Fortnightly, 25 December 2019

Fortnightly, 25 December 2019

December 25, 2019
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FortnightlyReport

THE FORTNIGHTLY
A Review of Middle East Regional Economic & Cultural News & Developments
25 December 2019
27 Kislev 5780
28 Rabi ul Akhar 1441

Written & Edited by Seth J. Vogelman*

TABLE OF CONTENTS:

1:  ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Establish $4 Million Innovation Lab in Haifa for Environmental Tech
1.2 Israel, Cyprus & Greece to Sign Landmark Gas Pipeline Deal on 2 January
1.3 Israel Approves Gas Exports to Egypt
1.4 Israel’s National Infrastructure Committee Approves Construction of 6th Desalination Plant
1.5 Top Officials of 11 U.S. States Visiting Israel with AJC Project Interchange
1.6 Tel Aviv Imposing Stiff E-Scooter Restrictions as Injuries Mount

2:  ISRAEL MARKET & BUSINESS NEWS

2.1 Scope AR Acquires Augmented Reality Toolset Company WakingApp
2.2 WeBuy Partners with ExitValley to Launch Their Equity Funding Round
2.3 Stifel Opens Israel Office
2.4 Intel Acquires Artificial Intelligence Chipmaker Habana Labs
2.5 Satori Cyber Raises $5.25 Million to Deliver Industry’s First Secure Data Access Cloud
2.6 Arbe Raises $32 Million for High-Definition Radar Chipset for ADAS & Autonomous Vehicles
2.7 E-Scooter Firm Lime Issues Call For Safety Innovation Proposals from Israeli Startups
2.8 Tel Aviv Stock Exchange Seeks To Improve Transparency & Broaden Appeal
2.9 Gloat Secures $25 Million in Series B Funding from Eight Roads and Intel Capital
2.10 Atrinet – Lenovo Strategic Partnership to Accelerate Transition to Open Networking
2.11 BIRD Energy to Invest $6.4 Million in Cooperative Israel-U.S. Clean Energy Projects
2.12 MusashiAI Launches World’s First Robot Employment Agency
2.13 OTI Raises $2.5 Million from Investors

3:  REGIONAL PRIVATE SECTOR NEWS

3.1 HALO Maritime Opens Headquarters Office in Bahrain
3.2 Inventus Power Establishes Manufacturing Operations in Qatar Free Zones
3.3 Emirates Healthcare Development Company Raises $150 Million to Fund Centers of Excellence‎
3.4 Floranow Closes $3 Million Series A Round Led by Wamda and Global Ventures
3.5 VentureSouq Invests in Insurance Platform Vouch
3.6 Carzaty Launches in UAE with $4 Million in Funding
3.7 Sabbar Secures $1.5 Million in Funding
3.8 Egypt’s DentaCarts Raises $450,000 in Seed Funding Investors
3.9 Morocco Allows Imports of Russian Beef to its Market
3.10 American Airlines Launches ‘Codeshare Deal’ with Royal Air Maroc

4:  CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 New Dubai Vertical Farm Set to Start Operations in Second Quarter of 2020
4.2 Giant Solar Park in the Desert Jump Starts Egypt’s Renewables Push

5:  ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Reaches $12.49 Billion in 2019’s Third Quarter
5.2 Number of Tourists to Lebanon Shrank by 14.2% to 142,624 in October 2019
5.3 Number of Lebanese Construction Permits Slumps by 19.37% in November 2019
5.4 Jordan’s Trade Balance Deficit Drops by 14% in 10 months
5.5 Jordan & USAID Sign $745 Million Grant Agreement

♦♦Arabian Gulf

5.6 Saudi Arabia & Kuwait to Sign Deal to Restart Production at Oilfields
5.7 Qatar Budget Surplus to Shrink in 2020
5.8 UAE Leaders Reveal Plan to Develop Strategy for Next 50 Years
5.9 USA, UK and France Top List of Visitors to Dubai in Third Quarter
5.10 UAE Tax Revenues Exceed $6.8 Billion, 5.5% of Public Purse
5.11 UAE’s Khalifa Port to Get a $1 Billion Upgrade
5.12 Overseas Tourism Worth Nearly $28 Billion to Dubai
5.13 Expo 2020 Forecast to Continue to Drive Dubai Construction Growth
5.14 Saudi Unemployment Drops to Lowest in Three Years
5.15 Saudi Arabia May Tap International Debt Markets to Fill Budget Gap

♦♦North Africa

5.16 Remittances to Egypt Reach $6.7 Billion in First Quarter of FY 2019/20
5.17 Egypt’s Economy to Strengthen in 2020 With 15% Rise in Profit Growth Rate
5.18 Egypt’s Trade Deficit Narrows by 28.7% in September
5.19 Egypt Signs $466.3 Million Locomotive Deal with Progress Rail
5.20 Egypt & USAID Sign a Second Phase of North Sinai Development Initiative Agreement
5.21 World Bank Loans Morocco $275 Million for Disaster Management Program

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey Posts $7.6 Billion Trade Surplus with the EU Over First 10 Months of 2019
6.2 Turkey’s Unemployment Rate Falls to 13.8%
6.3 Tourist Arrivals in Cyprus at Record High in November and for the First 11 Months of 2019
6.4 Greece’s Current Account Deficit Shrinks in October

7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Jerusalem Ranked as World’s Fastest Growing Tourist Destination

*REGIONAL:

7.2 Lebanon PM-Designate Begins Tough Talks to Form Government
7.3 Jordan & USA Sign MoU on Cultural Heritage and Antiquities Protection
7.4 Kuwait Appoints First Female Finance Minister in Arabian Gulf
7.5 Turkey Spent TL 214.6 Billion on Education in 2018
7.6 UN Studying Greek Demands for Action Against Turkey – Libya Deal

8:  ISRAEL LIFE SCIENCE NEWS

8.1 Vocalis Health Closes Merger and a $9 Million Investment Round
8.2 CathWorks FFRangio System Receives Regulatory Approval in Japan
8.3 Else Nutrition Receives Favorable Regulatory Assessment Ahead of U.S. Market Launch
8.4 RSIP Vision Launches AI-Based Total Hip Replacement Solution
8.5 NovaSight Leverages Netflix and Disney to Cure Vision Disorders
8.6 CardiaCare Wins First Prize at Cardiovascular Interventions (ICI) Technology Parade
8.7 Medasense to Provide Pain Index Solution for Treatment of Dementia Patients
8.8 Metabomed Raises $12.5 Million to Advance its Lead Program into Clinical Studies
8.9 Raziel Therapeutics Raises $22 Million in Series C Funding Round
8.10 Zebra Medical & DePuy Synthes Deploy Cloud Based AI Orthopedic Surgical Planning Tools
8.11 Check-Cap Announces $4.75 Million Private Placement
8.12 OurCrowd, Perrigo & BOL Win the Government Tender for Medical Cannabis Incubator

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Sproutt Uses Data and AI to Finally Reward Life Insurance Customers Who Live Healthy
9.2 Lightbits Labs Launches Industry’s First NVMe/TCP Clustered Storage Solution
9.3 Panorays & Konfidas Collaboration to Provide Supply Chain Cyber Risk Management
9.4 Silverfort Recognized as a Microsoft Security 20/20 Partner Awards Finalist
9.5 Cubed Mobile Named a 2019 Gartner Cool Vendor
9.6 Wi-Charge PowerPuck, an Ultra-Compact Long-Range Wireless Charger
9.7 Tactile Mobility & HERE Technologies Partner to Increase Access to Tactile Data
9.8 SafeRide & NXP Advanced Vehicle Health Monitoring With AI-based Anomaly Detection
9.9 Chicony & Emza’s First Battery-Powered, AI-based Human Sensing Solution for IoT
9.10 Radiflow Wins 451 Firestarter Award for Its OT MSSP Partner Program

10:  ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Inflation Rate for November Fell by 0.4%
10.2 Composite State of the Economy Index for November 2019 Rises by 0.2%‎
10.3 Immigration to Israel Surging and Asylum Seekers No Longer Arriving

11: IN DEPTH

11.1 ISRAEL: Notable Increase in Late-Stage Funding Allows More Israeli Firms ‎To Grow
11.2 ISRAEL: Israel Exits Double in Value in 2019
11.3 ISRAEL: Israel’s International Investment Position (IIP), Third Quarter of 2019‎
11.4 LEBANON: Lebanon’s Free Fall
11.5 LEBANON: Lebanon Defense Market Report 2019
11.6 KUWAIT: Fitch Says Kuwait Political Mess Likely to Weigh on Economic Reforms
11.7 MOROCCO: IMF Completes the Second Review Under Liquidity Line Arrangement
11.8 TURKEY: The Perils of the Turkey-Libya Maritime Delimitation Deal
11.9 TURKEY: Erdoğan under Political Siege
11.10 TURKEY: Turkey’s Energy Miscalculations Have Hefty Cost

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Establish $4 Million Innovation Lab in Haifa for Environmental Tech

Israel is setting up a $4 million cleantech innovation lab focused on environmental protection and sustainability. The Ministries of Environmental Protection (MoEP), and Economy and Industry, together with the Israel Innovation Authority – which are co-leading the project – announced that ESIL Technologies, a group made up of Israeli and international companies, was selected to run the lab.

ESIL is a partnership between Bnnovation, an innovation platform of Israel’s oil refining company Bazan Group, EDF Renewables, a subsidiary of Electricité de France, and British chemical company Johnson Matthey. The lab, which will be located in Haifa, aims to transform Israel into an environmental tech powerhouse and strengthen the Israeli industry. It will also encourage Israeli startups in the field and help them develop and integrate into the global market.

ESIL will receive funding for three years to set up the lab with unique technological infrastructure. It will also receive the funds for the lab’s ongoing operation as well as any feasibility projects by companies whose projects are accepted by the lab. Projects that are accepted into their innovation lab can receive financial support for up to 85% of the budget, up to a ceiling of almost $286,000, for a period of up to one year. The projects will be in the field of environmental protection and sustainability, with an emphasis on the development of innovative technologies that are not based on fossil fuel sources. (MEP 15.12)

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1.2 Israel, Cyprus & Greece to Sign Landmark Gas Pipeline Deal on 2 January

The leaders of Cyprus, Greece, and Israel plan to sign an agreement on 2 January for the building of the eastern Mediterranean natural gas pipeline. The agreement will be signed in Athens by Greek Prime Minister Mitsotakis, Cypriot President Anastasiades and Israeli Prime Minister Netanyahu.

As currently planned, the pipeline will run across the Mediterranean from Israel’s Levantine Basin offshore gas reserves to the Greek island of Crete and the Greek mainland, and then to Italy. The deal will be finalized with Italy’s signature at a subsequent date. In May, Italian Prime Minister Conte had expressed opposition to the Poseidon project, which is the last section of the pipeline that would connect Greece with Italy. Cyprus, Greece, and Israel already signed an agreement on the 1,900-kilometer (1,200-mile) pipeline earlier this year in the presence of US Secretary of State Pompeo.

The EastMed pipeline is expected to satisfy about 10% of the European Union’s natural gas needs, decreasing energy dependence on Russia. The EU has contributed to the cost of technical studies for the project. The three signatory countries are joined in a common opposition to Turkey’s recent deal with the UN-recognized Libyan government delineating “maritime borders” between the two countries in the Mediterranean. Turkey and Libya are geographically far from each other, with Greece and Egypt being in the way. (Various 23.12)

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1.3 Israel Approves Gas Exports to Egypt

Israel has approved the export of gas from its offshore reserves to Egypt, with a major reservoir expected to begin operations very soon. The 16 December approval by Energy Minister Steinitz was part of a long process under which Israel will transform from an importer of natural gas from Egypt into an exporter and potential regional energy player. It will be the first time Egypt, which in 1979 became the first Arab country to sign a peace accord with Israel, imports gas from its neighbor.

US-based Noble and Israel’s Delek, the consortium leading the development of the two offshore reservoirs, reached a $15 billion, 10 year deal last year with Egypt’s Dolphinus to supply 64 billion cubic meters (2.26 trillion cubic feet). Israel had previously bought gas from Egypt, but land sections of the pipeline were targeted multiple times by Sinai based Islamic terrorists in 2011 and 2012.

Tamar, which began production in 2013, has estimated reserves of up to 238 billion cubic meters (8.4 trillion cubic feet). Jordan began purchasing gas from Tamar on a small scale nearly three years ago. Leviathan, discovered in 2010, is estimated to hold 535 billion cubic meters (18.9 trillion cubic feet) of natural gas, along with 34.1 million barrels of condensate. Leviathan is expected to be operational shortly, with exports to Egypt set to begin on 1 January.

Besides being energy independent, Israel hopes its gas reserves will enable it to strengthen strategic ties in the region and help forge new ones, with an eye on the European market. Natural gas is set to replace coal as the fuel generating electricity in Israel’s power plants. (AFP 17.12)

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1.4 Israel’s National Infrastructure Committee Approves Construction of 6th Desalination Plant

Seeking to fight the surging water crisis, Israel’s National Infrastructure Committee has approved the construction of another desalination plant, this time in the Western Galilee. The new facility will join an array of five desalination plants that already operate on the country’s Mediterranean coast. The Western Galilee was chosen to house the plant because the area has been plagued by a prolonged drought and its access to desalinated water from the other facilities is limited over topographical issues that restrict pumping water to it.

Construction plans for the new facility detail two stages, with 100 million cubic meters of water being produced in each stage. This would make the new facility the largest in Israel and one of the largest in the world to use reverse osmosis technology.

Earlier this year, the Finance Ministry issued tenders for the plant’s construction. Bids were received from Israel’s IDE Technology, Hutchison Water, whose main investor is Hong Kong’s CK Hutchison Holdings, and a partnership of Afcon, Acciona and Allied Investments. The European Investment Bank has already said it would provide up to €150 million ($167 million) to help finance the project. (Various 19.12)

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1.5 Top Officials of 11 U.S. States Visiting Israel with AJC Project Interchange

A bipartisan delegation of Secretaries of State from across the United States visited Israel with the American Jewish Committee’s (AJC) Project Interchange. The program features in-depth discussions on cybersecurity policies and practices at the state, local, and federal level as it relates to business services, election administration, and records management. The weeklong educational seminar further aimed to enhance US – Israel relations at the vital state level. A number of American states have been expanding commercial and other ties with Israel. The 11-member delegation is chaired by Paul Pate of Iowa, President of the National Association of Secretaries of State (NASS) and Iowa Secretary of State. This is the first NASS delegation to visit Israel in partnership with Project Interchange.

The seminar provided the state officials with a firsthand understanding of Israel and mutually-beneficial bilateral ties. During the visit, they will learn about Israel, its vibrant democracy, diverse population, regional challenges, and economic and technological innovation, and the shared values between the U.S. and Israel.

Delegation participants included: Alabama Secretary of State John Merrill, Alaska Lt. Governor Kevin Meyer, Iowa Secretary of State Paul Pate, Kansas Secretary of State Scott Schwab, Maine Secretary of State Matt Dunlap, Michigan Secretary of State Jocelyn Benson, Montana Secretary of State Corey Stapleton, Nevada Secretary of State Barbara Cegavske, New Jersey Secretary of State Tahesha Way, West Virginia Secretary of State Mac Warner and Wyoming Secretary of State Ed Buchanan.

For over 35 years, AJC Project Interchange (American Jewish Committee) has brought 6,000 influential figures to Israel from 110+ countries and all 50 U.S. states, offering broad exposure and first-hand understanding of the complex issues facing Israel and the region. (AJC 16.12)

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1.6 Tel Aviv Imposing Stiff E-Scooter Restrictions as Injuries Mount

The Tel Aviv municipality has issued new instructions on e-scooters as the number of injuries from accidents mounts. Tel Aviv will become the world’s first city to require all electric bicycles and e-scooters for hire to have license numbers and helmets. The city will also ban electric bikes and scooters from busy pedestrian areas such as Tel Aviv Port. The speed limit for electric scooters and bikes will be reduced from 25 kilometers per hour to 15 in certain areas. GPS devices attached to the scooters will slow them down where the limit has been reduced.

In the past month alone Globes found that 288 people came to the emergency and accidents room at Tel Aviv’s Ichilov Hospital following injuries involving electric scooters and bikes. There was one fatality and 15% of the injuries were to the head. There are an estimated 8,000 electric scooters for hire in Tel Aviv and many thousands more private scooters.

The new license plates, which will be attached by the start of January, will enable people to report violations to the municipality, such as riding on the sidewalk, and the scooter companies will be required to sanction whoever had leased the scooter at the time – three violations and the scooter company will be required to block the users account. (Globes 17.12)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Scope AR Acquires Augmented Reality Toolset Company WakingApp

San Francisco’s Scope AR, the pioneer of enterprise-class augmented reality (AR) solutions, announced its acquisition of WakingApp, an AR technology company based in Tel Aviv, Israel. With this acquisition, six of the founding members of the WakingApp team will remain with the company and bring additional resources and expertise for developing the next generation of Scope AR’s augmented reality knowledge platform, WorkLink.

WakingApp has a proprietary AR platform with technologies to help enterprises across industries easily create cutting-edge AR experiences. The acquisition of WakingApp by Scope AR expands the company’s resources to more rapidly deliver new functionality to its WorkLink solution and push the boundaries of what’s possible in enterprise AR as the market continues to mature. WorkLink is the industry’s only industrial AR knowledge platform to provide real-time remote assistance and access to pre-built AR work instructions simultaneously in one application to allow workers to easily access the knowledge they need. (Scope AR 11.12)

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2.2 WeBuy Partners With ExitValley to Launch Their Equity Funding Round

WeBuy is now beta testing their innovative mobile shopping platform. The pilot release, scheduled for January 2020 in Oxford, is sure to make big waves in the online shopping industry. With WeBuy, buyers and sellers can connect to each other more directly, allowing buyers to find the goods and services they are looking for without the hassle of going store to store to find the best deal.

In December 2019, WeBuy launched a fundraising campaign on ExitValley. WeBuy works to be valuable for both consumers and businesses. As such, they aim to involve the general public in this first round of fundraising. WeBuy aims to make online shopping more efficient for both consumers and sellers by matching sellers with consumers directly. Currently, consumers have to go from store to store, or website to website, searching for the exact product or the best deal for the good or service they want to buy. With WeBuy, consumers post what they are looking for and sellers send them their best product and price. Then, the consumer can choose from the options and find the best deal for them. This takes the stress out of shopping and makes the whole process easy and quick.

Tel Aviv’s WeBuy is the first on-demand shopping platform. It connects people and local businesses, on-demand and in real-time. WeBuy provides buyers and sellers with the tools that allow them to save money and time while making educated and targeted decisions. (WeBuy 11.12)

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2.3 Stifel Opens Israel Office

St. Louis’ Stifel Financial Corp. announced the opening of its first office in Israel, focused on investment banking and related institutional services. Stifel is a premier full-service investment bank serving middle-market clients. According to Dealogic data, Stifel ranks No. 1 among middle market firms in public M&A transactions under $1 billion, No. 1 in equity deals under $1 billion in market capitalization and among the top three managers of venture capital-backed IPOs. Stifel is also a top-ranked U.S. equity research provider offering more coverage of small and midcap companies than any other firm.

