (QSFP56 to 4x SFP56); silicon photonics based AOCs for reaches to 200m; and silicon photonics transceivers for reaches to 2km. Mellanox 200Gb/s cables and transceivers will seamlessly support previous generations of 40 and 100Gb/s networks.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage and hyper-converged infrastructure. Mellanox intelligent interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance. (MellanoxTech 22.03)

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9.6 Articoolo Launches Technology for Unique, Human-Like Content Writing

Articoolo developed an algorithm that creates unique, proofread, high-quality textual content from scratch, simulating a real human writer and enables anyone who needs content to purchase articles online for a fraction of the price they used to pay until today. Anyone who deals with content creation on a daily basis dreams of a magical tool that will write articles for them. The struggle of constantly generating ideas, collecting materials, finding related information and summarizing content from several different sources is not only frustrating, but is time consuming and costly as well. Using Articoolo, all users are required to do is to type in a topic two to five words long, determine the length of the requested article and the algorithm will create the article within seconds. The result will be 100% unique, proofread and of high quality, exactly as if written by a human.

Articoolo’s content creator works like the human brain when asked to write an article. First, it will analyze and understand the context of your topic. For instance, if you wanted it to write an article about “The appliance variety of Apple”, the algorithm will understand first that “Apple” in this context is a name of a corporation, not a fruit. Once it has understood the context of your topic, it will find the best resources as a base and then extract sentiment and important keywords. It will then find related content based on the sentiment and main keywords and reconstruct everything to one coherent piece of text. At the end of this process the software will rewrite the article using an NLP engine for multi-level semantic identification, and then verify the readability of the text.

Yokneam’s Articoolo was founded in 2015. Articoolo raised seed funds a year ago and is about to begin its A round soon. (Articoolo 22.03)

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10: ISRAEL ECONOMIC STATISTICS

10.1 February Sees Israel’s Inflation Rate Fall by 0.3%

Israel’s Consumer Price Index (CPI) fell by 0.3% in February, the Central Bureau of Statistics announced, after falling 0.5% in January. Over the past 12 months, the CPI fell 0.2%, while it fell 0.8% over the first two months of 2016, but this was pushed mainly by the drop in world oil prices. This is well below the government’s inflation target range of between 1% and 3%. Outstanding price declines included fresh vegetables (7.8%), clothing and footwear (3.9%), communications (1%) and public transport (1%). Leading price increases in February included fresh fruit (9.1%). (CBS 15.03)

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10.2 Israeli Economy Grew by 2.5% in 2015

The Central Bureau of Statistics announced that the Israeli economy grew by 2.5% during 2015, a slight downturn from recent years. While the economy grew by 3.3% in 2013 and by 2.6% in 2014, growth rates in 2015 were the lowest in six years. However, equally as important, Israel’s growth rate was relatively higher than in other Organization for Economic Cooperation and Development (OECD) countries, which averaged only 2%.

Overall, Israel’s GDP marked an annualized increase of 3.9% in Q4/15. The GDP rose 2.5% in Q1/15, followed by 0.3% growth in Q2 and a 2.4% increase Q3/15. GDP per capita rose by only 0.5% in 2015, compared to 0.6% in 2014 and 1.3% in 2013. GDP per capita in terms of purchasing power parity was 85.3% the average per capita GDP in other OECD countries.

The business sector’s output increased by 2.3% in 2015, the lowest improvement rate since 2003. The government sector’s deficit in 2015 came to NIS 16.4 billion ($4.23 billion), or 1.4% of GDP, an improvement from a deficit of NIS 18.5 billion ($4.77 billion), or 1.7% of GDP in 2014, and of NIS 23.7 billion ($6.11 billion), or 2.2% of GDP, in 2013.

Exports of goods and services dropped by 1.3% in 2015, after rising 1.5% in 2014, while diamond exports fell by 20.4%. The imports of goods and services increased by 0.6% in 2015, following a 3% increase in 2014, while diamond imports fell by 14.8%.

The large number of exits in the high-tech industry and the acceleration in the development of the Tamar offshore gas field have created a record surplus of $13.8 billion in Israel’s current balance of payments. The overall surplus in the balance of payments over the past three years ($33.5 billion) means more dollars are flowing into the Israeli economy than out of it, translating into a low shekel-dollar exchange rate, which averaged NIS 3.9 in 2015. (CBS 13.03)

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10.3 Ten Israeli Companies Account for 51% of Exports

The Israel Export and International Cooperation Institute (IEICI) announced that Israel’s 10 largest exporters accounted for $23.6 billion in exports in 2015, 51.3% of Israel’s total exports of goods for the year, and 2% less in dollar terms than in 2014. Exports by all other companies fell 8% to $22.4 billion. The 10 leading Israeli exporters, excluding diamonds, are Intel Israel, Adama Agricultural Solutions, Elbit Systems, Oil Refineries, Israel Aerospace Industries, Iscar, Teva Pharmaceutical Industries, Israel Chemicals, Paz Oil Company and HP-Indigo.

The IEICI added that the figures for concentration in exports were the highest since it began measuring them in 2007. The balance between the large exporters and the medium and small ones remained equal in 2012-2014. Since 2007, the 10 largest exporters have increased their share of total Israeli exports by over 15%. The report also shows that starting in 2008, the large companies led the growth trend in Israeli exports, while the aggregate amount of exports by the other companies began to decline. In 2015, the large exporters increased their export business by 35%, in comparison with 2008, while exports by other companies were down 7%. (IEICI 19.03)

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10.4 Record Foreign Investment in Tel Aviv Stock Exchange

A weekly review published on 13 March by Ministry of Finance showed that foreign investors increased their holdings in Israeli securities by $6.58 billion in December. This figure is three times the previous record of $2 billion in June 2011. An investigation by Globes shows that the reason for this exceptional figure is the Teva Pharmaceutical Industries -Allergan deal in December, in which Teva issued shares for $7.24 billion in order to finance its $40.5 billion acquisition of Allergan’s generic division. (Globes 13.03)

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11: IN DEPTH

11.1 JORDAN: Jordan is Sliding Toward Insolvency

Kirk H. Sowell posted in Sada on 17 March that the latest budget confirms that Jordan is increasingly dependent on public debt and foreign aid to prop up continued spending—especially on energy subsidies.

On 14 January, Jordan’s elected parliament approved the 2016 budget law. Ten days later, the monarchy-appointed senate also voted to adopt the budget, a decision welcomed by the government. Yet, assessing the bill in the broader context of macroeconomic policy shows that Jordanian fiscal policy only remains sustainable because of immense dependence on foreign aid.

The 2016 budget accounts for total expenses of JD 8.496 billion ($11.983 billion), total revenues of JD 7.589 billion ($10.704 billion) and a deficit of JD 907 million ($1.279 billion), or about 3% of GDP. Revenues are further divided into $9.558 billion from internal sources, such as customs and fees, and foreign aid of $1.148 billion. The 2016 Budgets Law of Government Units, a separate law that details additional revenues and expenses largely by the National Electric Power Company (it also includes water expenses), has total expenses of $2.685 billion and assumes revenues of $2.155 billion (including $88 million in foreign aid), leaving a deficit of $530 million ($618 million excluding aid). Combined, this means that of overall 2016 spending ($14.7 billion), roughly 79% is covered by revenues ($11.6 billion), 9% by aid ($1.3 billion) and 12% is new debt ($1.8 billion).

Despite this high dependence on aid and debt to cover expenses, it appears the pro-government and austerity-averse parliament passed the budget without any revisions, as the figures are similar to those in the original draft bill debated last fall. Some opposition MPs had objected to the government’s few attempts at limited austerity measures, to no effect. Much of the criticism against Prime Minister Abdullah Ensour’s budgetary measures (largely on energy subsidy cuts and increases of customs fees) is lodged without any corresponding alternative economic plan. The only outspoken political dissent is simply opposing fiscal discipline without any serious thought for the economy’s sustainability.

In the past, Jordan’s public-sector-heavy, private-sector-weak economy has staved off insolvency with foreign aid and periodic, substantial reductions in total public debt through privatization. Joining the peace process that led to a peace agreement with Israel in 1994 brought substantial debt relief. In the late 2000s, a series of privatizations substantially reduced public debt, but companies once sold off cannot be sold again. In the last several years, Jordan’s debt-to-GDP ratio has increased substantially. As recently as August 2011 Jordan’s overall national debt was $16.9 billion, about 57% of its GDP. But an increase of $3.2 billion in the national debt in 2015, including regular deficit, new electricity debt, and accumulated interest, brought Jordan’s debt-to-GDP ratio to 90% and more than doubled its absolute debt in less than five years.

The key factor in the post-2011 debt boom is electricity, or more precisely, the sovereign debt of the above mentioned National Electric Power Company (NEPCO). Until 2011, Jordan imported gas from Egypt at prices frozen at relatively low rates. Following attacks on the pipeline in 2011, Egyptian authorities were slow in repairing it, and Egypt’s contribution to Jordan’s electricity supply fell annually from 87% in 2009 to 14% in 2012. This forced Jordan to resort to emergency importation and the use of expensive alternatives. Thus by 2013 NEPCO’s contribution to the deficit was $1.36 billion, or over 10% of the regular budget. Due to a mixture of falling oil prices and better government planning, the electricity deficit fell to “just” $738 million in 2014 and is projected in the budget to be $530 million in 2016. Accumulated electricity debt came to an estimated 17.8% of GDP in January, meaning that excluding this, the rest of Jordan’s debt forms 72% of its GDP.

As a limited effort to offset NEPCO’s contribution to the debt spiral, the government undertook an electricity austerity measure in 2015 that is regularly described by parliamentary critics and protesters as “increasing” prices by 7.5% (reduced from the original proposal of 15% in what was likely a prearranged compromise). Yet it may be more properly described as a subsidy cut for consumers. NEPCO bills residents on a graduated system whereby customers pay exponentially more per unit for higher usage, but even with the price hike it does not charge them enough collectively to cover expenses, and the result is NEPCO’s deficit. The practical implication is that during the summer only the relatively affluent have air conditioning, as a household with high usage will pay over $200 per month, about 40% of the average Jordanian family’s income. This system allows poor Jordanians to have virtually free electricity, but only enough to cover lighting with no heating or cooling. Were NEPCO forced to actually balance its budget, much of Jordan would struggle just to pay for basic utilities.

Instead, Jordan is increasingly turning to foreign aid to offset its debt, particularly from the United States and the Arabian Gulf. The Congressional Research Service reports that 2016 U.S. aid for Jordan is set at “not less than” $1.275 billion, with additional aid above that level available through separate military provisions. While U.S. economic aid to Jordan dates back to 1951, it has increased substantially in recent years. It was still below $400 million per year in 2011, but increased to $700 million in 2014. Arab Gulf states, especially Saudi Arabia, also provide aid to Jordan, although Qatar’s total freeze on aid has drawn some attention, including by Prime Minister Abdullah Ensour and Finance Minister Omar Malhas during his formal budget speech last December. As of January, the government claimed that Qatar’s aid termination accounted for almost all of the disparity between its original budget deficit of $970 million to a revised estimate of $1.27 billion for 2015.

Officials routinely cite regional instability and resulting refugee flows as the reason why Jordan is so much in need of aid, and there is some truth to this. The country has suffered a drop in tourism due to security fears emanating from its neighbors (although Jordan itself is quite safe), the collapse of trade with Iraq and Syria, and increased expenses from Syrian refugee aid.

Yet aid provided by international agencies to refugees, combined with the increase in direct budget support through foreign aid, appears to be balancing out the refugee costs, as seen from comparing deficit levels before and after recent instability. In 2011 the regular budget deficit was $1.49 billion after including foreign aid, and in 2010 it was $1.44 billion. As noted above, currently estimated corresponding figures for 2015 and 2016 (including foreign aid) are $1.27 billion and $1.28 billion, respectively. The rough equivalence between 2010-11 and 2015-16 deficits suggests that Jordan’s budget deficit (not counting NEPCO’s) is roughly $1–1.5 billion per year after foreign aid has been factored in. With the World Bank putting GDP at roughly $36 billion, that means that a minimum 3% of GDP is being added to public debt each year, not including electricity debt.

Meanwhile, the government maintains a socio-economic model burdened by decades of excessive public sector hiring, excessive reliance on low-wage foreign labor as an alternative to employing Jordanians, and an education system known for its production of quantity rather than quality. So even if the regional security crisis were to somehow disappear in the near future, the weakened incentives for foreign donors to provide aid for refugee costs would leave Jordan with a new debt crisis.

Kirk H. Sowell is the principal of Utica Risk Services, a Middle East-focused political risk firm. (Sada 17.03)

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11.2 GCC: GCC Forecast to See Slowest Growth since 2008

Weaker oil prices will stunt economic growth in the GCC region to its slowest pace since the global financial crisis, according to a new report. However, the Institute of Chartered Accountants in England and Wales (ICAEW) also said that serious fiscal reform should see the region avoid recession. According to the its Economic Insight: Middle East Q1 2016, depressed oil prices will compound economic concerns in a region already facing issues over fiscal sustainability, structural economic weaknesses and deepening military conflict in Iraq, Libya, Syria and Yemen.

The report, produced by Oxford Economics and commissioned by ICAEW, said oil prices are set to remain lower until at least 2017, due to the continuation of current Organization of Petrol Exporting Countries (OPEC) policy and increasing concerns over growth in China and other emerging markets. It forecast that Brent crude will average $32 per barrel this year and remain below $70 for the rest of this decade.

“Sustained low oil prices will erode existing buffers like subsidies in oil-rich Gulf countries more rapidly, threaten to undermine long-standing currency pegs and slow economic growth further as trade, investment and capital flows fall back. Although recession should be avoided, growth across the GCC will be just 2.1% – its lowest since the financial crisis,” said Tom Rogers, ICAEW economic adviser and economist at Oxford Economics.

He said that with the exception of the UAE, true economic diversification away from a heavy dependence on oil exports is yet to be achieved.

Although non-oil growth averaged an impressive 7.2% per year from 2003 – 2014, much of this growth was fueled by oil-financed government spending on infrastructure, key development projects, public sector salaries, benefits and subsidies, the report said, adding that with government spending now set to be cut back, these growth drivers will fade.

In recent months, GCC governments have given serious consideration to fiscal consolidation. The Saudi Government has announced a year-on-year decline in planned spending for the first time in 14 years, while Oman has announced a 16% cut in spending for 2016 and a rise in corporation tax.

All GCC governments have also committed to establishing a region-wide Value Added Tax (VAT) over the medium term to lift non-oil revenues and most have already started on cutting energy subsidies. Overall, government spending in the GCC region is expected to decline by 8% this year and rise more slowly in future years.

The report said that another threat to stability and growth in the GCC has emerged from pressure on long-standing currency pegs against the US dollar, with markets expecting an unprecedented 10% depreciation of the Saudi riyal over the next year.

The ICAEW said countries like Oman and Bahrain are particularly vulnerable due to low financial reserves. While de-pegging would generate greater government revenues by lifting the dollar oil revenues in local currency terms, it would also impose heavy costs, including rising inflation, a loss of policy credibility and additional volatility in oil revenues.

Michael Armstrong, ICAEW regional director for the Middle East, Africa and South Asia (MEASA), said: “The near-term objective for GCC governments will be to maintain financial stability and avoid a deeper crisis…Weak growth will make the case for economic reforms in areas such as privatization and competition policy, housing, the labor market, education and the public sector bureaucracy even more complex on a country-by-country basis. A period of skillful policymaking will be required to balance the need for both growth and stability.”

The report also forecast that GDP growth in Saudi Arabia over 2016 is expected to reach 1.2% while continued infrastructure investment for World Expo 2020 should lead to growth of 2.7% in the UAE in 2016. The Bahrain economy is expected to expand by 1.9% this year while Qatar’s economy is expected to grow by 4.3%, driven by substantial infrastructure investment. Expected GDP growth of 2.3% is forecast in Kuwait in 2016. (ICAEW 21.03)

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11.3 EGYPT: Fitch Says Devaluation Positive, Economic Challenges Remain

On 21 March, Fitch Ratings said decisions by the Central Bank of Egypt (CBE) last week, including a devaluation of the Egyptian pound, are broadly credit positive but the country faces a difficult year of slower growth, high inflation and large financing needs.

On 14 March, the central bank devalued the currency by 14% against the US dollar and said it would adopt a more flexible exchange-rate policy. The CBE supported the devaluation by auctioning $1.5b to help importers two days later, and hiked its main policy rates on Thursday by 150 basis points. These decisions reflect the pressures on the currency from a widening current account deficit, insufficient capital inflows and low levels of international reserves, which are less than three months of current external payments.

The auction last Monday devalued the currency from EGP7.73:$1 to EGP8.85:$1, while the auction on Wednesday was at the slightly stronger rate of EGP8.78. This is more than a minor adjustment and takes the rate closer to the parallel market rate, which had weakened to above EGP9.5:$1. Our forecast builds in further exchange-rate weakness to above EGP9:$1 by the end of 2016, given the challenges the economy still faces.

Much will depend on the CBE’s attempts to rebuild its stock of foreign reserves, which stood at $16.53b at end-February, down from $37b at end-2010 before the Arab Spring uprisings. The trade deficit has widened, insecurity has hit tourism revenue, political uncertainty has deterred foreign capital and financial support from the Gulf Cooperation Council has decreased for now. Expectations of devaluation have also restrained foreign inflows into Egypt. The CBE hopes that its decisions last week will bolster confidence in the currency and nudge portfolio investors off the sidelines.

Two initiatives in the banking sector may help. Two state-owned banks are now offering foreign investors options on treasury bills with exchange-rate hedging. These banks are also offering 15% on three-year certificates of deposit for domestic investors who buy them within 60 days in exchange for foreign currency. If constraints on the supply of foreign exchange persist around current levels, Egypt could turn to the IMF. Fitch believes an IMF program is within reach if required by the authorities.

It is unclear exactly what the central bank means by a more flexible exchange-rate policy. Inflation will be the central consideration. Consumer price inflation dipped to 9.1% y-o-y in February after averaging 10.4% in 2015. The central bank referenced this as supporting the timing of the devaluation. However, inflation is likely to rise again as the weaker exchange rate will make imports more expensive. If plans to implement VAT come to fruition this year, that could also put upward pressure on prices. In this context it was no surprise that the central bank raised interest rates following the depreciation to try to anchor inflation expectations.

While we view these monetary policy developments as credit positive, there are fiscal implications as higher interest rates raise the government’s cost of borrowing. Interest payments on government debt already accounted for 26% of budget spending in the fiscal year ending June 2015. This highlights the importance of consolidation measures for the budget currently under discussion for the 2017 fiscal year.

We affirmed Egypt’s ‘B’/Stable sovereign rating in December. (Fitch 21.03)

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11.4 TURKEY: After Seizing Zaman Newspaper, What’s Next for Turkey?

Mustafa Akyol posted in Al-Monitor on 11 March that not just a few newspapers like Zaman, but the entire Turkish media is under threat by the current regime in Turkey.

Something very unusual, if not unprecedented, happened in Istanbul on 4 March. A group of policemen marched to Zaman, Turkey’s largest-circulation daily newspaper, with a court order to seize it. They dispersed the hundreds of protesters waiting for them in front of Zaman’s offices with tear gas, forced themselves into the building and took control of the newsroom. Soon, Editor-in-Chief Abdulhamid Bilici learned that he was fired. The newspaper’s website went offline. Meanwhile, Zaman’s 27 years of digital archives — including all of its news stories, editorials and op-eds — were erased. A whole newspaper was destroyed.

The destruction made room for a new creation. A day after the police took full control, Zaman, which had lately become very outspoken against President Erdogan and his rule, found itself with an opposite political line under a trustee appointed by the government to manage the paper. It now praises Erdogan and his glorious “New Turkey.” In other words, it became one of dozens of other Turkish newspapers whose sole mission is to support the powerful president and intimidate his foes.

This news may have shocked outsiders, but in Turkey, hardly anyone was surprised. It was clear that Zaman and its entire media group, including Cihan News Agency, would be seized, as Ipek Media Group, which published the dailies Bugun and Millet, was seized last October and turned pro-Erdogan overnight. All these news outlets were affiliated with the movement of Fethullah Gulen, and the Turkish public is repeatedly told that every asset of his religious community will be confiscated by the state.

Who circulated this news? The regime’s own propaganda machine did, in particular a columnist in the pro-Erdogan daily Star who had recently become quite famous (or notorious) in Turkey as the mouthpiece of the new national security establishment. Cem Kucuk had written repeatedly (and joyfully) about the impending Zaman takeover.

After the seizure, the same columnist wrote a piece headlined “The real struggle is beginning only now,” referring to the struggle with the “Fethullah Gulen Terror Organization,” as the pro-Erdogan media has been calling it lately. Accordingly, all assets of the Gulen movement, including the new dailies that took the place of Zaman and Bugun, various news sites and 17 different universities across Turkey would also be seized. The reason: a “terrorist organization” — in fact “the most dangerous terrorist organization of the past 1,000 years” — could never be allowed to have such assets in any democratic society.

This is how the current regime in Turkey justifies the confiscation of Zaman and other closures of media outlets that have stood in its way. But this rationale raises many questions. At the very least, we have to ask if the Gulen movement really is a terrorist organization and why Erdogan and his party were in close collaboration with it until 2013, when the decade-old political alliance between these two camps collapsed. Most of the alleged crimes by the Gulen movement’s members in Turkey’s police and judiciary — such as illegal wiretapping and doctoring evidence to jail political opponents — took place before 2013 and with Erdogan’s full support. This must be why the columnist in question emphasized that the Gulen movement must be considered a terrorist organization only after 1 January 2014, just a week after the Gulen-affiliated police and prosecutors opened a corruption investigation into key government figures.

It is fair to say that the Gulen movement has much to account for in regard to its covert presence in the Turkish police force, judiciary and bureaucracy, and some of its members should indeed be tried for abuse of state power. But to treat the entire movement — which includes schools, kindergartens, nongovernmental organizations, charities and media outlets — as a terrorist organization has no legal basis. It is rather an act of political vengeance.

Furthermore, the confiscation of Zaman — and before that, Bugun and Milliyet — is not just an attempt to destroy of the Gulen movement, but part of efforts to subdue the entire Turkish media.

This situation has been going on for years now, but involves more subtle techniques than court orders and police seizures: financial measures. They typically start with the boss of a newspaper facing new economic challenges that originate in Ankara. As a result, the newspaper is sold to someone else, who then turns out to be a very close friend of Erdogan. Or the newspaper accepts handing over control to a “general manager” who is approved by the Turkish leadership. Consequently, the newspaper turns either mildly or zealously pro-Erdogan and fires the editors, reporters and columnists who displease the president and his men. At least seven major newspapers have been transformed in this way in the past seven years.

Even Islamist papers do not escape this suffocation if they are not solidly pro-Erdogan. Such was the case of Dirilis Postasi, whose key writer, Hakan Albayrak, displeased Erdogan with his pieces that, while praising the president as “the chief,” offered some constructive criticism. Soon, the companies that ran advertisements in Dirilis Postasi were encouraged by powerful people in Ankara to withdraw all advertising, Albayrak reported. Soon after that, Albayrak was fired.

So in the grand scheme of things, not just a few newspapers like Zaman, but the entire Turkish press is being taken over by the current regime. This is a regime that insists that democracy is about nothing but elections, and the winner of elections — as the embodiment of the “national will” — has the right to dominate every aspect of society.

Mustafa Akyol is a columnist for Al-Monitor’s Turkey Pulse, a columnist for the Turkish Hurriyet Daily News, and a monthly contributing opinion writer for The International New York Times. His articles have also appeared in Foreign Affairs, Newsweek, The Washington Post, The Wall Street Journal and The Guardian. (Al-Monitor 11.03)

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Fortnightly, 6 April 2016

April 6, 2016, 12:52 pm

≫ Next: What’s New at EDI – April 2016

≪ Previous: Fortnightly, 23 March 2016

6 April 2016
27 Adar II 5776
28 Jumada Al-Akhir 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel & US Sign New Energy Agreement
1.2  Foreign Construction Firms to Be Allowed to Operate in Israel
1.3  Knesset Limits Bankers’ Salaries to 2.5 Million Shekels Annually
1.4  Netanyahu Says Natural Gas Ruling Hurts Israeli Economy
1.5  Israel & China Open Talks on Free-Trade Agreement

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Moody’s Confirms Israel’s A1 Stable Rating
2.2  Intel Israeli Procurements Worth $10 Billion In Past Decade
2.3  Raytheon Commits To Israeli Reciprocal Procurements
2.4  Playbuzz Secures $15 Million in Funding from Saban Ventures & Disney
2.5  Israeli Incubator Teams with Chinese University
2.6  B Communications Completes Private Placement of NIS 148 Million
2.7  Magal S3 Acquires Ontario’s Aimetis Corp – A Global Leader in VMS Software
2.8  IAI Concludes a Successful Participation at India’s DEFEXPO

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Arab Internet Users Forecast to Rise to 226 Million by 2018
3.2  International Dairy Queen Opens First DQ Grill & Chill Restaurant in Jordan
3.3  Cummins and Olayan Announce Middle East Joint Venture
3.4  Dubai Seeks New Investments on Tour of US Cities
3.5  Xactly’s Growth Continues with First Customer in Saudi Arabia
3.6  Turkcell Officially Launches 4.5G in Turkey

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Plastic Bag Law Passes in Israel Banning Free Shopping Bags as of 2017
4.2  Oman to Encourage Household Generation of Solar Power
4.3  Morocco Seeks to Generate 52 % of its Power from Renewable Sources

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Trade Deficit Widened to $2.46B by February 2016
5.2  Lebanon’s Fiscal Deficit Broadened 28.62% by the End of 2015
5.3  World Bank’s $100 Million to Create Jobs for Jordanians & Syrian Refugees

♦♦Arabian Gulf

5.4  Indian Remittances Fall as Arabian Gulf Reduces Demand for Foreign Workers
5.5  Bahrain’s Real GDP Growth Rises to 2.8% in Fourth Quarter
5.6  Qatar Trade Surplus Shrinks 53.5% as Energy Exports Slump
5.7  Shrinking Saudi Money Supply Points to Slowing Economy
5.8  Foreign Firms in Saudi Arabia Will Have to Hire 75% Locals

♦♦North Africa

5.9  Egypt to Repay $1 Billion Owed to Qatar in July
5.10  Egypt’s Trade Deficit Falls 5% in December
5.11  Egypt’s Tourist Numbers Drop in February for Fourth Month in a Row
5.12  Egypt’s Foreign Currency Reserves Slightly Up In March
5.13  Egypt’s Suez Canal Revenues Decline for 2nd Consecutive Month
5.14  Morocco’s Automotive Industry Aims to Create 90,000 jobs by 2020
5.15  Morocco’s Economic Growth Stands at 4.5% in 2015

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Inflation Eases In March As Food Prices Drop
6.2  Turkey & Pakistan Sign Free Trade Agreement Framework
6.3  Only 30% of Workers in Turkey Are Women
6.4  Most Greeks Willing To Work Abroad As Job Insecurity Mounts

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Israelis’ Penchant for Holiday-Related Names

8: ISRAEL LIFE SCIENCE NEWS

8.1  Takeda and Teva Establish Teva Takeda Yakuhin in Japan
8.2  First Human Results with V-Wave’s Interatrial Shunt Published in The Lancet
8.3  Teva Announces FDA Approval of CINQAIR (reslizumab) Injection
8.4  Metabomed Completes $18 Million Series A Financing

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Stratoscale $27 Million Series C Funding as it Transforms Cloud Computing
9.2  Mellanox Announces New Line of InfiniBand Router Systems
9.3  Stratasys’ Transformational, Market Disruptive J750 3D Printer
9.4  Magos Systems Wins Challenge for Smart City in Brazil
9.5  Contextors Unveils Breakthrough Language-Learning Capabilities
9.6  justAd eyeMagnet Transforms Static Ads to Animated Ads Automatically
9.7  MUV Interactive Launches Smart Wearable BIRD in Japan

10: ISRAEL ECONOMIC STATISTICS

10.1 New Tel Aviv-Jerusalem Fast Rail Line to Open in 2018

11: IN DEPTH

11.1  ISRAEL: Natural Gas Judgement Casts Shadow Over Israel’s Energy Plans
11.2  ISRAEL: U.S. Firms Target Investment in Israeli Cannabis R&D
11.3  QATAR: Fitch Affirms Qatar at ‘AA’; Outlook Stable
11.4  EGYPT: Cairo’s Crude Crisis
11.5  EGYPT: Will Egyptian Parliament Cut Into the Military’s Profit Margin?
11.6  EGYPT: Egyptian State Takes on Independent Trade Unions
11.7  TURKEY: Key Trends Impacting the Turkish Elevators and Escalators Market
11.8  GREECE: Privatizations Program Struggles to Make Target of €2 Billion

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel & US Sign New Energy Agreement

U.S. Energy Secretary Moniz and his Israeli counterpart, Energy Minister Steinitz signed a new joint energy deal in Jerusalem on 4 April, intended to tighten cooperation between the countries. The agreement expands areas of cooperation to include fuels and fuel alternatives, natural gas, smart grid technologies, desalination and water treatment, and the physical and cyber-defense of energy and water installations. The deal stemmed from the understanding that developing advanced technologies in the fields of energy and water, for the purpose of creating secure methods of delivery while protecting the environment and making energy more efficient, was of utmost importance to both countries. (Various 05.04)

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1.2 Foreign Construction Firms to Be Allowed to Operate in Israel

Finance Minister Kahlon and Construction Minister Gallant invited foreign construction firms to bid on local tenders in an effort to introduce new technologies into Israel’s construction industry and boost its productivity. In an attempt to appease local contractors, Kahlon and Gallant said that international firms bidding for projects in Israel will do so as part of joint ventures with Israeli firms. The Housing Ministry will license up to six foreign companies to operate in the field of residential housing, for a period of up to five years. The firms selected will be able to bring up to 1,000 construction workers to Israel, and will have to adhere to strict guidelines and supervision pertaining to construction objectives and standards. While operating in Israel, the foreign firms will be subject to Israeli law, including the stipulations of the Sale (Apartments) Law and the orders of the Contractors Registrar. (Various 26.03)

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1.3 Knesset Limits Bankers’ Salaries to 2.5 Million Shekels Annually

The Knesset has passed a law capping the annual salaries of bank executives at NIS 2.5 million ($658,000), described as among the world’s toughest such restrictions. The law, approved on 21 March, says no salary in the financial sector can be more than 35 times that of the lowest-paid worker in the same company, with a ceiling of NIS 2.5 million. The high cost of living is a major concern in Israel and a key issue for Finance Minister Kahlon (Kulanu), who pushed for the legislation, approved by a vote of 56 to zero in the 120-seat Knesset. Prime Minister Binyamin Netanyahu has taken a pro-business stance, but needs Kahlon’s Kulanu party to maintain his majority. (AFP 22.03)

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1.4 Netanyahu Says Natural Gas Ruling Hurts Israeli Economy

On 27 March, Israel’s High Court of Justice overturned the government’s framework deal on natural gas, delivering a blow to Prime Minister Netanyahu and a consortium of energy companies. The ruling gave the Knesset a year to amend the plan or the framework will be canceled. It cited a clause in the deal that would prevent Israel from making significant regulatory changes for the next 10 years as the main reason for scuttling it, arguing that the clause restricts the Knesset’s powers.

Netanyahu has made the energy deal a centerpiece of his agenda, saying the gas sales from Israel’s large offshore reserves would bring energy self-sufficiency and billions of dollars in tax revenues. Critics have said the deal gives excessively favorable terms to the government’s corporate partners.

Resource-poor Israel announced the discovery of sizeable offshore natural gas deposits about five years ago. A partnership of Israeli and U.S. companies, including Texas-based Noble Energy and Israel’s Delek Group, have already begun extracting some reserves. (IH 28.03)

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1.5 Israel & China Open Talks on Free-Trade Agreement

Prime Minister Netanyahu and Chinese Vice Premier Liu announced on 29 March the start of talks on a free-trade agreement between the two nations. Netanyahu and Liu met at the launch of the 2016 Israel-China Committee for Cooperation in Innovation summit in Jerusalem. The talks on the potential agreement will be led by representatives from ten Israeli government ministries and agencies, including the Ministry of Foreign Affairs, Ministry of Agriculture, Ministry of Economy and Industry, the Council for Higher Education, and the Office of the Chief Scientist. Israeli sources believe an agreement with China has the potential to double the trading volume between the two nations and increase their individual production. Bilateral trade is currently estimated at $8 billion per year. (Globes 30.03)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Moody’s Confirms Israel’s A1 Stable Rating

On 31 March, Moody’s Investors Service confirmed Israel’s A1 rating with a stable outlook. Moody’s explained that the rating was supported by economic flexibility and the great effectiveness of the government, which is constantly working to improve Israel’s debt and financing figures. Moody’s added that were it not for Israel’s geopolitical risks, its credit rating would be higher.

Moody’s describes Israel’s economy as very strong, with growth supported primarily by high-tech exports. Writing about this sector, Moody’s economists say that it rests on a highly educated population and high R&D expenditure. Israel’s debt is low by international standards, and Israel dealt effectively with the crisis that engulfed the world’s economies. The weak points listed by Moody’s include political instability and security risks that grow when the situation in Syria becomes even more unstable. Moody’s also cites threats by Iran, which continues to fuel global terrorism, especially against Israel. Concerning the plan for natural gas development in Israel, Moody’s says that political disputes on the issue are liable to drive away potential investors in natural resources. Moody’s forecasts 2.9% economic growth and 0.6% inflation in 2016, compared with 2.5% growth and minus 1% inflation in 2015. (Moody’s 31.03)

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2.2 Intel Israeli Procurements Worth $10 Billion In Past Decade

Intel reported that it has spent $10 billion on procurement in the Israeli market over the past decade. Figures show that 80% of its purchases in Israel were from small and medium-sized businesses, and it spends an annual average of $1 billion on procurement from 1,000 different Israeli suppliers. Half of this $10 billion total has been recognized as part of the reciprocal procurement undertaken by Intel as a condition for the grants and benefits it received over the years from the Ministry of Economy and Trade Investment Promotion Center.

Intel says that its procurement is six times as much as its obligations under its agreements with the state. The company adds that its procurement personnel helped and trained local suppliers to meet its stringent standards, which enabled them to improve their businesses, thereby creating new jobs in the economy and enabling them to expand to new markets. According to Intel, these suppliers exported $2 billion in goods and services over the past decade.

Figures provided by Intel show that 80% of its procurement in Israel is used for its processor manufacturing activity, mostly at the company site in Kiryat Gat. The other 20% is designated for the company’s research and development in Israel and other countries. Intel has 1,100 employees in Israel and is now completing the construction of its upgraded fab in Kiryat Gat. The company’s investment in upgrading this plant is projected to reach $7 billion. When the work is completed, the Kiryat Gat fab will be one of Intel’s most advanced facilities in the world. (Globes 31.03)

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2.3 Raytheon Commits To Israeli Reciprocal Procurements

In an agreement signed on 30 March, US arms manufacturer Raytheon will make $9.5 million in reciprocal procurement in Israel over the next five years. The agreement was signed in the US by senior company officials and Ministry of Economy and Industry Division for Foreign Investment and Industrial Cooperation. The agreement follows cooperation between Raytheon and Rafael Advanced Defense Systems in the development and production of the new David’s Sling defense system against rockets and missiles. The two companies have equal shares in the venture: Rafael makes the interceptor missile for the system, while Raytheon produces the launchers, chassis, and other accessories for it.

Raytheon is committing itself to reciprocal procurement in Israel for the first time. Under the new agreement, its procurement in Israel will focus on electronics and semiconductor enterprises, many of which are already subcontractors for Rafael in the various ventures in which it is involved. The Division for Foreign Investment and Industrial Cooperation said that a large proportion of these companies were active in northern Israel. Since 2007, when the program for joint development of David’s Sling began, the US administration has allocated $800 million in special aid for it. US aid for this program, and for the Arrow 3 defense missile program, is slated to continue in the coming years. (Globes 31.03)

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2.4 Playbuzz Secures $15 Million in Funding from Saban Ventures & Disney

Tel Aviv’s Playbuzz, the leading platform for online content engagement and social distribution, has raised $15 million in new funding, led by Saban Ventures with participation from The Walt Disney Company. Existing investors 83North, Carmel Ventures and FirstTime Ventures also participated in the investment round. Playbuzz will use the investment to further enhance its proprietary content-engagement platform and expand its sponsored content business, which already works with many of the world’s leading brands to create and distribute native advertising campaigns at scale.

The Playbuzz platform is used by tens of thousands of publishers, brands and content creators to create and distribute content in formats that optimize audience engagement and social distribution. Examples of Playbuzz’s innovative content formats include slideshows, flip cards, galleries, quizzes, lists and video snaps. The popularity of content created using Playbuzz is skyrocketing, as engagement metrics for such items outpace those of traditional digital formats, such as articles and long-form video. Playbuzz-powered content generates average item completion rates of up to 94% and social share rates as high as 15%. (Playbuzz 31.03)

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2.5 Israeli Incubator Teams with Chinese University

On 30 March the Alon MedTech Ventures incubator signed a cooperation agreement with Tsinghua University, considered one of China’s leading universities. This is the first cooperation agreement of its kind between an Israeli technology incubator and a Chinese entity. The agreement is Tsinghua University’s second in Israel, after it signed an agreement with Tel Aviv University in 2013 to establish a joint center in China for Israeli and Chinese researchers, called the XIN Research Center.

Under the agreement, the Alon MedTech incubator will scan projects from the XIN Research Center, and select several of them for further development in the incubator. The products to be developed by these companies will probably be adapted to the Chinese market and be prepared for marketing in China at the accelerator jointly owned by Alon MedTech and the XIN Center, and will opened nearby the latter. The final model has not yet been settled, and any format signed will require prior approval from the Ministry of Economy and Industry Chief Scientist for sending technologies developed with his support overseas. At the same time, parties at Tsinghua University will help companies in the Alon MedTech incubator find both investors and marketing channels for their medical device products. (Globes 30.03)

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2.6 B Communications Completes Private Placement of NIS 148 Million

B Communications completed the private placement of NIS 148 million par value of its Series B Debentures to Israeli institutional investors for an aggregate consideration of approximately NIS 162 million (approximately $42 million). The Company received the approval of Midroog, an Israeli rating company affiliated with Moody’s, that the issuances will not cause a reduction in the Series B Debentures’ Aa3.il rating; and also received the Tel Aviv Stock Exchange approval for the listing of the additional debentures for trade. The private placement was carried out as an increase to the outstanding Series B Debentures of B Communications, which were first issued in September 2010 and have identical terms. Ramat Gan’s B Communications is an Israeli corporation focused on the telecommunications industry. Its shares are traded on the Nasdaq Global Market and the Tel-Aviv Stock Exchange under the symbol BCOM. B Communications’ asset is its controlling interest (approximately 26.34%) in Bezeq The Israel Telecommunication Corp, Israel’s incumbent telecommunications group. (B Communications 31.03)

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2.7 Magal S3 Acquires Ontario’s Aimetis Corp – A Global Leader in VMS Software

Magal Security Systems announced that Senstar, its fully owned subsidiary based in Canada, acquired Aimetis for an enterprise value of approximately $14 million. Aimetis, headquartered in Waterloo, Ontario, is a global leader in intelligent IP video management software (VMS), and was recently recognized by Deloitte, a leading consulting and accounting firm, as one of the fastest growing technology companies in North America. Aimetis’ product portfolio is highly complementary to Senstar’s large portfolio of perimeter intrusion detection systems (PIDS), adding a state of the art video surveillance offering with unmatched solutions for outdoor and critical sites. The acquisition expands the product portfolio by about 20%, and diversifies their offering into new markets such as education, health care and retail.

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2.8 IAI Concludes a Successful Participation at India’s DEFEXPO

At the conclusion of India’s defense exhibition ‘Defexpo’ 2016 that took place in Goa, India recently, IAI announced that it has finalized new sales worth hundreds of millions of dollars in the past quarter. Those sales covered Unmanned Aerial Systems (UAS), air defense and radar systems, among others. IAI top executives that participated at the event have met many of India’s senior leadership of India’s defense and security organizations. At the event IAI displayed advanced systems of interest to the Indian customers, many of them operationally proven in India. Among the new systems introduced here were radar systems providing early warning against mortar attacks and improvised explosive charges (IEDs).

IAI has been operating and selling advanced defense products to the Indian Ministry of Defense and other government organizations for the past 25 years, through a strategic partnership that span many areas. Through the years IAI established subcontracting, cooperation agreements and joint ventures with numerous Indian companies and expanded its operation and cooperation with military branches, navy and air force, coast guard, border security and other agencies. This cooperation also spans to joint research and development, for example in the Barak-8 air defense system, in its naval and land-based configurations, various radar systems, unmanned systems and more.

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Arab Internet Users Forecast to Rise to 226 Million by 2018

The number of internet users in the Arab world is expected to rise to about 226 million by 2018, according to the Arab Knowledge Economy report 2015-2016. The report said the internet penetration rate will jump from about 37.5% in 2014 to over 55% in 2018, or about 7% above the estimated world average of 3.6 billion users. Developed by Orient Planet Research, the study showed the six GCC states led the Arab region in terms of ICT indicators in 2015. Bahrain led the way, registering 74.15% in internet user penetration, while Kuwait registered the highest in mobile subscription penetration with 194.62%. The Arab ICT Use Index examines four major indicators for each of the 18 MENA economies – mobile phone subscribers, fixed-line subscribers, internet users, and installed computers. (AB 29.03)

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3.2 International Dairy Queen Opens First DQ Grill & Chill Restaurant in Jordan

The Dairy Queen system, part of Berkshire Hathaway, has opened a new DQ Grill & Chill restaurant at Abdoun Circle in Amman, Jordan. The opening of this location in Jordan represents the latest country outside of the United States with a DQ brand presence. SKM Franchise Co. has entered into a long-term franchise agreement with American Dairy Queen, Corp. (ADQ) and plans to develop a minimum of 10 locations, including five DQ Grill & Chill restaurants throughout Jordan over the next five years.

The Nafal brothers, who lead SKM Franchise Co. Ltd., have more than 20 years of retail development experience. In 2005, they opened El Rancho Supermercado, which grew into a chain of 13 supermarkets in Texas. They own La Bodega, a food distribution company based in the state as well. (IDQ 30.03)

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3.3 Cummins and Olayan Announce Middle East Joint Venture

Columbus, Indiana’s Cummins Inc. and The Olayan Group announced the formation of Cummins Arabia, a 50:50, three-country distribution joint venture company in the Middle East. This joint venture consolidates the distribution of Cummins products in the United Arab Emirates (UAE), Saudi Arabia and Kuwait. Those products are currently distributed by Cummins’ wholly-owned UAE distributor and Olayan-owned independent distributors – General Contracting Company (GCC) in Saudi Arabia and General Transportation and Equipment (GTE) in Kuwait. These three countries represent some of the largest markets for Cummins in the Middle East. The partnership allows Cummins to greatly expand access to the Saudi and Kuwaiti markets and operate closer to its customer base. At the same time, it will provide a valuable platform for the training and employment of nationals in each country.

The joint venture entity will be formed and the new operating structure implemented in the second half of 2016. It will be headquartered in Saudi Arabia. Plans are underway to build dedicated facilities there.

Cummins, a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. (Cummins 29.03)

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3.4 Dubai Seeks New Investments on Tour of US Cities

Dubai Investment Development Agency (Dubai FDI) and Dubai Exports are touring four cities in the US as part of a mission aimed to attract North American industries and investment into the emirate. Dubai FDI, an agency of the Department of Economic Development (DED) and Dubai Exports, the export promotion agency of DED, said the trade mission delegation also has representatives from Dubai South, Tecom, Dubai Silicon Oasis (DSO), and Emirates.

The itinerary includes presentations, meetings and site visits in Orlando, Dallas, Denver, and San Francisco to introduce the focal points of Dubai’s economic development strategy and share insights on successful investment projects. Orlando was the first stop for the Dubai delegation, where exports to the UAE is reported to have supported 17,598 jobs in 2014. Solar energy will be the focus of discussions in San Francisco, California where the delegation will tour the Solar Technology Acceleration Centre that has the largest test facility for solar technologies in the US. (AB 26.03)

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3.5 Xactly’s Growth Continues with First Customer in Saudi Arabia

San Jose, California’s Xactly, a leading provider of cloud-based incentive solutions, today announced that Sherbiny Holdings, a fast-growing Saudi industrial trading, manufacturing and servicing group, has chosen Xactly to provide real-time visibility to help motivate employees and retain top performers. Prior to choosing Xactly, Sherbiny Holdings wasn’t able to provide reps easy access to the important sales data they need to stay connected and help close key opportunities. As a growing company, selecting a product that would scale with them and help drive sales behavior was of utmost importance. In addition to purchasing Xactly Incent to manage their sales compensation, Sherbiny selected Xactly Objectives to further motivate employees and help align their individual goals with those of the organization as a whole. (Xactly 29.03)

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3.6 Turkcell Officially Launches 4.5G in Turkey

Turkcell officially launched 4.5G in Turkey as LTE-A services on its network went live at midnight on 31 March. With its 4.5G launch, Turkcell will offer the fastest LTE speeds that are supported on commercial terminals globally. Combining this speed with the geographical scope of its coverage – spreading over 81 city centers in a country with a territory of 783.6 thousand km² (302,5 thousand sq. miles)– makes Turkcell unique among its international peers.

Turkcell is a converged communication and technology services player in Turkey. Turkcell Group has approximately 68.8 million mobile, fixed and IPTV subscribers as of 31 December 2015. Turkcell was one of the first among the global operators to have implemented HSPA+. It has announced two new HSPA+ Technologies on its 3G network to meet rising data usage. Having successfully integrated 3C-HSDPA and DC-HSUPA Technologies, it became the first mobile operator in the world to enable peak speed of 63.3 Mbps downlink while also enabled an 11.5 Mbps uplink on a 3G network. Turkcell is the first telecom operator to offer households fiber broadband connection at speeds of up to 1,000 Mbps in Turkey. (Turkcell 01.04)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Plastic Bag Law Passes in Israel Banning Free Shopping Bags as of 2017

The Knesset passed on 22 March a bill intended to reduce Israeli’s use of disposable plastic bags. The bill, which would ban the free distribution of plastic shopping bags by supermarkets and other stores, was first proposed in 2014. While it passed the initial vote in late October 2014, it failed to pass the last legislative hurdles before new elections in 2015. The new bill, which proposes a mandatory 10 agorot (3 cents) charge for every shopping bag used, will go into effect in January of 2017. The previous bill proposed a 30 agorot (8 cents) charge per plastic bag. Because Knesset votes do not require a quorum, the bill was passed by a minority of 44 MKs out of 120 total. There were no votes in opposition to the bill.

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4.2 Oman to Encourage Household Generation of Solar Power

Oman will encourage households to generate electricity with solar panels and feed it into the national grid, the Authority for Electricity Regulation said on 28 March. The policy could put Oman in the forefront of Middle East nations promoting widespread use of solar power. Its finances severely damaged by low oil prices, the Omani government is seeking ways to save money, including a cut in electricity subsidies for commercial and industrial users. The Authority aims to have a mechanism in place by mid-year for households to generate power using solar roofing panels, and provide the power to the grid in exchange for cuts in their electricity tariffs. The new program will initially focus on residential units but eventually be extended to commercial entities. (Reuters 28.03)

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4.3 Morocco Seeks to Generate 52 % of its Power from Renewable Sources

Morocco seeks to generate 52% of its power from renewable sources by 2030, the British magazine Financial Times (FT) said on 22 March. A previous goal of generating 32% of its power from renewable sources by 2020 – which is likely to be comfortably exceeded – was extended late last year to a target of 52% by 2030. When production officially began at the world’s biggest concentrated solar power plant at Ouarzazate in southern Morocco in February, the country was widely celebrated for its achievement. Called Noor 1 after the Arabic word for light, the concentrated solar power (CSP) plant is designed to deliver 160 MW of electricity at peak output. It is the first of three stages in a project expected to provide 510MW of generating capacity by 2018. The complex will save 13m tons of carbon emissions over 25 years.

An important spin-off from this drive is the establishment of a local renewables industry, FT underlined, adding that officials say they want to establish Morocco as a hub for renewable energy, develop industrial capacity in the sector and even begin exporting energy in the coming decades. (MWN 23.03)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Widened to $2.46B by February 2016

Lebanon’s trade deficit for the first two months of 2016 stood at $2.46B, widening from the $2.17B registered by February 2015. Total imports grew by 7.93% year-on-year (y-o-y) to $2.87B, while exports slumped by 14.89% y-o-y to $414M.

The three major product categories that were imported to Lebanon by February 2016 were mineral products (24.08% share of total imports’), products of the chemical or allied industries (10.55% share of total imports) and machinery and electrical instruments (9% share of total imports). The change in imported mineral products, on a cumulative year-on-year basis, displayed an increase of 38.17% from February 2015. This was mainly caused by the 51% increase in the volume of imported mineral products. However, the value of the products of the chemical or allied industries and machinery and electrical instruments downturned by an annual 3.57% and 7.42%, respectively. Notably, the three major countries that Lebanon imported goods from, in the first 2 months of 2016, were China, Italy and Holland with corresponding weights of 11.48%, 7.56% and 7.23%.

Similarly, the major exported products in terms of value by February 2016 were pearls, precious stones, and metals, constituting 16.91% of total exports, which went down by 15.03 % y-o-y. Furthermore, prepared foodstuffs, beverages, and tobacco (16.3% share of total exports) experienced a yearly detraction of 8.92% by February 2016. It seems that the drop in the prices of fast moving consumer goods is following the trend of the internationally falling commodity prices. Machinery and electrical instruments (14.8% share of total exports) undergone a 2.35% increase in the value of exports. In terms of the major destinations of the Lebanese exports, the UAE, Saudi Arabia and South Africa grasped respective weights of 13.37%, 8.45% and 8.22% by February 2016.

On a monthly basis, total exports dropped by 3.29% from February 2015. However, overall imports inched up by a monthly 4.31%. In turn, the trade deficit broadened from $1.08B in February 2015 to $1.15B in February 2016. (CAS 26.03)

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5.2 Lebanon’s Fiscal Deficit Broadened 28.62% by the End of 2015

Following the 27% annual drop in 2014, Lebanon’s fiscal deficit increased by 28.62% year-on-year (y-o-y) to $3.95B by the end of 2015. This was attributed to the 12% yearly decrease in government revenues outpacing the 3% annual decline in fiscal expenditures. During the same period, the total primary balance displayed a surplus of $724M by the end of 2015 compared to a higher primary surplus of $1.31B by December 2014. Total government revenues stood at $9.58B by December 2015, compared to a higher level of $10.88B by December 2014. Tax revenues, constituting 19.97% of total public revenues, slightly declined by a yearly 0.56% to $6.85B. In details, VAT revenues (grasping a 30.58% share of tax receipts) dropped 4.34% y-o-y to $2.10B, while custom revenues (19.98% of tax receipts) added 1.07% to $1.37B, over the same period. As for telecom revenues (12.88% of total government revenues), they went down by 38.67% y-o-y to $1.23B after the Ministry of Telecommunication reduced internet and mobile tariffs in June 2014. Total government expenditures declined from $13.95B by December 2014 to $13.53B in the same period of 2015. Regarding transfers to Electricite du Liban, they dropped by 45.81% annually to $1.13B, on the back of the continuous fall in oil prices. In contrast, interest payments on government’s debt went up 6.45% to $4.46B, due to the 9.98% rise in interest payments on domestic debt to $2.87B, and the0.62% rise in the interest payments on foreign debt to $1.59B. (CAB 25.04)

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5.3 World Bank’s $100 Million to Create Jobs for Jordanians & Syrian Refugees

Aiming to create 100,000 new jobs for Jordanians and Syrian refugees in the next five years, the World Bank’s Board of Directors has agreed to offer Jordan $100 million in financing at rates usually reserved for the poorest countries. The World Bank’s Board extended the highly unusual financing offer because of the extraordinarily difficult situation facing both the refugees and their Jordanian hosts. A partnership among the Jordanian government, donor countries and development actors will use the financing to develop and strengthen existing special economic zones to attract international and domestic investments. Additional details of the job-creation plans will be announced in coming months.

The announcement came three days after Kim announced a separate $100 million financing to support education of Lebanese and Syrian refugee children living in Lebanon. The terms, approved by the World Bank’s Board of Directors, will be similar to those announced for Jordan. In both cases, the Board broke new ground in giving a middle-income country financing at a rate reserved for the poorest countries. (WB 27.03)

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►►Arabian Gulf

5.4 Indian Remittances Fall as Arabian Gulf Reduces Demand for Foreign Workers

Remittances to India – a large portion of which comes from the millions of Indians working in the Arabian Gulf region – fell to $15.8 billion last quarter, the lowest since April-June 2011. Bloomberg reported that the figure represented a 9.4% drop from a year earlier, as the global slowdown and slumping oil prices reduced the demand for foreign workers.

India relies on remittances and earnings from services exports to help bridge a trade shortfall and support its currency and Indians working overseas remitted $72.2 billion in 2015. It added that workers in the Gulf region accounted for more than half of funds sent home in 2014, while laborers in the UAE sent the single biggest amount of $13 billion. Indians working abroad send home the most money in the world, helping to pay for imports of fuel and electronics. India has about 14 million migrants overseas and remittances account for less than 4% of the Indian economy, compared with 10% for the Philippines and almost 30% for Nepal. (AB 01.04)

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5.5 Bahrain’s Real GDP Growth Rises to 2.8% in Fourth Quarter

Bahrain’s real Q4/15 gross domestic product growth rose to 2.8% in annual terms, according to data from the Central Informatics Organisation. The growth represented a rise from 2.4% in the third quarter. GDP in Bahrain expanded 2.9% in 2015 after 4.5% growth in 2014.

In December Fitch Ratings revised Bahrain’s outlook to negative from stable as it forecasts a wider double-digit budget deficit of 12.5% of GDP in the Gulf kingdom in 2015. The ratings agency, which also affirmed the country’s long-term foreign and local currency issuer default ratings at ‘BBB-‘and ‘BBB’ respectively, said in a statement that the revision comes as low oil prices continue to impact Bahrain’s economy. It said fiscal adjustment measures introduced so far have proven “insufficient” to offset lower oil prices, as social and competitiveness constraints hinder the pace of policy response. (AB 02.04)

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5.6 Qatar Trade Surplus Shrinks 53.5% as Energy Exports Slump

Qatar’s foreign trade surplus shrank 53.5% from a year earlier to QR7.41 billion ($2.04 billion) in February, data from the Ministry of Development Planning and Statistics announced on 28 March. Exports of petroleum and hydrocarbons fell 41.2% to QR10.35 billion. Qatar’s exports in February totaled QR17 billion, a 32.5% decline year-on-year and a 4.8% drop compared to January. Revenue from gas and hydrocarbons exports declined in February to QR10.2 billion. Imports meanwhile were QR9.6 billion, a 10.1% decline compared to January 2016.

Japan was the top destination for Qatari exports, with 17.2% of total exports, followed by South Korea and India. As for imports, Qatar relied on the US for 12.1% of its needs, ahead of China and the UAE. Qatar said in December that it has halved its forecasts for economic growth in 2016, the latest sign of the hit taken by the wealthy Gulf state’s economy at a time of low oil prices. Growth expectations were slashed to 3.7% from the 7.3% forecast in June. But the government’s biannual outlook said the hydrocarbon-rich nation would record a fiscal surplus this year of 1.7% of GDP, a figure above the 1.4% it projected in June. (AB 28.03)

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5.7 Shrinking Saudi Money Supply Points to Slowing Economy

Saudi Arabia’s money supply shrank in February for the first time in more than a decade, central bank data showed on 29 March, a fresh sign the economy of the world’s largest oil exporter is slowing sharply because of depressed oil prices. The broadest measure of money supply published by the central bank, M3, dropped 0.9% from a year earlier last month, its first annual decline since at least 2004. Narrower money supply measures M1 and M2 also shrank. M1, which includes currency in circulation and demand deposits but excludes less liquid assets such as savings and time deposits, contracted a hefty 5.1%.

Low oil prices pushed the budget into a deficit of nearly $100 billion last year and the government has embarked since late 2015 on spending cuts and tax rises to narrow the gap, hitting consumer spending and companies’ willingness to invest. More economic pain is expected in coming months due to new austerity measures, where the government ordered ministries in mid-March to cut their spending on contracts by at least 5%. Because of the austerity measures, inflation has risen sharply, which is expected to deter consumers. Annual consumer price inflation jumped to 4.3% in January, the highest in over three years, from 2.3% in December after the government cut fuel subsidies and hiked utility fees. (Reuters 29.03)

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5.8 Foreign Firms in Saudi Arabia Will Have to Hire 75% Locals

Foreign companies active in Saudi Arabia will be required to have 75% of their workforces made up of local nationals. The Saudi Arabian General Investment Authority (SAGIA), the government body tasked with encouraging greater foreign direct investment into the kingdom, had implemented the new rule. The regulation came into place last month for all foreign companies applying for a license to operate in Saudi Arabia, while firms already active in the kingdom would be given a two-year grace period to implement the change. Other new regulations stipulate that foreign firms must have a minimum of 50 employees and minimum capital must be not less than $9.5 million.

Despite extensive government efforts to find more jobs for locals, Saudi Arabia’s labor force grew by 46,000 during 2015, its slowest pace since records began in 1999. Jadwa Investment’s latest update on the labor market in Saudi Arabia, released earlier this month, also showed that ‘Saudization’ rates within the private sector fell for the first time since 2011. (AN 29.03)

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►►North Africa

5.9 Egypt to Repay $1 Billion Owed to Qatar in July

Egypt’s Central Bank Governor Tarek Amer has said that devaluing the Egyptian pound had attracted foreign investment worth $500 million in treasury bills and that he had pumped $22 billion into the banking system to clear goods piled at ports. Amer added that there was no currency crisis, but merely a crisis in managing the foreign exchange market. Amer said Egypt would pay back a $1 billion debt owed to Qatar in July and also $800 million to Paris Club countries. He said dollar-denominated “Belady” certificates offered by the three largest state-owned banks in recent weeks to Egyptians abroad in a bid to persuade them to invest their dollar savings in their home country had seen a very low turnout.

Egypt, which relies heavily on imports, has been facing a dollar shortage since a popular uprising in 2011 drove away tourists and foreign investors, both major sources of hard currency. The central bank had been keeping the pound artificially strong through regular auctions three times a week. Its reserves more than halved to $16.5 billion in February from around $36 billion in 2011. (Reuters 27.03)

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5.10 Egypt’s Trade Deficit Falls 5% in December

A drop in the imports of raw steel materials in December 2015 largely contributed to the fall in Egypt’s trade deficit by 4.8% compared to the same month a year earlier, the official statistics agency CAPMAS announced. Egypt’s trade deficit fell to EGP 31.25 billion in December 2015, down from EGP 32.82 billion in the same month in 2014. During this period, imports fell 6% to EGP 46.7 billion, down from EGP 49.7 billion, driven mainly by a sharp decline in the import of raw materials for steel by 40.5%. Other imports including plastics, petrochemicals and meat have also decreased in this period, while imports of pharmaceuticals, passenger cars, petroleum products and wheat have risen in December 2015 compared to the same month the prior year. The fall in the value of petroleum products on the other hand has contributed to the slight drop in exports by 8.3% to EGP 15.4 billion, down from EGP 16.8 billion.

In October 2015, lower exports and imports contributed to a decline in the country’s trade deficit by 11.8% year-on-year to EGP 34.16 billion, down from EGP 38.34 billion. (CAPMAS 24.03)

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5.11 Egypt’s Tourist Numbers Drop in February for Fourth Month in a Row

The number of tourists visiting Egypt declined in February for the fourth consecutive month, as a deadly air crash last year continues to have an impact on the country’s tourism industry. Egypt saw 346,500 tourists in February, down 46% compared to the same month last year, CAPMAS announced on 4 April. West Europeans led the visitor list, making up 35.6% of the total arriving tourists in February, followed by Middle Easterners with 26.7% and East Europeans with 14.1%. The countries sending the most tourists in each region are Germany, Saudi Arabia, and Ukraine. In February this year, tourists spent a total of 1.8 million nights in the country, versus 5.6 million in February 2015.

In a recent televised interview, newly appointed Tourism Minister Yehia Rashed said that he would meet with 12 low-cost airliners by next week to put in place a plan to attract tourists from different markets worldwide, especially those which are not served by Egypt’s national carrier EgyptAir. Rashed said that his ministry is targeting high-spending tourists such as Arab Gulf nationals in an attempt to “immediately” increase industry revenues.

Egypt accrued $6.1 billion in tourism revenue in 2015, down 15% from the year before, as the total number of tourists dropped in 2015 by 6% to 9.3 million and the total number of nights spent in the country declined by 14%. (CAPMAS 04.04)

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5.12 Egypt’s Foreign Currency Reserves Slightly Up In March

Egypt’s foreign currency reserves inched up in March to reach $16.561 billion from $16.53 billion the previous month, the Central Bank of Egypt announced. Egypt’s reserves stood at $36 billion in 2010 before the 2011 uprising drove away tourists and investors, the country’s main sources of the hard currency. The central bank will repay $800 million to the Paris Club and the remaining $1 billion it owes to Qatar next July, CBE governor Tarek Amer. (Ahram Online 04.04)

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5.13 Egypt’s Suez Canal Revenues Decline for 2nd Consecutive Month

Egypt’s Suez Canal revenues fell for the second consecutive month to record $401.4 million in February, official data from the canal’s authority showed. The revenues slowed from $411.8 million in January and $429 million in December last year amid claims that vessels are changing route to the Cape of Good Hope at the southern tip of Africa instead of the Suez Canal due to the drop in world oil prices. On an annual basis, the revenues saw an increase of 5.1% from February 2015 ($381.9 million).

The country’s vital waterway saw 1,300 vessels pass through last February, a year-on-year rise of 6.6%, said the authority. The canal is the fastest shipping route between Europe and Asia and is one of the country’s main sources of foreign currency. (SCA 22.03)

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5.14 Morocco’s Automotive Industry Aims to Create 90,000 jobs by 2020

Morocco’s automotive sector is aiming to create 90,000 jobs by 2020 in addition to the 100,000 that already exist, the British magazine Financial Times (FT) said. With total automotive exports reaching €4.8bn in value last year, the sector is seen as one of Morocco’s “big success stories,” the paper pointed out in a special edition on Morocco, citing the success of Renault’s factory in northern Morocco, which is the largest car factory in Africa. The plant produced 229,000 cars in 2015, up from export 174,000 the year before, FT pointed out, adding that the bulk of its output is destined for Spain, France and Germany.

The Renault plant, along with a range of tax and other incentives offered in Morocco’s free trade zones, has also attracted foreign makers of car parts, FT added, noting that some 150 automotive-related manufacturers are based in Morocco. (MWN 24.03)

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5.15 Morocco’s Economic Growth Stands at 4.5% in 2015

Morocco’s economic growth stood at 4.5% in 2015, a rise of 0.2 points compared to forecasts by the High Planning Commission (HCP) which is 4.3%. This progress is due to the good economic activity in Q4/15, with a growth of 5.2% instead of 2.2% a year earlier, said HCP in an information note on the situation of national economy at Q4/15. The GDP growth was 7.1%, thus generating an increase in its implicit price of 1.9% instead of 1.1%. The national economic growth in the fourth quarter of 2015 was driven by agriculture value added and an amelioration in non-agricultural activities. The agriculture value added, in terms of volume, increased by 13.5% instead of a drop of 1.3%, after an average growth of 14.3% was posted during the previous three quarters. Non-agricultural activities increased by 3% instead of 0.8%, after an average of 1.7% registered in the past three quarters. (MWN 01.04)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Inflation Eases In March As Food Prices Drop

Annual inflation in Turkey fell unexpectedly in March, mainly due to a sharp decline in food prices, according to official data released on 4 April. The Turkish Statistics Institute (TUIK) said the annual consumer price index fell to 7.46% in March. February’s rate stood at 8.78%. While the biggest decline in monthly prices was seen in food and non-alcoholic beverages, the highest rise in the annual index was seen in tobacco and alcoholic drink prices. The health sector saw the highest monthly increase for March, with a 1.84% rise. According to the TUIK data, the highest price decline in the food groups was seen in fresh fruits and vegetables.

After Russia began to impose sanctions against Turkish products following the outbreak of the jet crisis between the two countries, Turkey’s fresh fruit and vegetable producers have focused on seeking alternative markets and diverted most of their products into the domestic market. The Central Bank said on 24 March that limited improvement in core inflation indicators still required a tight liquidity stance. (TUIK 04.04)

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6.2 Turkey & Pakistan Sign Free Trade Agreement Framework

Turkey and Pakistan have paved the way for a new free trade deal, which has the potential to reduce barriers in bilateral trade and investment. On 22 March, Turkish Economy Minister Elitaş and Pakistani Commerce Minister Dastgir Khan signed the free trade agreement framework in the Pakistani capital of Islamabad. The free trade agreement between the two countries was expected to be signed before the end of 2016.

Negotiations over the deal were launched by Turkish Prime Minister Ahmet Davutoğlu and Pakistani Prime Minister Nawaz Sharif during the latter’s visit to Turkey in October 2015. Last year, bilateral trade was around $600 million, including $289 million in imports from Turkey. Turkey mainly exports telecommunication equipment, televisions, textiles and machinery, while imports from Pakistan include textile yarn, cotton fabrics, plastics and organic chemicals. (Anadolu Agency 23.03)

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6.3 Only 30% of Workers in Turkey Are Women

Some 30% of working people in Turkey are women, according to data from an annual income and life conditions survey released by the Turkish Statistics Institute (TÜİK). Some 53.9% of working women were employed on salaries or wages, the TÜİK data for 2014 showed, while another 29.2% were working in their families without any wages. Nearly 10% of women worked for themselves, while 6% of women were employed in casual jobs. Only 1.1% of them were employers. Working women in Turkey earned TL 1,654, roughly €513, per month on average. The highest wages were in the service sector with an average of TL 1,723, while wages in the agricultural sector were at the bottom of the list with TL 1,297. In the industrial sector women earned TL 1,404 on average. The data also showed education level had a direct impact on earnings, as women without higher education earned less than TL 1,000 per month, while university graduates earned some TL 2,419 per month. (AA 22.03)

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6.4 Most Greeks Willing To Work Abroad As Job Insecurity Mounts

More than half of Greek employees would be interested in working abroad or willing to move for the “right” job, a recent study by HR services firm Randstad Hellas has found, adding that job security is also a mounting concern. According to the Workmonitor survey, 58% of Greek employees expressed an interest in working abroad, jumping to 74% in the 18-24 age bracket, and 57% said they would be willing to move abroad for the “right” job. Women appeared more eager at 61% than men (55%) and the 18-24 age group particularly so at 67%, followed by the 25-34 age group at 61%.

On the question of job security, 42% of respondents said it is “highly likely” that they may lose their job or that their contract will not be extended within the next six months, showing a 3% rise from the fourth quarter of 2015. Women appeared more concerned about losing their jobs at 46% than men (39%) and the 55-67 age bracket had the greatest sense of job insecurity at 50%, followed by the 18-24 age group at 49%. (Ekathimerini 05.04)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israelis’ Penchant for Holiday-Related Names

To mark the holiday of Purim, Israel’s Population and Immigration Authority released on 20 March data regarding irregular first names in Israel. Relating to the holiday, are 91 Israelis named Purim, one woman named Vashti and one man whose name is Haman. There are 49,907 women in Israel named Esther and 22,797 men named Mordechai. Other holidays are represented, as well: 477 people are named Pesach, 123 people are named Chanukah, 43 are named Hashanah or Rosh Hashanah, seven are named Shvat or Tu B’Shvat and four are named Sukkot. The Names Law, approved by the Knesset in 1956, lays out how first and last names are given in the State of Israel. The parents communicate their decision to the Interior Ministry via the hospital shortly after birth or later on directly. Article 2 of the law states that every person in the Civil Registry must have a given and a family name.

According to the law, the minister of the interior is authorized to reject a name if he deems to likely “to mislead or harm the public or its feelings.” However, sources in the Population and Immigration Authority say that this rarely happens. (PIPA 20.03)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Takeda and Teva Establish Teva Takeda Yakuhin in Japan

Teva Pharmaceutical Industries and Japan’s Takeda Pharmaceutical Company announced the establishment of Teva Takeda Yakuhin. As a result of this strategic move, Takeda, an R&D driven pharmaceutical company which has a long history as a leading company in Japan, and Teva, among the top ten pharmaceutical companies in the world and the global leader in generics, will meet the wide-ranging needs of patients and growing importance of generics in Japan through the provision of off-patent drugs (products whose patents have expired).

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 01.04)

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8.2 First Human Results with V-Wave’s Interatrial Shunt Published in The Lancet

V-Wave announced the results of its first human implants were published in The Lancet. The study was performed at the Quebec Heart and Lung Institute, Laval University, Quebec. The first 10 consecutive patients had Class III symptoms despite being treated with maximally tolerated HF medications and had poor left ventricular function. All were successfully implanted with the shunt during a minimally invasive procedure that took generally less than one hour, and were discharged home the next morning. There were no device-related adverse effects. After three months, patients had significant improvements in symptoms, exercise capacity and quality-of-life assessments. Catheter measurements showed lowering of left atrial pressure without deterioration of right heart function. These findings are consistent with the shunt diverting just the right amount of blood from the left-side to the right-side of the heart.

Caesarea’s V-Wave is a privately-held medical device company with offices in Israel and the U.S. Venture investors include BRM Group, Pontifax, TriVentures, Pura Vida Investments, BioStar Ventures and strategic investors Edwards Lifesciences and Johnson & Johnson Innovation – JJDC Inc. (V-Wave 28.03)

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8.3 Teva Announces FDA Approval of CINQAIR (reslizumab) Injection

Teva Pharmaceutical Industries announced that the U.S. FDA has approved CINQAIR (reslizumab) Injection, an interleukin 5 antagonist monoclonal antibody (IgG4 kappa) indicated for add-on maintenance treatment of patients with severe asthma aged 18 years and older, and with an eosinophilic phenotype. The FDA approval of CINQAIR was based on review of efficacy and safety data from Teva’s global development program in asthma. Upon commercial availability of CINQAIR, Teva will launch Teva Support Solutions, a comprehensive program that will provide personalized support, training and education to healthcare providers and patients who have been prescribed CINQAIR. This is the first approval of CINQAIR (reslizumab) anywhere in the world. Reslizumab has been submitted to and is currently under review by European Medicines Agency (EMA) and Health Canada.

Teva Respiratory develops and delivers high-quality treatment options for respiratory conditions, including asthma, COPD and allergic rhinitis. The Teva Respiratory portfolio is centered on optimizing respiratory treatment for patients and healthcare providers through the development of novel delivery systems and therapies that help address unmet needs. Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. (Teva 28.03)

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8.4 Metabomed Completes $18 Million Series A Financing

Metabomed has completed an extension of its Series A round from current and new investors, bringing the total of its raise to $ 18 million. Existing investors include MS Ventures, Boehringer Ingelheim Venture Fund (BIVF), Pontifax Fund and the Technion Research and Development Foundation. New investors Pfizer and Arkin Holdings also joined the round. The final transaction is subject to the successful completion of the approval process by the Israel Antitrust Authority.

Metabomed is focusing on the discovery and development of potential small molecule drugs directed against novel targets in the field of cancer metabolism. Based on its proprietary interdisciplinary target identification platform, Metabomed utilizes a unique approach to discovery, which allows the company to potentially identify new targets that form a synthetic lethal gene pair with metabolic genes inactivated in cancer cells. By inhibiting these targets, Metabomed intends to develop more selective anti-cancer drugs that may potentially be highly targeted, and therefore sparing of normal cells.

The MS Ventures Israel BioIncubator is a strategic initiative designed to stimulate innovation by bridging the gap between academic research and the biotechnology industry in Israel. Launched in 2011 to invest in biomedical innovation in Israel, the BioIncubator offers both seed financing and access to dedicated laboratory facilities within the R&D center of the biophama business of Merck in Yavne, Israel. Through the incubator initiative, MS Ventures has committed to invest up to €10 million in early stage opportunities.

MS Ventures is the strategic venture capital fund of the healthcare business of Merck. The fund was established in March 2009 and focuses primarily on early stage investments.

Metabomed is a drug discovery company in the field of cancer metabolism with a proprietary target identification platform based on computational biology and metabolomics. Metabomed focuses on the discovery of drugs that inhibit targets that form a synthetic lethal gene pair with metabolic genes inactivated in cancer cells. Metabomed operates out of MS Ventures Bioincubator in Yavne, Israel. (Metabomed 04.04)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Stratoscale $27 Million Series C Funding as it Transforms Cloud Computing

Stratoscale has secured $27 million in Series C financing. Qualcomm Incorporated, through its venture investment group, Qualcomm Ventures, joined the Series C financing round with participation from all existing investors. Transforming cloud computing capabilities within the data center by enabling businesses to embrace new technologies at a faster pace, Stratoscale has raised over $70 million in funding over the past three years that is dedicated to support global expansion of the company.

To help customers keep up with business agility mandates that include rapid development and new age applications, Stratoscale provides a hardware-agnostic Software Defined Data Center (SDDC) solution that offers a holistic data center experience. Stratoscale’s solution enables IT to scale and respond to real-time needs with greater ease and assured control.

Since its $32 million Series B investment in 2014, Stratoscale has experienced significant growth and continued product innovation. The company also began expansion throughout North America and Europe with PartnerFirst, its 360 degree partner program. Through this program, Stratoscale is building an ecosystem of technology and distribution partners, expanding coverage and customer service to meet market demand for next generation data centers.

Herzliya’s Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, software-only hyper-converged platform to store everything, run anything and scale everywhere, IT is empowered to take control of their data centers. (Stratoscale 23.03)

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9.2 Mellanox Announces New Line of InfiniBand Router Systems

Mellanox Technologies announced a new line of InfiniBand router systems. The new EDR 100Gb/s InfiniBand Routers enable a new level of scalability critical for the next generation of mega data-center deployments as well as expanded capabilities for data center isolations between different users and applications. The network router delivers a consistent, high-performance and low latency router solution that is mission critical for high performance computing (HPC), cloud, Web 2.0, machine learning and enterprise applications.

Mellanox’s SB7780 InfiniBand Router family is based on the Switch-IB switch ASIC and offers fully flexible 36 EDR 100Gb/s ports, which can be split among six different subnets. The SB7780 InfiniBand Router can connect between different types of topologies. Therefore, it enables each subnet topology to best fit and maximize each applications’ performance. For example, the storage subnets may use a Fat-Tree topology while the compute subnets may use 3D-torus, DragonFly+, Fat-Tree or other topologies that best fit the local application. The SB7780 can also help split the cluster in order to segregate between applications that run best on localized resources and between applications that require a full fabric.

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9.3 Stratasys’ Transformational, Market Disruptive J750 3D Printer

Stratasys introduced another industry first with its market-disruptive 3D printer, the J750. The new solution breaks restrictive technology barriers, enabling customers for the first time to mix-and-match full color gradients alongside an unprecedented range of materials to achieve one-stop realism without post-processing. This, together with the system’s superior versatility, makes the J750 the ultimate 3D printing solution for product designers, engineers and manufacturers, as well as service bureaus.

The Stratasys J750, the premier addition to the Objet Connex multi-color, multi-material series of 3D Printers, allows customers to choose from more than 360,000 different color shades plus multiple material properties – ranging from rigid to flexible and opaque to transparent. Prototypes can include a vast array of colors, materials and material properties in the same part, speeding production of realistic models, prototypes and parts for virtually any application need – as well as delivering incomparable 3D printing versatility to produce tooling, molds, jigs and fixtures and more.

For more than 25 years, Stratasys has been a defining force and dominant player in 3D printing and additive manufacturing – shaping the way things are made. Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing. The company’s solutions provide customers with unmatched design freedom and manufacturing flexibility – reducing time-to-market and lowering development costs, while improving designs and communications. (Stratasys 04.04)

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9.4 Magos Systems Wins Challenge for Smart City in Brazil

Magos Systems won the 3C Smart City challenge for the smart city of Croata being built in Brazil. Magos Radar will be deployed in the Smart city project both at the construction phase of the project and the safe keeping of the city later on. The company beat twelve Israeli tech firms participated in the final stage of the Challenge held in Tel Aviv with cooperation from the Brazilian government, Italian group Planet Idea, the Tel Aviv University and Tyco Innovation.

Magos offers highly advanced, solid state radars for perimeter security applications at a low cost with minimum installation and maintenance requirements, and has a worldwide footprint including cooperation with FLIR Systems, Tyco Security, Panasonic and other large scale security firms and integrators.

Magos’ affordable radars are suitable for a wide variety of security applications and are already installed in facilities ranging from Oil\Gas production sites through US Utility Substations and in small sites such as car lots and protected neighborhoods. Magos Radars have detection ranges of up to 400m for Person and 600m for vehicle or boat and can even detect a drone at up to 100m, it has low power consumption(<3.5W), high range resolution(40 centimeters) which increases detection performance in highly cluttered environments and with 120-360 degree coverage depending on the model.

Rehovot’s Magos was established in 2008 with the vision of bringing state-of-the-art radar technologies to civilian markets, and after years of development for military graded applications and companies has made available its commercial products in 2015. (Magos 04.04)

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9.5 Contextors Unveils Breakthrough Language-Learning Capabilities

Contextors has been selected as one of only three companies to showcase technology for the “Classroom of the Future” at TESOL’s International Convention and English Language Expo in Baltimore. Contextors will unveil “Contextors Literate,” an advanced language-learning product that breaks new ground in helping English Language Learners (ELLs) master English by combining extensive reading with in-line intensive learning support. By providing e-book readers with context-specific definitions, explanations of grammatical rules, and adaptive challenges for a highly effective language learning experience, Contextors Literate meets the demands of a booming global market thirsty for new ways to master English.

Based in Tel Aviv, Contextors is pioneering groundbreaking linguistic technology by reinventing parsing, the analysis of sentences into relevant parts, in order to describe each part’s syntactic role. Contextors extracts complete, deep linguistic information from content, including each word’s grammatical functions, interword relationships and overall structural semantics. (Contextors 05.04)

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9.6 justAd eyeMagnet Transforms Static Ads to Animated Ads Automatically

justAd announced its newest product, eyeMagnet, which offers an automated, fully scalable solution to transform existing banner ads into engaging ad units, on the fly. By automating all the steps in the way of rich media creation, justAd enables the creation of rich media campaigns easily, without requiring developers, graphic designers or operations professional. Targeted to companies that require thousands of ads to get a single user click, and to branding agencies requiring a simply, streamlined way to animate video and display ads, eyeMagnet provides dynamic, eye-catching effects that attract users to respond.

Tel Aviv’s justAd is a powerhouse for mobile rich media solutions. We serve, in high scale, global leaders in ad tech. Starting from the large media and creative agencies to technical driven DSPs and Networks and dominated sale-driven publishers. Each segment is offered a part of our ensemble of technologies all focused on the creative aspect. (justAd 05.04)

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9.7 MUV Interactive Launches Smart Wearable BIRD in Japan

MUV Interactive, in partnership with Silicon Technology, a leader in electronics distribution in Japan, announced the launch of the wearable BIRD, an intuitive device worn on the tip of the finger. BIRD transforms any surface into a multi-touch interface with 3D interactive capabilities. BIRD communicates with the user’s computing devices, enabling rich interaction with anything from displayed content and smart home appliances to IOT devices and drones. BIRD will be sold through Silicon Technology with partners including, SoftBank Service & Commerce, Synnex Infotec, Ricoh Japan, CSE, Eizo-system, Gakuei System, and Dospara later this year.

BIRD is the first device to integrate the entire spectrum of interactive methods – including touch, remote touch, gesture control, mouse functionality and hover – into a single tiny wearable. This gives users the flexibility to interact with each type of digital content in the most intuitive way.

Founded in 2011, Herzliya’s MUV Interactive is a developer of innovative technologies for wearable interfaces. The company’s first product, BIRD, is a wearable device that transforms any surface into a multi-touch interface with 3D interactive capabilities. (MUV 05.04)

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10: ISRAEL ECONOMIC STATISTICS

10.1 New Tel Aviv-Jerusalem Fast Rail Line to Open in 2018

The high-speed rail line between Tel Aviv and Jerusalem currently being built will open for service in 2018, Israel Railways said on 28 March. Travel time between Tel Aviv’s Haganah station and Jerusalem’s International Convention Center station will be half an hour. Service frequency will be four trains per hour in each direction. Trains will make an intermediary stop at Ben-Gurion International Airport. The maximum speed on the new line will be 160 kilometers (99 miles) per hour. The total cost of the project will reach NIS 7 billion ($1.82 billion). The project has required the construction of six tunnels and eight bridges along the course of the line.

It currently takes around an hour and 15 minutes to travel between Tel Aviv and Jerusalem by train on the old line built during the Ottoman era in the 1890’s. The current station in Jerusalem is inconveniently located in the Malha neighborhood, on the southwestern outskirts of Jerusalem. (IH 28.03)

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11: IN DEPTH

11.1 ISRAEL: Natural Gas Judgement Casts Shadow Over Israel’s Energy Plans

Simon Henderson posted in The Washington Institute on 28 March that a new court decision could stunt exploitation of offshore gas reserves, open the possibility of a heavy punitive arbitration award, and hamper foreign investment in Israel.

On 27 March, the Israeli High Court passed a judgement condemning a key aspect of the government’s planned “framework” deal with energy companies hoping to tap the country’s largest offshore natural gas field. The companies in question – Houston-based Noble Energy and its Israeli partner Delek – had pressed for a ten-year regulatory and pricing stability clause to facilitate the investment of around $6 billion needed to develop the giant Leviathan field, which lies eighty miles west of Haifa deep below the Mediterranean Sea. The court rejected that clause, ruling that the deal should be suspended for another year and requiring the government to amend the terms and obtain approval from parliament.

Prime Minister Binyamin Netanyahu described the judgment as “bizarre,” arguing via Twitter that it “severely threatens the development of Israel’s gas reserves.” He continued: “Israel is seen as a country with exaggerated legal interference that makes doing business hard. We will seek alternative ways to overcome the serious harms inflicted on Israel’s economy by this hard to understand resolution.” Similarly, energy minister Yuval Steinitz called the judgement “miserable,” while Noble chief David Stover stated, “The court’s ruling…is disappointing and represents another risk to Leviathan timing. Development of a project of this magnitude, where large investments are to be made over multiple years, requires Israel to provide a stable investment climate…It is now up to the government of Israel to deliver a solution which at least meets the terms of the Framework, and to do so quickly.” If the issue cannot be resolved, Noble could resort to international arbitration against Israel, with a potential punitive award of up to $12 billion.

The ruling’s immediate consequence is to once again delay development of the Leviathan field, where the companies stopped working in December 2014 after the Israeli oil and gas regulator abruptly decided to reverse tentative approval of a compromise that would have spared the venture from being labeled a monopoly. The issue has since become a political football, with opposition parties and activist groups claiming that the likely price for Leviathan gas will be unreasonably expensive and the profits for Delek and its Israeli partners too high. Netanyahu’s government, which survives with a single-seat majority in parliament, has countered by emphasizing the resultant boost to government revenues and Israel’s need to attract foreign investment. The government had intended to issue new tenders this summer for more exploration, but enticing foreign gas companies with the necessary skills and financial reserves to drill in water 6,000 feet deep – where even an empty hole costs $100 million – could be challenging.

At present, Israel depends on gas from the offshore Tamar field, drilled by Noble in 2009 and in production since 2013. Less than half the size of Leviathan, it fuels nearly 60% of Israel’s electricity production. The government’s plans, now delayed if not derailed, are to increase the number of gas-fired power stations for domestic and industrial use while exporting surplus gas. Neighboring Jordan will receive a small amount of Tamar gas beginning next year, though plans for the multiyear sale of large volumes of Leviathan gas are on hold.

Meanwhile, gas development continues in other parts of the eastern Mediterranean after years of quiet encouragement by the United States. In Cyprus, Noble discovered the Aphrodite field, which lies mainly in the island’s exclusive economic zone and stretches partly into Israel’s EEZ as well. Cypriot officials are currently trying to attract more companies to drill there. Last year the Italian conglomerate Eni found the Zohr field in Egypt’s EEZ; even bigger than Leviathan, it lies only three miles from Egypt’s maritime border with Cyprus. Various actors have drawn up elaborate schemes for Israel, Cyprus, Egypt and Greece to cooperate in using and exporting this gas. Even Turkey, currently reliant on expensive Russian, Iranian and Azerbaijani gas, had contemplated buying Israeli supplies, a commercial decision that would require political rapprochement with both Jerusalem and Cyprus, and which may be further complicated by the latest court judgement.

In short, hopes of Israel becoming a mini-energy giant in the eastern Mediterranean have seemingly evaporated in little more than a year. This court decision flies in the face of commercial realities inherent to twenty-year, high-cost energy projects. Theoretically, the parliament could pass a law allowing for the ten-year stability clause, but Netanyahu would likely be opposed by coalition partners eager to force new elections. Noble might also be able to obtain a different set of assurances that are acceptable to all parties. Without such a breakthrough, resolving the impasse would require broader societal awareness of the benefits of natural gas wealth and domestic political compromise, yet the prospects for either, never mind both, seem slim.

Simon Henderson is the Baker Fellow and director of the Gulf and Energy Policy Program at The Washington Institute. (TWI

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11.2 ISRAEL: U.S. Firms Target Investment in Israeli Cannabis R&D

Already a pioneer in high-tech and cutting-edge agriculture, Israel is starting to attract American companies looking to bring medical marijuana know-how to a booming market back home.

Since 2014, U.S. firms have invested about $50 million in licensing Israeli medical marijuana patents, cannabis agro-tech startups and firms developing delivery devices such as inhalers, said Saul Kaye, CEO of iCAN, a private cannabis research hub.

“I expect it to grow to $100 million in the coming year,” Kaye said at iCAN’s CannaTech conference in Tel Aviv this month, one of the largest gatherings of medical marijuana experts.

Scientists say strict rules, some set by the Drug Enforcement Administration, limit cannabis studies in the United States, where the legal marijuana market is valued at $5.7 billion and expected to grow to $23 billion by 2020.

“In the United States it’s easier to study heroin than marijuana,” said U.S. psychiatrist Suzanne Sisley, who has researched the effects of cannabis as a treatment for American military veterans suffering from Post Traumatic Stress Disorder.

“With marijuana you have to go through added layers of government red tape. It highlights the way marijuana research is being shackled by politics,” said Sisley, Director of Medicinal Plant Research at Heliospectra.

While scientific exploration may be restricted, 23 U.S. states now permit medical cannabis, and recreational use is allowed in four states and Washington D.C. This is despite the fact that at the federal level, marijuana is still classified as a dangerous narcotic with no medicinal value.

In Israel, marijuana is an illegal drug and only 23,000 people have Health Ministry permits to purchase medical cannabis from nine licensed suppliers, creating a market of $15 million to $20 million at most.

But Israeli authorities are liberal when it comes to research. Growers work with scientific institutions in clinical trials and development of strains that treat a variety of illnesses and disorders.

Israeli Health Minister Yakov Litzman, an ultra-Orthodox Jew, supports medical cannabis usage and has introduced steps to ease its prescription and sale.

Israel is far from alone in the market, however. Britain’s GW Pharmaceuticals is licensed to grow cannabis for medicine and in 2013 opted for a dual listing on Nasdaq, where it raised nearly $500 million from U.S. investors.

This month, GW announced its cannabis-based medicine Epidiolex had successfully treated children with a rare form of epilepsy. Its share price doubled as a result.

Medical cannabis is developing fast. Patients can smoke marijuana cigarettes, use inhalers, ingest oil extracts or even consume cookies containing marijuana extracts. GW has a multiple sclerosis treatment which is sprayed under the tongue.

Pain Relief

In a clinic in Tel Aviv, 65-year-old Noa lights a joint. She suffers from fibromyalgia, a chronic pain disorder, and explains how six months of smoking medical cannabis has transformed her life.

“I can function again. Most importantly, I’m a grandma, I can roll around on the floor with the kids,” she said as she discussed with a nurse what strain would best alleviate her symptoms.

The clinic belongs to Tikun Olam, Israel’s largest medical marijuana supplier, which partnered this year with a private U.S. investment group to grow medical marijuana in four U.S. states.

Tikun Olam is taking part in clinical trials on epilepsy, Crohn’s disease, spasticity and tinnitus, said Zvi Bentowich, its chief scientist.

Professor Raphael Mechoulam of the Hebrew University in Jerusalem, whose landmark studies in the 1960s paved the way for cannabis research by isolating and synthesizing THC, the main psychoactive ingredient of marijuana, praised the Israeli government’s open approach to the research.

“Cannabinoid research was and still is viewed positively by government committees,” he said, adding that law enforcement was not involved in study approval.

Jeffrey Friedland, CEO of private U.S. investment firm Friedland Global Capital, has invested in two agro-tech companies and a pharmaceutical firm in Israel.

“Israel is a leader in agriculture, take that and couple it with research – you have the two sides, plant science and pharmaceutical development,” Friedland said.

“If you’re in California or Colorado, you’re getting medical marijuana in a lot of cases from someone who did not graduate high-school – there’s no science.”

It was only in October that California drafted its first comprehensive regulations on medical marijuana, two decades after legalization fueled a grey market in cultivation.

Seth Yakatan, CEO of California-based Kalytera Therapeutics, said the level of capital efficiency in Israel was high.

“What you would spend half a million dollars on in the U.S. you could easily get for 125 or 150 thousand dollars in Israel and it’s going to be done efficiently and on time. The quality of research is world-class and the arbitrage of value is good.”

A Hebrew University and Tel Aviv University study, findings of which were published in May 2015 in the Journal of Bone and Mineral Research, showed cannabis constituent Cannabidiol, or CBD, helped heal bone fractures in rats.

Based on that study and others, Kalytera has licensed two compounds from the Hebrew University’s Technology and Transfer company Yissum. They are synthetic cannabis derivatives that the firm eventually hopes to use in treating osteoporosis, bone fractures and other diseases. (Reuters 29.03)

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11.3 QATAR: Fitch Affirms Qatar at ‘AA’; Outlook Stable

On 31 March, Fitch Ratings affirmed Qatar’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘AA’ with a Stable Outlook. The Country Ceiling is affirmed at ‘AA+’ and the Short-term foreign-currency IDR at ‘F1+’.

Key Rating Drivers

The ‘AA’ ratings reflect Qatar’s large sovereign assets, the government’s fiscal adjustment efforts, a large hydrocarbon endowment and one of the world’s highest GDP per capita. Qatar’s hydrocarbon dependence is a key rating weakness, with oil and gas extraction averaging more than 50% of GDP over the past five years and hydrocarbon-backed government spending accounting for a further 30% of GDP. Qatar’s credit strengths are also balanced by government debt and deficits that are set to rise above those of rated peers, and by mediocre scores on the World Bank’s measures of governance and the business environment (both below the 70^th percentile).

We expect the general government to post deficits of around 10.4% of GDP (QAR61b) in 2016 and 2.7% of GDP (QAR18b) in 2017, as lower oil and gas prices hit revenues while the overall impact of expenditure reduction measures remains small. The government intends to tap debt markets instead of drawing on the assets of the Qatar Investment Authority (QIA). In total, new issuance will push Qatar’s government debt ratio up to 44% of GDP in 2016 from 32% in 2015. Capital income will allow QIA assets to rise to a forecast $330b by end-2017, from an estimated $300b at end-2015. As with other oil producers, large swings in nominal GDP will shift the ratio of QIA assets-to-GDP to nearly 200% in 2016 and back to 180% in 2017, from 190% in 2015.

Under our baseline oil price assumptions ($13/bbl lower than the government’s), we expect total government revenue to fall 38% to a trough of QAR141b in 2016 before recovering to QAR179b in 2017. We expect expenditure to fall 7% to around QAR203b in 2016 and a further 3% to QAR197b in 2017, underpinned by reductions in current expenditure other than salaries and wages. Measures to reduce current expenditure have included reductions to fuel and electricity subsidies, as well as travel and office expenses for government employees. The activities of state-owned organizations such as Al Jazeera and Qatar Museums have been scaled back. The number of government ministries has been reduced to 15 from 18. Nevertheless, the exact composition of the planned headline expenditure adjustment is unclear.

The adjustments to budgetary items have been accompanied by reforms to the fiscal framework, many of which were initiated in early 2015. Project proposals and budget requests are being more closely scrutinized, even as departments have more flexibility to shift spending between different items. Non-core functions are being outsourced. The government intends to pass a new law on public-private partnerships (PPPs) by end-2016 and to use PPPs to finance the construction of 40 schools, 10 medical centers and other infrastructure projects by the private sector.

The government is also taking steps to increase non-oil revenues, focusing on indirect taxes and levies. It has increased stamp duty and plans to levy additional taxes on alcohol, tobacco and energy drinks starting in 2017. It plans to start applying VAT at a rate of 5% in 2018 on all goods and services, excluding selected food and medical items, potentially adding QAR12b-15b per year to the government’s coffers.

We expect non-hydrocarbon growth to slow to 6% in 2016 from an estimated 8% in 2015. Average non-hydrocarbon growth has been 10% over the past five years. The slowdown will be a result of a less benign fiscal environment, where a contraction in current spending and a focus on fiscal efficiency leads to a slowdown of both private and public consumption growth. Some of the contraction will, however, be compensated by lower imports. With the government’s capital spending expected to remain at QAR94b per year through to 2021, its commitment to key infrastructure projects will support economic activity. After this, the non-oil growth outlook is highly uncertain.

In our forecast, hydrocarbon growth will pick up to 2.2% in 2016, after contractions of 3.2% in 2015 and 1.5% in 2014. This will raise overall growth to 4.1% in 2016 from 2.2% in 2015, despite the slowdown in non-hydrocarbon growth. The Barzan gas development should come on stream in 2016 and will add 1.4 billion scft/d of production of sales gas when it reaches full capacity, on top of additional production of LPG and condensates. The Ras Laffan II condensate refinery should be completed by 3Q16 and will add 146,000 bbl/d of capacity for petroleum products, offsetting the impact of declining crude oil production on overall hydrocarbon production. Oil field redevelopments could positively affect hydrocarbon production after 2020.

A widely expected glut in global LNG capacity poses a risk to Qatar’s fiscal and external revenues, on top of the risk stemming from low oil prices. Qatar’s market share in LNG exports, which stood at 31% in 2014, will likely shrink, although this should be partly mitigated by a focus on long-term customer relationships through flexible sales arrangements.

Banking sector liquidity has deteriorated as the public sector has drawn down on some of its deposits even as bank lending continued to grow. The banking system’s loan-deposit ratio rose to 120% in December 2015, from 105% in December 2014, and interbank rates rose sharply in 4Q15. However, banks have been able to find funding abroad, and we believe that the Qatar Central Bank (QCB) has at its disposal the tools to support liquidity, with the QCB’s repo rate and required reserve ratio both above 4%. Concentration of bank exposures to large business groups is a risk, as is their exposure to the real estate sector.

Rating Sensitivities

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

– Sustained weakness in hydrocarbon revenues and a failure to scale back expenditure, eroding fiscal and external buffers.

– A materialization of large contingent liabilities, such as from government-related enterprises or the banking sector, resulting in a rapid draw-down of sovereign assets or build-up of debt.

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

– Improvement in structural factors such as reduction in oil dependence, and a strengthening in governance, the business environment and the economic policy framework.

Key Assumptions

Fitch assumes that Brent crude will average $35/b in 2016 and $45/b in 2017 and rise to a long-term average of $65/b.

Fitch assumes natural gas prices will evolve broadly in line with oil prices.

Fitch assumes that regional geopolitical conflicts will not impact directly on Qatar or on its ability to trade and that the domestic political scene will remain stable. (Fitch 31.03)

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11.4 EGYPT: Cairo’s Crude Crisis

Yasser El-Shimy wrote in Sada that cheap oil is hurting Egypt’s economy in the short term and could have wider political consequences.

Low oil prices are heaping added pressure on Egypt’s currency crisis. While common wisdom holds that the finances of fuel-importing nations, such as Egypt, stand to benefit from declining energy prices, the net impact for Cairo’s economy is surprisingly negative. At least in the short term, this trend is exacerbating what was already a full-fledged foreign currency crisis as a result of significant falls in tourism and industrial exports revenues.

In the long run, Egypt should benefit from cheaper oil by spending less on importing and subsidizing gasoline and gas. Indeed, spending on petroleum and natural gas subsidies has decreased from EGP 73 billion ($8.2 billion) in 2014–2015 to EGP 55 billion ($6.2 billion) in 2015–2016. This is at least partially due to plummeting oil prices, which may eventually have a positive impact on inflation and allow Egypt to overcome four years of energy shortages. All in all, this may actually be conducive to future economic growth.

Yet there are a number of reasons why depressed oil prices are hurting the Egyptian economy in the shorter term. First, as Egypt’s single biggest export, petrochemicals constitute one of its main sources of U.S. dollars. For a country as dependent on imports as Egypt, access to foreign currency (particularly dollars) is crucial. Egypt is earning fewer dollars from its energy exports, partly due to lower energy prices. Inability to pay energy firms their dues in dollars is also contributing to a declining domestic energy production and, therefore, energy-related dollar revenues. Amid low energy prices, these companies are also curtailing their exploration activities, limiting Egypt’s future production and withholding precious dollars from the local market. According to statistics from the Ministry of Trade and Industry, Egypt’s exports of crude oil and petrochemicals declined 33% from $4.5 billion in between January 2014 and September 2014 to $3 billion in the same period of 2015. While more recent figures have not been released, it is likely that this revenue decline has accelerated due to the continued weakening of energy prices. Meanwhile, the country is paying more dollars for energy imports. Egypt’s imports of crude oil and petrochemicals rose in that same time period of January to September 2014 from $6.3 billion to $8.8 billion in 2015, partly because of declining energy grants, credits and aid from the Arabian Gulf.

Second, low oil and gas prices are substantially limiting aid from the Arabian Gulf countries, Egypt’s main economic lifeline since the July 2013 military coup. Although it is probable that there are also geopolitical reasons behind declining Saudi and Emirati aid and investments in Egypt, such as Cairo’s pro-Russian stance in Syria and reluctance to send combat troops to Yemen, both Gulf countries continue to support the military regime in an effort to curb growing Iranian influence in the Middle East.

Their commitment is more constrained by diminishing oil and gas revenues and the sharp costs of war in Syria and Yemen. Saudi Arabia’s budget deficit expanded from 2% of its GDP in 2014 to 15% one year later, and foreign reserves plummeted from $737 billion in to $640 billion. As such, assistance to Egypt has sharply declined. While Gulf aid and permissive loans for the Egyptian fiscal budget for July 2013–June 2014 are estimated to be at least $16.7 billion, such assistance plummeted to single digits in the period thereafter, and recent pledges are meager in comparison and lack a strict timeframe.

In February, Saudi Arabia rejected the Egyptian government’s project proposals that would have brought in $8 billion in Saudi investment. Likewise, Emirati contractors limited their participation in Abdel Fattah el-Sisi’s signature projects to build affordable housing and a new administrative capital. The financial pressure these countries feel as a result of oil that sells for approximately $30 per barrel will lead them to reject former blank-check forms of assistance and potentially opt instead for opportunistic investments, such as in the lucrative real estate sector. To be sure, Riyadh has recently hinted at further aid to Egypt, particularly in the energy sector, but this aid is far less generous than in previous years. Osama Kamal, Egypt’s former Minister of Petroleum, recently warned that Saudi Arabia cannot afford to invest in Egypt at the current oil prices.

Third, as oil-producing Gulf countries face their own economic challenges, remittances sent home by Egyptians working in these countries are plummeting. While Cairo’s banks received $22 billion in transfers in 2014, that figure declined to $18 billion in 2015. This is attributed to the Gulf economies’ stagnation and limited austerity measures, as well as the large discrepancy between the Egyptian official exchange rate and that of the black market.

Finally, cheap energy prices are limiting Egypt’s access to foreign currency via the Suez Canal. According to a report by SeaIntel, cheaper oil and cheaper fuel has already pushed many maritime cargo ships to take the longer route around the Cape of Good Hope instead to avoid the now uneconomical canal tariffs. Between October 2015 and the new year, 115 ships have already taken the longer, but now cheaper, route. More ominously, the commodity sector’s global decline has thus far been due to oversupply. If demand also declines due to a slowdown in the Chinese economy or emerging market credit problems, Egypt stands to lose even more dollars from the contraction in international maritime trade, on top of diminishing oil and LNG cargo revenues.

This foreign currency crisis (exacerbated by low energy prices) has broad social, economic, political and geostrategic implications for Egypt. On the socioeconomic front, Egypt faces a growing need to borrow from the IMF, which will give it little choice other than to embark on a painful array of structural reforms, austerity measures, and currency devaluation. These will pass tremendous costs to Egypt’s already strained consumers. The current inflation level of approximately 10% is likely to increase while the economy slows and jobs become scarcer. Additionally, cutting public spending by taking on the country’s bloated bureaucracy has proven no easy task, as the government confronts a powerful lobby of public employees numbering, according to divergent Egyptian government estimates, between 5 and 7 million. For instance, in January parliament reviewed hundreds of laws that President Sisi had passed in 2015, but the only one they struck down was the civil service law, which would have substantially curtailed hiring in the public sector and effectively frozen wages.

The current currency crisis will hit Egyptians across the board. Unusual shortages and price hikes in staples such as rice, cooking oil and medicine are spreading. Some companies, including General Motors, LG, Air France, British Airways and Italcementi, have either suspended operations temporarily or considered exiting the market entirely, due to their inability to repatriate earnings or access dollars needed for imports. The government’s recent decision to increase tariffs on a host of imported products to limit the pressure on the Egyptian pound highlights the impact of the dollar problem on manufacturers, importers, workers, and customers alike.

On the political front, President Sisi faces the seemingly contradictory challenge of managing the country’s finances while simultaneously forestalling and suppressing manifestations of public unrest. Given the rapid decline in Egyptians’ living standards and welfare benefits, outbursts of public anger may begin from professional syndicates, labor unions and even government employees. Should these groups openly defy the regime’s security forces, they may quickly be joined by a host of other groups and ordinary citizens. This is already happening with the Egyptian Medical Syndicate, Alexandria bus drivers, Cairo taxi drivers and labor unions in Alexandria and the Nile Delta. Public criticism of the president and the government, a taboo since Sisi came to power, is becoming common on media channels considered close to state institutions. In short, given the economic outlook, Egypt is likely to suffer from disruptive sociopolitical turmoil that will dampen hopes for political stability and further impede the government’s ability to turn the economy around.

Yasser El-Shimy is a senior teaching fellow at Boston University and the former Egypt analyst for the International Crisis Group. (Sada 30.03)

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11.5 EGYPT: Will Egyptian Parliament Cut Into the Military’s Profit Margin?

Rania Rabeaa Elabd posted on 1 April in Al-Monitor that the Egyptian army’s strength may hinder any attempt at limiting its economic activities.

Egypt’s politicians are preparing to do battle against its army. A number of lawmakers in the country’s recently elected parliament are working on laws designed to provide answers to questions about the army’s money and its place in the national budget.

“Armies are the basis of the administration and the administration is everything,” Maj. Gen. Mahmoud Nasr said at a conference four years ago on the role of the Egyptian Armed Forces (EAF) in supporting the economy through the institution’s many projects. At the same conference, held in Cairo and organized by the Supreme Council of the Armed Forces, he stressed that the so-called “army economy” is not derived from state funds, but rather from returns on Ministry of Defense projects.

The Defense Ministry’s projects and finances have long lacked transparency and many critics have questioned whether its funds constitute a black-market budget. Some estimate the size of the army’s economy at 35 – 45% of the Egyptian economy. President Abdel Fattah al-Sisi denied both assertions during his election campaign. In a May 2014 interview with Reuters, Sisi said the correct number was no more than 2%.

The army’s wealth comes through what is owned by the EAF’s ministries, military production and subsidiary bodies or economic institutions. The Armed Forces Land Projects, a government agency affiliated with the Ministry of Defense, is tasked with creating investment projects (housing, commercial centers, administrative units, parking areas) on EAF-owned land to serve the civilian sector. But the agency isn’t required to reveal the lands it owns or how it came to own them.

Among the most prominent of the army’s economic bodies is the Arab Organization for Industrialization, launched in 1975 as a partnership with Saudi Arabia, Qatar and the United Arab Emirates to establish an Arab common defense industry. But after Egypt signed a peace treaty with Israel in 1979, the Arab states withdrew their shares and the Egyptian government became the organization’s only owner.

Also in 1979, the army created the National Service Projects Organization to become self-sufficient and avoid relying on the private sector for its needs. The agency lists the companies it owns on its website. The companies operate in numerous sectors such as construction, cleaning, agriculture and food products, and they sell their surpluses in the domestic Egyptian market.

The army’s economic empire extends to public lands that are not declared in any document or official statement. They come to light when projects are planned on vital land. After investors become deeply involved in projects, they sometimes discover that the lands in question belong to the army or are disputed between the army and the police, which are represented by the Ministries of the Armed Forces and the Interior, respectively, according to parliament member Moataz Mahmoud, who spoke with Al-Monitor in a recent interview.

Mahmoud supports legislation known as Dominion of the Land (Wilayat al-Ard), which mainly aims to limit how much land the Egyptian army and the Ministry of Interior can own and to codify it as much possible. According to Mahmoud, existing laws are onerous for Egyptian and foreign investors. He would like to pass a series of new laws, such as Dominion of the Land, that clearly define state land ownership and protect property rights.

In addition to ruffling the military’s feathers, this legislation is expected to trigger a confrontation among parliament members. A number of international and domestic media outlets have reported that Egypt’s military intelligence pushed certain people to run in the elections, seeking to boost the army’s political influence even more.

In this context, a parliamentarian who spoke on condition of anonymity pointed out that the army’s economic assets keep expanding year after year but that “the national interest makes it imperative for parliament in general to not open this case.” He stressed that the army does not interfere with the economy or work against anyone, and that it “fills an economic void to provide goods that the state could not provide.” He did concede, however, that the army uses conscripts as laborers in its production operations, making its companies more competitive than the private sector.

From 2012 to 2014, the Engineering Authority implemented 473 strategic and service projects. A military source in EAF’s Engineering Authority told Al-Monitor that projects of the EAF and its affiliates are not subject to any kind of oversight, not even by parliament.

The source said that the expected clash between the army’s economic arm and the parliament members who support the legislation could prevent its passage, or at least prevent its application to the EAF, which is a sovereign body with economic and legal influence surpassing that of parliament members. Parliament is not allowed to examine the army’s budget, which is the responsibility of the Defense and National Security Committee alone in cases of extreme necessity.

The source said projects assigned to the army’s economic agency are always done directly through the Council of Ministers or the relevant ministries. In an attempt to create confidence between the agency and businesspeople, the agency sometimes enters into partnerships, such as the partnership with Osman Ahmed Osman and his company, Arab Contractors.

Rania Rabeaa Elabd is an Egyptian journalist focused on issues concerning the parliament and political parties. (Al-Monitor 01.04)

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11.6 EGYPT: Egyptian State Takes on Independent Trade Unions

Khalid Hassan posted on 24 March in Al-Monitor that after Egypt recently declared independent trade unions invalid, many groups said they will fight the decision on the grounds that it violates the constitution.

In what many critics see as an effort to eliminate union organization in Egypt and undermine all constitutional articles guaranteeing the right to establish trade unions, the state on 1 March declared that the stamps of independent trade unions will no longer be valid on official documents. The decision prohibits dealing with independent trade unions and considers them illegitimate entities.

The decision came following a more than five-year struggle between independent trade unions and the state, represented by the Ministry of Manpower, which is in charge of following up on the establishment and activity of trade unions. After the January 25 Revolution of 2011, dozens of independent trade unions started forming to express workers’ demands.

With time, the independent trade unions’ influence increased, as members elected their leaders and saw them as rights advocates. Workers abandoned the pro-government Egyptian Trade Union Federation (ETUF), which failed to unite them under its umbrella.

The Interior Ministry said the Ministry of Manpower had asked for the unions to be invalidated because they are not subject to the provisions of Law No. 35 of 1976 on trade unions, which prohibits union pluralism. Article 13 of that law states that workers in the same occupational groups or industries, or in industries correlated to each other or jointly working for the same production, can only form one trade union across the republic and no other.

Hani Afifi, vice president of the Egyptian Democratic Labor Congress (EDLC), which is an independent alliance of unions, told Al-Monitor, “This law is faulty and has no value, as it contradicts constitutional Article 76, which allows trade union pluralism and guarantees workers’ right to establish trade unions upon notifying the concerned authority. Constitutional provisions are the important thing for us, and the government needs to adjust its situation according to the constitution and refrain from implementing a law that contradicts the constitution.”

Constitution Article 76 states that the establishment of federations and trade unions on a democratic basis is a right guaranteed by the law. The article says unions shall have legal personality, operate freely, contribute to higher competencies among its members, advocate for their rights and protect their interests. The article also says the state shall guarantee the independence of trade unions and federations, and their boards of directors shall not be dissolved without a court order.

“We have in the [EDLC] congress of 125 independent trade unions and more than 800,000 workers, all of whom left the ETUF and decided to join us. The federation did not offer them anything and workers did not even elect their representatives, so how could ETUF be representative of workers in the state?” Afifi said.

“Why does the state refuse to implement the provisions of the constitution and continue to procrastinate on issuing the laws on freedom of association, which the ministry had announced two years ago? Why is the state trying to suppress workers with an outdated law from 40 years ago, which was canceled in the [2014] constitution? We will not be affected by these measures and we will continue to fight for our usurped rights and exercise the freedoms of association to the fullest, as per the constitution,” he added.

In January, the Permanent Conference of Alexandria Workers launched a campaign dubbed “Together for Freedom of Association” calling on the government to yield to workers’ demands and implement the constitution’s provisions regarding the freedom to establish trade unions unconditionally. The campaign has said it will take clear steps to pressure the government, including organizing seminars and meetings with workers from across the country’s different governorates, and collecting their signatures on a petition rejecting the decision. The campaign also plans to file lawsuits against the Ministry of Manpower for violating the constitution.

In press statements on 16 March, Khaled Tosoun, vice chairman of the Permanent Conference of Alexandria Workers, called upon the state to reject its thinking, which he said is negatively affecting its economic situation; to implement the international labor agreement it had signed; and to openly declare its support for the working class and workers’ right to establish independent unions.

Egypt is a signee of the International Labor Convention No. 87 for 1948, which states in its second and third articles that workers have the right to establish unions and organizations of their choice unconditionally, to set their bylaws and regulations and organize their administrative affairs and activities in full freedom. The convention’s Article 8 stipulates that the country’s laws shall not prejudice the provisions of the agreement.

Article 93 of the constitution says the state shall be bound to the international agreements, covenants and conventions on human rights ratified by Egypt, which shall enter into force after publication in accordance with the established procedure.

Abdel Monem al-Gamal, the ETUF deputy chairman, made scathing comments to Al-Monitor against the independent unions, calling upon them to respect the law and rejoin the federation, which is the only union legally recognized by the state. “Law No. 35 of 1976 is the only law governing the establishment of independent trade unions and federations. The government has yet to amend it in accordance with the constitution. So until the government passes the new law, the independent unions are void and invalid,” he said.

Concerning the accusations against that ETUF has not offered workers any benefits for the past 60 years, Gamal said, “If the ETUF has done nothing for workers, could anyone tell me what the independent unions have offered workers over the past five years since their establishment? “Unfortunately, some workers have exploited the chaos that followed the January revolution to create fake entities, obtaining funds from abroad without any control. Today, we have to correct the path by operating under the umbrella of the official federation exclusively.” (AL Monitor 24.03)

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11.7 TURKEY: Key Trends Impacting the Turkish Elevators and Escalators Market

Technavio’s latest elevators and escalators market in Turkey report highlights three key emerging trends predicted to impact market growth through 2019. Technavio defines an emerging trend as something that has potential for significant impact on the market and contributes to its growth or decline.

“Major international players such as ThyssenKrupp, Otis, Schindler, and Hyundai, dominate the elevators and escalators market in Turkey. Apart from these major international vendors, the key domestic players include Tromp and Edoux. The construction market in the country has been experiencing steady growth since 2013, and as a result, multiple construction projects are underway in the country, especially in the transport and healthcare infrastructure sectors. Technavio researchers predict the elevators and escalators market in Turkey will reach close to $972 million in revenue by 2019,” said Soumya Mutsuddi, one of Technavio’s lead industry analysts for construction research.

Technavio’s market research study identifies the following three emerging trends expected to propel the growth of the elevators and escalators market in Turkey:

Increase in export of elevator and escalator equipment
Increase in electric elevator installations
Increased focus on safety in elevators and escalators

Increase in export of elevator and escalator equipment

The elevator and escalator market in Turkey is characterized by the presence of a number of domestic manufacturers. The country is in close proximity to Europe as well as the Middle East. The construction industry in the Middle East, especially UAE and Qatar, is experiencing unprecedented growth in the construction of high-rise buildings, resulting in an increased demand for elevator and escalator equipment.

Similarly, with the growth of the construction industry in Russia and Iraq, especially in the high-rise construction sector, the demand for elevator and escalator equipment in these countries is expected to increase over the next four years. Because of this rising demand, the export of elevator and escalator equipment to Iraq and Russia is also anticipated to increase. As of 2014, Turkey exported more than $6.5 million worth of elevator and escalator equipment to Iraq and around $5 million worth of elevator and escalator equipment to Russia. Apart from these countries, Turkish manufacturers mainly export elevator and escalator components and equipment to Bulgaria and Iran.

Increase in electric elevator installations

Electric elevators have become a preferred choice among construction companies. Electric elevators dominated the market with a market share of 89% in 2014. The demand for energy-efficient elevators has significantly increased over the past few years. Energy efficiency is achieved when motors installed in electric elevators are used to overcome friction through a lifting action performed by counterweights.

It has become evident to users that energy-efficient elevators are more economical in the long run. Hence, in terms of carriage, electrical lifts can carry much more weights when compared to hydraulic elevators. Most of the energy consumed in these elevators mainly originates from heating, cooling, ventilation and lighting systems.

In hydraulic elevators, the energy that is used to perform the lifting action goes completely unutilized, as elevators use a pump system that helps lift the cabin. It pushes a cylinder of fluid on a piston while lifting the cab.

Increased focus on safety in elevators and escalators

The elevator and escalator market in Turkey witnessed a number of fatal elevator and escalator accidents during the 2012 – 2014 period. To overcome risks involved in the installation of faulty equipment, the government of Turkey has therefore increased its focus on safety standards. Inspectors all across the country are actively engaged in rigorous inspection of installed elevator and escalator equipment, especially in public buildings.

Equipment that does not comply with safety standards are given a red label and are sealed by inspectors. In 2014, the inspectors of Erzurum, a city in Eastern Turkey identified more than 1,500 elevators that pose potential safety hazards and sealed them off.

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies. (Technavio 25.03)

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11.8 GREECE: Privatizations Program Struggles to Make Target of €2 Billion

Greece’s privatizations program is again facing delays, this time due to new obstacles raised either by political developments or the stalling tactics of certain government officials who are ideologically against the sell-offs. Hopes of reaching the target for privatization revenues of €2 billion this year are rapidly diminishing, as key projects that would have contributed significantly are being put off. The original target for €3.5 billion is now but a pipe dream.

So far, the only certain sum is the €1.5 billion from the contracts of the state sell-off fund (TAIPED) with Fraport for the regional airports (€1.23 billion) and with Cosco for Piraeus Port Authority (€280 million). All other projects that could fetch significant revenues are under dispute.

For instance, the development of the old Athens airport at Elliniko is unlikely to bring in any takings this year, despite the optimism recently expressed by Finance Minister Euclid Tsakalotos in Parliament. The government has not yet reached the deal it desires with the preferred bidder.

The only projects that could help the budget within 2016 are Athens International Airport (AIA) and OTE telecom. However, the former is opposed by the Infrastructure Ministry and the latter is seen as bearing too heavy a political cost for this government.

Of course as the bailout review proceeds, the government will come under increasing pressure from its creditors to complete some key privatizations. In this context, the AIA negotiations are expected to start soon, with TAIPED and the Canadian stakeholders eager to reach a deal, which would be possible in the next four months. Should there be an agreement, the revenues are likely to top €200 million.

The government is also examining the case of its 10% stake in OTE, which could be used as a stopgap solution in case the privatizations program looks like missing its target. The state revenues from the sale of that stake would amount to €300 million, with another €200 million going to the Social Security Foundation (IKA).

Other sell-off projects, such as rail companies Trainose and Rosco, Egnatia Odos, Thessaloniki Port Authority and so on, are unlikely to fetch any revenues within this year. (Ekathimerini 05.04)

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What’s New at EDI – April 2016

April 12, 2016, 12:58 pm

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Visit of Ontario Premier Wynne Slated for May

Companies from the Former East Germany Visit Israel in June

A group of industrial exporters from the former East Germany will visit Israel in June on a mission initiated by Germany Trade & Invest, the economic development agency of the Federal Republic of Germany. During the visit, the companies will meet with potential importers/distributors in Israel and the government officials accompanying them will host an “Invest in Germany” seminar as well. EDI, in cooperation with Germany’s Enviacon International will handle all of the Israel arrangements for the visit.

California Department of Food and Agriculture Mission in June

A mission composed of representatives from California’s agricultural community will visit Israel in June. Headed by California’s Secretary of Agriculture, Karen Ross, the group is particularly interested in climate smart agriculture, an area where Israel has a great deal of recognized expertise. The Milken Institute will also be supporting the mission. EDI will handle all of the Israel arrangements for the visit.

Germany’s Miele Visits Israel in March

German appliance manufacturer Miele was in Israel in March to meet potential importers and distributors for their home appliance line. The company has identified significant potential in the Israel market for their products. EDI in cooperation with trAIDe GmbH in Germany handled the visit and identified the potential partners.

Oklahoma State University Delegation to Visit

A delegation from Oklahoma State University was in Israel in March to investigate academic cooperation possibilities with Israeli universities. EDI’s Trade Director, Seth Vogelman, addressed the group while they were in Israel. EDI represents the regional trade and investment interests of the Oklahoma Department of Commerce.

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Fortnightly, 20 April 2016

April 20, 2016, 1:33 pm

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20 April 2016
12 Nisan 5776
13 Rajab 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Expects $8 Billion Boost From Energy Efficiency Plan
1.2 Netanyahu Scraps Plans to Regulate Cyber Security Companies

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Over 30 Israeli Startups Raise More Than $10 Million Each in Funding in First Quarter
2.2  Vasona Networks Adds $14.6 Million in Venture Capital
2.3  Mintigo Raises $15 Million
2.4  Top Sensor Manufacturers Make Strategic Investment in CropX
2.5  Motorola Solutions to Set Up Israel Innovation Center
2.6  Acquisition of Crosswise Strengthens Oracle’s Data as a Service Offering
2.7  Azerbaijan Airlines to Launch Tel Aviv – New York Flights Via Baku
2.8  El Al Ranked Next to Last on Landing Punctuality

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Kuwait Signs Long-Delayed Deal to Buy 28 Eurofighter Jets
3.2  Evoqua to Provide Carbon Adsorbers for Sohar Refinery Improvement Project
3.3  SPAR International Said to Target 24 New Stores in Oman
3.4  Babson College to Help Open Campus in Saudi Arabia
3.5  NanoMech Receives $10 Million Investment from Saudi Aramco Energy Ventures

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 GCC Countries Set to Pump $100 Billion Into Renewable Energy

5: ARAB STATE DEVELOPMENTS

5.1 Jordan’s Defense Budget Stands at $1.7 Billion for 2016
5.2 KRG Oil Exports Average 327,000 bpd for March

♦♦Arabian Gulf

5.3  Dubai Targets 500,000 Medical Tourists by 2020 With New Website
5.4  Dubai Health Authority to Fully Implement Mandatory Health Insurance by June
5.5  Tourism Adds $36.4 Billion to UAE’s GDP in 2015
5.6  Indian PM Modi Signs Labor Agreement with Saudi Arabia
5.7  Saudi Oil Exports Fall to 7.553 Million bpd in February

♦♦North Africa

5.8  Egypt’s Annual Inflation Down to 9% in March
5.9  Egypt to Cut Fuel Subsidies by 43% as Cairo Seeks to Reduce Deficit
5.10  Moroccan Diaspora Remittances Reached $6.4 Billion in 2015
5.11  Saudi Arabia & Morocco Sign $230 Million Aid Agreement

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Budget Deficit at $2.4 Billion In March
6.2  Turkey’s Unemployment Rate Rose to 11 Month High in January
6.3  Approximately 300,000 SME Workers Lose Jobs After Turkey’s Minimum Wage Hike

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Passover Observance Will Begin on 22 April

8: ISRAEL LIFE SCIENCE NEWS

8.1  Lycored’s Cardi-O-Mato Selected as a Finalist for the 2016 NutraIngredients Awards
8.2  BioSight Completed Treatment of Patients in Astarabine Phase I/IIa Clinical Trial
8.3  Periods Are Awful! Livia’s Here to Relieve Your Pain

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Karamba Security Emerges From Stealth Mode to Protect Connected Cars from Cyber Attacks
9.2  Israel Aerospace Begins Producing F-35 C4 Systems
9.3  Hexadite Adds Mac & Linux Coverage to Intelligent Security Orchestration
9.4  Stratoscale Chosen as a 2016 Red Herring Europe Winner
9.5  LightCyber Introduces Security Industry’s First Attack Detection Metrics
9.6  Humavox Brings New Smart Wireless Charging Technology to Hearing Aids and Hearables
9.7  NTT Electronics Partners with VideoFlow for Broadcast Quality Video over Any IP Network
9.8  VisIC Technologies New 650V Half-Bridge Evaluation Board
9.9  Mutual Trust Life in Production with Sapiens ALIS Policy Administration System
9.10  SolidRun Announces the World’s Smallest Intel Braswell-based Computer

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Rate Drops 0.2% in March
10.2  Israeli Exports Fall by 14% in the First Quarter
10.3  Israel’s Foreign Currency Reserves Surge to Record Amounts
10.4  Israeli Defense Exports Up Despite Concerns
10.5  Employee Tax Burden Rising In Israel
10.6  Israel Railways Breaks Monthly Passenger Record

11: IN DEPTH

11.1  ISRAEL: Israeli Startups Raise $1.09 Billion in First Quarter
11.2  SAUDI ARABIA: Fitch Downgrades Saudi Arabia to ‘AA-‘; Outlook Remains Negative
11.3  SAUDI ARABIA: Laying the Foundation for a Post-Oil Centric Economy
11.4  EGYPT: Sailing Through the Straits
11.5  SAUDI ARABIA: Saudi Arabia Tilts Toward India
11.6  TURKEY: What Turkey’s New Central Bank Chief Means for the Economy
11.7  TURKEY: Turkey’s New 4G Mobile Network Comes With Many Dark Clouds

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Expects $8 Billion Boost From Energy Efficiency Plan

On 11 April, the Netanyahu government unanimously approved a plan for reducing greenhouse gases and increasing energy efficiency to benefit the economy. Government officials expect the cumulative benefit to Israel’s economy to reach more than NIS 30 billion ($8 billion), the Finance, Energy, Environment and Economy ministries said. Under the plan, which follows last year’s international climate accord in Paris, Israel will grant NIS 500 million ($132 million) in guarantees for loans to boost energy efficiency and NIS 300 million ($80 million) in grants for projects that will lead to efficiency in industry, the business sector and municipalities.

Israel has committed to cut per capita greenhouse gas emissions to 7.7 tons of carbon dioxide equivalent by 2030. This represents a reduction of 26% over emissions in 2005. Cabinet ministers said they would examine ways to lower the use of coal and encourage the transition to natural gas to lead to a substantial drop in air pollution. They also will study measures to help make transportation more efficient and cut travel times, while setting up a team to remove barriers to encourage Israel’s clean-tech sector and give tax incentives to encourage the use of renewable energy and promote green building projects. (IH 11.04)

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1.2 Netanyahu Scraps Plans to Regulate Cyber Security Companies

In a dramatic development in the plan by the National Cyber Bureau and the Defense Ministry Defense Export Controls Agency (DECA) to institute supervision of cyber systems exports from Israel, Prime Minister Netanyahu ordered that the continuation of procedures for drawing up the order be canceled. Netanyahu’s decision came after he adopted the recommendations by a recently formed team for consideration of aspects of the draft order and the effects of such an order on the Israeli cyber industry. The team members heard the views of the industrialists and cyber company heads, who expressed concern that implementing this order would have a negative impact on the development of the sector in Israel, lead to a brain drain, and divert planned investments in companies to countries not having regulation in this matter.

As a substitute for implementing a supervision order for cyber systems exports, the Prime Minister and National Cyber Bureau head Dr. Matania decided that Israel would comply with the Wassenaar Arrangement on this question – an international convention adopted by Israel that regulates exports of dual-purpose developments – civilian developments that when adapted somewhat can be used for military and aggressive purposes. In principle, all of the world’s countries supervise cyber systems exports on the basis of this convention.

Dozens of objections were submitted to the Ministry of Defense and the National Cyber Bureau in recent months by companies in the industry seeking to halt progress on the order. Among other things, these companies asserted that the order had been formulated too generally, and that there was no clarity concerning the circumstances in which a product would require authorization before it is exported. They further alleged that deals made by the companies would be delayed and jeopardized before being given the go-ahead by the state authorities.

Under the Prime Minister’s decision, DECA will supervise exports of cyber systems for security purposes, such as offensive and defensive cyber systems, while supervision of exports of cyber systems with a civilian character will be through a new authority to be established in the Ministry of Economy and Industry. (Globes 19.04)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Over 30 Israeli Startups Raise More Than $10 Million Each in Funding in First Quarter

Ethosia reported that Israel’s high-tech sector posted a confident first quarter with over 30 startups raising more than $10 million each in funding rounds from January to March 2016. The 33 high-tech companies raising more than $10 million each totaled $869.3 million in Q1/16 investments. These include cyber security analytics company Skybox Security ($96 million), network security company ForeScout Technologies ($76 million), immunotherapy startup Adicet bio ($51 million), JFrog, a developer of open source software distribution tools ($50 million), Zerto disaster recovery software solution ($50 million) and business analytics software company Sisense ($50 million). In addition, invoice financing startup BlueVine ($40 million), Elastifile flash storage solution ($35 million), V-Wave Unidirectional Shunt System ($28 million) and online financing company Ezbob ($28 million) raised significant funds, as did Insightec ($22 million), enSilo ($21 million), AppCard ($20 million), CartiHeal ($15 million) and TravelersBox ($10 million), among others.

The Ethosia report also highlighted the top five exits in the first three months of the year: Leaba ($350 million), Altair ($200 million), Replay ($170 million), TowerSec ($75 million) and Volicon (tens of millions, full details not disclosed). (Various 10.04)

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2.2 Vasona Networks Adds $14.6 Million in Venture Capital

Vasona Networks announced a $14.6 million series C Round, bringing total funds raised by the company to $48 million. The financing builds on global momentum that has seen the company’s solutions used by tier-one mobile network operators in four of the world’s largest cities, including announced use by Telefonica UK in its London O2 system. The additional venture capital supports these deployments and drives ongoing research and development efforts, such as extension of Vasona Networks’ leadership in the emerging edge computing movement. Participants in the funding round include Bessemer Venture Partners, New Venture Partners and NexStar Partners.

Key Vasona Networks offerings include the SmartAIR edge application controller and SmartVISION analysis suite. These platforms leverage edge locations between core and radio access networks, which is a key position for precise traffic management and monitoring at scale. SmartAIR assesses each cell’s conditions and acts on congestion in real time, taking into account the cause and the subscriber’s location. SmartVISION gives unprecedented live and historical visibility into networks at the level of individual cell performance.

Founded in 2009, Tel Aviv’s Vasona Networks works with global mobile network operators to deliver better subscriber experiences. The company’s pioneering edge application controller, the SmartAIR1000™, takes a holistic approach to addressing mobile network data traffic. (Vasona 07.04)

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2.3 Mintigo Raises $15 Million

Israeli predictive marketing company Mintigo has raised $15 million in a financing round led by Sequoia Capital. The startup generated 700% growth in 2015 – partnering with enterprise customers such as Oracle, Getty Images, Equinix, SolarWinds and Red Hat. Mintigo has developed a cloud-based software platform that enables sales and marketing teams to use data and predictive analytics to increase sales. Mintigo’s primary difference for B2B marketing and sales comes as a result of being able to quickly access the data that actually matters. A unit of data can best be described as “anything that makes a difference.” The difficulty for marketers is in knowing what that really means.

Ra’anana’s Mintigo believes in the power of data science to revolutionize marketing. Data for marketing is like GPS for driving – in the past, finding the fastest route required planning and making the right decisions at each and every turn. Mintigo is building the ultimate “GPS for marketers”. Mintigo’s Predictive Marketing Platform empowers marketers to be successful and get the results they want…every time. It helps marketers drive better marketing and find the fastest route to revenue. (Globes 07.04)

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2.4 Top Sensor Manufacturers Make Strategic Investment in CropX

CropX announced that global leaders in the sensor manufacturing space – Robert Bosch Venture Capital GmbH (RBVC) and the Flex technology accelerator, Lab IX – have invested in the company. Already serving 20 top farms across the United States, CropX plans to use the strategic partnerships to accelerate product development and rapidly expand market adoption. In tandem, CropX also unveiled a new version of its proven soil sensors that drastically reduces installation time. CropX’ proprietary science helps farmers better understand water usage across their fields. Its low-cost soil sensors can increase crop yields while simultaneously cutting water usage by one third. In just one irrigation season, CropX sensors were installed on thousands of acres of all major row crops and demonstrated immense value, with early customers across the United States reporting dramatic water, manpower and cost savings, as well as massive crop yield gains. During the current growing season, CropX technology will be rolled out across hundreds of thousands of acres.

The company’s Series A financing, which was extended from $9M to $10M to accommodate investor interest, is now closed. Leading AgTech investors Finistere Ventures, Innovation Endeavors, GreenSoil Investments and OurCrowd welcomed the addition of RBVC and Flex into the oversubscribed round due to their sensor manufacturing leadership. The funding will support the company’s continued growth and product development, including advances in nutrition, plant protection, planting and harvesting.

Tel Aviv’s CropX, the world’s most advanced adaptive irrigation software service, delivers dramatic crop yield increase and water and energy cost savings, while conserving the environment. Optimizing irrigation to help farmers around the globe, CropX generates daily, accurate, hassle-free irrigation maps and automatically applies the right amount of water to different parts of the same field. CropX is led by a team of top scientists, technologists and entrepreneurs with a track record of identifying and commercializing disruptive technologies. (CropX 12.04)

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2.5 Motorola Solutions to Set Up Israel Innovation Center

Motorola Solutions has announced it will be establishing an innovation center in Israel that will deal with cyber, analytics, mobile and the Internet of Things. On 13 April, Prime Minister Netanyahu met with Motorola Solutions Chairman and CEO Brown in Jerusalem, where the decision was formally announced. The move will be a boost to the Israeli economy, providing jobs and helping to encourage future investments in the Jewish state. Motorola Solutions noted that it views its Israeli branch “as a strategic asset and that the establishment of the aforesaid center expresses its continued long-term commitment to Israel and Israeli industry, which began in the 1970’s with the establishment – in Israel – of the company’s first development center outside North America. (Arutz Sheva 14.04)

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2.6 Acquisition of Crosswise Strengthens Oracle’s Data as a Service Offering

On April 14, 2016, Oracle announced it signed an agreement to acquire Tel Aviv, Israel’s Crosswise, a leading provider of machine-learning based cross-device data which enables marketers and premium publishers to realize the benefits of cross-device advertising, personalization and analytics. Crosswise’s innovative technology processes over one petabyte of user and device activity data from billions of unique devices every month. By applying advanced data science and proprietary machine-learning techniques to this data, Crosswise constructs a new probabilistic Device Map matching multiple devices to individual users in an accurate, scalable and high quality manner.

Oracle Data Cloud is the fastest growing global Data as a Service business, aggregating more than 3 billion profiles from over 15 million websites in its data marketplace and operating the most accurate ID Graph to enable understanding of consumer behavior across all media channels. Oracle Data Cloud ingests third-party data, extracts value, and activates the data to drive insights and harness this knowledge for targeting, personalization and measurement to help more than 80% of the top U.S. advertisers maximize their marketing spend. The addition of Crosswise further broadens the Oracle ID Graph to construct a complete view of consumers’ digital interactions across multiple devices. (Oracle 14.04)

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2.7 Azerbaijan Airlines to Launch Tel Aviv – New York Flights Via Baku

On Sunday, 24 April, Azerbaijan Airlines will begin weekly Tel Aviv-New York flights. Initially there will be two weekly flights on the route between Ben Gurion Airport and New York JFK on Sundays and Wednesdays, which will include a two hour stopover at Azerbaijan Airlines hub airport in Baku. Azerbaijan Airlines is represented in Israel by Mona Tours. Return flights begin from $700. (Globes 18.04)

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2.8 El Al Ranked Next to Last on Landing Punctuality

FlightStats, which tracks real-time information about airlines and airports, reported that Israel’s national air carrier, El Al, runs late – some 45% of the company’s flights for March 2016 landed over 15 minutes late at their destinations, putting the airline next-to-last. El Al flights landed an average of 44 minutes late in March. Out of 44 airlines surveyed, El Al placed 43rd, which means that the only airline in the survey less punctual was Pakistan Airlines, 46% of whose flights landed late and which had an average delay in landing time of an hour. The most punctual airline was Austrian Airways, with only 9.7% of the Austrian carrier’s flights landing more than 15 minutes late. El Al replied to say that they enjoy an operational accuracy of 79% in departures, while concerns with safety and security may play more of a role in Israel’s case. (FlightStats 07.04)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Kuwait Signs Long-Delayed Deal to Buy 28 Eurofighter Jets

Italy’s Finmeccanica signed a long-delayed contract with Kuwait for 28 Eurofighter jets on 5 April. A memorandum of understanding for the multi-billion jet deal was signed in September but the closing of the deal had been repeatedly postponed. The contract includes logistics, operational support and the training of flight crews and ground personnel, which will be carried out in cooperation with the Italian Air Force. Finmeccanica did not give the value of the deal, but it is estimated to be worth between €7 and €8 billion, with Finmeccanica’s share seen at roughly half of the total. The rest is in the hands of a group of companies in the Eurofighter consortium, including plane maker Airbus (AIR.PA) and Britain’s BAE Systems. (Reuters 05.04)

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3.2 Evoqua to Provide Carbon Adsorbers for Sohar Refinery Improvement Project

Pittsburgh’s Evoqua, a global leader in helping municipalities and industrial customers protect and improve the world’s most fundamental natural resource: water, was chosen to provide carbon adsorption equipment for the $2.1 billion Sohar Refinery Improvement Project (SRIP) in Sohar Port, Liwa, Oman. Scheduled for commissioning in late 2016, the SRIP project will add five new units to the Sohar refinery, improving its production volume, environmental performance and ability to process heavier Omani crude oil. Evoqua will provide the equipment to an energy contractor of the EPC directing the project for Orpic, the owner of the refinery. Evoqua has been asked to provide Vent-Scrub Vapor Phase carbon adsorption systems, proven to be the simplest and most cost-effective way to treat malodorous and VOC emission problems. The systems will be used for removing hydrogen sulfide, mercaptans and other sour gases created as byproducts of the refining process. (Evoqua 06.04)

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3.3 SPAR International Said to Target 24 New Stores in Oman

Dutch supermarket chain SPAR International reportedly plans to open 24 outlets in Oman by 2017, as part of significant expansion plans in the Arabian Gulf. SPAR is focusing on a multi-format retail offer – unlike the large store formats of regional giants such as Carrefour and Lulu – tailored to suit particular regions. The openings will reportedly be overseen by SPAR’s Oman franchise partner Khimji Ramdas. Treating the GCC retail market as a whole, about 7% of food retail comes from Oman. Looking at the current market in GCC, the most concentrated market is UAE, where the top three retail players have 27% share of the market. In Saudi Arabia, the top three players have only 12% of the market. (AB 18.04)

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3.4 Babson College to Help Open Campus in Saudi Arabia

The College for Business and Entrepreneurship at Saudi Arabia’s King Abdullah Economic City (KAEC) is being developed by a subsidiary of Babson College, a Massachusetts-based private business school, with US defense giant Lockheed Martin providing 10 years of funding. The project will be led by a third partner, the Saudi Arabia Economic Offset Program. The move is designed to boost KAEC’s credentials as an educational and entrepreneurship hub. Located about an hour north of Jeddah on the Red Sea coast, the $100 billion megaproject features a major point, an Industrial Valley, a series of residential communities and strong transport connections to other cities in the country. The college will be based on Babson’s methodology and expertise, which has made the school the number-one ranked college in America for the past 20 years, according to US News & World Report. When complete, the college will have a capacity of 1,400 students in graduate, undergraduate and entrepreneurship development programs. (AB 16.04)

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3.5 NanoMech Receives $10 Million Investment from Saudi Aramco Energy Ventures

Springdale, Arkansas’ NanoMech has secured $10 million in capital for leading its Series C Financing round from Saudi Aramco Energy Ventures (SAEV), the corporate venturing subsidiary of Saudi Arabia’s national oil company. This capital infusion and relationship will significantly accelerate NanoMech’s manufacturing, sales and product development. NanoMech uses nanotechnology to develop advanced products for industrial and mechanical applications – such as lubricants, coatings and specialty chemicals. These products have enabled a step change in performance, efficiency and reliability in multiple industries such as energy, transportation, aerospace, manufacturing, automotive, agricultural equipment and military. NanoMech has validated and commercialized its innovations to iconic world-leading businesses and has completed scale up of its smart factory and labs. Several Fortune 100 and emerging companies have incorporated NanoMech’s nano-engineered solutions, to create disruptive and higher-performance products. This announcement represents NanoMech’s most significant milestone in the continued validation and authentication of its unique technology.

Saudi Aramco Energy Ventures is the corporate venturing subsidiary of the Saudi Arabian Oil Company (Saudi Aramco), the world’s leading fully integrated energy and petrochemical enterprise. Headquartered in Dhahran, with offices in North America and Europe, SAEV’s mission is to invest globally in startups and high growth companies with technologies of strategic importance to its parent, Saudi Aramco. (NanoMech 13.04)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 GCC Countries Set to Pump $100 Billion Into Renewable Energy

According to the Kuwait Institute for Scientific Research (KISR), GCC countries are planning to invest some $100 billion into renewable energy projects over the next 20 years. The director-general of KISR, said such robust funding aims to meet the growing energy consumption in the GCC states, estimated at 3% annually. A few years ago, KISR launched Al-Saqaya renewable energy complex, which covers an area of 100 sq. km, with a compound capacity of 200,000 MW; the project will go operational by the end of 2016.

In January, Dubai’s Electricity and Water Authority (DEWA) said it was calling on consulting firms to tender for advisory and regulatory development services for the emirate’s planned 100 billion dirham ($27 billion) clean energy fund. The “Dubai Green Fund”, announced in November, will provide low-cost loans for investors in Dubai’s clean energy sector as part of wider green energy investment program in the desert city state of 2.4 million people. Dubai uses large amounts of energy to cool buildings and public spaces and to provide water through energy-intensive desalination plants. (AB 05.04)

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5: ARAB STATE DEVELOPMENTS

5.1 Jordan’s Defense Budget Stands at $1.7 Billion for 2016

Research and Markets has announced the addition of the “Future of the Jordanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020” report to their offering. Jordan’s defense budget increased marginally from $1.70 billion in 2011 to $1.71 billion in 2015, registering a CAGR of 0.27%. The slow growth rate can be attributed to the country’s struggling economy, high unemployment rates, lack of natural resources, and the burden of hosting a large refugee population. However, Jordan’s recent attempts to upgrade its military equipment are expected to drive its defense expenditure over the forecast period, which is projected to rise from $1.8 billion in 2015 to $1.9 billion by 2020, at a CAGR of 2.05%. The country is estimated to maintain the budget allocation for capital expenditure at an average of 3.3% over the forecast period, which is expected to be $8.8 billion cumulatively. The key areas of investment are expected to be armored vehicles, patrol boats, and border surveillance equipment. (R&M 07.04)

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5.2 KRG Oil Exports Average 327,000 bpd for March

The Kurdistan Regional Government (KRG) has published its monthly crude oil export report for March 2016. The KRG exported 10,148,487 barrels of crude oil (an average of 327,371 barrels per day (bpd)) in the month of March through the Kurdistan pipeline network to the port of Ceyhan in Turkey. Due to circumstances beyond the KRG’s control that occurred within the territory of Turkey, during the month of March there were approximately 12 days of downtime for the export pipeline. This was the continuation of the downtime period that started in the middle of February. The buyers of the KRG crude oil lifted 10 cargoes (totaling 9,232,371 barrels) according to the volumes allocated to them under their contracts. The cargo volumes lifted exceeded the March KRG export volumes. The excess derived from the previously exported oil accumulated in the storage tanks in Ceyhan. The KRG received $557,272,177 on account in March (including $350,000,000 in loans and prepayments) from its crude oil export, of which $36,014,177 was allocated to the producers. $4,258,000 was authorized and paid to Biwater Ltd on behalf of the Ministry of Municipalities and Tourism. (KRG 03.04)

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►►Arabian Gulf

5.3 Dubai Targets 500,000 Medical Tourists by 2020 With New Website

The world’s first medical tourism portal has been launched in Dubai with aim of increasing the number of international medical tourists to 500,000 by 2020. Sheikh Hamdan, Dubai Crown Prince, launched ‘Dubai Health Experience’ (DXH), the online portal that allows international medical tourists to book medical procedures via a website (www.dxh.ae), and avail of a discounted travel rates.

Dubai attracted 630,833 international and domestic medical tourists in 2015, generating over $400 million in revenues, with 296,491 (47%) of those tourists coming from international countries. Driven by the Dubai Health Authority (DHA), the website will offer medical packages for procedures like wellness, cosmetic and dental services, ophthalmology, orthopedics and physiotherapy.

Medical tourists who book the procedures through the website www.dxh.ae at any of the 25 healthcare centers in Dubai that are part of the DXH Group, will able to access special discounted airfares through Emirates, as well as a visa, medical insurance, hotel stay, leisure activities and a marhaba (VIP) service for airport transfer.

The move comes in lines with the vision of the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, to develop the tourism sector and make Dubai city a hub for medical, family and shopping tourism capable to woo over 500,000 tourists with the advent of Expo 2020 Dubai. (AB 11.04)

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5.4 Dubai Health Authority to Fully Implement Mandatory Health Insurance by June

With over 75% of Dubai’s expatriates already benefiting from the mandatory health insurance, which began coming into effect in phases starting January 2014, the Dubai Health Authority (DHA) announced that it is on the verge of fully implementing Dubai’s mandatory health insurance scheme ISAHD (Bringing Happiness) by the end of June. DHA is currently in the third and final phase of implementing the scheme on companies with less than 100 employees — including all spouses, dependents and domestic workers The implementation of the scheme — to have all Dubai residents covered by health insurance — is going according to the adopted time frame. The DHA has completed the first phase that included companies with more than 1,000 employees in 2014 and the second phase, which included companies with 999 to 100 employees, in 2015.

Companies can get the health insurance packages that are in line with the scheme from the 46 health insurance companies permitted by DHA, which includes nine companies that provide the essential benefits package. Employers are required to put in place health cover for their staff that meets the minimum requirements of the law. The law stipulates that employers cannot simply pass on the cost of the cover to their staff, and the DHA has made clear that it will treat any attempts to do so seriously. As a means of ensuring cover is put in place and maintained, the renewal of an employee’s visa will be subject to the employee having health insurance in place. Employers have to provide a basic health coverage with an annual premium anywhere between Dh500-Dh700 and a maximum insurance cover per person per annum of Dh150,000.