Stifel Financial Corp. is a financial services holding company that conducts its banking, securities and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, including its Eaton Partners business division; Keefe, Bruyette & Woods, Miller Buckfire & Co., Century Securities Associates and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. (Stifel 10.12)

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2.4 Intel Acquires Artificial Intelligence Chipmaker Habana Labs

On 16 December, Intel Corporation announced that it has acquired Tel Aviv’s Habana Labs, an Israel-based developer of programmable deep learning accelerators for the data center for approximately $2 billion. The combination strengthens Intel’s artificial intelligence (AI) portfolio and accelerates its efforts in the nascent, fast-growing AI silicon market, which Intel expects to be greater than $25 billion by 2024.

Habana will remain an independent business unit and will continue to be led by its current management team. Habana will report to Intel’s Data Platforms Group, home to Intel’s broad portfolio of data center class AI technologies. This combination gives Habana access to Intel AI capabilities, including significant resources built over the last three years with deep expertise in AI software, algorithms and research that will help Habana scale and accelerate.

Additionally, Habana’s Goya AI Inference Processor, which is commercially available, has demonstrated excellent inference performance including throughput and real-time latency in a highly competitive power envelope. Gaudi for training and Goya for inference offer a rich, easy-to-program development environment to help customers deploy and differentiate their solutions as AI workloads continue to evolve with growing demands on compute, memory and connectivity. (Intel 16.12)

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2.5 Satori Cyber Raises $5.25 Million to Deliver Industry’s First Secure Data Access Cloud

Satori Cyber announced it received $5.25 million in seed funding led by YL Ventures. Satori Cyber’s mission is to help organizations maximize their data-driven competitive advantage by removing barriers to broad data access and usage while ensuring security, privacy and compliance. The Satori Cyber Secure Data Access Cloud is the first solution on the market to offer continuous visibility and granular control for data flows across all cloud and hybrid data stores. The Satori Cyber Secure Data Access Cloud is currently in limited availability to qualified customers. General availability will begin in Q3/20.

Tel Aviv’s Satori Cyber is revolutionizing data protection and governance. Its Secure Data Access Cloud seamlessly integrates into any environment to deliver complete data-flow visibility utilizing activity-based discovery and classification. The platform provides context-aware and granular data access and privacy policies across all enterprise cloud or hybrid data stores. With Satori Cyber, organizations and their security teams can confidently ensure that data security, privacy and compliance are in place, enabling data-driven innovation and competitive advantage. (Satori Cyber 17.12)

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2.6 Arbe Raises $32 Million for High-Definition Radar Chipset for ADAS & Autonomous Vehicles

Arbe announced the closing of $32 million in Round B funding from existing, new, and CVC investors Catalyst CEL, BAIC Capital, AI Alliance (Hyundai, Hanwha, SKT), and MissionBlue Capital, and from earlier investors Canaan Partners Israel, iAngels, 360 Capital Partners, O.G. Tech Ventures, and OurCrowd. Arbe will use the funding to move to full production of its breakthrough radar chipset, which generates an image 100 times more detailed than any other solution on the market today.

With the new funding, Arbe will focus on expanding its team to support global Tier-1 customers in moving into full production of radar systems based on Arbe’s radar development platform. The delivery of radars based on Arbe’s proprietary chipset is a game changer in the automotive industry, as Arbe’s technology is the first to enable highly precise sensing in all environment conditions. The unique radar technology produces detailed images; separates, identifies and tracks hundreds of objects in high horizontal and vertical resolution to a long range in a wide field of view; enabling the OEMs to provide all-conditions, uncompromised safety to next generation cars with an affordable sensor for mass market implementation.

Tel Aviv’s Arbe is a provider of next-generation 4D Imaging Radar Chipset Solution, enabling high-resolution sensing for ADAS and autonomous vehicles. Arbe’s technology produces detailed images, separates, identifies, and tracks objects in high resolution in both azimuth and elevation in a long range and a wide field of view, and complemented by AI-based post-processing and SLAM (simultaneous localization and mapping). Arbe’s patented technology empowers automakers and Tier 1 companies in development of a next-generation radar that is 100 times more detailed than any other radar on the market, capable of operating in any weather or lighting environment. (Arbe Robotics 16.12)

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2.7 E-Scooter Firm Lime Issues Call For Safety Innovation Proposals from Israeli Startups

Micro-mobility company Lime has launched a safety portal in Hebrew for its Tel Aviv-based users, offering safety and parking tips, insurance and other information, instructions on where to purchase discounted helmets, and details on upcoming meetings and gatherings for Lime riders. The company also issued a call for safety innovation proposals from local startups, amid a crackdown by the Tel Aviv Municipality on scooter riders across the city and tougher restrictions on scooter companies.

The regulations include limiting the number of scooters and e-bikes available per provider and requiring the companies to hand over information to the municipality for research and analysis. The companies are also required to provide their services through the city, which has designated areas for riding and parking.

Tel Aviv recently issued stiffer restrictions, requiring shared scooters and e-bikes to have license plates and helmets. This will make Tel Aviv the first city in the world to have this requirement. The speed limit will also be reduced from 25km/h to 15km/h. Scooters and bikes are already banned from sidewalks, with riders facing fines for endangering pedestrians, not wearing helmets and being on the phones. The crackdown followed a number of severe injuries and even deaths involving shared scooters and bikes, and complaints by residents feeling endangered on sidewalks.

Tel Aviv introduced shared scooters almost two years ago and a number of international providers operate in the city including Lime, Bird and Wind. Tel Aviv has quickly become one of Lime’s top-performing markets. Lime also put out a call for proposals from Israeli startups “to help promote innovative safety advancements through new, locally sourced technology.” Intelligent Transport reported that Lime will fund the implementation of selected initiatives. (NoCamels 17.12)

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2.8 Tel Aviv Stock Exchange Seeks To Improve Transparency & Broaden Appeal

On 17 December, the Tel Aviv Stock Exchange (TASE) announced it is considering a new plan to try to enhance liquidity and improve transparency to try to attract more ordinary investors. The plan would impose restrictions on off-exchange transactions and provide an incentive program for market-making in shares in the Tel Aviv 35 index, TA35, similar to those available in leading exchanges worldwide. The TASE, which went public in August, has lost 40% of investors since 2010. With 447 traded companies at a market value of $215 billion, the exchange has been struggling with de-listings and declining trading volumes.

In 2019, nearly 23% of the total volume of securities trading on TASE derived from transactions entered into off the exchange – some 80,000 a year, averaging NIS 800,000 ($230,000) per transaction. Reporting off-exchange transactions is not mandatory in Israel and they may be entered into at any agreed price and volume. TASE is considering imposing a real-time reporting obligation on all transactions and permitting such transactions only for securities defined as “illiquid.”

TASE is also considering improving liquidity by encouraging market-making in major shares through incentives to stock exchange members that meet certain criteria. The program would be assessed over the course of a year. To date, there is virtually no market-making in major shares in Israel. Exchanges such as Euronext, the Frankfurt Stock Exchange, the Swiss Stock Exchange, the Korean Stock Exchange, and more operate incentive programs for market-makers. The programs are based on payments or refund of fees to market-makers, who make it easier for traders and investors to buy and sell. (Israel Hayom 18.12)

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2.9 Gloat Secures $25 Million in Series B Funding from Eight Roads and Intel Capital

Gloat has raised $25 million in Series B funding to further its mission of democratizing career development, unlocking skills, and enabling enterprises to build a future-proof workforce. The round was led by Eight Roads Ventures, the proprietary investment firm backed by Fidelity, alongside Intel Capital. Existing investors Magma Venture Partners and PICO Partners also participated. The funds will be used to expand Gloat’s New York and Tel Aviv offices with an ambitious hiring plan, and further enhance its HR technology, which has already been implemented by some of the world’s largest employers including Unilever and Schneider Electric.

Gloat’s AI-powered internal talent marketplace provides full visibility on an individual’s unique career path, by analyzing different possible career options and following the achievements and aspirations of an employee from their first day at the company. It then proactively matches employees with internal part-time projects, gigs, full-time positions, mentorships and job swaps so they can grow and gain targeted new skills, while also expanding their network. Previously, career progress was limited to the well-networked and privileged, now career growth is being democratized as a user-friendly platform and mobile application. Gloat also enables enterprises to gain real-time insights into their internal talent pools and impending skills gaps, providing managers with the frictionless access to the skills they need without the need for costly external recruitment.

Founded in 2015, Gloat is redefining the future of work with its mission to democratize career development, unlock skills, and help enterprises build a future-proof workforce. The company is based in New York and has a large R&D center in Tel Aviv, Israel. Gloat’s technology is being used by some of the largest employers in the world. (Gloat 18.12)

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2.10 Atrinet – Lenovo Strategic Partnership to Accelerate Transition to Open Networking

Atrinet announced a strategic partnership with Lenovo. Atrinet’s solution enables Communications Services Providers (CSPs) to manage digital network transformation using NetACE™. This partnership accelerates Atrinet’s market penetration to CSPs, data centers and enterprises. The Atrinet-Lenovo partnership expands CSPs’ deployment of open network infrastructure.

Atrinet’s NetACE network and service software for discovery and automation takes digital transformation agility to a whole new level. It simplifies processes with self-service onboarding of new vendors, technologies, and services. NetACE is vendor-agnostic, enabling smart and automatic migration to virtual networks. NetACE is an open model-driven network management platform that allows for real-time, policy-based provisioning and discovery of multi-vendor SDN/NFV and legacy networks.

Hod HaSharon’s Atrinet is an Independent Software Vendor (ISV) of elastic network and service management solutions for hybrid legacy, Network Function Virtualization and Software-Defined networks for accelerating services delivery and empower network operations. Atrinet’s solutions have been deployed by the largest service providers and enterprises driving unrivaled multi-vendor service agility and speed through an innovative model-based customization approach. (Atrinet 18.12)

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2.11 BIRD Energy to Invest $6.4 Million in Cooperative Israel-U.S. Clean Energy Projects

The U.S. Department of Energy (DOE) and Israel’s Ministry of Energy (MoE) along with the Israel Innovation Authority have selected seven clean energy projects to receive $6.4 million under the Binational Industrial Research and Development (BIRD) Energy program. The total value of the projects is $15.4 million, which includes $9 million of cost share from the companies selected for funding. BIRD Energy began in 2009 as a result of the Energy Independence and Security Act of 2007. Each project is conducted by a U.S. and an Israeli partner. Selected projects address energy challenges and opportunities that are of interest to both countries and focus on commercializing clean energy technologies that improve economic competitiveness, create jobs and support innovative companies. The seven approved projects are:

  • Chakratec (Lod, Israel) and Blink Charging Co. (Miami Beach, FL) will develop and demonstrate boosting EV charging through energy storage system.
  • EcoPlant Technological Innovation (Kibbutz Gevim, Israel) and Atlas Machine and Supply (Louisville, KY) will develop a novel solution to optimize energy efficiency and improve the quality of compressed air systems for the food & beverage industry.
  • Elbit Systems (Haifa, Israel)) and Ballard Unmanned Systems (Southborough, MA), will develop a hydrogen powered vertical take-off and landing drone for long endurance and zero emission.
  • Eta-Bar (Petah Tikva, Israel) and Adesto Technologies Corp. (Santa Clara, CA), will develop an efficient power supply for grid connected electronic devices.
  • Exency (Sderot, Israel) and Brayton Energy (Hampton, NH), will develop a low cost and high efficiency solid biomass and solid waste fueled electricity generation system.
  • Netafim Irrigation (Tel Aviv, Israel) and Polaris Energy Services (San Luis Obispo, CA), will develop an integrated irrigation & energy management system.
  • Ramot at Tel-Aviv University and Gas Technologies (Walloon Lake, MI), will develop scalable production of a novel methane dry reforming catalyst and its implementation into a synthetic fuel plant.
  • Projects that qualify for BIRD Energy funding must include one U.S. and one Israeli company, or a company from one of the countries paired with a university or research institution from the other. The partners must present a project that involves innovation in the area of energy and is of mutual interest to both countries. BIRD Energy has a rigorous review process and selects the most technologically meritorious projects along with those that are most likely to commercialize and bring about significant impact. Qualified projects must contribute at least 50% to project costs and commit to repayments if the project leads to commercial success.

    The BIRD (Binational Industrial Research and Development) Foundation encourages and facilitates cooperation between U.S. and Israeli companies in a wide range of technology sectors and offers funding to selected projects. The BIRD Foundation supports projects without receiving any equity or intellectual property rights in the participating companies or in the projects, themselves. BIRD funding is repaid as royalties from sales of products that were commercialized as a result of BIRD support. (BIRD 23.12)

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    2.12 MusashiAI Launches World’s First Robot Employment Agency

    MusashiAI, a joint venture between SixAI of Israel and Musashi Seimitsu of Japan (a Honda Motor Corporation affiliate company), has launched its fully-autonomous robots to integrate seamlessly with human workers in an industry 4.0 factory environment. Its robots will undertake the often strenuous and repetitive work endured by humans in industrial workplaces. Both of its forklift and visual inspection AI-controlled robots are being tested by Musashi Seimitsu, a global leader in automotive transmission parts with 35 manufacturing plants worldwide. The JV also introduces a unique business model by providing industrial employers an option to source needed labor through a robotic employment agency, instead of investing significant capital in purchasing robots. The model allows companies to hire robot labor by the hour or pay a task-completed-based salary rate.

    These developments represent a major leap forward in the deployment of robots. The robots are genuinely autonomous, opposed to automated – they are given tasks and define their own optimal way to perform them, just as humans do. The new commercial model of hiring robots by the hour or task means that they are now available to support many more companies or organizations. Self-taught machine learning is central to this achievement. (MusashiAI 23.12)

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    2.13 OTI Raises $2.5 Million from Investors

    On Track Innovations (OTI) announced that on 23 December 2019 it entered into a share purchase agreement with Jerry L. Ivy, Jr. Descendants’ Trust (“Ivy”) and two other investors who are members of the Company’s Board of Directors. The Agreement relates to a private placement of an aggregate of up to 12,500,000 ordinary shares of the Company at a purchase price of $0.20 per share, for aggregate gross proceeds to the Company of up to $2,500,000. The initial closing of the private placement took place on 23 December. At the initial closing, 6,500,000 shares were issued for aggregate gross proceeds to the Company of $1,300,000. A subsequent closing for the remainder of the amount to be invested is subject to the Company obtaining approval of its shareholders to, among other things, an increase the authorized share capital of the Company.

    Rosh Pina’s On Track Innovations (OTI) is a global leader in the design, manufacture and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for automated retail and petroleum markets.

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    3:REGIONAL PRIVATE SECTOR NEWS

    3.1HALO Maritime Opens Headquarters Office in Bahrain

    Newton, New Hampshire’s HALO Maritime Defense Systems, a marine engineering technology company and provider of advanced engineered solutions for the security needs of strategic maritime assets, announced its choice of Bahrain for its Middle East headquarters for investment in business development and building local relationships. Global maritime security risks are persistent and pervasive, and HALO Maritime has an opportunity to rapidly expand its Middle East business portfolio by taking advantage of the superior business climate in Bahrain.

    HALO is taking advantage of several benefits available to firms based in business-friendly Bahrain. Lower operating costs than other regional neighbors, a local workforce with an array of valuable skills, and its position as a natural gateway to the entire region, all make Bahrain an attractive headquarters location.

    HALO Maritime Defense Systems (HALO) offers unique maritime sea barrier solutions to secure critical assets vulnerable to water-based attacks. In a security-conscious world, both government assets (Naval bases, ships and facilities) and commercial and private assets (ports, terminals, nuclear power plants, and oil & gas rigs) have a real, immediate, and critical need for high levels of protection. HALO’s NEXT GENERATION patented maritime security products offer unique solutions to difficult marine security scenarios. HALO has the only maritime barrier to have been independently tested to meet U.S. Navy requirements. (HALO 15.12)

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    3.2 Inventus Power Establishes Manufacturing Operations in Qatar Free Zones

    Woodridge, Illinois’ Inventus Power announced it will establish a manufacturing presence in Qatar Free Zones and has entered into a partnership with Qatar Free Zones Authority (QFZA) to accelerate international expansion. Inventus is a global leader in the design and manufacture of Li-ion battery packs, chargers and power supplies for the commercial, industrial, consumer, medical and military markets across a broad range of portable, motive and stationary applications. The QFZA partnership will include a minority investment into Inventus to further facilitate growth and the entrance into new markets. Terms were not disclosed.

    In addition to establishing a manufacturing presence in Qatar, Inventus also plans to invest in additional research and development capabilities through partnerships with the impressive roster of universities and research institutions already located in the country, including through a significant local research hub.

    Inventus Power, founded in 1960, is the leading provider of advanced battery systems for global OEMs. We specialize in the design and manufacture of battery packs, chargers,  and power supplies across a broad range of portable, motive & stationary applications. (Inventus Power 20.12)

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    3.3 Emirates Healthcare Development Company Raises $150 Million to Fund Centers of Excellence

    A group of regional banks, including Emirates Islamic and Emirates NBD Capital, the investment banking arm of Emirates NBD, announced the close of an AED550 million ($150 million) syndicated financing facility for Emirates Healthcare Development Company, the owner of Saudi German Hospital, Dubai. The participating banks also included Gulf International Bank, Mashreq Bank, Commercial Bank of Dubai, Ahli United Bank, National Bank of Fujairah, National Bank of Kuwait, Arab African International Bank and United Arab Bank. The syndication was three times oversubscribed.

    Since opening its first hospital in Dubai in 2012, the Saudi German Hospital Group has continued to expand its presence in the UAE. It now has hospitals in Sharjah and Ajman and is building centers of excellence, for which it is using part of this facility. (AB 20.12)

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    3.4 Floranow Closes $3 Million Series A Round Led by Wamda and Global Ventures

    Dubai’s Floranow, the business-to-business (B2B) online floral marketplace, has closed a $3 million Series A round, co-led by Wamda and Global Ventures. The round includes previous investors Dash Ventures, Jabbar Internet Group, as well as new investors Sirocco Holdings, Adamtech Ventures, Zuaiter Holding Capital, HB Investments and angel investors.

    This latest round of funding will be used to support Floranow’s growth in Kuwait and further its expansion into the GCC, starting with Saudi Arabia. The company will also focus on optimizing its proprietary marketplace technology. Through its platform, Floranow disintermediates the marketplace for horticultural produce and minimizes the variability in demand for florists, effectively bypassing multiple layers of a costly, and at times, inefficient supply chain.

    Founded in 2016, Floranow connects horticulturists and suppliers from across the globe, including Colombia and Holland, directly to flower retailers through its online B2B marketplace. The company had previously raised its first round of financing from Jabbar Internet Group, Dash Ventures and Wamda back in December 2017. (MAGNiTT 15.12)

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    3.5 VentureSouq Invests in Insurance Platform Vouch

    Dubai-based VentureSouq (VSQ) has invested in San Francisco, California’s Vouch, an insurance platform exclusively targeting startups. Vouch announced its Series B of $45 million led by Y Combinator’s Continuity Fund. Previous top-tier investors include Ribbit Capital, SVB Financial Group, Y Combinator, Index Ventures and 500 Startups. The platform offers fast, tailored, digitally-delivered insurance designed to support and scale with startups in high-pressure, rapid-growth environments. (VentureSouq 15.12)

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    3.6 Carzaty Launches in UAE with $4 Million in Funding

    Carzaty, an online retailer for new and assured used cars, is launching in the United Arab Emirates. The rapidly growing e-commerce startup taps into the latest technology to offer a more affordable and convenient way to buy cars. Founded in 2017, Carzaty has raised $4 million in funding to date, and most recently announced a strategic investment from Innovation Development Oman (IDO Investments) to accelerate the company’s growth plans in the region. Carzaty replaces the large, expensive showroom with a simple and transparent digital experience, eliminating huge overhead costs. This innovative retail model enables Carzaty to sell cars for prices up to 25% less than traditional dealers.