Dubai’s health insurance rules do not require employers to provide coverage for the dependents of their employees, whereas this is the case in Abu Dhabi. The reasoning behind this is that by making family cover compulsory, companies could be biased towards hiring single executives to save costs which could, in turn, shift the balance of Dubai’s demographic make-up away from its current family-orientated focus. Instead, cover for dependents falls on the sponsor themselves. So where a dependent does not receive cover from an employer, it becomes the responsibility of the sponsor to put in place and maintain the required cover (though this does not apply until July). (Gulf News 16.04)

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5.5 Tourism Adds $36.4 Billion to UAE’s GDP in 2015

The UAE’s Minister of Economy has revealed that tourism contributed about $36.4 billion to the country’s gross domestic product (GDP) last year. Sultan bin Saeed Al Mansouri said the local tourism industry will be even more reliable in the post-oil economy. He said the sector accounted for 8.7% of GDP to grow by 4.4% this year, according to data issued by the World Travel and Tourism Council., adding that this contribution will rise at a rate of 5.4% annually over the next 10 years. Al Mansouri said that the tourism sector is an important part of the national economy and a core pillar of economic diversification policy of the state. (WAM 06.04)

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5.6 Indian PM Modi Signs Labor Agreement with Saudi Arabia

Indian Prime Minister Narendra Modi has signed a labor agreement with Saudi Arabian officials aimed at improving the welfare and rights of blue collar workers in the kingdom. Modi spent two days in Saudi Arabia on an official visit from 2 -4 April, during which he signed a number of agreements with Saudi Arabia. In a series of tweets from his official Twitter account, Modi revealed that he had a number of productive meetings, discussing ways to increase India-Saudi Arabia cooperation. He also reviewed the cases of Indians who are serving sentences for minor offences, prompting the Saudi Government to look at the cases sympathetically & constitute a review mechanism with immediate effect. (AB 06.04)

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5.7 Saudi Oil Exports Fall to 7.553 Million bpd in February

Saudi Arabia’s crude oil exports in February fell to 7.553 million barrels per day from 7.835 million bpd in January, official data showed. The world’s largest oil exporter produced 10.220 million bpd of crude in February compared with 10.230 million bpd in January, the data showed. Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries to the Joint Organization Data Initiative. Saudi Arabia’s domestic crude oil inventories fell to 305.599 million barrels in February from 314.119 million barrels a month earlier. Domestic refineries processed 2.67 million bpd of crude, compared with 2.468 million bpd in January, while exports of refined oil products rose to 1.55 million bpd from 1.343 million bpd. In February, crude oil burnt to generate power fell to 291,000 bpd from 293,000 bpd in January, the JODI data showed. (Reuters 18.04)

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►►North Africa

5.8 Egypt’s Annual Inflation Down to 9% in March

Despite widespread anecdotal reports of price hikes due to the devaluation of the pound in mid-March, the Central Bank of Egypt announced annual consumer price inflation declined to 9% in March. This puts Egypt’s inflation in single digits for the second month in a row, and marks the fourth consecutive month of declines, following an annual rate of 11.06 in December 2015, 10.1% in January and 9.13% in February. The Bank attributes the decrease in the annual rate to positive base effects from last year. Annual inflation in March 2015 measured 11.5%, the second highest rate that year. Meanwhile, the monthly rate accelerated to 1.44%, compared to an increase of 0.97% in February.

Core inflation — which leaves out volatile commodities like fresh fruits and vegetables, as well as items with prices regulated by the government — increased to 8.41% in March, compared to 7.5% the month before. Monthly core inflation increased by 0.88%, decelerating from the February rate of 1.62%. Central Bank statistics show that prices for fruits and vegetables increased by 1.71% in March, accelerating from 1.1% in February. The annual rate of inflation for fruits and vegetables hit 25.44%, which represented a decrease from the 30.35% recorded in February. (Mada Masr 10.04)

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5.9 Egypt to Cut Fuel Subsidies by 43% as Cairo Seeks to Reduce Deficit

Egypt will reduce spending on fuel subsidies by nearly 43% in the 2016/17 budget due mainly to lower global energy costs. Finance Minister Amr al-Garhy told a news conference that state energy subsidies would fall to EGP 35 billion ($3.94 billion) from about EGP 61 billion in the 2015/16 budget.

Consumers reacted angrily when the government cut spending on energy subsidies in mid-2014, a measure that caused domestic prices of natural gas, diesel and other fuels to rise by as much as 78%. They were reduced again in the current budget. However, deputy finance minister for fiscal policy Ahmed Kojak said a decline in international oil prices would account for the bulk of the reduced subsidy spending in the next fiscal year. He said that thus is also a saving of about EGP 8-10 billion that will come as a result of new reforms that the Petroleum Ministry.

Egypt is struggling to revive its economy since a popular uprising in 2011 shook investor confidence and drove tourists and foreign investors away. Its foreign currency reserves stood at $16.56 billion in March, down from about $36 billion in 2011. The government has been trying to cut subsidies, which eat up a big chunk of the budget. President Abdel Fattah al-Sisi has approved a draft state budget that reduces the budget deficit in the 2016/17 fiscal year to 9.8% of gross domestic product (GDP) from the current 11.5%. (Reuters 10.04)

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5.10 Moroccan Diaspora Remittances Reached $6.4 Billion in 2015

The World Bank expects the value of remittances received by the Maghreb to increase “only modestly” in 2016 and 2017 compared to other regions, according to the international banking organization’s recent report titled the “Migration and Development Brief.” The report estimated that the Moroccan diaspora community sent approximately $6.4 billion to their home country in 2015, making the kingdom the third-largest receiver of remittances among countries in the Middle East and North Africa (MENA). Egypt benefitted the most from remittances in 2015, the report said, as the country received an estimated $19.7 billion from citizens living and working abroad last year – equivalent to 6.8% of republic’s total GDP in 2014. Lebanon’s remittances were the second-highest at $7.2 billion. After Morocco at third place, Jordan imported $3.8 billion from its expatriates, with Yemen ($3.4 billion), Tunis ($2.3 billion) and Algeria ($2 billion). The bank predicts remittances to MENA will increase at a modest rate of 2.6% in 2016, falling short of the 4% growth the region witnessed in 2014. (MWN 15.04)

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5.11 Saudi Arabia & Morocco Sign $230 Million Aid Agreement

Saudi Arabia and Morocco signed an aid agreement worth $230 million as part of a five-year package of financial assistance extended by wealthy Gulf states. Four Gulf states – Qatar, Saudi Arabia, Kuwait and the United Arab Emirates – agreed in 2012 to provide aid worth a total of $5 billion to Morocco in the period 2012-2017 to help it weather “Arab Spring” protests. Each of the four countries has committed $1.25 billion to Morocco for the whole five-year period, in an effort to build up its infrastructure, strengthen its economy and foster tourism. The agreement signed on 6 April is Saudi Arabia’s 2016 part, Morocco’s finance minister said.

The $230 million agreement was signed in Bahrain by the Moroccan minister, Mohammed Boussaid, and Saudi Finance Minister Ibrahim bin Abdulaziz al-Assaf. It includes $100 million of support to small and medium-size enterprises), $80 million of aid to agriculture and $50 million for the health ministry. Morocco has budgeted to receive a total $1 billion in aid from the Gulf states for 2016. It hopes to cut its budget deficit to 3.5% of GDP this year from an estimated 4.3% in 2015. Moroccan officials have said Morocco had received only 4 billion dirhams of the 13 billion ($1 billion) expected in last year. It was unclear which Gulf countries have not provided their 2015 aid. The Gulf states have agreed a similar package of aid, also worth a total $5 billion over a five-year period, for Jordan. (Reuters 06.04)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Budget Deficit at $2.4 Billion In March

Turkey’s government ran a TL6.6 billion ($2.4 billion) budget deficit in March, the country’s finance minister said on 15 April. The deficit was TL 200 million lower compared to the TL6.8 billion deficit recorded in March last year. Government revenue in March stood at TL46.8 billion– an 11.4% increase year-on-year. Budget expenditure totaled TL40.3 billion, up 22.3% from a year earlier. The central government budget showed a surplus of TL46 million in the first three months of the year.

According to the Finance Ministry, the Turkish government’s budget revenue reached TL131.7 billion in the first three months of the year, a 16.4% increase compared with the same period last year. Tax revenue also increased by 12.7% within the period to TL108.5 liras. Budget expenditures between January and March rose to TL131.7 billion, marking an 11% increase year-on-year. In 2016, the Finance Ministry estimated that budget expenses for the fiscal year would reach TL570.5 billion, while budget income would reach TL540.8 billion, resulting in a budget deficit of TL29.7 billion. (AA 15.04)

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6.2 Turkey’s Unemployment Rate Rose to 11 Month High in January

Turkey’s unemployment rate increased to an eleven-month high of 11.1% in January from 10.8% in December, the Turkish Statistics Institute (TUIK) stated on 15 April. The unemployment rate was 11.3% last January, according to TUIK. The number of unemployed people aged 15 years and over rose to 3.29 million in January, an increase of 31,000 from the previous year largely due to the rising labor force participation rate. The labor participation rate was 50.7%, with a 0.7% increase from a year earlier. The total size of the Turkish labor force was announced as 29.57 million, with an 852,000 increase in January from a year earlier. Youth unemployment fell to 19.2% in January, down 0.8% from a year earlier. (HDN 15.04)

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6.3 Approximately 300,000 SME Workers Lose Jobs After Turkey’s Minimum Wage Hike

Following Turkey’s recent minimum wage hike, a total of 379,000 people lost their jobs in January, 76,000 of whom were women. They were working for small and medium-sized enterprises (SMEs), according to a new report by the Economic Policy Research Foundation of Turkey (TEPAV). TEPAV’s research showed that around 78% of the drop in the number of registered workers was seen in SMEs. Their total registered employment fell to around 11 million in January from the previous month, marking a fall of around 294,000. The research also revealed that the total number of SMEs dropped by 30,000 to 1.7 million in the same period. In this period, only the number of public servants rose, by around 1,000, to 3.03 million.

Turkey recently raised the minimum wage by 30% to TL 1,300 for around 8.5 million workers. The government said it would cover 40% of the cost of a hike in the minimum wage for 8.5 million employees, which came into effect on the first day of 2016, but only for one year. Business leaders had warned that layoffs could begin and some facilities would be forced to be closed if the conditions were not eased. The number of people awaiting approval to receive employment benefits in January also rose by 38% compared to the same month of the previous year, according to the TEPAV report. (HDN 15.04)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Passover Observance Will Begin on 22 April

On Friday night, 22 April, Israel and world Jewry will begin the week-long celebration of the Passover (Pesach) holiday. Passover celebrates the liberation of the Jewish People from slavery in Egypt by the hand of G-d. It is central to Jewish identity and Jewish practice, since the Exodus and life in the wilderness led to the true birth of the Jews as a distinct entity. Jacob and Josef came to Egypt numbering 70 souls and Moses led 600,000 out after the defeat of Pharaoh. Probably the most significant observance related to Pesach involves the removal of chametz (or leaven) from Jewish homes and businesses. This commemorates the fact that the Jews leaving Egypt were in a hurry and did not have time to let their bread rise. Even converts to Judaism relate to the Exodus as their own ancestors as having left Egypt. It is also a symbolic way of removing the “puffiness” (arrogance, pride) from our souls. Instead, special non-leavened bread called matzah is consumed, among a myriad of other special holiday dishes.

On the first night of Pesach (first two nights for Jews outside of Israel), there is a special family meal filled with ritual to remind Jews of the significance of the holiday. This meal is called a seder, from a Hebrew root word meaning “order,” because there is a specific set of information that must be discussed in a specific order. The seder is full of symbolism, all pointing to one salient point: that Jews all remember that G-d took us out of slavery in Egypt to freedom to observe his Torah. Pesach lasts for seven days (eight days outside of Israel). The first and last days of the holiday (first two and last two outside of Israel) are days on which no work is permitted. Work is permitted on the intermediate days. These intermediate days on which work is permitted are referred to as Chol Ha-Mo’ed, as are the intermediate days of Sukkot. Though work is permitted, many take vacations and a full work environment returns only after the holiday. Passover ends on 29 April in Israel, 30 April in the Diaspora.

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Lycored’s Cardi-O-Mato Selected as a Finalist for the 2016 NutraIngredients Awards

Lycored announced its hero supplement, Cardi-O-Mato, has been chosen as a finalist in the second annual NutraIngredients Awards. The awards reward true innovation and cutting edge research in health foods, supplements and nutrition and Cardio-O-Mato is a finalist for the best Finished Product of the Year – Heart Health. With more than 120 high-quality entries, Lycored’s Cardi-O-Mato was one out of 33 stand-out products to make the final cut in the 2016 NutraIngredients Awards.

Lycored’s Cardi-O-Mato is scientifically proven to support cardiovascular health and contribute to normal heart and vascular function, with measurable results in just six weeks. Supported by numerous clinical trials, Cardi-O-Mato manages and improves various conditions that effect heart health, including reducing oxidized LDL cholesterol, lowering systolic blood pressure already within the normal range, and preserving the endothelium, which lines artery walls and supports the proper functioning of blood vessels among healthy population. Cardi-O-Mato contains a unique and synergistic composition of the active compounds found in tomato fruit including lycopene, phytoene, phytofluene, beta-carotene, phytosterols, & tocopherols (vitamin E) which have been standardized and optimized to support their heart healthy quantities, with the final composition tested for effectiveness using pharma-grade human trials. In just one capsule at day, Cardi-O-Mato provides consumers with a revolutionary supplement that can help them take one giant positive step towards a healthier heart.

Committed to ‘Cultivating Wellness’, Israel’s Lycored is an international company at the forefront of unearthing and combining nature’s nutrition potential with cutting edge science to develop natural ingredients and products. Established in 1995, Lycored is the global leader in natural carotenoids for food, beverage and dietary supplement products. The company develops and supplies natural ingredient formulations into four main business areas: active health ingredients for wellness; colorings; ingredients for taste & texture improvement; and nutrient premixes for fortification. (Lycored 14.04)

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8.2 BioSight Completed Treatment of Patients in Astarabine Phase I/IIa Clinical Trial

BioSight announced completion of patient treatment in its ongoing Phase I/IIa clinical study of Astarabine in acute leukemia patients. The company expects to report the final results in the coming months. Astarabine is a non-toxic conjugate of the chemotherapy drug cytarabine (Ara-C) and the amino acid asparagine. Cytarabine is the first-line treatment for Acute Myeloid Leukemia (AML) and relapsed/refractory Acute Lymphoblastic Leukemia (ALL), however it is highly toxic with severe side effects such as cerebellar toxicity and bone marrow suppression. While the average age AML patients is almost 70 years, cytarabine doses are significantly attenuated for older patients due to its severe toxicity, and administration of high-dose cytarabine is precluded in patients with hepatic or renal dysfunction. Hence, the toxicity significantly limits its use, especially for older patients. Unlike cytarabine, the toxicity of Astarabine is mostly specific to leukemia cells, as it is preferentially taken up by leukemia cells where it triggers cellular mechanisms which lead to their death.

Karmiel’s BioSight is a private Israeli clinical-stage drug development company that focuses on development of chemotherapy pro-drugs with reduced toxicity, based on its proprietary technology S2DOT for chemotherapy pro-drug design and synthesis. BioSight develops a pipeline of targeted chemotherapy pro-drugs with reduced toxicity, thus, aiming to revolutionize the treatment for cancer patients, to enable safe and effective treatment to cancer patients around the world. Its lead proprietary product Astarabine is in clinical stages for treatment of leukemia. Additional products are in pre-clinical stages, addressing unmet medical needs and multi-billion dollar markets. (BioSight 19.04)

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8.3 Periods Are Awful! Livia’s Here to Relieve Your Pain

Livia, also known as the off switch for menstrual cramps, is a discrete wearable device which is used during menstruation to organically block pain receptors through electrical stimulation. Livia was unveiled on 7 April on Indiegogo and is aiming to bring the device into mass production to help the countless women who suffer from severe cramps, in a drug-free, all-natural way.

No matter what term they use, riding the crimson wave, or mother nature’s monthly gift, any woman will tell you that getting your period is annoying! Dealing with bloating and food cravings is so uncomfortable, not to mention the most wonderful womanly experience: cramps. They can sometimes be so severe that women often call in sick to work, and stay in bed popping pain killers, waiting for them to kick in. Livia’s portable device, on the other hand, provides instant relief from cramps, and lasts up to 15 hours on a single charge, long after those pills wear off. The company has tapped into physiotherapy tech to block pain receptors through electrical pulses. This is a game changer, especially during times when Aunt Flo can keep women in bed all day. Livia is extremely user-friendly, and a natural alternative to painkillers and other drugs. The fun colors, and non-conventional design make it even more discreet.

Tiberias’ iPulse Medical, the company behind Livia was founded in April 2015. The company aims to help every woman take control of her period and have a more comfortable few days each month. Livia uses a technology that has been proven effective and safe to use in several clinical studies. (iPulse Medical 07.04)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Karamba Security Emerges From Stealth Mode to Protect Connected Cars from Cyber Attacks

On 7 April, Karamba Security announced that it was coming out of stealth mode to launch its unique approach to in-car security. Karamba has purpose-built an ECU endpoint solution that protects a car’s externally connected components, identifying attack attempts and blocking exploits from infiltrating the car’s network to ensure drivers’ safety. The FBI’s recent warning has highlighted the cybersecurity risks of the increasingly connected car. Attackers have been able to infiltrate and take control over car systems, even killing a car’s engine as it drove on the freeway. Karamba enables car companies to protect their automobiles from these threats by hardening Electronic Control Units (ECUs) that are open to external access (via the internet, Wi-Fi, Bluetooth, etc.), so they can’t be used by hackers to infiltrate the car’s network and launch attacks. With Karamba, automotive companies can embed robust security detection and enforcement capabilities directly on the ECU to ensure only explicitly allowed code and applications can be loaded and run on the controller. Karamba blocks any foreign code, which means the controller is safe from attackers, regardless of how they entered (via the internet, USB drive, service port, etc.), with no false alarms.

Tel Aviv’s Karamba Security is a pioneer in ECU endpoint security to protect the connected car. The company hardens the connected Electronic Control Units (ECUs) within automobiles to protect them from cyber-attacks and ensure the car’s safe, ongoing operations. (Karamba 07.04)

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9.2 Israel Aerospace Begins Producing F-35 C4 Systems

Israel Aerospace Industries is beginning production of the Command, Control, Communications and Computing (C4) systems developed for the Adir – F-35I, Israel’s variant of the Fifth Generation Fighter F-35. The company recently completed system definition, prototyping and testing phases. The system developed exclusively for the F-35I by IAI’s LAHAV Division is part of IAI’s cutting edge ‘tactical C4 architecture’ introducing unique force multipliers in the modern, networked battle arena. The induction of advanced systems of this type with the Israel Air Force (IAF) combat fleet will enable the IAF to better manage, and rapidly field networked applications that interface with core services over proprietary protocols developed especially for the IAF. Using generic communications infrastructure based on the latest Software Defined Radios (SDR), IAI’s new C4 system developed for the Adir will provide the backbone of the IAF future airborne communications network. This network will dramatically improve over legacy systems currently operating with the current fleet of 4th Generation aircraft (F-16, F-15).

The integration of IAI’s C4 systems in the F-35I avionics program represents major milestone in the introduction of advanced, indigenous capabilities to the multinational F-35 program. Fully embedded into the aircraft integrated avionic system, IAI’s new C4 system provides the user the latest, most advanced processing capabilities with relative independence of the aircraft manufacturer. Part of the F-35I avionic system, the C4 system introduces a new level of freedom for the IAF, as it paves the way for additional advanced capabilities to be embedded in the F-35I in the future. (Globes 07.04)

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9.3 Hexadite Adds Mac & Linux Coverage to Intelligent Security Orchestration

Hexadite, creator of the only agentless intelligent security orchestration and automation platform, announced industry-first support for Mac and Linux-based devices. By extending its capabilities to additional operating systems, the company confirms its commitment to mitigating security incidents on any device and becomes the first solution capable of automating the end-to-end investigation and resolution process on machines running Mac and Linux.

Hexadite amplifies the capabilities of a security team by automatically and intelligently performing the same steps that a security analyst would implement to address a threat. Once a company’s detection systems (SIEM, endpoint solution/EDR, IDS, Gateway anti-malware detection, etc.) identify a threat, Hexadite aggregates relevant information from the network and devices. Its intelligent, proprietary algorithms and tools analyze the information to identify whether an alert is a false alarm, a low level threat or a security breach. Based on best practices codified in the system, Hexadite automatically determines the best course of action for each alert, and applies targeted mitigation efforts to stop the full extent of a breach.

Tel Aviv’s Hexadite is the only agentless intelligent security orchestration and automation platform for Global 2000 companies. By easily integrating with customers’ existing security technologies and harnessing artificial intelligence that automatically investigates every cyber alert and drives remediation actions, Hexadite enables security teams to amplify their ability to mitigate cyber threats in real-time. (Hexadite 07.04)

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9.4 Stratoscale Chosen as a 2016 Red Herring Europe Winner

Stratoscale has been recognized as a Red Herring Europe 2016 winner for its hardware-agnostic, Software Defined Data Center (SDDC) solution. The prestigious list honors the year’s most promising private technology ventures from the European business region. Stratoscale delivers cloud-scale economics to data centers of all sizes with efficiency and operational simplicity. Its SDDC solution, Stratoscale Symphony, brings the agility of the public cloud into the enterprise data center, providing capabilities that are scalable, affordable and easy to deploy with existing IT teams.

The Red Herring editorial team selected the most innovative companies and entrepreneurs from a pool of hundreds across Europe. The nominees were evaluated on 20 main quantitative and qualitative criterion, including: disruptive impact, market footprint, proof of concept, financial performance, technological innovation, social value, quality of management, execution of strategy, and integration into their respective industries.

Herzliya’s Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere, IT is empowered to take control of their data centers. Stratoscale is offering a Hyper-converged cloud supporting OpenStack out of the box. (Stratoscale 15.04)

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9.5 LightCyber Introduces Security Industry’s First Attack Detection Metrics

LightCyber announced new Attack Detection Metrics – the first of their kind – to measure the Accuracy and Efficiency of security solutions in detecting stealth attackers that have circumvented conventional threat preventions systems. LightCyber simultaneously revealed its own Attack Detection Metric results, derived from actual customer deployment data, indicating that its Magna platform has achieved a level of efficacy two orders of magnitude better than incumbent solutions. By focusing scarce security personnel on the critical few security alerts related to active attackers while dramatically reducing false positives, security organizations can take immediate and decisive action to thwart attackers early in the attack lifecycle, reducing or eliminating damage before it is done.

Quarterly, LightCyber will self-report its own measured Attack Detection Metrics based on aggregated and anonymous metadata from customer production deployments. For Q1/16, LightCyber customers achieved a median Efficiency of 1.1 alerts per 1,000 endpoints per day. For example, a company with 5,000 endpoints would expect to receive a median of 5.5 total alerts per day from LightCyber Magna. As it relates to Accuracy metrics, Magna creates three categories of alerts: Confirmed, Suspicious and Unverified attacks. The median Accuracy reported for LightCyber customers is 62% percent useful alerts across all alert categories, as compared to 4% typically produced by other security products. The subset of alerts automatically categorized by Magna as “Confirmed” attacks achieved an accuracy of 99%.

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9.6 Humavox Brings New Smart Wireless Charging Technology to Hearing Aids and Hearables

Humavox is advancing the next generation of hearing aids and hearables with the introduction of wireless charging. The company will wirelessly power rechargeable batteries through the utilization of their proprietary radio frequency (RF) technology. Humavox’s unique technology uses one of ON Semiconductor’s energy efficient innovations to bring quality charging to hearing aids, in order to simplify the lives of the hearing impaired.

New generation hearing aids are becoming much smaller, more sophisticated, and packed with dense electronics, yet still lack effective charging solutions. Humavox’s flexible hardware platform, ETERNA, includes the smallest power receiver available in the market, making it able to fit into the tiniest of hearing aids. Wireless charging technology also enables bypassing the USB port, which allows for a waterproof design. This is of significant value to hearing aid manufacturers as well as manufacturers of various hearables, such as wireless earbuds, for commercial use.

Humavox’s ETERNA platform uses HPM10, a power management IC (PMIC) from ON Semiconductor, designed specifically to support rechargeable batteries within hearing aids. This unique technology automatically detects the battery chemistry deployed in the hearing aid, and then operates as a high-efficiency regulator to provide the necessary charging supply voltage. HPM10’s built-in charger communication interface (CCIF) can send data to the hearing aid charger during the charging cycle. This enables communication of battery parameters such as battery voltage levels, current levels, temperature and different forms of battery status and failures. With HPM10’s advanced communication interface, Humavox’s platform receives data, which can be used to optimize the charging process.

Tel Aviv’s Humavox is an innovative developer of groundbreaking technology in the field of wireless power. With its ETERNA platform, Humavox uses near-field radio frequency (RF) technology, and provides users with a simple and intuitive charging experience (“drop & charge”). The technology can be implemented in the smallest of devices, such as wearables and IoT devices. (Humavox 13.04)

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9.7 NTT Electronics Partners with VideoFlow for Broadcast Quality Video over Any IP Network

Yokohama, Japan’s NTT Electronics, a leading supplier of codec solutions, and VideoFlow are partnering to enable the delivery of high reliability, low delay professional-quality video over any IP network. Committed to providing customers with a reliable and cost-effective solution for video delivery over IP, various NEL encoders now leverage VideoFlow’s DVP Controlled Adaptive Rate (CAR) technology to ensure continuity of service over unmanaged IP connections. The DVP constantly probes the connection’s bitrate capacity. In the event of a change, DVP adapts the NEL MVE5000 encoder bitrate in real time to be slightly below the network capacity, thereby avoiding congestion. The MVE5000 responds to the DVP’s commands in a seamless manner, adapting the video bitrate on-the-fly with no interruption to the service.

The MVE5000 encoder is the newest NEL encoder to benefit from the partnership with VideoFlow. Now, broadcasters looking to deliver live video over IP can choose among the MVE5000 and NEL’s HVE9x00 encoder family. The MVE5000 is already the encoder of choice for many major broadcasters, and the addition of VideoFlow’s CAR technology has accelerated the evaluation of this encoder for professional live broadcasts over IP. In addition, MVE5000 can bring users the super low latency, seamless protection switching and multiple FEC functions required to enhance the robustness of the transmission system.

Rosh HaAyin’s VideoFlow is a leading provider of products that enable a secure, uninterrupted and reliable live video broadcast over any IP network. By boosting the reliability of IP networks through patent-pending technology and a rich built-in feature set, VideoFlow’s Digital Video Protection (DVP) product line has made service continuity an affordable reality. These products allow customers to accelerate ROI through lower operational costs and new revenue streams. (VideoFlow 12.04)

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9.8 VisIC Technologies New 650V Half-Bridge Evaluation Board

VisIC Technologies announced its new Half-Bridge Evaluation Board using its VT15R65A GaN Power ALL Switch (Advanced Low Loss Switch) in a “work horse,” half-bridge power conversion circuit. The VT15R65A-EVBHB demonstrates 98.5% power conversion efficiency operating at a switching frequency of 200kHz. Silicon MOSFET-based systems demonstrating similar efficiencies in this power range are limited to operation at 60kHz or less, and competitive GaN devices have only shown similar efficiency at 100kHz. The evaluation board can be easily configured into any half bridge-based topology such as synchronous Boost or Buck conversion. The board can also operate in a pulsed switching configuration for evaluating transistor waveforms. The VisIC’s GaN ALL Switch is driven by standard industry high frequency drivers.

Based in Ness Ziona, Israel, VisIC Technologies was established in 2010 by experts in Gallium Nitride (GaN) technology to develop and sell advanced GaN-based power conversion products. VisIC has successfully developed, and is bringing to market, high power GaN-based transistors and modules. (GaN is expected to replace most of the Silicon-based (Si) products currently used in power conversion systems.) VisIC has been granted keystone patents for GaN technology and has additional patents pending. (VisIC 14.04)

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9.9 Mutual Trust Life in Production with Sapiens ALIS Policy Administration System

Sapiens International Corporation announced today that Mutual Trust Life (MTL), a Pan-American life insurance company, based in Oakbrook, Ill., has successfully deployed the Sapiens ALIS policy administration system to support its life insurance business. The launch includes the roll-out of the Sapiens ALIS Agent and Commission module to manage MTL’s sales and distribution network. The deployment of Sapiens ALIS completes the first phase of a multi-phased transformation initiative to modernize MTL’s technical infrastructure. The program includes utilizing the Sapiens ALIS platform to support all of MTL’s product offerings, including whole life, universal life, term and fixed annuities for new business and its in-force book of business.

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9.10 SolidRun Announces the World’s Smallest Intel Braswell-based Computer

SolidRun announced the first member of its new Intel-based SolidPC Q4 family, the world’s smallest Braswell-based Single Board Computer (SBC). Designed for fast, flexible IoT system implementations, the computer provides powerful x86 computing capabilities, combined with rich connectivity features. At 100mm x 80mm, the SolidPC Q4 is intended to provide outstanding form-factor flexibility for a wide range of applications, including mission-critical IoT systems, 4K video analytics, point of sales and digital signage. The SolidPC Q4 is equipped with Dual HDMI 4K Display and DisplayPort interfaces, three USB-3.0 Host ports, Dual GigE LAN interfaces, MicroSD interface, headphone and microphone ports, and an infrared receiver, and is extendable via its miniPCIe and M.2 connectors.

Established in 2010, Tel Aviv’s SolidRun is a global leading developer and manufacturer of powerful, energy-efficient System on Modules (SoMs) and mini computers. SolidRun’s innovative ARM and Intel based embedded architectures are simple, compact, and include comprehensive software packages, drivers and support for major operating systems. Investing in software as one of its key differentiators, SolidRun is a proud member of the OSS community and strongly believes in its principles. (SolidRun 19.04)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Inflation Rate Drops 0.2% in March

The Central Bureau of Statistics announced on 15 April that Israel’s Consumer Price Index (CPI) fell by 0.2% in March to 98.1 points. This follows a 0.3% drop in February and 0.5% in January. The index without housing costs fell more sharply, by 0.4% in March. Over the past 12 months, the CPI fell 0.7% and it has fallen 1% in the first three months of 2016, fueled by the fall in world oil prices. This is well below the government’s inflation target range of between 1% and 3% although with oil prices now recovering CPI’s from this month will likely start rising, after falling for the past five consecutive months. Outstanding declines in price during March included fresh fruit and vegetables (3.9%), public transport (1%) and food (0.5%). Leading price increases in March included culture and entertainment (0.7%) and housing costs (0.4%). (CBS 15.04)

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10.2 Israeli Exports Fall by 14% in the First Quarter

Figures published by the Central Bureau of Statistics on13 April show Israeli exports fell at an annualized rate of 14.1% in Q1/16, following a 5.9% annualized decline in Q4/15. The first quarter’s weak exports caused an exceptional NIS 10.1 billion trade deficit in goods, compared with a NIS 4.1 billion deficit in Q1/15. The Q1/16 trade deficit for goods was greater than the trade deficit in goods for all of 2015.

Exports of goods in March 2016 totaled NIS 17.5 billion. According to trend data, exports by medium-high technology industries declined 12.1%, following a 4% annualized drop in Q4/15. Export figures by sector show an annualized 21.8% decrease in chemicals and chemical products (an average monthly drop of 2%). Exports by low-tech industries increased.

Imports of goods totaled NIS 22.1 billion in Q1. Dividing the data by sector indicates a continued rise in private consumption, the economy’s growth engine for the past two years. According to trend data, imports of consumer products in January-March 2016 were up by an annualized 9%, following a 14.0% annualized increase in October-December 2015. Another encouraging figure is imports of investment products (excluding ships and aircraft), which rose by an annualized 18.1% in Q1/16, following an annualized 28% increase (an average monthly increase of 2.1%) in Q4/15. Imports of machinery and equipment, which account for 54% of imports of investment products, were up by an annualized 4.9%. Imports of vehicles for investment soared by an annualized 35%, an average monthly increase of 2.4%. (CBS 13.04)

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10.3 Israel’s Foreign Currency Reserves Surge to Record Amounts

Israel’s foreign exchange reserves stood at a record $94.775 billion at the end of March 2016, up $4.156 billion from their level at the end of the previous month, which was itself a new record, the Bank of Israel announced. The increase was the result of foreign currency purchases by the Bank of Israel totaling $700 million, of which $300 million were bought as part of the purchase program intended to offset the effects of natural gas production on the exchange rate. In addition, there was a revaluation that increased the reserves by about $1.885 billion, government transfers from abroad of about $1,505 million, and an increase of about $66 million derived from private sector transactions. Israel’s foreign currency reserves have risen from $88.9 billion at the end of 2015 and $84.9 billion twelve months ago. (BoI 07.04)

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10.4 Israeli Defense Exports Up Despite Concerns

Israel’s arms exports in 2015 were surprisingly high. Israeli defense companies signed export deals worth $5.7 billion last year, according to figures reported by SIBAT (the International Defense Cooperation Directorate of the Israel Ministry of Defense). The figures indicate a slight rise in Israel’s defense exports in comparison with 2014, when exports totaled $5.6 billion.

Towards the end of 2015, the heads of Israel’s four largest defense companies, Elbit Systems, Israel Military Industries, Rafael Advanced Defense Systems and Israel Aerospace Industries expressed concern that defense exports would fall to their lowest level in a decade because of the decline of the global economy, shrinking defense markets, and tough competition. The two leading categories in Israel’s 2015 defense exports were upgrading of airplanes, mainly by Israel Aerospace Industries and Elbit Systems and the sale of ammunition and weapons platforms. Each of these categories accounted for 14% of exports by defense companies last year.

The main destination of the defense companies’ export production last year was Asia and the Pacific; exports of products and systems to the region exceeded $2.3 billion. Europe received over $1.6 billion in Israeli exports of weapons and systems, the US and Canada over $1 billion, Latin America $577 million, and Africa $163 million. SIBAT predicted that despite the intense competition between defense companies for weapons tenders in the various markets, Israeli companies would maintain their levels of new contracts. Advanced negotiations are taking place between some of the companies and countries for the signing of deals, and some of these deals are significant and very valuable. (Globes 06.04)

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10.5 Employee Tax Burden Rising In Israel

Israel is one of the five developed countries in the world that increased the tax burden on labor in 2015, according to a review of taxes on labor published by the Organization for Economic Cooperation and Development (OECD). The review indicates that the direct tax burden in Israel rose by nearly 0.5% as a result of a real 0.25% income tax hike. The National Insurance tax remained unchanged.

Together with Prime Minister Benjamin Netanyahu, Minister of Finance Moshe Kahlon led a 1% cut in VAT (starting in October 2015) and a 1.5% cut in corporation tax (starting on January 1, 2016), but there was no cut in income tax. Formally, the income tax rate has not risen since 2013, and it is therefore possible that the reason for the increased tax burden in Israel is negative inflation (-1% in 2015 and -0.2% in 2014). Published on 12 April, the OECD survey analyzes the tax burden on labor in the organization’s 34 member countries. Taxes on income from labor are also called direct taxes, in contrast to taxes on spending or consumption, which are called indirect taxes. Israel is considered a country with a low direct tax burden, but a relatively high indirect tax burden.

As of the end of 2015, the direct tax burden in Israel was 21.6%, compared with the OECD average of 35.9%. The tax burden on a worker with children was lower 18.9% for a family with one breadwinner and two children. The direct tax burden in Israel consists of income tax, which averages 8.9% on income from labor, and National Insurance tax: 7.5% for the worker and 5.1% for the employer. The cost of employing a worker in Israel is $36, 094 in purchasing power parity (PPP), and the average annual income is $34,241. (Globes 13.04)

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10.6 Israel Railways Breaks Monthly Passenger Record

Israel Railways recorded an all-time number of passengers in March, some 5.4 million rides, 17% more than the 4.6 million rides in March 2015 and 29% more than in March 2014. The previous record of 4.9 million rides was in November 2015. Israel Railways said that the biggest increase in the number of rides was 25% on the Tel Aviv-Binyamina line (compared with the corresponding month last year). Rides were up 24% on the Ashkelon-Tel Aviv route and 19% on the Hod HaSharon-Tel Aviv route, compared with the corresponding period last year. (Globes 13.04)

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11: IN DEPTH

11.1 ISRAEL: Israeli Startups Raise $1.09 Billion in First Quarter

IVC and KPMG reported on 19 April that in Q1/16, 173 Israeli high-tech companies raised a combined total of $1.09 billion in private financing rounds, a 10% decrease from the $1.2 billion attracted by 201 companies in Q4/15, which was a record quarter. According to the Survey editors, fourth quarters typically exhibit the highest amounts in capital raising, and a five-year trend suggests an average 12% decline in investments between the last quarter of the year and the ensuing first quarter. The capital raised in the first quarter of 2016 represented an 8% year-on-year increase ($1 billion was raised by 162 companies in Q1/15), and was in keeping with the quarterly average in the five previous quarters ($1.1 billion).

Koby Simana, CEO of IVC Research Center, explained: “Despite of the slowdown reported in high-tech capital raising and venture capital investments in the United States, and until now – despite of various forecasts published lately regarding the industry in Israel – the results of the first quarter of 2016 indicate stability. The capital volume, the number of quarterly deals, and the mix of deals by size, are very similar to the averages of 2015, which was considered very successful. The following quarters will determine if the slowdown trend which began in the United States will take hold in Israel as well, or perhaps the fact that the Israeli market didn’t experience the same peak as Silicon Valley and China in the past years indicates lower local volatility overall.

The average company financing round in the first quarter stood at $6.3 million, slightly above the $6.1 million and $6.2 million averages of Q4/15 and Q1/15, respectively.

Ninety six VC-backed deals amounted to $744 million in Q1/16, a 19% plunge from $915 million raised in 108 deals in Q4/15, and a 12% year-on-year decrease from the $849 million attracted by 91 deals a year earlier.

The share of VC-backed deals shrunk to 68% in Q1/16, lower than their 75% share in the previous quarter, and far lower than the 84% recorded by VC-backed deals in Q1/15. However, VC-backed deals maintained their share out of the total number of deals, with a steady 55%, in keeping with the two-year 56% average.

Ofer Sela, Partner in KPMG Somekh Chaikin’s Technology group commented, “This quarter is quite interesting, as there is still much available cash around, ready to be invested, and a significant number of interesting companies that are good candidates for investments. On the other hand, there is fear that the global technology market is about to shrink. Nevertheless, the amount of available cash and attractive companies have their pull – as can be seen from the total volume of investments this quarter, the industry is hard at work and the investors are still in the game.

Israeli VC Fund Investment Activity

Israeli venture capital funds invested $130 million in Israeli high-tech companies, just 12% of all investments in Q1/16. This figure represents a whopping 40% drop from the $217 million (18% of total) raised in Q4/15, and a 23% year-on-year drop ($168 million, (17%) in Q1/15).

The fourth quarter of 2015 was exceptionally strong for first investments by Israeli VC funds, with 47% of their total capital investments directed into new portfolio companies. In Q1/16, first investments by Israeli VCs declined to 30%, slightly below the 33% five-year average.

Capital Raised by Sector, Stage and Deal Size

Software companies raised a total of $392 million in the first quarter of 2016, ranking the sector first with 36% of total capital, a slight increase over the 32% attracted in Q4/15, and well over the 19% share in Q1/15. The life science sector placed second with 30%, an increase from 21% of total capital in Q4/15, and 22% in Q1/15.

The Internet sector experienced its weakest quarter since 2013, with only $100 million raised by 37 companies or a mere 9% of the total capital. This was a plunge from the previous quarter’s best ever record, at $389 million (32%), as well as a drop from the $339 million (34%) raised in Q1/15.

Growth stage deals declined in Q1/16, reaching 26% of total capital, down from 41% in Q4/15. At the same time, early stage deal share increased from 20% to 30% with a total of $322 million raised, while initial revenue (mid-stage) deals grew from 32% to 38%, placing first in capital raising, with a total of $411 million raised in Q1/16.

KPMG’s Ofer Sela explains: “A significant portion of the investments in mature companies is led and driven by private equity funds focusing on growth, and mature entrepreneurs that have made exits back in 2013-2014 are starting new ventures based on money from investors which deem them trustworthy. It seems that the industry is far from a crisis, although some shrinkage is expected in the near future.”

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital and private equity industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies and academic and research institutions in Israel. (IVC 19.04)

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11.2 SAUDI ARABIA: Fitch Downgrades Saudi Arabia to ‘AA-‘; Outlook Remains Negative

On 12 April 2016, Fitch Ratings downgraded Saudi Arabia’s Long-term foreign and local currency Issuer Default Ratings (IDRs) to ‘AA-‘ from ‘AA’. The Outlooks on the Long-term IDRs remain Negative. The Country Ceiling is affirmed at ‘AA+’ and the Short-term foreign-currency IDR is affirmed at ‘F1+’.

Key Rating Drivers

The downgrade of the IDRs reflects the following key rating drivers:

The downward revision of our oil price assumptions for 2016 and 2017 to $35/b and $45/b, respectively, has major negative implications for Saudi Arabia’s fiscal and external balances. The central government deficit widened to 14.8% of GDP in 2015, after a deficit of 2.3% in 2014 and continuous surpluses in previous years since 2010. Fitch forecasts the deficit-to-GDP ratio to narrow only marginally in 2016 and, on the back of a moderate recovery in oil prices, more substantially in 2017.

A large share of the government’s financing needs will be funded by disposing of foreign financial assets, but the government has also started raising debt domestically. It is also in negotiations on a syndicated loan of up to $10bn and is planning a first Eurobond issue later this year. This should push the general government debt-to-GDP ratio to 9.4% of GDP in 2017 from 1.5% in 2014, which will still be low compared with peers (36.9%).

The sovereign net foreign asset (SNFA) position will decline quite sharply to 78% of GDP in 2017 from 113% in 2014. While this will still be one of the highest ratios among Fitch-rated sovereigns, it will be considerably less than half of SNFA/GDP for Kuwait, Abu Dhabi or Qatar. In 2015, the current-account balance recorded a deficit of 8.2% of GDP, Saudi Arabia’s first since 1998, which we expect to worsen to 14% in 2016.

The pace of fiscal consolidation has increased. Utility and fuel prices have been hiked and some taxes raised. Further reforms are to be presented as part of a National Transformation Program that, if implemented, would boost non-oil revenues and streamline spending sustainably. According to press reports, the measures could raise non-oil revenue by $100b per year by 2020. In addition, the government is re-prioritizing and re-negotiating projects and spending plans to make substantial savings.

The authorities will be careful to sequence fiscal reforms to avoid adverse social consequences. Even if fully implemented, the measures will not prevent a substantial erosion of fiscal and external buffers during 2016 and 2017, although the buffers will still be sufficiently high to constitute an important rating strength.

Saudi Arabia’s IDRs also reflect the following key rating drivers:

Real GDP grew 3.4% in 2015, supported by a strong expansion of oil production and continued work on major projects, but growth will slow to 1.5% in 2016 and 1.7% in 2017. We expect oil output to stabilize and non-oil GDP to be hit by fiscal consolidation measures and weaker confidence. Monetary policy remains constrained by the peg to the US dollar, although this provides an important nominal anchor. Despite heightened speculation about devaluation, a change in the peg remains highly unlikely.

Control over economic policy making has been concentrated in the hands of Prince Mohamed bin Salman, the deputy crown prince and son of the king who is also chairman of the Council on Economic and Development Affairs as well as defense minister. This may have contributed to an acceleration of the economic policymaking process, but has also reduced the predictability of decision-making. The degree of support for this accumulation of power from other parts of the royal family is uncertain.

Fitch considers geopolitical risks high relative to ‘AA’-rated peers. Tensions have risen between Saudi Arabia and its long-standing regional rival Iran, and are expected to persist, although a direct confrontation is highly unlikely. Saudi Arabia’s military intervention in Yemen and in Syria shows a greater assertiveness in foreign policy.

Structural indicators are generally weaker than peers, despite recent improvements in some areas. GDP per capita and World Bank governance indicators are well below peer medians. The World Bank measure for voice and accountability is the lowest among all rated sovereigns.

The banking sector remains healthy but the weaker economic climate has started to affect profitability, with the return on equity falling to 14.5% in Q4/15, the lowest since 2013. A slowdown in loan growth will accompany a moderate rise of the ratio of non-performing loans- to-total gross loans, from a low level of 1.2% in 2015. The sector remains well-supervised with conservative regulation in place.

Rating Sensitivities

The main factors that could lead to a downgrade are:

Continued erosion of fiscal or external buffers.
A slower-than-expected narrowing in the fiscal deficit, for example as a result of a failure to implement fiscal reforms or due to a renewed fall in oil prices.
Spill-over from regional conflicts or a domestic political shock that threatens stability or affects key economic activities.

The Outlook is Negative. Consequently, Fitch does not currently anticipate developments with a material likelihood of leading to an upgrade. However, the following factors could lead to the Outlook being revised to Stable:

Fiscal consolidation sufficient to stem the depletion of fiscal and external buffers and put the budget on a path to a surplus.

A sustained period of higher oil prices.

Key Assumptions – Fitch forecasts Brent crude oil prices to average $35/b in 2016 and $45/b in 2017. (Fitch12.04)

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11.3 SAUDI ARABIA: Laying the Foundation for a Post-Oil Centric Economy

On 8 April, Diane Munro posted at the Arab Gulf States Institute that an unprecedented transformation of Saudi Arabia’s economic future is underway with recently unveiled plans to establish a $2 trillion sovereign wealth fund secured by state-owned giant Aramco as a key pillar of this new strategy. Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman (MbS) announced in a wide-ranging interview with Bloomberg on 1 April that the government plans to use a share offering in Aramco to sharply increase the value of the country’s Public Investment Fund.

The PIF could become one of the largest investment funds in the world following an initial public offering of Aramco. As currently planned, the IPO would be for “less than 5%” and listed on the domestic Tadawul stock exchange in 2017 or 2018 at the latest. MbS estimates the value of the fund could exceed $2 trillion. “IPOing Aramco and transferring its shares to the PIF will technically make investments the source of Saudi government revenue, not oil,” MbS said.

Saudi Arabia embarked on an aggressive new strategy of economic reforms and transformative policies in the past year in the wake of the 60% drop in global oil prices since mid-2014. The goal is to enable the country to diversify its investments in non-oil entities both domestically and globally. “What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn’t depend mainly on oil,” MbS said.

Saudi Arabia’s existing PIF launched its sovereign wealth fund with assets of $5.3 billion in 2008 but is dwarfed by its Gulf neighbors’ more robust investment vehicles. Kuwait launched the world’s first sovereign wealth fund in 1953 and today the Kuwait Investment Authority’s assets are estimated at just under $600 billion. The Abu Dhabi Investment Authority was launched in 1976 and has an asset base of between $750 billion and $800 billion. The Gulf state’s sovereign wealth funds are designed to invest oil income in non-oil global financial instruments, stocks, companies, or real estate as a means to diversify the state’s income sources, hedge against oil market volatility, and create long-term, non-oil investment returns for future generations in a post-oil era.

Saudi Arabia’s PIF foreign asset base is pegged at just 5% but plans are to increase that share to 50% by 2020, Yasir Al Rumayyan, the fund’s secretary-general said in an interview with Bloomberg. The PIF has been quietly ramping up its operations since 2015, in part due to criticism that the fund has been too conservative with investments and that they are largely domestic. The fund has been hiring specialists in international markets, private equity, and risk management, according to Al Rumayyan. The share offering of Aramco, with its massive cash injection, will play a pivotal role in turning the PIF into a world-class investment fund for future generations.

The ambitious plans for a sovereign wealth fund and share offering in Saudi Aramco are being orchestrated by MbS as head of the Council for Economic and Development Affairs. CEDA, which replaced the Supreme Economic Council in 2015, has already instituted policies aimed at curbing spending by reducing subsidies for fuel and electricity and capping the deficit at 15% of gross domestic product – all part of a broader plan to counter the budget crisis brought on by lower oil prices.

The Devil is in the Details

MbS used a broad brush when announcing the plans for a share offering in Aramco, making it nearly impossible to assess the value of the planned IPO at this early stage. MbS introduced the prospect of an Aramco IPO in an interview with The Economist on 4 January, with speculation rife that Saudi Arabia’s coveted oil reserves would be part of the offering. However, Khalid Al-Falih, Aramco’s chairman of the board of directors, clarified in an interview on Al Arabiya television in late January that oil and gas reserves would not be included in the IPO. “What will be offered is the economic value of Saudi Aramco and not its oil reserves,” Al-Falih said in the interview. “The oil reserves belong to the state. Therefore, we will offer the ability of the company to produce from those reserves,” he explained.

MbS elaborated on the Aramco IPO in the latest interview with Bloomberg, saying “The mother company will be offered to the public as well as a number of its subsidiaries.” This imprecise language has again raised expectations that the country’s oil reserves would be part of an IPO. For international investors, inclusion of the country’s prized reserves is key. Saudi Arabia has historically guarded its reserve base as a state secret and therein lies a problem for assessing a value – the lack of transparency that is part and parcel of a state-owned enterprise.

Aramco includes an estimate of around 260 billion barrels for its reserves in its annual report but that figure has not been updated in more than 25 years. (In comparison, U.S. reserves stood at 39.9 billion barrels as of 2014.) Since the early 1980s, after the government assumed full control of the company from its partners, field and reserve data have been withheld from the public domain, leaving outside experts unable to verify the country’s reserves. An IPO would notionally oblige the government to provide more transparency on its opaque oil reserves, something many veteran Saudi observers doubt will be forthcoming.

The market uses booked reserves as a key measure to assess the value of international oil companies such as Exxon and Chevron. Without access to verifiable data, the investment community would be hard-pressed to place a comprehensive value on Aramco assets. Technically, however, Saudi Arabia’s crude oil reserves are owned by the government, not Aramco. Any IPO of Saudi Aramco would likely include some mechanism to book oil and gas reserves for financial reporting purposes, though the oil in the ground remains the property of the Saudi state.

Yet it is not implausible that as part of the process of developing the IPO the new regime may finally lift the veil on the country’s reserves and put an end to decades of speculation. Indeed, a new level of transparency will be a financial imperative in whatever form the final share offering takes, not least because Saudi laws require financial audits for stock listings. The task ahead of preparing for an IPO is daunting, especially for a company like Aramco that has never before even officially reported revenue.

Saudi Aramco Saudi Arabia’s sale of shares in Aramco could lead to a publicly listed company valued in the trillions, with some estimates as high as $10 trillion. This compares with Exxon Mobil, the largest publicly traded oil company, with an estimated market value of $332 billion on average in first quarter 2016.

While the prospect of a share offering has been mooted over the past year, serious studies have yet to be undertaken. With new urgency, in late February the government issued tenders for bids to consultants to study various scenarios for an IPO. Options include, but are not limited to, selling shares in the parent company that would include producing assets, creating holding companies for various asset groups such as refineries, or selling shares in existing joint ventures. While estimates of trillions of dollars are making headlines, a parcel package of assets is expected to fall in the smaller $100 billion to $500 billion range, which would still make for a world-class offering. The record-breaking share offering of Alibaba in 2014 was valued at $170 billion.

The unprecedented size of the potential IPO will require an enormous effort that could take 18 to 24 months, if not longer, given the imperative for an unprecedented level of financial and operating data transparency. Equally, the sensitive nature of putting the family firm on the block will require deft, behind-the-scenes politicking to gain much-needed political goodwill among the various factions of the royal family. Recent public statements by MbS about the need for transparency and for rooting out corruption no doubt rankled some family members and sparked concern about future largess from the monarchy. Current funds for the royal family are reportedly channeled from Aramco to the king’s executive office, the Royal Diwan. One option under an IPO scenario could involve allocating shares to the Royal Diwan or even buying a portion of the shares issued by Saudi Aramco.

A restructuring of Aramco, expected to be announced by mid-year, may provide further clarity ahead of the IPO. “We will also announce Aramco’s new strategy and will transform it from an oil and gas company to an energy/industrial company,” MbS also told Bloomberg. In 2015, Aramco was brought under the broader umbrella of the Council for Economic and Development Affairs, separating the state oil company from the Ministry of Petroleum and Mineral Resources. As part of the restructuring, the company was placed under the control of a newly created Supreme Council for Saudi Aramco, also chaired by MbS. Saudi Aramco’s operations are ranked as the best in class and run by top technocrats, which will underpin any change in strategy.

Ironically, however, the long lead time needed to develop and execute what could be the world’s largest IPO may be useful for a country that has always taken a conservative, go-slow approach, allowing the executives in charge time to navigate the complex financial mechanisms and sensitive family issues. In any event, with oil prices at near 12-year lows, there is little incentive to hurry the process near term.

Diane Munro is a former senior oil market analyst at the International Energy Agency and a contributing writer at the Arab Gulf States Institute in Washington. (AGSIW 08.04)

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11.4 EGYPT: Sailing Through the Straits

Col. (res.) Dr. Eran Lerman and Prof. Joshua Teitelbaum wrote on 17 April in the BESA Center Perspectives Paper No. 340 that the fact that Saudi Arabia has now undertaken to uphold in practice the obligations assumed by Egypt under its peace treaty with Israel, means that Israel’s place in the region is no longer perceived by Arab leader Saudi Arabia as an anomaly to be corrected. This is a far cry from normalization of Saudi relations with Israel, but it is nevertheless a welcome ray of light, demonstrating the benefits of cooperation and coordination in a region beset by violence.

For Israelis above a certain age, mentioning the name of Tiran and Sanafir islands is enough to send a thrill – or a chill – down their spines, bringing to mind the proud refrain of a popular song, written in the tense days just before the Six Day War: “We shall make our way/ at nighttime or day/ with our flag, blue and white/ through the Tiran Straits.”

Indeed, the Straits were the casus belli back in 1967, when Gamal Abd al-Nasser cast all caution (and international norms) to the wind and closed them to Israeli shipping. Eilat is a strategic asset and the terminus of Israel’s trade with much of Asia and Africa. Even the secretive Protocol of Sevres signed by Britain, France and Israel in October 1956 had included an explicit reference to Israel’s needs concerning the two islands.

Israel captured the islands in the Six Day War, but the 1979 Peace Treaty between Israel and Egypt enshrined Egypt’s commitment to international norms regarding the freedom of navigation and the islands were returned. One of the region’s neuralgic points was thus removed for many years from the headlines and from the field of conflict.

Will it now re-emerge again as a source of tension? The answer, at least for the foreseeable future, can be deduced from the circumstances of this recent dramatic announcement. It came as the culminating achievement of Saudi King Salman’s historic visit to Cairo, which cemented the vital relationship between these two pillars of regional stability and saw the promulgation of a long list of bilateral agreements on economic and strategic cooperation.

Having played a major role in sustaining the present Egyptian regime against political and economic challenges, the Saudis were now in a position to finalize the restoration of their sovereignty over the islands, control of which they have ceded to Egypt back in 1949 in the context of the latter’s better ability to utilize them in the struggle with Israel – which has by now become irrelevant. Their legal case was apparently unassailable, and it was thus more a matter of when rather than whether they will actually assert their claim.

This came as no surprise to Israel. Back in July 2015, the “Cairo Declaration” issued during the visit of Salman’s activist son, Muhammad – serving as Saudi Arabia’s Defense Minister – included an explicit reference to the need to settle certain questions of maritime demarcation between the two countries – which could only mean the two islands. Egypt took care to explain its decision to Israel and to allay any fears that this may have any effect on the freedom of navigation. The Saudis did so as well, according to Israeli Defense Minister Moshe Ya’alon, albeit in their own way, while asserting that no direct coordination with Israel can be expected (nor is it necessary).

Israel’s freedom of navigation in the Straits was guaranteed in the deal, said Ayalon. Indeed, the restoration of sovereignty serves to bolster the Saudi commitment to Egyptian stability – which goes a long way towards explaining the rage expressed by the Muslim Brotherhood at this breach of Egypt’s “national rights.” With the need to confront Iran high above all other considerations in the Saudi and Egyptian national security playbook – and in Israel’s – any major step that helps bring together the “camp of stability” in the region under joint Egyptian-Saudi leadership will also serve Israel’s interests.

Moreover, despite the disavowal of any direct contacts over this issue – and other important issues – over the years, the very fact that Saudi Arabia now undertakes to uphold in practice the obligations assumed by Egypt under the peace treaty means that Israel’s place in the region is no longer perceived by Arab leader Saudi Arabia as an anomaly to be corrected. This is a far cry from “normalization” (tatbi`) – which remains a dirty word in the Arab dictionary. But it is nevertheless a welcome ray of light, demonstrating the benefits of cooperation and coordination in a region beset by so much violence.

Col. (res.) Dr. Eran Lerman is former deputy for foreign policy and international affairs at the Israel National Security Council. He served for two decades in Israeli military intelligence. Prof. Joshua Teitelbaum, an expert on the Gulf states, Saudi Arabia, and pan-Arab issues, teaches in the department of Middle East studies at Bar-Ilan University. Both are senior research associates at the Begin-Sadat Center for Strategic Studies. (BESA 17.04)

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11.5 SAUDI ARABIA: Saudi Arabia Tilts Toward India

Bruce Riedel posted in Al-Monitor on 6 April that Saudi Arabia’s King Salman bin Abdul-Aziz Al Saud gave Indian Prime Minister Narendra Modi a very warm welcome recently in a public tilt of Saudi policy toward New Delhi and away from its traditional ally Pakistan. Economic interests are part of the tilt, but so too is Saudi pique at Pakistan’s refusal to back its military adventure in Yemen.

Pakistan, after refusing to supply troops for Saudi Arabia’s war against Yemen, finds the Gulf kingdom improving relations with Pakistani archenemy India.

Modi and the Saudis signed five new bilateral agreements to improve relations, covering intelligence sharing on terrorism financing, increasing private investment and enhancing defense cooperation. Salman bestowed the King Abdul Aziz Order of Merit medal on the prime minister; it is the kingdom’s highest honor and has never been given to a purely civilian Pakistani leader (although it was given in 2007 to President Pervez Musharraf, a general who ousted Prime Minister Nawaz Sharif in a 1999 coup). Modi in turn gave the king a gold replica of the Cheraman Juma Masjid mosque in Kerala, the first mosque in India, dating from the seventh century, and a symbol of trade between Arabia and the Indian subcontinent.

Just days before the visit, the United States and Saudi Arabia jointly announced sanctions against four individuals and two organizations in Pakistan involved in financing terrorist organizations, including al-Qaeda, the Taliban and Lashkar-e-Taiba. The joint announcement was unprecedented. Four years ago, the kingdom deported a senior Lashkar-e-Taiba official to India who had been involved in the 2008 Lashkar-e-Taiba attack on Mumbai, which was backed by Pakistani intelligence. Modi met with Crown Prince Mohammed bin Nayef, who is also minister of interior and the kingdom’s top counterterrorism official.

Economics play a big role in the Saudi-India relationship. About 3 million Indians work in Saudi Arabia, almost half the 7.3 million Indian worker population in the Gulf states. Bilateral trade in 2015 was almost $40 billion and India imports a fifth of its oil from the kingdom. The Pakistani emigre population is about 1.5 million and trade was about $6 billion last year. Modi met with senior Aramco officials to discuss more energy and investment opportunities.

This was only the fourth visit ever by an Indian prime minister to the kingdom. By contrast, Pakistani prime ministers often visit that many times in a single year. Sharif, who is again prime minister, was in Saudi Arabia in early March to watch the Northern Thunder military parade in which troops from 21 Muslim countries participated, although the place of honor next to the king was given to Egyptian President Abdel Fattah al-Sisi.

A year ago, Sharif wisely rebuffed Salman’s request to provide Pakistani troops to join the Saudi-led coalition in Yemen fighting the Houthi rebellion. The Pakistanis thought the Saudi war plan was impetuous and not thought out. They were not eager to get in the middle of another Saudi-Iran conflict. They expected a costly stalemate would ensue.

The Pakistani move removed a key component of the Saudi plan for a quick, decisive victory in Yemen. Sharif’s decision was very popular at home, however, and was endorsed by a unanimous vote in the parliament. Lashkar-e-Taiba was among the few voices critical of Sharif’s decision. His top aides privately anticipated some blowback from the Saudis would result.

Pakistan is very wary of the Saudi campaign against Iran. Last month, Islamabad hosted Iranian President Hassan Rouhani in his first foreign trip since the beginning of the Iranian new year. Sharif and Rouhani signed several agreements and discussed the long-standing plan to build a gas pipeline linking the two neighbors. Pakistan conditioned its participation in the Northern Thunder military exercise on the premise that the exercise and the new Saudi-sponsored Islamic military alliance is not directed against any country, meaning Iran. Of course, the main point of the exercise and the alliance, from Riyadh’s perspective, is precisely to challenge Iran. Sharif has allegedly rebuffed Saudi suggestions that Pakistan’s chief of army staff be made the titular commander of the alliance.

The Saudis now seem eager for the Yemen war to end. They have proclaimed a victory in preventing the emergence of an Iranian foothold in the Arabian Peninsula. Whether that was ever a serious danger is uncertain, but it gives Riyadh some face-saving cover for ending the war with the Houthis still in Sanaa. Talks are planned for 18 April in Kuwait to end the conflict.

The war has created a humanitarian disaster for Arabia’s poorest country and generated widespread criticism of the kingdom around the world. The European Parliament voted to cut off all arms sales to Saudi Arabia, for example. While not a binding vote, it is a symbolic defeat for Saudi diplomacy.

Pakistan will remain a key ally for Saudi Arabia. The kingdom has invested billions in supporting Pakistan for decades. The military relationship between the two remains robust despite the differences over Yemen. The bonds of religion and history unite the two Islamic countries. Sharif knows Riyadh will want to avoid any damage to its ties to Islamabad. But Salman is also warning Pakistan that the kingdom has other suitors.

Bruce Riedel is a columnist for Al-Monitor’s Gulf Pulse. He is the director of the Intelligence Project at the Brookings Institution. His new book, “JFK’s Forgotten Crisis: Tibet, the CIA and the Sino-Indian War,” was published this fall. (Al-Monitor 06.04)

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11.6 TURKEY: What Turkey’s New Central Bank Chief Means for the Economy

Recep Tayyip Erdogan’s war on interest rates began immediately after his Justice and Development Party (AKP) came to power in 2002. Flouting the conventional economic theory, the Turkish leader advanced his own theory with the unusual argument that high inflation is the product of high interest rates. As a result, he has often clashed with Central Bank governors, incensed that they kept interest rates too high.

In a first for Turkey, Kerim Karakaya observed on 12 April in Al-Monitor, an Islamic finance professional has been named Central Bank governor amid questions of whether the appointment is linked to Erdogan’s war on interest rates.

For Erdogan, the “merciless” interest rate system is “the biggest weapon of colonialism,” while his political opponents are an “interest-rate lobby” greedy for higher rates. Thus, he believes, interest-free Islamic banking should be strengthened and expanded. Fourteen years into office, Erdogan may have finally found the perfect Central Bank chief to put his rebellious economic vision into practice.

On 11 April, Turkey’s Central Bank got its first governor with an Islamic finance background, Murat Cetinkaya, as a replacement to the outgoing Erdem Basci. For the past four years, Cetinkaya served as the bank’s deputy governor, a post he assumed after a career with Islamic banks such as Albaraka Turk and Kuveyt Turk.

The biggest question in Turkey now is whether or not this appointment reflects Erdogan’s Islamist-inspired economic vision, which many have come to call Erdoganomics. The answer is not easy, for both Cetinkaya and his economic views are a mystery to the public. “We know nothing about Cetinkaya. We have not even heard him speaking so far. We’ll have to see his policies,” economist Haluk Burumcekci told Al-Monitor. “His selection was likely a compromise between Erdogan and Prime Minister Ahmet Davutoglu, which means no radical changes should be expected.”

Unlike Erdogan, Davutoglu and his deputy in charge of the economy, Mehmet Simsek, embrace the rules of the free market economy and the conventional economic wisdom, hence they believe in fighting inflation and not interest rates.

For Atilla Yesilada of Global Source Partners, a business consultancy, the new Central Bank chief represents a rare victory for Davutoglu over Erdogan. “I think he is the best of a bad lot. The appointment of someone from within the Central Bank rather than a direct Erdogan crony is a victory for Davutoglu. It’s the best possible option in the current conditions.”

Former Central Bank governor Durmus Yilmaz, who served from 2006 to 2011, warned that a shift to the policies Erdogan favors would mean a drastic paradigm change, which could shortly trigger an economic crisis. “Turkey is a country with a savings gap. How are the savings to be increased without an interest rate? Would foreign investors come to Turkey then? If interest rates are cut at the pace the president wants, we’ll plunge into a crisis in three months’ time,” Yilmaz told Al-Monitor.

Back in the summer of 2013, when environmentalist protests at Istanbul’s Gezi Park grew into nationwide anti-government demonstrations, Erdogan claimed an “interest-rate lobby” seeking to push up the rates was behind the unrest. Dissatisfied with the Central Bank’s rate cuts, he accused Basci of “treason” and said the 5% share of Islamic banking in Turkey’s banking sector should be increased to 25% by 2025. “The interest rate system is unfair and merciless. It’s the biggest weapon of colonialism,” he added.

The president’s aides often slam the Central Bank, as well. Last month, for instance, chief economy adviser Cemil Ertem said, “Let me put it openly here that the Central Bank debate is not a debate about who the [new] governor will be. It is a debate about if and when one of the last strongholds of economic tutelage in Turkey will be torn down. In this sense, it is a debate about whether Turkey’s economy and monetary policies are shaped in [Turkey] or in London or Washington.” Cetinkaya’s first major test with the financial markets will be on 20 April, when he makes his maiden interest rate decision.

Yilmaz, who is remembered for a remarkable resistance to government pressures during his term at the Central Bank’s helm, said, “The markets will no doubt test the new governor. They did the same with me as well. They wanted to see how much influence the government wielded over me or how independent my policies would be. It took me three years to convince them I was independent.” Cetinkaya’s background in Islamic banking, coupled with scarce information about his economic vision and political leanings, has deepened uncertainty over the Central Bank’s independence and monetary policies in the coming period. If one thing is certain, however, it’s that the new governor will have to always consider Erdogan’s unrelenting aversion to interest rates before making a move. (Al-Monitor 12.04)

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11.7 TURKEY: Turkey’s New 4G Mobile Network Comes With Many Dark Clouds

Barin Kayaoglu posted in Al-Monitor on 14 April that on April 1, the fourth-generation (4G) mobile data network finally arrived in Turkey — nearly eight years after arriving in Scandinavia and South Korea.

As Al-Monitor reported last year, Turkish mobile phone users had to wait for bureaucratic infighting and uncertain market conditions to clear up before they could use faster data connections. In May 2015, following an intervention by President Erdogan and lobbying efforts by a mobile service provider that was not ready to compete, Turkey’s Information and Communications Technologies Authority postponed the 4G tender to August 2015.

Today, those uncertainties seem to be a thing of the past. Turkey’s move to its self-declared “4.5G” network is taking place amid much pomp and fanfare. On 1 April, Minister of Communications Binali Yildirim launched the new system by holding a videoconference with Erdogan, who was in Washington for the Nuclear Security Summit.

Turkish mobile operators have engaged in even more impressive marketing stunts to sell new phones and data plans. The market leader Turkcell appeals to popular and patriotic sentiments with its “bagliyiz biz” (we are tied / connected / loyal to each other) campaign. Vodafone, with its “4 bucak g” (4 corners g) campaign, showcases folk dancers from the four corners of Turkey performing their own regional dances as well as those of other areas. Former telecom monopoly Turk Telekom (previously Avea) takes a different route and uses Portuguese soccer star Cristiano Ronaldo to emphasize its 4G network’s speed.

These campaigns, however, have had a limited effect on the target audience. While service providers, phone vendors and consumers are excited about the long-awaited boost to connection speeds, high prices discourage customers. Three storeowners in Ankara’s affluent Cankaya district told Al-Monitor that although customers with phones that are not equipped to use mobile data have expressed interest in upgrading to 4G-compatible phones, they get cold feet upon finding out that the cheapest devices cost 750 Turkish lira (about $265).

Subscription plans also do not come cheap. Modest plans with 2 gigabytes (GB) of data, 1,000 text messages and 1,000 minutes of phone calls vary between 35-50 Turkish lira ($12 to $17). But some plans with 15 GB of data can reach as high as 159 Turkish lira ($55), including taxes and other fees. For a country where the net minimum wage is 1,300 Turkish lira ($457), even the cheapest data plan seems like a luxury.

To boost consumer demand and usage, Turkey must create a mature 4G network and, more importantly, a robust Internet infrastructure.

Kozan Demircan, one of the country’s leading technology experts, calls the new 4.5G an “April Fool’s joke” because Turkey simply does not have the fiber optic network to support the promised connection speeds. High levels of fiber optic penetration (an area in which Turkey comes up short) enable high-quality connections between personal computers, mobile devices and cell towers.

As another expert told Al-Monitor a few months ago, Portugal — with a total area of 100,000 square kilometers (38,600 square miles) — boasts a fiber optic network of 545,000 kilometers (338,000 miles). But Turkey, with nearly eight times the area of Portugal, only has 250,000 kilometers of fiber optic cable (a figure that was already 150,000 kilometers in 2005), when it should have over 4.5 million kilometers of fiber optic cable to catch up with Portugal.

These shortcomings slow connection speeds. Demircan points out that “whereas the targeted speed with 4.5G is around 330 to 400 megabits per second [Mbps], average connection speeds are 30-40 Mbps.” Although those figures are a respectable improvement over actual speeds of 14 Mbps on the 3G network, even those limited speeds are not available to Turks who live in major cities such as Istanbul and Ankara. According to Akamai Technologies, a global content delivery company, Turkey’s average Internet connection speed was 6.2 Mbps in the third quarter of 2015. As Demircan warns, there is a positive relationship between high broadband Internet penetration and its contribution to high levels of national income.

So why does Turkey focus on the flashy aspects of the 4G network but not do the heavy lifting (and digging) that would help to grow its economy?

A big part of the problem is the Turkish state’s inability to open up the market to competition. In particular, Turk Telekom, which owns most of the fiber optic network thanks to its former status as Turkey’s telecom monopoly, does not want to share its property with service providers. Likewise, Turkish municipalities continue to charge exorbitant fees whenever service providers attempt to lay new fiber optic cables.

A bigger challenge is the allegation that the Turkish state and the ruling Justice and Development Party (AKP) view high-speed Internet with suspicion. One Turkish internet expert and former government employee told Al-Monitor on condition of anonymity that after the Gezi protests of 2013 and the Gulen-AKP fallout in early 2014, the state — especially the national security apparatus — has become wary of very high speed internet connections. “You cannot upload high-quality videos or extended audio files on the 3G,” said the expert. So there is not much enthusiasm to improve conditions through the 4G network.

That last point is particularly unfortunate considering that much of the hardware and software for Turkey’s new 4G network was supposed to be based on the indigenous ULAK system. Developed through public-private cooperation under the guidance of the Ministry of Communication and the Undersecretariat for Defense Industries, the ULAK system could have provided a majority of the new 4G-compatible 80,000 cell towers and saved Turkey considerable sums in foreign currency. However, Turkey’s renowned technology expert and entrepreneur Fusun Sarp Nebil warns that only 1,700 ULAK towers may become part of the 4G network.

Nebil raises the agonizing possibility that Turkey, having had a late start to the 4G game, could also miss out on the 5G system once it debuts in 2020 and fall further behind in economic development. (Al-Monitor 14.04)

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What’s New at EDI – May 2016

May 1, 2016, 1:08 pm

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EDI Participates in SOFEX Jordan in May

EDI Trade Director Seth Vogelman will be in Amman, Jordan during the week of May 9^th to participate in the SOFEX 2016 exhibition (Special Operations Forces Exhibition and Conference) on behalf of the Commonwealth of Pennsylvania. While there, he will identify potential business opportunities for Pennsylvania. EDI has represented the trade and investment interests of Pennsylvania in the Middle East since 1997.

Visit of Ontario Premier Wynne Slated for May

Ontario Premier Kathleen Wynne will head a 100+ delegation to Israel from May 16-19. At that time, she will be accompanied by provincial officials, representatives of Ontario’s life science community, academic institutions and companies seeking to build a stronger commercial relationship between Israel and Ontario. EDI represents the trade, innovation and investment interests of Ontario in Israel.

Startmeup Hong Kong Executive to Visit Israel

Jayne Chan, senior executive of Startmeup Hong Kong, will visit Israel on May 23^rd to meet Israeli companies who are potential participants in that annual event. The Hong Kong startup ecosystem has witnessed phenomenal growth over the past few years and the city is consistently ranked as one of the fastest growing startup hubs in the world. Ms. Chan will use her visit to generate interest in Hong Kong. EDI represents the investment promotion interests of Hong Kong in Israel.

Wiggin & Dana to Host Seminar in Tel Aviv

On May 30^th, the US law firm Wiggin & Dana, in cooperation with Israel’s Gross, Kleinhandler, Hodak, Halevy, Greenberg and Co. will host a seminar in Tel Aviv on navigating the complex web of risk posed by the long arm of United States export/technology transfer controls and economic sanctions. EDI will organize the seminar on behalf of Wiggin & Dana, as it did last year as well.