    Carzaty was founded in Muscat, Oman in 2017. In addition to IDO Investments, Carzaty’s shareholders include venture capital firms and strategic investors with roots in the automotive industry. (Carzaty 17.12)

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    3.7 Sabbar Secures $1.5 Million in Funding

    Riyadh’s Sabbar, a Saudi-based tech startup that aims to be the platform of choice for connecting job seekers with businesses for on-demand work opportunities in the region, has raised $1.5 million in funding. The seed round was led by Dubai-based Venture Souq, backed by 500 Startups, Derayah VC and Super Angels from Saudi Arabia. The company stated that it is planning to use the money for engineering and operations teams to further develop the platform for gig jobs including enhancing its matching algorithm, operations automation, and scheduling management.

    In Saudi Arabia, employee turnover is estimated at 70% in the retail and service industries, placing thousands of businesses at financial risk. In addition, the region has a significant unutilized workforce of students. Sabbar aims to bridge this gap by leveraging technology to provide businesses the opportunity to fulfill shift on-demand with temporary workers. Additionally, the platform relieves businesses from associated administrative costs by streamlining a lengthy process that typically includes interviews, training, placement, shift scheduling, worker payments, and everything in-between.

    Sabbar enables businesses in retail, entertainment and hospitality industries to book casual staff during peak hours or high seasons from a roster of pre-qualified professionals. Since its launch in mid-2019, Sabbar has received over 100,000 job applications and is currently connecting hundreds of workers to businesses on a monthly basis. Sabbar leverages a proprietary engine, which builds user & role profiles and leverages geospatial analytics to match workers with job opportunities near them, in roles which to date have included cashiers, baristas, sales associates, among others. (Sabbar 15.12)

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    3.8 Egypt’s DentaCarts Raises $450,000 in Seed Funding

    Nasr City’s DentaCarts is a one-stop-shop marketplace for dental supplies that offers the widest range of authenticated products via authorized dealers. Moreover, DentaCarts is deeply integrated with dental clinics management software, creating a higher quality marketplace through deep data insights and analytics. DentaCarts is the largest of its kind not only in Egypt but also in the Middle East.

    Having been part of Misk500‘s first cohort, DentaCarts was co-founded in late 2017. The company has successfully raised an investment of $450,000 from 500 Startups (US), AAIC (Japan), Wadi Makkah (Saudi Arabia) and AUC Angels (Egypt). This unique marketplace is dealing with three main issues, the fake products that have serious complications to patients’ health and safety, limited access to the market then limited choices, and over-inflated prices. The company claims that so far, they have served over 1,500 dental clinics, and delivered over 10,000 orders to Egypt, Saudi Arabia, Kuwait, Kenya and Ghana. DentaCarts consists of a variety of more than 10,000 items on its platform, from monthly supplies to clinic furnishing, and it has over 100 authorized dealers onboard. (DentaCarts 22.12)

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    3.9 Morocco Allows Imports of Russian Beef to its Market

    Rabat and Moscow have concluded an agreement that will allow Russian companies to export beef to the Moroccan market. The Federal Service for Veterinary and Phytosanitary Surveillance announced that the two countries signed a veterinary certificate to supply Morocco with beef products. The veterinary office emphasized that Russian companies have already passed the inspection of Morocco’s veterinary service. The export of Russian meat will start immediately.

    Both Moscow and Rabat vowed to strengthen agricultural cooperation at their 7th session of the Moroccan-Russian Joint Cooperation Committee last year. Agricultural products represent 77% of Moroccan exports to Russia. The products value is estimated at MAD 1.5 billion. Russia is also Morocco’s primary citrus export destination. The minister said that citrus fruits top agricultural exports, followed by other fruits and vegetables. In 2017-2018, the North African country’s exports of mandarin and tangerine totaled 205,091 metric tons to Russia and 166,299 metric tons to the EU. Since 2014, trade has grown between the two countries by 10%. Last year, trade between Russia and Morocco increased in the first half of 2018 to $900 million, or 20% more than the same period of 2017. To boost agricultural cooperation, Morocco also lowered the grain tax to zero for Russia.

    Last year, the US Trade Representative (USTR) and the US Department of Agriculture (USDA) announced that Morocco agreed to allow imports of US beef and beef products into Morocco. Moroccan imports of agricultural products from the US exceeded $512 million as of November last year, according to the USDA. The US forecasts that Morocco would represent an $80 million market for US beef and beef products. Morocco also agreed to authorize US poultry imports last year. (MWN 19.12)

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    3.10 American Airlines Launches ‘Codeshare Deal’ with Royal Air Maroc

    American Airlines announced the launch of a codeshare agreement with Morocco’s state owned carrier Royal Air Maroc (RAM). The agreement will be effective from 26 December, whereby the two airlines will jointly offer new options to travel to Morocco. Customers of American Airlines will be able to buy tickets for RAM flights to Casablanca. The codeshare will expand to other cities across Africa in 2020. Casablanca’s international airport is a well situated hub to offer American Airlines’ customers “convenient connections between North America and over 40 destinations throughout Africa. The airline aims to increase visibility in the African market through the codeshare agreement with Morocco’s RAM. (MWN 22.12)

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    4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

    4.1 New Dubai Vertical Farm Set to Start Operations in Second Quarter of 2020

    Dubai Industrial City has announced it will be home to Badia Farms’ upcoming new large-scale high-tech vertical farm. Badia Farms, a regional AgTech leader, said the vertical farm is expected to start operations in the second quarter of 2020. Spanning an area of 50,000 sq. ft., the facility will have the capacity to produce 3,500kg of high-quality fruits and vegetables on a daily basis.

    From Dubai Industrial City, Badia Farms will grow more than 30 varieties of fruits and vegetables sustainably. The Badia Farms facility in Dubai Industrial City is rare as it will combine fruits and vegetables on a commercial large-scale basis. Vertical farming uses high-tech methods to produce crops in a controlled environment leveraging vertical space, without pesticides, and using fewer resources compared to traditional farming. (AB 17.12)

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    4.2 Giant Solar Park in the Desert Jump Starts Egypt’s Renewables Push

    Near the southern Egyptian city of Aswan, a swathe of photovoltaic solar panels spreads over an area of desert so large it is clearly visible from space. They are part of the Benban plant, one of the world’s largest solar parks following completion last month of a second phase of the estimated $2.1 billion project. Designed to anchor a renewable energy sector by attracting foreign and domestic private-sector developers and financial backers, the plant now provides nearly 1.5 GW to Egypt’s national grid and has brought down the price of solar energy at a time when the government is phasing out electricity subsidies.

    In 2013, Egypt was suffering rolling blackouts due to power shortages at aging power stations. Three gigantic gas-powered stations with a capacity of 14.4 GW procured from Siemens in 2015 turned the deficit into a surplus. National installed electricity capacity is now around 50 GW and Egypt aims to increase the share of electricity provided by renewables from a fraction currently to 20% by 2022 and 42% by 2035.

    The Benban project’s 32 plots were developed by more than 30 companies from 12 countries, including Spain’s Acciona, UAE-based Alcazar Energy, Italy’s Enerray, France’s Total Eren and EDF, China’s Chint Solar and Norway’s Scatec. Developers of the plant, around 40 km (25 miles) northwest of Aswan, are guaranteed a feed-in tariff price for 25 years. A third phase at Benban could add more than 300 MW, though nothing has been decided yet, while another large scale solar development is planned 45 km north of Aswan at Kom Ombo. (Reuters 17.12)

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    5: ARAB STATE DEVELOPMENTS

    5.1 Lebanon’s Trade Deficit Reaches $12.49 Billion in 2019’s Third Quarter

    Lebanon’s trade deficit narrowed in the first 9 months of the year to reach $12.49B, down by 3.58% compared to the same period in 2018. The total value of imports gained an annual 0.98% to stand at $15.30B. Also, the value of exports rose by 27.83% to stand at $2.81B in Q3/19. Worth noting that Mineral products and Vegetable products are the only 2 categories to witness an increase in its imported value. As for the month of September alone, total Deficit amounted to $1.12B which is 8.20 % lower when compared to the same month last year. In term of value, Mineral products were the leading imports to Lebanon in Q3 2019, grasping a 34.06% stake of total imported goods. Products of the chemical or allied industries followed, constituting 10.17% of the total, while machinery and electrical instruments grasped 8.71% of the total. Lebanon imported $5.21B worth of Mineral Products, compared to a value of 3.20B in the same period last year. The net weight of imported mineral fuels, oils and their products is still increasing since the start of the year and witnessed a yearly rise from 4,936,754 tons in Q3/18 to reach 9,288,583 tons in Q3/19. Meanwhile, the value of chemical or allied industries recorded a decrease of 5.90% y-o-y to settle at $1.55B and that of machinery and electrical instruments also declined by 24.81% over the same period to $1.33B. In terms of top trade partners

    Lebanon primarily imported from US, China, and Russia with shares of 8.65%, 8.58% and 7.65%, respectively, in Q3/19. As for exports, the top category of products exported from Lebanon were pearls, precious stones and metals, which grasped a share of 38.89% of total exports, followed by a share of 10.09% for Machinery; electrical instruments and 9.92% for Products of the chemical or allied industries over the same period. In details, the value of pearls, precious stones, & metals surged from 505.38M in Q3/18 to reach $1.93B in Q3/19. As for the value of Machinery; electrical instruments, it recorded an increase of 25.64% year-on-year to $283.79M. Meanwhile, the value of Products of the chemical or allied industries, it increased by 4.24% y-o-y to $278.95M. In the first 9 months of 2019, Switzerland followed by the UAE and Saudi Arabia were Lebanon’s top three export destinations, respectively constituting 27.68%, 11.71%, and 6.40% of total exports. (BLOM 11.12)

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    5.2 Number of Tourists to Lebanon Shrank by 14.2% to 142,624 in October 2019

    Civic protests erupted in the country on 17 October 2019, triggering economic and political unrest. As a result, the latest data by the Ministry of Tourism revealed the number of tourists in the month of October 2019 stood at 142,624 travelers, down by 14.2% compared to October 2018. Nonetheless, the cumulative number of tourists rose by 5% year-on-year (YOY) to 1.75M tourists in the first ten months of the year.

    On a monthly basis, the down tick in overall tourists in October 2019 alone revealed the sharpest falls of 11.1% and 21.5% in tourists from Europe and the Arab countries, such that these respectively stood at 55,433 and 40,325 travelers in October. Tourists from the Americas also fell by an annual 3.5% to 20,934 over the same period.

    Meanwhile, the increase in the cumulative number of tourists first ten months of the year revealed that Europeans constituted the largest portion of total tourists, grasping a lion’s share of 36.7%, while travelers from the Arab countries came in second with a share of 30.6%, tourists from the Americas had 18.8% and Asia comprised 6.8% of total tourists. (MoT 15.12)

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    5.3 Number of Lebanese Construction Permits Slumps by 19.37% in November 2019

    The civic protests that erupted starting on 17 October across Lebanon and the ensuing financial and economic developments negatively impacted the real estate and construction sector over the period, as shown by the latest figures released by the order of engineers of Beirut and Tripoli. In fact, the total number of construction permits dropped by an annual 19.37% to stand at 10,354 permits by November 2019. The respective Construction Area Authorized by Permits (CAP) in its turn slumped by a yearly 32.06% to 5.7M sqm., corroborating investors’ affinity for smaller construction areas for their projects. (BLOM 24.12)

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    5.4 Jordan’s Trade Balance Deficit Drops by 14% in 10 months

    Jordan’s trade balance deficit decreased by 14% over the last 10 months, compared with the same period in 2018. According to figures released by the Department of Statistics, the trade balance deficit in the last 10 months stood at JOD 6.392 billion. According to the data, the Kingdom’s total exports increased during the mentioned period of 2019 by 8.6% compared to the same period of 2018, recording about JOD 4.882 billion. The value of national exports during the past ten months amounted to JOD 4.136 billion, while the value of re-exports amounted to JOD 746 million. On the other hand, during the past ten months, imports decreased by 5.5% compared with the same period of 2018, declining to about JOD 11.274 billion. (Petra 23.12)

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    5.5 Jordan & USAID Sign $745 Million Grant Agreement

    On 15 December, the Jordanian Government signed an agreement with the United States Agency for International Development (USAID), under which the US agency will provide a $745.1 million cash grant to the Kingdom’s treasury. The grant is part of the 2019 US economic assistance package to Jordan. This grant will be part of the 2019 budget to support priority development projects listed in the 2019 General Budget Law, which would contribute to reducing the budget deficit. The grant value is expected to be received before year end.

    The USAID program in Jordan is one of the agency’s largest and most diverse programs in the world. Noteworthy, the total economic (non-military) assistance provided to Jordan by the United States for 2019 is about $1.15 billion, up by about $300 million over the indicative value of economic aid set out in the memorandum of understanding that governs US aid to the Kingdom during the period 2018-2022, which was signed in February 2018. The remaining sum of economic aid for 2019, which amounts to nearly $400 million, will be used to support economic development, provide employment opportunities, boost the social sector, and promote local development. It will also include $50 million allocated to the Kingdom by the US Congress as additional support within the aid fund. (Petra 15.12)

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    ►►Arabian Gulf

    5.6 Saudi Arabia & Kuwait to Sign Deal to Restart Production at Oilfields

    On 24 December, Saudi Arabia and Kuwait signed a deal to resume production at two major oilfields in a shared neutral zone after five years of stoppage. The Kuwait Gulf Oil Company (KGOC) said the signing ceremony took place in the neutral zone where the offshore Khafji field and onshore Wafra field are located. The two fields were pumping some 500,000 barrels per day before production was halted first at Khafji in October 2014 and then at Wafra months later over a dispute between the two Arab Gulf neighbors. Riyadh said at the time the decision was due to environmental issues.

    The oil produced in the neutral zone in the border area is shared equally between the two nations. Khafji was jointly operated by KGOC and Saudi Aramco Gulf Operations, while Wafra was operated by KGOC and Saudi Arabian Chevron. It was not immediately specified when the two fields will start pumping again, but the agreement comes as oil prices are under pressure due to abundant reserves and weak global economic growth. The slump has prompted OPEC and its allies to make deeper production cuts starting next month. (AB 24.12)

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    5.7 Qatar Budget Surplus to Shrink in 2020

    Qatar, the world’s largest exporter of liquefied natural gas, will see its budget surplus shrink in 2020 due to projected higher wage bills. The country ran a provisional surplus of 4.4 billion riyals ($1.21 billion) — its first surplus in three years — in 2019 due to higher energy prices. That is now expected to shrink to 500 million riyals in 2020. Expenditure is estimated at 210.5 billion riyals, up by 1.9% compared with 206.6 billion in 2019. Budget expenditures are the highest in the past five fiscal years, reflecting the country’s commitment to the completion of multiple development projects ahead of the 2022 World Cup. A 3.3% hike in the government wage bill was due to a hiring spree for newly completed education, health and railway projects.

    Qatar has been under an economic and diplomatic boycott by neighboring countries led by Saudi Arabia for the past two-and-a-half years although signs of reconciliation efforts have recently emerged. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with Qatar in June 2017, accusing it of links to extremist groups and being too close to Iran. Doha has denied the charges and increased business with existing trade partners outside the region, announced plans to produce more gas and sought new markets. Qatar, the third largest economy in the Gulf, has also sought to secure new revenues to boost income streams that shrank due to the slump in oil prices after mid-2014. (Various 17.12)

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    5.8 UAE Leaders Reveal Plan to Develop Strategy for Next 50 Years

    Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, and Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, announced 2020 to be the year of preparations for the next 50 years. Declared “2020: Towards the next 50,” next year will witness the biggest national strategy to prepare for the coming 50 years on the federal and local level as the country approaches its Golden Jubilee in 2021.

    Sheikh Mohammed issued directives to form two committees. The 50-year Development Plan committee, chaired by Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, is tasked with involving all segments of the society in shaping life in the UAE for the next 50 years. It will draw a new economic map for the UAE and develop “exceptional projects and policies” to make giant leaps in the national economy. It will also work on cementing the soft power of the UAE and establishing media systems to share the country’s new story with the world, bringing economic and social returns that protect its gains and enhance opportunities in the new economy.

    Among the committee’s other responsibilities is developing vital sectors including health, education, housing, transport and food security across the country to increase future readiness. The committee will also develop a comprehensive vision of the UAE society in the next 50 years that adapts demographics, family life and cultural identity to a rapidly-changing world.

    The second committee, the Golden Jubilee Celebrations committee, will be chaired by Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation, with his deputy Sheikha Mariam bint Mohamed bin Zayed Al Nahyan. It will be tasked with overseeing all Golden Jubilee celebrations involving the private sector and involving embassies across the country. The committee’s responsibilities also involve setting mechanisms to coordinate events and activities on a federal and local level. (AB 14.12)

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    5.9 USA, UK and France Top List of Visitors to Dubai in Third Quarter

    Travelers from the USA, UK and France topped the list of visitors to the UAE in the third quarter of 2019, according to the latest data from Expedia Group. The top ten feeder markets for the UAE also included India, China, Ireland, Australia, Germany, Italy and Brazil. Figures for Q3/19 showed particular demand from Brazil and Portugal, reflecting the Emirates codeshare partnership with LATAM Airlines and direct flights to Porto. While travelers from China showed a 50% year-on-year growth in package demand. A surge in arrivals into Dubai was recorded over the summer months resulting in 12.08 million international overnight visitors in the first nine months of 2019, according to data released by Dubai’s Department of Tourism & Commerce Marketing. According to the Central Bank’s Third Quarter Economic Review and Dubai Tourism data, approximately 56.3% – or 6.8 million – of tourists who arrived in Dubai between January and September 2019 stayed at the emirate’s hotels. (AB 15.12)

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    5.10 UAE Tax Revenues Exceed $6.8 Billion, 5.5% of Public Purse

    Tax revenue, including VAT, amounted to 5.5% of the UAE’s total public revenue last year, while oil revenues and the profits of public joint-stock companies accounted for 36.1% and 32.9% respectively, according to the Ministry of Finance. The ministry said the UAE’s decision to apply VAT was positively reflected in the country’s overall budget. Total revenues in the government budget amounted to AED456 billion ($124 billion) in 2018, including tax revenues worth AED25 billion ($6.8 billion). It added that 2018 witnessed a budget surplus of 2.2% compared to deficits of 0.2%, 1.3% and 6.4% in 2017, 2016 and 2015.

    The UAE Government adopted a VAT rate of 5% at the start of 2018 to promote economic growth in isolation from oil revenues and increase the state’s ability to continue providing educational and health services and public facilities. Recent studies by the ministry pointed out that the budget surplus in 2018 resulted from the growth of general revenue by 13.3%, which surpassed the rate of public spending growth of 4.2%. (AB 11.12)

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    5.11 UAE’s Khalifa Port to Get a $1 Billion Upgrade

    Khalifa Port, situated halfway between Abu Dhabi and Dubai, was officially inaugurated on 12 December 2012, by UAE President Sheikh Khalifa bin Zayed Al Nahyan. Seven years later, an investment of AED2.2 billion will be made in the development of South Quay and Khalifa Port Logistics, as well as an AED1.6 billion expansion at Abu Dhabi Terminals. The South Quay development, which will be completed by the first quarter of 2021 comprises a 3 km. quay-wall with 18.5 meters alongside draft for general cargo, ro-ro and bulk usage. It will also include eight berths and 1.3 million square meters of the terminal yard.