Companies from the Former East Germany to Visit Israel in June

A group of industrial exporters from the former East Germany will visit Israel in June under a German government-sponsored initiative. During the visit, the companies will meet with potential importers/distributors in Israel, and the government officials accompanying them will host an informational seminar for Israeli companies. EDI, in cooperation with Germany’s Enviacon International, will handle all of the arrangements in Israel for the visit.

California Department of Food and Agriculture Mission in June

A mission composed of representatives of California’s agricultural community will visit Israel in June. Headed by California’s Secretary of Agriculture, Karen Ross, the group is particularly interested in climate smart agriculture, an area where Israel has a great deal of recognized expertise. The Milken Institute will also be supporting the mission. EDI is handling all of the arrangements in Israel for the visit.

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Fortnightly, 4 May 2016

May 4, 2016, 5:23 am

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4 May 2016
26 Nisan 5776
27 Rajab 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Tax Authority Targets Non-Residents
1.2 One Million Shekel Aid Package Awarded to Holocaust Survivors

2: ISRAEL MARKET & BUSINESS NEWS

2.1  On-Line Bra Fitting Company Brayola Raises $2.5 Million
2.2  Preempt Security Closes $8 Million in Series A Funding
2.3  Kuang-Chi to Launch $300-Million Global Fund & Incubator in Israel
2.4  Renewed Drilling Finds Oil near Dead Sea
2.5  SintecMedia Management & Francisco Partners Acquire SintecMedia
2.6  Zooz Closes $24 Million Investment Round

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Middle East Remittances Said to Exceed $120 Billion in 2015
3.2  USAID Awards Tetra Tech $28 Million Contract for Jordanian Water Management
3.3  Thrill Park Coming to Dubai Parks and Resorts
3.4  First All-Women Business & Technology Park in Saudi Arabia Inaugurated
3.5  Turkish Airlines Expands Fleet with 26 New Boeing Aircraft

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE’s Masdar set to Complete Rural Morocco Solar Project in Second Quarter

5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Widened to $3.99 Billion in First Quarter
5.2 Deflation in Lebanon Dropped to 3.57% in First Quarter

♦♦Arabian Gulf

5.3  Bahrain Says Dependence on Oil Revenues Slashed in 2015
5.4  Bahrain Launches New Tourism Identity
5.5  Qatar to Let Domestic Fuel Prices Fluctuate in Subsidy Reform
5.6  UAE’s Non-Oil Foreign Trade Totals $424.7 Billion in 2015
5.7  Dubai Sees 5% Rise in Tourists to 4.1 Million in First Quarter
5.8  Dubai Launches $270 Million ‘Future Fund’ to Shape Growth
5.9  Switzerland is First to Officially Sign Up for Dubai Expo 2020
5.10  Oman Presents New 20-Year Tourism Plan
5.11  Saudi Prince Unveils Sweeping Reform Plan for Economy

♦♦North Africa

5.12  Israeli Industrialist Delegation Visits Egypt for First Time in 10 Years
5.13  UAE Allocates $4 Billion to Egypt to Support Cash Reserves
5.14  Egypt Builds Mega Project Named After Abu Dhabi Crown Prince
5.15  China Wants to Sign a Free Trade Agreement with Morocco
5.16  Kuwait Grants $ 250 Million in Financial Assistance to Morocco

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkish Exports Fall by 2.8% in April
6.2  Turkey’s Tourism Revenue Drops 16.5% in First Quarter
6.3  Turkey Gives Permission to Bank of China to Set Up Business
6.4  Higher Greek Taxes Expected to Bring in €1.35 Billion of €1.8 Billion Shortfall

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1  Yom HaShoah – Holocaust Martyrs’ & Heroes’ Remembrance Day 2016
7.2  Israel Commemorates Those Who Fell in Service to the Nation
7.3  Israel’s Independence Day – 68 Years After Sovereignty was Regained

♦♦REGIONAL:

7.4 Morocco’s Economic Council Calls for Decriminalization of Sex Outside Marriage
7.5 Oscar Wilde & the Oscars Cause Confusion in Turkish Parliament Commission Debate

8: ISRAEL LIFE SCIENCE NEWS

8.1  AV Medical Completes Study with Angioplasty Balloon Catheter Chameleon
8.2  Biocancell Therapeutics Raises $6 Million
8.3  Corsens Medical Files 510(k) Pre-Marketing Notification with FDA for Cardiac Monitor
8.4  Can-Fite Presents Data on CF602 for the Treatment of Erectile Dysfunction

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Israelis Take Second Place in Prestigious High School Robotics Contest
9.2  Arecont Vision Technology Partner Program Expands Wirelessly with Siklu
9.3  Enter Selects Mellanox Open Composable Networks to Power European Cloud
9.4  Eutelsat Selects Gilat to Power Satellite Broadband Services in Western Russia
9.5  Elbit Systems to Supply Mobile Tactical Software Defined Radio Systems
9.6  Argus and Check Point Selected as Finalist for 2016 TU-Automotive Award
9.7  Two Sapiens P&C Customers Receive Celent Model Insurer Awards
9.8  LightCyber Wins Cybersecurity Excellence Award
9.9  CallVU Presents New Mobile Digital Engagement Platform for Financial Institutes

10: ISRAEL ECONOMIC STATISTICS

10.1 March Hotel Figures Show Israel’s Slow Tourism Recovery

11: IN DEPTH

11.1  MENA: Cheap Oil Means a New Reality for Middle East, North Africa Region
11.2  ISRAEL: Fitch Revises Israel’s Outlook to Positive; Affirms at ‘A’
11.3  JORDAN: Outlook on Jordan Revised To Negative; ‘BB-/B’ Ratings Affirmed
11.4  SAUDI ARABIA: Saudi Arabia’s Challenging Plan to Shift From Oil
11.5  LIBYA: Libyan Government, Parliament Enter Into Standoff
11.6  MOROCCO: Fitch Affirms Morocco at ‘BBB-‘; Outlook Stable
11.7  CYPRUS: Fitch Affirms Cyprus at ‘B+’; Outlook Positive

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Tax Authority Targets Non-Residents

The Israel Tax Authority has been working continually and intensively on a legislative program designed to give it more tools and powers in the war on unreported income and wealth. In this context, the Tax Authority seeks to expand the obligation to file tax returns, in order to make taxpayers’ affairs more transparent so that it can decide whether they are paying tax as required or are hiding income from the state. To this end, the obligation to file returns has been widened concerning a matter that may appear technical, but that in fact will have a dramatic effect on many people: Israeli businesspeople that relocate overseas for an extended period and foreign citizens living in Israel unknown to the Tax Authority.

The legislative amendment concerns the physical presence test that determines whether or not a person is resident in Israel for tax purposes. Under the Income Tax Ordinance, an Israeli resident is liable to income tax on their worldwide income, whereas a foreign resident is liable only on income produced in Israel. Residence is determined according to the test of a person’s “center of life”, whereby their connection to Israel is examined according to criteria such as possessing a home and vehicle in Israel, having family in the country, economic connections, etc. There is an additional test for determining residence, which is the physical presence test, whereby a person who is present in Israel for more than 183 days a year is assumed to be an Israeli resident. This assumption is rebuttable and in many cases people who spend more than 183 days a year in Israel do not report on their income to the Israel tax authority, relying on the other tests of residence and on expert opinions, which overturn the physical presence assumption. In such cases, there may be no reporting to the Tax Authority at all.

Under the new amendment, a person who claims not to be a resident of Israel but who falls within the physical presence assumption, being in Israel for more than 183 days in a year, will be obliged to file a report detailing the facts on which the non-residency claim is based, with supporting documentation. This is in addition to a report on the person’s income in Israel.

The Israel tax Authority thus seeks to expose various kinds of tax planning on the part of Israelis who relocate overseas for a period, or who constantly travel overseas, and receive expert opinions that they are not liable to tax in Israel. The reporting required by the proposed amendment will mean disputes with the Tax Authority, which in some cases will argue that the person concerned is an Israeli resident for tax purposes and will require a report on all their overseas income. This will lead to many more civil cases vis-à-vis the Tax Authority, as well as exposure of taxpayers to criminal proceedings for tax evasion. (Globes 25.04)

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1.2 One Million Shekel Aid Package Awarded to Holocaust Survivors

The Knesset Finance Committee awarded one million shekels ($264,782) to Holocaust survivors on 3 May, just before Holocaust Remembrance Day. The funds, which were from a 2015 budget surplus, were transferred after Committee members withdrew their opposition to a request from MK Elazar Stern (Yesh Atid), who chairs the Lobby for Holocaust survivors. A study published earlier said 45,000 Holocaust survivors live in poverty and 60% are worried about their finances – a fact compounded by Bituach Leumi (National Insurance Institute) benefits not reaching the cost of living. It was also reported that thousands of survivors have never received those benefits at all. (Arutz7 03.05)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 On-Line Bra Fitting Company Brayola Raises $2.5 Million

Brayola announced the close of a $2.5 million Series A round. Investors include Haim Dabah of HDS Capital and FirstTime Capital’s Jonathan Benartzi. The company is also unveiling its own marketplace, leveraging inventory from brand partners to help women not only find the right bra, but take action on that item directly from the Brayola website. Brayola’s premise is simple to understand and difficult to execute. Women upload a picture of their breasts wearing their favorite bra. Then, users collectively vote on these pictures (that don’t show faces) on whether or not these bras fit the wearer. At the end of the poll, a “bra expert” steps in and makes the final call. As it turns out, most women are wearing bras that don’t fit properly and don’t know what the “right” fit even looks like. The polling is meant to help these women better understand how a bra should fit. Beyond the polling, Brayola also lets users upload their favorite bra (make, model, and size) and Brayola generates suggestions for other bras they might like.

Tel Aviv’s Brayola is the first & only marketplace for women’s intimate apparel, partnering with top brands & indie designers, using technology, data & community to provide a personalized way to shop for lingerie online for each and every woman. We solve a real pain point for women in a $3.2 billion intimate apparel industry. (TechCrunch 22.04)

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2.2 Preempt Security Closes $8 Million in Series A Funding

Preempt Security announced $8 million in Series A funding. General Catalyst Partners led the round with participation from well-known security leaders and innovators, including Mickey Boodaei and Rakesh Loonkar, the founders of Trusteer, and Paul Sagan, the former CEO of Akamai Technologies. The financing will be used to expand marketing and sales efforts, and accelerate product development. Additionally, the company appointed Heather Howland as vice president of marketing.

Ramat Gan’s Preempt Security was founded in 2014 by global security and networking experts. The team has deep roots in security with a large component of the team from Unit 8200, the elite intelligence unit of the Israeli Defense Forces. In addition, members of the team were instrumental in defining the first commercial Intrusion Prevention System, which led to the creation of the Unified Threat Management segment of gateway security products. The Preempt team leverages its experience to build industry first technology to help enterprises combat malicious breaches and insider threats. (Preempt 21.04)

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2.3 Kuang-Chi to Launch $300-Million Global Fund & Incubator in Israel

Kuang-Chi, a Shenzhen-based technology conglomerate, is launching an international innovation fund based in Israel to invest in companies worldwide. The “Kuang-Chi GCI Fund & Incubator” will be the first Chinese fund of its kind, combining investment in early to mid-stage Israeli and global companies with incubation by Kuang-Chi. The newly established fund has an initial mandate of $50 million which is planned to grow to $300 million within the next three years. GCI refers to the Global Community of Innovation initiated by Kuang-Chi. It brings together innovators from all over the world and turns science fiction and human dreams into reality by delivering “the future” to the world. Kuang-Chi will make its full corporate resources, from sales and marketing to technology collaboration and joint development, available to the companies in which it invests.

Kuang-Chi will also announce investments in local Israeli technology companies that are joining GCI, led by a sizable investment in a leading Israeli technology company. Kuang-Chi’s longtime partner in Israel, Indigo Global, will represent and manage the GCI Fund & Incubator’s activity.

A senior Kuang-Chi delegation will visit Israel in early May to formally announce the fund and to meet with high-level government officials and industry leaders. The talks will end with a launch event at the offices of leading Israeli law firm ERM Law. (Kuang-Chi 01.05)

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2.4 Renewed Drilling Finds Oil near Dead Sea

The Hatrurim oil and gas exploration license in the Dead Sea area contains an oil reservoir worth NIS 1.2 billion, according to a resources report published by the companies holding the license on 1 May. The report from Dunmore Consulting states that the best estimate is that the reservoir contains 7 million barrels of oil, while the high estimate is 11 million barrels. The estimates are given with 100% geological certainty of oil being found, since oil has already been produced from the reservoir, in the Halamish drilling.

The Hatrurim license is spread over 94 km² in the Dead Sea area. In 1995, Delek Group carried out an initial drilling in the license, to a depth of two kilometers, and found oil. This was the last drilling by Delek Group and Avner Oil and Gas on land, before their offshore gas discoveries. It was decided at the time not to produce oil from the reservoir because of the low oil price then prevailing.

Last October, the Petroleum Commissioner in the Ministry of National Infrastructures, Energy and Water Resources approved the application from the Israel Opportunity Energy Resources gas and oil exploration partnership to receive 25% of the Hatrurim license. The application was submitted together with Zerah Oil And Gas Explorations (28.75%), Gulliver Energy (28.75%), Cyprus Opportunity (5%), Ashtrom Properties (10%), and a company controlled by geologist Dr. Eliyahu Rosenberg, founder of the Avner partnership, who will hold 2.5% of the license. This is the first time that a company listed in Cyprus has entered oil and gas exploration activity in Israel. (Globes 01.05)

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2.5 SintecMedia Management & Francisco Partners Acquire SintecMedia

SintecMedia announced that SintecMedia’s management team and Francisco Partners, a global technology-focused private equity firm, have acquired SintecMedia from its existing shareholders, including Riverwood Capital. SintecMedia, which manages the business of multi-platform TV, is a business software partner for over 150 of the world’s top TV and media companies. Its products manage multi-platform ad sales, traffic, billing, programming and rights, processing over $33 billion in advertising revenue from leading brands and agencies around the globe. Financial details of the deal are not being made public.

Using the new resources and investment from Francisco Partners, SintecMedia will continue to accelerate the expansion and development of its cutting-edge product portfolio including OnBoard, its state-of-the-art programmatic sell-side platform. The company will continue to deepen relationships with customers and partners that already make the most of their valuable assets through its solutions.

Jerusalem’s SintecMedia is the preferred business software partner for over 150 of the world’s top media brands. No other software company brings a comparable depth of experience to create truly innovative software that performs across all platforms, revenue models, and business units. Since 2000, SintecMedia has grown to over 800 employees in 12 offices around the world and processes more than $33 billion in advertising revenue for the best known companies in the industry. (SintecMedia 27.04)

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2.6 Zooz Closes $24 Million Investment Round

Payment technology provider Zooz announced the closing of $24 million in new funding. The round was led by Target Global Ventures, and included Fang Fund, iAngels, Kreos Capital and existing investors Blumberg Capital, lool ventures, Rhodium, Claltech (Access Industries’ Israeli tech vehicle), XSeed Capital, CampOne Ventures and angel Eilon Tirosh. Zooz will use the funding to accelerate its growth, develop new products, open new markets, and increase its presence in existing markets. Zooz has grown considerably since its last round in July 2014 and has opened offices in London, Berlin and San Francisco. The new funding will help the company to continue building its global customer base, enhancing and evolving its products which serve some of the world’s leading companies.

In today’s age of global commerce, relying on a single payments provider can lead to high international credit card fees and decline rates. However, integrating with multiple solutions has always been difficult, expensive and time-consuming. The Zooz platform overcomes these obstacles by connecting merchants to multiple financial and technological entities and payment methods and Smart Routing each payment to the most appropriate provider for that transaction. Zooz’s merchant customers also benefit from its Insights offering, which provides intelligent analysis based on customer transactional data.

Ra’anana’s Zooz provides a payments platform designed to help merchants maximize their payments performance. It offers the flexibility to connect with multiple financial institutions, seamlessly integrate acquirers, e-wallets, alternative payment methods, fraud management and other third-party services, and intelligently route transactions through the entire payment process. Zooz consolidates and analyzes all payment data to provide valuable information to merchants, enabling them to personalize customer experiences online and in-store. It is the partner of choice for any business seeking to extend reach, reduce decline rates, increase revenues, maintain strong customer relationships and meet the challenges of the dynamic global market. (Zooz 03.05)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Middle East Remittances Said to Exceed $120 Billion in 2015

The Middle East saw outward remittances of more than $120 billion during 2015, cementing its place as one of the top remittance hubs in the world. The study by money transfer brand Xpress Money indicated that remittances within the Middle East are rising rapidly, particularly with the Arab nationals transferring money from GCC countries to other Arab countries. The research showed that not only are Arabs sending money more frequently, but the amounts tend to also be larger.

Of all Arab expatriates across multiple nationalities surveyed, 71% said that they send money back home, with 38% sending money home at least once a month and another 32% sending money at least every 2-3 months. On average, Arabs are also more likely to send more money home, with figures showing expat Arab remitters based in select GCC countries regularly transferring amounts in the $700-1,000 range.

Xpress Money said that while the $120 billion outward remittance figure for the Middle East includes destinations the world over, including prolific receivers in South/South East Asia, non-GCC Arab countries are rising on the list. (AB 30.04)

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3.2 USAID Awards Tetra Tech $28 Million Contract for Jordanian Water Management

The U.S. Agency for International Development (USAID) awarded California’s Tetra Tech a $28 million, single-award contract to improve water sector management and governance in Jordan. Under the five-year project, Tetra Tech will support the Government of Jordan to achieve measurable improvements and greater sustainability of the water sector. Tetra Tech will provide technical assistance to strengthen the government’s efforts in reform, capacity building, and policy development and implementation. Tetra Tech will help improve the sustainability of Jordan’s water supply systems, improve water conservation and water governance systems, and protect water resources. Through targeted technical assistance and capacity building, Tetra Tech will support the implementation of improved utility management practices; especially those related to non-revenue water reduction and improved cost recovery. Tetra Tech also will develop water demand management programs and behavior change communication strategies aimed at enhancing water conservation. (Tetra Tech 25.04)

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3.3 Thrill Park Coming to Dubai Parks and Resorts

Texas’ Six Flags Entertainment Corporation, the world’s largest regional theme park company, released initial plans for Six Flags Dubai, which is scheduled to open in late 2019 in the second phase of the Dubai Parks and Resorts development initiative. Six Flags Dubai will feature record-breaking roller coasters, spectacular shows and interactive attractions synonymous with the Six Flags brand worldwide. Guests will enter and exit the park through an impressive, state-of-the-art promenade. The fully air-conditioned area will offer a VIP mezzanine, space for private and catered events, along with an assortment of retail and food locations including a signature bakery and deli. Guests will have access to three attractions from inside the plaza and the park’s signature roller coaster will encircle the entire promenade.

Six Flags Dubai will be the first dedicated thrill park in the GCC. The intricately-themed park, designed in partnership with FORREC, will feature 27 rides and attractions, including best-in-class roller coasters, soaring tower rides, thrilling water slides, out-of-this-world virtual reality experiences, and a next generation 4-D interactive dark ride. When the sun sets, the park will come alive with spectacular lights dancing in the nighttime sky. (Six Flags 03.05)

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3.4 First All-Women Business & Technology Park in Saudi Arabia Inaugurated

Saudi Aramco, Princess Nourah University (PNU) and Wipro Arabia Limited, a subsidiary of Wipro Limited, a leading information technology, consulting and business process services company, inaugurated the Kingdom of Saudi Arabia’s first all women Business & Technology Park. The project is expected to create nearly 21,000 jobs for Saudi women over a period of ten years. The Women’s Business Park (WBP) is a result of a joint venture between Princess Nourah University (PNU), the largest women’s university in the world, and Wipro Arabia. Saudi Aramco is the strategic advisor and anchor of this initiative. Dedicated to working women, this business park is a first of its kind project aimed at providing knowledge-based employment for women in the Kingdom of Saudi Arabia.

The Women’s Business Park is envisioned to be the largest Engineering Drafting Services, Business Process Services and Information Technology hub in the region for a number of industry sectors including Oil & Gas, Manufacturing, Government, Healthcare, Telecom and Construction.

The idea of the business park was conceived in September 2014 when Saudi Aramco signed a Memorandum of Understanding with PNU. Wipro joined the partnership because of its experience in managing talent and providing IT services to a multi-industry customer base. The joint venture will be responsible for developing the park’s facilities and infrastructure as well as training and employing up to 21,000 Saudi women. The park will be developed in the PNU premises and will include entrepreneur incubators, daycare centers and a one-stop coordination center for government transactions. (WPU 04.05)

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3.5 Turkish Airlines Expands Fleet with 26 New Boeing Aircraft

Turkey’s national carrier Turkish Airlines is expanding its aircraft fleet. According to Boeing, 2016 will be a record year for deliveries to Turkish Airlines, with 26 new aircraft entering service: twenty 737-800s and six 777-300ERs. The 2015 annual passenger report by the Israel Airports Authority shows that despite cool relations between Israel and Turkey, and despite that fact that Turkish vacation spots have been wiped off the Israeli vacationer’s map, the country is still the number two travel destination for Israelis, chiefly for connecting flights to other places. In 2015, Turkish Airlines recorded 19% growth in the number of its Israeli passengers, putting it in second place after El Al Israel Airlines, which carried nearly five million passengers. About 823,000 Israelis flew with Turkish Airlines in 2015, most of them continuing to further destinations around the world.

Turkish Airlines’ growing fleet now numbers 311 aircraft. The company posted a record net profit of $1.69 billion for 2015 on sales turnover of over $10 billion. (Globes 02.05)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE’s Masdar set to Complete Rural Morocco Solar Project in Second Quarter

Masdar, Abu Dhabi’s renewable energy company, has announced it has installed 50% of the solar home systems as part of a project to electrify rural Morocco. The installation of 9,000 out of 17,670 systems across 940 villages comes only a year after the partnership agreement was signed between Masdar and Morocco’s Office National de l’Electricité et de l’Eau Potable (ONEE). The project is expected to be fully completed by the second half of this year.

All of the 290-watt solar home systems are designed, supplied and installed under a project that is being executed by the Masdar Special Projects team. Along with other local initiatives, the full installation will result in 99% of rural Morocco having energy access by the end of 2017. Morocco is considered one of the Middle East and North Africa’s most promising renewable energy market, with the government already committed to securing 42% of nation’s energy from renewable sources by 2020. (AB 22.04)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Widened to $3.99 Billion in First Quarter

According to data from the Lebanese customs, Lebanon’s trade deficit reached $3.99B in Q1/16, up by 16% from the $3.43B registered in Q1/15. Exports dropped by an annual 15% to $634.29M while imports grew by an annual 11% to $4.62B. Pearls, precious stones and metals accounted for 17.23% of exports, followed closely by 17.16% for prepared foodstuffs, beverages and tobacco and by 14.44% for machinery and electrical instruments. The value of exports in all of the top classified categories witnessed yearly declines: Exports of pearls, precious stones and metals fell by 9% year-on-year (y-o-y) to $109.31M in Q1/16. Exports of prepared foodstuffs, beverages and tobacco dropped by 8% y-o-y to $108.82M in Q1/16. Exports of machinery and electrical instruments fell by 9% y-o-y to $91.60M in Q1/16. As for imports, the largest value is accounted for by mineral products with 25.9% followed by shares of 10.9% for products of the chemical or allied industries and 9% for machinery and electrical instruments. Imports of mineral products grew substantially from $736.45M in Q1/15 to $1.20B in Q1/16. Imports of products of the chemical and allied industries rose by an annual 3% to $505.28M Imports of machinery and electrical instruments slid by 10% yearly to $416.19M. The top import destinations for the first three months of the year were China, the US, Holland, Italy and Germany with respective shares of 11.3%, 8.2%, 7.5%, 7.46% and 5.2%. The top export destinations for Q1/16 were South Africa, Saudi Arabia, UAE, Syria and Iraq with respective shares of 11.7%, 11.58%, 9.44%, 6.81% and 5.94%. (CAB 26.04)

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5.2 Deflation in Lebanon Dropped to 3.57% in First Quarter

Lebanon’s consumer prices maintained the downward trend during the first quarter of 2016 as reflected by the Consumer Price Index (CPI) that dropped by 3.57% y-o-y in March 2016. According to the Central Administration of Statistics (CAS), the depreciation of the euro, the local and global economic slowdown and the great decline in oil prices were the primary reasons behind this deflation.

In terms of CPI’s components, food and non-alcoholic beverages (20.6% of CPI) declined by 1.84% y-o-y in March 2016. Moreover, transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI), witnessed yearly drops of 8.24% and 18.15%, respectively. The other sub-indices that waned were health (7.8% of CPI) and clothing (5.4% of CPI), posting a 3.06% and 1.90% y-o-y declines, respectively. Also, communication (4.6% of CPI) posted a 0.31% downtick from Q1/15’s level. However, the education sub-index, constituting 5.9% of the CPI, augmented annually by 1.49% in March 2016. Furthermore, restaurants & hotels prices (2.6% of CPI) went up by 3.00% y-o-y in Q1/16. In addition, the actual rent sub-index for households (old and new rent), with a stake of 3.4% of the CPI, increased by an annual 1.93%. (CAS 22.04)

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►►Arabian Gulf

5.3 Bahrain Says Dependence on Oil Revenues Slashed in 2015

Bahrain’s non-oil growth reached 3.9% in 2015, according to the latest update by the Economic Development Board (EDB), while overall GDP growth for the year was 2.9%. Despite the broader regional economic challenges, growth remained positive across all the non-oil sectors, with construction (6.4%) and hotels and restaurants (7.3%) leading the way. The EDB said that the private sector remains a vital factor in the kingdom’s continuing economic growth profile, contributing nearly 3% to the overall growth figure for the year.

The oil sector share of real GDP fell to only 19.7%, demonstrating the success of Bahrain’s economic diversification efforts. Financial services (16%) and manufacturing (15%) continued to account for sizeable elements of the economy with government services (13%), construction (7%), transport and communications (7%), social and personal services (6%) and real estate and business activities (6%) all prominent.

The total value of the non-oil goods exported stood at approximately $17.5 billion in 2015. The EDB said significant infrastructure investments have continued to progress, with the total value of projects tendered reaching $3.8 billion by the end of March 2016. (EDB 23.04)

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5.4 Bahrain Launches New Tourism Identity

On 26 April, Bahrain launched its new tourism identity under the slogan of ‘Ours. Yours’ as part of plans to further diversify the national economy away from its dependence on oil. The new identity was unveiled by the Bahrain Tourism and Exhibitions Authority to the regional market at the Arabian Travel Market in Dubai. The kingdom plans to revamp its access points for foreign visitors including a modernization program for the Bahrain International Airport which result in increasing its capacity to 14 million visitors annually as well as upgrading port facilities for yachts. Bahrain’s tourism sector contributed around $700 million – around 3.6% of GDP – in 2015, and is expected to increase to $1 billion by 2020. The industry currently provides more than 31,500 jobs, accounting for 4% of the total workforce in Bahrain while total investment in the travel and tourism sector last year amounted to $280 million. (AB 26.04)

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5.5 Qatar to Let Domestic Fuel Prices Fluctuate in Subsidy Reform

Qatar will allow its domestic gasoline and diesel prices to fluctuate in response to changes in global markets as it seeks to reduce waste of fuel and save money for the state budget. Currently, local fuel prices are fixed at low levels, requiring the government to spend on subsidies to keep them down. From May, prices will fluctuate monthly. Future prices will be based on a formula that includes global levels, production and distribution costs within Qatar, and prices elsewhere in the region. Qatar’s state budget has been strained as low international oil and gas prices have slashed its export revenues, so it has been looking for ways to save money.

In January the government raised domestic prices of gasoline by 30%, but at 1.30 riyals ($0.357) per liter, the price of Super 97 Octane gasoline remained among the lowest in the world, encouraging a preference among drivers for huge sports utility vehicles. Other Gulf countries have implemented or are considering such a reform as low oil prices pressure their finances; the UAE moved to a similar formula for domestic fuel prices last year. (Reuters 26.04)

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5.6 UAE’s Non-Oil Foreign Trade Totals $424.7 Billion in 2015

The UAE’s non-oil total foreign trade volume reached about AED1.56 trillion ($424.7 billion) in 2015, according to official figures. Direct trade represented 68% of the total volume valued at AED1.06 trillion while free zone trade totaled AED497 billion, according to the Federal Customs Authority. Export volumes in 2015 had risen by 17%. The FCA data indicated that the share of imports of the UAE total foreign trade amounted to AED952.3 billion during 2015.

Native gold and semi-processed gold was the most common imported good during 2015, recording AED96 billion with a share value of 10% of the total imports. Mobile phones were ranked second followed by vehicles, non-composite diamonds and ornaments, jewelry and precious metals. Total UAE exports reached AED185.4 billion, with gold the most trading commodity, followed by ornaments and jewelry, cigarettes and ethylene polymers. (AB 23.04)

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5.7 Dubai Sees 5% Rise in Tourists to 4.1 Million in First Quarter

Dubai welcomed 4.1 million overnight visitors in the first three months of 2016, a 5.1% increase over the same period last year, according to figures released by Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism). The increase was backed by strong double digit growth from its top two proximity markets, the GCC and India, albeit the GCC continued to be the destination’s leading feeder region, delivering 25% of all overnight visitation to Dubai in Q1/16. Visitors from Saudi Arabia grew 14% to 476,000 from January to March in 2016, making it the number one source country, followed by strong growth from Oman, which increased by 32% over the same period in 2015 with 322,000 visitors. Kuwait, which remained in the top 10 with 119,000 visitors, and Qatar, which saw 26% spike in visitor volumes, rounded off the high performing regional traffic with strong contributions.

The subcontinent also remained a key driver of tourism volumes with India growing at 17% in the opening quarter to deliver 467,000 overnight visitors, making it the second largest feeder country, followed by Pakistan within the region, which swelled by 18% over the same period.

Despite challenging global market conditions, and a strong US dollar, visitors from Western Europe continued to be second largest source region with a 23% visitor share overall in the opening quarter of 2016. This was led by 10% year-on-year quarter growth from the UK, which remained Dubai’s third largest country contributor with 334,000 visitors. (AB 25.04)

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5.8 Dubai Launches $270 Million ‘Future Fund’ to Shape Growth

As part of a strategy to help shape the future of Dubai, Sheikh Mohammed launched an AED1 billion ($270 million) ‘Future Endowment Fund’ to invest in innovation, and a ‘Future Cities’ program to develop sectors deemed crucial in helping Dubai to become a ‘smart’ city, including energy, transport and infrastructure. More than 20 separate initiatives will be implemented over the coming years to improve the way Dubai functions as a city, WAM said. The Dubai Future Foundation, set up in 2015, will be responsible for implementing the strategy by coordinating action by public and private sector bodies. Since its inception last August, the foundation has forged partnerships with organizations such as UNESCO, the Mohammed bin Rashid Space Centre, the Shenzhen Foundation for International Cooperation and General Electric. It has also established the World Federation of Future Sports. (WAM 25.04)

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5.9 Switzerland is First to Officially Sign Up for Dubai Expo 2020

Switzerland has become the first country to officially sign up for the Dubai Expo 2020 mega event. The chairman of the Expo 2020 Dubai Higher Committee, made the announcement after meeting with Maya Tissafi, Switzerland’s Ambassador to the UAE. The Swiss Federal Council agreed to take part in Expo 2020 at a recent meeting which also agreed a budget for the Swiss Pavilion – which will be built on the Expo site – of $15.5 million. To be held between October 2020 and April 2021, Expo 2020 Dubai is expected to welcome more than 180 nations and an international audience of 25 million visitors. UAE officials are expecting the event to create 277,000 jobs, most of which will be in the tourism industry. (AB 19.04)

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5.10 Oman Presents New 20-Year Tourism Plan

Oman has unveiled a 20-year strategy to double visitor numbers to five million per year by 2040. The strategy hinges on developing the tourist spots of Musandam, the Hajar Mountains, the Frankincense Trail in Salalah, the city of Muscat and the surrounding deserts and making them “destinations in their own right”, the Oman Ministry of Tourism said. The development of these clusters would help Oman to attract visitors from one of the world’s fastest growing tourism segments, adventure tourism. The sultanate wants to grow the contribution of travel and tourism to more than 6% of annual GDP – it is currently estimated to account for around 2.5%. It plans to employ more than 500,000 people in the sector by 2040, 75% of which are to be Omani nationals in line with the sultanate’s Omanization policy. (AB 25.04)

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5.11 Saudi Prince Unveils Sweeping Reform Plan for Economy

Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman unveiled ambitious plans aimed at ending the kingdom’s “addiction” to oil and transforming it into a global investment power. His “Vision 2030” envisaged raising non-oil revenue to 600 billion riyals ($160 billion) by 2020 and 1 trillion riyals ($267 billion) by 2030 from 163.5 billion riyals ($43.6 billion) last year. But the plan gave few details on how this would be implemented, something that has bedeviled previous reforms.

Part of the plan includes selling shares of Saudi Aramco, to be valued at more than $2 trillion, ahead of the sale of less than 5% of it through an initial public offering (IPO). The prince added that the kingdom would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion). The plans also included changes that would alter the social structure of the ultra-conservative Muslim kingdom by pushing for women to have a bigger economic role and by offering improved status to resident expatriates.

His economic team has already announced efforts to curb wasteful government spending, to diversify revenue streams by introducing sales tax and privatizing state assets, and to make reforms in the education sector. But ambitious targets, such as raising the private sector share in the economy to 60% from 40%, reducing unemployment to 7.6% from 11% and growing non-oil income to 1 trillion riyals ($267 billion) from 163 billion riyals ($44 billion) were not explained further.

A green card system would also be launched within five years to enable expatriate Arabs and Muslims to live and work long-term in the country, Prince Mohammed said, in a major shift for the insular kingdom. (AB 26.04)

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►►North Africa

5.12 Israeli Industrialist Delegation Visits Egypt for First Time in 10 Years

A delegation of 38 Israeli captains of industry went to Egypt under the framework of the Qualifying Industrial Zones (QIZ) in late April for the first time in 10 years. The delegation was sent in an attempt to determine the viability of strengthening Israeli economic cooperation with Egypt. The industrialists were warmly welcomed by their Egyptian counterparts, who were enthusiastic about the prospect of enlarging the scope of trade between the two countries. A similar delegation of Egyptian industrialists is expected to visit Israel at the end of 2016.

Very little has been done to develop Israel–Egypt trade and economic relations over the past few years. Now, however, with renewed political stability in Egypt, the council decided to open once again to encourage the strengthening of ties between the two countries and to strengthen the interpersonal relationships between the two peoples.

Most of the industrialists who took part in the delegation work in textile, chemical, plastic, or packaging production, and were looking into the possibility of expanding exports of different products to Egypt.

Israeli exports to Egypt in 2015 amounted to $113.1 million, compared to $147.1 million in 2014. Meanwhile, Israeli imports from Egypt were $54.6 million in 2015 and $58.3 million in 2014. 2011 was the last year that trade between the two countries was at full strength, with Israel exporting $236 million worth of goods to Egypt and imports of $178.5 million. The drastic reduction in trade came about as a result of the Egyptian Revolution.

As well, the Central Bank of Egypt’s recently decided to allow the foreign exchange of shekels. It’s the first time that the bank has recognized Israeli currency, and even set an exchange rate: 2.19 Egyptian pounds to the shekel. (Ynet 22.04)

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5.13 UAE Allocates $4 Billion to Egypt to Support Cash Reserves

The United Arabic Emirates has allocated $4 billion to Egypt, half of it in investment and half as a central bank deposit to support cash reserves. This refers to a previously announced UAE offer to give Egypt $4 billion, which was made at a conference in Sharm El-Sheikh in 2015 along with pledges from other Gulf Arab states.

Egypt has struggled to spur economic growth since its 2011 uprising ushered in political instability that scared off tourists and foreign investors, key sources of foreign currency. Details of the UAE aid allocation came at the end of a visit of Abu Dhabi’s crown prince, Sheikh Mohammed bin Zayed al-Nahayan, to Egypt. He said the aid, authorized by UAE President Sheikh Khalifa bin Zayed al-Nahayan, showed the UAE was firm in its support for Egypt. The funds were aimed at promoting development in Egypt, which has a “pivotal role” in the region. Earlier this month Egypt and Saudi Arabia signed a pact to set up a $16 billion investment fund. At the Sharm El-Sheikh conference in March 2015, Kuwait and Saudi Arabia each also offered $4 billion to Egypt. (WAM 22.04)

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5.14 Egypt Builds Mega Project Named After Abu Dhabi Crown Prince

The foundation stone will be laid next month at a mega project in Egypt which is named after Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces. Construction of roads and utilities for the Sheikh Mohammed bin Zayed Residential Complex project will be completed within two years. The residential complex connects Cairo with the new administrative capital project. The new neighborhood includes financial, business and residential districts, science city, medical global city, and a smart village, in addition to an exhibition center, entertainment and service centers. It also has several restaurants as well as trails for bicycles and pedestrians. About 50 Egyptian construction companies with a total of 50,000 engineers, technicians and laborers are working at the mega project. (AB 23.04)

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5.15 China Wants to Sign a Free Trade Agreement with Morocco

China has proposed a free trade agreement with Morocco. The state-run press agency of the People’s Republic of China (PRC) said the two countries “are on track to conclude a series of strategic agreements covering the economy, trade and investments in Africa.” News of the proposal followed less than a week after King Mohammed VI gave a speech at the joint Gulf Cooperation Council (GCC) summit in Riyadh, during which he said Morocco was looking to “diversify” its economic and political relationships by seeking stronger partnerships with major Asian countries, such as China and India.

Morocco’s status as a net oil and gas importer has limited Chinese interest in the North African country in the past, though a 2013 study by U.S. researchers counted 36 Chinese projects in the kingdom between the years 2000 and 2012. Another factor mitigating bilateral relations could include Morocco’s strong ties to its European neighbors and the United States, most of who view China with suspicion. Things have changed in recent months, however, as Morocco looks to gain new allies in its territorial dispute with the separatist Polisario Front in the Western Sahara. Among other developments, the Bank of China opened its first Moroccan branch in Casablanca last month and the Moroccan royal family participated in New Year’s celebrations in Hong Kong this year. (MWN 25.04)

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5.16 Kuwait Grants $ 250 million Financial Assistance to Morocco

Following King Mohammed VI’s “strategic and security” tour of Gulf countries, Kuwait has accelerated the release of $250 million, the remaining sum of Kuwait’s assistance to Morocco. The $250 million released by Kuwait for the kingdom is one-fifth of the MAD 1.5 billion promised to Morocco and Jordan. On 3 May, Kuwait signed off on the payments to Morocco and Jordan just after the Morocco-GCC Summit in Riyadh, which gave birth to strategic partnerships between the Gulf countries and Morocco. The GCC extended an invitation to Jordan and Morocco to join the alliance during the GCC summit in Riyadh in May 2011. While Morocco doesn’t belong to the Gulf States or is a wealthy oil producer, the council offered the observer status for its leading role in the region and expertise in the fight against radicalism and the perceived Shia threat in the region.

On an economic level, the Morocco-GCC alliance also aims to ”help Africa benefit from the funding sources of the Gulf and the Moroccan expertise.” But analysts see this alliance as a predominately political one that creates a “shield” against the aims of Iran in the region following the accords between Iran and the United States on its nuclear program. The more than $120 billion that Morocco will receive from the Gulf countries over the next 10 year reflects the will of both parties to move forward in their economic partnership while taking advantage of their promising development prospects. Over the past few years, Morocco has signed collaborative partnerships with most of the GCC countries that cover economic development, counter-terrorism strategies and other points of mutual concern. (MWN 03.05)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkish Exports Fall by 2.8% in April

The value of Turkey’s exports dropped by 2.8% in April to $11.4 billion from the same period last year due to a decline in export prices, the Turkish Exporters’ Assembly (TIM) stated on 1 May. The country’s exports fell by 8.4% to $46.2 billion during the first four months of the year compared to the same period of 2015. The value of Turkey’s total exports over the last 12 months stood at $139.6 billion, down by 9.6% compared to the previous 12 months. Exports decreased in April after increasing for two straight months in February and March.

Meanwhile, Turkey’s foreign trade deficit decreased by 16.2 to $4.22 billion in April compared to the same month of 2015, according to temporary data from the Customs and Trade Ministry. The country’s deficit declined to $16.24 billion, by 19.96% in the first four months of the year compared to the same period of 2015, according to ministry data released on 2 May.

The automotive sector made the highest exports in April with exports worth over $2 billion, an increase of 11.5% compared with April 2015. Other champion export sectors were the ready-made textiles sector with $1.5 billion of exports, up 13.3% from April last year, followed by the chemical materials and products sector with exports of $1.22 billion, a decrease of 14.6%. Exports to the EU, Turkey’s main trading partner, increased by 5.1%, while Turkish exports to the Middle East decreased by 14% in April year-on-year. Exports to the Far East, including China and South Korea, increased by 11.1% in April. Germany, Italy, the U.S., the U.K. and Iraq were the largest export markets for Turkey in April. Exports to Germany increased by 3.8%, exports to Italy rose 12.7%, and exports to the U.S. rose by 11.9% in April. Exports to Iraq declined by 27.9% and exports to the U.K. declined by 1.3%. (AA 02.05)

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6.2 Turkey’s Tourism Revenue Drops 16.5% in First Quarter

Turkey’s tourism revenue decreased by 16.5% in the first quarter of the year compared to the same period of 2015 due to a significant decrease in the number of Russian tourists visiting the country and rising security concerns after a number of suicide attacks. During the first three months of 2016, tourism revenue decreased to $4.07 billion, according to data that was released by the Turkish Statistical Institute (TUIK) on 29 April. While 71.3% of the revenue came from foreign visitors, some 28.7% was obtained from citizens who reside abroad, the data showed. Tourism revenue was $31.5 billion in 2015 with an 8.3% decline compared to the previous year.

The number of foreign arrivals in Turkey declined approximately 13% in March to 1.65 million compared to the same month of 2015, the sharpest drop since October 2006, according to data from the Tourism Ministry. The number of foreign arrivals to Turkey declined by 10.3% to around 4 million in the first three months of the year compared to the same period of 2015, according to the ministry data. The number of arrivals from Russia saw a roughly 59% decline in the period in question.

According to official figures, the number of arrivals from Germany declined 17% in March compared to the same month of 2015. Meanwhile, the number of Japanese tourists dropped by 48% in the same period. (HDN 30.04)

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6.3 Turkey Gives Permission to Bank of China to Set Up Business

Deputy Prime Minister Mehmet Simsek announced in 3 May that Turkey’s banking watchdog has given Bank of China (BOC) permission to launch operations in Turkey. Noting that the bank first applied to the Banking Regulation and Supervision Agency (BDDK) in January for a Turkish banking license, Simsek said the BDDK decided to give the permission in its meeting on 2 May. Simsek noted that the headquarters of the lender will be in Istanbul, and the BDDK has expected it to start its operations in the next nine months. Simsek said the lender would help attract Chinese investments into Turkey and raise financing opportunities for the private sector. With the BOC entering the Turkish market, the number of Chinese lenders in Turkey will increase to two, as ICBC acquired a majority stake in Turkey’s Tekstilbank. The BDDK said early April that the lender had completed its application to receive the license in Turkey after submitting the required documents. (AA 03.05)

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6.4 Higher Greek Taxes Expected to Bring in €1.35 Billion of €1.8 Billion Shortfall

Hikes on taxes on a slew of consumer products and services that will be presented to Parliament for ratification shortly are expected to bring in €1.35 billion of the €1.8 billion shortfall seen in revenues. According to deal reached by the Greek government and international lenders, the hikes will include raising the top rate of value-added tax from 23% to 24% on many basic commodities, expected to bring €450 million into state coffers. Raises, however, are not expected on public utilities like water and electricity. Industries will also have to pay more for unleaded gas, natural gas and butane, as taxes are also raised on various imported products such as coffee, as well as on tobacco. Pay TV will also become more expensive for consumers, as also may internet or mobile phone services and hotel accommodation. The unified property tax, of ENFIA, is to be revised so as to place a bigger burden on the owners of multiple or large properties, while raises are also expected on the tax on bank checks, vehicle use and car imports. The new measures are calculated to bring in €900 million, in addition to the revenues from the higher VAT rate.

Savings, meanwhile, of around €350 million are to be made by preserving the rule of one hiring for every five departures in the civil service and freezing promotions in sectors of the public administration that are in a higher salary bracket. An additional €100 million will be cut from the defense budget to reach the overall target of €1.8 billion in revenues and savings the government needs to hit to satisfy creditor demands for a primary surplus of 3.5% of GDP in 2018, as outlined in the latest bailout deal. (eKathimerini 03.05)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Yom HaShoah – Holocaust Martyrs’ & Heroes’ Remembrance Day 2016

Israel will mark Holocaust Martyrs’ & Heroes’ Remembrance Day (Yom HaZikaron HaShoah ve-laGvura in Hebrew) beginning on Wednesday evening, 4 May and Thursday, 5 May. Holocaust Remembrance Day (Yom HaShoah) is a national day of mourning commemorating the six million Jews murdered in the Holocaust. It is a solemn day, usually beginning at sunset on Hebrew date of 26 Nisan and ending the following evening. The internationally recognized date comes from the Hebrew calendar and corresponds to the 27th day of Nisan on that calendar. It marks the anniversary of the 1943 Warsaw ghetto uprising.

Places of entertainment are closed and memorial ceremonies are held throughout the country. The central ceremonies, in the evening and the following morning, are held at Yad Vashem and are broadcast nationally on television. Marking the start of the day, in the presence of the President and the Prime Minister, dignitaries, survivors, children of survivors and their families, gather together with the general public to take part in the memorial ceremony at Yad Vashem in which six torches, each representing one million of the six million murdered Jews, are lit. The following morning at 10:00, the ceremony at Yad Vashem begins with the sounding of a siren for two minutes throughout the entire country. For the duration of the sounding, work is halted, people walking in the streets stop, cars pull off to the side of the road and everybody stands at silent attention in reverence to the victims of the Holocaust. Afterward, there is a central ceremony at Yad Vashem, while other sites of remembrance in Israel, such as the Ghetto Fighters’ Kibbutz and Kibbutz Yad Mordechai, also host memorial ceremonies, as do schools, military bases, municipalities and places of work. Throughout the day, both the television and radio broadcast programs about the Holocaust.

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7.2 Israel Commemorates Those Who Fell in Service to the Nation

Israel’s Memorial Day for Fallen Soldiers and Victims of Terrorism which will begin at sundown on 10 May, honors the soldiers who have fallen in the line of duty since 1860 (when modern-day Jews first lived outside of Jerusalem’s Old City walls). The Memorial Day begins with a minute-long siren sounded at 20:00h, followed immediately by official events. On the following day, a two-minute siren will be sounded at 11:00 as part of Memorial Day ceremonies across the country. For the duration of the sounding of both sirens, work is halted, people walking in the streets stop, cars pull off to the side of the road and everybody stands at silent attention in reverence to the fallen soldiers and victims of terrorism.

A small flag and a black ribbon will be laid on the graves of every soldier who died in the line of duty as an expression of respect and sympathy. More than a million people are expected to visit military cemeteries across the country. Though a regular work day, activity is usually curtailed and many leave their offices early to prepare for the Independence Day celebrations that follow. Both Memorial Day and Independence Day are observed one day earlier this year to prevent the desecration of the Sabbath.

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7.3 Israel’s Independence Day – 68 Years After Sovereignty was Regained

Celebrations for the 68th anniversary of Israel’s regaining its independence will begin on Wednesday evening, 11 May throughout the country, continuing throughout Thursday, 12 May. The official observance starts when the state flag is raised to full mast at a national ceremony on Mount Herzl in Jerusalem. Israel Independence Day is celebrated annually on 5 Iyar, which corresponds to 14 May 1948, the date the British mandate ended over the Land of Israel. A religious and national holiday, Yom Atzmaut – Independence Day is a celebration of the renewal of the Jewish state in the Land of Israel, the birthplace of the Jewish people. In this land, the Jewish people developed its distinctive religion and way of life. In the Land of Israel, the Jews preserved an unbroken physical presence, for centuries as a sovereign state, at other times under foreign domination. Throughout their long history, the yearning to return to the Land has been the focus of Jewish life. With the rebirth of the State of Israel, in 1948, Jewish independence, lost 1,879 years earlier, was restored.

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*REGIONAL:

7.4 Morocco’s Economic Council Calls for Decriminalization of Sex Outside Marriage

On 29 April, the Moroccan Economic, Social and Environmental Council discussed a new report about the conditions facing Moroccan women, drafting controversial recommendations that are likely to stir up debate. The council, presided by Nizar Baraka, former Minister of Economy, called for the decriminalization of sex outside marriage and raised the issue of equality in inheritance. The report included recommendations, such as a call for the abolition of Chapters 490 and 491 of the Criminal Code, which the report claims “discourage women from reporting rape cases.” Under Article 490 of the Moroccan penal code, couples can be imprisoned for having sexual relations outside marriage. The article states that “unmarried couples will be arrested only if the perpetrators confessed or if they were caught in the act of having intercourse.” Article 491 of Morocco’s penal code calls for a prison term of one to two years for adultery.

The Council also called for an “objective evaluation, through a quite national debate involving the parties concerned, of the various provisions and forms of application of the family code in controversial issues, in particular provisions relating to women’s right to inheritance, and enlisting the couples’ properties in a marriage contract.” (MWN 02.05)

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7.5 Oscar Wilde & the Oscars Cause Confusion in Turkish Parliament Commission Debate

Turkish lawmakers had the chance to debate Oscar Wilde during a constitutional commission meeting on 2 May, after several lawmakers did not know who the Irish writer was and had confused the Academy Awards, also known as the Oscars, with him. The discussion between the Peoples’ Democratic Party (HDP) and the ruling Justice and Development Party (AKP) deputies started when a HDP lawmaker wanted to quote Wilde as an example, but the AKP lawmakers didn’t know who Wilde was.

“Please nobody take it personally, but I want to quote Oscar Wilde,” said HDP deputy Prof. Mithat Sancar, who was received by confusion from AKP deputies. “Who is he?” asked AKP deputy Zeyid Aslan, to which Sancar replied by saying that Aslan should look up Wilde himself. “I can’t give you a lecture; we don’t have time but if someone needs it than we can rent a room and do a private session in the parliament,” Sancar said. After much debate, Sancar recited the quote anyway, relating it to the abandoned peace process over the Kurdish issue.

“I can oppose vulgar power, but I can’t stand vulgar reasoning. There are unjust things in vulgar reasoning. Vulgar reasoning aims below the belt,” Sancar stated, quoting Wilde. However, the debate left others still confused, as an AKP deputy later asked Sancar to talk about the award ceremony known as the Oscars. “It’s Oscar Wilde. He is not an award, he is a guy called ‘Oscar Wilde,’” an HDP deputy explained to the AKP lawmaker. (HDN 03.05)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 AV Medical Completes Study with Angioplasty Balloon Catheter Chameleon

AV Medical Technologies announced the culmination of a 30 patient study that evaluated the proprietary design of the Chameleon angioplasty balloon catheter. The Chameleon demonstrated clear advantages compared to standard balloon designs. Among these are reduced catheter exchanges and maintaining guidewire access during contrast injection through the catheter. In addition, the Chameleon design allows hands free reflux angiography, simplifying visualization of the entire AV graft circuit. The Chameleon balloon offers unique advantages over standard balloon catheters provided by their proprietary SuperVision feature.

SuperVision is a proximal injection technology enabling simultaneous catheter based interventions and contrast fluid injection for imaging in one device, eliminating multiple exchanges and maintaining guidewire access. This proprietary technology enhances performance by achieving superior targeted imaging and a smoother and more efficient procedure.

AV Medical Technologies is dedicated to the development of advanced and efficient solutions in catheter-based interventions. The company is now focusing on its flagship catheter, the Chameleon, targeted for dialysis patients undergoing routine angioplasty procedures. (AV Medical Technologies 21.04)

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8.2 Biocancell Therapeutics Raises $6 Million

Biocancell Therapeutics announced a $6 million financing round from US investors (apparently life sciences funds) for a third of its shares after the allocation. The company plans to enlarge its private placement to $15 – 20 million and to raise an additional $6 million through an issue of rights on the TASE, led by Clal Biotechnology Industries, which holds a 82.6% stake in Biocancell. The private placement will take place at a 22% premium on the current Biocancell market cap of NIS 39 million. Following the announcement, the Biocancell share jumped 11%. The company also intends to register for trading on the NASDAQ stock exchange and raise tens of millions of dollars there. Biocancell has two drugs based on the common ideal of combining a diphtheria toxin with a component that becomes attached to a receptor in cancer cells significantly more frequently than it becomes attached to a receptor in healthy cells. Once the component attaches itself to a cancer cell, it releases the toxin, thereby killing the cell.

The product for bladder cancer has successfully passed a Phase IIb trial, and is now being prepared for a Phase III trials. Two Phase III trials for two different types of bladder cancer will actually be conducted, depending on the next financing round.

Jerusalem‘s Biocancell Therapeutics is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapies to treat cancer-related diseases. Its most advanced product candidate, BC-819, is under development as a treatment for non-muscle-invasive bladder cancer (NMIBC). BC-819 will enter two Phase III confirmatory studies in the first half of 2016. BioCancell is also developing a second generation drug, BC-821 for the systemic treatment of advanced malignant neoplasms. (Various 02.05)

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8.3 Corsens Medical Files 510(k) Pre-Marketing Notification with FDA for Cardiac Monitor

Corsens Medical successfully completed filing of a Pre-Marketing Notification (510(k)) with the US FDA for its Corsens Cardiac Monitor1,2. The company is seeking the following indications statement for the Corsens Cardiac Monitor: “CORSENS records vibrational waveforms produced by the heart contractions and transmitted to the chest wall. CORSENS may be used as a tool to measure the timing of part of the events in the cardiac cycle.” The Corsens Cardiac Monitor is designed to detect cardiac contractility parameters via a series of acoustic, accelerometers and cardiac rhythm non-invasive sensors arrayed on the patient’s chest.

Corsens Medical, founded in October, 2013, is a development stage medical device company based in Tel Aviv. Their Corsens Cardiac Monitor is intended to participate in the global cardiac monitoring and cardiac rhythm management devices market which is expected to reach $12.5B by the end of 2020 growing at a CAGR of around 13.2% from 2014 to 20206. (Corsens Medical 02.05)

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8.4 Can-Fite Presents Data on CF602 for the Treatment of Erectile Dysfunction

Can-Fite BioPharma will present data at the American Urology Association’s Annual Meeting (AUA 2016), which will take place in San Diego, California on May 6-10, 2016. The presentation is entitled, “CF602 Improves Erectile Dysfunction in Diabetic Rats.” Can-Fite plans to file an Investigational New Drug (IND) application with the U.S. FDA for CF602 in the fourth quarter of 2016 and plans to initiate a Phase I trial following IND approval.

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 CF101 drug candidate is scheduled to enter Phase III trials in 2016 for two indications, rheumatoid arthritis and psoriasis. Can-Fite’s liver cancer drug CF102 is in Phase II trials for patients with liver cancer and is slated to enter Phase II for the treatment of non-alcoholic steatohepatitis (NASH). (Can-Fite BioPharma 02.05)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Israelis Take Second Place in Prestigious High School Robotics Contest

An Israeli high school team from Binyamina, near Haifa, came in second at the prestigious FIRST Robotics Competition in St. Louis, Missouri, held on 27-30 April. The final match was a showdown between the Orbit team of students from Binyamina’s Rothschild-HaShomron High School, and an American team. Although it ended in a 2:2 draw, the defending American champion won due to a technicality. FIRST, which stands for For Inspiration and Recognition of Science and Technology, brings together students from around the world for a sports-like tournament in which they pit their robots against one another in completing set tasks. The competition aims to turn students into the next generation of trailblazers, honing their technological and engineering skills and encouraging innovation, bolstering self-confidence, and improving communications skills and leadership qualities. Six Israeli teams participated in the competition although only two — the Binyamina team and BumbleB from Kfar Yona — managed to advance to the final stage. (IH 02.05)

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9.2 Arecont Vision Technology Partner Program Expands Wirelessly with Siklu

Los Angeles’ Arecont Vision, the industry leader in IP-based megapixel camera technology, announced that Siklu, a leading Israeli manufacturer of gigabit throughput wireless products, has joined the Arecont Vision Technology Partner Program. Siklu products are available in the Arecont Vision MegaLab as part of the agreement to enable pre-installation integration and new product testing. The Siklu gigabit throughput E-band (70/80 Ghz) and V-band (60 Ghz) radios are the market’s most cost-effective solutions for short-range wireless point-to-point links. They are based on more than 30 patents, and include the first SiGe E-band chip and other unique achievements. Siklu has sold thousands of radios worldwide to service providers, mobile operators, wireless security network operators, and enterprises. With 30% market share, Siklu firmly leads the millimeter wave radio market. Top operators have tested their radios rigorously, and they are now deployed in all climates, working smoothly even through monsoons and hurricanes.

Petah Tikva’s Siklu has been committed to reducing the cost of high capacity wireless backhaul solutions since 2008. The company’s success centers on an innovative silicon-based design of the E-band radio system and components that has resulted in systems priced as low as 20% of competition. The EtherHaul delivers Gigabit speeds over the uncongested millimetric wave spectrum and is ideal for a wide range of urban and metropolitan Ethernet wireless backhaul applications. (Arecont Vision 25.04)

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9.3 Enter Selects Mellanox Open Composable Networks to Power European Cloud

Mellanox Technologies announced that Enter, creator of Enter Cloud Suite (ECS), Europe’s first multi-regional OpenStack-based cloud, has selected Mellanox Open Composable Networks (OCN) as the Ethernet network fabric for its Infrastructure-as-a-Service cloud offering. Enter will deploy Mellanox Spectrum SN2700 switches with Cumulus Linux from Cumulus Networks, along with Mellanox ConnectX-4 Lx NICs and LinkX cables on its ECS. Enter has seen substantial performance, efficiency and flexibility gains that stem from Mellanox OCN’s open design, ready integration with OpenStack and Cumulus Linux, and advanced offload and acceleration capabilities such as SR-IOV, RDMA, and VXLAN Offload.

Enter has been a Mellanox customer using end-to-end 10/40Gb/s Ethernet solutions including SwitchX-2 SX1710 and SX1410 Open Ethernet switches, ConnectX-3 Pro NICs and Mellanox’s LinkX cables in production. As they build out their OpenStack cloud, they are increasingly adopting open software and expecting the open design concept will evolve in networking for Enter to enable a truly open platform, unleash innovation in cloud infrastructure, and stay clear of vendor lock-in. The Mellanox Open Composable Networks platform and its partnership with Cumulus Networks have realized Enter’s vision and principles for their open cloud design.

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9.4 Eutelsat Selects Gilat to Power Satellite Broadband Services in Western Russia

Eutelsat Communications, one of the world’s leading satellite operators, announced its selection of Gilat Satellite Networks to power a new range of broadband services in Western Russia. Eutelsat has selected Gilat’s SkyEdge II-c hub with X-Architecture and SkyEdge II-c small user terminals to deliver broadband services using the new Express AMU1/EUTELSAT 36C satellite. The hub will be installed at the Dubna satellite center operated by RSCC, near Moscow. The satellite’s High Throughput payload comprises 18 Ka-band beams delivering continuous coverage of Western Russia, from the Arctic coastline to the Caspian Sea.

Petah Tikva’s Gilat Satellite Networks is a leading provider of products and services for satellite-based broadband communications. Gilat develops and markets a wide range of high-performance satellite ground segment equipment and VSATs, with an increasing focus on the consumer and Ka-band market. In addition, Gilat enables mobile SOTM (Satellite-on-the-Move) solutions providing low-profile antennas, next generation solid-state power amplifiers and modems. Gilat also provides managed network and satellite-based services for rural telephony and internet access via its subsidiaries in Peru and Colombia. (Gilat 21.04)

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9.5 Elbit Systems to Supply Mobile Tactical Software Defined Radio Systems

Elbit Systems was awarded an approximately $20 million contract from a Western European country for the supply of tactical mobile radios, from the new and advanced E-LynX Software Defined Radios (SDR) family. The contract will be performed over a three-year period. The E-LynX radio solution offers reliable voice, data and video services simultaneously, along with integrated blue force tracking capabilities, both in narrow and wide band waveforms. Based on unique combat proven Mobile Ad- Hoc Networking (MANET) capabilities, the E-LynX solution is designed to serve as the mobile networking backbone for modern Battle Management Systems (BMS) and soldier systems.

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. (Elbit Systems 26.04)

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9.6 Argus and Check Point Selected as Finalist for 2016 TU-Automotive Award

Argus Cyber Security and Check Point Software Technologies announced that their integrated solution, Argus Intrusion Detection and Prevention System (IDPS) with Check Point Car Capsule, has been selected by TU-Automotive as a finalist for the Best 2016 Automotive Cyber Security Product/Service Award. TU-Automotive is the undisputed home of the connected car. The finalists were selected by a panel of high-level experts after evaluating over four hundred nominations based on innovation, industry engagement, user experience and market update. The finalists had a great impact over the last year and are setting the pace for the future of the automotive industry. This is the second consecutive year that Argus has been selected as a finalist by TU-Automotive.

The partnership and joint offering between Argus and Check Point prevents cyber-attacks on connected cars through a holistic solution that helps automakers stay one step ahead of cyber threats. The joint solution provides multi-layers of security against attacks by securing both in-vehicle and out-of-vehicle communication. By enabling real-time alerts, detection and prevention, an automaker or fleet manager can significantly reduce the risk associated with cyber-attacks on connected vehicles. The joint solution is readily available today and has already been demonstrated to prospective customers. It enables situational awareness on an intuitive dashboard, over-the-air (OTA) updates and operational threat intelligence.

Tel Aviv’s Argus is the global leader in automotive cyber security. Argus’ comprehensive and proven solution suite protects connected cars and commercial vehicles against cyber-attacks. With decades of experience in both cyber security and the automotive industry, Argus offers innovative security methods and proven computer networking know-how with a deep understanding of automotive best practices. Customers include car manufacturers, their Tier 1 suppliers and aftermarket connectivity providers. (Argus 26.04)

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9.7 Two Sapiens P&C Customers Receive Celent Model Insurer Awards

Sapiens International Corporation announced that its property and casualty clients, DirectAsia and L&T General Insurance Company (L&T Insurance), were both recognized at Celent Model Insurer Asia Summit 2016 event with “Model Insurer” awards. Celent, a leading research and advisory firm, annually recognizes excellence in insurance technology in Asia through its Model Insurer awards. Winners are chosen based on IT programs that epitomize best practices for insurance technology projects.

DirectAsia, a motor insurance specialist, was recognized in the “legacy and ecosystem transformation” category. The company created a common DirectAsia layer and specific local configurations across countries – Singapore, Thailand and Hong Kong – and transformed its customer-facing portals into responsive and platform-agnostic applications. Receiving the award in the “digital and omni-channel technologies” category, L&T Insurance – a health, motor and home insurance provider based in India – was chosen for its single, web-based portal that is integrated with L&T’s core policy administration system, Sapiens IDIT.

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9.8 LightCyber Wins Cybersecurity Excellence Award

LightCyber has earned the 2016 Cybersecurity Excellence Award as the best solution in the Intrusion Detection & Prevention awards category. The award recognizes that the ability to find an active attacker on a network is paramount to curtail a data breach and other even more damaging consequences. The LightCyber Magna platform was selected as the winner based on the content of its nomination as well as the votes from the Information Security Community and comments LightCyber received from customers and partners.

Magna uses behavioral profiling to learn what is normal on the network and endpoints, and thereby detect anomalous attacker behaviors that are by-necessity required to perpetrate a successful breach or conduct malevolent goals, including command and control, reconnaissance, lateral movement and data exfiltration. These behaviors can be identified early to reduce attacker dwell time and curtail the activity. At the same time, Magna can identify harmful activity from insiders – rogue or unaware employees or contractors – that is either intentionally malicious or unknowingly dangerous. Magna presents a small number of actionable alerts with supporting contextual and investigative details to greatly enhance the efficiency of a security operations team in its detection and remediation operations.

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9.9 CallVU Presents New Mobile Digital Engagement Platform for Financial Institutes

CallVU will showcase its flexible multichannel suite which addresses customers’ transformation to digital at Finovate Spring 2016, 10-11 May in San Jose, California. CallVU’s platform enables financial enterprises to improve digital engagement beyond the regular web and mobile users, and offers all callers a rich media customer journey. Financial institutions can improve service availability, ensure that a higher percentage of customers benefit from their digital content investment, reduce call volumes and enhance customer experience. CallVU was chosen by the event organizers to make a special presentation on how to revolutionize the customer journey. CallVU will demonstrate how banks, credit card and insurance companies can offer better customer experience, engagement and revenues, while utilizing new and existing web and mobile assets and reducing overall costs.

Tel Aviv’s CallVU has developed an innovative Mobile Digital Engagement platform, which combines rich digital and interactive media with the voice channel. CallVU delivers a highly engaging and collaborative customer experience and creates a new customer service channel for smartphone users. (CallVU 03.05)

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10: ISRAEL ECONOMIC STATISTICS

10.1 March Hotel Figures Show Israel’s Slow Tourism Recovery

Tourism to Israel has not fully recovered from the precipitous drop that followed the 2014 summer war with Hamas, according to new figures by the Central Bureau of Statistics. In the first three months of 2016, hotels sold roughly 705,000 nights to tourists, which represents only a 5% increase over the same period in 2015 (674,000), but still about 29% lower than 2014’s 993,000. Hotel occupancy rates, which fell from 63% in March, 2014 to 55% in March, 2015, rebounded to 58% nationwide last month. The most dramatic drops from 2014 were in Jerusalem (72% to 49%) and Nazareth (58% to 36%). In Tel Aviv, the effect was far less pronounced, with rates dropping from 73% to 67%.

Part of the reason that the tourism numbers were more dramatic than the occupancy rates is that internal Israeli tourism helped fill the gap. Internally, Israelis bought 917,000 hotel nights in the first three months of 2016, up 28% from the equivalent period in 2014. Though hotel operators have raised concerns that they would lose business to online person-to-person room rental apps, such as Air BB, the overall tourism numbers seem to reflect the same trends as the hotel stays.

According to a Central Bureau of Statistics report from earlier this month, overall tourism fell from 705,300 in the first three months of 2014, to 593,300 in the same period last year (a 16% drop), and only recovered to 596,500 this year (a 0.5% increase). On possible explanation for the tourism decline is the continued violence in the region. (CBS 03.05)

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11: IN DEPTH

11.1 MENA: Cheap Oil Means a New Reality for Middle East, North Africa Region

-Intense conflicts and low oil prices continue to weigh on the region’s economic prospects
-Oil exporters should focus on fiscal reforms and diversifying away from oil
-Higher growth expected in oil importers, but unemployment remains high

Growth in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region remains subdued owing to persistently low oil prices and deepening regional conflicts, said the IMF in its latest regional assessment.

The IMF’s Regional Economic Outlook Update for the Middle East and Central Asia, released on 25 April, projects that growth this year will be about 3%. Although slightly higher than in 2015 (see table), the modest pick-up largely reflects increased oil production in Iraq and post-sanctions Iran.

Growth in most other oil exporters, however, is projected to slow further this year as they tighten public spending in response to lower oil prices. The latest report has downgraded 2016’s growth projections in almost all MENAP oil exporters relative to the projections made last October.

Economic recovery among MENAP oil importers, meanwhile, remains fragile and uneven. Growth is projected to slow to 3.5% in 2016 because of adverse spillovers from slowing growth in oil-exporting neighbors and intensifying regional conflicts.

“Therefore, it is crucial that all countries step up their efforts to design and implement reforms to boost economic prospects, create jobs, and improve inclusiveness of growth, before they run out of time,” IMF Middle East and Central Asia Department Director Masood Ahmed said at the report’s launch in Dubai.

The cost of conflicts

Conflicts – particularly in Iraq, Libya, Syria and Yemen – continue to intensify, resulting in massive numbers of displaced people and severe economic damage. Since October 2015, more than 600,000 people have fled Syria alone, bringing the total number of Syrian refugees to almost five million. The mounting costs of conflicts have put enormous pressure on government budgets and infrastructure, driving up inflation and diverting resources away from much-needed social spending, the report mentioned. The conflicts are also having repercussions in neighboring countries, who are hosting large numbers of refugees, and tackling disruptions in trade and tourism, worsening security, and decreasing levels of investor confidence.

Ahmed emphasized that the international community needs to scale up and better coordinate its support to help refugees and stabilize the affected countries. “There are large financing needs, with host countries requiring additional financing on affordable terms to fund crisis-related projects,” he said.

Lost revenues for oil exporters

The second factor shaping the region’s outlook is the continued slump in oil prices. The oil-exporting countries enjoyed large fiscal and external surpluses and rapid economic growth in recent years because of booming oil prices. Since mid-2014, however, the persistent decline in oil prices has turned surpluses into deficits, slowing growth and raising concerns about unemployment.

“The fall in oil prices has led to large export revenue losses: a staggering $390 billion last year and the expectation of a further $140 billion this year,” Ahmed told reporters.

Many countries have taken significant steps to consolidate their budget positions, focusing mostly on capital expenditure cuts, but also on substantial energy price reforms.

However, for Algeria and the Gulf Cooperation Council (GCC), fiscal deficits are still expected to average 12¾% of GDP in 2016, and remain at 7% over the medium term. The deficit for other oil exporters in the region – those generally less reliant on oil revenue – is projected to be 7¾% of GDP in 2016 (see Chart 1).

Despite the concerted efforts to rein in deficits, “further and substantial deficit-reduction measures will be needed over a number of years to ensure that fiscal positions are sustainable and oil wealth is shared equitably with future generations,” Ahmed said. In many countries, there is room to cut public spending further, widen ongoing energy pricing reforms, and raise new revenues by designing broad-based tax systems, including value-added taxes. The GCC countries are already planning to introduce such taxes in the coming years.

The report suggests that countries need to reduce their dependence on oil and accelerate reforms to manage the new reality of low oil prices. Policymakers are encouraged to implement reforms to promote economic diversification and non-oil sector growth, such as reducing the public-private sector wage gap, and better aligning education and skills with the needs of the market.

“An equally important priority is to ensure that the private sector can create enough jobs for a young and growing population, a process that will require deep structural reforms to improve medium-term growth prospects,” Ahmed said.

Uneven and fragile growth for oil importers

The region’s oil importers saw a pickup in growth from 3% in 2011-14, to 3¾% in 2015. Growth is expected to remain around that level in 2016-17, based on the report’s assessment. Lower oil prices and improved confidence levels, owing to progress from recent reforms, have supported this recovery. However, security disruptions and adverse spillovers from regional conflicts and, more recently, lower remittances, trade, and financial assistance arising from the slowdown in the GCC, strain the outlook.

The effects of energy subsidy reforms, coupled with low oil prices, have helped to reduce government deficits to about 6½% of GDP in 2016 from a 2013 peak of 9½%. The report recommends additional fiscal consolidation measures—designed in a growth-friendly way—to put public debt on a sustainable path and preserve macroeconomic stability (see Chart 2). For some countries, greater exchange rate flexibility would support fiscal consolidation by helping them to absorb the impact of external shocks, and improve external positions by strengthening competitiveness.

Despite this mild economic recovery, “medium-term growth prospects of the oil-importing countries are still insufficient to address their long-standing problem of high unemployment,” Ahmed said. The region’s unemployment rate remains high at 10%, with youth unemployment reaching a staggering 25%.

In the report, the IMF encourages policymakers in these countries to step up structural reforms that strengthen the quality of education, improve the functioning of labor and financial markets, and increase trade openness to help boost economic growth and create jobs. (IMF 25.04)

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11.2 ISRAEL: Fitch Revises Israel’s Outlook to Positive; Affirms at ‘A’

On 21 April 2016, Fitch Ratings revised its Outlook on Israel’s Long-term foreign currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at ‘A’. Fitch has also affirmed the Long-term local currency IDR at ‘A+’, with a Stable Outlook. The issue ratings on Israel’s senior unsecured foreign- and local-currency bonds are affirmed at ‘A’ and ‘A+’ respectively. The Country Ceiling is affirmed at ‘AA-‘ and the Short-term foreign-currency IDR at ‘F1’.

Key Rating Drivers

The revision of the Outlook on the Long-term foreign currency IDR reflects the following key rating drivers:

Israel’s external finances continued to strengthen in 2015. The current account surplus expanded to 4.6% of GDP and the Bank of Israel’s (BoI) stock of foreign reserves climbed to $90.6b (10.9 months of current account payments). Israel’s net external creditor position improved to 43% of GDP in 2015 from 35.4% in 2014 and on a longer horizon from 27.4% in 2008 when Fitch last upgraded Israel’s IDRs. The net external creditor position is double the ‘A’ median and slightly above the ‘AA’ median. While the overall recent performance of exports of goods and services has been weak, Fitch expects the current account surplus to continue in 2016-17.

There has been a concerted improvement over a number of years in reducing the government debt to GDP ratio. This has been a policy priority for successive Israeli administrations, leading to a decline in the ratio to 64.9% at end-2015 from 74.6% at end-2007 and 95.2% at end-2003. Nevertheless, it remains above the peer median of 44.6%.

Israel’s IDRs and the Stable Outlook on the local currency IDR also reflect the following key rating drivers:

Fitch forecasts the central budget deficit to widen to 2.9% of GDP (equivalent to around 3.5% on international standard general government definition), from 2.1% in 2015, which was the smallest since 2008. The low deficit in 2015 narrowed on the back of robust revenue growth and because spending was constrained in the absence of a budget until mid-November. The 2016 budget target is above that specified in the prior fiscal rule and represents a loosening of fiscal policy. Fitch’s budget deficit projections imply the government debt-to-GDP ratio will broadly stabilize in 2016-17.

Although government debt-to-GDP remains above the peer median, Israel benefits from high financing flexibility. It has 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. The structure of debt is also favorable. Foreign currency debt-to-GDP, for example, has fallen to 8.7% in 2015 from 14% in 2008. The low level of foreign currency debt helps to explain why the Outlook on the local currency IDR has not been revised to Positive, as the agency envisages an equalization of the foreign and local currency IDRs in the event that the former is upgraded.

Israel’s ratings continue to be constrained by political and security risks, but its credit profile has shown resilience to periodic conflict and political shocks over an extended timeframe. Frequent yet uncoordinated attacks by young Palestinians have continued with varying intensity since September 2015. Although these do not currently amount to a third intifada, the attacks reflect the lack of progress towards peace between Israel and the Palestinians. The prospects for a realistic peace process remain bleak.

Although Israel’s borders are currently relatively quiet, conflicts with military groups in surrounding countries and territories flare up intermittently and can be damaging to economic activity. The ongoing war in Syria poses risks to Israel and to other neighboring countries that could impact Israel, although direct spillover has so far been negligible. The implementation of the nuclear deal between Iran and world powers will remain a concern for Israel.

Domestic politics can be turbulent, with coalition governments often not lasting their full term. No party in the coalition currently seems to have an incentive for the government to fall and precipitate new elections, but the coalition remains vulnerable given its one-seat majority. The next test for the government will be the 2017-18 budget process later this year.

Production at the Tamar gas field since 2013 has obviated the need for gas imports, thus benefiting the external finances. However, the development of the larger Leviathan field remains uncertain, following the Supreme Court’s decision in April 2016 not to approve the proposed gas framework. The project was not factored into Fitch forecasts, so delays do not affect our external and fiscal projections. If Leviathan does go ahead Israel could become a gas exporter in the medium term.

GDP growth has slowed in recent years. In 2012-15 annual growth averaged 2.8%, compared with 4.5% in 2004-11. The explanation for this relates to a number of factors, including slower growth in the working-age population, less productive additions to the labor force, sluggish world trade and competitiveness challenges. In response, the government is seeking to enact a number of structural reforms to improve efficiencies in some markets and the business environment overall as well as boosting labor market participation.

Inflation was negative in 2015 due to lower commodity prices, domestic currency strength and measures to stimulate greater competition. Fitch expects robust domestic demand and the dropping out of one-off factors to push inflation into the lower end of the BoI’s 1% – 3% target range in 2017.

Israel’s well-developed institutions and education system have led to a diverse and advanced economy. Human development and GDP per capita are well above the peer medians and the business environment promotes innovation, particularly among the high-tech sector. However, Doing Business indicators, as measured by the World Bank, have slipped below peers. The government also faces a number of socio-economic challenges in terms of income inequality and social integration.

Rating Sensitivities

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

-Sustained strength of the external balance sheet.
-Improvements in the business environment that support investment and growth.
-Further progress in reducing the government debt-to-GDP ratio.
-A sustained easing in political and security risks.

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

-A sustained deterioration of the government debt-to-GDP ratio.
-A serious worsening of political and security risks.
-A worsening of Israel’s external finances, for example due to a loss of export competitiveness.

Key Assumptions

Current regional conflicts and tensions are assumed to continue, but their impact on Israel is not expected to worsen materially. Fitch does not expect a military conflict between Israel and Iran.

Renewed conflict with Hamas in Gaza is possible, despite a serious degradation of the latter’s military capacity. The tolerance of the rating and Outlook depends on the economic and fiscal implications of any conflict. Fitch does not assume any breakthrough in the peace process with the Palestinians or a pro-longed serious deterioration in domestic security conditions. (Fitch 21.04)

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11.3 JORDAN: Outlook on Jordan Revised To Negative; ‘BB-/B’ Ratings Affirmed

On April 22, 2016, Standard & Poor’s Ratings Services revised its outlook on the long-term rating on the Hashemite Kingdom of Jordan to negative from stable. At the same time, we affirmed the long- and short-term foreign and local currency sovereign credit ratings at ‘BB-/B’.

Rationale

Jordan continues to face enormous pressures stemming from ongoing regional conflicts. We have revised downward our economic growth projections, and now expect wider current account deficits. Excluding lower government transfers to NEPCO, the national electricity provider, underlying fiscal performance has also deteriorated. According to 2015 census data, Jordan’s population has increased by about 45% since 2011, which is exerting huge expenditure pressures on government finances and has contributed to the high stock of government debt. Furthermore, we now expect slower regional growth, relating to lower oil prices, which in turn could slow financial flows into Jordan through lower foreign direct investment (FDI), remittances, and other transfers, therefore putting further upside pressure on debt. In our opinion, the government’s ability to respond to further shocks absent external support has become more tenuous. We continue to expect that external support for Jordan will remain strong, helping to offset these pressures.

Despite this deterioration, Jordan has managed to preserve relative macroeconomic stability through a period of intense pressure and numerous external shocks. Although slower than we previously expected, growth in 2015 was 2.4%, reflecting continued expansion in the finance, insurance, transport and communication sectors. The main contributor to slower growth was the closure of a major border with Iraq midway through 2015, to which Jordan exports 16% of total goods. However, political instability has continued to dent confidence and thereby reduce investment, despite the announcement of some major infrastructure investments in the energy sector. We expect that slower growth in regional oil-producing countries will likely reduce external demand and investment in Jordan, thereby lowering future growth expectations, despite an anticipated acceleration in 2016. From a domestic political perspective, we expect that tensions could rise in the run-up to elections at the end of 2016 or early 2017, particularly in light of continued high unemployment and strains posed by a vast surge in Jordan’s migrant population. Still, we expect broad policy continuity, in line with continued external support.

As anticipated, Jordan’s population increased significantly to 9.5 million in 2015 from an estimated 6.7 million in 2011, according to the 2015 census, which has reduced GDP per capita to just over $4,000 in 2016 (compared with our previous estimate of $5,400) and also reduces our measure of real GDP per capita trend growth.

According to the UNHCR, the UN refugee agency, about 630,000 Syrian refugees have registered in Jordan, of whom more than 100,000 are living in the large Zaatari refugee camp. Nevertheless, most estimates suggest that there is a much larger refugee population in Jordan generally, including a more recent flow of refugees from Iraq and Libya. This influx has weighed on public resources, particularly in terms of security, medical, and education costs. Although refugees can provide a boost to consumption, recent cuts to aid flows, including from the World Food Program, could start to weigh more heavily on Jordan’s public finances, particularly if conditions in camps deteriorate.

On a headline basis, Jordan’s fiscal performance showed an improvement over 2015, mainly because of lower transfers to NEPCO as lower oil prices kicked in and new LNG feedstock came online. However, if the impact of NEPCO is removed, then the 2015 fiscal deficit widened by over 1% of GDP in 2015 (to an estimated 3.5% of GDP), mainly reflecting lower-than-anticipated grants (from 17% of total revenue in 2014 to 13% in 2015). Tax revenues also fell short of expectations in line with lower growth and, conversely, lower oil-related tax receipts, given the reduction in prices. Expenditures reduced slightly, through a mix of capital expenditures and goods and services. However, expenditure pressures remain large and we do not expect that they will abate.

This restricts any scope for a reduction in imbalances over the forecast period aside from a further reduction in transfers to NEPCO (which has also benefitted from increasing electricity tariffs) and an increase in grants, which we expect to be augmented by $700 million per year for the next three years following an agreement under the Jordan Compact. Further substantial adjustments to underlying fiscal imbalances will likely be agreed upon in a new International Monetary Fund (IMF) program, which we expect will be announced over the next few months. We view the signature and implementation of related program criteria as pivotal for creditworthiness, given the large stock of government debt and associated servicing costs, and Jordan’s vulnerability to further shocks.

Before 2011, NEPCO imported about 400 million cubic meters a year of relatively cheap gas from Egypt and operated with small profits. Since the disruptions to supply that began in 2011, it has been running annual deficits of around 5% of GDP. Imports of Egyptian gas averaged only around 100 million cubic meters per year over 2012-2013, due to lower output and disruptions. Supplies from Egypt were further disrupted in 2014 and averaged only 30 million cubic meters. NEPCO borrowed to fund its purchase of costlier diesel fuel supplies over 2012-2013, with a sovereign guarantee. The government also subsidized the difference between NEPCO’s buying and selling price. In mid-2013, the government began directly paying NEPCO’s debt-servicing costs.

We include NEPCO’s debt as part of the general government debt stock, which we estimate will peak at close to 80% of GDP in 2016. At the central government level, however, gross debt is now estimated at 93% of GDP, the difference between the two explained by the social security sector’s holdings of government paper. On a net basis, we estimate general government debt at approximately 63% of GDP in 2016. We view this level of debt as a constraint to the implementation of supportive policy reform and vulnerability in the event of additional shocks.

Jordan’s external imbalance widened over 2015 despite a substantial price reduction in fuel imports. This is in part due to the closure of a key trade channel with Iraq, which offset these gains, in addition to a reduction in grants. We expect the latter will increase in 2016, but that unsupportive regional growth will mean a similar current account deficit over the forecast period 2016-2019. The main financing items remain foreign direct investment (FDI) and debt, although we see risks to the former in light of lower growth in the Gulf Cooperation Council (GCC). We note that high positive errors and omissions could well represent unreported FDI.

External financing needs remain high (above 100% of CARs) and include a high proportion of short-term debt related to financial institutions that contain a high proportion of nonresident deposits. While these have continued to increase, and we understand that they mainly relate to the Jordanian diaspora, we view a reversal as a potential risk. We also note that remittance flows could decline as a result of weaker growth in the Gulf, therefore exerting further pressure.

Previous reductions in dollarization have stopped. Meanwhile, the exchange rate peg to the U.S. dollar supports price stability, although it also limits the central bank’s room for policy maneuver. Deflation over 2015 mainly relates to lower fuel prices.

We expect international support for Jordan to remain strong. Regional instability has affected Syria and Iraq, and is increasingly affecting Lebanon. This has made Jordan one of the most stable countries in the region. We believe that maintaining this relative stability is an important foreign policy objective for the U.S. and the GCC, as seen in the level of grants from the U.S. and the $5 billion GCC Fund intended for project financing, as well as the U.S. guarantee of U.S.-dollar Eurobonds issued over 2013-2015. We view these commitments as an important rating strength.

Outlook

The negative outlook reflects our view that lower growth prospects over 2016 to 2019 may hamper Jordan’s efforts to reduce structural fiscal imbalances, thereby further increasing reliance on foreign support.

We could consider lowering the ratings if fiscal balances diverge significantly from our expectations, growth is lower than we currently expect, external and official funding becomes less forthcoming, or financing needs widen beyond the scope of available external assistance. We also consider that upcoming elections could pose a risk to relative domestic political stability, which could compound the above issues.

We could revise the outlook to stable if Jordan can successfully implement key political and structural economic reforms that support more sustainable economic growth and further ease fiscal and external vulnerabilities, for example, through the anticipated IMF program. We could also consider revising the outlook to stable should there be a significant improvement in the regional security environment, which could reduce the threat of further shocks. (S&P 22.04)

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11.4 SAUDI ARABIA: Saudi Arabia’s Challenging Plan to Shift From Oil

Simon Henderson wrote on 25 April in the Washington Institute that the success of Riyadh’s new economic policy will partly depend on changes in social and political attitudes, as well as greater transparency on legal and other issues.

In 1984, a British ambassador departing Saudi Arabia at the end of his tour wrote a “valedictory telegram” defining the kingdom in terms of three “I’s” — Islam, insularity and incompetence. Unsurprisingly, the telegram was promptly leaked. Islam is certainly still the country’s dominant feature, but the internet and social media mean that at least the younger generation is well aware of what is going on in the wider world, even if the population remains generally conservative and insular. As for incompetence, it is now less well hidden — most recently, the minister of water and electricity was fired on 23 April for poor performance.

Against this backdrop, Riyadh announced a new economic plan on 25 April called “Vision 2030.” Promptly approved by the Council of Ministers, the plan is the brainchild of Deputy Crown Prince Muhammad bin Salman (aka MbS), the thirty-year-old royal who is increasingly seen as representing the aspirations of the emerging generation. His campaign to implement Vision 2030 will be helped by the fact that he is regarded as the most powerful person in the kingdom – a consequence of being the favorite son of the ailing King Salman, even though his older cousin, Crown Prince Muhammad bin Nayef, is theoretically above him.

The main challenges, arguably, will be legal. Tantalizingly, MbS wants to attract foreign investment in the national oil company, Saudi Aramco, and build up the world’s largest sovereign wealth fund, valued at up to $3 trillion. But the business success of neighboring states such as Abu Dhabi, Dubai and Qatar is grounded in providing foreign investors with a system for resolving commercial disputes based on common law and foreign arbitration, rather than the Islamic law that dominates life in the kingdom.

Two political challenges loom as well. First, a key beneficiary of Vision 2030 will be the Saudi business and technocratic class, which thirsts for commercial opportunities. But the royal family has to balance the business elite’s influence against the power of the ulama, the clerical body that grants vital religious legitimacy to the House of Saud. Second, within the royal family, which traditionally works on consensus, MbS is believed to have less than total support. Some princes regard him as impetuous and inexperienced, and many are likely concerned that they will lose their privilege of securing favorable terms on business deals – a traditional way for royals to accrue wealth, but also a source of resentment among non-royals.

Economically, the plan seems contradictory in relying on partial privatization of Saudi Aramco to fund a shift away from oil dependency. The kingdom has more than 15% of the world’s proven oil reserves, second only to Venezuela, which has much higher production costs. As much as 70% of the Saudi economy is currently linked to oil.

To attract foreign investors, the kingdom will also need to be much more transparent about the information it releases. Official statistics are often limited and sometimes unbelievable. For example, government data indicates that two-thirds of the country’s 30 million residents are Saudi and one-third expatriate, but some experts believe the proportion is exactly the reverse, undermining the validity of Riyadh’s stated plans for housing and educational needs.

Fundamentally, Vision 2030 represents an opening up of Saudi Arabia – not only to foreign investment, but also to world opinion, much of which regards the kingdom’s ban on women driving, its public beheadings, its state-mandated floggings and other practices as reprehensible. Some of the potential investors Riyadh seems to covet most, particularly in the West, might be deterred by this problematic human rights record. These concerns also formed part of the conversation that President Obama had with King Salman, MbS and other senior princes during his visit to the kingdom recently, yet the royals countered by noting that such punishments are Islamic. The disagreement is a reminder that Saudi Arabia, home to Mecca and Medina, still sees itself as the leader of the Muslim world.

Vision 2030 represents a Saudi plan for economic leadership in a world where oil is no longer dominant. If it succeeds, it will also bring about much broader changes within the kingdom.

Simon Henderson is the Baker Fellow and director of the Gulf and Energy Policy Program at The Washington Institute. (TWI 25.04)

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11.5 LIBYA: Libyan Government, Parliament Enter Into Standoff

Mustafa Fetouri posted in Al-Monitor on 29 April that many Libya experts expected the arrival of Libya’s Government of National Accord (GNA) in Tripoli to trigger violence between militias supporting it and those opposing it, but nothing serious has yet occurred. The government, brokered by the United Nations and headed by Fayez al-Sarraj, has installed itself with minimum trouble. That said, since its establishment on 30 March, the GNA has been confined to temporary headquarters, an old naval base a few kilometers west of the capital, for security reasons.

The GNA is completely dependent on local, supportive militias for protection, such as the Tripoli Revolutionary Brigade (TRB). It helped to secure its arrival and provides security details for its headquarters. Hashim Bishr, a TRB leader, told Al-Monitor, “[We are] working within the Ministry of Interior, making sure that nothing serious happens and the capital remains safe.”

No single armed group or alliance has moved to establish itself as the dominant force in the capital, where security remains shaky and uncertain in terms of who controls what. The GNA’s strategy appears to be to gain as much political and bureaucratic support as possible before engaging the militias in the hope of integrating them into the armed and security forces. The good news is that no militia opposing the GNA has thus far shown any inclination to use force against it

Since its arrival, the GNA has gained the support of numerous municipal councils in western Libya as well as many district councils, the grassroots of political power, at least in the capital. The most serious political hurdle, however, remains the endorsement, through a vote of confidence, of the internationally recognized House of Representatives (HoR) in Tobruk, as required by the Libyan Political Agreement, signed 17 December, giving birth to the GNA.

The Speaker of the HoR, Agila Saleh, has consistently stressed that the parliament cannot vote on the government unless it presents itself to the deputies in Tobruk, a basic requirement in the democratic process. The GNA has, however, failed to do so, without explaining why. Its reluctance, it seems, stems from security-related fears and the situation its members might face in eastern Libya.

A high-ranking military source speaking on condition of anonymity confirmed to Al-Monitor that Gen. Khalifa Hifter fears that after the GNA gains full authority his official role as chief of staff of the Libyan National Army could be scraped, because many militias and Islamist political leaders in western Libya do not like him. The mufti of Libya, Sadiq al-Ghariani, has called for jihad against the army led by Hifter, but at the same time, refuses to accept the GNA. Hifter is unlikely to disappear anytime soon, however, given the popular and political support he enjoys, thanks to his recent gains on the ground in his fight against Islamist groups, particularly in Benghazi.

More than half of HoR deputies have voiced support for the GNA, but they have been unable to assemble a quorum. A two-thirds majority is needed for a vote of confidence to be legal and binding. Some people, including UN envoy Martin Kobler, blame Saleh for delaying the vote. This view is shared by the European Union, which has imposed sanctions, including a travel ban and assets freeze, on Saleh and other politicians — including Nouri Abusahmen, former speaker of the General National Congress (GNC) in Tripoli, along with GNC-affiliated, self-proclaimed prime minister, Khalifa al-Ghweil — for obstructing implementation of the political accord and thus obstructing the GNA from carrying out its duties. Abusahmen and Ghweil consider the GNA illegal, claiming that it does not represent the wishes of the Libyan people. Both men, however, lack international standing.

Meanwhile, the GNA has so far failed to translate the political support and endorsement of Western and regional powers into action. France, the United Kingdom, Germany, Spain and Italy expressed their support in strong terms when their foreign ministers visited Tripoli and met with GNA members on 16 April. They also promised financial and military support and made it clear that they would only deal with the GNA, ignoring any other party claiming to be the legitimate government.

Some Western ambassadors, including from France, the United Kingdom and Spain, have visited Tripoli for the first time since the summer of 2014, when war broke out between the GNC, backed by a coalition of Islamists, and Zintan militias, forcing them out of the capital.

Thus, the political and security wrangling continues as the daily lives of Libyans become even more difficult, stemming from the banking system’s lack of liquidity, skyrocketing prices and lack of security. Cash withdrawals from banks are limited to no more than 500 Libyan dinars (approximately $366), which doesn’t last long for a middle-class family averaging five persons. The only cheap thing these days is gas and local phone calls.

This setting, with the government in Tripoli being far from safe, to the extent that it is operating from an old naval base, demonstrates how dangerous it is to go to the official government building, less than 10 kilometers (6 miles) away. The Islamic State (IS) is one of the serious sources of danger. After taking control of Sirte, IS has imposed horrific punishments on anyone daring to oppose it and has forced thousands to flee their homes, helping create nearly half a million internally displaced Libyans and more than a million emigrants.

Stemming the surge of migrants making the dangerous trip across the Mediterranean to Italy is another complex issue the GNA must attend to satisfy its Western backers. The number of people making the journey is set to rise given increasingly calm seas and restrictions on the Turkish-Greek route.

The GNA faces a multitude of urgent problems with very little means to solve any of them, thus adding to Libya’s already combustible status as a country ungovernable for the last five years. (Al-Monitor 29.04)

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11.6 MOROCCO: Fitch Affirms Morocco at ‘BBB-‘; Outlook Stable

On 22 April 2016, Fitch Ratings affirmed Morocco’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘BBB-‘ and ‘BBB’ respectively. The Outlooks are Stable. The issue ratings on Morocco’s senior unsecured foreign- and local-currency bonds are also affirmed at ‘BBB-‘ and ‘BBB’ respectively. The Country Ceiling is affirmed at ‘BBB’ and the Short-term foreign-currency IDR at ‘F3’.

Key Rating Drivers

Morocco’s ratings balance macro stability and neutral public and external finance indicators relative to ‘BBB-‘ rated peers, with weak structural indicators (including development and governance).

The IDRs reflect the following key rating drivers:

External vulnerabilities have receded over the past two years, primarily as a result of the sharp drop in oil prices and, to a lesser extent, the development of new export industries. The current account deficit narrowed to 1.9% of GDP in 2015, from 5.7% in 2014, and net external debt declined for the first time since 2007, to 24.8% of current account receipts, aligning most external finance indicators with ‘BBB’ medians. We expect the sovereign to remain a net external creditor.

Risks to external finances from swings in international oil prices and spillover effects of terrorism in the region on tourism receipts will likely remain but Morocco benefits from a number of buffers. These include strengthened international reserves (which covered more than six months of current account payments at end-2015), rising FDI prospects and a $5b precautionary line from the IMF. The expected gradual liberalization of the exchange rate would also support the country’s ability to adjust to external shocks.

Fiscal consolidation and reforms implemented since 2013 have gradually helped bring public finance indicators in line with ‘BBB’ medians. The removal of energy subsidies caused the central government budget deficit to shrink to 4.3% of GDP in 2015 from 5% in 2014 and the government’s fiscal deficit target of 3.5% for 2016 is credible in light of the expected rise in disbursed grants from Gulf Cooperation Council countries. The full implementation of the Organic Budget Law will help strengthen the budget’s framework, limiting net new borrowing to investment spending.

General government debt remains higher than peers, at an estimated 49.1% of GDP at end-2015 (BBB median: 42.2%), although it stabilized in 2015 after six years of increases (2008: 32.1%) and Fitch expects it to decline from 2016. Its structure is favorable, with a lower interest rate burden and a smaller share of foreign currency debt than the ‘BBB’ medians.

Real GDP grew 4.5% in 2015, largely due to an exceptionally strong agricultural season. Fitch expects real GDP growth to fall below 2% in 2016, as a result of falling agricultural output and moderate non-agricultural growth. Traditional growth engines (including construction, tourism, and textiles) are affected by slow growth in the EU and the impact of regional insecurity on tourism arrivals, while emerging industries, such as cars and aeronautics, continue to play a limited role in the country’s real GDP growth. Average GDP growth over the past five years is, however, in line with peers, while volatility of inflation and real effective exchange rate is lower than the ‘BBB’ medians.

Political stability is better than regional peers, though below ‘BBB’-rated peers according to the World Bank measure. We expect legislative elections in October 2016 to run smoothly. Exposure to financial shocks is also moderate, with a developed and financially sound banking sector. However, Fitch considers that structural features are weaker than peers with GDP per capita at less than half of the ‘BBB’ category and World Bank governance indicators also substantially lower than the ‘BBB’ median. The ease of doing business indicator also ranks below peers.

Rating Sensitivities

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the rating are currently balanced. The main factors that may, individually or collectively, lead to positive rating action are as follows:

-Continued fiscal consolidation and reduction in the general government debt-to-GDP ratio
-Evidence of a structural improvement in the current account consistent with declining net external debt-to-GDP ratio
-Over the medium term, increase in per capita income level and an improvement in social indicators

The main factors that may, individually or collectively, lead to negative rating action are as follows:

-A widening of current account deficit and an increase in net external debt/GDP
-A widening of the budget deficit and an increase in general government debt
-Weakening of medium-term growth prospects
-Political and social instability affecting macroeconomic performance

Key Assumptions

Fitch assumes that Brent crude prices will average USD35 and USD45 per barrel in 2016 and 2017 respectively.

Fitch assumes that the Eurozone economies will grow 1.5% in 2016 and 1.6% in 2017 in real terms. (Fitch 22.04)

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11.7 CYPRUS: Fitch Affirms Cyprus at ‘B+’; Outlook Positive

On 22 April 2016, Fitch Ratings affirmed Cyprus’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘B+’. The Outlooks are Positive. The issue ratings on Cyprus’s senior unsecured foreign and local currency bonds have also been affirmed at ‘B+’. The Country Ceiling is affirmed at ‘BB+’ and the Short-term foreign currency IDR at ‘B’.

Key Rating Drivers

Cyprus is undergoing a major financial sector, fiscal and economic adjustment following the 2013 banking sector crisis and the ensuing EU/IMF bail-out program. The country’s early exit from the macroeconomic adjustment program in March 2016 reflects a track record of fiscal consolidation, progress in financial sector restructuring and economic recovery.

A number of factors, however, continue to weigh heavily on Cyprus’s credit profile. At close to 109% of GDP in 2015, gross general government debt (GGGD) is more than twice the ‘B’ median, reducing Cyprus’s fiscal scope to absorb domestic or external shocks. With assets at 4x GDP, the banking sector’s exceptionally weak asset quality undermines economic stability and growth. The country’s weak external position implies that further economic rebalancing may be in prospect over the medium term.

Economic recovery is underway. GDP grew 1.6% in 2015, following three years of contraction resulting in a cumulative 11% loss of output until end-2014. Fitch projects GDP growth of around 2% per year for 2016-17, supported by household consumption benefitting from a decline in unemployment, and a pickup in tourism and investment.

Banks remain fundamentally weak and pose an ongoing risk to the economy and public finances. The ratio of consolidated sector NPEs (non-performing exposures) to total loans stood at 45% in December 2015, one of the highest of Fitch-rated sovereigns, though down from a peak of over 50% in 2014. Unreserved problem loans, represented by gross NPEs minus system-wide reserves, stood at €16.9b (97% of GDP) at end-2015, compared with total bank capital of €6.6b.

Major steps have been taken to restructure the banking sector. The new regulatory framework put in place since 2015 has enhanced the restructuring toolkit and contributed to a rise in restructurings, albeit from a low level. However, some 30% of restructured loans since January 2014 were in arrears (including of short duration) by end-2015. Progress is ongoing in bank supervision, both through the central bank and the EU Single Resolution Board, in full effect from January 2016.

The economic recovery is also translating into improved sector capitalization and liquidity. In a sign of increased confidence, the central bank has reduced its dependence on emergency liquidity assistance, to EUR3.4b in February 2016 from over €11b in 2013. Deposits have been broadly stable since capital flow restrictions were lifted in April 2015.

Fiscal policy management has been strong, with the government continuing to over-achieve fiscal targets. Cyprus delivered a general government deficit of 0.5% of GDP for 2015, after a deficit of 0.2% in 2014. Fitch projects budget surpluses of 0.2% and 1% of GDP for 2016 and 2017, respectively, reflecting a neutral fiscal stance that is supported by the economic recovery. GGGD peaked at 108.9% of GDP in 2015, and is projected by Fitch to decline to below 100% by 2017. Debt-management operations and cash buffers, which at around 5.5% of GDP fully cover 2016 financing needs, reduce refinancing risks.

At 128% of GDP in 2015, Cyprus’s net external debt (NXD) is the third-highest of Fitch-rated sovereigns, reflecting a highly indebted private sector and the capital-intensive nature of the shipping industry. The current account position improved in 2015, albeit still a deficit of 3.6% of GDP in 2015.

Progress has been made with structural reforms, including selling the Limassol port and Casino. However, a number of bills are currently awaiting discussion in parliament following the May elections. The improved economy and exit from the adjustment program could reduce the urgency for reform.

Negotiations for a reunification deal between Greek and Turkish Cypriots are underway. The likelihood of success and the terms of a potential deal remain uncertain. A deal would benefit both sides in the long term by boosting the Cypriot economy, giving the Greek side access to Turkey, and the Turkish side greater access to the rest of the world, but would likely entail short-term cost and uncertainties.

Rating Sensitivities

Future developments that may, individually or collectively, lead to an upgrade include:

-Further signs of a stabilization in the banking sector, including a pick-up in loan restructurings
-Further track record of economic recovery and reduction in private sector indebtedness
-Continued fiscal adjustment leading to a decline in the government debt-to-GDP ratio
-Narrowing of the current account deficit and reduction in external indebtedness
-A sustained track record of market access at affordable rates

Future developments that may, individually or collectively, lead to a negative rating action:

-Re-intensification of the banking crisis in Cyprus
-A reversal of fiscal discipline, resulting in a less favorable trajectory in debt-to-GDP
-A return to recession or deflation with adverse consequences for public debt
-A lack of market access, putting pressure on government and banking system liquidity

Key Assumptions

In its debt sensitivity analysis, Fitch assumes a primary surplus averaging around 2% of GDP, trend real GDP growth averaging 1.9%, an average effective interest rate of 3.6% and GDP deflator inflation of 1.3%. On the basis of these assumptions, the debt-to-GDP ratio would fall steadily to around 85% by 2025.

Debt-reducing operations such as privatization (€1.4b by 2018) are not incorporated in Fitch debt dynamics. Our projections also do not include the impact on GDP growth of potential gas reserves off the southern shores of Cyprus.

According to ECB rules, which exclude speculative-grade rated borrowers from the ECB scheme unless a bailout-related waiver is in place, Cyprus is no longer eligible for QE support. Fitch assumes that Cyprus will not need QE support to tap markets, although that could be more challenging in the event of shocks or less favorable market conditions.

Fitch’s base case is for Greece to remain a member of the Eurozone, though it recognizes that a resurfacing of ‘Grexit’ fears is a risk. Cyprus is exposed to Greece mainly via confidence effects, as its financial ties have been reduced significantly. Banks no longer hold Greek government bonds and are no longer exposed to the Greek private sector. The subsidiaries of the big four Greek banks in Cyprus have also been ring-fenced. (Fitch 22.04)

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Fortnightly, 18 May 2016

May 17, 2016, 7:00 pm

≫ Next: ONTARIO VISITS ISRAEL – BIG TIME

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18 May 2016
10 Iyar 5776
11 Shaban 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 PM Netanyahu & Finance Minister Agree On Two-Year Budget
1.2 Israel Military Industries Privatization to Proceed

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Ontario Delegation Visits Israel
2.2  Zooz Closes $24 Million Investment Round
2.3  Simplee Raises $20 Million from Social Capital and American Express Ventures
2.4  OurCrowd Releases New Social Investor App At Finovate Spring 2016
2.5  E8 Storage Raises $12 Million Series B to Create a New Standard for Storage
2.6  Avanan Raises $14.9 Million Series A Financing Round
2.7  illusive networks Raises $3 Million
2.8  HP Launches Investment Arm in US & Israel

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Cubic Showcases Integrated Solutions at SOFEX 2016
3.2  Oshkosh Defense Showcases Highly Transportable JLTV at SOFEX
3.3  Omeros Exclusive Middle East Distribution Agreement for OMIDRIA
3.4  UAE Cities Named Among World’s Fastest Growing Retail Markets
3.5  Do it Best Corp Plans Debut & Expansion in Saudi Arabia

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Renewable Sources to Constitute 20% of Jordan’s Energy Mix in 2020

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Balance of Payments Deficit $644.2 Million in First Quarter
5.2  Lebanon’s Number of Registered Cars Improved 4.29% by April
5.3  Figures Show Slight Decline in Jordan’s Inflation Rate
5.4  Jordan Ranks First Among Arab Countries in Open Budget Index
5.5  Jordan to Acquire Raytheon’s TOW Missiles

♦♦Arabian Gulf

5.6  GCC Faces Teacher Shortage as Student Numbers Grow
5.7  Qatar’s Population Climbs 9% to 2.5 Million
5.8  Qatar’s HMC Said to Open Seven New Hospitals by 2018
5.9  IMF Says Oman’s Growth to Slow Further Despite $4.5 Billion Savings
5.10  Oman to Build Six Water & Electricity Projects By 2019
5.11  Saudi’s King Salman Replaces Oil Minister Ali Al-Naimi in Cabinet Shuffle

♦♦North Africa

5.12  Egypt’s Urban Consumer Inflation Hits 10.3% in April
5.13  Egypt’s Jobless Rate Falls To 12.7% in First Quarter of 2016
5.14  Ministry Says Egypt to Launch 4G Mobile Network in 2 Months

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Ankara Vows to Maintain Fiscal Discipline After Budget Posts Surplus in April
6.2  Greek Deflation Persists For Another Month
6.3  Athens to Vote on Multi-Bill of Remaining Bailout Measures

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1 Israel’s Jewish Population Numbers Over 6,000,000 Seven Decades After the Holocaust
7.2 Israel’s Population Passes 8.5 Million Mark

♦♦REGIONAL:

7.3 Jordanian Independence Day
7.4 Turkey Marks Ataturk Day on 19 May

8: ISRAEL LIFE SCIENCE NEWS

8.1  Israeli App Uses IDF Technology to Detect Skin Cancer
8.2  Pluristem Awarded $3.3 Million Grant by Israeli Government
8.3  MarginProbe Preserves More Breast Tissue & Reduces Need for Additional Surgery
8.4  Kitov Reports KIT-302 Study Successfully Meets U.S. FDA Standards
8.5  Chief Scientist Approves $13.7M for Kadimastem in 2016
8.6  Evogene & Marrone Bio Disclose Positive Results in Insect Control Collaboration
8.7  BioLineRx & MaRS Innovation Sign Framework Collaboration Agreement
8.8  Arkin Holdings & Primera Capital Lead Investment in BioSight for Leukemia
8.9  Lycored’s Cardiomato Named Winner at 2016 NutraIngredients Awards
8.10  ReWalk Collaboration with Harvard University’s Wyss Institute Announced

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 CallVU’s New Mobile Digital Engagement Platform for Financial Institutes
9.2  WhiteSource/Checkmarx Testing Solution for Proprietary & Open Source Code
9.3  Asiasoft Solutions & Stratoscale to Bring Cloud Capabilities to the Data Center
9.4  Utab’s Algorithm Enhances Music Information Retrieval
9.5  Silicom Awarded Design Win from Tier-1 Network Monitoring Player
9.6  Earnix Version 8 to Introduce R Integration and Machine Learning Capabilities
9.7  New mobiliBuy App Ushers in Shopping at the “Speed of Selfies”
9.8  RADWIN Boosts Capacity for Public Safety and Video Surveillance
9.9  SECDO Named a 2016 Gartner “Cool Vendor” in Security for Technology
9.10  2breathe Unveils First Smart Device to Induce Sleep
9.11  Magal Wins $10 Million in Orders to Secure Critical Power Utility Sites
9.12  Stratasys Launches Bold 3D Printing Software Strategy – GrabCAD Print
9.13  MinuteLab Raises $2 Million from Glilot Capital Partners
9.14  Saguna Networks Named a “Cool Vendor” in Report by Gartner
9.15  CellMining Selected as a “Cool Vendor” by Gartner

10: ISRAEL ECONOMIC STATISTICS

10.1  CPI Rises by 0.4% in April
10.2  Israel Economy Grows 0.8% in First Quarter
10.3  Israel’s Exports Fall by 22% During 2016

11: IN DEPTH

11.1  ISRAEL: Taub Center Says Israeli Wages Static for Fifteen Years
11.2  JORDAN: Changes to Jordan’s Constitution Raise Concerns
11.3  UAE: Truck Market Sales Set to Grow at 8% CAGR till 2021
11.4  LIBYA: The Story Behind the General Who Will Likely Shape Libya’s Future
11.5  TUNISIA: Is Homophobia at All-Time High in Tunisia?
11.6  EGYPT: Arab Republic of Egypt Outlook Revised To Negative; ‘B-/B’ Ratings Affirmed
11.7  TURKEY: Outlook Revised To Stable; ‘BB+/B’ Ratings Affirmed
11.8  TURKEY: TURKEY: Erdogan’s Secret Economic Weapon
11.9  TURKEY: Erdogan After Davutoglu
11.10  TURKEY: Turkish Military Faces Secularism Test

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 PM Netanyahu & Finance Minister Agree On Two-Year Budget

On 8 May, a two-year budget for Israel in 2017-2018 was finally agreed in a second meeting in Jerusalem between Prime Minister Netanyahu and Minister of Finance Kahlon. Kahlon, who initially objected to a two-year budget, accepted after he was promised that the 2018 budget could be changed in November 2017, leaving direction of Israeli economic policy in his hands. The Governor of the Bank of Israel reiterated her position at the meeting that she did not oppose a two-year budget, provided that measures were taken to ensure its durability in the face of unexpected events.

Representatives of the budget department reiterated their opposition to a two-year budget, due to the difficulty in predicting revenue a year in advance. It was also argued that the government’s ability to make spending decisions will be even more limited than in the past, due to the use of the numerator – a restraining mechanism, which on the one hand prevents the government from assuming uncovered liabilities, while on the other hand reduces flexibility in budgetary decision-making when there is an urgent need, for example a security or economic crisis.

It was agreed at the meeting to establish an assessment and control mechanism at the end of 2017 that would facilitate changes in the event of a deviation from the revenue forecast. Definition of the mechanism’s authority will be formulated in the coming days by joint Ministry of Finance-Prime Minister’s Office work teams. (Globes 08.05)

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1.2 Israel Military Industries Privatization to Proceed

The Government Companies Authority will order a third valuation and ask the Antitrust Authority to explore the potential sale to Elbit. The Ministry of Finance and the Government Companies Authority will continue the process of privatizing Israel Military Industries, now known as IMI Systems, and will order another valuation of the company. Elbit is the only company left in the bidding for IMI. In addition, the Government Companies Authority will ask the Antitrust Authority to explore the consequences of Elbit acquiring IMI. In the past, sources involved in the matter warned of the effect the purchase would have on the domestic defense market the creation of a new monopoly. (Globes 08.05)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Ontario Delegation Visits Israel

The Premier of Ontario, Kathleen Wynne, arrived in Israel at the head of a delegation of over 130 Canadian politicians and business leaders on 15 May. Included in the delegation is Ontario Minister of Health and Long-Term Care Eric Hoskins and Ontario Minister of and Development Reza Moridi, amongst others. Ontario is the most populous province in Canada, and is also home to Toronto, the most populous city in Canada. Ten of the world’s largest tech companies have their research and development centers in the province, and the information technology sector provides over 250,000 jobs. Ontario is represented in Israel by Atid, EDI, who coordinated important aspects of the Premier’s visit.

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2.2 Zooz Closes $24 Million Investment Round

Zooz closed a $24 million new funding round, led by Target Global Ventures, and included Fang Fund, iAngels, Kreos Capital and existing investors Blumberg Capital, lool ventures, Rhodium, Claltech (Access Industries’ Israeli tech vehicle), XSeed Capital, CampOne Ventures and angel Eilon Tirosh. Zooz will use the funding to accelerate its growth, develop new products, open new markets, and increase its presence in existing markets. Zooz has grown considerably since its last round in July 2014 and has opened offices in London, Berlin and San Francisco. The new funding will help the company to continue building its global customer base, enhancing and evolving its products which serve some of the world’s leading companies.

In today’s age of global commerce, relying on a single payments provider can lead to high international credit card fees and decline rates. However, integrating with multiple solutions has always been difficult, expensive and time-consuming. The Zooz platform overcomes these obstacles by connecting merchants to multiple financial and technological entities and payment methods, and Smart Routing each payment to the most appropriate provider for that transaction. Zooz’s merchant customers also benefit from its Insights offering, which provides intelligent analysis based on customer transactional data.

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2.3 Simplee Raises $20 Million from Social Capital and American Express Ventures

Social Capital and American Express Ventures backed Simplee, a startup that aims to facilitate medical bill payments, in its latest $20 million funding round. Simplee says it works with over 900 hospitals and physicians and helps process “over $1 billion in annual payments” in the U.S. 83North and Heritage Group also participated in the investment, which including its seed round brings funding up to at least $37.8 million for Simplee.

Tel Aviv’s Simplee is helping healthcare providers engage with the 21st century patient on financial matters. Founded in 2010, their mission is to make healthcare consumer friendly. They offer providers a financial engagement platform that engages patients with a unified experience across the healthcare journey. From pre-service to billing to financing, the company focuses on building rapid trust and paving a path to payment (ultimately loyalty). Their customers enjoy higher patient satisfaction, lower costs and better payment success. (Simplee 10.05)

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2.4 OurCrowd Releases New Social Investor App at Finovate Spring 2016

OurCrowd announced a significant expansion of its leading global equity crowdfunding platform with its new social investor app at FinovateSpring 2016 in San Jose, with a demo alongside some of the world’s top Fintech startups. OurCrowd’s new app gives investors the ability to make informed investment decisions ranging from $10,000 to $10M right from their mobile phone. Private deal rooms will harness the power of the crowd, providing access to OurCrowd’s 12,000-strong (and growing) member community to collaborate and receive input on investments from friends and experts in their social networks.

Jerusalem’s OurCrowd is a leading equity crowdfunding platform for investors from around the world to invest in global startups. OurCrowd vets and selects opportunities, invests its own capital, and brings companies to its accredited membership of global investors. OurCrowd provides post-investment support to its portfolio companies, assigning industry experts as mentors and in some cases takes board seats. OurCrowd has raised over $220 million for its 100 portfolio companies, generating six exits in three years. (OurCrowd 11.05)

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2.5 E8 Storage Raises $12 Million Series B to Create a New Standard for Storage

E8 Storage announced a $12 million Series B financing round led by Accel, with participation from existing investors Magma Venture Partners and Vertex Ventures. The investment will help the company to launch its next-generation flash storage with a rack-scale architecture for the enterprise and software-defined cloud.

As new generations of high-performance enterprise applications come to market, businesses are trying to find ways to improve the performance and latency of their data centers. This has led to the introduction of NVMe (Non-Volatile Memory Express), a new standard of flash storage which is significantly faster than previous generations of flash storage. NVMe has the potential to unlock massive performance improvements and enable a new generation of applications to emerge. However, existing flash array architectures were not designed with NVMe devices in mind. Because of this, enterprises are missing out on NVMe’s huge potential to make high-performance applications run much cheaper and faster.

As the first shared, software-defined NVMe solution in the industry, E8 Storage’s rack-scale flash architecture has been designed to maximize the performance of NVMe for high-performance enterprise applications. The solution performs 10x faster than existing all-flash arrays with lower total costs. In live beta tests, E8’s appliance has delivered unprecedented performance (10M IOPS) and latency on par with local NVMe flash (100us/50us of read/write). E8 combines these performance metrics with the benefits of software-based centralized storage, making it an ideal choice for use in high-performance enterprise applications such as real-time market data analytics, hyper-scale data centers and high-performance computing.

Tel Aviv’s E8 Storage provides the next generation of flash storage with a rack-scale architecture for the enterprise and software-defined cloud, delivering 10 times the performance for half the cost of existing storage products, while using only off-the-shelf hardware. E8 Storage’s appliance eliminates storage need projections, is easily upgradeable and expandable, enables converged networking, and increases SSD utilization to over 90%. With E8 Storage, data centers can enjoy unprecedented storage performance density and scale, delivering on the promise of software-defined storage without compromising on reliability and availability. (E8 Storage 10.05)

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2.6 Avanan Raises $14.9 Million Series A Financing Round

Avanan has raised $14.9 million in Series A financing. Greenfield Cities Holdings, L.P. (GFC), a TPG Growth portfolio company, led the round, with participation from both of Avanan’s existing investors, Magma VC and StageOne Ventures. The round brings the company’s total capital raised to $16.4 million and will allow Avanan to support its rapidly growing customer base and the fast pace of market adoption.

Avanan’s Cloud Security Platform is a new way to secure the cloud. With a click of a button, enterprises can protect Amazon AWS, Box, Google, Office 365, or any other Software-as-a-Service (SaaS) or Infrastructure-as-a-Service (IaaS) product, using preconfigured cloud-based versions of security technology from more than 60 leading vendors such as Check Point, Symantec, McAfee, Palo Alto Networks, Sophos and Kaspersky.

Avanan protects data in the cloud with the same industry-leading security one trusts in their datacenter. The cloud-based platform is completely out-of-band, requires no proxy, and can be deployed in just 10 minutes. It provides seamless policy governance across users and data in the cloud. Company headquarters are in New York City with R&D in Tel-Aviv. Avanan was founded in 2014 by the team that led ForeScout’s successful pivot to Network Access Control. (Avanan 17.05)

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2.7 illusive networks Raises $3 Million

Israeli cyber security company illusive networks announced extending the Series B funding by a further $3 million to $25 million. The investors are New Enterprise Associates (NEA), Bessemer Venture Partners, Cisco Investments, Marker LLC, Citi Ventures, and Eric Schmidt’s Innovation Endeavors. The company is at the forefront of deception technology. illusive networks’ solutions are deployed across leading financial institutions, insurance, retailers, law firms, healthcare providers, and energy and telecommunication companies in both the US and EMEA. illusive networks’ detection by deception technology has identified numerous advanced attacks that went undetected by other solutions, thereby securing its customers’ networks from Advanced Persistent Threats (APT).

Launched in June 2015, Tel Aviv’s illusive networks raised a $5 million Series A round from cybersecurity foundry Team8. The $25 million Series B round is aimed at further fueling the startup’s global expansion through significant expansions of sales and marketing, as well as expansion of engineering and support teams for the company’s patent-pending deception technology. (illusive networks 17.05)

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2.8 HP Launches Investment Arm in US & Israel

With offices in Palo Alto and Tel Aviv, HP Tech Ventures will invest in 3D printing, virtual reality, IoT, artificial intelligence, smart machines and more. US technology and printing giant HP is launching HP Tech Ventures, a corporate investment arm that will develop cooperation and investments in early stage technology companies. The business of HP Tech Ventures will focus on strategic investments and cooperation in areas such as 3D printing, virtual reality, hypermobility, the Internet of Things (IoT), artificial intelligence, and smart machines. HP will try to provide the startups in which it invests with added value by leveraging its infrastructure and network of partners in development, production, and distribution channels. (Globes 10.05)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Cubic Showcases Integrated Solutions at SOFEX 2016

San Diego’s Cubic Global Defense (CGD), a business unit of Cubic Corporation (NYSE: CUB), exhibited various training and Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) products and capabilities at Special Operations Forces Exhibition and Conference (SOFEX) held in Amman, Jordan, from 9 – 12 May. Founded in 1996, the biennial event gathers Special Operations and homeland security experts from around the world to discuss a range of topics related to current counter-terrorism and homeland security issues. For the first time, Cubic displayed its comprehensive C4ISR products and solutions, including technologies from the company’s newly acquired subsidiaries: DTECH LABS (DTECH), GATR Technologies (GATR) and TeraLogics. These integrated capabilities include “internet on-the-move,” end-to-end Full Motion Video (FMV) management and satellite-based communications operating in a network-centric environment that can interact with virtually all modern Combat Net Radio systems. Cubic also demonstrated mission readiness solutions – from training to tactical operations – including tactical vehicle laser engagement training and advanced special operations skills for defense and security organizations. (Cubic Corporation 04.05)

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3.2 Oshkosh Defense Showcases Highly Transportable JLTV at SOFEX

Wisconsin’s Oshkosh Defense featured its Joint Light Tactical Vehicle (JLTV) at the Special Operations Forces Exhibition (SOFEX), which took place 10 – 12 May in Amman, Jordan. The Oshkosh JLTV is the next-generation light tactical wheeled vehicle with an unprecedented combination of protection, mobility, transportability, and net-ready systems integration that delivers the network capability of a mobile command center. Weighing less than 6,350 kg at curb weight, the JLTV maintains MRAP levels of protection. The JLTV uses the TAK-4i intelligent independent suspension system, the next-generation of Oshkosh’s advanced TAK-4 independent suspension system, to deliver 25% improved wheel travel while providing improved ride quality for soldiers.

Based on the Oshkosh Light Combat Tactical All-Terrain Vehicle (L-ATV) platform, the Oshkosh JLTV is the U.S. Department of Defense’s choice to replace the U.S. fleet of up-armored HMMWV for the Army and Marine Corps. The Oshkosh JLTV has the latest in automotive technologies, as well as the Oshkosh Core1080 crew protection system, which is an occupant-centric, comprehensive systems engineering approach that considers every inch of the vehicle with respect to crew protection in case of blast events. (Oshkosh Defense 09.05)

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3.3 Omeros Exclusive Middle East Distribution Agreement for OMIDRIA

Seattle’s Omeros Corporation, a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system, announced entry into an exclusive supply and distribution agreement for the sale of OMIDRIA (phenylephrine and ketorolac injection) 1% / 0.3% in Saudi Arabia, the United Arab Emirates and other countries in the Middle East with ITROM Trading Drug Store (ITROM). ITROM is Dubai-based and an internationally recognized pharmaceutical marketing and distribution company specializing in ophthalmology. Under the agreement, ITROM will be responsible for obtaining marketing authorizations for OMIDRIA within the licensed territory and for marketing, selling and distributing product supplied by Omeros. Existing ophthalmology medical sales representatives employed by ITROM are expected to be reinforced with additional medical sales representatives that will be dedicated to OMIDRIA. (Omeros 10.05)

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3.4 UAE Cities Named Among World’s Fastest Growing Retail Markets

Abu Dhabi and Dubai have together ranked among the top 20 of the most active cities for shopping center development, according to CBRE’s latest Global Shopping Center Development report. The cities currently have a total of 626,887 m² of total retail space under construction, an 11% rise on last year’s figures. Dubai accounts for 361,127 m² and Abu Dhabi for 265,760 m² of retail space. In the global rankings for shopping centers delivered over the last year, Dubai, along with Muscat, ranked in the top 30, with Muscat leading the way for the GCC region.

According to the 2016 report, the Middle East retail market remains a very attractive proposition for international brands. Dubai ranks second for international brand presence, with high per capita incomes, significant growth potential, and a high spending consumer base. Within the Middle East, the UAE’s development pipeline is significant with a number of major malls set out for delivery over the next three years.

The report also said that Doha is currently witnessing a transformation of its retail sector amidst an ongoing construction boom, which could see around 1.2 million m² GLA delivered over the next three years alone, with the government striving to modernize the city in the build up to the 2022 Qatar World Cup. (AB 09.05)

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3.5 Do it Best Corp Plans Debut & Expansion in Saudi Arabia

Indiana’s Do it Best Corp is set to make its debut in Saudi Arabia under an agreement with Attken International, part of Saudi Arabia-based Albawardi Group. The company will open the first Attken Do It Best in the eastern province of Dammam at the end of May. As part of the company’s expansion programs, Attken Do It Best is planning to open three stores per year throughout Saudi Arabia. The company said the opening of the new Attken Do It Best is “a big step in the home improvement industry” in Saudi Arabia. It will display over 40,000 products and will encourage customers to follow the concept of “Do It Yourself” by providing counselling and advice from its experts, engineers and technicians who will be present at the store. (AB 07.05)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Renewable Sources to Constitute 20% of Jordan’s Energy Mix in 2020

Jordan has attracted solar and wind energy projects worth $1.6 billion at a total capacity of 1,000 megawatts (MW), of which 500 MW will be connected to the grid by the end of this year, Prime Minister Abdullah Ensour announced. The premier made his remarks at the opening of the Jordan International Energy Summit, where he said the renewable energy contribution to the overall power generation is expected to reach 20% by 2020. It currently ranges from 3-4%, according to official figures.

At the event, Jordan signed several agreements including one with Algeria in the field of oil, gas and exchange of expertise and training in addition to another between the National Electric Power Company (NEPCO) and the Jerusalem District Electricity Company on providing electricity to Jericho. Another agreement was signed with Al Manaseer Group to explore copper in the south of Jordan.

Under the deal with memo signed with Algeria, the country is expected to start providing Jordan with liquefied natural gas and liquefied petroleum gas as of September this year. Jordan also signed an agreement with the Jordanian-Egyptian Fajr for Natural Gas Transmission and Supply to provide industries in Jordan with natural gas.

According to Ensour, Jordan will produce 48% of its electricity using nuclear power by 2025 once the project is implemented in cooperation with Russia’s Rosatom. The premier added that the country’s first oil shale fueled power plant at a total capacity of 470mw and a total investment of $2.2 billion will be ready by 2019, thus reducing energy costs. The available reserve of oil shale in Jordan, according to official estimates, is around 70 billion tonnes. (JT 17.05)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Balance of Payments Deficit $644.2 Million in First Quarter

Lebanon’s Balance of Payments (BoP) revealed a deficit of $644.2m in Q1/16, compared to a higher deficit of $850.2m in the same period last year. In spite of the relative improvement, the overall weakening in European and regional economies might be still weighing on the remittances and Foreign Direct Investments (FDIs) to Lebanon. Up until March, Net Foreign Assets (NFA) of the Central Bank (BDL) dropped by $407.1m, while that of commercial banks fell by $237.1m. In March alone, Lebanon’s BoP also registered a deficit of $287.9m, compared to a surplus of $362.6m in February 2016. (Blom 13.05)

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5.2 Lebanon’s Number of Registered Cars Improved 4.29% by April

According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars improved by 4.29% year-on-year (y-o-y) to number 11,909 cars by April 2016. This was triggered by the 3.33% yearly increase in the number of newly registered passenger cars to 11,099 and the 19.47% rise in newly registered commercial vehicles to 810. Japanese cars were the most demanded cars in Lebanon in the first 4 months of 2016, grasping a 37.3% share of total passenger cars. Korean cars came second with a market share of 34.7% by April 2016, while European cars maintained their third rank with a market share of 21.89%. In terms of brands, Kia kept its largest share of newly registered passenger cars (20.09%), followed by a 14.42% stake for Hyundai. Toyota and Nissan came next in the ranking, as Toyota held 14.04% of newly registered passenger cars, while Nissan held 9.91%. (BlomInvest 13.05)

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5.3 Figures Show Slight Decline in Jordan’s Inflation Rate

Jordan’s inflation rate in the first four months of 2016 went down by 1.2%, compared to the same period of 2015, the Department of Statistics (DoS) announced. This decline was attributed to the drop in consumer prices in main item groups including transportation, meat and poultry, fuel and lightening, vegetables and fruits and nuts. An increase occurred in prices of items including rents, culture, recreation, clothes and education. The statistics also revealed that average prices went down by 1.2% in April 2016, compared to the same month of 2015. On monthly basis, the average consumer prices went up by 0.8% in April 2016 compared to the previous month, the report said. (Ammon 12.05)

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5.4 Jordan Ranks First Among Arab Countries in Open Budget Index

Jordan scored 55 out of 100 in the 2015 Open Budget Index (OBI), according to the results of the International Budget Partnership organization (IBP) Open Budget Survey. The OBI assigns a score to each country based on the information it makes available to the public throughout the budget process.

Jordan’s score was 10% higher than the average figure of the index which covered 102 countries. The Kingdom ranked first among Arab countries, followed by Tunisia, Morocco and Yemen which scored 42, 38 and 34 respectively. The country’s 2015 OBI is very much as its 2012 result, when it scored two notches higher, according to the survey results carried on the IBP website.

In terms of budget transparency, the survey’s results said the government provides the public with “limited” budget information. With regard to public participation, the survey said the government is “weak” in providing the public with opportunities to engage in the budget process. In its recommendations, the survey said Jordan should prioritize the following actions to improve budget transparency. These include producing and publishing a mid-year budget review and increasing the comprehensiveness of the executive budget proposal by, for example, presenting more details on macro-economic forecasts and on issues beyond the core budget. It also suggested increasing the comprehensiveness of the end of year report by, for example, presenting more details on planned versus actual performance. (JT 15.05)

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5.5 Jordan to Acquire Raytheon’s TOW Missiles

Jordan’s Ministry of Defense signed an agreement with the U.S. Department of Defense to acquire tube-launched, optically tracked, wireless-guided, or TOW, missiles made by Raytheon Company. Raytheon will begin deliveries this year. TOW is in service in more than 40 international armed forces and integrated on more than 15,000 ground, vehicle and helicopter platforms worldwide. Raytheon has delivered more than 690,000 TOW missiles to U.S. and allied warfighters. The TOW weapon system will be in service with the U.S. military beyond 2025. (Raytheon 10.05)

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►►Arabian Gulf

5.6 GCC Faces Teacher Shortage as Student Numbers Grow

The total number of students in the GCC education sector is projected to reach 15 million in 2020 but the region faces a shortage of teachers and an overdependence on expats. Alpen Capital said the number is set to increase from an estimated 12.6 million in 2015 as an expanding base of school and college age population is likely to drive the growth. The number of students at private schools is projected to grow at a 5.1% compound annual growth rate (CAGR) to 2020 while enrolments at public schools are anticipated to increase at an annual average of 2.6%.

Alpen’s report said Saudi Arabia will continue to dominate the education market in the GCC by 2020. From an estimated 9.2 million in 2015, the total number of students in Saudi is projected to grow at an annualized rate of 3.5% to 11 million in 2020. In terms of annualized growth from 2015 to 2020, the number of students in Oman, Qatar, and the UAE are projected to grow faster than the other member nations, it added. The GCC governments’ investments coupled with private sector participation have resulted in a spate of projects in the region’s education sector. More than 500 educational projects collectively worth above $50 billion are under various stages of development across the member nations.

The GCC population is projected to reach close to 60 million in 2020, of which, the number of people below 25 years of age is likely to surpass 22 million. A large and increasing base of school and college going population is fostering the demand for education in the region. Furthermore, a diversified expatriate community is increasing the demand for international curricula, thus attracting several international schools and colleges to the region. (AB 07.05)

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5.7 Qatar’s Population Climbs 9% to 2.5 Million

Qatar’s population grew another 216,000 people last month, reaching a total of 2,559,267 residents as of 30 April 2016, a 9% jump from April 2015, according to figures released by the Ministry of Development, Planning and Statistics (MDPS). There was a 1.27% increase in the population of 32,000 from the end of March this year, most likely due to the late return of residents abroad on spring break. Generally, May and November have shown to be the most populated months for Qatar. The number of residents is likely to increase again this month before dropping for the summer, as residents leave for good while others leave for holiday. The population drop is expected to drop around Eid al-Fitr in early July. Despite recent reports of numerous job layoffs, some sectors in Qatar are still bringing in people to the country, notably employees in the construction and hospitality sectors, as hotels and projects continue to be developed in preparation for hosting the World Cup in 2022. (MDPS 02.05)

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5.8 Qatar’s HMC Said to Open Seven New Hospitals by 2018

Hamad Medical Corporation (HMC) has announced plans to open seven new hospitals in Qatar over the next 18 months, creating more than 1,100 hospital beds. In the biggest boost to hospital bed numbers in Qatar in recent years, the equivalent of almost 60 new beds each month will be created in specialties where there is high demand for services, a statement said. The seven hospitals include a 65-bed Communicable Diseases Centre, a Women’s Wellness and Research Centre with capacity for up to 15,000 births per year, an Ambulatory Care Centre, a Qatar Rehabilitation Institute with 193 beds, and three new Industrial Area Hospitals in Doha, Al Khor and Mesaieed Industrial Areas – each with 112 beds. (HMC 06.05)

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5.9 IMF Says Oman’s Growth to Slow Further Despite $4.5 Billion Savings

Oman’s economic growth is projected to slow further this year despite authorities taking “bold measures” to limit the impact of declining oil prices, according to the International Monetary Fund (IMF). It applauded the government’s action in cutting spending on wages and benefits, subsidies, defense and capital investment, saying these measures are projected to reduce expenditures in 2016 by $4.5 billion, 8% of GDP. However, the IMF added that these savings will be largely offset by the projected drop in hydrocarbon revenues, resulting in a deficit broadly unchanged at 17.1% of GDP.

The IMF said the sustained impact of the cost-cutting measures, combined with the planned increase in corporate income tax from 2017 and the introduction of VAT in 2018, will narrow the fiscal deficit over the medium-term. The current account deficit, estimated at 18.7% of GDP in 2015, is also expected to persist, though declining, through the medium-term. (AB 10.05)

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5.10 Oman to Build Six Water & Electricity Projects By 2019

Six water and electricity projects, including four desalination schemes, are set to open in Oman by 2019 and 2020. The projects, headed by Oman Power and Water Procurement (OPWP) Company, include the Salalah Independent Water Plant (IWP), located opposite the existing Salalah IWPP, which will have a capacity of 100,000 cubic meters per day (m3/d), the Al Sharqiyah IWP at Al Ash’kharah, which has a capacity of 80,000 m3/d, the Al Duqm IWP with a capacity of 60,000 m3/d, and the Khasab IWP with a capacity of 16,000 m3/d.

According to OPWP, renewable energy projects such as solar energy projects and wind farms are expected to complement gas-fired power plants in the country. The company is set to sign a deal for two gas-fired power plants in Ibti and Sohar Industrial Port with Mitsui & Co, ACWA Power and Dhofar International for Development and Investment Holding. It will purchase the full production of the two plants, which have an investment cost of $2.3 billion (RO885 million), for the duration of 15 years. OPWP will also sign a power purchase agreement with Rural Area Electricity Company (RAEC) for a wind-operated power plant in Dhofar, which will produce 50 megawatts per year. It is expected to start operations in 2017. In addition, it will implement two independent water desalination projects in Salalah and southern Al Sharqiyah. (AB 15.05)

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5.11 Saudi’s King Salman Replaces Oil Minister Ali Al-Naimi in Cabinet Shuffle

On 7 May, Saudi Arabia’s King Salman replaced his veteran oil minister and restructured some big ministries in a major reshuffle apparently intended to support a recently unveiled wide-ranging economic reform program. The most outstanding move was the creation of a new Energy, Industry and Natural Resources Ministry under Khaled al-Falih, chairman of the state oil company Aramco. He replaces the 80-year-old oil minister Ali al-Naimi, in charge of energy policy at the world’s biggest oil exporter since 1995.

Major changes were also made to the economic leadership, with Majed al-Qusaibi named head of the new Commerce and Investment Ministry, and Ahmed al-Kholifey made governor of the Saudi Arabian Monetary Agency (SAMA), the central bank.

These changes, announced in a series of royal decrees, go far beyond Salman’s previous reshuffles since he became king in January last year, and also put the stamp of his son, Deputy Crown Prince Mohammed bin Salman, author of the Vision 2030 reform program, on the government.

The new SAMA governor, Kholifey, is promoted from deputy governor for research and international affairs. He replaces Fahd al-Mubarak, who has held the post since December 2011. A veteran of SAMA and graduate of King Saud University in Riyadh and Colorado State University, Kholifey had also served from 2011 to 2013 as executive director for Saudi Arabia at the International Monetary Fund in Washington.

Finance Minister Ibrahim Alassaf, who has held the post since 1996, remains in place. However, other economic departments have over the past year taken over some of his ministry’s responsibilities. The decrees broke up the Water and Electricity Ministry, with the water portfolio added to a new Environment, Water and Agriculture Ministry, and electricity added to the new energy ministry. Those changes may help Saudi Arabia to cut subsidies, reduce domestic power and water consumption, make sure that energy pricing meshes clearly with industrial development goals, and that nuclear and solar policy are more carefully integrated. (Reuters 07.05)

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►►North Africa

5.12 Egypt’s Urban Consumer Inflation Hits 10.3% in April

Egypt’s urban consumer inflation jumped in April after easing since the end of last year, CAPMAS said on 10 May, putting pressure on the government to raise subsidies with Ramadan approaching in June. Food demand normally spikes during the Muslim holy month because of heavy consumption following the dawn to dusk fasting period. Ramadan this year begins on 6 June. President al-Sisi is under increasing pressure to revive the economy and keep prices under control to avoid any backlash from the public whose mantras in the 2011 revolution included “bread, freedom and social justice”. Army trucks have distributed cheap food and Sisi has promised to protect the poorest in a society where tens of millions rely on subsidies.

Urban consumer inflation rose to 10.3% in April from 9% in March, data from the CAPMAS statistics agency showed, the first time since November that inflation has risen. Core inflation, which excludes items such as fruit and vegetables as their prices fluctuate widely, also jumped in April to 9.51% from 8.41% in March. The government said in November that it would control prices of 10 essential commodities to help restrain inflation with the country short of foreign hard currency, and price movements subsequently eased.

But inflationary pressure resurged when the central bank devalued the pound in March by about 13% in order to close the gap between official and black-market rates for the U.S. dollar. The bank later hiked interest rates by 150 basis points at its monetary policy committee (MPC) meeting on March 17 to curb expected inflationary pressures.

Egypt has been struggling to revive its economy since a 2011 uprising drove away tourists and foreign investors who are major sources of hard currency, eroding its foreign reserves. Reserves diminished by more than half to $17 billion in April. The central bank has been rationing its dollars, focusing on imports of essential goods. A black market for dollars has seen the pound weaken to about 11 a dollar, far from the central bank’s official rate of 8.78. (CAPMAS 10.05)

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5.13 Egypt’s Jobless Rate Falls To 12.7% in First Quarter of 2016

Egypt’s unemployment rate inched downward to 12.7% in Q1/16 compared to 12.8% registered in both the first and last quarters of 2015, CAPMAS announced. Egyptian officials hope to reduce unemployment to less than 10% and are targeting a growth rate of at least 6% by the end of the 2018/19 fiscal year. According to the ministry of planning, Egypt’s GDP growth rate slowed to 2.2% in Q4/15, compared to 3.7% during the same period a year earlier. Unemployment among 15-29 year olds reached 27.3% of the workforce. Compared to Q1/15, the Egyptian workforce grew 2.6% to a record 28.4 million people in the first quarter of 2016. The CAPMAS report noted that unemployment among females is 25.7%, while unemployment among males is 8.9%. Urban unemployment amounted to15.2%, compared to 10.9% in rural areas. (CAPMAS 15.05)

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5.14 Ministry Says Egypt to Launch 4G Mobile Network in 2 Months

Egypt will launch 4G licenses for the four mobile operators in the country within two months, and the value will depend on each company’s needs of available frequencies, communications and information technology ministry said in a statement. Legal drafting will be completed shortly. Earlier in May, the cabinet approved a mandate for the National Telecommunications Regulatory Authority (NTRA) to launch high-speed 4G mobile network. According to the cabinet statement, the decision aims to increase government resources and improve services provided to citizens. The fourth generation of mobile technology (4G) succeeds 3G by providing higher speed internet access.

There are currently three mobile operators in Egypt: Orange, Vodafone Egypt and Etisalat Misr. A long delayed fourth license for a mobile operator is expected to be issued for state-run fixed line monopoly Telecom Egypt. Egypt has around 94 million subscribers to mobile services, according to Ministry of Communications and Information Technology data. (Ahram Online 09.05)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Ankara Vows to Maintain Fiscal Discipline After Budget Posts Surplus in April

The Turkish government will maintain fiscal discipline for the rest of the year, Finance Minister Naci Agbal vowed on 16 May, adding that positive budget data for the first four months of the year was a result of that discipline. Turkey’s government ran a TL5.4 billion ($1.83 billion) budget surplus in April. According to economists, the profit transfer of over TL9.5 billion ($3.2 billion) by the Central Bank to the Treasury played a leading role in the hike of tax revenues in April. The Central Bank posted TL13.7 billion ($4.6 billion) in profit in 2015. Some TL9.5 billion of this amount was expected to be transferred to the Treasury’s accounts.

According to official data from the Finance Ministry, the Turkish government budget, which ran a deficit of TL4.1 billion ($1.39 billion) in the first four months of last year, saw a budget surplus of TL5.4 billion ($1.83 billion) this April. (CBT 16.05)

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6.2 Greek Deflation Persists For Another Month

Greece’s annual European Union-harmonized inflation rate stayed negative in April for the second month in a row after a positive reading in February. The reading in April was -0.4%, easing from -0.7% in March. Consumer prices were led lower by housing costs, durable goods, foods and non-alcoholic beverages, apparel and footwear. The data also showed the headline consumer price index fell 1.3% year-on-year, with the annual pace of deflation easing from -1.5% in March.

For years an inflation outlier in the Eurozone, Greece has been in deflation mode for the last two and a half years as wage and pension cuts and a protracted recession took a heavy toll on Greek household income. Deflation in Greece, which signed up to its first international bailout in 2010, hit its highest level in November 2013, when consumer prices registered a 2.9% year-on-year decline. (Reuters 11.05)

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6.3 Athens to Vote on Multi-Bill of Remaining Bailout Measures

A multi-bill containing the remaining measures Greece has to pass to conclude its bailout review and receive its next tranche of funding is due to be submitted to Parliament on 18 May, with the aim of MPs voting the legislation through on the 22nd.

The omnibus bill will include €1.8 billion in fiscal measures, mostly increases to indirect taxes, provisions for the sale of non-performing loans, the framework for the new privatization agency and the legislation for the fiscal mechanism to trigger automatic cuts if Greece misses its primary surplus targets in the coming years. The multi-bill will be table under the emergency procedure, meaning a curtailed debate at committee level before it goes to the full assembly for an equally brief discussion before the vote. If the legislation is passed, a meeting of technical experts that advise Eurozone finance ministers is expected to approve the Eurogroup to disburse a minimum of around €6 billion for Greece. (eKathimerini 16.05)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel’s Jewish Population Numbers Over 6,000,000 Seven Decades After the Holocaust

Seventy-one years after the end of World War II and the Holocaust, Israel’s population stands at roughly 8,502,900, including some 6,374,400 Jews, the Central Bureau of Statistics announced on 1 May. The figures do not include foreign workers, who numbered just over 190,000 in 2014. The figures also show that Israel’s general population growth rate is 13,500 per month, which includes a Jewish population growth rate of about 10,000 per month. Jews make up some 74.8% of the population, according to the figures. Some 1.76 million Arabs live in Israel, representing more than 20% of the population.

There are about 400,000 people in Israel who do not fall under any religious group under the criteria set by the bureau. They are mostly from the former Soviet Union and Ethiopia and arrived in Israel during the large immigration waves from those areas. They were granted citizenship under the Law of Return, which allows Jews and people with Jewish ancestry to immigrate to Israel provided they meet certain conditions. (CBS 01.05)

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7.2 Israel’s Population Passes 8.5 Million Mark

Upon the re-establishment of the State of Israel in 1948, the population stood at about 806,000. 68 years later on Yom HaAtzmaut (Independence day) 2016, Israel’s population stood at approximately 8.522 million, according to the Central Bureau of Statistics. The Jewish population numbered approximately 6.377 million (74.8% of the population), the Arab population is approximately 1.771 million (20.8%) and the rest of the population (non-Arab Christians, other faiths and no religious affiliation by registering in the Population Registry) is approximated at 374,000 (4.4%). Since last Independence Day, Israel’s population grew by approximately 182,000, an increase of 2.2%. During this period, Israel welcomed approximately 195,000 babies, and about 47,000 people died during that same period. The number of new immigrants coming to Israel was 36,000.

About 75% of the Jewish population was born in Israel and more than half are second generation in the country, compared to only 35% in 1948. In 1948 there was only one city in Israel with more than 100,000 residents – Tel Aviv-Jaffa. Today, there are 14 cities with more than 100,000 residents. Of those, 8 cities have more than 200,000 residents: Jerusalem, Tel Aviv, Haifa, Rishon LeZion, Petah Tikva, Ashdod, Netanya and Beersheba. According to population projections, the State of Israel’s population is expected to reach 11.3 million by 2035. (Arutz7 09.05)

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*REGIONAL:

7.3 Jordanian Independence Day

On 25 May, Jordan will celebrate its 70th independence day. Jordan was granted its full independence from the British mandate and was declared a Kingdom on 25 May 1946. Celebrations marking the 1916 Great Arab Revolt anniversary and Army Day, which falls on June 10, customarily begin on Independence Day.