    The Khalifa Logistics expansion will encompass a 3.1 km. quay wall with an 8-metre draft, 15 berths and land plots, which can be tailored to individual customers. Phase 1 of the South Quay expansion will be completed by Q4/20, while phase 2 and the Khalifa Logistics expansion will follow a few months later. These two projects will create more than 2,800 direct and indirect jobs and contribute more than AED3.2 billion to the emirate’s GDP by 2025.

    With this capacity expansion project in place, Khalifa Port will see its container handling capacity jump from the current 5 million to 7.5 million TEUs, which sets it firmly on the path towards its 9 million TEU milestone over the next five years. Khalifa Port will be the first in the UAE to be linked to the new Etihad Rail network, which is currently under construction. (AB 12.12)

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    5.12 Overseas Tourism Worth Nearly $28 Billion to Dubai

    Dubai has been ranked the third biggest city in the world for international tourism spending with a total of $27.9 billion, according to a new report from the World Travel & Tourism Council (WTTC). The council, which represents the global travel and tourism private sector, has released its Cities Report for 2019, which reveals that the Middle East & North Africa (MENA) contributed $92 billion to the global tourism GDP. The report revealed many cities across MENA make a significant contribution to the city’s overall GDP, with Marrakech’s travel and tourism sector contributing 30.6% and Dubai contributing 11.5%.

    According to the WTTC, Dubai and Riyadh are the most reliant on international visitor spending in the region, with 89% and 86% respectively of the total travel and tourism spend coming from international visitors. Additionally, Riyadh sees its international spending per visitor nine times higher than domestic spending.

    In terms of employment, the report showed MENA to be performing particularly well with three of the top 10 fastest growing cities for employment located within the region, including Dubai. Of the top five cities for fastest growth in travel and tourism employment between 2008-2018, Abu Dhabi comes in first with 8% growth, with Riyadh (5.9%) in third place. It also highlighted the Saudi city of Mecca for its more balanced split between domestic and international demand – 48% international and 52% domestic. (WTTC 17.12) (DNE 28.11)

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    5.13 Expo 2020 Forecast to Continue to Drive Dubai Construction Growth

    Expo 2020 and government-led infrastructure projects were key factors driving the growth of Dubai’s construction sector in 2018 and 2019 and this is expected to continue over the next two years, according to a new report. Analysis released by Dubai Chamber of Commerce and Industry, based on recent data from BNC, IMF, Haver Analytics and Fitch Connect, revealed that the construction sector contributed an estimated 6.4% to Dubai’s GDP in 2018. It added that there are 4,792 current active projects in Dubai, accounting for 42% of the UAE’s total.

    Other key growth drivers for Dubai’s construction market include the emirate’s strong economic fundamentals and diversification strategy, steady increase in population and number of tourists, sustained infrastructure investment over the medium term and major government investments in transportation, the report noted. It also said that most Expo 2020 related infrastructure projects are either under construction or completed, while the majority of the contracts are for building works located at the Expo site. Other mega projects include expansions of Al Maktoum International Airport (DWC), Jebel Ali Port and the Dubai Metro Red line connecting the city center to the Expo 2020 site.

    The findings also showed that the UAE leads the GCC in the value of awarded contracts for 2019 as the country is estimated to have $48.4 billion worth of contracts in the pipeline, followed by Saudi Arabia ($40.2 billion) and Kuwait ($15.8 billion). The UAE also outperforms other countries in the region when it comes to the contribution of its construction sector to national GDP with the value of this figure reaching $33.2 billion in 2018. (AB 14.12)

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    5.14 Saudi Unemployment Drops to Lowest in Three Years

    According to the General Authority for Statistics, Saudi Arabia’s citizen unemployment rate fell to the lowest in more than three years as the kingdom’s non-oil economy gradually recovers from a slowdown. Joblessness slipped to 12% in the third quarter from 12.3% in the previous three months. Unemployment dropped for both men and women – though Saudi female unemployment remains over 30% as more women enter the labor force seeking jobs.

    Saudi Arabia’s unemployment is a key indicator watched by officials as they try to create jobs for nationals in a private sector dominated by foreign labor. Until now, improvements in the labor market have continued to lag a rebound in non-oil growth this year to the fastest since 2015, a reflection of the persistent weaknesses in business confidence that’s been made worse by a string of fiscal reforms such as new taxes and fees. Joblessness among nationals has held at or above 12% for the past three years, especially testing the patience of young Saudis entering the labor market. (GAS 15.12)

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    5.15 Saudi Arabia May Tap International Debt Markets to Fill Budget Gap

    Saudi Arabia may tap international debt markets as early as next month as the kingdom seeks funding to help bridge its widening budget deficit. Most of the debt will be local and about 45% will be raised overseas through sukuk and conventional bonds, the head of the Finance Ministry’s debt management office said. The country will refinance roughly SR44 billion ($11.7 billion) of existing debt.

    Saudi Arabia expects its budget deficit next year to rise to SR187 billion and plans to finance that with debt and drawing down the kingdom’s reserves. The new budget marks a shift away from the fiscal stimulus that helped power non-oil economic growth this year to the fastest since 2015. The world’s largest oil exporter is embarking on three years of spending cuts as it looks to private businesses to take the lead. (AB 11.12)

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    ►►North Africa

    5.16 Remittances to Egypt Reach $6.7 Billion in First Quarter of FY 2019/20

    Remittances from Egyptian expatriates increased in the first quarter of the 2019/2020 fiscal year to reach $6.7 billion, the Central Bank of Egypt announced on 17 December. Remittances increased by 13.6% year on year in the quarter, up from $5.9 billion in the first quarter of the 2018/2019 fiscal year. Remittances are one of the country’s main sources of foreign currency. (Ahram Online 17.12)

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    5.17 Egypt’s Economy to Strengthen in 2020 With 15% Rise in Profit Growth Rate

    Hermes Financial Group, one of the leading investment banks in the Middle East and Africa, forecast that the Egyptian economy will become stronger and will be based on solid grounds in 2020 due to the Egyptian economic reform program that succeeded in creating an appropriate business atmosphere. In its annual report, Hermes said the Egyptian market is likely to lead emerging markets in the Middle East in 2020 with an expected 15% profit growth rate. Exchange prices are expected to return to their previous rates before the liberalization of the Egyptian pound, it added.

    It said restructuring energy prices in July helped the government to go ahead with doubling wages’ minimum rates, boosting local products and increasing pensions. Fiscal deficit is likely to decrease within the next two years due to decline of interest rates that will lower borrowing costs, it added. Hermes group expected that the pound price will be more stable against the dollar and that the total deficit will hit 2.9% of GDP thanks to improvement in the tourism sector.

    Companies planning to expand are expected to achieve more profits in 2020 prompted by the decrease of interest rates, it said. Hermes expected a relative recovery of the cement sector and an increase in the profits of communications companies operating in Egypt that showed an excellent performance in 2019. (EFG Hermes 15.12)

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    5.18 Egypt’s Trade Deficit Narrows by 28.7% in September

    Egypt’s trade deficit value reached $3.49 billion in September 2019, down from $4.9 billion during the same month the previous year, making a decline of 28.7%, according to CAPMAS. Unfortunately, Egypt’s export value decreased by 2.7% in September, amounting to $2.37 billion during September, down from $ 2.43 billion in September 2018, the CAPMAS added. CAPMAS attributed the decrease in the export value to the decreased value of some commodities such as fertilizers by 32.5%, fresh fruits by 7.9%, carpets by 8.5% and other varieties of textile materials by 7.1%.

    Export values of some commodities increased during September 2019, versus the same month the previous year such as crude oil by 1.2%, petroleum products by 5.2%, ready-made clothes by 11.7%, plastics in primary forms by 7.6%. In addition, CAPMAS showed that Egypt’s import value decreased by 20.1%, recording $5.86 billion, down from $7.33 billion during the same month last year.

    The CAPMAS attributed the decrease in Egypt’s import value to the decreased value of some commodities, including petroleum products by 37%, raw materials of iron or steel by 12.6%, plastics in primary forms by 15.9%, and organic and inorganic chemicals by 1.2%. Meanwhile, imports of some commodities increased in September 2019, versus the same month previous year such as wheat by 12.8%, pharmaceuticals and pharmaceutical preparations by 8.6%, meat by 12.4% and corn by 26.6%. (CAPMAS 17.12)

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    5.19 Egypt Signs $466.3 Million Locomotive Deal with Progress Rail

    Egyptian National Railways (ENR) signed a $466.3 million deal with Progress Rail, an Alabama based subsidiary of Caterpillar, on 15 November regarding the supply and refurbishment of locomotives. The deal involves the supply of 50 EMD diesel locomotives, modernizing 50 diesel locomotives from ENR’s existing fleet and overhauling another 41 locomotives. ENR will fund the overhaul of the 41 locomotives at an estimated cost of $27 million. Progress Rail will also take over responsibility for the long-term maintenance of all 141 locomotives.

    The new EMD locomotives are scheduled for delivery within 22 months of the activation of the contract, while the 50 ENR locomotives will be modernized within 30 months. (IRJ Pro 19.12)

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    5.20 Egypt & USAID Sign a Second Phase of North Sinai Development Initiative Agreement

    On 17 December, Egypt and the USAID signed an agreement for an additional $6 million for the North Sinai development initiative, bringing the total in the bilateral assistance program to the governorate to $56 million. The agreement aims at achieving major social and developmental improvement for citizens in North Sinai through providing safe drinking water and sanitation services for around 100,000 residents, in addition to upgrading the infrastructure in order to attract investments. The Egyptian government’s priorities include the empowerment of young people and women, supporting SMEs, improving drinking water and sanitation, and expanding social protection programs through implementing development projects in all sectors, especially in infrastructure, new road networks, social housing, healthcare, and education. (Ahram 17.12

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    5.21 World Bank Loans Morocco $275 Million for Disaster Management Program

    On 11 December, the World Bank approved a loan of $275 million to Morocco for its Disaster Risk Management Development Policy, developing its response to the impact of natural disasters and climate-related shocks. The loan also aims to help Morocco to develop a Deferred Drawdown Option for Catastrophe Risks (Cat DDO) to manage the financial impact of natural disasters. The fund is a critical tool which complements private insurance by providing compensation to the uninsured, such as the poor and most vulnerable.

    In order to insulate the country against the financial shock of natural disasters, the Cat DDO makes use of sophisticated risk financing instruments to cover losses caused by extreme flooding and earthquakes. In practical terms, the program means that in the face of natural disasters such as flooding or earthquakes, Morocco’s government will have direct access to liquid funds to support rescue operations as well as emergency response. The program will also upgrade Morocco’s National Civil Protection system and launch a National Flood Risk Management Information System.

    The approval of the loan comes after several months of trials for the Moroccan government, with four earthquakes hitting central Morocco in the space of two weeks after widespread flooding killed at least seven people. An earthquake with a magnitude of 5.3 on the Richter scale hit the province of Midelt, Central Morocco on 17 November. The first quake was quickly followed by three more earthquakes, with the most recent hitting Morocco on 5 December. Flooding ravaged the Moroccan countryside in late August and early September with heavy rainstorms hitting the province of Taroudant. The flood killed seven people when a river burst its banks, sweeping over a recently built football facility. (WB 12.12)

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    6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

    6.1 Turkey Posts $7.6 Billion Trade Surplus with the EU Over First 10 Months of 2019

    Turkey was the fifth-largest trading partner of the EU in the first 10 months of this year with trade volume of €127.4 billion ($142.2 billion), EuroStat announced. EU exports to Turkey totaled €60.3 billion ($67.3 billion), while imports from the country were€ 67.1 billion ($74.9 billion) during the same period, leaving Turkey with a trade surplus of €6.8 billion ($7.6 billion).

    The EU’s foreign trade balance posted a €28 billion ($31 billion) deficit in the first 10 months of this year. The 28-member bloc’s exports of goods totaled €1.69 trillion ($1.89 trillion) in January-October with a year-on-year rise of 3.8%.

    The U.S. was the top market for EU exporters with €376.9 billion ($420.7 billion) or a share of 22% of the bloc’s total exports. The EU’s other major export markets were China, Switzerland, Russia and Turkey. On the imports side, China was the main source, with €351 billion ($392 billion), accounting for 20.3% of total imports, followed by the U.S., Russia, Switzerland and Turkey. (DS 17.12)

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    6.2 Turkey’s Unemployment Rate Falls to 13.8%

    On 16 December, the Turkish Statistical Institute (TurkStat) announced that Turkey’s unemployment rate fell to 13.8% over the past three months to October. The jobless rate declined from 14% in the three months ending September, according to data on the institute’s website. The rate had stood at 11.4% in October 2018. Non-farm unemployment eased to 16.4% from 16.7% in September.

    Turkey’s government is seeking to stimulate the troubled economy with cheap loans from state-run banks, tax cuts and lower central bank interest rates after a currency crisis sent economic growth into a tailspin last year. The government revised down its growth estimate for 2019 to 0.5% in its latest economic program revealed in September. It targets expansion of 5% for 2020. Youth unemployment fell to 26.1%, the institute’s figures showed. It hit a record high of 27.4% in September. (TurkStat 16.12)

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    6.3 Tourist Arrivals in Cyprus at Record High in November and for the First 11 Months of 2019

    Tourist arrivals in November and in the first eleven months of this year were at a record high for the time of the year, data released by the Cyprus Statistical Service on 17 December showed. In particular, according to the results of the passengers’ survey, arrivals reached169,392 in November compared with 158, 685 in November last year, an increase of 6.7%. November 2019 had the highest volume of tourist arrivals ever recorded in Cyprus during the specific month.

    For the period January –November 2019, tourist arrivals reached 3,866,447 compared with 3,832,062 in the same period of 2018, an increase of 0.9% and outnumbering the total arrivals ever recorded in Cyprus during the first eleven months of the year.

    According to the official data, arrivals from the UK increased by 10.4% in November compared with November last year while an increase of 8.9% was recorded in tourists arriving from Russia and 59.3% from Israel. On the other hand, a fall of 6% in was seen in arrivals from Greece and 33.5% from Germany. The UK constituted the main source of tourism for Cyprus in November at 32.6% while arrivals from Russia comprised 13.7% of the total, Greece 8.6% and Israel 7.7%. (CSS 17.12)

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    6.4 Greece’s Current Account Deficit Shrinks in October

    Greece’s current account deficit shrank in October compared with the same month last year thanks to higher tourism revenues, the Bank of Greece said on 20 December. Central bank data showed the deficit was €673 million, down from €915 million in October 2018. Tourism revenues rose 4% to €1.442 billion, from €1.385 billion in the same month last year. Last year, Greece’s current account showed a deficit of €5.3 billion, up €2.1 billion year-on-year as the trade gap widened. (Reuters 21.12

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    7: GENERAL NEWS AND INTEREST

    *ISRAEL:

    7.1 Jerusalem Ranked as World’s Fastest Growing Tourist Destination

    The latest survey of the world’s most popular tourist cities by UK business intelligence company Euromonitor International shows Jerusalem as the world’s fastest growing destination. Jerusalem rose six places in the rankings of the Top 100 City Destinations report in 2018 to 61st place with 3.93 overseas tourists, up 12% from 2017 and is expected to enjoy 38% growth in 2019 to 4.8 million, according to Euromonitor International.

    Tel Aviv was ranked 79th in 2018 with 2.8 million visitors, up 8% from 2017 and is expected to attract almost 3 million visitors in 2019. The six most popular cities in 2019 are Hong Kong (26.7 million tourists despite the demonstrations); Bangkok 25.8 million; Macau 20.6 million; Singapore 19.8 million; London 19.6 million; and Paris 19.1 million. (Globes 15.12)

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    *REGIONAL:

    7.2 Lebanon PM-Designate Begins Tough Talks to Form Government

    Lebanon’s prime minister-designate launched consultations on 21 December to form a desperately-needed government for a protest-hit country facing economic collapse amid political rifts over the Cabinet’s line-up. Debt-burdened Lebanon has been without a fully functioning government since former prime minister Saad Hariri resigned on 29 October in the face of nationwide protests. Demonstrators are demanding an overhaul of the political establishment which they deem corrupt and inept, insisting on a government of independents and experts with no ties to the country’s sectarian parties.

    Hassan Diab, a 60-year-old engineering professor, was designated prime minister with backing from the country’s Iran-aligned Shiite Hizbollah movement and its allies. But Hariri’s Sunni bloc did not endorse his nomination, along with other key Christian and Druze Muslim parties and have said they will not take part in Diab’s government. Diab, considered a technocrat, is hoping to set up the new Cabinet within four to six weeks and has said he wanted to choose experts to join the line-up, calling on demonstrators to give him a “chance” to carry out the task.

    A dollar-liquidity crisis has pushed banks to impose informal capital controls on dollar deposits and the Lebanese pound, officially pegged to the US dollar, has lost around 30% of its value on the black market. The faltering economy has pushed several companies to close, while surviving businesses try to stay open by paying half-salaries and laying off employees. A recession of more than 0.2% is expected for this year, the World Bank says. (AFP 21.12)

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    7.3 Jordan & USA Sign MoU on Cultural Heritage and Antiquities Protection

    Director General of Jordan’s Department of Antiquities and the US Assistant Secretary of State for Educational and Cultural Affairs signed on 16 December a memorandum of understanding (MoU) in the field of protecting the cultural heritage and antiquities between the two countries. The memorandum, which was signed at the Jordan Museum, included restricting the import of Jordanian antiquities to the United States, which includes coins, manuscripts, stones, minerals, ceramics, glass, mosaic and bone plates, seashells and human, animal and plant remains, which history ranges from 1.5 million years BCE to about 1750, according to the Jordanian Antiquities Law.

    Under the MoU, the US pledged to return Jordanian antiquities confiscated in the United States to the Kingdom, and the Jordanian government also pledges to return any properties that have been confiscated to the American side if these properties was classified as US cultural heritage. (Petra 16.12)

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    7.4 Kuwait Appoints First Female Finance Minister in Arabian Gulf

    Kuwait appointed Mariam Al-Aqeel as finance minister, the first woman in the Arabian Gulf to hold the post. Khaled Al-Fadhel retained his posts as minister overseeing oil, electricity and water in Sheikh Sabah Al-Khaled Al-Sabah’s new cabinet, which includes three women and eight new faces. As finance minister, Al-Aqeel automatically heads the country’s sovereign wealth fund, Kuwait Investment Authority.

    The cabinet is expected to serve for less than a year since Kuwait is scheduled to hold parliamentary elections in 2020. The country has witnessed tumultuous relations between the elected legislature and the government appointed by the country’s hereditary emir. This is the eighth cabinet in as many years.

    Kuwait, home to about 6% of the world’s oil reserves, is the fourth-biggest producer in OPEC. The IMF expects its economy to grow 0.6% this year, squeezed by a reduction in oil output as part of an OPEC agreement. (Various 17.12)

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    7.5 Turkey Spent TL 214.6 Billion on Education in 2018

    Turkey spent nearly TL 214.6 billion on education last year, a 21.6% increase from 2017, the Turkish Statistical Institute (TurkStat) revealed. The share of education spending vis-à-vis the gross domestic product (GDP) rose from 5.7% in 2017 to 5.8% in 2018. Nearly 73% of the expenditures were financed by the state, while households contributed up to 20%. The biggest rise in education spending was recorded for pre-school with a 27.3% increase from 2017, followed by high school with a 24.3% increase.

    Of the expenditures made by state institutions, 33.2%, or TL 51.5 billion, went to higher education and 25.3%, or TL 38.9 billion, went to secondary education. Private institutions contributed 43.3% of their expenditures, or TL 20.5 billion to secondary education and 30.3%, or TL 14.4 billion to higher education.

    The average educational expenditure per student increased from TL 8,111 in 2017 to TL 9,790 in 2018. The highest spending per student occurred in higher education, at TL 16,248 per student. The amount spent per student in higher education has increased by 20.7% from 2017. The greatest rise in spending per student occurred at middle school and high school levels, with increases of 26.2% and 22.7%, respectively. (DS 18.12)

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    7.6 UN Studying Greek Demands for Action Against Turkey – Libya Deal

    The United Nations is studying a protest letter sent by Greece urging for action against the maritime border deal signed between Turkey and Libya’s internationally-backed government. Greece outlined its objections to the “legally invalid” deal and calls on UN Secretary-General Guterres to bring the matter before the Security Council. The letter states that the deal blatantly violates the rules governing the law of the sea regarding the demarcation of maritime borders, as Turkey and Libya do not have overlapping sea zones or common boundaries. It also points out that the memorandum of understanding ignores the presence of Greek islands, including Crete. Moreover, the continental shelves and exclusive economic zones described in the agreement’s text are dismissed as illegitimate, arbitrary, provocative and an open violation of Greece’s sovereign rights.

    Cyprus has also condemned the deal as illegal and disregarding the maritime rights of Mediterranean states and island. Egypt has also called the MoU “legally invalid” and has joined Nicosia and Athens in a diplomatic offensive. (FM 12.12)

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    8: ISRAEL LIFE SCIENCE NEWS

    8.1 Vocalis Health Closes Merger and a $9 Million Investment Round

    Beyond Verbal and Healthymize, two early-stage Israeli AI healthtech companies, announced a merger to create a joint company that will be a global leader in vocal biomarkers. The new company, to be called Vocalis Health, will be based in Newton, MA and Israel, and will receive a $9 million investment from a syndicate of funds led by aMoon, Israel’s largest healthtech and life sciences fund. The merger and funding are expected to be completed before the end of 2019.

    Vocalis Health develops an artificial intelligence-based platform that uses voice to evaluate an individual’s health status. With Vocalis Health, healthcare providers can leverage remote voice interaction through a call center or smart device to passively screen and monitor millions of patients that live with a range of voice-affecting diseases, like chronic respiratory or cardiac conditions or depression. Vocalis Health’s early clinical data demonstrates the ability to efficiently triage and monitor chronic patients. Vocalis Health expects to use the proceeds from the current round of investment to recruit additional talent, enhance its voice database and continue to validate its offering through clinical trials. The combined company intends to advance its vocal biomarkers platform, obtain regulatory clearances and launch its product offering in 2020.

    Vocalis Health, an AI healthtech company, is developing a platform of diverse vocal biomarkers to monitor and diagnose health when a person speaks. Vocalis’ solution, seamlessly integrated into remote care, is designed to improve the care and management of patients with chronic disease by providing valuable patient heath indicators through analysis of their voice. While the Vocalis’ platform is applicable to multiple chronic disease indications, the company’s initial focus is on cardiovascular and respiratory conditions. (aMoon 11.12)

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    8.2 CathWorks FFRangio System Receives Regulatory Approval in Japan

    CathWorks announced the approval of The CathWorks FFRangio™ System by the Japan’s Ministry of Health, Labour and Welfare (MHLW). The CathWorks FFRangio System is a non-invasive diagnostic technology that is used at the time of a routine angiography. The CathWorks FFRangio System transforms routine angiogram images into objective and comprehensive physiology information, including a color-coded 3D renderings of blood flow in the heart’s arteries to help physicians optimize coronary artery disease decision making, including whether a stent is needed.

    The CathWorks FFRangio System is also commercially available in the United States and Europe. It is non-invasive and performed intra-procedurally during coronary angiography without adding additional clinical risk or per procedure costs. The technology has the potential to positively impact a significant patient population in Japan, where heart disease is the second leading cause of death and coronary artery disease accounts for approximately half of these deaths.1

    Kfar Saba’s CathWorks is a medical technology company focused on applying its advanced computational science platform to optimize coronary artery disease therapy decisions and elevate coronary angiography from visual assessment to an objective FFR-based decision-making tool for physicians. FFR-guided PCI decision-making is proven to provide significant clinical benefits for patients with coronary artery disease and economic benefits for patients and payers. (CathWorks 11.12)

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    8.3 Else Nutrition Receives Favorable Regulatory Assessment Ahead of U.S. Market Launch

    Else Nutrition Holdings has received a favorable regulatory assessment of its toddler formula ingredients from Virginia’s EAS Consulting Group, which conducted a preliminary review of the Else formula in view of the US FDA requirements. With vast, global expertise in regulatory approvals, and specialty in FDA requirements, EAS has unique experience and capability pertaining to the introduction of food, drinks and new infant formulas. Else Nutrition’s 100% plant-based toddler formula is set to launch in the U.S. market in the second quarter of 2020.

    Tel Aviv’s Else Nutrition is a food and nutrition company focused on research, development, manufacturing, marketing, sale and/or license of innovative plant-based food and nutrition products to the infant, toddler, children and adult markets. Its revolutionary 100% plant-based non-soy alternative to dairy-based baby formula received the “Best Health and Diet Solutions” award in the Global Food Innovation Summit in Milan in May 2017. (Else Nutrition 16.12)

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    8.4 RSIP Vision Launches AI-Based Total Hip Replacement Solution

    RSIP Vision announced a new AI-based total hip replacement solution that provides a precise, automated 3D structure of the patients’ hip for physicians to better plan surgery. The new technology will create a precise fit of the new implant to best fit the patients’ body, enabling a better clinical outcome and an easier recovery. At the heart of the solution is a cutting-edge AI algorithm that brings new capabilities to the world of Orthopedics.

    A total hip replacement is a surgical procedure where the diseased cartilage and bone of the hip joint is surgically replaced with artificial materials. Instead of relying on a surgeons’ personal experience, this new solution allows complex segmentation and landmark detection of the patient’s body structure, making the surgical planning much simpler, faster and accurate.

    Jerusalem’s RSIP Vision is a global leader in artificial intelligence, computer vision, and image processing technology. The company draws on a depth of knowledge and experience to provide customized services, sophisticated algorithms, and deep learning technology to businesses of all kinds, most notably medical devices, pharmaceuticals, and autonomous driving.

    RSIP Vision develops practical AI modules that ensure precision, reduce time to market, cut costs, and free the core R&D team staff for other endeavors, saving significant time and money and giving businesses a real edge over the competition. RSIP Vision partners with customers on scientific research and development projects using customized algorithms in fields including physics, computer science, mathematics, biomedicine and neuroscience. (RSIP Vision 17.12)

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    8.5 NovaSight Leverages Netflix and Disney to Cure Vision Disorders

    NovaSight will be presenting its AI-driven eye tracking solutions for vision care at the upcoming CES 2020 event in Las Vegas. NovaSight and the company’s recently released CureSight™ solution intend to replace eye patching with a first-of-its-kind amblyopia treatment based on AI and eye tracking technologies. The treatment is performed using advanced real-time 3D image processing algorithms, while the patient watches their favorite web-based content. CureSight uses eye tracking technology to blur only the momentary gaze position of the dominant eye, forcing the brain to start using the amblyopic eye. The CureSight system, which is FDA registered, offers dozens of content sources including Netflix, Amazon, Disney, Cartoon Network, Fox, National Geographic and more.

    Recent clinical results of CureSight showed significant improvement in visual acuity in a cohort of twenty children that followed a twelve week treatment program with a 95% compliance rate. NovaSight also reports that the company recently signed a global OEM distribution agreement with Essilor for its EyeSwift® system. Essilor is the largest ophthalmic optics provider worldwide with a market capitalization of over $65B and intends to sell the EyeSwift system to its broad network of optical stores. EyeSwift is an automated, objective and easy-to-use eye tracking based vision assessment system for which NovaSight has obtained FDA approval and CE mark.

    NovaSight is currently engaging strategic partners to co-develop the next generation of AI-driven eye tracking solutions for screening and monitoring of neurological disorders, such as Alzheimer’s and Parkinson’s diseases.

    Airport City’s NovaSight brings pediatric vision care into the digital age by bringing together the power of eye-tracking and AI. Aiming to prevent pediatric vision loss, our products are specially designed for the unique needs and attention spans of children. The EyeSwift® system is an easy-to-use vision assessment system, which monitors the patient’s eye movements and provides within seconds accurate and objective assessments of numerous vision impairments. The CureSight™ system is a fun and engaging solution intended to replace traditional eye patching for amblyopia treatment. (NovaSight 17.12)

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    8.6 CardiaCare Wins First Prize at Cardiovascular Interventions (ICI) Technology Parade

    CardiaCare has been named the First Prize winner of the 2019 Innovation in Cardiovascular Interventions (ICI) Technology Parade in Tel Aviv. CardiaCare presented its innovative product, a wearable neuromodulation (nerve stimulation) device for monitoring and treating AFIb. Atrial fibrillation incidence is rising in the EU and US and current available solutions involve ablation procedures and pharmacotherapy which are not side effect free and have limited efficacy. CradiaCare’s solution involves a non-invasive closed loop approach of both monitoring and therapy. Its intended use as an add-on therapy in the home-care setting is tuned with this rising trend in medical care. CardiaCare is planning to commence first-in-human regulatory clinical trial in 2020.

    Nes Ziona’s CardiaCare has developed the world’s first wearable therapy for treating Atrial Fibrillation. Despite new therapies, Atrial fibrillation (AFib) is still the most common sustained arrhythmia and is considered a rising epidemic affecting millions of people worldwide. CardiaCare is a wrist-band with medical grade ECG but more importantly, with noninvasive neuromodulation (nerve stimulation) capabilities that mediate a cardiovascular antiarrhythmic response that reduces atrial fibrillation burden. The technology employs a closed loop approach involving both monitoring and therapy. (CardiaCare 16.12

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    8.7 Medasense to Provide Pain Index Solution for Treatment of Dementia Patients

    Medasense Biometrics has been awarded a development grant from the Israel Innovation Authority (IIA) to extend the application of its NOL® pain response monitoring index for non-communicating dementia patients. The development project will be conducted in collaboration with the Dorot Rehabilitation and Geriatric Medical Center in Netanya, Israel.

    Medasense’s NOL technology enables clinicians to optimize and personalize pain control and avoid overmedication. NOL is a unique technology that applies a non-invasive sensing platform and an artificial intelligence algorithm to objectively monitor and quantify the individual patient’s pain response. The technology is a known solution in operating rooms, where it helps surgical teams manage pain medication during surgery, when the patient is under anesthesia. With the IIA grant, Medasense will now be extending its NOL pain index solution for the treatment of dementia patients.

    Ramat Gan’s Medasense offers a breakthrough technology that enables clinicians to optimize and personalize pain control and avoid overmedication. Medasense’s flagship product, the PMD-200 with its NOL® index, is a unique platform that objectively monitors and quantifies the patient’s pain response by means of artificial intelligence and a proprietary non-invasive sensor platform. (Medasense Biometrics 19.12)

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    8.8 Metabomed Raises $12.5 Million to Advance its Lead Program into Clinical Studies

    Metabomed completed $12.5 million in financing to bring the total raised to date to $30 million. The company announced that it has declared a clinical candidate for its first-in-class program targeting the inhibition of the AcetylCoA Short chain Synthase 2 enzyme (ACSS2) in cancers dependent on acetate metabolism. The financing round was led by Yonjin Venture, with the participation of all its existing investors: M Ventures, Pfizer Ventures, Pontifax Venture Fund, Boehringer Ingelheim Venture Fund and Arkin Bio Ventures. The proceeds of the round will be used to move Metabomed’s clinical candidate for its ACSS2 program towards IND approval by the end of 2020 and to strengthen its internal pipeline to further develop lead compounds for MetaboMed’s other programs that modulate targets forming synthetic lethal pairs in cancers characterized by metabolic vulnerabilities such as MTAP deficiency, NRF2 addiction and a defective TCA cycle.

    Yavne’s Metabomed is a drug discovery company in the field of cancer metabolism. Through its proprietary technology, Metabomed identifies metabolic pathways that arise uniquely in cancers and are essential for their growth. These discoveries are used to develop small molecules that specifically target the reprogrammed cancer cells’ metabolism to halt their growth. Since these molecules inhibit divergent pathways that are specific to cancer cells, these therapies will not damage healthy surrounding tissues. (Metabomed 19.12)

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    8.9 Raziel Therapeutics Raises $22 Million in Series C Funding Round

    Raziel Therapeutics announced a $22 million Series C preferred stock financing led by Pontifax, with the participation of existing investors Dr. Shmuel Cabilly and Docor International plus new investors, Catalyst Fund, Quark venture, Peregrine Investments and Wille AG.

    Raziel Therapeutics is developing a proprietary New Chemical Entity Drug, RZL-012, for Aesthetic applications (i.e. submental fat and fat disorders, such as Dercum’s disease) with a single injection treatment into subcutaneous fat. Financial proceeds will support Phase 2b development of RZL 012 for Submental fat reduction and Dercum’s Disease. The company received on 19 November n approval from the FDA to develop RZL-012 as an orphan drug for Dercum’s disease patients. Phase 2b study for Dercum’s disease will be initiated during Q2 2020 and if successful could lead to NDA filing as soon as 2021.

    Rehovot’s Raziel Therapeutics is a clinical-stage pharmaceutical company developing a novel synthetic small molecule (NCE) for aesthetics and fat disorders. A Single multi-site injection of RZL-012 into subcutaneous fat causes immediate fat cell death at the injection site, resulting in significant reduction of fat tissue for long time periods. (Raziel Therapeutics 18.12)

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    8.10 Zebra Medical & DePuy Synthes Deploy Cloud Based AI Orthopedic Surgical Planning Tools

    Zebra Medical Vision announced a global co-development and commercialization agreement with DePuy Synthes* to bring Artificial Intelligence (AI) opportunities to orthopedics, based on imaging data. Every year, millions of orthopedic procedures worldwide use traditional two-dimensional (2D) CT scans or MRI imaging to assist with pre-operative planning. CT scans and MRI imaging can be expensive, and CT scans are associated with more radiation and are uncomfortable for some patients. Zebra-Med’s technology uses algorithms to create three-dimensional (3D) models from X-ray images. This technology aims to bring affordable pre-operative surgical planning to surgeons worldwide without the need for traditional MRI or CT-based imaging.

    This technology is planned to be introduced as part of DePuy Synthes’ VELYS Digital Surgery solutions for pre-operative, operative, and post-operative patient care.

    Kibbutz Shefayim’s Zebra Medical Vision’s imaging analytics platform allows healthcare institutions to identify patients at risk of disease and offer improved, preventative treatment pathways, to improve patient care. The company is funded by Khosla Ventures, Marc Benioff, Intermountain Investment Fund, OurCrowd Qure, Aurum, aMoon, Nvidia, Johnson & Johnson Innovation – JJDC, Inc. (JJDC) and Dolby Ventures. (Zebra Medical Vision 19.12)

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    8.11 Check-Cap Announces $4.75 Million Private Placement

    Check-Cap announced that the company has entered into definitive agreements with certain investors to purchase approximately $4.75 million of its ordinary shares in a private placement. In connection with the offering, the Company will sell an aggregate of 2,720,178 ordinary shares at a purchase price of $1.75 per share. The private placement is subject to customary closing conditions and is expected to close during the week of December 23, 2019. Proceeds from the private placement are expected to be used for general corporate and working capital purposes.

    Usfiya’s Check-Cap is advancing the development of the C-Scan® System, the first and only preparation-free ingestible scanning capsule based system for the prevention of colorectal cancer (CRC) through the detection of precancerous polyps. The patient-friendly test has the potential to increase screening adherence and reduce the overall incidence of CRC. The C-Scan System utilizes an ultra-low dose X-ray capsule, an integrated positioning, control, and recording system, as well as proprietary software to generate a 3D map of the inner lining of the colon. (Check-Cap 20.12)

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    8.12 OurCrowd, Perrigo & BOL Win the Government Tender for Medical Cannabis Incubator

    OurCrowd, Perrigo and BOL Pharma today announced that the consortium they established won the tender issued by the Israel Innovation Authority to operate CanNegev, a medical cannabis incubator which will be located in Yeruham in the south of Israel. According to the terms of the tender, the consortium will operate the incubator for five years, with an option for an extension for a further three years. The Innovation Authority and the member companies of the consortium will invest tens of millions of shekels in the coming years, with estimates putting the total amount at NIS 150 million, to be invested in the operation of the incubator, support of startup companies and follow on investments. The plan calls for six startup companies with breakthrough technology in the medical cannabis field to be admitted into the incubator annually, for a total of 30 companies over the first five years of operation of the facility.

    Jerusalem’s OurCrowd is a global venture investing platform that empowers institutions and individuals to invest and engage in emerging companies. The most active venture investor in Israel, OurCrowd vets and selects companies, invests its capital, and provides its global network with unparalleled access to co-invest and contribute connections, talent and deal flow.

    Revadim’s BOL Pharma is a leading, vertically-integrated producer of medical cannabis and cannabis products in Israel, supplying patients, pharmacies and the pharmaceutical industry, and targeting export markets in the EU, as well as Canada and Australia. BOL Pharma is the first Israeli company with pharma-level GMP certification in line with international regulations, and plans to become a global leader in producing medical cannabis and innovative cannabis products, including new pharmaceutica l drugs intended to address unmet medical needs of patients in therapeutic areas including central nervous system disorders, pain and palliative care management, and inflammation and autoimmune disorders. (OurCrowd 23.12)

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    9: ISRAEL PRODUCT & TECHNOLOGY NEWS

    9.1 Sproutt Uses Data and AI to Finally Reward Life Insurance Customers Who Live Healthy

    Sproutt Insurance announced that it has launched and secured $12 million in Series A funding from State of Mind Ventures (SMOV), Moneta Capital and Guardian Life. Sproutt sets out to do what many of today’s players in life insurance do not: celebrate life. Sproutt’s mission is to look after the lives of those who look after theirs. Using their “Quality of Life Index” (QL Index), Sproutt believes it has never been easier to blend data analytics and human-aligned health insights, and then use artificial intelligence (AI) to discern a person’s life potential to match them with the best life insurance providers and policy.

    Enter “Gaia” (guy-a), the Guided Artificial Intelligence Assessment technology that powers the Sproutt QL Index. Based on established research of how various lifestyle behaviors impact longevity, Gaia is able to assess and correlate a variety of previously siloed human health attributes such as sleeping patterns, eating habits, and whether you own a pet, and then leverage them for a more precise assessment of a specific individual’s health. The assessment process and resulting QL Index score are used to provide personal insights, recommendations, and best matching life insurance product.