This year’s celebrations will be highlighted by the centennial of the Great Arab revolt of 1916-1918. Sharif Hussein, the emir of Mecca and king of Hijaz, launched the Great Arab Revolt in June 1916 with the objective of establishing an independent and unified Arab state. The Great Arab Revolt secured Arab rule over most of the Arabian Peninsula, Syria and all of modern Jordan, founded by Sharif Hussein’s son, the late King Abdullah I. All Jordanian ministries, public departments and institutions will observe a holiday.

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7.4 Turkey Marks Ataturk Day on 19 May

The Commemoration of Ataturk, Youth and Sports Day, or simply Ataturk Commemoration (Atatürk’ü Anma) or Youth and Sports Day (Gençlik ve Spor Bayramı), is an annual Turkish national holiday celebrated on 19 May to memorialize the start of the Turkish War of Independence. Specifically, 19 May 1919 is the day Mustafa Kemal Ataturk, then Mustafa Kemal, who would become independent Turkey’s first president, landed on the main peninsula of Turkey to begin leadership of the liberation effort. In early 1920, Kemal convened the first Turkish Grand National Assembly in Ankara, and by 1922 all of Anatolia was freed from foreign rule. The independent Republic of Turkey was declared a year later. During the course of his term as president, Ataturk himself proclaimed 19 May as “Youth and Sports Day.” In the aftermath of Ataturk monumental legacy the day serves to honor the country’s founder.

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Israeli App Uses IDF Technology to Detect Skin Cancer

Emerald Medical Applications’ DermaCompare is a free smartphone app that can detect changes in marks and moles over time. The app alerts the user to changes that ought to be screened for cancer. The public company, founded in Petah Tikva in 2013, has distribution agreements in Israel, Australia (where one out of seven people get skin cancer), the United Kingdom, Germany, Italy, Sweden, New Zealand, and Brazil. In April, the Brazil Chamber of Commerce selected DermaCompare as the Israeli technology “most likely to succeed in Brazil.” A Spanish-language version of the app was recently launched for Puerto Rico, Mexico and Argentina, with more South American locations to come.

To use the free iOS or Android app, you strip down to your underwear and have someone take smartphone or digital camera photos of your moles and lesions according to instructions explained by a friendly avatar. DermaCompare’s algorithm then analyzes the photos. If any suspicious moles or changes are found, the app recommends contacting a doctor for evaluation, and can automatically link you to a dermatologist near your location. The app harnesses the power of the crowd. As users upload photos of their skin to the cloud, they are building a database toward more accurate identification and comparison of moles and lesions. Machine learning and artificial intelligence can use this crowdsourced data to predict which kinds of moles are most likely to become cancerous, “and by using that we can prevent melanoma in advance.” (ISRAEL21c 03.05)

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8.2 Pluristem Awarded $3.3 Million Grant by Israeli Government

Pluristem Therapeutics announced that its wholly owned subsidiary, Pluristem, Ltd., has been awarded NIS 12.7 million (approximately $3.3 million) from the Israel Innovation Authority (previously the Office of the Chief Scientist – OCS) of the Israeli Ministry of Economy & Industry. The grant will support Clinical trials and R&D activities for calendar year 2016.

The Israeli Innovation Authority, empowered by the Law for the Encouragement of Industrial Research & Development – 1984, oversees all government sponsored support of R&D in the Israeli hi-tech and bio-tech industries. This broad-spectrum support stimulates the development of innovative, state-of-the-art technologies, enhances the competitive power of the industry in the global hi-tech market, and creates employment opportunities.

According to the Israeli Innovation Authority grant terms, Pluristem Ltd. is required to pay royalties of 3% – 4% on sales of products and services derived from technology developed using this and other Israeli Innovation Authority grants until 100% of the dollar-linked grants amount plus interest are repaid. In the absence of such sales, no payment is required.

Haifa’s Pluristem Therapeutics is a leading developer of placenta-based cell therapy products. The Company’s patented PLX (PLacental eXpanded) cells release a range of therapeutic proteins in response to inflammation, ischemia, hematological disorders, and radiation damage. PLX cells are grown using the Company’s proprietary three-dimensional expansion technology and are an “off-the-shelf” product that requires no tissue matching prior to administration. Pluristem has a strong intellectual property position, Company-owned, GMP-certified manufacturing and research facilities, strategic relationships with major research institutions, and a seasoned management team. (Pluristem 09.05)

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8.3 MarginProbe Preserves More Breast Tissue & Reduces Need for Additional Surgery

According to a new research study from Mercy Medical Center in Cedar Rapids, IA, and the University of Iowa Hospitals and Clinics, the use of Dune Medical Device’s MarginProbe, a tool for assessing clear margins during lumpectomies, led to a 75% reduction in the number of second surgeries needed by breast cancer patients.

Traditionally, one-in-four women who undergo a lumpectomy require additional surgery to remove cancer missed during the initial procedure. The study is the latest research to show how MarginProbe, the first and only FDA-approved technology, offers surgeons a real-time detection of cancer at the surface of excised tissue specimens during surgery.

Caesarea’s Dune Medical Devices proprietary tissue characterization technology offers surgeons and radiologists the real-time ability to identify cancerous tissues and react immediately. This technology holds the potential for a broad range of surgical and diagnostic applications. (Dune Medical Devices 11.05)

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8.4 Kitov Reports KIT-302 Study Successfully Meets U.S. FDA Standards

Kitov Pharmaceuticals announced that KIT-302 has successfully completed its pharmacokinetic (PK) bioequivalence (BE) study and successfully met the U.S. FDA standards for establishing bioequivalence to the reference drugs. The study compared the PK of Kitov’s drug product of KIT-302 which is a fixed dose combination consisting of celecoxib (200 mg), indicated for osteoarthritis pain, and amlodipine (10 mg), indicated for high blood pressure, to off-the-shelf branded 200 mg celecoxib capsules and 10 mg amlodipine tablets. These evaluations were conducted under both fed and fasted conditions. The results demonstrated that for both the Cmax (the maximum blood level achieved) and Area Under the Curve (the area under the concentration time curve for drug levels), the 90% confidence intervals for both the amlodipine and celecoxib components of KIT-302 were documented to be between 80% and 125% of the values obtained with the off-the-shelf drugs. These results mean Kitov has fulfilled the FDA standard for demonstrating BE under both fed and fasted conditions.

According to FDA requirements, a similar PK bioequivalence study for the KIT-302 product, containing a lower dosage (2.5 mg) of amlodipine will be conducted by the end of this year. The FDA has indicated that KIT-302’s final approval will not be dependent on this study’s results.

Jerusalem’s Kitov Pharmaceuticals is an innovative biopharmaceutical company focused on late-stage drug development. Leveraging deep regulatory and clinical-trial expertise, Kitov’s veteran team of healthcare professionals maintains a proven track record in streamlined end-to-end drug development and approval. Kitov’s pipeline currently features two combination drugs intended to treat osteoarthritis pain and hypertension simultaneously, including one that achieved the primary efficacy endpoint for its Phase III clinical trial. Lowering development risk and cost through fast-track regulatory approval of novel late-stage therapeutics, Kitov delivers rapid ROI and long-term potential to investors, while making a meaningful impact on people’s lives. (Kitov Pharmaceuticals 09.05)

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8.5 Chief Scientist Approves $13.7M for Kadimastem in 2016

Kadimastem announced a yearly budget approved by the OCS in the total amount of NIS 13.7m, which is an increase of more than NIS 2m over the previous year. The funding is intended to accelerate the company’s two primary fields of activity which are based on pluripotent stem cells, ALS and diabetes, including the advancement towards the company’s clinical trial in ALS patients.

Ness Tziona’s Kadimastem is a biotechnology company, operating in the field of regenerative medicine – a groundbreaking field in which the malfunctioning of organs which leads to diseases is repaired by external cells, tissues or organs. The company specializes in the development of human stem cell-based medical solutions for the treatment of diabetes and neurodegenerative diseases, such as ALS and Multiple Sclerosis. Based on the company’s unique platform, Kadimastem is developing two types of medical applications: A. Regenerative medicine, which repairs and replaces organs and tissue by using functioning cells differentiated from stem cells. The company focuses on transplanting healthy brain cells to support the survivability of nerve cells as cell therapy for ALS, and transplanting insulin-secreting pancreatic cells for the treatment of insulin-dependent diabetes; B. Drug screening platforms, which use functional human cells and tissues to discover new medicinal drugs. The company has two collaboration agreements with leading global pharmaceutical companies. (Kadimastem 09.05)

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8.6 Evogene & Marrone Bio Disclose Positive Results in Insect Control Collaboration

Evogene and Davis, California’s Marrone Bio Innovations, a leading global provider of bio-based pest management and plant health products, successfully met an important milestone in their multi-year collaboration focused on discovery and validation of novel genes for insect control. In diet-based insect assays, certain proteins demonstrated control activity against several target pest insects, including fall armyworm, a devastating pest that causes annual damage of approximately $1 billion worldwide. Based on these results, selected bioactive proteins are now being advanced by the two companies to plant validation.

The collaboration, initiated in July 2014, and supported by funding from the Binational Industrial Research & Development (BIRD) Foundation, aims to bring to market new insect control solutions – seed traits and bio-insecticides – through leveraging the expertise and distinct assets and capabilities of each party. Utilizing Evogene’s proprietary computational platform BiomeMiner and other predictive discovery capabilities, the two companies were able to pinpoint candidate proteins out of over tens of thousands of proteins identified from MBI’s extensive and proprietary microbial collection. The proteins’ bioactivity for pest control were then validated in diet-based insect assays by both companies, and a subset of the candidates showed positive insecticidal results.

Based on the positive results announced today, the parties agreed to advance several novel insecticidal protein candidates, which have met the required test criteria, to model plant validation and to be followed by target crop validation. Successful candidates will then be further developed by Evogene, potentially in collaboration with a seed company, for insect control in crops such as corn, soybean and cotton, while MBI may commercialize the microbials as sprayable bio-insecticide products. The parties have agreed to share revenues from any products that may result from this collaboration.

Rehovot’s Evogene is a leading biotechnology company for the improvement of crop productivity. The Company has developed a proprietary innovative technology platform, leveraging scientific understanding & computational technologies to harness Ag ‘Big Data’ for developing improved seed traits (via: GM and non-GM approaches), as well as innovative ag-chemical and novel ag-biological products. (Evogene 16.08)

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8.7 BioLineRx & MaRS Innovation Sign Framework Collaboration Agreement

BioLineRx signed a framework collaboration agreement with MaRS Innovation, the commercialization agent for fifteen of Toronto’s top academic institutions. Under the terms of the agreement, BioLineRx intends to review innovative projects and assets of startup companies originating from MaRS Innovation’s members, in order to identify in-licensing, co-development or other partnering opportunities. MaRS Innovation represents and invests in early stage assets derived from 15 institutions in Ontario, Canada, including the University of Toronto and its 9 affiliated teaching hospitals.

Jerusalem’s BioLineRx is a clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates. The Company in-licenses novel compounds, primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization. (BioLineRx 16.05)

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8.8 Arkin Holdings & Primera Capital Lead Investment in BioSight for Leukemia

Karmiel’s BioSight, an Israeli pharmaceutical development company focused on the development of innovative chemotherapy pro-drugs with reduced toxicity, announced the closing of an investment of $13m led by Arkin Holdings and the US based venture firm Primera Capital. Proceeds of the financing will be used to fund a multi-center phase IIb clinical trial with the company’s lead product, Astarabine, for the treatment of AML. According to the investment terms, Arkin Holdings and Primera Capital will invest $5M each, and additional $3M will be invested by existing shareholders including Michael Ilan Management & Investments. The investment is made in two steps, the first is immediate and the second is expected in the upcoming year, upon completion of a milestone by the company.

Astarabine is an innovative compound of the chemotherapy drug cytarabine (Ara-C) and the amino acid asparagine. Cytarabine is the first-line treatment for AML and relapsed/refractory Acute Lymphoblastic Leukemia (ALL). The use of cytarabine is accompanied by high toxicity and severe side effects such as cerebellar toxicity and bone marrow suppression. Therefore, despite the effectiveness of cytarabine as an anticancer drug, its toxicity significantly limits its use, especially for older patients and for patients with comorbidities, who constitute a significant percentage of AML patients. BioSight is in preparations for a multi-center Phase IIb trial in the US, Europe, and Israel, to further evaluates the efficacy and safety of Astarabine in the treatment of AML. (BioSight 16.05)

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8.9 Lycored’s Cardiomato Named Winner at 2016 NutraIngredients Awards

Lycored announced that its hero supplement, Cardiomato, has taken home the NutraIngredients Award for Best Finished Product of the Year – Heart Health. Cardiomato, Lycored’s nutrient complex for heart health, stood out to judges in the first round of over 120 high-quality products entered, again in the second round of over 33 stand-out products, and then in final judging amongst two other competitors. To be awarded the win, judges determined that Cardiomato met and exceeded all eligibility requirements including viability, fitting into an emerging category, validated through research, unique and innovative, distinct health and lifestyle application, unique packaging, and creatively marketed.

Lycored’s Cardiomato is scientifically proven to support cardiovascular health and contributes to normal heart and vascular function, with measurable results in just six weeks. Supported by numerous clinical trials, Cardiomato manages and improves various conditions that affect heart health, including reducing oxidized LDL cholesterol, lowering systolic blood pressure already within the normal range, and preserving the endothelium, which lines artery walls and supports the proper functioning of blood vessels among healthy population.

Committed to ‘Cultivating Wellness’, Beer Sheva’s Lycored is an international company at the forefront of unearthing and combining nature’s nutrition potential with cutting edge science to develop natural ingredients and products. Established in 1995, Lycored is the global leader in natural carotenoids for food, beverage and dietary supplement products. The company develops and supplies natural ingredient formulations into four main business areas: active health ingredients for wellness; colorings; ingredients for taste & texture improvement; and nutrient premixes for fortification. (Lycored 13.05)

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8.10 ReWalk Collaboration with Harvard University’s Wyss Institute Announced

ReWalk Robotics announced a collaboration with Harvard University’s Wyss Institute for Biologically Inspired Engineering for the licensing of Intellectual Property (IP), and development of concepts and designs of lightweight exoskeleton system technologies for lower limb disabilities. This exclusive licensing and collaboration agreement will focus on the development of “soft suit” systems for the treatment of stroke, Multiple Sclerosis (MS), mobility limitations for the elderly and other medical applications.

The majority of Stroke and MS patients as well as the elderly do not require the structural support of current market rigid exoskeleton systems for individuals with spinal cord injury. The soft suit prototypes from the Wyss Institute transmit power to key joints of the legs with cable technologies powered with software and mechanics that are similar to the technologies used in the ReWalk system. The cables are connected to fabric-based designs that attach to the legs and foot, thus lending the name “soft suit.”

Yokneam Elite’s ReWalk Robotics develops, manufactures and markets wearable robotic exoskeletons for individuals with spinal cord injury. Their mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies. (ReWalk 17.05)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 CallVU’s New Mobile Digital Engagement Platform for Financial Institutes

CallVU showcased its flexible multichannel suite which addresses customers’ transformation to digital at Finovate Spring 2016 in San Jose, California. CallVU’s platform enables financial enterprises to improve digital engagement beyond the regular web and mobile users, and offers all callers a rich media customer journey. Financial institutions can improve service availability, ensure that a higher percentage of customers benefit from their digital content investment, reduce call volumes and enhance customer experience.

Regardless of the channel the customer is using to connect to the bank, CallVU offers a single, unified, digital communication channel. The blending of interactive visual content with voice calls creates an engaging, collaborative and more efficient customer experience. CallVU offers banks a platform for moving customers who are not used to using digital services to the digital world. CallVU’s engaging and intuitive customer journey ensures a high rate of digital self-service and facilitates greater digital engagement through an omni-channel user experience journey.

Tel Aviv’s CallVU has developed an innovative Mobile Digital Engagement platform, which combines rich digital and interactive media with the voice channel. CallVU delivers a highly engaging and collaborative customer experience and creates a new customer service channel for smartphone users. (CallVU 03.05)

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9.2 WhiteSource/Checkmarx Testing Solution for Proprietary & Open Source Code

Checkmarx and WhiteSource announced a partnership, providing Checkmarx users with a comprehensive Open Source Analysis (OSA) solution. The new capability adds full visibility of the open source components used by developers. It reports known security vulnerabilities contained in the open source code and suggests available fixes. It also highlights licensing and compliance issues in any used open source components. The new version of Checkmarx’s application security testing platform combines best-of-breed source code analysis and open source component analysis in a single product. Checkmarx’s platform is the only one to provide a comprehensive solution that covers all code security aspects in all major coding languages and is available both on-premises and on-demand.

Tel Aviv’s Checkmarx develops solutions used by developers and security professionals to identify and fix vulnerabilities in web and mobile applications early in the development lifecycle. It provides an easy and effective way for organizations to automate security testing within their Software Development Lifecycle (SDLC) which systematically eliminates software risk before applications are released.

Bnei Brak’s WhiteSource allows engineering, security and compliance officers to effortlessly manage the use of open source components in their software, allowing developers to focus on building great products. WhiteSource fully automates all open source management needs: component detection, security vulnerability alerts, license risk and compliance analysis along with policy enforcement and new version alerts. (Checkmarx 03.05)

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9.3 Asiasoft Solutions & Stratoscale to Bring Cloud Capabilities to the Data Center

Singapore’s Asiasoft Solutions, a leading IT solutions provider that specializes in cloud technologies, announced a partnership with Stratoscale to deliver comprehensive, flexible and scalable data center cloud solutions to its customers. Stratoscale’s 360 degrees partner program, PartnerFirst, was created with an all-inclusive approach to maximize partner’s technology, products and services with the goal of bringing mutual benefits to customers and partners. By partnering with Stratoscale, Asiasoft Solutions is bringing new innovation to market and delivering value to its customers by leading them into the next generation of private cloud data centers. Stratoscale has brought the control back to IT by providing unparalleled private cloud capabilities in the data center in a way that’s faster and simpler than legacy infrastructure, and doesn’t require specific expertise or expensive services. Offered through its channel partners, Stratoscale’s hardware-agnostic, easy-to-use software platform, Stratoscale Symphony, delivers cloud-scale economics to data centers of all sizes with efficiency and operational simplicity.

Herzliya’s Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere, IT is empowered to take control of their data centers. Stratoscale is offering a hyper-converged cloud supporting OpenStack out of the box. (Stratoscale 05.05)

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9.4 Utab’s Algorithm Enhances Music Information Retrieval

Tel Aviv’s Utab has developed a social music platform for music enthusiasts that can analyze a chord in under 15 seconds. Utab’s new algorithm is so smart that it is capable of analyzing and establishing a chorded timeline to every song in the world in just under 15 seconds – regardless of the record quality, release year and music genre. Once any song from practically any platform is added to utab’s database, the server analyzes the song and extracts the chords and tempo from it. The website will then prompt the user to the editor and will show the chords and beats. The company that created the original code for utab’s algo’ (zplane.development audio technology) utilizes intelligent signal processing solutions, dealing with extraction of high level musical information from the music signal like tempo, rhythm, melody and key. These features are already incorporated within the chord analyzer and in the near future there will be more advanced twik-abilities such as switching from sharp to flat key, showing more advanced chords and tablature containing four or more noted chords and the option to re-analyze certain parts of the song, allowing users to get the best suitable option. (Reuters 10.05)

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9.5 Silicom Awarded Design Win from Tier-1 Network Monitoring Player

Silicom has been awarded its first Design Win from a Tier-1 Network Monitoring company, a new customer for the Company. This Design Win is for Silicom’s 40 GBPS Time Stamping and Packet Processing card, representing the successful conclusion of a multi-year evaluation and product definition process that was carried out by the combined team of Silicom and Fiberblaze, the Application Acceleration company that Silicom acquired in late 2014.

To date, the customer has placed orders totaling approximately $500,000 for both the product for which it has awarded the Design Win and for another Time Stamping product which is currently in the process of evaluation, indicating its intention to design-in this additional product, following full compliance with the customer’s requirements. In parallel, the customer continues to evaluate additional Silicom products based on a variety of technologies and speeds. As such, Management believes that this customer will give Silicom many additional Design Wins over time, and that it will eventually become a multi-million dollar account.

Kfar Saba’s Silicom is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the performance and availability of networking appliances and other server-based systems. (Silicom 09.05)

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9.6 Earnix Version 8 to Introduce R Integration and Machine Learning Capabilities

Earnix announced the release of Earnix version 8, the newest edition of its software solution. Earnix V8 delivers a new level of sophistication in modeling and decision analytics with the ability to directly operationalize these decisions online. Earnix V8 integrates models built in the R and Python statistical environments into the Earnix optimization framework. This new capability enriches the Earnix decision making environment with advanced machine learning algorithms and mathematical tools. The new version introduces a state of the art graphical user interface, designed to improve the user’s concentration while reducing cognitive fatigue over long periods of time. The new interface also allows for better management, access and organization of a large number of models.

Ramat Gan’s Earnix integrated customer analytics software empowers financial services companies to achieve optimal business performance through data science and predictive analytics. The Earnix analytical solutions drive superior product, pricing and marketing decisions, while ensuring alignment with changing market dynamics. Earnix combines predictive modeling and optimization with real-time connectivity to core operational systems, bringing the power of analytic-driven decisions to every customer interaction. (Earnix 11.05)

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9.7 New mobiliBuy App Ushers in Shopping at the “Speed of Selfies”

Caesarea’s mobiliBuy, the creator of a free, simple to use, iOS and Android app that allows users to scan product images from magazines or screens and then instantly buy the product, announced that the app is now available for download and is compatible with the entire June issue of COSMO magazine. Users will now be able to see, scan and buy any product directly from the pages of the magazine with the touch of a button, saving them time spent searching for the products they see in the magazine. The product is then shipped directly to the users’ home. In addition to magazines, mobiliBuy enables users to see, scan & buy any product across numerous mediums, including print, online and TV. Following the rollout with COSMO, mobiliBuy is planning to expand the service to additional magazines and media. (mobiliBuy 10.05)

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9.8 RADWIN Boosts Capacity for Public Safety and Video Surveillance

RADWIN announced that RADWIN 5000 JET beamforming PtMP and RADWIN 2000 D+ PtP solution now support the 4.9GHz Public Safety band. RADWIN’s award-winning, smart beamforming PtMP JET Base Station in 4.9GHz Public Safety band, provides Municipalities and Public Safety agencies a much-needed boost in capacity, essential for video surveillance, leased line replacement and other bandwidth-demanding applications. RADWIN 5000 JET delivers ultra-high capacity in 4.9GHz with up to 600Mbps per cell when using two 20MHz channels, and up to 3Gbps per cell in unlicensed frequencies. JET also enables deployment flexibility with multiband support (4.9GHz – 5.8GHz range) and is capable of providing outstanding uplink capacity (up to 90%) and SLA for video-centric applications.

Tel Aviv’s RADWIN is a leading provider of Point-to-Multipoint and Point-to-Point sub-6 GHz broadband wireless solutions. RADWIN also offers solutions specifically geared for non-line-of-sight (NLOS) small cell backhaul. Incorporating the most advanced technologies such as a Beam-forming antenna and an innovative Air Interface, RADWIN’s systems deliver optimal performance in the toughest conditions including high interference and obstructed line-of-sight. (RADWIN 10.05)

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9.9 SECDO Named a 2016 Gartner “Cool Vendor” in Security for Technology

SECDO has been named a “Cool Vendor in Security for Technology and Service Providers, 2016” by Gartner, the world’s leading information technology research and advisory company. Gartner’s 2 May 2nd report notes that, “The shortfalls of established security technologies along with the mounting pressure coming from sophisticated attackers is creating opportunities for innovative startups in the areas of security intelligence and detection of advanced targeted attacks.” SECDO provides advanced alert validation, investigation and remediation capabilities. The platform dramatically improves the efficiency of the Security Operations Center (SOC) by automatically validating alerts from the SIEM using unique thread-level endpoint activity data to identify false positives and prioritize true positives.

Tel Aviv’s SECDO is a groundbreaking provider of Security Investigation and Response solutions. The SECDO platform combines alert validation, interactive visual investigation and automated remediation to transform the way security operations centers work. Security Operations teams are overwhelmed by alerts but at the same time, do not have the data and intelligence to investigate and remediate efficiently. Using patented technology, SECDO automatically validates alerts to weed out false positives. For suspicious activity, SECDO visualizes the attack chain timeline and provides deep visibility into all endpoint activity so analysts immediately understand the “who, what, where, when and how” behind the incident. Then, based on an analysis of exactly how endpoints were compromised, SECDO surgically remediates the incident with minimum user impact. (SECDO 10.05)

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9.10 2breathe Unveils First Smart Device to Induce Sleep

2breathe Technologies announced that 2breathe, a new smart, connected device tackling sleeplessness via a patented guided-breathing technology, is now publicly available. 2breathe broadly-patented technology grew out of a FDA-cleared device for non-drug treatment of hypertension and stress, RESPeRATE, used by hundreds of thousands of doctors and patients. RESPeRATE’s one “side effect” was that users reported dozing off during the session and improved sleep. The Company adapted the technology for smartphones and created the 2breathe platform to induce sleep.

2breathe uses smart, connected technology to deliver the ancient wisdom of sleep-inducing breathing exercises in an easy and effective manner. A sensor worn around the torso picks up the user’s inhale and exhale movements sending it to an iOS app via low energy Bluetooth. The app transforms, in real time, the breathing into tones that gradually guide the user to prolonged exhalation and slow breathing. Within minutes, neural sympathetic activity is reduced, the user begins to disassociate from both external and internal stimuli, and the mind and body relax into sleep. Once sleep is detected, 2breathe automatically shuts off and generates a report showing the falling asleep process breath-by-breath.

2breathe Technologies (www.2breathe.com) and its founders are pioneers in the development of the digital therapeutic devices field, first in hypertension and now in sleeplessness. The original product, RESPeRATE, is the world’s first FDA-cleared, non-drug hypertension treatment device now used by hundreds of thousands of patients and featured in the American Heart Association statement on non-pharmacological treatments. The new product, 2breathe, adopts RESPeRATE guided-breathing technology for individuals who have difficulties falling asleep. 2breathe is not a medical device and is not intended to diagnose or treat medical conditions. (2breathe 10.05)

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9.11 Magal Wins $10 Million in Orders to Secure Critical Power Utility Sites

Magal Security Systems received orders amounting to $10 million for new security systems for four critical power utility sites and the maintenance of another thirteen existing secured sites. The sites belong to a major national power supplier in Latin America, a customer for which Magal already provides integrated security solutions. The orders include hundreds of surveillance cameras, high-end thermal imaging cameras and smart access control and gate systems. In addition, the physical security network will be reinforced by Magal’s cyber security solution.

Yehud’s Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 42 years, Magal S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions. Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G – their 4th generation, cutting-edge hybrid PSIM with SEIM (Physical Security Information Management system integrated with Security Information & Event Management). The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced CCTV / IVA technology and Cyber Security solutions. (Magal Security Systems 10.05)

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9.12 Stratasys Launches Bold 3D Printing Software Strategy – GrabCAD Print

Stratasys unveiled a bold, new software strategy designed to make 3D printing significantly easier, more intuitive and highly accessible. The approach is powered by a new, open architecture “design-to-3D print” workflow application, GrabCAD Print* – residing on the popular GrabCAD SaaS platform and supported by a community of more than 3 million designers, engineers and students. 3D printing techniques are typically characterized by significant “model fixing” time which forces businesses to devise costly, manual solutions to construct an acceptable workflow. GrabCAD Print is designed to make 3D printing fast and easy-to-use, while reducing errors by eliminating requirements to translate and repair computer-aided design (CAD) files. Product designers, engineers, and 3D printer operators can now send native CAD files to a Stratasys 3D Printer or service bureau directly from their familiar CAD environments. Further bolstered by an extensive new business intelligence environment, the application also accelerates data-driven decision-making.

GrabCAD Print works with a variety of Stratasys FDM and PolyJet 3D Printers and can natively read several popular CAD formats from PTC Creo, Dassault Systemes’ SOLIDWORKS, Siemens PLM Software’s NX software, CATIA and Autodesk Inventor. The application also facilitates data sharing related to job scheduling, print queue status, material usage and historical usage. All information is readily available via standard Web browsers, mobile applications or locally installed clients while securely managed through the GrabCAD Platform.

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9.13 MinuteLab Raises $2 Million from Glilot Capital Partners

Minute Lab has recently secured funding of $1.75 million by Glilot Capital Partners, who specialize in the area of Enterprise Software. The first round of financing allows Minute Lab to improve its existing product and expand sales.

Setting up a fully functional, production-like lab environment for developers to interactively execute their newly written code has been a critical component of their daily work. Minute Lab intends to capitalize on offering developers and DevOps teams a way to save a significant amount of time and resources in building and maintaining their software. The company will offer its virtual lab solution as a service for a variety of team sizes and projects.

Over the past 12 months, Minute Lab has built an alpha release of its product, enabling individual developers to setup their own labs locally or remotely on co-tenant servers. Aligning with development best practices, Minute Lab allows swift spin-up and teardown of lab environments on demand, for development teams to efficiently manage as many lab environments as needed to deliver better quality code faster thus reaching the continuous integration phases better prepared.

Tel Aviv’s Minute Lab offers a powerful, containers-based virtual labs for developers to enable true agile development by making interactive and automated code development in a live environment, easy. The company will offer its solution for free for individual developers and open source projects. It will offer software as a service, delivered as virtual clustered servers running multiple dev/test labs in the cloud, as well as on premise software for enterprises that demand it. (Minute Lab 17.05)

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9.14 Saguna Networks Named a “Cool Vendor” in Report by Gartner

Saguna has been named in the Cool Vendors list of the Gartner “Cool Vendors in Communications Service Provider Infrastructure, 2016” report. The report states that elastic provisioning of network capacity and services to multiple CSP customers, based on their dynamic needs, are emerging, leading to virtual network solutions such as bandwidth calendaring on demand, mobile-edge computing (MEC) and Internet of Things (IoT) offerings. It also recommends CSP CIOs/CTOs and network planners should look to newer MVNOs for innovative offerings, such as industrial IoT solutions, MEC and video caching solutions closer to the radio edge of the network.

The Saguna Open-RAN MEC platform creates an open ecosystem and long-term growth engine inside the mobile RAN. With fully virtualized software architecture, the solution promotes network agility and the adoption of NFV. Based on the ETSI MEC standard, Saguna Open-RAN enables mobile operators to quickly and effectively deploy new revenue generating services for content delivery, Internet-of-Things (IoT) connectivity, retail and enterprise applications and more.

Yokneam’s Saguna Networks, a pioneer of Mobile Edge Computing (MEC), makes mobile broadband faster, simpler and more economical with smart NFV software solutions. Based on the ETSI MEC standard, the Saguna Open-RAN platform enables mobile operators to quickly and effectively deploy new revenue generating services. The Mobile Edge Computing platform has fully virtualized software architecture providing cost effective scalability and flexibility. (Saguna 17.05)

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9.15 CellMining Selected as a “Cool Vendor” by Gartner

CellMining has been included in the list of vendors whose products and services are evaluated in the “Cool Vendors in Communications Service Provider Operational and Business Infrastructure, 2016” report by Gartner.

Founded in 2013, Caesarea’s CellMining closed a Series A funding round in December 2015 with a total value of $5 million, to help fund the further development of its pioneering subscriber-centric mobile network optimization capabilities, and expansion into new markets. In February 2016 it was announced that Bosnian mobile network operator M:tel had selected CellMining’s SON solution to enhance its network performance and deliver a superior subscriber experience, following a detailed evaluation on the live M:tel mobile network. (CellMining 17.05)

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10: ISRAEL ECONOMIC STATISTICS

10.1 CPI Rises by 0.4% in April

The Consumer Price index rose in April after five straight months of declines, the Central Bureau of Statistics announced on 15 May. The rise was lower than expected with some analysts predicting that the CPI would rise 0.6% last month. Over the past 12 months, the CPI fell 0.9% and it has fallen, fueled by the fall in world oil prices. This is well below the government’s inflation target range of between 1% and 3% although with oil prices now recovering, the CPI is likely to rise again in May. Outstanding price rises in April included culture and entertainment (2.1%), clothing and footwear (3.7%), and transport (1.7%). Outstanding price falls in April included furniture and household equipment (0.8%). (CBS 15.05)

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10.2 Israel Economy Grows 0.8% in First Quarter

The Central Bureau of Statistics announced on 16 May that Israel’s economy grew at an annualized rate of 0.8% during Q1/16. This is in an initial estimate for the first quarter in comparison with the fourth quarter of 2015, seasonally adjusted. This is also a much lower growth rate than the Ministry of Finance forecast for the year as a whole. The ministry’s forecast stands at 2.8%. The Central Bureau of Statistics states that, at annualized rates, private sector gross product fell by 0.4%, private consumption rose 4%, investment in fixed assets rose 7.5%, exports of goods and services fell 12.9%, and public spending fell 1.7% in Q1/16 in comparison with Q4/15. (CBS 16.05)

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10.3 Israel’s Exports Fall by 22% During 2016

The Central Bureau of Statistics announced that Israel’s trade deficit in goods (excluding ships, airplanes, diamonds, and energy materials) since the beginning of the year totaled NIS 8.6 billion. These figures indicate a continuation of the slowdown in exports of goods from Israel, which fell by 21.7% in January-February, following an annualized 13.7% decline in November 2015-January 2016. The figures also indicate that the trade deficit widened to NIS 13.4 billion in January-April 2016, compared with a NIS 6.6 billion deficit during the corresponding period last year. The figures further show that imports excluding ships, airplanes, diamonds, and energy materials, grew by an annualized 0.1% in February-April 2016, following 5% growth in November 2015-January 2016. (CBS 10.05)

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11: IN DEPTH

11.1 ISRAEL: Taub Center Says Israeli Wages Static for Fifteen Years

The just released Taub Center‘s “A Picture of the Nation Report” provides a statistical analysis of Israeli society and the Israeli economy as at the end of 2014.

The booklet presents a picture of Israel across various topics, such as the cost of living, housing, inequality, labor force trends, wages, education and health. Among the new findings in this publication: transfers between educational streams, industries that cause productivity gaps and the share of young adults who own their home. The publication, based on Taub Center research, presents an overall picture of the socioeconomic situation in Israel, highlighting areas in which Israel performs well, those where improvement can be seen, and those in which a change of course is needed.

For the first time, this booklet presents infographics designed by students from HIT (Holon Institute of Technology), which are based on findings from selected Taub Center studies.

Among the most striking findings in the Taub Center’s A Picture of the Nation 2016:

* After controlling for the national security component of taxes and expenditures, the share of taxes in Israel is among the lowest in the OECD countries – a fact that attests to government policy of less involvement in market activities. The relation between the sources of revenue and their use, though often ignored, is critical in understanding public policy. Tax receipts as a share of GDP in Israel are much lower than the OECD average. As a result, Israel’s revenues are lower, and so, too, is the country’s ability to invest in a variety of areas, including infrastructure and welfare programs.

* Old-age pensions have risen while child allowances have decreased. Between the years 2000 and 2014, among all the cash benefits of the National Insurance Institute, the vast majority of expenditure was for those benefits earmarked for the elderly – the Old-age and Survivors allowance and the Long-term Care allowance. Over the years, there has been a clear, increasing trend in spending devoted to this population, a fact that primarily reflects the demographic trend of an aging population. In contrast, there has been a decline in child allowance payments, following changes in the legislation between 2002 and 2004 that reduced this benefit.

* The majority of the population purchases supplementary health insurance or commercial insurance in addition to the health coverage provided by the state. Out of 20 OECD countries, Israel ranks third in the share of citizens holding private health insurance. In 2012, about 80% of the population had supplementary insurance offered by the health funds, and slightly over 40% held commercial insurance. Many Israelis are double-insured, as almost everyone who has private insurance is also insured through supplementary insurance. The share of those purchasing supplementary insurance increased by almost 60% between 1999 and 2012, and the share of commercial insurance holders grew by almost 80% in the same years. Almost all households with high income have supplementary health insurance, while only about half of households in the lowest income levels have such coverage. These figures indicate inequality in access to high-quality, timely medical care – an issue that has raised concerns in the past few years.

* Trends in pupil transfers between education streams show evidence of a move away from more religious educational settings. Among Jews, movement from more religious schools to less religious ones is greater than movement in the opposite direction. That is, more pupils transfer from Haredi schools to state and state-religious schools and from state-religious to state schools than move from the state schools to the more religious schools. The largest number of transfers was from state-religious education to state education, a figure which is even more notable given the small share of state-religious schools in the education system (about 15%).

* Across all sectors, women are more educated than men. Across population groups, the share of women who hold a bachelor’s degree is greater than men. The difference is especially large in the Haredi sector, where the share of women with a first degree (about 26%) is about twice as high as that of men. The low share of degree holders among Arab Israelis indicates the importance of accessibility to higher education for this population sector. The group with the highest share of degree holders is secular Jews, followed by Jews who consider themselves national-religious.

* Seven industries are responsible for about 75% of the labor productivity gap between Israel and the OECD. Labor productivity is an important factor in determining workers’ wages. Productivity in Israel is low relative to the OECD, and the gap is widening over time. The majority of the productivity gap between Israel and the OECD stems from seven industries where the productivity gap is particularly large – the majority of them in the service sector. The “other business services” sector (which includes legal and accounting services) is responsible for a gap of about $3.32 per work hour, which is about 27.7% of the total gap between Israel and the OECD. Additional industries that contributed substantially to the total productivity gap are wholesale trade (16.4%), hotels and restaurants (9.0%), retail trade (5.7%), food and tobacco (5.4%) and land transport (5.4%). In contrast, it appears that those industries that were opened to imports and exposed to meaningful competition from abroad (like the textile industry) were forced to become more efficient in order to survive; this is manifested via a rise in their productivity levels and a narrowing of their gap relative to the OECD.

* In general, men earn higher wages than women, except among Haredim and Arab Israelis. Among Haredim, and in contrast to other population groups, women’s wages are higher than men’s; among Arab Israelis the gap between men and women is relatively low. The difference between population groups is explained by different levels of education and participation rates in the labor force. In the Arab Israeli population, the majority of women holding a bachelor’s degree are working while those women without a degree are employed at much lower rates. In contrast, the majority of Arab Israeli men work regardless of their education level. Thus, the wages of women in this group are heavily weighted by those with a high education level, while the wages of men in this group are heavily weighted by those with a lower education level.

* The price of housing and rental properties has risen sharply since 2007, while real wages have not risen since 2000. Since the beginning of the millennium, nominal wages have risen in parallel with the consumer price index, such that real wages have not risen for at least 15 years. Housing prices and rental prices have risen much faster than the CPI – although each has risen at a different rate, in contrast to theoretical projections. The shortage of affordable, long-term housing in the rental market allows housing prices to move even further away from the expected level of prices in a balanced market. This situation underlies the importance of the creation of an organized rental market in Israel.

* Among young couples, the home ownership rate has decreased. As long-term rentals are not viable options in Israel, young couples tend to dream of home ownership, even at a high price. It is not surprising that a very high share of over 45-year-old Israelis live in a home they own – primarily because these homes were purchased before the sharp rise in prices at the end of the past decade. Younger populations, though, have been greatly influenced by the rise in prices. Among those aged 35-44, the share of singles who do not live in a flat they own rose to about 36% in 2014 in contrast to less than 30% in 2004. Among those aged 25-34, the share rose more than 10 percentage points during the same period, with more than 60% living in a flat they do not own.

The Picture of the Nation Report covers a variety of additional areas, including new research on topics such as the employment of mothers, tax receipts, and poverty rates in Israel. To read the full publication on the Taub Center website, click here.

The Taub Center for Social Policy Studies in Israel, headed by Prof. Avi Weiss, is an independent, non-partisan institution for socioeconomic research based in Jerusalem. The Center provides decision makers, as well as the public in general, with a big picture perspective on economic and social areas. The Center’s interdisciplinary Policy Programs – comprising leading academic and policy making experts – as well as the Center’s professional staff conduct research and provide policy recommendations in the key socioeconomic issues confronting the State. (Taub Center 16.05)

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11.2 JORDAN: Changes to Jordan’s Constitution Raise Concerns

On 4 May, Osama Al Sharif posted in Al-Monitor that it took Jordan’s two-chamber parliament about two weeks to overwhelmingly approve a number of constitutional amendments that the government had hastily presented on 18 April. On 2 May, the upper house of parliament adopted the amendments a week after the lower house had done the same.

The newly approved amendments to the Jordanian Constitution will change the king’s role in appointing key officials, though observers disagree on whether this will serve or weaken the country’s parliamentary system.

In contrast to the amendments that were recommended by a special royal committee in September 2011, in the midst of the Arab Spring, this time there was no public debate. While the 2011 amendments — which affected one third of the constitution and limited the king’s constitutional powers to postpone elections, dissolve the lower house indefinitely, keep a government in office or re-appoint a prime minister — were seen by the public as enhancing political reforms and underlining the kingdom’s status as a constitutional monarchy, the latest installment of alterations triggered controversy.

The government did not specify the reasons behind the changes, which give King Abdullah the sole power to appoint the heads of the military, security forces, police, senate and constitutional court, in addition to the regent, without the recommendation of the Cabinet of ministers, as was the case previously. In addition, one article in the constitution was revised to allow dual nationals to run for or be appointed to senior public posts.

But when the lower house discussed the amendments over a number of sessions on 19 April, Prime Minister Abdullah Ensour defended them, saying they are “progressive” and aim to enhance the principle of separation of powers. Speaker of the upper house and former Prime Minister Faisal al-Fayez went further, saying that the changes are intended to pave the way for the formation of parliamentary governments, in which the largest party or coalition in the lower house would form a new government.

At present the king has the sole power to appoint a prime minister from within or outside of parliament. Fayez said the amendments are meant to keep key sovereign military and security posts from being politicized.

Refuting criticism that the amendments actually reverse the reform path and consolidate the powers of the king, Fayez responded, “A strong king means a strong Jordan.”

But the amendments elicited strong criticism from public figures, including the former speaker of the lower house, Abdel Karim al-Dughmi, who voted against them. Addressing lawmakers on 24 April, he described the alterations as a “coup against the constitution and Jordan’s political system.” He vowed to vote against them, adding that the king enjoys immunity under the constitution. But how would that work when he alone appoints public figures who may still be accountable under the law?

One constitutional authority, Mohammad al-Hammouri, addressed this particular point in a 24 April article for news site JO24, saying that under the Jordanian constitution, “The king can do no wrong” and the authority comes from the people through an elected legislature and the king rules through his ministers, who are accountable when he is not. He added, “Under these amendments, we are no longer a parliamentary system.”

The Islamic Action Front, the largest opposition party in the country, issued a statement on 24 April criticizing the amendments and described them as “leading to absolute rule and constituting a clear reversal from the reform discourse that the king had preached, especially with regard to the formation of parliamentary governments with full authority.”

But the debate has failed to spill over into the public arena. In contrast to mass protests during the Arab Spring, there were few demonstrations in Amman and other towns following Friday prayers on 29 April. Only the article regarding allowing dual nationals to hold public posts appeared to galvanize popular protests.

Still, the amendments were defended by prominent figures who had previously called for wider political reforms. Former Prime Minister Taher al-Masri told Al-Monitor that the latest amendments “pave the way for the formation of parliamentary governments and strengthens political parties while distancing military and security institutions from political gravitations.” He added that these institutions belong to Jordan’s citizens and should not be politicized. Masri stressed that the king is still committed to political reforms and “the latest amendments point to the fact that our constitutional monarchy is maturing.”

But former deputy prime minister and head of the Royal Committee for the National Agenda Marwan Muasher disagreed. He told Al-Monitor that it is wrong to believe that these amendments “actually serve the king or that they enhance the principle of separation of powers.” He added, “We all know that appointing the head of the army or security cannot be done without the approval or choice of the king. But changing the rules of the game now and altering the principle that the king rules through his minister, which has preserved the stability of the country, is a [dangerous] precedent.”

One lawmaker who is well known for advancing equal rights for citizens and defending political reforms, Mustafa Hamarneh, is critical of the recent amendments, which he said have “deformed the constitution, damaged the three branches of government and concentrated powers in the hand of the king.” He told Al-Monitor, “The changes have taken authority from the people and distanced us from the goal of forming parliamentary governments.”

On 2 May, Ensour announced that Jordan is currently preparing to hold parliamentary elections, though no date has been specified yet. It is not clear if the latest amendments will lead to the formation of parliamentary governments as promised by the king.

Jordan may be attempting to copy the Moroccan example of allowing political parties to form governments while keeping so-called sovereign posts in the hands of the king. Those who defend the move say Abdullah remains the best guarantor against possible abuse of power by ruling parties or blocs. Others are asking what will happen if the experiment fails and we end up with a monarch who wields too much power and is unaccountable for his decisions. (Al-Monitor 04.05)

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11.3 UAE: Truck Market Sales Set to Grow at 8% CAGR till 2021

According to a recently published TechSci Research report “UAE Commercial Vehicles Market Forecast & Opportunities, 2021” UAE truck market, which includes pickup & light duty trucks, medium and heavy duty trucks (M&HCV), is the dominating segment of the UAE commercial vehicle market. In comparison with other Middle East countries, which derive a large chunk of their revenue from the oil and gas sector, the UAE has diversified into non-oil sectors such as manufacturing, construction, power, wholesale, retail and transportation which has reduced its dependence on oil and gas sector.

Despite of such a positive contrast, the country’s truck market witnessed negative growth during 2011-2015 due to slowdown in construction projects across the country and tight liquidity situation. However, in 2014, $100 billion investment was allocated for the housing and transport sector in Abu Dhabi, which was in line with country’s economic vision 2030. In addition, Abu Dhabi’s Executive Council announced investment of $89 billion, road development and other infrastructure projects in the housing sector in 2013. Further, around $2 billion are estimated to be invested in developing state-of-the-art housing establishments in the country. Various road construction project such as 62 km highway connecting Dubai and Abu Dhabi are also scheduled for completion by 2017.

According to TechSci analysis, the country is expected to witness investment in energy, infrastructure, residential and commercial projects over the next five years. Moreover, the country would be hosting the “World Expo 2020”. Consequently, the country is poised to witness large scale infrastructure development. Moreover, the UAE government is focusing on diversification of economy in the non-oil sector over the next decade, as per the government’s plan to trim down the share of revenue derived from the oil sector to around 20% by 2030.

Few of the prominent projects, which are likely to raise the demand for trucks in the UAE are, Abu Dhabi Metro construction, Dubai Metro rail line construction, Emirates Roads Master Plan, Etihad railway Network, Airport expansion project, Abu Dhabi Airport expansion projects, etc.

The average selling price (ASP) of trucks in the UAE is anticipated to increase at a low pace over next five years. Garnering support from the expected growth in the volume sales coupled with anticipated price rise, market for trucks in the UAE is projected to grow by 2021, thereby exhibiting revenue growth at a CAGR of around 8.65% during 2016-2021.

The UAE truck market is dominated by Mitsubishi. The company emerged as a leader in pickup & light truck category backed by its wide product portfolio. The market share of Mitsubishi is estimated to further grow by 2021 backed by anticipated increase in its market share in medium and heavy duty truck markets.

On the other hand, second and third largest market shares in the UAE truck market were held by Nissan and Toyota respectively, in 2015. Nissan with its presence in the pickup & light duty truck segment and medium duty truck segment has been playing on volume sales. However, Toyota, along with its subsidiary “Hino” accounted for third largest market share in the pickup & light duty truck category in the same year. Hino was the largest player for medium duty trucks in the UAE in 2015. The market share of Toyota (along with its subsidiary Hino) is further forecast to increase by 2021 according to TechSci Research report. (TechSci Research 11.05)

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11.4 LIBYA: The Story Behind the General Who Will Likely Shape Libya’s Future

On 9 May Mustafa Fetouri posted in Al-Monitor that Gen. Khalifa Hifter’s star appears to be rising once again in Libya, and it is only a matter of time before we see him become a figurehead in a country that is lacking any but is eager to have one.

His enemies in Misrata and Tripoli have always questioned his motives and intentions, but it remains to be seen if he will be a uniting leader for a fragmented country or a divisive politician pushing Libya toward even more fragmentation.

During March, Hifter almost completely liberated Benghazi and started moving his troops to retake Sirte in western Libya, where the Islamic State (IS) has been in control for almost two years. Hifter’s troops are surrounding the city, awaiting his orders to attack IS, which has launched battles west and southwest of the city, taking more territories and small villages such as Abu Grain and Zamzim.

Hifter’s declared aim is to liberate Libya from Islamists, but it is unclear what his next step will be if he takes Sirte. The next big city on the way to Tripoli is Misrata, which has the most powerful local militia in Libya. Misrata is already an enemy of Hifter, which means attacking it will trigger longer, more devastating war in the country.

So who is this man who has been on and off the Libyan political scene for the last 40 years, shifting positions as his fortune changed from a Moammar Gadhafi loyalist to a prisoner of war to Gadhafi’s sworn enemy and — most recently — as chief of staff of the Libyan army under the internationally recognized government in Tobruk?

Born to a big clan in the even-larger al-Firjan tribe, dominant in both Ajdabiya and Sirte, Hifter was recruited as a young officer by the late Gadhafi to join the Free Unionist Officers movement inspired by Egyptian leader Gamal Abdel Nasser. The movement was secretly founded by Gadhafi in the 1960s and used to topple King Idris I of Libya in September 1969 and take power.

Hifter attained the rank of colonel in 1986 and became the commanding officer of Libyan ground troops in Chad’s civil war. He was captured in 1987 when his base was overrun by Chadian forces and he was taken to Chad. Gadhafi, denying that he had any troops in Chad, disowned Hifter and left him, along with 300 of his troops, at the hands of Chadian authorities. Under pressure from the West, particularly France, which supported counter-Chadian factions, Gadhafi never admitted that he had any troops in Chad.

The United States, having already attempted many times to remove Gadhafi from power — including bombing his residence in April 1986 after accusing him of supporting terrorism — came to Hifter’s rescue with the hope of enlisting his aid against Gadhafi.

In return for his freedom from Chadian jail, Hifter was asked to join the newly formed opposition group, the National Front for the Salvation of Libya, which enjoyed US military and financial support. Hifter, already angry from being left hopeless in a Chadian jail, joined the front and was flown into the United States by the Central Intelligence Agency (CIA) with troops willing to join him. Hifter lived comfortably in Virginia, relatively close to CIA headquarters, from the earlier 1990s to 2011. He apparently even became a US citizen, but he never forgot his grudges against Gadhafi.

It is not clear what kind of relations he had with the CIA. Many aspects of his life in suburban Washington are hard to explain — for example, how he supported himself and his family. It is assumed that he became the CIA’s man against Gadhafi. He maintained ties with Libyan opposition groups in exile and organized military opposition to Gadhafi from abroad, but without any success until the revolt against Gadhafi erupted in 2011.

Sensing his time had come to settle scores with Gadhafi, Hifter arrived back in eastern Libya in March 2011 and played a role in leading the rebels fighting the regime under NATO air cover. After the regime was toppled, Hifter faded into obscurity again, only to surface in October 2012 for a brief time when the new government decided to invade Bani Walid, a town southwest of Tripoli accused of harboring former regime officials. There are no confirmed reports of him taking part in actual fighting.

Hifter disappeared again until February 2014, when he suddenly appeared on TV, making a statement resembling an announcement by a military leader taking over power. In the announcement, he launched “Operation Dignity” against Islamist militias in Benghazi; however, no one took Hifter seriously at the time since he had neither an official military role nor a loyal militia to fight with him. It turned out that he was still preparing his military capabilities.

Hifter again disappeared from the scene, spending the next few months moving between al-Marj and Benghazi and trying to organize former military officers into a fighting force, counting on old loyalties among the remnants of the Libyan army and his tribal connections. He managed to cultivate political support within the internally recognized government based in Tobruk, which named him chief of staff of its infant army in March 2015.

After he gained political and military legitimacy, Hifter concentrated on fighting Islamists in Benghazi, though with little initial success. His most sworn enemy was Ansar al-Sharia, the dominant terror group in Benghazi at the time, which the United States had already declared a terrorist organization after it was accused of killing the US ambassador in 2012.

Hifter relied heavily on his tribal connections in eastern Libya and capitalized on the bad security situation in Benghazi. By May 2015, he believed he had enough force to declare war on terror throughout Libya, not just Benghazi, where hundreds of former security officials, army officers and civil and political activists had been assassinated. In a way he was defending himself since he knew that he could be next on the death list. His offensive in Benghazi stalled for a while since the army fragments he managed to reorganize were few in numbers and lacked training and equipment. Above all, many former professional officers did not join him because neither his motives nor his objectives were clear.

However, that changed in late 2015 and early this year. In March 2016, Hifter established contact with a group of former professional officers and politicians exiled in Egypt. Al-Monitor has learned that two former high-ranking regime politicians visited him and agreed to provide him with more former army officers with certain know-how, including mine expertise and maintenance technicians for military airplanes.

The agreement included unconditional return for any former official or army officer wishing to return to Libya without being prosecuted or threatened. At least one former high-profile politician has already been welcomed back to Libya. Tyeb al-Safi, a former minister and close aid to Gadhafi, returned to eastern Libya under the protection of his own tribe.

While Hifter’s definitive military plans are unknown after Sirte, his political intentions also are not clear. He has repeatedly distanced himself from politics, but his increasing popularity, particularly in eastern Libya, might well develop into a nationwide phenomenon pushing him to take some political role or even run for president in the next elections. In eastern Libya today, Hifter is the de facto chieftain as he tries to extend his leadership role westward. Forces loyal to him already control parts of western and southern Libya. One thing, however, is certain: Hifter is here to stay, and he will play a role in shaping Libya’s political scene within the Government of National Accord and beyond. (Al-Monitor 09.05)

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11.5 TUNISIA: Is Homophobia at All-Time High in Tunisia?

Conor McCormick-Cavanagh posted on 4 May in Al-Monitor that homophobia has reached an unprecedented level in Tunisia, as National Guard members are posting violent threats against the gay community on social media and signs banning gays from entering are displayed in public places.

The wave of homophobia began 14 April when a Tunisian actor went on live television and blatantly made homophobic remarks. Ahmed Landolsi appeared on the popular talk show El Hiwar Ettounsi (The Tunisian Conversation) and was asked about his views on homosexuality. He expressed his belief that “homosexuality is a sickness” and that “Tunisia’s constitution states that the country’s religion is Islam,” so homosexuality is “against the constitution.”

Landolsi’s motivation for these comments remains unclear. He is a key public supporter of the Esperance Football Club in Tunis and his supporters would likely not respond favorably to comments friendly to the lesbian, gay, bisexual and transgender (LGBT) community. He may have been pandering to these soccer fans or even expressing his true beliefs. Either way, he doubled down on his comments, expressing the same thoughts on Mosaique FM.

The LGBT activist community condemned his comments and implored him to rescind his homophobic remarks, but Landolsi refused. Landolsi’s comments and refusal to apologize were not surprising; he expressed a belief shared by many Tunisians. According to a survey by ELKA Consulting, 64.5% of Tunisians believe homosexuals deserve punishment.

In response to this general acceptance of such normative homophobic comments, Ahmed Ben Amor, vice president of Shams, Tunisia’s first LGBT activist organization, appeared live on El Hiwar Ettounsi to publicly condemn Landolsi’s comments and share his organization’s principles. The talk show is not known for being a particularly thoughtful program and the episode featuring Ben Amor reinforced this idea.

To create controversy, the TV show not only invited Walid Ettounsi, a blatantly homophobic singer, but also Imam Mohamed Ben Hamouda. They strategically placed Ben Hamouda and Ben Amor across from each other and constantly showed viewers the face of the imam while Ben Amor was speaking.

The show lasted for more than 43 minutes and Ben Amor expressed his organization’s guiding goal: the repeal of Article 230 of Tunisia’s penal code, which criminalizes sodomy. He also spoke about the general tolerance of homosexuality in Arab-Muslim society, citing Abu Nawwas, an Arabic writer famous for his stories involving homosexuality.

The imam countered by saying that homosexuality is not just forbidden in Islam, but also in Christianity and Judaism. Ettounsi also expressed homophobic sentiments and got the audience to laugh at Ben Amor’s ideas.

This episode of El Hiwar Ettounsi kicked off the controversy in Tunisia, which continues to this day. Never before had an entire episode of a Tunisian talk show been dedicated solely to the topic of LGBT rights. Shams leaders, including Ben Amor, had previously gone on talk shows such as El Hiwar Ettounsi and Mamnoua min el-Bath (Forbidden to be Broadcast), but only as part of short segments.

In the days following the airing of the show, pictures spread across social media, depicting signs above doors of restaurants, internet cafes and grocery stores that homosexuals were forbidden to enter. The window of a taxi in Kairouan displayed a sign that read “No rides for homosexual passengers.”

In addition, National Guard members posted multiple threatening photos, with guns and knives next to signs that expressed homophobic sentiments. Many of the photos from National Guard members referred to the show as El Himar Ettounsi, meaning “The Tunisian Donkey.” Some National Guard members even called for homosexuals to be “burned to death.”

Following these threatening and homophobic social media posts, Shams lawyer Mounir Baatour called for an “official boycott of all homophobic shops and service providers.” He also called for the “prosecution of any service provider found guilty of discrimination based on sexual orientation.”

LGBT activists have never before expressed such profound worry about the potential for hate crime attacks. In fact, their worries are quite rational. Baatour told Al-Monitor of three hate crimes in the past week. He said, “A group of homophobic men attacked Shams member Bouhdid Behadi at the downtown Passage metro station. Safwen Charfi, another man, also reported being verbally harassed with homophobic slurs in the Bardo neighborhood. Another young man was beaten on his back in another homophobic attack in the Cite Ettadhamen neighborhood.”

Ramy Ayari, a prominent LGBT activist who caused controversy on social media in September 2015 for posting a photo of himself kissing another man, also was beaten and kicked in the face in a homophobic attack by off-duty police officers outside the Wax nightclub in Gammarth, a suburb of Tunis, on 29 April. Speaking to Al-Monitor, Ayari said, “I can’t even move. They attacked me and my friends because we were with transgender people.”

In response to the rise in homophobia throughout Tunisia, LGBT activists have organized a march in downtown Tunis on 15 May. A group of counter-demonstrators have also posted a Facebook event on the same day, titled “Beat the gays.” Neither security forces nor the Ministry of Justice have addressed the potential for violence and intimidation.

Riadh Mouakher, a member of parliament from Afek Tounes, told Al-Monitor, “Most parties aren’t saying anything about the issue of homosexuality. They are afraid of a negative reaction.” Afek Tounes is the one mainstream party that has been clear in its position demanding a full repeal of Article 230.

Tunisia’s LGBT community may have scored one moral victory recently. After Ettounsi expressed his homophobic comments on TV, Shams reached out to concert organizers in Canada and the United States who had already scheduled Ettounsi for shows on 20 – 21 May. The organization informed them of Ettounsi’s comments and according to Shams, the organizers responded by announcing a cancellation of the shows and a ban of Ettounsi from all future shows. However, the final outcome remains unclear, as Naoufel Ourtani, a Tunisian journalist, has questioned these claims.

The path forward for LGBT activists in Tunisia remains challenging, but there are reasons for optimism. A judge recently threw out a case of eight men arrested on charges of violating Article 230, marking the first time men arrested on charges of violating this article were found not guilty. In addition, although most mainstream politicians either oppose repealing Article 230 or are afraid to speak about it, Afek Tounes, the party with the fifth-most seats in parliament, supports repealing the law banning sodomy.

Mouakher said, “Shams’ demand is really simple. They aren’t demanding the right to gay marriage. All they want is privacy.” He added, “The constitution is very clear about this. There is a minimum amount of human dignity that you have to respect.”

Conor McCormick-Cavanagh is a journalist based in Tunisia. He writes about politics and culture of the MENA region. (Al-Monitor 04.05)

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11.6 EGYPT: Arab Republic of Egypt Outlook Revised To Negative; ‘B-/B’ Ratings Affirmed

On 13 May 2016, S&P Global Ratings revised its outlook on its long-term sovereign credit rating on Egypt to negative from stable. At the same time, we affirmed our ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Egypt.

Rationale

The negative outlook reflects our view that Egypt’s external and fiscal vulnerabilities might increase further over the next 12 months. We consider that this could dampen the country’s economic recovery and exacerbate sociopolitical tensions.

Our ratings on Egypt remain constrained by wide fiscal deficits, high public debt, low income levels, and institutional and social fragility. We expect some Gulf States to continue to provide economic assistance to Egypt in the form of direct investment, participation in new projects and concessionary loans to purchase petroleum products, given Egypt’s strategic importance in the region. Although financial support from some Gulf Cooperation Council (GCC) countries – namely Saudi Arabia, the United Arab Emirates (UAE) and Kuwait – may partially offset Egypt’s growing external financing pressures, we think that the slump in these countries’ oil-related revenue may make such support less forthcoming in future.

We project that Egypt’s real GDP growth will weaken to 3% in 2016, after rebounding to 4.2% in 2015. Several factors are constraining the gradual economic recovery in the near term – in particular, the worsening of the foreign exchange shortage and the significant drop in tourism. Business conditions in Egypt have continued to suffer from these bottlenecks and the government needs to address them to maintain the country’s growth momentum, in our view. We anticipate that Egypt’s economic growth will average 3.8% in 2016-2019, fueled by domestic consumption and investments. These will be underpinned by resilient remittances from Egyptians working abroad, some inward foreign investment, and an improved power supply as new natural gas developments come on-stream by end-2017.

Eni SpA has discovered a natural gas field offshore of Egypt, estimated to be capable of producing 850 billion cubic meters or 500,000 barrels of oil equivalent per day. We consider that the discovery could support Egypt’s economic growth by encouraging investment in the oil and gas sector. Production at the Zohr field is expected to start by end-2017 and be fully scaled-up by 2019. It could improve the country’s energy and trade imbalances in the medium term. However, we understand that the Egyptian General Petroleum Corp. still owes arrears of about $3 billion to foreign oil companies. We believe that any delays in paying back foreign oil companies could discourage investment in the Egyptian oil and gas sector, particularly while oil prices remain low.

Since 2014, the Egyptian authorities have launched a number of politically sensitive fiscal and structural reforms aimed at reducing the budget deficit. The government raised electricity prices twice and plans to gradually phase out fuel subsidies over the next five years. The government also raised taxes on corporations and property, and introduced taxes on dividends. Other reforms, such as introducing a tax on capital gains and raising value-added tax (VAT), have been postponed. However, we understand that the law governing the new VAT system has been finalized and will be submitted to the parliament for its approval. We expect it to be implemented before the end of 2016. Overall, we expect budgetary consolidation to continue at a slower pace than we had anticipated, in light of Egypt’s social fragility.

Egypt’s fiscal deficit, which stood at 11.5% of GDP in 2015, remains one of the highest among the sovereigns we rate at ‘B-‘. We anticipate that mild fiscal consolidation will continue as a result of subsidy reforms, new fiscal measures (including those to VAT), and low energy prices. In our view, the government has a very limited ability to significantly cut spending, given Egypt’s shortfall in basic services, the need for social assistance to low-income individuals and families, and the country’s high debt service cost. Spending on public wages and salaries, subsidies and social transfers, and debt service represents about 80% of the total expenditure in the 2015/2016 budget. Moreover, the government has channeled some of the savings from subsidy reforms into higher spending on health, education, and scientific research.

We forecast that general government debt will increase to 91% of GDP in the next three years. We estimate the annual change in general government debt will average about 11.5% of GDP in 2016-2019, down from 13.8% of GDP in 2012-2015. We project that general government interest expenditure will reach one-third of general government revenues on average in 2016-2019.

We understand that financial assistance from official lenders such as the World Bank and some GCC countries remains an important component in the government’s debt financing strategy. The government’s debt strategy during the upcoming fiscal year (July 2016 to June 2017) includes the possible issuance of a new Eurobond of up to $2 billion, and up to $1.5 billion from the World Bank and the African Development Bank via a development policy financing loan. In November 2015, Egypt reached an agreement with the World Bank and the African Development Bank to receive $4.5 billion in concessional funding over the next three years.

The remaining fiscal funding will most likely be raised from the Egyptian banking system. Domestic banks are heavily exposed to the Egyptian government debt. Their customer deposit bases continue to grow, while private-sector credit remains relatively flat. Egyptian banks tend to invest their excess liquidity in domestic government debt. The Egyptian authorities have increasingly been relying on the Central Bank of Egypt (CBE) to finance budget deficits.

We forecast current account deficits to average 4.8% of GDP in 2016-2019, prompted by a widening of the overall trade deficit as import demand remains strong while export and tourism receipts are subdued. We expect Egypt’s overall net external liability position to stand at 169% of current account receipts (CARs) in 2016. Over time, remittances from Egyptians abroad, tourism, Suez Canal receipts and foreign direct investments are unlikely to be sufficient to fund the overall trade deficit. In our view, the low and decreasing reserves coverage – estimated at three months of current account payments (CAPs) in 2016 – represents a key vulnerability in the near term and a limited buffer to absorb any further downward pressure on the Egyptian pound. Although we expect some Gulf States (including sovereigns and government-related entities) will continue to provide economic assistance to Egypt, financing pressures will remain.

Over the past four years, Saudi Arabia, the UAE and Kuwait have demonstrated support to Egypt by providing substantial financing – totaling close to $25 billion – in grants, aid and concessionary loans, because they view Egypt as an important geopolitical ally. The CBE received $6 billion in deposits from the Gulf states in April 2015, which has helped increase Egypt’s foreign currency reserves to $20.5 billion. We understand that Egypt will receive an additional $2 billion in deposits from the UAE before end-June 2016. Despite this support, Egypt’s international reserve position had dropped to $17 billion as of April 2016 and will remain under pressure

We assess Egypt’s monetary policy flexibility as low, reflecting our appraisal of the CBE’s intermittent interventions in the foreign exchange market and its exposure (along with that of the banking system) to the government. Despite the CBE’s interventions, the Egyptian pound has continued to depreciate against the U.S. dollar by about 25% since January 2015. In March 2016, the CBE carried out a 13% devaluation of the Egyptian pound. The CBE described the devaluation as being part of a shift to a more flexible exchange-rate policy. This leaves open the possibility of further adjustments in the foreign currency rate, in our view. We expect the Egyptian pound to continue to weaken over the medium term.

President Abdel-Fattah El-Sisi has been in office since June 2014 and Egypt concluded its most recent parliamentary elections on 16 December 2015. The security and sociopolitical environment in Egypt remains fragile. Contentious issues include the transfer of islands in the Red Sea to Saudi Arabia and continued hostility between the Egyptian security forces and the terrorist group ISIS in Northern Sinai.

Outlook

The negative outlook reflects our view that Egypt’s external and fiscal vulnerabilities might increase further over the next 12 months, slowing the country’s economic recovery and heightening sociopolitical tensions.

We could lower the ratings if external imbalances increase beyond our current expectations, for example, if foreign exchange reserves decreased more quickly than we currently expect. We could also lower the ratings if current account financing, including from GCC countries, became less forthcoming.

Deteriorating domestic fiscal funding options, increased political risk, or a weaker institutional environment could also lead us to lower the ratings.

We could affirm the ratings at their current levels if external and fiscal deficits reduce, and if GDP growth picks up. (S&P 13.05)

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11.7 TURKEY: Outlook Revised To Stable; ‘BB+/B’ Ratings Affirmed

On May 6, 2016, S&P Global Ratings revised its outlook on the Republic of Turkey to stable from negative. At the same time we affirmed our unsolicited ‘BB+/B’ foreign currency long- and short-term sovereign credit ratings and ‘BBB-/A-3’ local currency long- and short-term sovereign credit ratings on Turkey.

We also affirmed our unsolicited ‘trAAA/trA-1’ long- and short-term Turkey national scale ratings.

Rationale

The outlook revision reflects the demonstrated resilience of the Turkish economy and our view that risks to the financing of Turkey’s still-large current account deficit and the roll-over of its external debt have moderated. The Turkish economy has faced several challenges – escalating domestic violence following the ending of the peace process with Kurdish militants, two general elections, a sharp depreciation of the lira amid sustained portfolio outflows, heightened instability along its southeastern border and weaker demand from major export markets. Despite these challenges, during 2015 the economy expanded by 4% versus our original expectation of 3.1% at the time of our 6 November 2015, affirmation. Lower oil prices and net gold exports allowed a narrowing of the current account deficit, despite the weakness in demand from oil-exporting markets and a fall in tourism numbers. We expect economic growth to average about 3% over our forecast horizon of 2016-9. That is not to say, however, that risks do not persist. The tourism season is expected to underperform that of past years; the government’s deficit position is projected to widen to support the economy; rising oil prices could push up the cost of imports; domestic political volatility is likely to persist; and the implementation of reforms may be sidetracked to make way for constitutional changes. But in our base case, we do not expect that these factors will have a significant negative effect on external investors’ willingness to fund the Turkish economy.

Strong consumer demand in 2015 was supported by lower oil prices; purchases, particularly of automobiles, some of which were brought forward in order to avoid the price impact of further exchange rate declines; and the additional spending of the large migrant population (estimated at around 3 million, 4% of the population). Consumer credit growth decelerated, owing to macro-prudential measures taken to curb excessive household borrowing, but credit card lending recovered in the second half of the year. The negative effect of lira depreciation (24% against the U.S. dollar and about 5%-7% on a real effective exchange rate basis) on households’ purchasing power was partially mitigated, as they continue to hold more foreign currency assets than liabilities, given that foreign currency lending to households is prohibited. The current account deficit narrowed to 4.5% of GDP in 2015 from 5.5% in 2014, largely due to the low price of energy imports and the improvement in the volatile net nonmonetary gold exports position; excluding these effects, the current account deficit widened. The general government deficit was unchanged at a modest 1.2% of GDP, with an increase in tax revenues compensating for stronger-than-budgeted spending.

We project real GDP will grow by 3.4% in 2016, slowing compared with the 4% growth in 2015, despite the government’s 30% increase in the minimum wage. In our view, the government’s largesse in relation to its pre-election promise will be more than offset by the slowdown in credit growth, moribund private investment, volatile external demand, and a sharp decline in the tourism sector as a result of the recent terrorist attacks and Russia’s ban on the sale of package holidays to Turkey.

We expect heightened political uncertainty in 2015 to spill over into 2016, and this could also dampen economic growth prospects this year. The implementation of the ambitious medium-term economic program for 2016-2018 is likely to stall in 2016, in our view, due to the president’s focus being directed more toward bringing about constitutional change with the end goal of achieving an executive presidency. The reform agenda targets increasing domestic savings, reducing dependence on imports, improving educational standards, and increasing labor market flexibility, among other things. A referendum, or parliamentary elections, could be called again in 2016 in order for the AKP party to win enough seats to enable it to change the constitution.

Under our base case, we do not expect eventual constitutional reform to result in significant policy changes. In particular, we do not expect an intensification of intervention in the independence of Turkish institutions, including the central bank, nor the abrogation of any private sector rights such as the nationalization of private sector banks.

As well as focusing on ways to raise domestic savings – including plans to fund the private pension and severance pay systems – the government’s reform plan also aims to deepen domestic capital markets, and cut the bill for imported energy (an important contributor to the current account deficit), while increasing the currently low participation of women in the labor market and reducing the size of Turkey’s substantial informal economy. If the pace of implementation accelerates, it could help Turkey shift away from its current economic growth model, which still depends on net debt financing from abroad and therefore to a large extent on monetary policy settings of major central banks. In the absence of such reforms, though, we believe Turkey’s external position will remain a weakness for the rating.

Gross international reserves of the central bank amounted to $111 billion in 2015. However, foreign currency and gold reserve requirements made up about 70% of this total in 2015 (up from 37% in 2011). Excluding these reserve requirements we estimate usable reserves at about $30 billion in 2015, an amount roughly equal to the 2015 current account deficit, providing only a limited buffer against any further exchange-rate pressure. We estimate Turkey’s gross external financing needs will average close to 180% of current account receipts and usable reserves in 2016-9.