    Tel Aviv’s Sproutt is a new kind of life insurance company that loves life and rewards those who love theirs. It is our purpose is to use data and AI to finally reward people who live a healthy life with the best life insurance. They believe it’s important to live a balanced life that includes a reasonable amount of exercise, eating well and getting a proper amount of sleep. But they also believe that owning pets, being surrounded by friends and family, and feeling supported by your community, are equally important factors on longevity that should be rewarded. (Sproutt 12.12)

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    9.2 Lightbits Labs Launches Industry’s First NVMe/TCP Clustered Storage Solution

    Lightbits Labs advanced its software solution, LightOS, to deliver the first NVMe/TCP clustered storage solution. With more companies moving away from direct attached storage (DAS), and with storage requirements typically growing far faster than compute requirements, both public-cloud providers and private-cloud builders are looking for ways to separate storage and compute so each can scale separately. One of the limiting factors to scaling disaggregated storage, however, is the need for high availability across clusters of storage and compute. Lightbits LightOS delivers the availability, flexibility and efficiency of hyperscale cloud infrastructure to on-premise data centers. LightOS is now the first NVMe/TCP storage solution that protects against data loss and avoids service interruptions at scale. In the presence of server, storage, or network failures, LightOS maximizes operational efficiency, ensuring applications continue working in the presence of failures, and failover is handled automatically, keeping data fully consistent and available.

    Installed on commodity servers in large-scale data centers, LightOS is optimized for I/O intensive compute clusters, such as Cassandra, MySQL, MongoDB and time series databases. With end-to-end NVMe, LightOS delivers high performance and consistently low latency. The result is a 10X increase in storage reliability and 50% decrease in total cost of ownership (TCO). As a standard-based, target-only solution that does not require installing any proprietary software on the client side, the ease of deployment at scale is unmatched. LightOS is built to run in your existing data center, requiring no changes to application servers or your network infrastructure, so that deploying it at scale is a breeze.

    Haifa’s Lightbits Labs, founded in 2016, is remaking modern cloud infrastructure on a global scale. The company’s mission is to reinvent the way storage and networking are conducted in data centers. As trailblazers in this field, its solutions are successfully being used in industry-leading private cloud and enterprise data centers around the globe. (Lightbits Labs 11.12)

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    9.3 Panorays & Konfidas Collaboration to Provide Supply Chain Cyber Risk Management

    Panorays, which automates third-party security lifecycle management, has collaborated with Tel Aviv’s Konfidas, the leading Israeli managed security service provider (MSSP), to offer clients an end-to-end supply chain cyber risk management package. With this collaboration, Konfidas will help Panorays’ customers integrate and manage their third-party security processes. The combined service is already being used by a number of organizations, including banks and insurance companies.

    The Panorays platform provides transparency and control for companies that want to have the full picture of the cyber posture of their supply chain. It does this by combining automated, smart and customizable questionnaires with a continuous hacker’s view of the evaluated vendor. Panorays’ 360-degree view enables companies to understand and mitigate their security risk.

    For companies that seek a managerial solution as well, Konfidas offers a service that includes a custom risk management methodology, mapping of suppliers, suppliers’ surveys, regulatory consulting and management of the daily usage and management of the Panorays platform. In addition, Konfidas also offers a managed cybersecurity service and cyber insurance to comply with new market demands for these services and products. Hence, the collaboration offers a solution both for companies who manage their own cyber risks, as well as for those who wish to outsource their cyber protection. (Konfidas 11.12)

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    9.4 Silverfort Recognized as a Microsoft Security 20/20 Partner Awards Finalist

    Silverfort announced it has been named a finalist in the Microsoft Security 20/20 Partner award. The company was honored among a global field of top Microsoft partners for demonstrating excellence in innovation, integration, and customer implementation with Microsoft technology. At the inaugural Microsoft Security 20/20 partner awards, Silverfort was nominated as a finalist for Emerging ISV Disruptor.

    Tel Aviv’s Silverfort delivers secure authentication and Zero Trust across corporate networks and cloud environments, without deploying any software agents or inline proxies. Using patent-pending technology, Silverfort enables risk-based multi-factor authentication for all sensitive users, devices and resources, including systems that could not be protected until today, such as homegrown applications, IT infrastructure, file systems, machine-to-machine access and more. Silverfort allows organizations to prevent data breaches and achieve compliance instantly, by preventing identity-based attacks across complex, dynamic networks and cloud environments.

    The company has been named a CNBC ‘Upstart 100’, Gartner ‘Cool Vendor’, a 451 Research ‘FireStarter’, and received worldwide recognition, including the Most Innovative Adaptive Authentication InfoSec Award 2019, InfoSecurity 2018 Global Excellence Awards for Best Authentication Product, and is a gold winner of the Cybersecurity Excellence Awards in the Multi-Factor Authentication category. (Silverfort 17.12)

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    9.5 Cubed Mobile Named a 2019 Gartner Cool Vendor

    Cubed Mobile has been named a Cool Vendor in the Gartner Cool Vendors in Communications Service Provider Business Operations report. Cubed Mobile delivers comprehensive unified corporate communication and mobile device management with complete protection, communication, and productivity in a single package. The complete workspace, encapsulated into an app, transforms any phone into a unified communication hub and mobile workspace. The platform simplifies the corporate mobile experience and improves work-life-privacy balance by providing a self-contained, centrally managed virtual smart phone that can be installed into any device, allowing complete separation between the corporate and personal environments using separate runtime environments and phone lines.

    Cubed Mobile accelerates workforce digital transformation by eliminating the need for employees to have a second device and/or a second SIM, creating a complete separation between personal life and work – different phone numbers, contacts, ringtones, apps, etc. The intuitive UI allows for minimal training and shallow learning-curve, all with flexibility, security and control.

    Kibbutz Einat’s Cubed Mobile combines the best of unified communications with the highest levels of mobile and endpoint device management in a single solution. SMBs and SMEs benefit from a convenient system that delivers protection, communication, and productivity in a single package. . Customers include everything from small sales organizations to large-scale enterprises. (Cubed Mobile 17.12)

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    9.6 Wi-Charge PowerPuck, an Ultra-Compact Long-Range Wireless Charger

    Wi-Charge announced the PowerPuck — an ultra-compact long-range wireless charger for smart and IoT devices. Built with Wi-Charge’s safe and efficient AirCord technology, the PowerPuck plugs into a wall outlet or screws into a lightbulb socket, and powers compatible devices wirelessly from distances up to 30 feet. Commercial samples of the product are now available to qualified partners.

    PowerPuck’s sleek form factor coupled with its fast and flexible installation eliminate the need for constant battery changes and take away the hassle of running cables to smart devices. Like other Wi-Charge products, the PowerPuck delivers constant power regardless of distance, and is completely safe for consumers. The PowerPuck is slightly larger than a Nest Thermostat and is very easy to install in a variety of ways. For example, an Edison screw adapter makes it compatible with numerous light fixtures, and a socket adapter allows the PowerPuck to plug directly into a standard wall outlet. Once installed, the PowerPuck automatically locates compatible receivers and initiates power transfer. The receivers can be as small as 0.5 x 0.5 inches and are typically embedded in the charged devices themselves.

    Rehovot’s Wi-Charge is the long-range wireless power company, founded with the goal of enabling automatic charging of phones and other smart devices. Our patented infrared wireless power technology can safely and efficiently deliver several watts of power to client devices at room-sized distances. It gives end-users the freedom they crave and product designers the power they need to usher in the next generation of mobile smart devices. (Wi-Charge 17.12)

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    9.7 Tactile Mobility & HERE Technologies Partner to Increase Access to Tactile Data

    Tactile Mobility and Amsterdam’s HERE Technologies, a global leader in location platform services, announced a partnership to release and commercialize Tactile Mobility’s unique tactile virtual sensing data, including data on road conditions, on the HERE Marketplace for location-based data. Joining other premium mobility brands, Tactile Mobility will expand its commercial reach to automotive and municipal customers seeking tactile data.

    Tactile Mobility’s newfound commercial relationship with HERE will accelerate the sale of tactile data to companies seeking to develop services and products based on how vehicles “feel” the road. The HERE Marketplace will enable large collections of tactile data to be brought to market for a range of potential customers and support the easy transmission of data for new location-based applications and solutions.

    Currently embedded in multiple major car manufacturers’ vehicles, Tactile Mobility’s software utilizes a vehicle’s built-in, non-visual sensor data, including wheel speed, wheel angle, RPM, and more, to calculate valuable information on vehicle-road dynamics and to create two data models that enable safer and more enjoyable driving in diverse environments: VehicleDNA, a representation of each vehicle’s unique characteristics, including engine and braking efficiency, tire health, and fuel consumption; and SurfaceDNA, a mapping layer of road conditions and hazards that offers an in-depth and real-time view of driving environments to support planned maintenance, live hazard detection, post-accident analysis, and more.

    Haifa’s Tactile Mobility is the world’s leading tactile virtual sensing technology and data provider, enabling actionable insights for smart and autonomous vehicles, municipalities and fleet managers. Tactile Mobility’s unique technology collects “first principle,” crucial, real-time data generated from cars’ non-visual, existing sensors and turns it into actionable insights such as road quality, tire grip, vehicle weight, and other vehicle- and road-specific models. (Tactile Mobility 18.12)

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    9.8 SafeRide & NXP Advanced Vehicle Health Monitoring With AI-based Anomaly Detection

    SafeRide Technologies and Eindhoven’s NXP Semiconductors announced the integration of vSentry Edge AI – an embedded behavioral profiling and anomaly detection solution for connected vehicles with the NXP vehicle network processors. Based on SafeRide’s vXRay AI technology, and combined with the NXP vehicle network processors, vSentry Edge AI delivers real-time advanced vehicle health monitoring capabilities and provides valuable insights for OEMs on cybersecurity, predictive maintenance and vehicle performance.

    vSentry Edge AI uses advanced machine learning and deep learning technology to establish the normal behavior of the vehicle, without dependencies or previous knowledge of the vehicle system’s properties and protocols. Once the normal behavior is established, the machine learning models can accurately detect, categorize, and flag any abnormal behavior and report it in real-time. Embedded in the central vehicle gateway, vSentry Edge AI monitors all the in-vehicle communications, including control signals and sensors data.

    Tel Aviv’s SafeRide Technologies is the provider of vSentry™, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security and unlock data driven services. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyber-attacks, and helps to improve operational efficiency, avoid financial damage, prevent reputation loss, and save lives. (SafeRide 18.12)

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    9.9 Chicony & Emza’s First Battery-Powered, AI-based Human Sensing Solution for IoT

    Taipei, Taiwan’s Chicony Electronics Co., a multinational electronics manufacturer of input devices, power supplies and digital imaging products, and Emza Visual Sense announced that a reference design of the world’s first battery-powered human sensing solution for the Internet of Things (IoT) is now available to customers.

    Chicony and Emza are bringing the sense of sight to IoT products and systems. Where cameras and motion detectors do not have the intelligence or accuracy to effectively sense and differentiate people, the jointly developed human sensing solution does. Its unique ability to exclusively detect human beings, and their activities, results in reduced false positives and increased cost-effectiveness. The compact unit installs easily, with no infrastructure requirements, and maintains privacy by not storing images.

    Givatayim’s Emza Visual Sense (Emza) designs, develops, manufactures and markets always-on, ultra-low-power, clever visual sensor solutions allowing for the wide adoption of artificial intelligence (AI) in a variety of applications. They enable computer manufacturers, appliance OEMs and IoT solution providers to make their products and systems smarter, in industries spanning Smart Home/Building, Consumer Electronics, Automotive and more. Their always-on WiseEye® platform – which integrates unique machine-learning trainable algorithms with a specialized CMOS sensor and AI SOC processor – sits at the edge of the Cloud to optimize data and bandwidth usage, maximize privacy and minimize latency and computing/storage costs. (Emza Visual Sense 18.12)

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    9.10 Radiflow Wins 451 Firestarter Award for Its OT MSSP Partner Program

    Radiflow announced that the company has been recognized with a 451 Firestarter Award from 451 Research, a leading technology research and advisory firm. Radiflow has earned this 451 Firestarter award for its OT MSSP partner program and the framework it has created for equipping managed security service providers (MSSPs) with the technologies and expertise needed to secure and protect critical and vulnerable operational technology (OT) environments, including industrial control systems (ICS) and supervisory control and data acquisition (SCADA) systems on industrial automation networks.

    Radiflow works closely with each of its OT MSSP partners to implement new OT cybersecurity services based on its portfolio of industrial cybersecurity solutions. These services can include monitoring the network and networked assets, provisioning software updates and patches, assessing and mitigating vulnerabilities, optimizing end user cybersecurity expenditures and more. Many of Radiflow’s OT MSSP partners are leveraging the company’s business-oriented risk assessment tools to map business processes and prioritize OT risk mitigations that reduce the potential for business interruptions.

    451 Firestarter awards recognize organizations for exceptional innovation and disruption in their markets. Firestarter awards are given to technology firms based the insights and expert opinions on long term trends and competitive landscapes of 451 Research’s analyst team.

    Tel Aviv’s Radiflow develops trusted industrial cybersecurity solutions for critical business operations. The company offers a complete portfolio of game-changing solutions for ICS/SCADA networks that empowers users to maintain visibility and control of their OT networks, including an Intelligent Threat Detection tool that passively monitors the OT network for anomalies as well as Secure Gateways that protect OT networks from any deviations from set access policies. (Radiflow 19.12)

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    10: ISRAEL ECONOMIC STATISTICS

    10.1 Israel’s Inflation Rate for November Fell by 0.4%

    Israel’s Consumer Price Index (CPI) fell 0.4% in November, the Central Bureau of Statistics announced, at the extreme end of the economists’ predictions. Over the past twelve months to the end of November, the index rose 0.3%, well below the government’s 1% – 3% annual inflation target range. Prices have risen by 0.6% since the start of 2019.

    Fresh fruit and vegetable prices fell 4.2% in November, fashion and footwear prices fell 2.1% and public transport prices fell 1.1%. Prices traditionally fall in November after the holiday season. The housing price index continues to rise. Home prices in the September-October period rose 0.6% in comparison with August-September. Home prices have risen 2.6% over the past 12 months. (CBS 15.12)

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    10.2 Composite State of the Economy Index for November 2019 Rises by 0.2%‎

    The Bank of Israel’s Composite State of the Economy Index for November increased ‎by 0.24%. ‎The Index’s rate of increase reflects growth at the long-term pace. ‎ The Index for November ‎was positively affected by increases in the industrial ‎production index and in the retail trade and ‎services indices for October.‎ In contrast, ‎there were declines in consumer goods imports, ‎consumer goods exports, and in the ‎import of inputs in November, which moderated the ‎increase in the Composite ‎Index. There were no significant revisions to the overall Index for ‎previous months.‎ (BoI 23.12)

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    10.3 Immigration to Israel Surging and Asylum Seekers No Longer Arriving

    On 16 December, the Central Bureau of Statistics announced that Israel is on pace for a 20% surge in immigration in 2019 over 2018. In 2019, some 27,300 people immigrated to the Jewish state between January and the end of October, 20% more than the same period last year. Over 28,000 new immigrants moved to Israel in 2018, according to the report. The 27,300 figure would put Israel on pace to break 32,000 new immigrants for the entirety of 2019, though figures are expected to slow for the winter months. The bureau reported that more than 37,000 people in total moved to Israel in 2018, including 3,500 “returning citizens.” The largest number of migrants in 2018, about 10,500 people, came from Russia while 6,400 hailed from Ukraine, 2,400 from the United States and 2,400 from France.

    The official report also spotlighted the sharp fall in asylum seekers from Africa entering the country, with not a single person in the category in 2018. According to authorities, some 2,700 asylum seekers left the country in 2018. It said 33,600 migrants from Eritrea and Sudan remained in the country as of late 2018.

    According to the report, more than 3 million people have immigrated to Israel since the establishment of the state, with around 44% of them arriving after 1990. Some of the rise in immigration could be attributable to a law passed in 2017 granting an Israeli passport to anyone eligible for Israeli citizenship, without any requirement to reside in the country.

    According to statistics released by the bureau earlier this year, 2018 marked the first time in Israel’s history when Jewish immigrants to Israel were outnumbered by non-Jewish immigrants. Under Israel’s Law of Return, anyone with a single Jewish grandparent is eligible for citizenship. Such immigrants, hailing largely from the former Soviet Union and Baltic states, count Jewish ancestry but are ineligible to marry as Jews under the state-controlled rabbinic court system if, for example, that single Jewish grandparent was male. (CBS 16.12)

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    11: IN DEPTH

    11.1 ISRAEL: Notable Increase in Late-Stage Funding Allows More Israeli Firms ‎To Grow

    No Camels reported on 16 December that a significant increase in later-stage funding is allowing more Israeli tech companies and ‎startups to grow and expand without going down the road of acquisition or having to raise ‎money on the public markets, according to Start-Up Nation Central (SNC), the Israeli non-profit ‎organization that tracks Israel’s tech ecosystem.‎

    In a new report published this month, SNC said the biggest trend in Israel’s tech industry in ‎‎2019 is firms raising money in growth stages. Late-stage funding this year climbed to $5.24 ‎billion, up from $3.45 billion in 2018, according to the organization’s findings. This marks an ‎increase of over 50%, coming on the heels of relative stagnation over the previous three ‎years, wrote Meir Valdman, senior research analyst at SNC. ‎

    Growth-stage funding rounds are on the rise, according to Start-Up Nation Central.‎

    In 2019 alone, there were at least 15 rounds of $100 million or more raised by Israeli companies, ‎compared to just four rounds in 2018, the report stated. Of these 15 rounds, six were for ‎financial tech (fintech) companies including insurance tech firms Lemonade and Next insurance, ‎which raised two of this year’s largest rounds – $300 million in Series E and $250 million in ‎Series C, respectively. Another two large investments went to cybersecurity companies ‎Cybereason ($200 million) and SentinelOne ($120 million). Three investments went into ‎industrial technologies companies -Vayyar with $109 million, Innoviz with $132 million, and ‎Fabric with $110 million). And another two for software applications companies, as well as one ‎for media and telecommunications.‎

    Investors in these large rounds were dominated by foreign VCs, with General Catalyst ‎participating in three of the 15 rounds, followed by Softbank, Bessemer Partners, Insight ‎Partners and HarbourVest with two each. Israeli investors ClalTech, Vintage Investment ‎Partners and Ion Crossover Partners also invested in two each.‎ The prevalence of foreign investors is a global trend, wrote Valdman. In 2019, there were some ‎‎442 VC-led rounds globally of $100m and over – the highest number ever – according to ‎Pitchbook.

    In Israel, there’s also a noted increase in later stage round size more generally. The median ‎round size at later stages increased from $18.25 million in 2018 to $26 million in 2019 – an ‎increase of over 40%, SNC said. Series C rounds and beyond saw an increase of 56 ‎percent, from a median of $25 million in 2018 to $39 million this year.‎ This signals that startups based in Israel can raise substantial growth rounds (C and above) ‎‎“and are not forced to sell or move locations after their B round or earlier as frequently occurred ‎in the past,” according to the SNC report. ‎

    Significant growth rounds explain in part why the value of exits has declined in recent years ‎‎“despite the continued boom in the sector.” M&As, wrote Valdman, “have declined from a peak ‎of $7 billion in 2017 to $4.3 billion in 2019 as companies opt to raise more capital, grow and stay ‎private rather than look to be bought.” ‎

    The IVC Research Center released a report this month noting that the increase in later-stage ‎funding has contributed to a decline in newly established companies.‎ ‎“The prolonging uptrend in Israeli high-tech capital raising boosted the local ecosystem with a ‎steady stream of capital that flew mainly to mature and growing companies,” wrote IVC.‎ According to its findings, IVC said that in the first three quarters of 2019, only 83 seed deals ‎were recorded, raising a total of $118 million. The number of deals lower than $1 million is ‎sharply declining – from 394 deals in 2014 to 332 deals in 2018, and down to 158 deals under $1 ‎million in Q1-Q3/2019.‎

    A slide from the IVC’s 2019 report on the decline of newly established companies. ‎

    This trend may slowly be “eroding early-stage startup activity,” IVC suggested, as the number ‎of newly established companies is declining.‎ In 2018, only 707 new companies were formed, down from 1,383 in 2014, just four years prior. ‎IVC did not yet disclose the figures for 2019 but said they were “low” and suggested that the ‎Israeli high-tech industry “will witness a negative record in the number of newly established ‎companies and their capital raising results.” ‎

    Exits Fall

    Early this year, PwC Israel released a report on the Israeli high-tech ecosystem scene, noting ‎that, the number of high-tech exits – merger and acquisition deals and initial public offerings — ‎declined sharply over the course of 2018, decreasing by 33% compared to 2017.

    In 2018, there were 61 exit deals accounting for a total of $4.9 billion (a figure that excludes ‎high-profile but non-tech deals such as the acquisition of SodaStream, and Frutarom), ‎compared to 70 for a value of $7.4 billion in 2017. The average deal size in 2018 was around ‎‎$81 million, compared to $106 million in the previous year.

    The report suggested that the decline in exits in 2018 is directly related to a more cautious and ‎long-term approach whereby Israeli companies and entrepreneurs are halting their exit process ‎in favor of a potentially greater, more profitable acquisition in the future. Some of the concerns ‎involved also relate to the ongoing US-China trade feud, the relative instability of global ‎markets and rising interest rates.‎

    PwC Israel partner, head of advisory services, and transaction services leader Liat Enzel-Aviel ‎was quoted as saying: “It appears that the decline in the number of high-tech deals is due to ‎continued development by companies in the sector and growth possibilities that are postponing ‎the sale of companies.” (NC 16.12)‎

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    11.2 ISRAEL: Israel Exits Double in Value in 2019

    Globes reported that the Israeli technology industry posted 587 exits over the past decade – companies that were sold or held stock exchange offerings – with a total of $71 billion. If follow-on deals, companies acquired more than once or acquired after holding an offering, are taken into account, the amount rises to $108 billion.

    The volume of exits in 2019, according to a new report by consultation company PwC, comes to $9.9 billion, double the volume in 2018 and 33% more than in 2017. PwC excluded 10 follow-on deals, among them the acquisitions of Mellanox, ClickSoftware Technologies and Lumenis. If these deals are included, the volume of deals in 2019 rises to $22 billion. While the volume of deals has fluctuated over the years, the number of deals in the past year, 80, was the highest in the past decade. 67 of these deals were mergers, and 13 were offerings.

    There was one deal amounting to over $1 billion in 2019 – Intel’s acquisition of Habana Labs for $2 billion. Three deals were in the $500 million-$1 billion range, and 20 more were in the $100-500 million range. There were 24 deals of over $100 million each in 2019, compared with 17 last year and 23 in 2018.

    Half of the volume of deals, $4.5 billion, was in the computing services and software for corporations sector. Deals in the internet sector totaled $1 billion, deals in the life sciences totaled $1.7 billion, and deals in the chips sector totaled $2.3 billion (featuring the Habana Labs deal). Other prominent deals this year were two acquisitions by Palo Alto Networks: Demisto and Twistlock, for $560 million and $410 million, respectively, and McDonald’s acquisition of Dynamic Yield for $300 million. The large-scale merger of Israeli companies Taboola and Outbrain was not included in the report. There were three prominent IPOs in 2019: Fiverr, which developed a trading platform for freelancers; cybersecurity company Tufin; and medical devices company InMode.

    The US was again the leading acquirer of Israeli companies with 48 deals, 60% of the total, amounting to $8.9 billion. Israeli companies made 11 acquisitions, but their aggregate value was only $230 million.

    Commenting on the figures, PwC Israel high-tech partner Yaron Weizenbluth said, “The local technology market has become an efficient machine for entrepreneurs supported by, and supporting, a professional and focused ecosystem. Early in the decade, it was said that one of the weaknesses of Israeli entrepreneurs was their haste to sell. Now, at the end of the decade, Israeli entrepreneurs have gained more confidence than ever before, and are willing to go a long way before making a decision.

    “On the other hand, it is impossible to ignore the fact that the value achieved by many of the technology companies arouses quite a few questions. To this should be added a trend, the consequences of which cannot be assessed at this stage: the decline in the amount of funding raised by startups in the early stages, as well as uncertainty about future trends in the global economy.” (Globes 24.12)

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    11.3 ISRAEL: Israel’s International Investment Position (IIP), Third Quarter of 2019‎

    The Balance of Israel’s Assets Abroad

    The balance of the assets abroad held by Israeli residents increased by about $3.7 billion (about ‎‎0.8%) in the third quarter of 2019, to approximately $470 billion at the end of September. The ‎increase in the asset portfolio derived from the flow of direct investments abroad by Israelis, ‎investments in the securities portfolio abroad, and from an increase in the prices of securities ‎held by Israeli residents. This increase was partly offset as a result of the effect of the ‎exchange rate, which reduced the asset balance, primarily in reserve assets.

  • The value of direct investments increased by about $1.8 billion (1.7%) in the third ‎quarter. This was mainly as a result of the flow of net direct investments in equities totaling ‎about $1.4 billion (1.5% of the balance of investments in equities).‎
  • The value of the securities portfolio increased by about $3.7 billion (2.3%) in the third ‎quarter, mainly as the result of the flow of financial investments in equities by about $2.3 ‎billion (2.6% of the balance of financial investments in equities) and of price increases of ‎foreign equities (totaling about $0.5 billion, 0.5%) and bonds (totaling about $0.7 billion, ‎‎1.0%) held by Israeli residents. In addition, in the third quarter there net investments in ‎foreign bonds totaling about $0.4 billion (0.6%). Most of the financial investments (in ‎foreign equities and bonds) were by institutional investors.‎
  • The value of other investments abroad decreased by about $0.8 billion (0.9%) in the third ‎quarter, mainly due to net withdrawals from Israeli deposits abroad totaling about $1.8 ‎billion and due to net withdrawals by Israeli banks from deposits abroad of about $1.6 ‎billion. In contrast, there were financial loans that Israeli residents provided to ‎nonresidents at a scope of about $1.4 billion and investments in other assets of about $1.1 ‎billion. ‎
  • The value of the foreign exchange reserves decreased by about $0.6 billion (about 0.5%) ‎in the third quarter, to about $120 billion at the end of the quarter. The decline in the value ‎of the reserves derived from the impact of the exchange rate on the reserves, and in ‎particular by the strengthening of the dollar vs. the euro.
  • The composition of Israelis’ securities portfolio abroad: In the third quarter, there was ‎an increase in the value of assets in equity instruments that was greater than the increase ‎in the value of assets in debt instruments. As a result, there was an increase in the third ‎quarter of 0.7% in the share of equity instruments in the portfolio of Israeli residents’ ‎assets abroad, to 44.6% of the total portfolio at the end of September.‎
  • ‎1. Israel’s Liabilities Abroad

    The balance of Israel’s liabilities to abroad increased by about $0.3 billion (0.1%) in the third ‎quarter of 2019, to about $320 billion at the end of September. Most of the increase derived ‎from the flow of direct investments in Israel by nonresidents and from investments in the ‎securities portfolio (mainly bonds). These investments were partly offset by declines in prices ‎of Israeli shares held by nonresidents, and by net realizations in other investments.

  • The value of direct investments in Israel increased by about $3.6 billion (2.3%) in the ‎third quarter. The increase derived mainly from the net flow of direct investment by ‎nonresidents in Israeli equities of about $3.6 billion.‎
  • The value of the securities portfolio declined by $1.8 billion (1.6%) during the third ‎quarter, mainly due to the decline in the prices of Israeli shares held in the portfolio, ‎totaling $3.6 billion (4.7% of the balance of financial investments in Israeli equities). In ‎contrast, there were net investments by nonresidents in Israeli bonds, totaling $2.2 billion ‎‎(6.2% of the balance of financial investment in bonds).‎
  • The value of nonresidents’ financial portfolio on the Tel Aviv Stock Exchange, which ‎makes up a part of nonresidents’ financial investments in Israel, increased by about $3.8 ‎billion in the third quarter, to about $47.1 billion at the end of September. The change in the ‎value of the portfolio was due to the flow of investment into Israeli bonds and by an ‎increase in the prices of Israeli equities traded in Israel (direct and in the financial ‎portfolio). ‎
  • The value of other investments in the economy declined during the third quarter by about ‎‎$1.5 billion (2.7%), mainly as a result of the repayment of suppliers’ credit and the maturity of ‎financial loans of about $0.7 billion and $0.4 billion, respectively.
  • The balance of liabilities in debt instruments alone, which makes up Israel’s gross ‎external debt, increased by about $0.3 billion (0.3%) in the third quarter of 2019, to about $98.3 ‎billion, mainly due to the issuance abroad of about $0.6 billion in government bonds.‎

    The ratio of gross external debt to GDP declined by 0.4% in the third quarter, to 25.6% at the ‎end of September. The decline in the debt to GDP ratio reflected a rate of increase in the ‎balance of gross external debt that was smaller than the rate of increase in GDP.‎

    2. Israel’s Surplus Assets Over Liabilities Abroad

    Israel’s surplus of assets over liabilities vis-à-vis abroad increased by approximately $3.4 billion ‎‎(2.3%) in the third quarter, to about $150 billion at the end of September. The increase in ‎surplus assets over liabilities abroad was a result of an increase in outstanding assets that was ‎greater than the increase in outstanding liabilities.‎

    3. Net External Debt

    The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net ‎external debt) decreased by 1.5 billion (0.9%) during the third quarter, to $162 billion at the end ‎of September.‎

    The balance of short-term debt assets (maturity/realization within a year) increased in the ‎third quarter by $2.7 billion, to $166.4 billion at the end of the quarter, of which $120 billion is in ‎the Bank of Israel’s foreign exchange reserves. This reflects a coverage ratio of 4.3 times ‎short-term debt. (BoI 17.12)‎

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    11.4 LEBANON: Lebanon’s Free Fall

    Mona Alami posted on 19 December in Sada that Lebanon’s long-standing economic crisis takes a new turn in the face of protracted protests, cabinet reshuffling, and scarce money supply.

    Lebanon is in the midst of the worst economic and financial crisis since the onset of its civil war in 1975. The economic crisis triggered massive anti-government protests, resulting in the cabinet’s resignation in October. Deteriorating economic conditions and scarce dollars led to a restrictions on the permitted value of withdrawals of both U.S. dollars and Lebanese pounds. Despite the Central Bank’s intervention, the Lebanese pound lost over 30% of its value, reaching 2,000 Lebanese pounds to the USD. Lebanese citizens are taking severe measures as they face difficult economic conditions, lose their jobs or fail to provide for their families. Following years of economic mismanagement, Lebanon is facing dark days, and still more ahead.

    The crisis engulfing Lebanon did not happen overnight. Over the past few years there has been ample warnings of looming economic collapse. Following the civil conflict in the 1990s, Lebanon adopted a short-term economic vision, built on services, mainly catering to neighboring countries and, therefore, highly dependent on the regional political environment. To rebuild the country, Prime Minister Rafic Hariri’s government focused on appealing to foreign depositors by offering attractive interest rates. Offsetting interest rates created a rentier economy and impeded the development and diversification of the productive sector. The government and the Central Bank decided to peg the Lebanese pound (LL) to the dollar and maintain parity at LL 1515 against the dollar. In the long run, this proved to be a costly move as it slowly depleted dollar reserves. For years, political haggling hindered necessary reforms, the absence of which, in turn, led to increased corruption and continuous instability.

    In the early 1990s, Lebanon also engaged in a large-scale reconstruction project of more than $18 billion to propel Lebanon as a regional tourism, real estate, and financial hub. These sectors, however, were highly dependent on funds from wealthy regional investors and the Lebanese diaspora. The latter group represented more than half of total tourist arrivals after the 2008 Doha agreement, which ushered in a short phase of political stability across the country. The real estate sector had grown considerably following the reconstruction of downtown Beirut. Growth spread across the rest of Lebanon, which led to a speculation upsurge until the 2011 Syria war. The drop in global oil prices, and what followed it in terms of economic downturn in the Gulf, the war in Yemen and prior to those the war in Syria – all destabilized the political and security environment in Lebanon. The economic downturn in Gulf countries, the war Yemen, and the Gulf crisis, also eroded regional tourists and investors’ purchasing power. Even more, the 400,000 Lebanese diaspora members also experienced a diminished financial ability to buy goods and services.

    The dynamic rise of Lebanon’s banking sector has also been slowing down. Since 1992, the government’s decision to undertake regular issues of treasury bills to finance the country’s reconstructions has significantly impacted how banks operated. In order to attract deposits that allowed the banks to finance the debt, the government pushed higher interest rates. By 2019, rates reached an all-time high, reaching over 8% on the dollar and over 12% on the Lebanese pound. Moreover, the interest rate differential resulted in predatory speculative trends, benefiting the wealthiest classes. These rates not only impacted Lebanon’s treasury by contributing to a rapidly growing debt but also limited the business sector’s growth. Banks preferred to invest in treasury bills, thus failing to diversify their risks. Banks began lending less and less to the private sector, whose productive capacity was already weakened by the civil war. Fadi Makki, an expert in behavioral economics, and the founder of Nudge Lebanon and the Consumer Citizen Lab, asserted that “the rentier economy crowded out entrepreneurs.”

    The massive use of the dollar in the Lebanese economy and the maintained parity of the Central Bank’s exchange rate against the dollar continued to grow. According to Senior Economist and Head of Research at BLOM bank Marwan Mkhael, the treasury faced increased pressure as Lebanon experienced prolonged economic shocks. These shocks came on the heels of destabilizing political events including, the Israeli aggression of 1996, the assassination of Prime Minister Rafic Hariri in 2005, the 2006 Hezbollah War – all of which resulted in capital flight. Mkhael noted that while most previous shocks had an average duration of about three months, the current economic decline has persisted since 2011. Dropping remittances, the use of CB dollar reserves to defend the lira, and declining growth rates contributed to a bleeding of the Lebanese state’s coffers.

    Still, the political class refuses to implement structural reforms. The dysfunction of the electrical sector alone accounts for over $37 billion losses of the country’s $87 billion debt. According to the Corruption Perceptions Index, Lebanon’s corruption reached a record high ranking of 143 out of 175 in 2017, a stark drop from its 2006 score of 63. Mkhael notes that the balance of payment deficit worsened from 2011 onward, recording a cumulative deficit of $18.5 billion at the end of July 2019. The deficit climbed from $3.1 billion in 2014 to $6.2 billion in 2018, according to figures provided by Byblos Bank.

    Furthermore, unprofitable investments in Turkey and Syria, as well as the deterioration of financial indicators such as Credit Default Swaps (the exchange contracts against the risk of default of the Lebanese government), compounded the increasing balance of payments deficit. These factors, along with the deterioration of the sovereign debt ratings, pushed the Central Bank to intervene several times on the market through financial engineering operations. The Fitch rating agency has also downgraded Lebanese banks’ viability ratings (VR) from ccc-.to f. Furthermore, allegations of Lebanese Oil importers backed by politicians, smuggling over $1.7 billion to Syria added fuel to fire. If true, this monetary trafficking would have contributed to draining the Lebanese market of its dollars.

    The growing incapacity of the state to finance its expenditures and debt heralded a new and dangerous turning point for Lebanon. “As the state’s revenues drop as more and more businesses close down and the political stalemate continues, the inability of the government to pay public employees’ salaries in the next few months is becoming a reality,” says a source from the Finance Ministry.

    Lebanese food and oil traders increasingly complain about their inability to finance imports. Severe shortages in essential goods such as food, pharmaceuticals, and oil products inevitable, with hospital staff and medical equipment importers already sounding the alarm. Many businesses are closing their doors. An increasing number of businesses are closing their doors. In 2019, 265 restaurants have shut down; over 10% of Lebanese companies are believed to have gone out of business and over 22% have reduced staff levels by 60%. In addition, business owners are reportedly cutting salaries by half.

    Hopes of a new, competent cabinet that could inspire trust are eroding each day. The country appears to be in free fall. Unemployment and the bankruptcy of major corporations are expected to grow in the next few months, increasing dollar scarcity, hyperinflation and the inaccessibility of basic goods. These are but a few of the many immediate threats awaiting Lebanon. Economic pressure will only further mobilize citizens to take to the streets and amplify violent trends, leaving Lebanon’s state nothing but bleak.

    Mona Alami is a nonresident fellow at the Atlantic Council and at Trends Research and Advisory. (Sada 19.12)

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    11.5 LEBANON: Lebanon Defense Market Report 2019

    The “Lebanese Defense Market – Attractiveness, Competitive Landscape and Forecasts to 2024” report has been added to ResearchAndMarkets.com’s offering.

    Lebanon’s defense and security expenditure is expected to register a CAGR of 5.69% over the forecast period to reach $3.6 billion in 2024. Lebanon’s military and security expenditure is valued at $2.7 billion in 2019, registering at CAGR of 5.08% during 2015-2019, and the country is anticipated to record a CAGR of 5.69% over the forecast period to value $3.6 billion in 2024. As a percentage of GDP, the country’s defense and security expenditure averaged 4.7% over the historic period and is expected to remain the same at an average of 4.7% over the forecast period.

    The country faces sectarian violence, threats of militancy, homegrown extremism and unrest at refugee camps. The Syrian civil war and the Israeli-Lebanon conflict have resulted in a large number of refugees’ crossing the border into Lebanon, which has burdened the Lebanese economy, led to sectarian violence, and complicated its internal security. Lebanon is rife with sectarian violence and is also heavily impacted by the problem of drug trafficking, hence there is a need to protect the country against communal violence and narcotics smuggling. The modernization of the police force and developing domestic infrastructure are the primary areas that the country is expected to invest in over the forecast period.

    The country’s capital expenditure allocation stood at an average of 33% during the historic period and is expected to decrease to 32.5% over the forecast period. Lebanon is not endowed with oil reserves and lacks the economic ability to invest in expansive defense capabilities, unlike its neighboring Middle Eastern countries.

    Missiles, aircraft and armored vehicles cumulatively accounted for 81.4% of imports during 2014-2018, with the US being the biggest supplier with 76.9%. Other significant import partners include Brazil, Canada, France, Italy, Jordan and the UAE. The country’s small defense budget and lack of military manufacturing capability forces the Lebanese armed, naval and air forces to rely on imports. The country is not expected to export any arms to foreign countries, as Lebanese domestic defense is under-developed.

    The Lebanese government does not allow foreign direct investment in its military and security sector. The country’s small defense capital expenditure does not equip it with the bargaining power to impose offsets on procurement deals. Participating in government-to-government deals is the preferred route for foreign defense manufacturers and equipment suppliers to enter the Lebanese defense market.

    Plagued by sectarian violence, the country faces increasing threats of militancy, homegrown extremism, and unrest in refugee camps. In addition, the Syrian civil war has resulted in a large number of refugees crossing over to Lebanon to live in camps. As a consequence, these refugee camps have increased the burden on the Lebanese economy by fueling sectarian violence in the country and complicating its internal security. Lebanon’s military expenditure, which is valued at $2.7 billion in 2019, registered a CAGR of 5.08% during 2015-2019.