Between 2008 and 2015, net banking sector external debt increased to about $150 billion (21% of GDP) from less than $8 billion (1% of GDP). External leverage for Turkey’s banking sector remains relatively high. Nevertheless, increases to reserve requirements for short-term borrowing resulted in a sharp fall in banks’ reported short-term debt in 2015, down to about 40% of banks’ total external debt from about 55% in 2014. At the same time we see a general trend for Turkish banks to increase the maturities of their longer-term debt. Although we view Turkey’s banking system as generally well capitalized and supervised, the size of state-owned banks (representing about one-third of total banking system assets), and their involvement in quasi-fiscal operations, means that domestic banks’ asset quality may not be homogenous throughout the system. Furthermore, although the banking sector is fully hedged, its foreign currency funding has risen in tandem with declining profitability. This could represent a risk for banks if their hedges do not hold, due to counterparty risk, or because of the second-round effects of the large open foreign exchange position in the corporate sector (at about 25% of GDP) on banks’ asset quality. We also remain concerned about the decrease in Turkish exports and tourist arrivals, as both of these will put pressure on borrowers in these industries.

The uncertain global economic environment, particularly a possible reversal in historically low U.S. interest rates could, in our opinion, raise real interest rates in Turkey. This could exacerbate any slowdown and in turn reduce the risk appetite of nonresident investors in Turkey’s government debt and equity markets, which have been important destinations for external financing inflows over the past several years. Further increases in the prices of oil and other energy products could also exacerbate any slowdown, given Turkey’s large net energy import bill.

Mitigating its external vulnerabilities to some degree, Turkey has deep local currency capital markets that have benefited the sovereign’s access to and cost of financing. Two-thirds of government debt is funded in local currency and at fixed rates. Furthermore, we view the treasury’s policy of meeting net public-sector financing needs by issuing in local currency at longer maturities as a positive rating factor.

Central government expenditures exceeded budgetary expectations in 2015 as big ticket current spending items, such as personnel expenditure, current transfers and purchases of goods and services all accelerated by more than 10%. Meanwhile, capital spending and transfers also accelerated. However, the central government balance narrowed marginally to 1.2% of GDP in 2015, from 1.3% in 2014, as budget revenues increased by 14%, largely due to a 16% increase in tax revenues, and non-tax revenues increased by 2%.

In our base-case scenario, we anticipate that the government will continue running modest deficits, averaging 2.4% of GDP in 2016-2019. This widening in the deficit from 1.2% in 2015 results from the implementation of election pledges alongside our lower economic growth forecasts when compared with those in the government’s medium-term plan for 2016-2018. We expect the government’s debt stock to remain largely flat in the absence of external shocks that could weigh further on growth prospects, the exchange rate, and on budgetary performance.

Under our fiscal assumptions, we also incorporate our view that the contingent liabilities of the Turkish general government are limited. Specifically, we consider that Turkey’s domestic banks–the intermediators of the country’s external deficit–will remain well regulated and amply capitalized. Nevertheless, we expect asset quality to gradually deteriorate, evident from the 9% increase in domestic nonperforming loans (NPLs) in the system during the first 16 weeks of 2016 versus 2% credit growth. The stock of outstanding NPLs is at about 3.3% as of the end of April 2016. We expect a sharp decline in tourism receipts in 2016, following the terrorist attacks in 2015 and 2016, to result in higher, but manageable, NPLs for the banks.

Anecdotally, we understand that system wide NPLs could be about 2% higher, when including large Turkish banks’ sales of NPLs and large restructurings that are classified under Group II performing loans. We understand that the latter is attributable to clients who can’t pay owing to the 2015 lira depreciation and who have requested an extension of the original maturity.

We foresee the general government’s interest burden at about 5% of revenues and net general government debt at about 27% of GDP over 2016-2019. Since 2009, the weighted average maturity of Turkish government domestic borrowing has more than doubled to six years. One risk to the central government’s funding profile remains the high stock of domestic debt held by nonresidents. It stood at 17% of total domestic debt in 2015. In the event of external instability, this stock could become an outflow, putting pressure on balance-of-payments financing.

Turkey’s low domestic savings rate results in a low level of investment and high interest rates to attract capital flows to Turkey, some potentially flighty. This is also partly due to a lack of confidence in the Turkish lira. More credible monetary policy could reduce inflation expectations and result in a higher level of savings. Overall, we think the central bank’s challenged credibility has diminished the status of the Turkish lira as a reliable transactional currency, making it more vulnerable to shifts in investors’ portfolios of cross-border holdings. We think this poses greater risks to the refinancing of Turkey’s considerable stock of external debt. Although we consider that Turkey’s relatively deep capital markets benefit its monetary flexibility, we view the complex monetary framework – with multiple interest rates and an unusually broad interest rate corridor – as relatively ineffective, given the high pass-through of exchange rate depreciation into headline inflation. We note the central bank’s recent efforts to simplify the monetary policy framework. However, the cuts to the upper range of the interest rate corridor loosen monetary policy settings at a time when core inflation remains stubbornly above 9% and inflation expectations are around 7.5% in one year’s time and 7% in two years’ time.

Outlook

The stable outlook reflects our expectation that Turkey’s economic growth prospects will remain resilient to external shocks and domestic political risks and that the government will post modest fiscal deficits, against lingering geopolitical risks and still-high external financing needs.

We could lower our ratings if Turkey’s fiscal performance and debt metrics were to deteriorate beyond our current expectations. This could occur, for instance, following a sudden drop in government revenues, higher government expenditures, or the materialization on the government’s balance sheet of contingent liabilities from financial-sector instability.

We could also lower our ratings if we were to view the ability of the Turkish economy to roll over its external debt as weakening, for instance resulting from a change in investor sentiment in relation to regional or domestic instability, the perception of a deterioration in monetary policy credibility, tightening global policy rates, or a sharp rise in external debt. In our view, such an outcome would have broad negative macroeconomic effects.

We could raise our ratings if a sustained rebalancing of the source of economic growth resulted in much lower external borrowing needs. (S&P 06.05)

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11.8 TURKEY: Erdogan’s Secret Economic Weapon

Ufuk Sanli posted on 4 May in Al-Monitor that during his first decade in power, Turkish President Erdogan won widespread respect as a mediator working to resolve international issues. He largely settled Turkey’s problems with neighboring countries, advocated democratic values and presided over a dynamic economy, cashing in on the reputation he had earned. From 2002 through 2012, Turkey’s exports increased fourfold, from $36 billion to $152 billion, boosting economic prosperity and employment in the country.

In recent years, however, the tide has turned. Erdogan’s new problems with neighbors sounded alarm bells for exports, which have dropped to $144 billion. In a medium-term economic program announced at the end of 2015, the government’s projection for this year’s exports was $155.5 billion. The data from the first four months of 2016, however, show that this target is nothing but a dream, with Turkish companies destined to sell even less to international markets this year compared with 2015. According to figures from the Turkish Exporters’ Union (TIM), exports for the period January-April dropped 8.4%, or $4.2 billion, compared with the same period last year.

Yet, one sector stands out in this otherwise gloomy picture: the defense and aviation industry. Exports by Turkish defense companies reached $556 million in the first four months of the year, a 23% increase, up from $460 million for the same period last year, according to TIM.

Latif Aral, head of the Defense and Aviation Industry Exporters’ Union, told Al-Monitor, “I guess we’ll go over the $2 billion mark this year, setting an all-time record.” The revenues of Turkish defense companies have risen from $800 million to $1.6 billion over the past five years.

“The Turkish defense industry provides a wide range of products and services, from advanced satellite systems to boots,” Aral said. “Investment in the sector has increased product variety, thanks to which new export items are being added to sub-product groups. With the advantage of such a broad portfolio, we are able to enter new markets more easily.”

The Stockholm International Peace Research Institute lists Turkey, which has NATO’s second-largest standing army, as the world’s seventh-largest arms importer and the world’s 16th-largest arms exporter in terms of sales. The country’s arms imports total $2 billion to 2.5 billion per year. As recently as 15 years ago, Turkey spent much more on such imports. A comprehensive drive to expand the local defense industry since the early 2000s has led to a significant reduction in money spent on foreign-made weapons and equipment.

In a 30 April ceremony in Istanbul marking the start of construction on Turkey’s first assault ship, the TGC Anadolu, Erdogan said, “Our reliance on [defense imports] has decreased to about 40%, from 80% in 2002. Our target is to bring this down to zero at the centenary of the republic [in 2023]. We’ll not only be meeting our own needs, but we’ll also become the main supplier of friendly and brotherly countries.”

Turkey’s defense industry bureaucracy adopted quite a simple road map in its drive to reduce spending on imports and produce critical weapons and equipment domestically: Instead of buying weapons, manufacture them in Turkey when possible, and if not, ensure technology transfers through joint production.

Turkish defense companies have teamed up with Italian counterparts to produce assault helicopters and with Spanish counterparts for cargo planes and the assault ship, and talks on air defense systems are underway with US and European firms. The Turkish defense sector has already put a domestically produced warship to sea and is preparing to put a main battle tank in the field. A domestically produced infantry rifle and a drone have been tested successfully and are being showcased at international fairs.

Figures place the United States at the top of the Turkish defense companies’ client list, with the Americans paying $30 out of every $100 the industry earns from exports. Turkish defense exports to the United States amount to $500 million a year, while such Turkish imports from the United States stand at about $1.5 billion. Hence, Ankara can hardly be satisfied with the current state of trade. The picture is more or less the same vis-a-vis other Western countries, including Britain, Germany, France and Spain, from which Turkey buys more than it sells. According to 2015 figures, Western allies bought more than half of Turkey’s defense exports, while supplying all its imports in the sector.

Azerbaijan, Pakistan and Central Asian republics form the second-largest group of Turkey’s clients. Located in conflict-torn regions, these countries have quite high defense expenditures and naturally tend to prefer the much cheaper Turkish products over their Western-made equivalents.

Meanwhile, conflict and tensions in the wake of the Arab Spring have boosted Turkish arms sales to the Middle East and North Africa, according to data compiled from TIM figures. In this regard, Saudi Arabia, the United Arab Emirates (UAE) and Lebanon are Turkey’s leading clients in the Middle East, while Tunisia is its top trade partner in North Africa. The state-owned Aselsan, Roketsan, Machinery and Chemical Industry Corporation and armored vehicles producer BMC, owned by the Sancak Group, which is known to have close ties to the Erdogan family, have all emerged as winners from the Arab Spring’s fallout.

Turkish sales of arms and military equipment to MENA

(in millions of dollars)

Compiled from Turkish Exporters Union data

Africa is another market that Turkish defense companies have recently targeted. TIM figures reveal some remarkable Turkish sales of arms and equipment to African countries on a seasonal basis. Few are willing to talk about the nature and content of exports to Rwanda, Nigeria, Djibouti and Kenya.

Turkish Sales of Arms & Military Equipment to Sub-Saharan Africa

(in millions of dollars)

Compiled from Turkish Exporters Union data

The number of defense company owners and executives taking part in Erdogan’s foreign trips grows by the day. With his personal charisma and strong relationships, Erdogan is cutting paths for arms companies to new markets, providing an important boost for the Turkish economy. It remains unclear, however, whether arms sales are a better remedy for the Turkish economy than peace. (Al-Monitor 04.05)

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11.9 TURKEY: Erdogan After Davutoglu

Soner Cagaptay posted in the Washington Institute on 8 May that Turkish Prime Minister Ahmet Davutoglu’s 5 May resignation at the request of President Recep Tayyip Erdogan is a further consolidation of power in the hands of a man who is already the most powerful politician in Turkey since the country became a multiparty democracy in 1950. Erdogan has ruled since 2003, first as prime minister and head of the ruling Justice and Development Party (AKP) and then as president, a constitutionally non-partisan office in Turkey’s parliamentary system. When Erdogan became president in 2014, Davutoglu took over as AKP chair and became the country’s new prime minister. Davutoglu had risen in politics as Erdogan’s chief adviser, finally becoming Erdogan’s foreign minister in 2009. The two men were colleagues in conceiving and executing Turkey’s foreign policy pivot to the Middle East. Accordingly, when Erdogan offered Davutoglu the prime minister position that was sure to be somewhat neutered, Davutoglu happily obliged.

To the extent that Davutoglu was a compliant partner of Erdogan, for instance, working closely with him on Syria, where the two have tried for years to oust the Bashar al-Assad regime, Davutoglu never completely satisfied Erdogan. This is because Davutoglu is a household name both in Turkey and overseas, which irked Erdogan, who seeks to consolidate and personalize political power. Erdogan was reportedly upset, for instance, when Davutoglu wanted to visit Washington to meet with President Barack Obama only weeks after the Turkish president himself had visited Washington in March 2016 to do the same.

Having now fallen from grace, Davutoglu is likely to become a quiet observer of Turkish politics, following the path of previous cast-off AKP officials, including former President Abdullah Gul, who have chosen not to confront Erdogan after he ejected them from the AKP leadership. For his part, Erdogan is set to pick a new, more compliant politician as AKP chair at the party’s 22 May convention. This person will then take office as the country’s new prime minister, and after some months, few will even recall the name of the new leader, much like in Jordan or Morocco, where all-powerful kings overshadow little-known prime ministers.

Soner Cagaptay is the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute. (TWI 08.05)

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11.10 TURKEY: Turkish Military Faces Secularism Test

Turkey’s imam-hatip schools are vocational schools that educate state-employed imams and preachers. These schools offer primary school graduates the traditional secondary school curriculum in addition to vocational courses related to Islamic theology. The Justice and Development Party (AKP) government has been working hard to increase the number of imam-hatip schools. Over the past 13 years, the number of these schools went up from 450 in 2003 to 940 today, and the number of students rose from 70,000 to more than 500,000 in the same period.

Metin Gurcan posted in Al-Monitor on 9 May that as the popularity of religious vocational schools increases, the ban on the enrollment of imam-hatip graduates into military schools is being questioned.

The activities of the imam-hatip schools have been receiving more extensive coverage of late. President Recep Tayyip Erdogan, who is an imam-hatip graduate along with his children, called these schools, “The hope of Turkey and the entire Muslim nation.” Imam-hatip graduates can go to any university they want and become a police officer, doctor, lawyer, engineer or bureaucrat. But there is only one career that is off-limits to these students: the military. Military training regulations stipulate that imam-hatip graduates are not allowed to enroll in military academies to train as officers and noncommissioned officers.

In fact, the military academies that train officers for the Turkish Armed Forces (TSK) do not accept graduates of the imam-hatip schools, or any technical or medical schools.

The pro-AKP media, however, has undertaken an intensive campaign to promote the enrollment of imam-hatip graduates in vocational schools that train noncommissioned officers. According to pro-AKP commentators, the current ban is illegal and reminiscent of the military era; many Turks believe this discriminatory policy has to be terminated.

The latest incident took place about a month ago, when imam-hatip graduates who passed the initial entry exams of the Gendarmerie Noncommissioned Vocational School were not allowed to take the advanced exam in health and physical education.

One student told pro-AKP daily Yeni Akit that he was not allowed to take the advanced exams. “Because I’m an imam-hatip graduate I cannot achieve my lifelong dream of becoming a noncommissioned officer. They didn’t allow me take the advanced exams although I passed the written tests. If they were not going to allow me to take the final exams, then why did they allow me to sit for the written tests? Imam-hatip graduates can become president of the republic but not noncommissioned officers in the TSK. We want an end to this secularist discrimination,” he said.

Ecevit Oksuz, chairman of Turkey’s Imam Hatip Graduates Foundation, told Al-Monitor, “Not allowing imam-hatip graduates into military schools is an ugly heritage from a foregone era. The enrollment in the military of our children who are imam-hatip graduates will strengthen our army. Just as the students of other schools are children of this nation, so are the students of imam-hatip schools whose parents are dignified members of this country. Just as our graduates could serve as judges, deputies, prosecutors, prime ministers and even presidents, they should also be able to serve as captains, majors and generals.”

But TSK’s upper echelons still maintain their firm opposition to accept imam-hatip graduates. In 2012, when Vatan newspaper published an article with the headline “Imam-hatip officers are coming,” the TSK chief of general staff issued a denial within minutes. Behind this rigid stance is the concern that enrolling imam-hatip graduates in military schools would be perceived as a major blow to the perception that the military is the defender of secularism in Turkey, as well as pave the way to spread religion in the TSK ranks.

On the other hand, the TSK has softened its firm stand on headscarves and now accepts women wearing a headscarf to enter military institutions.

The question now raised is why the TSK cannot ease its ban on the enrollment of imam-hatip graduates in the military, at least for noncommissioned officers. The pro-AKP media appears to be pursuing this stance, which eventually could put political pressure on the TSK.

How much longer can the TSK maintain its position on defending secularism? The answer lies in Turkey’s focus on the current security issues related to the Syrian crisis, the increasing clashes with the Kurdistan Workers Party and the Islamic State and the public perceptions of close relations between the TSK, Erdogan and the AKP bureaucracy in general. There are those who fear that allowing imam-hatip graduates to enter military schools could force the TSK to make a choice between this close cooperation and secularism.

The question whether the TSK high command still continues to treat secular principles as vital or whether it will at least ease the restrictions on imam-hatip graduates’ entry into the vocational schools that train noncommissioned officers for the sake of preserving good relations with the government may seem like a technicality. But in Turkey this is actually a question related to the future of the country. As long as the ban continues, for many it reflects the persisting sensitivity of the TSK to issues of secularism; rescinding the ban means the erosion of this sensitivity.

It will be interesting to see how the TSK command will navigate this minefield. (Al-Monitor 09.05)

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ONTARIO VISITS ISRAEL – BIG TIME

May 24, 2016, 6:17 am

≫ Next: Fortnightly, 1 June 2016

≪ Previous: Fortnightly, 18 May 2016

Ontario’s Premier Kathleen Wynne was in Israel last week heading a group of close to 130 representatives of business, government and academia intent on further expanding cooperation in all three sectors between Israel and Ontario.

At the closing reception on May 18^th, the Premier announced that agreements had been signed during the week valued at over $118 million and the expectation is that at least 200 high tech jobs will be created in Ontario as a result.

Some of these agreements included:

*Ontario’s Centre for Commercialization of Regenerative Medicine and six Israel-based universities and medical research institutions signed a five-year agreement valued at $50 million to create a Centre for Regenerative Medicine in Israel. This project will generate an estimated 150 new high-tech jobs in Ontario and position the province as a leader in the global commercialization of regenerative medicine.

*Ontario’s True Phantom Solutions signed a five-year agreement valued at $5 million with Israel-based Microtech Medical Technologies Ltd. to develop the first-ever thoracic phantom, which will create realistic mechanical representations of the rib cage, heart, lungs and spine. The device will enable better medical training and research.

*The Canadian Centre for Aging and Brain Health Innovation at Baycrest Health Sciences in cooperation with the Office of the Chief Scientist in Israel signed an agreement valued at $4 million to collaborate on innovations and bring new programs to the fore in aging and brain health solutions for seniors.

*Ontario-based University Health Network signed an agreement valued at $3 million to use Israel-based Insightec‘s ultrasound technology for clinical research and development in Ontario.

Of course, in addition to the business and academic activities, the Premier had a full political schedule, meeting with senior political officials both in Israel and the Palestinian Authority.

For our company, as Ontario’s trade and investment representative in Israel, it was the largest mission of its kind that we have ever been involved with from a sub-federal entity in either the U.S. or Canada. In our experience, groups of 30-35 are common and make an impact, but nowhere near the impact of close to 130 people plus staff traveling around the country seeking opportunities for cooperation.

Building new relationships and helping businesses compete globally are part of every government’s economic plan aimed at delivering on one of government’s top priorities, to grow the economy and create jobs. Most state and provincial governments understand that encouraging greater exports and promoting inward investment are the two key elements of job growth.

What this mission proved, once again, is that even in this age of advanced communication, Email, Twitter, Skype, Instagrams and the like, nothing beats sitting down face-to-face with potential business partners as a vehicle to get the message across that there is serious potential for cooperation between the two parties. As always, coming to the market is the best catalyst for jump starting business relationships.

We applaud Premier Wynne and her staff for committing a week of their time and significant resources to make this happen and are sure that the investment will be a worthwhile one for Ontario in the long term.

Sherwin Pomerantz

President

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Fortnightly, 1 June 2016

June 1, 2016, 6:41 am

≫ Next: What’s New at EDI – June 2016

≪ Previous: ONTARIO VISITS ISRAEL – BIG TIME

1 June 2016
24 Iyar 5776
25 Shaban 1437

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Natural Gas Deal Revived Due to Reworked Clause Previously Nixed by Court
1.2  Ministry of Finance Considering Measures to Encourage Growth
1.3  Knesset Committee Approves Investment Provident Funds

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Startup Accelerator Opens in Jerusalem
2.2  Saguna Networks Secures $5 Million in Funding Round Led by CE Ventures
2.3  First Italian Air Force G550 Arrives in Israel for AEW Mods
2.4  Glide Raises $8 Million to Focus on Smartwatches
2.5  Sensifree Secures $5M in Series A Financing Led by TransLink Capital
2.6  Volkswagen Invests $300 Million in Israeli Taxi-Hailing Company Gett
2.7  Votiro Raises $4 Million in Series A Round to Neutralize Zero-Day Threats
2.8  United Adds Flights to Tel Aviv-San Francisco Route
2.9  Demisto Raised $6 Million in Series A Funding
2.10  Leviathan Partners Signs $3 Billion Gas Deal

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Arby’s Signs Agreement for 25 New Restaurants in Kuwait & Saudi Arabia
3.2  Dnata Considers Second North American Acquisition
3.3  Chinese Investors Confirm Plan to Build Oman Industrial Park
3.4  Covalon Wins Tender at King Abdullah Medical City in Saudi Arabia
3.5  Papa John’s International Among First U.S. Brands to Enter Tunisia
3.6  PayPal Halts Operations in Turkey as Local Authorities Reject License Application

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Largest Solar Energy Array Inaugurated

5: ARAB STATE DEVELOPMENTS

5.1  Average Deflation in Lebanon Fell to 2.9% by April 2016
5.2  Lebanon’s Trade Deficit Widened to $5.28 Billion by April 2016
5.3  Number of Tourists to Lebanon Up By a Yearly 8% by April 2016
5.4  Jordan & China Stress Need to Improve Ties

♦♦Arabian Gulf

5.5  Bahrain’s GDP Forecast to Grow by 2.9% in 2016
5.6  Bahrain’s Inflation Rises to Highest Mark Since Dec 2013
5.7  State of Qatar’s Proposed Eurobonds Assigned ‘AA’ Ratings
5.8  Qatar Slashes Healthcare Spending Though World Cup Escapes Cuts
5.9  Abu Dhabi Lays Off Staff as Arabian Gulf Austerity Tightens
5.10  UAE Sets Up Firm to Operate First Nuclear Power Plants
5.11  Oman Parliament Votes to Raise Taxes in Three Industries

♦♦North Africa

5.12  Egypt’s First Half GDP Growth 4.5%
5.13  Egyptian Drug Prices To Drop If Shortage Not Solved In 3 Months
5.14  Moroccan E-Commerce Websites Earned MAD 24.09 Billion in 2014

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Foreign Trade Deficit Continues to Fall Amid Oil Plunge
6.2  Greek Unemployment Down Slightly in February
6.3  Greek GDP 1st Quarter Contraction Worse Than Expected
6.4  Greece Near Bottom in Global Competitiveness Survey

7: GENERAL NEWS AND INTEREST

♦♦ISRAEL:

7.1  Avigdor Lieberman Installed as New Defense Minister
7.2  Ontario Science Centre Collaborates with Bloomfield Science Museum
7.3  Arab Israeli Wins First ‘Miss Trans Israel’ Pageant
7.4  Shavuot Holiday Begins on Eve of 11 June
7.5  Ramadan Begins on Eve of 6 June

♦♦REGIONAL:

7.6 Jordan’s King Abdullah Dissolves Parliament & Orders New Elections

8: ISRAEL LIFE SCIENCE NEWS

8.1  Gamida Cell Announces $4.4 Million Grant from the Israeli Government
8.2  Mazor Robotics Signs Strategic Agreements With Medtronic
8.3  Nucleix Raises $3 Million
8.4  OrbiMed Launches $307 Million Israel Venture Capital Fund
8.5  MedyMatch Presents at Israel’s BioMed Conference
8.6  FDA Approves Medic Vision SafeCT-29 that Helps Achieve Radiation Safety
8.7  Health Canada Approves Insightec’s Exablate Neuro System Tremor Treatment
8.8  Zebra Medical Vision Raises $12 Million
8.9  Check-Cap Preliminary Data Evaluating its Preparation-Free Colon Screening Capsule
8.10  Nano Dimension & Accellta Successfully BioPrint Stem Cell-Derived Tissues
8.11  Steak TzarTzar Farms Insects To Fight World Hunger
8.12  Ultra Health Cannabis forms Joint Venture With Panaxia
8.13  NeuroRx Wins Startup Competition at IATI-Biomed 2016
8.14  Rosetta Genomics Confirms Validity of its Novel Thyroid Nodule Classification Assay
8.15  HIL Applied Medical Acquires Nanolabz
8.16  CollPlant Receives OCS Authorization for a NIS 12 Million in R&D Projects
8.17  BioRap Technologies Collaborates with Pfizer for Novel Immunomodulators R&D
8.18  Intec Pharma Receives Approval for $5.2 Million Grant

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Israel Successfully Tests Iron Dome Defense System at Sea
9.2  New FDM 3D Printer Enhancements Make Stratasys Solutions Stronger
9.3  StoreDot Unveils World’s First MolecuLED TV
9.4  ECI Wins Leading Lights 2016 Award for Most Innovative Security Strategy
9.5  Allot Demonstrates Security VNF & vCPE Interoperability
9.6  Handwriting.io Announces Partnership with XMPie
9.7  Faception Claims It Can Spot Terrorists
9.8  Optimal+ Selected by Xilinx for Real-Time Analytics for Wafer Sort Operations
9.9  LightCyber Brings Behavioral Attack Detection to UK Organizations
9.10  Anodot Named a 2016 ‘Cool Vendor’ in Analytics by Gartner
9.11  ElectRoad Can Turn Any Road Electric
9.12  Demisto Introduces Industry’s First ChatBot to Improve Security
9.13  Javelin Networks Named a Cool Vendor by Gartner
9.14  SodaStream Launches Homemade Beer System

10: ISRAEL ECONOMIC STATISTICS

10.1  Unemployment in Israel Reaches Historic Low
10.2  WHO Finds Israeli Life Expectancy Among Highest in World
10.3  Bankruptcies in Israel Increase by 55% in 3 Years

11: IN DEPTH

11.1  JORDAN: Jordan in Negotiations With Potential Partners in Nuclear Project
11.2  IRAQ: IMF Deal Supports Iraq in Face of Multiple Challenges
11.3  IRAQ: How Much Will the $15 Billion IMF Loan Really Cost Iraq?
11.4  OMAN: Ratings on Sultanate of Oman Affirmed At ‘BBB-/A-3’; Outlook Stable
11.5  EGYPT: Fitch Affirms Egypt at ‘B’; Outlook Stable
11.6  EGYPT: Will Sisi Squander His Chance To Fix Egypt’s Economy?

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Natural Gas Deal Revived Due to Reworked Clause Previously Nixed by Court

The Israeli government officially approved an altered version of the natural gas deal, after the deal’s previous incarnation was controversially vetoed by the Supreme Court. Under the new agreement, a clause forbidding subsequent governments from changing the deal for 10 years has been scrapped. That clause has been replaced instead with a compromise text, which would mandate compensation to the US-led consortium purchasing the rights over the Leviathan natural gas field in the Mediterranean, in the event that the deal was indeed changed by any future Israeli government.

A breakthrough has been achieved in the negotiations over a deal that would regulate the exploration, harvesting and development of Israel’s offshore gas fields. The framework agreement was contested by multiple legal petitions seeking to repeal it. Most recently, Israel’s High Court of Justice overturned the landmark deal, giving the Knesset a year to amend the plan or risk cancellation of the deal altogether. The court cited a clause in the deal that would prevent Israel from making significant regulatory changes for the next 10 years as the main reason for scuttling it, arguing that the clause, dubbed the “stability clause,” restricts the Knesset’s powers.

The initial “stability clause” stipulated that the government could not impose regulatory changes, such as breaking up suspected monopolies, on the consortium for a full 10 years from when the deal was signed. On 18 May, the companies and Energy Minister Steinitz reached an agreement on a new framework that in effect softened the contested clause. According to Steinitz’s office, the representatives of the energy companies agreed to rework the clause to allow future governments to amend the deal, should changes become necessary – something that the previous clause restricted.

Netanyahu has previously warned that efforts to stymie or delay the deal would result in potential customers giving up in frustration and turning to other gas-producing countries instead – many of whom are overtly hostile to Israel. (Various 19.05)

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1.2 Ministry of Finance Considering Measures to Encourage Growth

Israel’s Ministry of Finance is considering emergency measures to encourage growth that will allow deviations from the permitted spending ceiling and help close the gap created in the state budget. The growth issue is the focus of disputes between the Ministry of Finance budget department, which has warned against increasing the budget deficit target from 2.5% to 2.8%, and the prime minister and accountant general, who believe that a 0.3% increase in the budget deficit should be allowed in order to increase growth-encouraging spending.

Senior Ministry of Finance officials met with Prime Minister Netanyahu to present him with the main points of the two-year budget for 2017-2018. The meeting was overshadowed by the disappointing growth figures for the first quarter showing a drop to 0.8% in the annualized growth rate (while the forecast for 2016 is 2.8-2.9%) and a warning note by leading credit rating agency Moody’s following those data.

In view of the figures, the prime minister spoke of the need to encourage growth in the economy with measures such as increasing infrastructure investments and increasing the Ministry of Economy and Industry Chief Scientist’s R&D budget. Ministry of Finance budget director Levy, on the other hand, argued for the importance of maintaining budgetary restraint, and mentioned concern about a reversal of the downtrend in the ratio of government debt to GDP, regarded by the credit rating agencies as the principal strong point of the Israeli economy. Accountant General Abadi-Boiangiu, who is responsible for professional management of the state debt, said that increasing the budget deficit to 2.8% would not worsen the ratio of debt to GDP.

Underlying the budget department’s position is a large gap created in the 2017 budget. According to the 2017 budgetary frameworks, a deviation of less than NIS 10 billion was expected, which is actually NIS 15 billion, composed of a deviation of almost NIS 11 billion from the legal spending ceiling and NIS 4 billion from the deficit target. (Globes 29.05)

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1.3 Knesset Committee Approves Investment Provident Funds

On 23 May, the Knesset Finance Committee approved the Ministry of Finance’s new capital saving scheme, an investment provident fund. The investment limit will be NIS 70,000 a year per individual. The Ministry of Finance had originally intended a limit of NIS 100,000 per person, while the Israel Securities Authority, which opposes this product, sought to reduce the limit to NIS 50,000.

This is a new saving product that will be an attractive alternative to mutual funds, managed portfolios and bank deposits. The maximum management fee on this product, which is similar to an insurance company investment policy, will be 1.05% annually on the cumulative amount together with a management fee of 4% on annual deposits in the fund, in line with the maximum on pension provident funds and executive insurance since 2013.

The current management fee structure is problematic and is likely to be changed, since saving programs for individuals carry a 2% management fee on the cumulative sum and no fee on new deposits. Furthermore, investment provident funds will probably be characterized by large one-time deposits and not regular small deposits, and it makes no sense at all to charge someone who deposits NIS 70,000 a fee of 4% on this amount. The new regulations now have to pass second and third readings in the Knesset plenum.

Deposits in the investment provident fund will be made from the saver’s after-tax income, and the savings will be subject to capital gains tax only on redemption and not during the life of the program. Savers who keep their money in the investment provident fund until the age at which they are entitled to an old age allowance and choose to withdraw the money by way of a monthly allowance and not a one-time capital payment will be exempt from capital gains tax on their savings. (Globes 23.05)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Startup Accelerator Opens in Jerusalem

The MassChallenge startup accelerator, which calls itself the world’s friendliest accelerator, has accepted 48 new startups for a special program in Jerusalem, which it launched on 22 May at an event in the Mahane Yehuda open air market, where the accelerator will operate. The accelerator’s projects are from around the world, not just Israel. Some 500 projects have been incorporated: 150 of which are from other countries, including Turkey, Nigeria, South Korea, Cameroon and the US. Some 45% of the companies accepted to the accelerator are from the high-tech industry, 20% from the life sciences, 10% from social initiatives and the result are scattered among other fields.

The entrepreneurs and companies taking part in the program will benefit from the accelerator’s work environment, training, and access to the chain’s professional partners in Israel and throughout the world. In Israel, the program will finish on October 27 with a ceremony at which prizes of up to NIS 1 million will be given to the outstanding companies. In addition to MassChallenge, Israel will send seven Israeli startups to the accelerator program in Boston. This program is a non-profit accelerator active in Boston, London, Switzerland, and Jerusalem. Over the past six years, 835 companies have participated in MassChallenge’s global programs, and have raised over $1 billion. The annual revenue of these companies amounts to more than $500 million, and they have generated 8,500 new jobs. (Globes 22.05)

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2.2 Saguna Networks Secures $5 Million in Funding Round Led by CE Ventures

Yokneam’s Saguna Networks, the Mobile Edge Computing (MEC) pioneer making mobile broadband faster, simpler and more agile, announced that it closed a new $5 million financing round led by CE Ventures and supported by the company’s existing shareholders. Saguna will use the funding to expand the company’s MEC offering and global market presence. Saguna helps mobile operators improve user experience, network economics and monetization by bringing distributed cloud-computing into the Radio Access Network (RAN); as close as possible to mobile users. With Saguna’s solution, mobile operators can deploy new revenue generating services for content delivery, Internet of Things (IoT), retail and enterprise applications. The Company’s standard-based MEC solution, Saguna Open-RAN, creates an open ecosystem and growth engine inside the RAN. The solution features fully-virtualized, scalable architecture adding value to 4G networks, 5G and HetNets. (Saguna 23.05)

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2.3 First Italian Air Force G550 Arrives in Israel for AEW Mods

The first of two Gulfstream G550 business jets for the Italian air force has arrived at Israel Aerospace Industries’ facilities, ahead of reconfiguration into an airborne early warning and control (AEW&C) aircraft. In 2012 the Israeli air force (IAF) selected the Leonardo M-346 for its advanced trainer requirement and, under the deal, Italy signed a contract to buy two G550s with an advanced AEW suit, similar to the one operated by the IAF. The first G550 with the Elta AEW suite is expected to be delivered in 2020, and according to the contract, IAI will also supply an observation satellite to Telespazio. The G550s have been modified and fitted by Gulfstream with the radomes to house the antennas of the Elta radar. The second aircraft to be modified is expected to arrive shortly. IAI has previously supplied G550-based AEW&C aircraft to the air forces of Israel and Singapore, which operate a combined six of the model. (Flightglobal17.05)

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2.4 Glide Raises $8 Million to Focus on Smartwatches

Jerusalem’s Glide has raised an $8 million round of “bridge financing,” which was structured as convertible debt. The investment came from a “syndicate of new strategic investors” with participation from all Series B investors – Menlo Ventures, Marker LLC, and Two Sigma Ventures. The Jerusalem-based startup also recently laid off 25% of employees in order to focus on smartwatches. Glide has raised $36.5 million to date, including the latest financing. In 2013, the company launched the Glide app in 2013, which allows users to quickly send short video messages to friends, in a similar way to which text messages work. The free app has been downloaded “tens of millions” of times, resulting in “billions of messages” being sent. (Globes 25.05)

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2.5 Sensifree Secures $5M in Series A Financing Led by TransLink Capital

Sensifree has completed a $5 million Series A round of financing. TransLink Capital led the investment round with participation from existing and new investors, including UMC Capital, a subsidiary of United Microelectronics Corp. and an undisclosed strategic investor. The investment adds to seed investment made by Samsung’s Catalyst fund and brings Sensifree’s total funding since launching its revolutionary RF-based biometric sensor technology to $7 million. The funding will help the company aggressively expand its engineering and product development teams, and accelerate its business development efforts. TransLink Capital Venture Partner and Senior Advisor, Eric Hsia, will join the Sensifree Board of Directors.

Petah Tikva’s Sensifree is the pioneer of patented, low power electromagnetic sensors that accurately collect a range of continuous biometric data without the need to touch the human body. The Company’s first product is a heart rate sensor for wearable devices for wearable applications such as traditional watches, activity trackers and smart clothing. (Sensifree 24.05)

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2.6 Volkswagen Invests $300 Million in Israeli Taxi-Hailing Company Gett

Israeli tax-hailing company Gett (formerly Get Taxi) has raised $300 million from Volkswagen. The strategic investment – which will allow Volkswagen to expand on-demand mobility services in Europe – comes on the same day as Toyota’s undisclosed investment in Uber, and several months after General Motors invested $500 million in ride-sharing app Lyft. The plan is for VW to offer on-demand ride services to its business customers, while Gett drivers will be offered discounted VW cars for their taxis.

The Volkswagen Group is hoping that by partnering with Gett, it will be able to keep up with other automotive giants which have already jumped on the on-demand mobility bandwagon. Automakers fear that the rise of ride-sharing apps and on-demand transportation services such as Gett, Uber, Lyft and Via (another Israeli startup) could lead to a decline in car ownership. That’s why they’re either investing in such startups or starting their own mobility divisions. (Gett 25.05)

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2.7 Votiro Raises $4 Million in Series A Round to Neutralize Zero-Day Threats

Votiro completed a $4 million financing round led exclusively by Redfield Asset Management. The capital will be used to expand Votiro’s team and continue the rapid growth of the Company’s patented solutions and product portfolio. With the sophisticated nature of today’s cyberattacks, secure email gateway solutions struggle to properly protect organizations from malicious email. Most cybersecurity solutions are designed to combat known threats, but when unknown threats-such as zero-day or undisclosed exploits-penetrate an enterprise’s network, the cost and the harm to the company’s reputation can be devastating.

By disarming threats in all files attached to incoming email messages, Votiro’s neutralization technology prevents zero-day exploits from penetrating an organization’s network. To neutralize unknown and zero-day threats, Votiro processes all attachments and removes all active code. The cleansed attachments, which preserve the integrity and functionality of the original files, can then safely continue on to the organization’s email server.

Tel Aviv’s Votiro provides organizations with protection against undisclosed and zero-day exploits that are used in cyberattacks. The company’s secure email gateway and patented Zero-Day Exploit Protection technology cleanse incoming files of potential cyber threats. (Votiro 25.05)

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2.8 United Adds Flights to Tel Aviv-San Francisco Route

Two months after launching direct flights between Tel Aviv and San Francisco, United Airlines announced that it was increasing the frequency of its flights on the route from three a week to one daily. The daily flights will begin on 8 October on Boeing 787 Dreamliners. The additional flights will operate according to the same timetable as that of the existing flights. Flights to San Francisco will leave Ben Gurion Airport every day at 00:55 AM and reach San Francisco at 6:00 AM on the same day. Return flights will take off every day from San Francisco at 8:00 PM and land at Ben Gurion Airport at 8:15 PM of the following day (Israel time). The flight time will be 15:05 hours westward and 14:10 hours eastward. Tickets to San Francisco cost $1,200 for tourist class and $4,500 for business first class. (Globes 26.05)

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2.9 Demisto Raised $6 Million in Series A Funding

Demisto has emerged from stealth mode and raised $6m in Series A funding. Their backers included Accel, Cylance CEO Stuart McClure, Lookout CTO Kevin Mahaffey and Blue Coat Systems president Mike Fey. The new funding will be used to expand sales and marketing efforts, and to grow partner ecosystem integrations. Demisto has just launched Demisto Enterprise, its Bot-powered security ChatOps platform that automates and streamlines security operations and brings enhanced collaboration to incident management processes. (Demisto 25.05)

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2.10 Leviathan Partners Signs $3 Billion Gas Deal

On 29 May, the partners in the Leviathan natural gas reservoir announced the signing of a gas supply agreement with the IPM company in Be’er Tuvia, Israel. The partnership will supply 13 BCM of gas to the power station slated for construction in the Be’er Tuvia industrial zone. The value of the 18 year agreement is estimated at $3 billion. The contract is the second for the partners, following a contract with Edeltech, owned by the Edelsberg family, last January. The IPM power station is controlled by Triple M and Israel Power Management 3000. It is designed for construction on a 62-dunam (15.5-acre) site, and will produce 430 megawatts of electricity using combined cycle power technology (natural gas as the main fuel and diesel oil as a backup).

The government recently approved the revised natural gas plan, with the omission of the commitment to refrain from changing anything in the gas sector for the next 10 years. The gas companies assert that the approval of the plan enabled them to sign the agreement with IPM. Noble Energy added that the agreement shows its continued commitment to developing Leviathan and the natural gas industry in Israel. (Globes 29.05)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Arby’s Signs Agreement for 25 New Restaurants in Kuwait & Saudi Arabia

Arby’s Restaurant Group, Inc. (ARG), parent company of the franchisor of the Arby’s brand, announced an international franchise development agreement with Al-Kharafi Global for General Trading & Contracting Company (Kharafi Global) to open 25 new Arby’s restaurants in Kuwait and Saudi Arabia over the next seven years. This news follows a strong year of development for Arby’s in 2015 with 69 new restaurant openings globally along with agreements for 138 new restaurants announced in Q1/16.

Arby’s, founded in 1964, is the first nationally franchised sandwich restaurant brand, with more than 3,300 restaurants worldwide. Arby’s Restaurant Group is the parent company of the franchisor of the Arby’s brand and is headquartered in Atlanta, Ga. (ARG 24.05)

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3.2 Dnata Considers Second North American Acquisition

Emirates Group’s aviation services unit dnata is in talks to acquire a Canadian cargo handling business in what would be its second North American acquisition since entering the market. Dnata acquired Ground Services International (GSI) last month. The ground-handling operator is present at more than 20 airports, including “major international gateways,” in the United States. Dnata reported a record a AED1.1 billion profit for the 12 months ending 31 March and has made a series of acquisitions in airport and travel services companies globally in recent years. The company has AED3.5 billion in cash assets at its disposal. dnata plans to acquire part — or whole — of at least two other airport services companies in the United States, but declined to disclose who the companies were.

Dnata is entering the North American market amid an ongoing row between American and Middle East airlines, including dnata’s sister company, Emirates, also owned by the Emirates Group. American, Delta and United accuse Emirates, Etihad Airways and Qatar Airways of receiving US$42 billion in state subsidies from their government owners, an allegation the Middle East carriers deny. (Aviation 19.05)

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3.3 Chinese Investors Confirm Plan to Build Oman Industrial Park

A group of Chinese investors have signed an agreement to build an industrial park at Oman’s southern port of Duqm in a project that could attract billions of dollars of investment. The Omani government is working to develop the area around Duqm, on a stretch of barren coast 550 km south of the capital Muscat, into a major business zone as part of efforts to diversify the economy beyond oil. The industrial park deal, signed during a visit to Oman by Wang Yong, a member of China’s State Council, could provide a big boost to that project and reduce pressure on Omani state finances, which have been hurt by low oil prices.

The Omani state authority developing Duqm predicted the 1,172-hectare industrial park would attract $10 billion of investment by 2022, including $370 million which the Chinese side would spend on infrastructure. Oman Wanfang, the Chinese-owned company that will manage investments at the industrial park, said it would include light and heavy industry as well as a $150 million, five-star hotel, a $100 million hospital and a school. Planned investments include an oil refinery, a cement plant, a factory making pipes for the petroleum industry, an automobile assembly plant, and a 1 GW solar power generation facility.

Oman Wangfang is a subsidiary of China-Arab Wanfang Investment Management Co, which was established with government backing in 2015 by companies in the northwestern Chinese region of Ningxia, according to the parent firm’s website. (Reuters 23.05)

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3.4 Covalon Wins Tender at King Abdullah Medical City in Saudi Arabia

Mississauga, Ontario’s Covalon Technologies, an advanced medical technologies company, announced that via its exclusive distribution partner, Covalon has been awarded a tender for both IV Clear and SurgiClear products at the King Abdullah Medical City in Mecca, Saudi Arabia. With over 1,500 beds, King Abdullah Medical City is one of the most influential hospitals in the Middle East, given its location in Mecca where over 14 million people will visit over the next 15 weeks.

Covalon Technologies researches, develops and commercializes new healthcare technologies that help save lives around the world. Covalon’s patented technologies, products and services address the advanced healthcare needs of medical device companies, healthcare providers and individual consumers. Covalon’s technologies are used to prevent, detect and manage medical conditions in specialty areas such as wound care, tissue repair, infection control, disease management, medical device coatings and biocompatibility. (Covalon Technologies 31.05)

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3.5 Papa John’s International Among First U.S. Brands to Enter Tunisia

Louisville, Kentucky’s Papa John’s International, will be among the first U.S. restaurant brands to enter Tunisia. Following Egypt, Tunisia will be only the second country in Africa to boast a Papa John’s franchise. Tunisia recently opened their borders to outside franchising. Franchisee, Mr. Sofiene Ghali, a Tunisian leader in the QSR industry, is excited to bring a high-quality hand-made pizza to his home country. Owning and operating over 25 hamburger and sandwich restaurants, Mr. Ghali knows that one of the first U.S. restaurant brands to enter Tunisia should satisfy what the citizens are craving – high quality, freshly made pizza.

Headquartered in Louisville, Kentucky, Papa John’s International, Inc. (NASDAQ: PZZA) is the world’s third-largest pizza delivery company. For 14 of the past 16 years, consumers have rated Papa John’s No. 1 in customer satisfaction among all national pizza chains in the American Customer Satisfaction Index (ACSI). (Papa John’s International 31.05)

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3.6 PayPal Halts Operations in Turkey as Local Authorities Reject License Application

Global online payment platform PayPal has announced that it stopped operations in Turkey, as it could not get the necessary license from local authorities, in a written statement on 30 May. PayPal noted it would continue its efforts to take the required licenses in Turkey. Customers in Turkey will not be able to send or receive money through their PayPal accounts as of 6 June. (Various 31.06)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Largest Solar Energy Array Inaugurated

The largest solar energy array in Israel was inaugurated in late May. The Zmorot solar park, owned by the French electric utility company EDF, is expected to generate 50 MWp of clean energy. The plant is the French company’s eleventh solar array in Israel. The NIS 330 million project is trailed by the former largest solar park – also owned by EDF – at Kibbutz Ketura (40 MWp). EDF began planning the project in 2010 with its local partner Solex and received all the necessary permits by 2013. It installed 200,000 photovoltaic panels over 153 acres at the site. EDF Israel now generates 160 MWp of electricity in Israel. The company is currently working to advance new solar projects (including electricity storage) and wind projects.”

In Israel, the 2% of electricity generated from renewable sources is produced solely from solar energy. Israel hosts two small wind farms, but they rely on older technology. EDF is currently in the process of applying for permits to construct a 150 MW wind farm, but the project has been opposed by some environmental organizations which claim the farm would obstruct birds and bats and by the Electricity Authority as well because of disagreements over the tariff. (Globes 24.05)

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5: ARAB STATE DEVELOPMENTS

5.1 Average Deflation in Lebanon Fell to 2.9% by April 2016

Lebanese consumer prices maintained the downward trend by the fourth month of 2016 as reflected by the Consumer Price Index (CPI) that dropped by an average of 2.9% y-o-y by April 2016. According to the Central Administration of Statistics (CAS), the average CPI decreased from 97.62 points by April 2015 to 94.78 points by the end of April 2016. The depreciation of the euro, the local and global economic slowdown and the decline in oil prices were the primary reasons behind this deflation. In terms of CPI’s components, average prices of food and non-alcoholic beverages (20.6% of CPI) declined by 1.7% y-o-y by April 2016, while transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI) witnessed average yearly drops of 5.3% and 16.2%, respectively. The other sub-indices that waned were health (7.8% of CPI) and communication (4.6% of CPI), posting a 3.8% and 0.4% y-o-y average declines, respectively. However, the education sub-index, constituting 5.9% of the CPI, augmented annually by 1.50% by April 2016. Furthermore, average restaurants & hotels prices (2.6% of CPI) went up by 2.8% y-o-y by April 2016. In addition, the actual rent sub-index for households (old and new rent), with a stake of 3.4% of the CPI, increased by an annual average of 1.8%. On the other hand, the slight rise in oil prices and the appreciation of the euro during the month of April alone led to a 0.8% month-on-month (m-o-m) increase in consumer prices. In details, transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI), witnessed monthly growths of 3.7% and 2.8%, respectively. (CAS 22.05)

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5.2 Lebanon’s Trade Deficit Widened to $5.28 Billion by April 2016

According to data from the Lebanese customs, Lebanon’s trade deficit reached $5.28B in the first four months of 2016, up by 14% from the $4.63B registered by April 2015. Exports dropped by an annual 2.56% to $953.23M while imports grew by an annual 11.09% to $6.23B. Prepared foodstuffs, beverages and tobacco accounted for 16.39% of exports, followed closely by stakes of 15.74% for pearls, precious stones and metals and 14.35% for machinery and electrical instruments. The value of exports in all of the top classified categories witnessed yearly declines: Exports of prepared foodstuffs, beverages and tobacco dropped by 4% year-on-year (y-o-y) to $156.20M by April 2016. Exports of pearls, precious stones and metals fell by 2% y-o-y to $150.03M by April 2016 Exports of machinery and electrical instruments ticked down by 0.1% y-o-y to $136.78M by April 2016.

As for imports, the largest value was held by mineral products with 25% followed by shares of 10.93% for products of the chemical or allied industries and 9.43% for machinery and electrical instruments. Imports of mineral products grew substantially from $933.27M by April 2015 to $1.56B by April 2016, which is mainly linked to the 57% increase in total imported volume. Imports of products of the chemical and allied industries rose by an annual 4% to $681.33M. Imports of machinery and electrical instruments slid by 13% yearly to amount to $582.49 million.

The top import destinations for the first four months of the year were China, the US, Italy, Holland and Germany with respective shares of 11%, 8%, 8%, 7% and 6%. The top export destinations by April 2016 were South Africa, Saudi Arabia, United Arab Emirates, Syria and Iraq with respective shares of 12%, 12%, 9%, 7% and 6%. (CAS 31.05)

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5.3 Number of Tourists to Lebanon Up By a Yearly 8% by April 2016

According to Lebanon’s Ministry of Tourism, the number of tourists who visited Lebanon in the first four months of the year increased by a yearly 8% and totaled 428,947. Arab tourists, representing the third of total tourists, saw their number rise by only 1% year-on-year to 140,307 by April this year. The number of incomers from Iraq, who usually come to Lebanon to escape the tough conditions in their country rather than for tourism, grew by an annual 15% to 60,725 and the number of Egyptian tourists grew by an annual 9% to 25,891 by April 2016. In late February, the diplomatic crisis between Lebanon and Saudi Arabia resulted in the issuance of travel bans preventing GCC nationals from going to Lebanon. Therefore, the number of incomers from Saudi Arabia, Kuwait and the UAE all registered annual drops of 39%, 35% and 51% to reach 9,639, 6,078, and 1,075, respectively. The number of European visitors, also representing the third of total tourists, increased by a yearly 10% to 143,203 by April. French tourists saw their number rise by an annual 8% to 37,594 while UK tourists saw their number grow by 18% to 17,481. Visitors from Germany also rose in number from 16,893 by April 2015 to 18,655 by April 2016. American tourists, constituting the third largest share of the total (15% of total tourists), also increased by an annual 9% to 63,230 by April 2016. The number of visitors from the US and Canada rose from 28,835 and 20,503 by April 2015 to 31,933 and 22,355 by April 2016, respectively. In the month of April alone, the number of tourists to Lebanon increased by a yearly 5% from 116,703 in April 2015 to 122,431 in April 2016. (MoT 27.05)

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5.4 Jordan & China Stress Need to Improve Ties

Jordanian Prime Minister Ensour met with visiting China State Councilor Wang Yong and his accompanying delegation to discuss bilateral relations and developments in the Middle East. During the meeting, which was attended by several Jordanian ministers, Ensour stressed the distinguished relations between Jordan and China and the need to enhance them in all fields. He noted that Jordan can be a starting point for China’s industrial and trade activities in the region, citing the stability and security that Jordan enjoys, its good relations with neighbors and its investor-friendly regulations and laws.

Hosting Syrian refugees poses the primary challenge resulting from the crisis, Ensour told the visiting delegates, noting that the cost stands at around JD3billion a year, mainly shouldered by the Treasury because of scarcity of international aid. Wang asserted that Jordanian-Chinese relations have noticeably developed during the past few years, underlying the significance of the King’s successful visit to China last September in which he signed a joint statement with the Chinese President, Xi Jinping, to create a road map for strategic relations. (WAM 25.05)

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►►Arabian Gulf

5.5 Bahrain’s GDP Forecast to Grow by 2.9% in 2016

Bahrain’s gross domestic product (GDP) is forecast to grow by 2.9% this year, according to the country’s Economic Development Board (EDB). Bahrain’s non-oil sector growth reached 3.9% last year. The continued downward pressures on oil prices, along with steps toward fiscal re-engineering, is likely to curb growth in the near-to medium-term. However, this negative impact is likely to be countered by the large pipeline of infrastructure projects planned in Bahrain. During 2015 as a whole, the growth contribution of the non-oil private sector was 2.8% while government services contributed 0.3% and the oil sector saw negative growth of 0.2%.

Growth in Q4/15 was led by private education and healthcare which grew by 6.9% during the year as a whole. The construction sector expanded by 6.4% while the hotel and restaurants sector expanded by 7.3%. Transportation and communications grew by 5.9% and manufacturing expanded by 4.1%. More than 80% of Bahrain’s real GDP was generated by an increasingly diverse non-oil sector in 2015 while the oil and gas sector accounted for 19.7%. The GCC region accounted for about 28% of Bahrain’s total non-oil trade and 50% of the total value of non-oil exports. (AB 18.05)

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5.6 Bahrain’s Inflation Rises to Highest Mark Since Dec 2013

Inflation in Bahrain rose to its highest level since December 2013, according to official figures published on 23 May. Bahrain’s statistics office released the April consumer price data, showing inflation at 3.8% year-on-year, its highest for 29 months. Housing and utility costs, which account for 24% of consumer expenses, rose 3.8% from a year earlier. Prices of food and non-alcoholic beverages, which account for 16% of the basket, climbed 5.9%, the figures showed. (Various 24.05)

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5.7 State of Qatar’s Proposed Eurobonds Assigned ‘AA’ Ratings

S&P Global Ratings has assigned its ‘AA’ long-term issue ratings to the proposed Eurobonds to be issued by the State of Qatar (AA/Stable/A-1+). They expect the bonds will be issued in two series, of likely 5 and 10 years’ duration. With Qatar’s government revenues dipping to an estimated 32% of GDP in 2016 from an average of 42% of GDP over 2010-2014, due to lower hydrocarbon prices, S&P forecast a government budget deficit of 8% of GDP this year, including their estimates of a corrective fiscal response. This Eurobonds’ issuance is consistent with our expectation that Qatar will finance this deficit through debt, rather than by drawing upon its substantial assets. (S&P 23.05)

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5.8 Qatar Slashes Healthcare Spending Though World Cup Escapes Cuts

Qatar has cut its planned spending on building healthcare facilities by about two-thirds this year following the drop in energy prices, although expenditure on its World Cup-related projects should be unchanged. The world’s top liquefied natural gas exporter is one of the richest countries per capita but it faces a 46.5 billion riyal ($12.8 billion) budget deficit this year because of the continued lower oil and gas prices. Like other Gulf states, it is turning to international markets to bridge the gap – it is expected to price its first sovereign bond issue in four years on Wednesday – but it is also having to reduce and prioritize state spending.

Qatar’s Public Works Authority (Ashghal) is responsible for planning, design, construction and delivery of all infrastructure projects and public buildings in Qatar. It aims to build 60-70 new primary healthcare centers over the next decade. This year, it was meant to award contracts to build seven of these but that number has been cut to three. Ashghal will spend 2.5 billion riyals building healthcare facilities this year, instead of 7 billion riyals as previously planned. The authority has cut its 2016 budget for public buildings, which includes schools, healthcare and public parks, by 50-60 percent versus what it had originally expected to spend. (AB 25.05)

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5.9 Abu Dhabi Lays Off Staff as Arabian Gulf Austerity Tightens

Thousands of layoffs at state-linked companies in Abu Dhabi are a fresh sign the Gulf’s wealthy oil states are hunkering down for a long period of austerity as low crude prices pressure their economies. Since mid-2015, the UAE, Saudi Arabia, Qatar and other countries in the region have curbed spending on some construction projects and reduced energy subsidies to limit budget deficits caused by cheap oil. Now some governments are also starting to reduce staff at the companies they control, many in the energy industry, to ensure the firms are not a drain on state finances if oil prices stay low for several years.

Abu Dhabi’s National Oil Co (ADNOC), which employs about 55,000 people, has cut hundreds of jobs in the past few months and will have reduced its workforce by at least 5,000 by the end of 2016. The reduction will occur across most of its 17 subsidiaries as part of a restructuring following a reshuffle of the firm’s leadership.

In Qatar, state-controlled firms such as Qatar Petroleum and Qatar Rail have been laying off staff. State companies in other states such as Saudi Arabia and Oman have been looking at ways to reduce costs but have so far not resorted to major job cuts. Most cuts at state firms in Abu Dhabi and elsewhere involve foreign staff because governments want to limit unemployment among their citizens. Nevertheless, job losses are contributing to an economic slowdown in the region. The IMF has predicted Abu Dhabi’s gross domestic product growth will fall to 1.7% this year from 4.4% in 2015. (Reuters 22.05)

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5.10 UAE Sets Up Firm to Operate First Nuclear Power Plants

The Emirates Nuclear Energy Corporation (ENEC) has announced the formation of a new subsidiary called Nawah Energy Company to operate and maintain the UAE’s first nuclear reactors at Barakah. The ENEC board of directors mandated ENEC management to proceed with the formation of the operating company and to ensure the transfer and provision of all required resources to form the operating subsidiary. It added that Nawah’s mission will be to “safely and reliably generate electricity from nuclear energy”, and aims to become a globally recognized nuclear utility in the safe operation of nuclear energy plants.

ENEC said last month that the project at Barakah is progressing steadily – Unit 1 is now more than 87% complete, Unit 2 is 68% complete, Unit 3 is 47% complete and Unit 4 is 29% complete. Overall, construction of Units 1 to 4 is now more than 62% complete. Pending regulatory approval, the four units in Barakah are scheduled to be delivered by 2020, providing nuclear energy to the UAE grid. When the four reactors are completed, the UAE’s nuclear energy program will provide approximately 25% of the UAE’s electricity needs and save up to 12 million tons of greenhouse gas emissions each year. (AB 17.05)

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5.11 Oman Parliament Votes to Raise Taxes in Three Industries

Oman’s parliament voted on 26 May to sharply raise taxes on the petrochemical industry, non-oil natural resources and liquefied natural gas companies in a drive to address a budget deficit. The legislation, which is subject to approval by the sultan, raises the tax rate of LNG companies to 55% from 15%. Tax rates for petrochemical companies and on exports of non-oil natural resources, both currently at 12%, would rise to 35%. Both houses of the Council of Oman, one elected and one appointed, voted in favor of the hikes, which Sultan Qaboos bin Said had sent over for review.

Oman is imposing a series of austerity measures after it posted a budget deficit of about 4.5 billion rials ($11.7 billion) last year. Gasoline and diesel price subsidies have been cut and similar cuts are planned for electricity and liquid petroleum gas. (Reuters 27.05)

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►►North Africa

5.12 Egypt’s First Half GDP Growth 4.5%

Egypt’s economy grew 4.5% in first half of 2015/2016 fiscal year, down from 5.5% growth in the previous year, the country’s planning minister said on 28 May. Total GDP for first half of fiscal year 2015/2016 was 1.4 trillion Egyptian pounds ($158 billion) in the first half compared with 1.275 trillion pounds in the same period last year, the minister said. Second quarter growth for 2015/2016 was 3.8% from 4.3% a year earlier, Planning Minister Ashraf al-Arabi told a press conference. (Al-Masry Al-Youm 28.05

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5.13 Egyptian Drug Prices To Drop If Shortage Not Solved In 3 Months

Egyptian Health Minister Emad pledged on 31 May to reverse his recent decision to raise the price of pharmaceutical drugs if he cannot make up the shortage in supply within three months. In an effort to combat an increasing shortage in local supply, Emad announced earlier this month that the price of medicines costing less than LE 30 would be raised by 20%. Now, according to a new press statement, the minister said he had met with pharmaceutical industry officials and drug manufacturing companies to inform them of the time limit on turning around the crisis. He urged them to make up for the shortage within three months or prices would be decreased again. He added that 75 types of medication produced by international companies in Egypt would be provided on the market at low prices. (Al-Masry Al-Youm 31.05)

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5.14 Moroccan E-Commerce Websites Earned MAD 24.09 Billion in 2014

Lahcen Haddad, Morocco’s Minister of Tourism, spoke at a conference on “Global Economic Mutations and Growth Perspectives” on 26 May. Haddad underlined the importance of digital media as a “vector for job opportunities” and suggested that the use of digital technologies and mass communication outlets will enable economic growth.

Globally, E-commerce is predicted to contribute 50% to global GDP by 2025. Haddad said that a “digital revolution” is imminent, as the evolution of E-commerce in Morocco is particularly promising. In Morocco, the average online e-cart of a consumer is about MAD 709, close to that of an American online consumer’s average e-cart which amounts to approximately $73. Various facets of E-commerce are appealing to Moroccan internet users, such as its rapid service, large number of choices in products, and the possibility of easily comparing prices. The relevance of E-commerce to Moroccans in Morocco is significant. Approximately 903,000 Moroccans shopped online in 2014.

E-commerce websites accumulated a total of MAD 24.09 billion in transactions [in 2014] and MAD 23.1 billion in 2013, amounting to annual growth of 4.29%, according to the National Federation of E-commerce in Morocco (FNEM). (MWN 29.05)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Foreign Trade Deficit Continues to Fall Amid Oil Plunge

Turkey’s foreign trade deficit has fallen sharply in April 2016 compared to the same period last year, mainly due to lower energy prices, the Turkish Statistical Institute (TUIK) said in a report issued on 31 May. The foreign trade deficit was down by 16.3% compared with the same month last year, falling to $4.2 billion. Exports for April fell by 10.2% from April last year to $11.99 billion, while imports fell by 11.9% to $16.2 billion. Turkey’s foreign trade gap was $16.2 billion over the first four months of this year.

Energy imports, which make up the country’s largest import item, declined by 33.8% in April to around $2 billion compared to the same month of 2015. They saw a drop of 39% over the first four months of the year from the same period of 2015, falling to $8.5 billion amid low energy prices. However, analysts have warned about rebounding energy prices, which will lessen the positive contribution of the energy slump in lowering Turkey’s foreign trade gap.

The country exported goods worth $1.2 billion to Germany, its largest market, in April. Turkish exports to the U.K. amounted to $838 million, while exports to Italy were worth $583 million. While the share of the EU in Turkey’s exports was 39.5% in April 2015, this rate rose to 47.3% in April this year, according to TUIK data. The country’s exports to the EU market rose by 7.5% to $5.7 billion in April from the same month of 2015. China ($1.83 billion), Germany ($1.81 billion) and Russia ($1.15 billion) were the main sources of imports in April. ((TUIK 31.05)

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6.2 Greek Unemployment Down Slightly in February

Greek unemployment dipped slightly to 24.2% in February from 24.4% the previous month, according to data published on 31 May by the European statistical authority, Eurostat. In April 2015, Eurozone unemployment was 11%, with the EU rate at 9.6%. No data was available for Greece for March and April of this year.

In total, there were 21.22 million unemployed people in the EU in April and 16.42 million in the Eurozone. The highest rates were recorded in Greece in February (24.2%), followed by Spain (20.1%). The Czech Republic (4.1%), Germany (4.2%) and Malta (4.3%) had the lowest rate of joblessness. In Greece, the total number of registered unemployed people in February came to 1.16 million, 20.6% for men and 28.7% for women. (Eurostat 31.05)

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6.3 Greek 1^st Quarter GDP Contraction Worse Than Expected

Greece’s economic contraction in the first quarter of the year was bigger than originally thought, as Hellenic Statistical Authority data released on 30 May showed GDP fell 1.4% year-on-year, against a previous estimate for 1.3% drop. The January-March 2016 period was the third quarter of economic contraction in a row for Greece, following six consecutive quarters of growth. The Finance Ministry is anticipating a contraction in the second quarter too, before the economy starts recovering in the second half of the year and ends with a 0.7% drop in GDP for the year as a whole.

The slide in economic output is attributed to two main factors. The first is the 1.3% decrease in consumption, with state consumption shrinking 1.5% on an annual basis. Figures showed that consumption totaled €41.6 billion in the first quarter (down from €42.2 billion a year earlier). Private consumption dropped some €400 million and state consumption by €150 million.

The second factor was the 0.3% decline in investment. The drop in capital investment was sharper, at 2.7%. Notably, since the third quarter of 2014 – i.e. in the last seven quarters – it was only in two quarters that a drop in capital investment was recorded: in the third of 2015 and the first of 2016.

The negative impact on GDP from the drop in exports was offset by the 12.8% decline in total imports (9.2% in goods and 26.6% in services). Imports amounted to €13.5 billion in Q1/16, down from €15.5 billion a year earlier. Therefore the country’s trade deficit dropped from €1.6 billion last year to €1.2 billion this year.

In the five quarters since SYRIZA and Independent Greeks came to power, to end-March 2016, GDP has shrunk 1.3%, private consumption has fallen 1.4%, investment has dropped 1.8%, exports decreased 12.3% and imports 12.7%. (Elstat 30.05)

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6.4 Greece Near Bottom in Global Competitiveness Survey

Greece slid closer to the bottom of the global competitiveness list in 2015, as it dropped six positions to 56th out of the 61 countries surveyed by the International Institute for Management Development (IMD). The downward spiral of the Greek economy last year, with the imposition of capital controls and the credit crunch, saw confidence in the country as well as its enterprises drop anew. Greece had risen to 50th spot in 2014 due to a series of interventions in the labor market, including a reduction in salary costs.

Each country’s position on the list is determined by its performance in four categories that between them count 340 indices. Greece plummeted in the business efficiency category last year, dropping from 43rd to 57th place. This is attributed to the credit crunch and local enterprises’ lack of liquidity, primarily as a result of the capital controls.

It is no coincidence that Greece was last (61st) in the indices of financial risk and credit sector operation, while ranking 60th in credit availability to corporations. This was the same position that Greece ranked in term of its image abroad, which reflects the lack of confidence in the Greek economy and entrepreneurship as well as domestic politics. In the other three main categories, Greece remained in 58th position for financial returns, it slumped two spots to 59th in government efficiency, and dropped from 35th to 38th in terms of infrastructure. (eKathimerini 31.05)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Avigdor Lieberman Installed as New Defense Minister

On 30 May, the Israeli government formally approved the appointment of Yisrael Beytenu party leader Avigdor Lieberman as defense minister. The unanimous cabinet approval came after Prime Minister Binyamin Netanyahu finally secured the vital backing of the Jewish Home party, after a compromise deal with Education Minister Naftali Bennett was successfully brokered by Health Minister Yaakov Litzman (UTJ). Bennett had demanded the creation of a military liaison for the government’s security cabinet, a smaller forum of cabinet members which decides on matters of national security. The Jewish Home leader insists such a post is needed to avoid security cabinet members being kept in the dark on important developments, pointing to aspects of the 2014 conflict with Palestinian terrorists in Gaza, among other concerns.

Under the compromise brokered by Health Minister Yaakov Litzman, of the haredi United Torah Judaism party, security cabinet members will receive frequent personal briefings from Israel’s National Security Council as an interim measure, while a committee of experts looks at ways to improve procedure.

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7.2 Ontario Science Centre Collaborates with Bloomfield Science Museum

On 20 May, the Ontario Science Centre signed a three-year Memorandum of Understanding (MoU) with the Bloomfield Science Museum Jerusalem with the goal of fostering innovation in science education. The MoU outlines key areas of collaboration in the fields of science, technology, innovation and STEAM (science, technology, engineering, art and math) education and was signed during the Government of Ontario’s trade mission to Israel from 15 – 20 May. The two cultural institutions focus on providing interactive and immersive experiences to increase interest in science and technology among students and the general public. They will collaborate on exhibit development and fabrication; travelling exhibition tour rentals and management; public and curriculum-based programming; program evaluation; and exhibits and programs that focus on women and girls in science and engineering.

The Ontario Science Centre has welcomed more than 50 million visitors since it opened in 1969, implementing an interactive approach now adopted by science centers around the world. Today, the Science Centre is an international leader in free-choice science learning and a key contributor to Ontario’s education and innovation ecosystems, offering lifelong learning through hands-on, engaging experiences.

The Bloomfield Science Museum Jerusalem is one of Israel’s foremost institutions for informal science education and science communication providing life changing experiences and enables dialogue between various sectors of the community. It is a cultural anchor in the city of Jerusalem, stimulating creativity and innovation for the future of Israel. (Ontario Science Centre 20.05)

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7.3 Arab Israeli Wins First ‘Miss Trans Israel’ Pageant

An Israeli from a Catholic Arab family has been crowned the winner of the country’s first transgender pageant. Talleen Abu Hanna, 21, from the northern city of Nazareth wore a white bridal dress as she was declared the first “Miss Trans Israel” on 27 May at Habima, Israel’s national theater, in Tel Aviv. The pageant consisted of a swimsuit competition, two formal-wear competitions and a question-and-answer portion. Abu Hanna described her victory as “historic” and said it promotes equality. She will represent Israel at the Miss Trans Star International pageant in Spain in August.

Israel is generally tolerant of gay people, and Tel Aviv has emerged as one of the world’s most gay-friendly destinations. The Israeli city stands in sharp contrast to many parts of the Middle East, where gay people are often persecuted. (Various 29.05)

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7.4 Shavuot Holiday Begins on Eve of 11 June

On 11/12 June, the Jewish world will observe the holiday of Shavuot. Shavuot is the second of the three major pilgrim festivals (Passover being the first and Sukkot the third) and occurs exactly fifty days after the second day of Passover. This holiday marks the anniversary of the day when the Jewish People received the Torah at Mount Sinai. This is a biblical holiday complete with special prayers, holiday candle lighting and Kiddush, with many forms of work and labor are prohibited. The word shavuot means weeks and it marks the completion of the seven-week counting period between Passover and Shavuot. During these seven weeks the Jewish people cleansed themselves of the scars of Egyptian slavery and became a holy nation ready to enter into an eternal covenant with G‑d with the giving of the Torah. Before the giving of the Torah the Jews were a family and a community. The experience of Sinai bonded the Jews into a new entity: the Jewish people; the Chosen Nation. This holiday is likened to their wedding day – beneath the wedding canopy of Mount Sinai, G‑d betrothed the Jews.

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7.5 Ramadan Begins on Eve of 6 June

Ramadan 2016 is expected to start on the night of 6 June and will continue for 30 days until the evening of 7 July. Ramadan is the ninth month of the lunar Islamic calendar, which lasts 29 or 30 days according to the visual sightings of the crescent moon according to numerous biographical accounts compiled in Hadiths. It is the Muslim month of fasting, in which Muslims refrain from dawn until sunset from eating, drinking and sexual relations. The sawab (rewards) of fasting are many, but in this month, they are believed to be multiplied. Muslims fast in this month for the sake of demonstrating submission to God and to offer more prayers and Quran recitations.

Ramadan is a time of spiritual reflection and worship. Muslims are expected to put more effort into following the teachings of Islam and to avoid obscene and irreligious sights and sounds. Purity of both thoughts and actions is important. The act of fasting is said to redirect the heart away from worldly activities, its purpose being to cleanse the inner soul and free it from harm. It also teaches Muslims to practice self-discipline, self-control, sacrifice and empathy for those who are less fortunate; thus encouraging actions of generosity and charity (zakat).

It becomes compulsory for Muslims to start fasting when they reach puberty, so long as they are healthy, sane and have no disabilities or illnesses. The elderly, the chronically ill and the mentally ill are exempt from fasting, although the first two groups must endeavor to feed the poor in place of their missed fasting. Also exempt are pregnant women if they believe it would be harmful to them or the unborn baby, women during the period of their menstruation, and women nursing their newborns. A difference of opinion exists among Islamic scholars as to whether this last group must make up the days they miss at a later date, or feed poor people as a recompense for days missed. While fasting is not considered compulsory in childhood, many children endeavor to complete as many fasts as possible as practice for later life. Lastly, those traveling (musaafir) are exempt, but must make up the days they miss. Twelver Shi’a believes that those who travel more than 14 miles (23 km) in a day are exempt.

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*REGIONAL:

7.6 Jordan’s King Abdullah Dissolves Parliament & Orders New Elections

Jordan’s King Abdullah appointed veteran politician Hani Mulqi as prime minister after dissolving parliament by royal decree on 29 May, following the end of its four-year term, charging him with holding new elections by October. The monarch accepted the resignation of Prime Minister Abdullah Ensour, as is customary under the constitution, before appointing an interim head of government.

Under the constitutional rules the election should be held within four months and after the lower house passed an amendment to the electoral laws in March government sources and political analysts say there are likely to be more candidates from political parties vying for votes with traditional tribal and family allegiances. Jordan’s main political opposition to the government comes from the Muslim Brotherhood movement which is facing increasing legal curbs on its activities, leaving mostly pro-monarchy parties and some independent Islamists and politicians to compete in the elections, the sources say. (Reuters 29.05)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Gamida Cell Announces $4.4 Million Grant from the Israeli Government

Gamida Cell has been awarded a grant of up to $4.4 million from the Israel Innovation Authority (formerly the Office of the Chief Scientist) of the Israeli Ministry of Economy and Industry. The mission of the Israel Innovation Authority is to encourage innovation and entrepreneurship in various industries, including science and technology, while stimulating economic growth. The non-dilutive funding will support Gamida Cell’s ongoing research and development efforts including its Phase 3 registration study of NiCord for hematological malignancies (blood cancers like leukemia and lymphoma), and its clinical trials of CordIn for sickle cell disease and thalassemia and NK cells as a potential immune therapy for cancer.

Jerusalem’s Gamida Cell is a world leader in cellular and immune therapies for the treatment of cancer and orphan genetic diseases. The company’s pipeline of products are in development to treat a wide range of conditions including cancer, genetic hematological diseases such as sickle cell disease and thalassemia, bone marrow failure syndromes such as aplastic anemia, genetic metabolic diseases and refractory autoimmune diseases. (Gamida Cell 23.05)

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8.2 Mazor Robotics Signs Strategic Agreements With Medtronic

Mazor Robotics entered into two strategic agreements with Medtronic. One agreement is a two-stage, multi-faceted, commercial agreement for co-promotion, co-development and, upon meeting certain milestones, potential global distribution of certain Mazor products. The second agreement is for an equity investment by Medtronic in Mazor.

Mazor remains an independent company, which will continue to innovate in spine as well as in other markets, and will continue to sell and fully support the Renaissance System through its own sales team and distribution partners. Throughout the agreement, current and jointly developed Mazor systems will continue to maintain universal implant compatibility, allowing complete hospital and surgeon freedom in surgical tool, implant and procedure selection.

Caesarea’s Mazor Robotics believes in healing through innovation by developing and introducing revolutionary robotic-based technology and products aimed at redefining the gold standard of quality care. Mazor Robotics Renaissance Guidance System enables surgeons to conduct spine and brain procedures in a more accurate and secure manner. (Mazor Robotics 18.05)

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8.3 Nucleix Raises $3 Million

Rehovot’s Nucleix has raised $3 million from Morris Kahn’s Aurum Ventures MKI, OrbiMed Israel Partners and Zohar Zisapel. OrbiMed and Zohar Zisapel invested in the startup’s first $5.5 million financing round and the company has also raised $3 million from private investors. Nucleix is involved in the relatively new research field of epigenetics (a situation in which identical genes express themselves in different ways) in order to detect different types of cancers. Cancer cells are different from healthy cells with chemical patterns, which are added on to or not added on to their genes. Nucleix has developed a method that can read the epigene patterns in different cells. The company’s first test for the detection of bladder cancer could be available in Europe within a couple of months. (Globes 23.05)

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8.4 OrbiMed Launches $307 Million Israel Venture Capital Fund

OrbiMed announced the closing of its second Israel-focused venture capital fund, OrbiMed Israel Partners II, with approximately $307 million in capital commitments. Investors in the Fund include several of the world’s largest healthcare companies, in addition to dozens of institutional investors and family offices. Consistent with its predecessor fund, OrbiMed Israel Partners II will target all stages and sectors of the healthcare industry, with a focus on biopharmaceuticals, digital health, medical devices and diagnostics companies in Israel. The fund is targeting to invest in approximately 20 portfolio companies. Where appropriate, Israel Partners II may co-invest with OrbiMed’s global private equity team, leveraging the full financial and strategic resources of OrbiMed’s 100+ team members and $15 billion global investment platform.

Herzliya’s OrbiMed is a leading investment firm dedicated exclusively to the healthcare sector, with over $15 billion in assets under management. OrbiMed invests globally across the spectrum of healthcare companies, from venture capital start-ups to large multinational companies utilizing a range of private equity funds, public equity funds, royalty/debt funds, and other investment vehicles. (OrbiMed 23.05)

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8.5 MedyMatch Presents at Israel’s BioMed Conference

MedyMatch Technology was selected to present at the 2016 Israeli Advanced Technology Industries (IATI) BioMed Conference. The Biomed conference is the preeminent event for the Israeli life sciences industry, attracting leading members of the healthcare industry from around the globe.

Tel Aviv’s MedyMatch utilizes advanced cognitive analytics and artificial intelligence to deliver real-time decision support tools to improve clinical outcomes in acute medical scenarios. The foundation of clinical discovery and value creation lies in the deep clinical understanding of how to diagnose disease, utilizing the right data (electronic medical record, medical imaging, and genomic data). MedyMatch’s vision includes an innovative approach in re-defining ‘capacity in healthcare’ by applying advanced analytic technologies in the emergency room setting to prognosticate downstream cost of care outcomes. The MedyMatch team of artificial intelligence, machine learning, deep learning and algorithmic experts along with its medical and science advisory boards are achieving breakthroughs in standards of cost and care. (MedyMatch 24.05)

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8.6 FDA Approves Medic Vision SafeCT-29 that Helps Achieve Radiation Safety

Medic Vision Imaging Solutions announced the FDA clearance of SafeCT-29 to help healthcare facilities achieve compliance as mandated by NEMA XR-29 “Smart Dose” standard. SafeCT-29 provides full compliance with the XR-29 Dose Check function for CT and PET/CT systems of all vendors and models. It is the only third-party solution that offers Dose Check functionality without interrupting or interfering with the scanner’s design and operation. NEMA estimates that one-third of the current CT installation base may not be retrofitted by the OEMs to become XR-29 compliant. Now there is an alternative solution that can make the 4-slice, 8-slice, some 16-slice CT scanners, as well as the majority of PET/CT scanners, compliant.

SafeCT-29 is a patent-pending, innovative, add-on system that is easy to install and operate. It is fully automatic and maintains the scanner’s workflow. It connects to the CT console, analyzes dose data in real time, alerts the operator if the dose is too high, and prevents the patient scan until dose levels are changed or confirmed and justified.

Tirat HaCarmel’s Medic Vision Imaging Solutions is a leading provider of cost-effective, vendor-independent image enhancement and dose management solutions for CT exams. The company’s flagship product, SafeCT, enhances CT images acquired with low-dose protocols. SafeCT is in routine clinical use at more than 100 major hospitals and imaging centers nationwide, supporting CT scanner systems from all manufacturers. (Medic Vision 24.05)

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8.7 Health Canada Approves Insightec’s Exablate Neuro System Tremor Treatment

INSIGHTEC announced that Health Canada has approved its Exablate Neuro system for the treatment of essential tremor. INSIGHTEC’s Exablate Neuro platform is transforming medicine by presenting a non-invasive treatment alternative that combines two technologies: Focused Ultrasound, which is used to lesion the targeted tissue deep in the brain, and Magnetic Resonance Imaging (MRI), which is used to guide the ultrasound waves to the specific target tissue and provide real-time feedback on treatment progress and outcomes. Essential tremor is the most common movement disorder, affecting millions of people worldwide. It is a progressive and debilitating neurological condition that causes a rhythmic trembling of the hands, head, voice, legs or trunk. Exablate Neuro was investigated as a treatment alternative for these patients.

Haifa’s INSIGHTEC is a world leader in MR-guided Focused Ultrasound (MRgFUS). The company, founded in 1999, develops and distributes a non-invasive therapy platform that is transforming medicine. INSIGHTEC is continuously expanding its applications ranging from functional neurosurgery to oncology and gynecology. MRgFUS is embraced by world-renowned physicians in more than 120 leading medical facilities around the world, who value both its clinical and economic value. (INSIGHTEC 24.05)

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8.8 Zebra Medical Vision Raises $12 Million

Kibbutz Shefayim’s Zebra Medical Vision raised $12 million in a funding round led by Utah-based healthcare provider Intermountain Healthcare, with the participation of existing investors. Intermountain plans to work with Zebra to accelerate the creation of imaging algorithms to improve patient care. Zebra Medical, founded in 2014, seeks to teach computers to automatically read and diagnose medical imaging data. Its analytics engine helps physicians and healthcare providers analyze millions of imaging records. Current algorithms are in the fields of bone health, cardiovascular analysis, liver and lung indications. The company currently offers algorithms supporting analysis of imaging results for osteoporosis, fatty liver, and emphysema. (Various 25.05)

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8.9 Check-Cap Preliminary Data Evaluating its Preparation-Free Colon Screening Capsule

Check-Cap announced that preliminary data from pre-clinical and clinical studies were discussed in a podium presentation entitled “A Novel Preparation-Free X-Ray Imaging Capsule for Colon Cancer Screening” during Digestive Disease Week (DDW) 2016, taking place in San Diego from 21 – 24 May. The presentation included a preliminary analysis of the first participants evaluated in the Company’s ongoing multi-center clinical feasibility study, which aims to establish the safety, functionality and preliminary efficacy of the Check-Cap system.

Data presented showed safe and complete passage for the 75 participants enrolled in a completed study to assess the natural motility of the capsule. Preliminary analysis of the ongoing clinical feasibility study evaluated data from 54 participants who swallowed Check-Cap’s scanning capsule, tracking the passage of the capsule through the alimentary tract using radio frequency telemetry and Check-Cap’s proprietary capsule position tracking system. Capsule passage was safe and well tolerated, with an average transit time of 66 ±37 hours observed in 53 volunteers who completed the study (one asymptomatic volunteer withdrew prior to completion and the capsule was retrieved endoscopically from the colon), and the total radiation dose was found to be ultra-low (0.03±0.007 mSv, or the equivalent exposure of one dental or chest x-ray). Three-dimensional image reconstructions of the colonic wall and lumen detected and located small and large pedunculated and sessile polyps, as validated by subsequent colonoscopy.

Isfiya’s Check-Cap is a clinical stage medical diagnostics company developing the first system for preparation-free scanning and imaging of the inner colon to identify precancerous polyps and cancers while being less invasive than traditional procedures. The Company is developing an ingestible capsule that utilizes proprietary, ultra-low-dose X-ray technology to safely generate high-resolution, 3-dimensional imagery of the interior of the colon. Without requiring bowel preparation or diet and activity modifications, Check-Cap’s system is designed to increase patient acceptance and adherence to colorectal cancer screening recommendations. The Check-Cap system is currently not cleared for marketing in any jurisdiction. (Check-Cap 25.05)

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8.10 Nano Dimension & Accellta Successfully BioPrint Stem Cell-Derived Tissues

Nano Dimension has successfully lab-tested a proof of concept 3D Bioprinter for stem cells. The trial was conducted in collaboration with Accellta, a company that has developed proprietary technologies for the unique production of high quality media, stem cells, progenitors and differentiated cells for drug discovery, regenerative medicine and research. The feasibility study confirmed that the combined technologies of the companies enabled printing of viable stem cells using an adapted 3D printer. The companies will consider the formation of a new entity for these future solutions and do not intend to invest significant capital directly to expand this activity. Such funds would be raised by and for the use of the joint entity.

3D bioprinting enabled by the two companies’ technologies, means that Nano Dimension and Accellta have the potential to accelerate high fidelity and high viability manufacturing of living cellular products. Accellta’s unique, robust and reproducible suspension-based cell culturing systems produce billions of high quality stem cells per batch and represent a transformative step in terms of stem cell production. Accellta’s technology can deliver large quantities of high quality cells which can be an enabler for printing even large and complex tissues and organs.

Advanced 3D inkjet technology, the core competence of Nano Dimension, enables rapid printing of complex multi-material objects such as those needed for next generation bioprinting. Nano Dimension’s novel capabilities, developed for its state-of-the-art 3D printed electronics technology for printed circuit boards (PCBs) may pave the way to other advanced multi-material printing domains such as 3D bioprinting. This latest development is consistent with Nano Dimension’s strategy of offering commercial solutions to help companies and partners develop innovative products through advanced 3D printing and multi-material technology.

Ness Ziona’s Nano Dimension, founded in 2012, focuses on development of advanced 3D printed electronics systems and advanced additive manufacturing. Nano Dimension’s unique products combine three advanced technologies: 3D inkjet, 3D software and nanomaterials. The company’s primary products include the first 3D printer dedicated to printing multi-layer PCBs (printed circuit boards) and advanced nanotechnology-based conductive and dielectric inks.

Haifa’s Accellta specializes in innovative, high quality and cost-effective media and custom-made technologies for culturing and differentiation of human stem cells in unique 3D suspension culture systems, using bioreactors, with no animal products, no feeder cells or micro-carriers and serum-free. (Nano Dimension 25.05)

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8.11 Steak Tzartzar Farms Insects To Fight World Hunger

An Israeli company is promoting edible insects that are high in protein and affordable to cultivate, with the aim of helping to curb world hunger and boost nutrition. The Israeli startup Steak TzarTzar has developed strains of edible mealworms and grasshoppers grown in controlled environments without chemicals and free of pesticides, and says it conducts high scale farming of insects for human consumption. The company also develops innovative protocols and technologies to enable growing commercial quantities of grasshoppers in climate controlled facilities as an alternative healthier and more sustainable protein ingredient for the food industry. The firm aims to set up warehouses in East Africa and make grasshoppers — which are in season only six weeks out of the year — available to consumers all year round at lower costs than current market rates. Grasshoppers multiply exponentially and can grow from 2,000 to over a million within two months. The company also wants to penetrate the North American market. But most Westerners do not find the notion of eating insects appealing, so overcoming the “yuck factor” will be a challenge. (Various 29.05)

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8.12 Ultra Health Cannabis Forms Joint Venture With Panaxia

Albuquerque’s Ultra Health, the largest and leading medical cannabis operator in New Mexico, announced a joint venture with Panaxia, a pharmaceutical company based in Israel. The firms concluded an agreement after a 14-month negotiation and due diligence process. Panaxia will be providing smokeless proprietary cannabinoid dosage and treatment protocols not readily available in the U.S. in order to manufacture state-of-the-art products to treat a number of illnesses. The two companies will be building a production facility that implements Panaxia’s technology including advanced validated analytical systems and Good Manufacturing Practices (GMP) production protocols.

The new smokeless designed cannabis products will provide better delivery systems for patients and physicians with regard to safety and dosage. The products will be beneficial to current chronic conditions requiring ongoing dosing such as PTSD, chronic pain, cancers, neuropathy pain, epilepsy, anorexia and HIV/AIDS. The U.S. legal cannabis market is expected to grow by 25% in 2016 to $6.7 billion. It is estimated that nearly one third of the market will likely be smokeless cannabis products.

Lod’s Panaxia is a research and development company as well as a manufacturer of medical devices and pharmaceuticals. Panaxia has developed more than 30 formulations, most of them having already been registered as medical products and have reached the market. These products include various indications and dosage forms, many of them are topical preparations (e.g. dermal, vaginal, nasal and otic). Panaxia handles all aspects of product expansion starting from formulation development, registration at the Israeli Ministry of Health and, if required, with the U.S. FDA, clinical trials and finally manufacturing of the licensed product on an industrial scale. Panaxia has been developing and manufacturing in Israel smokeless cannabis dosage forms which include: extracts, tablets and inhalers since 2010. (Ultra Health 30.03)

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8.13 NeuroRx Wins Startup Competition at IATI-Biomed 2016

NeuroRx won IATI-BIOMED’s startup completion and was chosen out of dozens of applicants as the most innovative life science company. NeuroRx has successfully completed a Phase 2 for a newly-purposed class of drugs that have shown rapid efficacy in reducing symptoms of depression and risk of suicide. The drug named Cuclurad targets the brain’s NMDA receptor rather than the traditional serotonin pathway. It includes initial use of Ketamine, followed by D-cycloserine in combination with one of three FDA-approved mood stabilizers and achieves reduction of symptoms within two hours of treatment and maintains that clinical benefit over 8 weeks. The Company is expected to receive FDA approval under a fast track, following completion of clinical trials expected by the end of 2017.

Haifa’s NeuroRx is a clinical stage, small molecule pharmaceutical company developing novel therapeutics for the treatment of central nervous system disorders. The company is built upon 30 years of basic science and clinical expertise in understanding the role of the brain’s N-methyl-D-aspartate (NMDA) receptor in regulating human thought processes in general and in regulating depression and suicidality in specific. The company’s lead drug candidate is Cyclurad, the first oral therapeutic for the treatment of acute suicidal crisis associated with bipolar disorder. (IATI 28.05)

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8.14 Rosetta Genomics Confirms Validity of its Novel Thyroid Nodule Classification Assay

Rosetta Genomics announced that data from the analytical validation of the Company’s novel, microRNA-based assay for the classification of indeterminate thyroid nodules have been published online in the peer-reviewed journal, Cancer Cytopathology. The article, “Analytical Validity of a microRNA-based Assay for Diagnosing Indeterminate Thyroid FNA Smears from Routinely Prepared Cytology Slides,” highlights the robustness of RosettaGX Reveal, a test that stratifies indeterminate thyroid lesions as “benign,” “suspicious for malignancy by microRNA” or “positive for medullary carcinoma” in preoperative Fine Needle Aspirate (FNA) by utilizing existing cytology smear samples. The article can be accessed here.

In addition to its excellent performance, RosettaGX Reveal has significant advantage to current assays on the market because it can work off the same cytology slides that were created to perform the initial diagnosis, thus eliminating the risks, added patient stress, and unnecessary pain associated with additional fine needle passes. Importantly, RosettaGX Reveal can evaluate the same cells that were already examined. The published data add to the growing body of clinical evidence, including previously reported clinical validity data, that support the use of RosettaGX Reveal to help resolve ambiguity in an indeterminate thyroid cancer diagnosis and thus reduce unnecessary surgeries.

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8.15 HIL Applied Medical Acquires Nanolabz

HIL Applied Medical announced the acquisition of Nanolabz, a Reno, Nevada company born out of University of Nevada, Reno research and focused on developing and fabricating smart targets for laser-based proton acceleration. HIL Applied Medical is developing a new class of ultra-compact, high-performance Proton Beam Therapy systems, based on high-intensity lasers and nano-engineered smart targetry.

Jerusalem’s HIL Applied Medical is developing a new class of ultra-compact, high-performance proton therapy systems. They apply a patented approach to particle acceleration and beam delivery, combining nano-technology with ultra-high-intensity lasers and ultra-fast magnets. These technological breakthroughs enable meaningful reduction in the size, complexity and cost of proton therapy systems, without compromising clinical utility. Thus HIL aims to enable, for the first time, a single-room add-on proton therapy solution that is truly cost-effective. (HIL 26.05)

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8.16 CollPlant Receives OCS Authorization for a NIS 12 Million in R&D Projects

CollPlant has received authorization from the Chief Scientist of Israel’s Ministry of Economy, for funding approximately 50% of its NIS 12 million development project for 2016. The Chief Scientist’s grant amounts to NIS 5.6 million, measurably higher than last year’s authorized grant, which totaled NIS 4.7 million. The development programs for which the funding was authorized include human collagen-based medical products leveraging CollPlant’s technology. Of note, the Chief Scientist authorized the support of development of collagen and cell-based formulations intended for use as BioInk for 3D printing of tissues and organs. Also receiving Chief Scientist funding is a product to treat tears in tendons and ligaments, such as the Anterior Cruciate Ligament (ACL) in the knee joint. The development plans authorized by the Chief Scientist also include support for the completion of the development process of VergenixSTR, a product to heal tendons inflammation, and other products.

Ness Ziona’s CollPlant is a clinical-stage regenerative medicine company leveraging its proprietary, plant-based rhCollagen technology for the development and commercialization of tissue repair products, initially for the orthobiologics and advanced wound care markets. The Company’s cutting-edge technology is designed to generate and process proprietary recombinant human collagen (rhCollagen), among other patent-protected recombinant proteins. Given that CollPlant’s rhCollagen is identical to the type I collagen produced by the human body, it offers significant advantages compared to currently marketed tissue-derived collagen, including improved biofunctionality, superior homogeneity and reduced risk of immune response. (CollPlant 31.05)

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8.17 BioRap Technologies Collaborates with Pfizer for Novel Immunomodulators R&D

BioRap Technologies, the technology transfer company of the Rappaport Institute for Biomedical Research at the Technion – Israel Institute of Technology, has entered into a research collaboration, option and license agreement with Pfizer that aims to further develop a certain monoclonal antibody into potential new treatment options for a number of chronic autoimmune diseases. The collaboration is based on a scientific breakthrough made at the Rappaport Institute. The team developed a novel monoclonal antibody that – when bound with a certain immune checkpoint molecule – drives the activity of regulatory T-cells, a cell type that plays an important role in controlling autoimmunity. Autoimmune diseases include Inflammatory Bowel Disease (Crohn’s Disease and Ulcerative Colitis), Diabetes and Multiple Sclerosis. Under the terms of the agreement, Pfizer has an exclusive option to obtain a license to the monoclonal antibody program. If the option is exercised, Pfizer will be responsible for further development and potential commercialization of any resulting product.

Haifa’s BioRap is the Rappaport Institute’s technology transfer company led by Dr Orit Shaked and its liaison to industry, bringing promising scientific innovations generated at the Institute to collaboration with industry and commercialization. The company provides the legal and commercial frameworks for the inventions and innovations of RI researchers, protecting discoveries and innovations with patents, and working jointly with industry to bring scientific discovery to the market. (BioRap Technologies 31.05)

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8.18 Intec Pharma Receives Approval for $5.2 Million Grant

Intec Pharma announced that the Israeli National Authority for Technological Innovation (NATI), formerly known as the Israel Office of the Chief Scientist, approved a grant of up to NIS 20 million ($5.2 million) in connection with company’s 2016 research and development program. The majority of this grant is allocated for the pivotal Phase III clinical trial for its lead product candidate, the Accordion Pill Carbidopa / Levodopa for the treatment of Parkinson’s disease symptoms in advanced Parkinson’s disease patients.

Jerusalem’s Intec Pharma is a clinical stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology. The Company’s Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism. (Intec Pharma 31.05)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Israel Successfully Tests Iron Dome Defense System at Sea

Israel has successfully tested its Iron Dome anti-rocket defense system aboard naval ships for the first time. The Israel Navy announced on 18 May that the system shot down a volley of rockets during a drill recently. The rockets were fired from the shore and all were detected by the radar system and then intercepted by the weapons system. The Iron Dome protects against short-range rockets and intercepted hundreds of projectiles fired by Hamas and other Palestinian terrorists at Israeli towns during Operation Protective Edge in 2014. (Various 18.05)

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9.2 New FDM 3D Printer Enhancements Make Stratasys Solutions Stronger

Stratasys introduced four new enhancements to Stratasys Fused Deposition Modelling (FDM)-based 3D printers, fully optimizing select models for creating functional product prototypes, production tools and end-use parts for the most demanding manufacturing applications.

Sacrificial tooling, a process in which 3D printed molds are wrapped in composite material and then removed after part curing, enables manufacturers to rapidly and cost-effectively create complex, hollow composite parts. Stratasys is improving this process with a new sacrificial tooling solution, comprised of its new ST-130 material and new fill patterns. Together, the new material and fill patterns provide faster dissolution, rapid build speed, better autoclave performance and greatly improved tool quality.

To reduce production time and cost for both parts and tooling, Stratasys is introducing the Fortus 900mc Acceleration Kit. This new kit, designed for Stratasys’ most powerful FDM 3D printer, allows very large structures to be 3D printed up to three times faster.

Aerospace engineers and manufacturers require materials with precise specifications and traceability for prototypes and end-user parts. Stratasys ULTEM 9085 Aerospace grade filaments are produced according to aerospace specification requirements. While there is no change from the standard ULTEM 9085 material, the new Aerospace designation allows for full production traceability in compliance with strict aerospace requirements.

With its high durability and smooth matte finish, PC-ABS is a natural choice for challenging applications, such as power-tool prototyping and industrial equipment manufacturing. Owners of the Fortus 380mc and 450mc 3D Printers will now have the ability to leverage PC-ABS, reducing time-to-market and high tooling costs for low-volume and custom production builds.

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9.3 StoreDot Unveils World’s First MolecuLED TV

StoreDot unveiled the next evolution in display technology – a massive 55 inch display powered by StoreDot’s MolecuLED technology. This groundbreaking metal-free approach to color conversion is the first and only fully organic solution that is positioned to replace traditional Quantum Dot technology. The new display demonstrates the viability of this next generation technology to supplant current generation technologies such as LED, OLED, and AMOLED. The new technology allows for displays that produce vivid colors, are more cost effective, and are environmentally friendly. The MolecuLED is an organic color conversion layer that delivers very competitive wide color gamut. It is completely heavy metals free – no use of Cadmium, Indium, or any type of metal.

StoreDot has developed the technology that allows creation of organic materials inspired by natural molecules. The MolecuLED is a new generation of color conversion film. It’s a combination of new organic compounds and processes that provide an alternative for any inorganic QD film. The MolecuLED layer has much lower cost compared to QD film, and is environmentally-friendly.

Herzliya’s StoreDot is an innovation leader in materials and device applications, developing ground-breaking technologies based on a unique methodology for the design, synthesis, and tuning of organic compounds. Designed to replace known technologies by means of enhanced chemical, electrical, and optical properties, StoreDot’s proprietary technology, inspired by nature, can be optimized for multiple industries including fast-charging batteries in mobile devices and electric vehicles and next generation displays. (StoreDot 23.05)

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9.4 ECI Wins Leading Lights 2016 Award for Most Innovative Security Strategy

ECI, a global provider of ELASTIC Network solutions for service providers, utilities and data center operators, announced that its LightSEC security solution has won Light Reading’s, Leading Lights 2016 award for most innovative security strategy (vendor). Developed to be comprehensive, flexible and centralized LightSEC ensures that customers cope well with current security challenges as well as retain the ability to add security functions which will protect against future threats. The LightSEC solution is comprised of three major pillars:

*A Suite of Security Applications which delivers a flexible security mitigation solution. The solution leverages a set of security functions, understanding that protection cannot be achieved by protecting individual elements.
*LightSEC COMPASS – With the growing number of threats, every organization is likely implementing a variety of security engines and applications. The LightSEC COMPASS features an aggregated view of calculated threats from all security engines, whether ECI’s proprietary applications or those of a third party.
*The Mercury NFV solution – facilitates a consolidated security and connectivity solution. The solution is based on a commercial, off-the-shelf platform, which can be deployed as a plug-in blade (in ECI’s Neptune product line) or as a stand-alone appliance.

Petah Tikva’s ECI is a global provider of ELASTIC Network solutions to CSPs, utilities as well as data center operators. Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cyber security solution, and a range of professional services. (ECI 24.05)

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9.5 Allot Demonstrates Security VNF & vCPE Interoperability

Allot Communications has successfully demonstrated that its security services virtual network functions (VNF) and virtual customer premises equipment (vCPE) solutions are interoperable with leading NFV Infrastructure (NFVI) and orchestration (NFVO) ecosystems. Allot will showcase the readiness and agility of its solution by onboarding and orchestrating successfully with different NFV infrastructures in a live interoperability demonstration being held at the Big Communications Event 2016. NIA’s Live Interoperability Demo addresses service function chaining and provides a realistic and neutral set of tests based on public standards, open-source community developments and market feedback. The interoperability testing included an Allot VNF based on Allot Service Gateway – Virtual Edition, capable of delivering services such as Security-as-a-Service (SECaaS) with Allot’s WebSafe Personal and WebSafe Business.

Hod HaSharon’s Allot Communications is a leading provider of security and monetization solutions that enable service providers to protect and personalize the digital experience. Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks enabling service providers to get closer to their customers; to safeguard network assets and users; and to accelerate time-to-revenue for value-added services. (Allot Communications 24.05)

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9.6 Handwriting.io Announces Partnership with XMPie

New York’s Handwriting.io, an API that incorporates digital handwriting technology into mobile apps, desktop applications and websites, announces a partnership with XMPie, the leading provider of software for cross-media, variable data, one-to-one marketing solutions. This partnership enables XMPie to expand their offering to include authentic handwriting to help businesses add a personal touch to their direct marketing and cross-media campaigns. As businesses work to put customers at the center of communications, they are leaning heavily on print and digital marketing agencies to deliver unique solutions to help them stand out. These agencies count on XMPie’s innovative technology to help them rise to the challenge. XMPie’s omni channel platform, coupled with Handwriting.io’s patented technology brings a new level of personalization that delivers stunning results.

XMPie provides powerful, variable data publishing software that unites customer databases and creative content to help print service providers, marketing service firms, and small-to-medium sized businesses and enterprises, leverage customer data and create personalized, multiphase campaigns that use today’s communication vehicles including print, web, e-mail and mobile. XMPie is headquartered in New York with an R&D center in Israel, and sales, support and professional service operations in the U.S., Europe and Asia Pacific. (Handwriting.io 24.05)

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9.7 Faception Claims It Can Spot Terrorists

Israeli facial personality profiling startup Faception has made global headlines after claiming that it can predict deviant behavior with a high degree of accuracy. Put simply the Tel Aviv based company says it has developed software that can spot terrorists, criminals, pederast and other deviants. For example, Faception claims that just by letting its software scan the photographs of the 11 jihadist terrorist responsible for the Paris massacres last November, it could have identified nine of them as terrorists from their facial features. Most of them did not have prior criminal records. Faception argues that its software could provide a vital homeland security or police tool in identifying budding terrorists and criminals.

Faception demonstrated its technology recently at an amateur poker tournament where it predicted which four competitors would be the best by comparing their pictures with a database of professional players. Ultimately, two of those four ended up among the event’s three finalists.

Tel Aviv’s Faception is a facial personality profiling company. Their breakthrough computer-vision and machine learning technology analyzes facial images and automatically reveals personalities in real-time. Backed by Social and Life Science research and proven results, their mission is to revolutionize how companies, organizations and even robots understand people to dramatically improve public safety, communications, decision-making, and experiences. (Globes 25.05)

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9.8 Optimal+ Selected by Xilinx for Real-Time Analytics for Wafer Sort Operations

Optimal+ was selected by Xilinx to provide real-time visibility into their production test operations taking place in their global supply chain. In a move intended to improve efficiency, quality and yield, Optimal+ and Xilinx collaborated to create an environment based on the Optimal+ Global Ops solution that would provide Xilinx with real-time visibility into all test operations occurring in their OSATs.

Through the use of the Optimal+ Big Data Infrastructure, Xilinx is able to monitor all aspects of their test operations being performed in their OSATs, including site-to-site test results, temperature monitoring and bin limits. Additionally, Xilinx can create highly flexible and reconfigurable rules that can automatically check for issues that would otherwise be too difficult to track manually. This creation of this tightly integrated environment was driven by Xilinx to enable even faster response times to their manufacturing issues.

Holon’s Optimal+ is a global provider of Manufacturing Intelligence software solutions, enabling any semiconductor company to seamlessly aggregate, organize and act upon the global manufacturing and test data they generate across their internal and external supply chains to measurably improve yield, quality and productivity. The company’s real-time, big data analytics solutions are deployed in every major foundry and OSAT currently serving the semiconductor ecosystem, processing over 35 billion chips every year on behalf of its customers. It is ushering in an era of unprecedented supply chain visibility that translates into strong and measurable ROI. (Optimal+ 24.05)

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9.9 LightCyber Brings Behavioral Attack Detection to UK Organizations

LightCyber is making its unique solution for detecting active network attacks available to the UK market for the first time. Early detection of network attackers gives organizations the ability to curtail data breaches and prevent other consequences. LightCyber, with its dual headquarters in Israel and Silicon Valley, recently established its European headquarters in the Netherlands and inaugurated an EU-based cloud for its Magna Cloud Expert System to comply with the EU Data Protection Directive (Directive 95/46/EC).

To address escalating threats of cyberattacks, the LightCyber Magna platform uses behavioral profiling to learn what is normal on the network and endpoints, and thereby detect anomalous attacker behaviors that are by-necessity required to perpetrate a successful breach or conduct malicious goals, including command and control, reconnaissance, lateral movement and data exfiltration. These behaviors can be identified early to reduce attacker dwell time and curtail the activity. At the same time, Magna can identify harmful activity from insiders – rogue or unintentional actions from employees or contractors – that is either malicious or unknowingly dangerous. Magna is differentiated by the accuracy and efficiency of the alerts produced, as well as the supporting contextual and investigative details that greatly enhance the efficiency of a security operations team in its detection and remediation operations.

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9.10 Anodot Named a 2016 ‘Cool Vendor’ in Analytics by Gartner

Anodot has been named a “Cool Vendor” in Analytics in the 2016 Gartner report. Each year, Gartner, the world’s leading information technology research and advisory company, identifies new Cool Vendors in key technology areas and publishes a series of research reports about them. Anodot is one of five companies identified in the report as “innovative vendors that are redefining the types of analysis that it is feasible for organizations to perform. They are doing so by providing high levels of automation or extending analytics’ reach to new classes of user and new types of decision.”

Anodot’s automated business incident and anomaly detection platform enables business analysts to uncover outliers in vast amounts of streaming data without manually setting thresholds or prioritizing which metrics to track. Identifying anomalies quickly can provide early notice of market shifts, niche use cases, or leaky revenue pipelines. The SaaS solution is based on patented machine-learning algorithms that isolate issues and correlate them in real time to alert users to a need for action.

Based in Sunnyvale, Calif. and Ra’anana, Israel, Anodot is disrupting the static nature of the Business Intelligence (BI) market with a unique technology for real-time analytics and automated anomaly detection for big data. Using patented machine learning algorithms, Anodot automates the discovery of outliers in vast amounts of data, isolates issues and correlates them across multiple parameters. (Anodot 25.05)

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9.11 ElectRoad Can Turn Any Road Electric

The new ElectRoad wireless charging solution can be implemented in any roadway and will end dependence on expensive batteries. ElectRoad has uses a specialized technology that supplies electricity to the car wirelessly from the road – thereby dispensing with the need for carrying expensive batteries and ending the limits on travel distances. ElectRoad says the electric lines can be integrated into urban roads at a rate of one kilometer per day, with the supply coming directly from the power grid, and that a bus will be able to travel for up to 5 kilometers on a regular road after being charged on the electric road.

The company is initially targeting the public transit market. ElectRoad hopes to enter the market using infrastructure contractors and bus companies which work on transportation projects with local authorities across Europe. The company says there are as many as one million buses operating in Europe, with a stock replacement rate of 6%, or about 60,000 buses per year, meaning that the companies can pay back their investment within three years for the average electrified road, as new buses adapted to the technology are introduced.

Rosh HaAyin’s ElectRoad was founded in 2013 to revolutionize E- mobility with the ultimate goal of eliminating the dependency on oil. ElectRoad aimed to be the enabler of large scale adoption of pure electric buses. ElectRoad’s first product is a dynamic wireless electrification system for urban transportation. (Globes 26.05)

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9.12 Demisto Introduces Industry’s First ChatBot to Improve Security

Demisto introduced Demisto Enterprise, the industry’s first Bot-powered security ChatOps platform to automate and streamline security operations and incident management processes. With Demisto, security analysts can finally scale their time and effort during critical incident investigation stages while sharing knowledge and working collaboratively for faster resolution.

The company’s Security Operations Platform unveils two new technology applications never before seen in the security industry. Demisto combines the industry’s first intelligent security bot for automating playbooks and response tasks, and for detecting duplicate incidents with the industry’s first security ChatOps-based platform for ticketing, collaboration and reporting. The unique combination delivers automated investigation and response workflows, and auto documentation of evidence; while providing collaboration and transparency for IT teams and management.

Demisto Enterprise’s intelligent automation is provided by DBot, a first-of-its-kind security chatbot. DBot automates actions across security products and correlates artifacts across incidents by using sophisticated patterns and powerful search capabilities. DBot searches in past and ongoing forensic investigations, and proactively alerts the users when duplicate or related incidents are identified. The playbooks were developed by security and incident response experts, while following NIST and other regulatory documents. To help create best practices, new playbooks can be created to satisfy compliance and audit requirements, or for interactive modeling and training of analysts.

Tel Aviv’s Demisto helps Security Operations Centers scale their human resources, improve incident response times, and capture evidence while working to solve problems collaboratively. Demisto Enterprise is the first comprehensive, Bot-powered Security ChatOps Platform to combine intelligent automation with collaboration. Demisto’s intelligent automation is powered by DBot which works with teams to automate playbooks, correlate artifacts, enable information sharing and auto document the entire incident lifecycle. (Demisto 25.05)

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9.13 Javelin Networks Named a Cool Vendor by Gartner

Javelin Networks, which neutralizes attackers invading the Enterprise by camouflaging the entire real network topology without business or IT Disruption, announced it has been included in the 6 May Cool Vendors in Digital Workplace Security, 2016 report by Gartner. Attackers are already inside the network and Targeted attacks are the number one biggest security challenge today for Enterprises and in order for attacks to be successful, attackers need a very important key component – the knowledge of the Enterprise’s internal topology: the critical servers, key users and endpoints. Once they’re in, they begin collecting the knowledge and planning their next move based on what they’ve discovered. It is impossible to prevent attackers from collecting this knowledge since it’s not considered a malicious act and therefore, can’t be discovered. Javelin Networks takes a different approach than many solutions on the market – simply taking the knowledge away from attackers by masking the entire real network topology without agents, or additional network hardware.

With Javelin Network’s “Infinite Deception System,” the odds are flipped on the attacker because most of the assets are fake. If the attacker uses any of the decoy entries created by Javelin, the system will automatically alert, thwarting the attack before any damage is done.

Tel Aviv’s Javelin Networks is the only company in the world that neutralizes attackers invading the Enterprise by camouflaging the entire real network topology without business or IT Disruption. With its agentless flagship infinite deception system customers become attacker ready getting only high fidelity alerts and disruptive defense before the breach. Led by security and Computer Networking experts, veterans leading Israeli intelligence corps, Cisco and the Israeli Air Force. Javelin Networks is still in stealth mode and gearing up to launch in Q3/16. (Javelin Networks 25.05)

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9.14 SodaStream Launches Homemade Beer System

SodaStream International released its new home beer system, the Beer Bar. The brand is an exciting concept of making quality home-crafted beer using sparkling water and a unique beer concentrate brewed to perfection. The Beer Bar is unveiled with a light beer called Blondie that has a smooth authentic taste, and a hop filled aroma. The Beer Bar enables consumers to concoct crafted beer in seconds by adding Blondie concentrate to Sparkling Water. Blondie contains 4.5% alcohol by volume, the average level found in most global beer brands. A one liter Blondie bottle yields approximately three liters of beer. SodaStream chose to first launch the Beer Bar in some of Europe’s beer capitals. Other markets are expected to launch the Beer Bar in late 2016 and 2017.

Airport City’s SodaStream is the world’s leading manufacturer and distributor of Sparkling Water Makers, which enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water more exciting and fun to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks. (SodaStream 30.05)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Unemployment in Israel Reaches Historic Low

According to the Central Bureau of Statistics, April’s unemployment rate fell to the historic low of 4.9% as compared with 5.3% in March. Some 193,000 people were unemployed in April as compared with 208,700 in March. The unemployment rate among the 25 – 64 age group stood at 4.4% in April and 4.5% in March. The rate of people in the same age group who are participating in the labor force rose to 80.5% in April as compared with 79.8% in March. The rate of men in the 25-64 age range participating in the labor force was 84.8%, marking no change since March, while the participation of women in the same age range rose from 75% in March to 76.3% in April.

Still, despite the seasonal influences of the Passover holiday in April, the drop in unemployment is noteworthy. Its significance, along with the impact of temporary holiday employment, will be revealed when the May labor force data is released. (CBS 24.05)

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10.2 WHO Finds Israeli Life Expectancy Among Highest in World

A World Health Organization report on global life expectancy has found that Israelis have one of the highest life expectancies in the world. According to the report, Israel ranks sixth in the world, with an average life expectancy of 82.5 years. The report found that life expectancy around the world has increased dramatically over the past 15 years, with the global average rising by about five years. Such an increase has not been recorded since the 1960s.

Worldwide, the average life expectancy for a baby born in 2015 is now 71.4 years of age — 73.8 for women, and 69.1 for men. Topping the list is Japan, with an average life expectancy of 83.7 years, followed by Switzerland, with 83.4. Broken down by gender, Japan tops the list for women, with an average life expectancy of 86.8 years, while Switzerland has the highest life expectancy for men, 81.3 years. Israel comes in sixth place overall. When the results are split by gender, Israel has the fifth highest male life expectancy, with 80.6 years, and the ninth highest for women, 84.3 years. (Various 22.05)

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10.3 Bankruptcies in Israel Increase by 55% in 3 Years

The 2015 report by the Administrator (Custodian) General and Official Receiver shows a 55% rise in bankruptcies requests in Israel over the past three years. The report, which contains a general review of the Administrator General and Official Receiver’ activity (as the Custodian General, Official Receiver, and Registrar of Inheritances), accompanied by comprehensive statistics, shows a dismal portrait of a bankrupt country. For example, the report shows that more private citizens are in economic trouble in recent years: 16,491 requests to open bankruptcy proceedings (receivership orders) were filed in 2015, 14% more than in 2014. In addition, the Court issued 14,756 orders for opening bankruptcy proceedings (receivership orders), compared with 13,228 in 2014 and 11,256 in 2013, increases of 12% and 31%, respectively. The increase was 43% over the past three years and 137% in five years.

The report also shows that the number of cases handled by the Official Receiver (following a receivership order) rose 69% in three years and 185% in five years. According to the report, 50,269 cases were handled by the Official Receiver in 2015, 16% more than in the 43,185 cases in 2014 and 37% more than in 2013. The figures also indicate some difference in the rate of increase in receivership orders between outlying areas and the central region. In Jerusalem, for example, the number of receivership orders rose from 745 to 1,165 within a year, while the increase in Tel Aviv was relatively moderate from 4,636 to 4,931 orders. (Globes 24.05)

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11: IN DEPTH

11.1 JORDAN: Jordan in Negotiations With Potential Partners in Nuclear Project

Jordan is in talks with several international companies to be partners in the country’s first nuclear plant by providing necessary turbines and systems for the plant, according to Khaled Toukan, the chairman of the Jordan Atomic Energy Commission (JAEC).

Jordan is currently in discussions with Shanghai Electric, China National Nuclear Corporation, Alstom and other Japanese and Czech companies to provide the plant with necessary electric systems and turbines for the two reactors that will be built under the program, Toukan said in a recent interview with The Jordan Times. “We are moving ahead at the same time with studies related to the project that entails building two reactors with 1,000 megawatts capacity each,” Toukan said. Toukan added that the JAEC is also negotiating with several regional investors and funds on another project to build a factory for the production of mine.

The facility, which will cost around $300 million, will produce 400 metric tonnes of uranium per year by 2021, which will be enough to power the two reactors. Production will later increase to 15,000 tonnes per year, said Toukan, adding that uranium is expected to be exported to several countries in the region that have plans for nuclear reactors including the UAE, Egypt, Turkey and Saudi Arabia.

According to Toukan, the first nuclear reactor is expected to be ready by 2023, while the second will go online by 2025. Toukan added that by 2030, Jordan will need around 6,800 megawatts of electricity capacity, stressing that the nuclear plant is crucial for ensuring a sustainable, low-cost supply of power.

The two reactors, he said, will require around 50 million cubic meter of water per year for cooling, which will come from As-Samra Wastewater Treatment Plant that has a production capacity of 106 million cubic meter at present and will witness a further increase in the near future.

Jordan has recently reached a deal with Rosatom State Nuclear Energy Corporation under which Russia will provide enriched nuclear fuel for the reactors for the first 10 years after which Jordan has the option of buying nuclear fuel from Russia or any other market. In March last year, Jordan signed an inter-governmental agreement with Russia to build and operate the nuclear power plant. Russia’s Rosatom will own 49% of the project. (JT 23.05)

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11.2 IRAQ: IMF Deal Supports Iraq in Face of Multiple Challenges

The staff-level agreement between Iraq and the IMF for a three-year Stand-By Arrangement (SBA), under which Iraq could access $5.4 billion of financial assistance, is credit positive, Fitch Ratings said on 20 May.

The deal is likely to pave the way for further international support and may enable the government to issue international bonds. This will provide some support to Iraq’s finances as the country faces sharply lower oil revenue, ongoing conflict with the Islamic State (IS) group and a political crisis that has paralyzed parliament and led to mass protests.

Engagement with the IMF could bring some improvements to economic policymaking and management. Following on from the Staff-Monitored Program agreed in November, the SBA is likely to set benchmarks related to budget spending levels, non-accumulation of arrears and various fiscal reforms, as well as strengthening the government’s cash management.

The twin shocks of sharply lower oil prices and the conflict with IS have severely damaged Iraq’s financial position. We project the budget deficit in 2016 to widen to 15% of GDP – around $22, assuming crude exports marketed by the central government remain around 3.3 million b/d and the government makes modest spending cuts. The government has also built up arrears.

Lower oil revenue is also causing a balance-of-payments shock. The central bank’s stock of foreign reserves (including gold) has fallen from $78 at end-2013 to around $50 currently. This is still a robust level, at around nine months of current external payments, but is set to fall further this year and next.

Disbursements under the SBA and the further foreign assistance that is likely to follow will be a source of additional finance, but cannot mask the challenges Iraq faces. Oil revenue accounts for more than 90% of budget revenue and current external receipts. Government expenditure increased rapidly before the oil price collapse in 2014, creating a fiscal breakeven oil price above $100/barrel.

Full implementation of the SBA will prove challenging. Wide-ranging fiscal reforms that would put Iraq’s finances back on a sustainable footing would require tackling a bloated civil service (the government accounts for 40% of total employment), a troubled banking sector, and serious weaknesses in governance.

Iraq’s political challenges have vividly played out in Baghdad in recent months. In February, Prime Minister Haider al-Abadi announced his intention to appoint a new technocratic government, but has been unable to do so as various parties seek to protect their influence. Meanwhile, large protests culminated in the storming of the previously unviolated Green Zone and parliament itself. This situation remains unresolved and presents a risk of further political instability and violence. Progress has been made in retaking territory from IS, but it still holds significant parts of the country, and continues to present a major threat.

We affirmed Iraq’s ‘B-‘ Long-Term Foreign-Currency Issuer Default Rating in March, and revised the Outlook to Negative from Stable as lower oil prices lead to a significant deterioration in Iraq’s financial position. We said at the time of the Outlook revision that international support, including from the IMF, was likely. (Fitch 20.05)

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11.3 IRAQ: How Much Will the $15 Billion IMF Loan Really Cost Iraq?

On 19 May, Iraq signed an agreement with the International Monetary Fund (IMF) for a loan for as much as $15 billion over the next three years. Observers are wondering how Iraq will be able to repay the loan and meet the conditions imposed by creditors, which include various countries and the World Bank. One such condition is that Iraq must lift its oil and food subsidies.

Omar Sattar posted on 24 May in Al-Monitor that the International Monetary Fund’s loan to the Iraqi government may come with too many strings attached.

The Iraqi Ministry of Finance said the IMF Stand-By Arrangement (SBA) will help Iraq in its battle against the Islamic State (IS) to liberate Iraqi territory, while also helping cut the budget deficit, which is projected at $25 billion, a figure that could worsen because of lower oil prices. The ministry said the loan will not affect government spending on social and health services, but rather it will bring about real financial and economic reform.

Iraq’s previous experience with the IMF doesn’t encourage optimism. In 2004, the IMF imposed an economic reform package that required Iraq to privatize some sectors and raise fuel prices in exchange for reducing and rescheduling the country’s Paris Club debt, estimated at $50 billion. Iraq failed to meet those conditions.

Sirhan Ahmed, a member of the parliamentary finance committee, told Al-Monitor the new IMF loan will only make things worse in the long run. “Iraq does not need a loan from the IMF, as this loan will eventually turn into a set of conditions and dictations on the Iraqi economy. Instead of borrowing, the government should have resorted to retrenchment and issuing bonds while earnestly fighting corruption to address the budget deficit.”

Majda al-Tamimi, another finance committee member, told Mawazin News on 17 May that the loan “will lead to corruption.” “The Central Bank’s governor held meetings and negotiations concerning the IMF loan, knowing that he sells $126 – $140 million from the state’s treasury funds through currency auctions on a daily basis,” she said, referring to the fact that funds are available, yet the bank’s governor is using Iraqi money in buying and selling operations, not to support the budget deficit.”

Tamimi criticized some ministers for boycotting government meetings. She called for the loan to be canceled, alleging that some political parties said they would only return to parliament in exchange for financial shares on behalf of their constituents.

The IMF loan is also causing new problems between Baghdad and the Kurds. On 18 May, Samira al-Moussawi, a member of parliament for the ruling State of Law Coalition, accused Kurdish parliament members of agreeing to return to Baghdad only in return for their party receiving 17% of the loan. However, the Kurdistan Alliance parliamentary bloc, which was boycotting the parliament after Sadrists stormed the parliament on 13 April, rejected the accusation.

“Moussawi is trying to create new problems between Baghdad and the Kurdistan region, and her accusation does not deserve a response, as she is not competent in the field of economy and does not know the details of the agreement that has been signed with the IMF,” Kurdish Alliance representative Ahmed Hama, a finance committee member, told Al-Monitor. “She does not know that the loan is aimed at supporting the general budget and that the [Kurdistan] region has a share in the budget.” Hama added, “The IMF conditions on Iraq in exchange for the loan favor the government, not the citizen, as these include the removal of subsidies on the ration card, fuel and social welfare in addition to tax increases. Everyone knows this and the government cannot deny it.”

But the government does deny that the conditions IMF has imposed will be difficult to meet. Parliamentary parties, however, claim the opposite. Economic expert Abdul Rahman al-Mashhadani told Al-Monitor that the SBA is similar to the 2004 agreement that Iraq signed but didn’t uphold. “The IMF will help provide the loan to Iraq from several parties: The IMF will provide $830 million; the World Bank, about $5 billion with an interest of 1.5-3%; and the rest will come from other organizations and countries and will be guaranteed by the IMF at an interest rate of 7.5- 8%, provided that Iraq repays the loan and its interest in a very short period of seven years,” Mashhadani said.

“Among the conditions set by the IMF is that the government decrease subsidizing fuel prices and reformulate the budget terms and fund allocations to reduce government spending, especially in the operating budget. A large number of parliamentary blocs have rejected this on the grounds that the budget is a law that should remain untouched,” he added.

The government is facing a predicament and it has failed to deal with the Iraqi public with transparency and clarity in a bid to end the controversy over the IMF conditions. In 2004, Iraq refused to continue to abide by the IMF’s terms after 2007 because of a hike in oil prices and concerns over the public’s wrath. Iraq consequently lost the confidence of the global market and economic organizations. Now, the current drop in oil prices will force the country to defer to the will of the IMF and face the wrath of citizens, who will have to pay more for fuel, consumer goods and services as the subsidies are lifted. (Al-Monitor 24.05)

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11.4 OMAN: Ratings on Sultanate of Oman Affirmed At ‘BBB-/A-3’; Outlook Stable

On May 20, 2016, S&P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on the Sultanate of Oman. The outlook is stable.

The transfer and convertibility (T&C) assessment on Oman remains at ‘BBB’.

Rationale

The ratings are supported by Oman’s external and fiscal stock positions, which we expect Oman will broadly maintain over 2016-2019. They are constrained by the significant weakening of fiscal flows, the shift of the current account into a large deficit position, lower real economic growth prospects for Oman than for similarly rated sovereigns, and the Omani economy’s dependence on the cyclical hydrocarbons sector.

Policymakers’ past decision to save sizable oil receipts has helped maintain Oman’s strong external stock position. Low oil prices lead us to forecast that the current account deficit will average about 14% of GDP in 2016-2019, based on our current Brent oil price assumptions of $40 per barrel (/bbl) on average in 2016 and $50/bbl by 2018. Futures prices are currently trading at about a $2 premium for Omani crude.

Notwithstanding Oman’s related external borrowing and expected decline in foreign currency reserves, its external position – as measured by liquid external assets minus external debt – remains a rating strength. We project that Oman will maintain a creditor position of about 6% of current account receipts (CARs) on average over 2016-2019. This represents a significant weakening from about 53% in 2015, but, in our view, provides the economy (including the public sector) with a buffer to deal with the shock from low energy prices. We expect the country’s gross external financing requirements will rise to 120% of CARs and usable reserves in 2019 from 115% in 2015.

The vulnerability of broader economic performance to energy prices remains a key credit weakness for Oman because the volume of oil production is likely to stagnate at around current levels. This distinguishes Oman from some peers, for example, Saudi Arabia, which benefits from additional capacity.

In Oman, the hydrocarbon sector’s contribution to the economy fell to close to 35% of nominal GDP in 2015 following the pronounced decline in oil prices, compared with just under 50% of GDP in 2014. Hydrocarbons accounted for 58% of goods exports and just over 80% of government revenues in 2015. We estimate trend growth in real GDP per capita at negative 2%, which is well below that in most economies at similar levels of development. Our GDP per capita estimate for 2016 is $15,400, which we expect will recover only slowly to about $17,000 in 2019, compared with $20,600 on average in 2011-2014, largely due to weak real and GDP deflator growth over that period.

We expect the contribution of domestic demand to real GDP growth to remain weak in 2016-2019, but for our assumed modest increase in oil prices to result in a more positive contribution from net exports. We expect slow progress on the government’s Omanization program–a training program for Omani citizens aimed at easing dependence on foreign labor – due to a skills mismatch between many Omani workers in the private sector and the more attractive pay and conditions of Omanis working in the public sector.

We estimate Oman’s budget deficit at 13% of GDP in 2016, in line with the government’s own budget forecast. This compares with a deficit of close to 16% of GDP in 2015. Oman increased its oil output to a record high 358 million barrels of oil in 2015, a 4% increase on the previous year, with exports rising by 5.5% to 308 million barrels. However, this increase failed to effectively mitigate the negative effect of lower oil prices, with the government’s oil revenues falling by about 40%. Our general government balance forecasts include an estimate of the government’s investment returns.

In 2016, the government has reduced spending, raised corporate taxes to 16% from 12%, and increased fees for government services. We expect spending to fall 11% compared with that in 2015, with the largest cuts likely to come from “other” expenditures, such as vehicle, travel, and hospitality expenses, followed by spending on civil ministries and investment. We consider this to be an important effort to consolidate the country’s fiscal position. We project, however, that partly offsetting these expenditure reductions, government revenues will fall by about 6%, largely due to a further oil price decline, which we assume for 2016. We acknowledge that this projection is highly contingent on the prices of Oman’s key exports, over which domestic policymakers have no control. We understand that the 2016 budget is based on an oil price assumption of about $45/bbl compared with $75/bbl in 2015.

Oman’s 2016-2020 five-year plan aims to increase the role of the private sector, and the government has suggested that it could privatize some entities in 2016. A value-added tax to be imposed across the Gulf Cooperation Council (GCC) could be in place by 2018, which would further support Oman’s government revenues. Our 2016-2019 general government deficit estimates are in line with those of the five-year plan.

We think that the government has relatively limited room for additional spending cuts, given that nearly 50% of spending relates to public-sector wages, subsidies and exemptions, which are typically difficult to reduce, although we note that some progress has been made with regard to subsidy reduction. The Omani government has committed to increasing non-hydrocarbon-related tax revenues over the medium term. As a result, we expect the general government deficit will average 11% of GDP in 2016-2019.

Our forecasts for the annual average increase in general government debt (which is our preferred fiscal metric because in most cases it is more comprehensive than the reported headline deficit) have increased to about 7% of GDP over 2016-2019. We understand that the government will finance its deficits largely via the issuance of foreign currency debt. When we last reviewed Oman, we assumed a more even split between debt issuance and drawings from assets. We now estimate that the government’s net asset position will average about 26% of GDP in 2016-2019, much reduced from 53% of GDP in 2015. We forecast general government liquid assets at about 64% of GDP in 2016, including government deposits at the central and commercial banks, alongside the government’s investment funds, the largest component of which is the externally invested State General Reserve Fund. We consider that the government could draw on these assets were it to face temporary external pressures.

We assess the Omani government’s contingent liabilities as limited, including those related to the banking system. We classify Oman’s banking sector in group ‘5’ under our Banking Industry Country Risk Assessment methodology, with group ‘1’ indicating the lowest risk and ’10’ the highest. We assess the Omani banking system as having high capital adequacy and relatively limited reliance on external funding. Financial institutions’ total gross external liabilities accounted for 17% of total liabilities as of end-February 2016, up from 9% at year-end 2014. Omani banks are largely funded by domestic customer deposits. We see moderately high vulnerability to the substantial change in the competitive environment, triggered by the low oil price. On the one hand, due to the decline in government revenues and the significance of public-sector deposits in the total bank deposit base (about one-third of total deposits), we expect banks’ cost of funds to prove sensitive to tightening liquidity in the system. On the other hand, the corporate segment remains narrow, and lending to small and midsize enterprises is low. As a result, we expect competition among banks in the retail segment will remain intense, which could create new pressure on asset quality. The still immature domestic debt capital market remains a negative aspect of our assessment of bank funding options.

In our view, monetary policy flexibility is limited because the Omani rial is pegged to the U.S. dollar. That said, the peg has provided a stable nominal anchor for the economy, particularly because contracts for oil, the main export, are typically priced in dollars. Reflecting the strength of the U.S. dollar versus other key currencies, since April 2014, Oman’s real effective exchange rate has appreciated by about 12%. In our view, this represents a deterioration in international competitiveness of the country’s modest tradables sector, which is likely to dampen non-oil GDP growth, absent any offsetting factors, such as improved efficiency or technological capacity. The transmission of monetary policy is constrained by Oman’s underdeveloped capital market, although we expect to see some growth in local debt and sukuk issuance over the next four years. Nevertheless, we expect the peg to be maintained over the medium term. We estimate reserve coverage (including government external liquid assets) at about 60% of the monetary base and seven months of current account payments in 2019. Rules of thumb for the adequacy of reserve coverage in relation to these measures are 20% and three months, respectively. We also consider the more qualitative aspects of the GCC currency arrangements. At a time of already significant change and regional geopolitical instability, politically conservative regimes such as the GCC are unlikely to decide to increase uncertainty about their economic stability by amending this fundamental macroeconomic policy. We expect these concerns will outweigh the potential economic benefits of removing the currency peg.

Under the rule of Sultan Qaboos bin Said Al Said, the country has undergone steady improvement in human development. Oman now ranks in the 70th percentile of countries in the United Nations Development Program’s Human Development Index. Although this advancement stems largely from high hydrocarbon revenues during the sultan’s reign, we think it also results from effective policymaking. However, the sultan exercises absolute power in governance and decision-making, which poses risks to the effectiveness and predictability of policymaking, in our view.

We understand that the sultan remains popular, but the eventual process of succession remains untested because the country lacks recent experience in smooth transitions of power. Although we expect that succession will be smooth, without any radical policy shifts, we cannot rule out the possibility that Oman could experience a disruptive period of uncertainty if the royal family does not quickly agree on a successor. We do not anticipate that the conflict in neighboring Yemen will affect Oman’s creditworthiness, because it appears unlikely to spill over into Oman, which has remained neutral in the conflict.

Outlook

The stable outlook reflects the balance between our expectation that Oman will largely maintain fiscal and external stock positions over 2016-2019, against risks from weakening economic income, fiscal, and external flows.

We could consider raising the ratings if the foundations of economic growth in Oman strengthened–raising per capita income levels – or if our forecasts for Oman’s fiscal and external positions improved substantially compared with our current projections.

We could consider lowering the ratings if risks to Oman’s external position materialized, through wider current account deficits in 2016-2019 than we currently expect.

We could also lower the ratings if Oman’s debt-financing risks were to significantly rise through a combination of substantially higher interest costs as a proportion of revenues and a sharp increase in the share of foreign currency and nonresident holdings of total government debt. We could also lower the ratings if we were to see increasing signs of succession risks that are likely to disrupt governance standards or the functioning of institutions. (S&P 20.05)

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11.5 EGYPT: Fitch Affirms Egypt at ‘B’; Outlook Stable

On 30 May, Fitch Ratings affirmed Egypt’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B’ with a Stable Outlook. The issue ratings on Egypt’s senior unsecured foreign- and local-currency bonds have also been affirmed at ‘B’. The Country Ceiling has been affirmed at ‘B’ and the Short-Term Foreign-Currency IDR at ‘B’.

Key Rating Drivers

Egypt’s ratings balance a high fiscal deficit and general government debt/GDP ratio, low foreign-reserve coverage of imports and recent volatile political history, with low external debt and gradual progress in implementing an economic and fiscal reform program.

We estimate a budget sector deficit of 11.6% of GDP in FY16 (to end-June), broadly the same as in FY15. This is larger than budgeted for a number of reasons. These include the failure to introduce VAT as planned (estimated to raise revenue of about 1% of GDP), the devaluation in March and surging interest payments. An important reason for the failure to introduce the VAT was the parliamentary elections in October-December 2015 and a decision to wait for parliament to be operational. There has been some spending restraint, especially in regard to wages.

The draft budget for FY17, which is still subject to approval by parliament, aims to reduce the deficit to 9.8% of GDP, helped by the belated introduction of VAT and further reform of fuel and electricity subsidies. We expect the budget sector deficit to remain larger than the draft target, owing to our weaker growth assumptions and implementation risk, but nevertheless to narrow to 11% of GDP.

General government debt increased to an estimated 90.3% of GDP in FY16, well above the peer median. Government external debt is relatively low, although the devaluation of the Egypt pound in March has an upward effect on the debt stock. We expect debt/GDP to edge up to 90.5% in FY17, given only modest deficit reduction and assuming some further exchange-rate weakness. Thereafter, we forecast that deficit reduction and robust nominal GDP growth will put the debt/GDP ratio on a gentle downward trend.

Foreign-exchange reserve coverage remains low at around three months of current external payments. Security incidents have dealt a blow to tourism inflows in 2015-16, while other lines of the current account have also struggled. FDI increased in 2015, and is likely to rise this year; some further support is coming in, both multilateral and from the Gulf Cooperation Council (GCC). The Central Bank of Egypt responded to the strain on the balance of payments by devaluing the currency in mid-March by 14% against the US dollar, and further exchange-rate weakness is likely.

Gross external debt has been rising, due largely to concessional support from the GCC, but it remains below peers. We forecast it will rise to around 18% of GDP by end-2016. Net external debt will remain just below 7% of GDP, compared with a ‘B’ median of 26.3%. The bulk of external debt is on a concessional basis, and while Egypt’s external liquidity ratio has been worsening it remains stronger than peers. The rating is supported by the absence of a recent history of debt restructuring.

Real GDP growth has slowed in FY16 to an estimated 3.2%, owing to declines in tourism and shortages of foreign exchange. This is after strengthening to 4.2% in FY15, from an annual average of around 2% since the Arab Spring in 2011. However, energy shortages are being addressed, and public and private investment is rising. Fitch assumes growth will strengthen slightly to 3.6% in FY17 and further the following year. Inflation is above peers, and we forecast that it will remain in double-digits in 2016-2017, with structural rigidities aggravated by the weaker exchange rate.

A new parliament started work in January 2016, following elections that formally completed the political transition. While the existence of a functioning parliament should be a positive step for Egypt, some signs of rising public discontent together with a crackdown on dissent are areas to watch. Serious security incidents have occurred, and remain a risk factor. World Bank governance indicators have deteriorated in the last few years, and are below those of its peers.

Sovereign Rating Model & Qualitative Overlay

Fitch’s proprietary sovereign rating model (SRM) assigns Egypt a score equivalent to a rating of ‘B’ on the Long-Term Foreign-Currency IDR scale.

Fitch’s sovereign rating committee did not adjust the output from the SRM to arrive at the final Long-Term Foreign-Currency IDR.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign-Currency IDR. Fitch’s qualitative overlay (QO) is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

Rating Sensitivities

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the ratings are currently balanced.

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

*Failure to anchor the fiscal deficit on a downward trend towards levels closer to the peer median.
*Strains on the balance of payments, which prevent an improvement in the level of international reserves.
*Serious security incidents that undermine economic activity.

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

*A track record of progress on fiscal consolidation leading to a decline in debt/GDP.
*Sustained stronger economic growth supported by reforms to the business environment which lead to increased investment and employment.

Key Assumptions

Fitch assumes local banks remain willing and able to finance the deficit.

The political environment is assumed to be more stable than in 2011-2013, although sporadic and at times serious attacks on security forces are assumed to continue and underlying political tensions will remain. (Fitch Ratings 30.05)

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11.6 EGYPT: Will Sisi Squander His Chance To Fix Egypt’s Economy?

David Schenker posted in TWI on 17 May that the latest bailout from Saudi Arabia may be the last, so Cairo needs to focus on helping itself by implementing complex subsidy and tax reforms.

Ever since Saudi King Salman’s early April visit to Cairo, Egypt’s President Abdel Fattah el-Sisi has been in damage control mode, trying to contain a crisis sparked by two nearly simultaneous announcements: that Egypt would be transferring sovereignty of two Red Sea islands to Saudi Arabia, and that Riyadh would be providing an enormous economic aid package to Cairo. This news – coupled with reports that King Salman had showered senior Egyptian officials and parliamentarians with Rolexes – led many to conclude that Sisi had “sold” the islands.

The visuals were awful and catalyzed Cairo’s largest demonstrations in years, with thousands once again calling to topple the regime. Amidst the intense focus on the islands, however, the significance of the Saudi grant has largely been overlooked. Absent the $22 billion in Saudi aid, Egypt was seemingly on a glide path to economic collapse.

Egypt has long faced economic challenges, but over the past two years – since Sisi took power in a military coup – the situation has markedly deteriorated, precipitated by declining tourism and Suez Canal revenues, as well as a persistent Islamist insurgency led by the Islamic State. With foreign reserves dwindling to dangerous levels, a staggering 9% annual inflation rate, over 13% unemployment and an annual budget deficit of about 12%, Cairo’s finances, the Sisi administration’s durability and Egypt’s stability were all increasingly at risk.

While he has made concerted efforts to encourage foreign direct investment, Sisi has not tackled Egypt’s core structural economic problems, chief among them the military’s oversized role in the financial system – the army controls an estimated 30% of the economy – and food and energy subsidies, which account for nearly 20% of the annual budget. These subsidies, along with salaries for the seven million employees in the state’s bloated bureaucracy and debt servicing, equate to 80% of annual government spending.

Complicating matters, a new baby is born about every nineteen seconds, constituting an annual growth rate of 2.6%, which means that Egypt’s population is poised to double to 180 million by 2050. Already, nearly half of Egyptians subsist on less than $2 per day.

The situation is so bad that even in Egypt, where denial is a perennial hallmark of the government, this past March Prime Minister Sherif Ismail was compelled to issue a dour 205 page policy statement on the state of the economy.

Even as popular anger about the islands persists, Saudi Arabia’s latest largesse could enable Sisi’s Egypt to reverse the current trajectory. The aid package consists of $20 billion to underwrite Egypt’s purchase of Saudi petroleum projects, as well as some funding to expand power generation capacity, and $1.5 billion to jumpstart some economic development in the Sinai Peninsula, where the Islamic State insurgency has taken root.

This funding, which covers the next five years, couldn’t have come at a better time. In 2015, an Italian firm discovered an estimated three hundred trillion cubic feet of natural gas one hundred miles off Egyptian shores. The find, which is worth as much as $100 billion and will come online in two or three years, represents a potential boon to Egypt’s economy. Until this natural gas starts flowing, Riyadh’s grant will provide a critical cushion, helping Cairo to bridge its substantial and increasing funding gaps.

More important, this Saudi funding represents an opportunity for Sisi to finally undertake serious structural reforms, including increasing taxes on Egypt’s wealthiest, who currently pay a marginal rate of just 22.5%, phasing in value-added and capital-gains taxes, reducing public-sector wages and streamlining regulations to improve the business and investment environment. The government says it will also better ration energy subsidies to the poor, cutting these expenditures by 43% next year. The tax increases and energy-subsidy reductions, while onerous, will allow Cairo to raise food subsidies for the legions of impoverished suffering under high inflation, while at the same time lowering the crippling deficit.

Regrettably, it’s unclear that Egypt will capitalize on this opportunity. Implementing these measures will require political capital, which in the aftermath of the island-transfer scandal is in short supply for Sisi. The last time when Sisi was flush with cash – Saudi Arabia, the UAE and Kuwait gave Egypt $20 billion in 2013 — instead of making difficult decisions, Cairo muddled through, squandering the windfall and the chance for real and enduring change.

Washington and the International Monetary Fund, which in the coming weeks is poised to loan billions to Egypt, shouldn’t let Sisi miss yet another opportunity. Cairo has a history of deferring economic reforms, but the window may be closing. At a minimum, Saudi Arabia’s increasingly precarious economic situation means that two years from now, Egypt cannot count on another mega-grant.

Despite Sisi’s currently diminished stature, the erstwhile general demonstrated – by improving the consistency and capacity of Egypt’s electricity grid in 2015 prior to the onset of the sweltering summer – that he is capable, when focused and committed, of implementing complex policies and delivering some positive change. While the controversy over the islands may eventually dissipate, Egypt’s economic crisis will not subside unless and until Cairo embraces reform.

David Schenker is the Aufzien Fellow and director of the Program on Arab Politics at The Washington Institute. (TWI 17.05)

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What’s New at EDI – June 2016

June 3, 2016, 4:14 am

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Companies from the Former East Germany to Visit Israel in June

A group of 8 companies from the former East Germany will visit Israel in June under an initiative of German Trade and Invest (GTAI). During the visit, the companies will meet with potential importers/distributors in Israel and the government officials accompanying them will host an informational seminar for Israeli companies as well. EDI, in cooperation with Germany’s Enviacon International, will handle all of the Israel arrangements for the visit.

California Department of Food and Agriculture Mission in June

A mission composed of representatives of California’s Agricultural community will visit Israel in June. Headed by California’s Secretary of Agriculture, Karen Ross, the group is particularly interested in climate smart agriculture, a field in which Israel has a great deal of recognized expertise. The Milken Institute will also be supporting the mission. EDI will handle all of the Israel arrangements for the visit.

EDI to be Represented at the Select USA 2016 Summit in Washington

As part of its association with the International Business Group (IBG Global LLC), EDI has made arrangements for the group to have a booth in the exhibition hall of the Summit scheduled for June 19-21 at the Washington Hilton. During the Summit, multiple US states will be promoting their locations as a landing point for foreign companies seeking new locations in the United States. EDI is a founding member of IBG with associates in 21 countries worldwide covering more than 60 key markets.

EDI Participates in SOFEX Jordan in May

EDI Trade Director Seth Vogelman was in Amman, Jordan during the week of May 9^th to participate in the SOFEX 2016 exhibition (Special Operations Forces Exhibition and Conference) on behalf of the Commonwealth of Pennsylvania. While there, he was able to identify potential business opportunities for Pennsylvania. EDI has represented the trade and investment interests of Pennsylvania in the Middle East since 1997.

May Visit of Ontario Premier Wynne Completed

Ontario Premier Kathleen Wynne headed a 130+ person delegation to Israel from May 16-19. She was accompanied by provincial officials, representatives of Ontario’s life science community, academic institutions and companies seeking to build a stronger commercial relationship between Israel and Ontario. EDI set more than 70 one on one B2B meetings for 20 of the companies and institutions who were in Israel and arranged a life sciences seminar at the Hebrew University of Jerusalem in cooperation with BioJerusalem. EDI represents the trade, innovation and investment interests of Ontario in Israel.

Wiggin & Dana Hosts Seminar in Tel Aviv

On May 30^th the US law firm Wiggin & Dana, in cooperation with Israel’s Gross, Kleinhendler, Hodak, Halevy, Greenberg and Co. hosted a seminar in Tel Aviv on navigating the complex web of risk posed by the long arm of United States export/technology transfer controls and economic sanctions. EDI, as it did last year, organized the seminar on behalf of Wiggin & Dana. About 40 local attorneys attended the session.

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