    Moreover, the country is anticipated to record a CAGR of 5.69% over the forecast period to value $3.6 billion in 2024. As a percentage of GDP, the country’s defense and security expenditure is estimated to average 4.7% and is the same over the historic period and forecast period. (R&M 16.12)

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    11.6 KUWAIT: Fitch Says Kuwait Political Mess Likely to Weigh on Economic Reforms

    The Kuwaiti government’s resignation and subsequent cabinet reshuffle point to political frictions that could delay new debt issuance and weigh on broader fiscal and economic reforms, according to Fitch Ratings. In a new research note, the agency said Kuwait has been the slowest reformer in the Gulf Cooperation Council in recent years, partly due to these frictions and partly due to its exceptionally large sovereign assets, which could finance decades’ worth of fiscal deficits. Parliamentary authorization to issue or refinance debt expired in 2017 and governments have been unable to secure approval for renewed borrowing.

    Fitch had assumed this would happen in the fiscal year to end-March 2020 (FY19/20), but given continued political acrimony, we now think it will be delayed until FY20/21. Fitch estimates Kuwait’s central government gross financing need at about $23 billion (17% of GDP) for FY19/20, despite their expectation of a roughly balanced budget. This reflects the government’s legal obligation to transfer 10% of its revenue into the Reserve Fund for Future Generations (RFFG) and the fact that principal or income from the RFFG is not available for financing without special legislation.

    Fitch estimates that RFFG foreign assets were about $500 billion at end-FY18/19 and assume these would be made available for financing if required, although this would generate further controversy in parliament. The government’s financing needs are currently being met entirely from the General Reserve Fund.

    Fitch noted that rising financing requirements will further deplete easily available reserves without measures to increase revenue or cut spending, even if debt issuance resumes in FY20/21. “We forecast a budget deficit of over 5% of GDP by FY21/22 (including estimated investment income) as average oil prices fall further, increasing the annual central government financing need to $27 billion. Implementation of excise or value-added tax remains a remote prospect, subsidy reforms have been limited, and the government has struggled to contain current spending through executive measures while managing an uncooperative parliament,” the ratings agency said.

    In November, Kuwait’s Prime Minister of more than seven years resigned and refused to be reappointed. The Emir subsequently replaced the caretaker Interior and Defence ministers and asked the Foreign Minister to form a government. This followed attempts in parliament to secure a no-confidence vote in the Interior Minister, a senior royal family member, over alleged financial irregularities. The Minister of Defence Sheikh Nasser – at 71 years old, the eldest son of the Emir – had called for an investigation by the public prosecutor and boycotted cabinet meetings over this.

    Conflicts between an appointed government and an elected parliament are a recurring feature of Kuwaiti politics but Fitch said the latest public dispute involving senior royals reflects an underlying struggle for influence ahead of the November 2020 election and an eventual leadership transition. Kuwait’s Emir, 90-year-old Sheikh Sabah, retains firm control of government affairs, but recently underwent medical treatment in the US. Crown Prince Nawaf is 82 years old and is a half-brother of the Emir. Consultations on the composition of the new Cabinet are continuing. (Fitch 20.12)

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    11.7 MOROCCO: IMF Completes the Second Review Under Liquidity Line Arrangement

    On 13 December 2019, the Executive Board of the International Monetary Fund (IMF) completed the second review under the Precautionary and Liquidity Line (PLL) Arrangement for Morocco. The two-year arrangement supports the authorities’ policies to strengthen the economy’s resilience and promote higher and more inclusive growth. The Moroccan authorities have not drawn on the arrangement and continue to treat it as precautionary.

    The PLL arrangement for Morocco in the amount equivalent to SDR 2.1508 billion (about $3 billion) was approved by the IMF’s Executive Board on 17 December 2018. Following the Executive Board’s discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, said:

    “Morocco has made significant strides in strengthening the resilience of its economy in recent years. In 2019, economic activity has weakened due to a contraction in agricultural output, while inflation remains low. The external position is expected to improve only modestly, and fiscal consolidation has slowed down due in part to weaker-than-expected tax revenues and increased public wage spending.

    “Looking ahead, growth is expected to accelerate gradually over the medium term. However, the outlook remains subject to downside risks, including potential delays in reform implementation and the external environment. In this context, the PLL arrangement continues to provide valuable insurance against external risks and support the authorities’ economic policies.

    “The authorities are committed to sustaining sound policies. The government’s economic program remains in line with key reforms agreed under the PLL arrangement, including to further reduce fiscal and external vulnerabilities, while strengthening the foundations for higher and more inclusive growth.

    “In light of the slowdown in fiscal consolidation, stepped up tax reforms and contained wage bill are needed to lower the public debt-to-GDP ratio while securing priority investment and social spending in the medium term. A decisive and comprehensive tax reform should aim to secure adequate revenues while bringing about greater equity and simplicity of the tax system. In addition, further improvements are needed in the efficiency and governance of the public sector, careful implementation of fiscal decentralization, strengthened state-owned enterprise oversight, and better targeting of social spending.

    “The transition to greater exchange rate flexibility initiated last year would enhance the economy’s capacity to absorb shocks and preserve its external competitiveness. The current favorable economic environment continues to provide a window of opportunity to conduct this reform in a sequenced and well-communicated manner. Following the adoption of the central bank law, addressing weaknesses in the AML/CFT framework, and continuing to make the supervisory framework more risk-based and forward-looking will help further improve financial sector soundness.

    “Building on recent progress in improving the business environment, sustained reforms are needed to raise potential growth and reduce high unemployment, especially among the youth, increase female labor participation, and reduce regional disparities. Reforms of education, governance, and the labor market should also contribute to more private sector-led growth and job creation.” (IMF 13.12)

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    11.8 TURKEY: The Perils of the Turkey-Libya Maritime Delimitation Deal

    Gallia Lindenstrauss, Sarah J. Feuer and Ofir Winter posted in INSS Insight No. 1238 on 18 December 2019 that the 27 November 2019 signing of the maritime delimitation agreement between Turkey and the internationally recognized Government of National Accord (GNA) in Tripoli, led by Prime Minister Fayez al-Sarraj, has heightened concerns among many countries in the Eastern Mediterranean. The deal will negatively affect Turkey’s relations with Greece, Cyprus, Egypt and Israel; pose further challenges to the already questionable plans for the EastMed pipeline; and raise the stakes for outside actors involved in the Libyan civil war, likely prolonging the conflict there. It may, however, have a boomerang effect from Ankara’s perspective in that it strengthens Egypt’s determination to become an energy hub for the region.

    On 27 November 2019, Turkey signed a maritime delimitation agreement with the internationally-recognized Government of National Accord (GNA) in Tripoli, Libya. A rival government, based in the eastern city of Tobruk and linked to self-styled military commander Khalifa Haftar, has rejected the legitimacy of the agreement, as have Greece and Egypt. Athens denounced the deal for ignoring the presence of the Greek island of Crete, which lies between the coasts of Turkey and Libya, and Cairo similarly dismissed the agreement as illegal. Following the signing, Greece expelled the Libyan ambassador and the European Union condemned the deal.

    Three key factors help to explain the motivation and timing of the agreement. The first is Turkey’s longstanding objection to the United Nations Convention on the Law of the Sea (UNCLOS) of 1982, which (along with Israel and the United States) it has refused to ratify. Given the geographic proximities between Turkey, the Greek islands, and Cyprus, implementation of UNCLOS principles would likely limit the scope of Turkey’s exclusive economic zone (EEZ) and continental shelf. Turkey is highly dependent on energy imports, and so its objections to some of the UNCLOS principles have only intensified in light of the natural gas findings in the Eastern Mediterranean in recent years.

    The second is Ankara’s frustration with a number of agreements ratified by its neighbors in recent years and considered inimical to Turkish interests in the region. These include the Republic of Cyprus’s EEZ delimitation deals with Egypt in 2003, Lebanon in 2007 and Israel in 2010. More broadly, Ankara views the evolving cooperation between Israel, Egypt, Greece and Cyprus – as reflected, for example, in their recent establishment of an Eastern Mediterranean Gas Forum (EGMF) – as an effort to isolate Turkey. Washington’s support for such agreements has only added to Ankara’s concerns. From this perspective, the Turkey-Libya agreement should be seen as an attempt to push back against Turkey’s perceived encirclement. If it holds, the deal will represent a considerable success, as thus far Turkey has only concluded a continental shelf delimitation agreement with the breakaway Turkish Republic of Northern Cyprus (2011), a territory that Turkey alone recognizes as a sovereign state.

    The third factor is Turkey’s assertiveness in its immediate neighborhood, a trend evidenced by the three military operations Ankara has conducted in northern Syria since 2016 (most recently in October), and by Turkey’s decision earlier this year to send drilling ships accompanied by gun boats to the Cypriot EEZ , which Turkey contests in light of its ongoing conflict with Cyprus.

    Setting aside the matter of its legality, which will likely remain in dispute since the Libyan government in question only exercises control over a small portion of Libyan territory, the Turkey-Libya agreement is likely to have three main consequences. These relate to bilateral Turkish relations with the different Eastern Mediterranean countries, the feasibility of the construction of the Eastern Mediterranean (EastMed) natural gas pipeline, and the renewed civil war in Libya.

    Perhaps first and foremost, the Turkey-Libya agreement presents a challenge to the already fraught Turkey-Greece relations. In contrast to the ties between Ankara and Cairo, or between Ankara and Jerusalem, there are still open lines of communication between Ankara and Athens, as reflected in the meeting between the two heads of state on the sidelines of the NATO summit in London earlier this month. However, there is a heightened sense of fear that a military confrontation between the two states could erupt, and the agreement adds new areas of disagreement and potential conflict to the tense relationship.

    The Republic of Cyprus has suffered the most from Turkey’s growing assertiveness in the Eastern Mediterranean and Turkish actions may now lessen the appetite of foreign companies to be further involved in developments concerning the natural gas findings in the Cyprus vicinity. On the other hand, it is possible that the Turkish moves will add urgency to a renewal of talks concerning a political solution in Cyprus, even as the difficulties that rendered earlier rounds of negotiations unsuccessful are likely to remain.

    Reactions in Egypt to the Turkey-Libya agreement have also been negative. Egypt-Turkey relations were already strained, and the deal prompted warnings in state-run Egyptian media that Cairo will not stay silent in the face of growing Turkish influence in Libya. From Egypt’s standpoint, such interference adds to the instability in Libya and increases the potential threat of terrorist activity spilling over into Libya’s eastern neighbor. For Egypt, Saudi Arabia and the United Arab Emirates (UAE), the agreement is not only a violation of UNCLOS and of previous understandings between rival Libyan parties, but also reflective of the broader regional struggle between advocates and opponents of political Islam. Egyptian media has highlighted the Turkish-Libyan agreement as an unacceptable intervention in Arab-Libyan affairs, as harm to the Arab nation, and as an action that requires a response from the Arab League. Moreover, it is cast as a threat to Eastern Mediterranean states, specifically Egypt, Greece and Cyprus. In November 2019 the latter three conducted the Muduza 9 joint military exercise in the Eastern Mediterranean, which was meant to enhance their cooperation on defense and security challenges stemming largely from Turkey.

    Meanwhile, whereas the feasibility of the EastMed pipeline was already in question even before the latest Turkey-Libya agreement, the deal presents further complications. The original plan was for the (1,300 km offshore and 600 km onshore) pipeline to extend from Eastern Mediterranean natural gas fields off the Israeli coast to Cyprus, from Cyprus to Crete, from Crete on to the Peloponnesian Islands, and from there to western Greece, where it would link up with another pipeline, the Poseidon, before ultimately reaching Italy. But Turkish President Recep Tayyip Erdogan has reportedly stated that his agreement with Sarraj means “Greek Cyprus, Egypt, Greece and Israel cannot establish a gas transmission line without first getting permission from Turkey.” The diminished possibility of a direct route to export gas to Europe might actually reinvigorate Egyptian efforts to position itself as a regional energy hub, as it already possesses facilities for liquefying natural gas, thus enabling the export to Europe and other markets by ship and obviating the need for a long pipeline.

    Finally, the deal, which was accompanied by an enhanced security cooperation agreement, is likely to exacerbate the negative effects of foreign intervention in the ongoing Libyan civil war. Prior to the agreement, Turkey was already providing the GNA with weapons, including drones and armored vehicles, and Ankara was assisting the GNA in training its affiliated militias. Erdogan has now announced that Turkish forces may be deployed in Libya, should the GNA request them. Haftar’s forces, meanwhile, have received financial support and weapons from Egypt, Saudi Arabia and the UAE, while Russia recently bolstered its presence to the tune of an estimated 1,400 military contractors fighting on Haftar’s behalf. Meanwhile, notwithstanding President Trump’s statements of support for Haftar earlier this year, the United States remains largely absent from the scene. Since Turkey and Russia now support opposing factions in Libya, the recent Erdogan-Sarraj pact may become a source of friction between Ankara and Moscow. Indeed, Haftar has reportedly ordered his naval forces to sink any Turkish vessel approaching the country. Ankara’s assistance to the GNA is likely to grow, thereby raising the stakes for rival outside actors and prolonging the conflict, which has already claimed over one thousand lives and left tens of thousands internally displaced since April.

    For its part, Israel has a clear interest in seeing the Eastern Mediterranean remain an area free of conflict. The strengthening of Israel-Greece-Cyprus relations in recent years led Israel’s Ministry of Foreign Affairs to issue statements of solidarity, both with Cyprus in response to the dispatch of a Turkish drilling ship to its EEZ, and with Greece in response to the Turkey-Libya agreement. These unprecedented statements signal that Israel will have growing difficulty remaining a bystander if hostilities break out between its neighbors in the Eastern Mediterranean. Indeed, in recent weeks Turkish ships reportedly forced an Israeli research vessel operating in the Cypriot EEZ (in conjunction with the Cypriot government) to depart the area. Given that Israel will not want to become mired in the emerging regional conflict, policymakers in Jerusalem should begin formulating potential responses to this increasingly complicated situation. (INSS

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    11.9 TURKEY: Erdoğan under Political Siege

    Dr. Hay Eytan Cohen Yanarocak, in the 16 December edition of Turkeyscope, published by the Moshe Dayan Center for Middle Eastern and African Studies, Tel Aviv University analyzes the latest moves of the emerging charismatic Turkish opposition figures challenging Erdoğan.

    As of 2002, Turkey has been ruled by Recep Tayyip Erdoğan’s Justice and Development Party (AKP). It is not a secret that one of the most important reasons for the AKP’s constant success in all general election campaigns is the existence of an ineffective opposition that could challenge the party’s head, Erdoğan. Inevitably, this impressive record of victories over the past 17 years has created an image of invincibility among Erdoğan’s comrades and also throughout opposition circles. However, this reputation of invincibility suffered a huge blow in the 2019 municipal elections when the AKP lost control of Turkey’s largest city, Istanbul, as well as its capital Ankara. Since the president knows well the unwritten fundamental rule of the Turkish politics that whoever controls Istanbul and Ankara will rule Turkey, these municipal election defeats not only rang the alarm bells of the presidential palace in Ankara but also encouraged opposition figures to come out against the Turkish president.

    Besides the reasonable attrition that he suffers after being in power for 17 years, Erdoğan is challenged by serious problems, such as the deepening economic crisis due to the Turkish Lira’s continuous de-valuation vis-à-vis the US Dollar and the Euro, which impacts all citizens. Additional challenges include the Kurdish question, extra-territorial Turkish military campaigns in Syria, and the status of the Syrian refugees whose official numbers reached 3.6 million people in October 2019. These crucial problems formed a suitable atmosphere for criticizing Erdoğan’s policies on the matters that directly affect people’s daily lives. This dissatisfaction can be observed easily on the Turkish street and felt in daily conversations as well as in social media.

    Turkey’s politicians are keenly aware of this tense situation. While still celebrating the municipal victory over the AKP, the secular Republican People’s Party (CHP) – the only political adversary that can threaten Erdoğan’s rule – is still very busy with its own “Game of Thrones” starring the head of the party, Kemal Kılıçdaroğlu, CHP’s presidential candidate for the 2018 elections, Muharrem İnce, and the new Istanbul mayor, Ekrem İmamoğlu, who has risen to the ranks of CHP leadership from behind the scenes.

    On the other hand, within the AKP, the charismatic figures in the party such as Ahmet Davutoğlu and Ali Babacan (who is secretly supported by Abdullah Gül) seem to be fed up with Erdoğan’s unprecedented authoritarianism, and therefore it seems that they will no longer play the role of the president’s “rubber stamp,” as former Turkish Prime Minister Binali Yıldırım did. This new awakening led by Davutoğlu and Babacan resulted in mass resignations from the party. In last two months alone approximately 60 thousand members of the party have resigned from the AKP. It should also be noted that since August 2018 the total number of resignations from the party reached to 902,000 people, while then the total registered members was above just 10 million people. Erdoğan is aware of this phenomenon but he tries to persuade his followers that the decline in the numbers is due to natural deaths of the party members rather than political resignations.

    Besides Davutoğlu and Babacan, there are also some very influential candidates who have not resigned from the AKP but should be taken into account in all future political equations. The former chief of staff and current Defense Minister, Hulusi Akar, as the champion of Turkey’s extra-territorial military operations in Syria, and the Minister of Interior, Süleyman Soylu, who is orchestrating the mass arrests of Gülenists, Kurdish separatists and other opposition figures at home appear as the most popular candidates who could replace Erdoğan in the future. It should be noted that given the deteriorating economic situation it seems that Erdoğan’s son-in-law, the minister of Treasury Berat Albayrak, who is seen by many as a natural candidate to succeed Erdoğan is unlikely to meet this expectation due to his lack of public support.

    Having set the political scene above, it should be noted that last November was a crucial month for all of Erdoğan’s rivals given the intra-party power struggle and important progress they made in forming new frontiers against the Turkish president. For instance, the new Istanbul mayor Ekrem İmamoğlu who managed to defeat Erdoğan’s candidate Binali Yıldırım in the Istanbul municipal elections, has been able to implement revolutionary changes in the Istanbul municipality. While making administrative reforms that resulted in cutting the funds to AKP affiliated non-governmental organizations and foundations, İmamoğlu is attempting to stabilize the budget of the municipality which suffers from deficit. To fulfill this goal, since his entry to the office, İmamoğlu has fired 3,800 people including those who would have retired from their jobs. Given the AKP majority in the municipal council İmamoğlu’s task is not an easy one. Since his ascension to power, due to party discipline within the opposition and budget cuts from the central government the construction of eight metro lines were halted. In order to find a solution to the problem the İmamoğlu administration sought to receive credit from Turkish public banks, but could not receive a penny due to pressure from the central government. Therefore, in November İmamoğlu signed a €110 million credit agreement with Germany’s Deutsche Bank to overcome this obstacle. As can be seen in the example of Deutsche Bank, Istanbul’s mayor proved that he is capable of thinking out of the box. As it is expected from him, he is utilizing his current office as a springboard to go further. In an exceptional move last October İmamoğlu paid a visit to European Council where he emphasized his commitment to European values, while expressing his gratitude for European support in the second round of the cancelled municipal elections. On the same stage, İmamoğlu went on and made important criticisms against the EU and the Turkish government regarding the Syrian refugees and Turkey’s Kurdish question respectively. Certainly, these brave statements once again showed İmamoğlu’s great ambitions. However, the Istanbul mayor should also be aware that he is not alone in this race in his camp. The recent loud quarrel between the party head, Kemal Kılıçdaroğlu, and CHP’s defeated presidential candidate Muharrem İnce over the rumors regarding whether İnce paid a secret visit to Erdoğan’s palace to seek Turkish president’s support in order to gain the control of the CHP or not also indicates that the CHP will likely be the base of any future “game of thrones.” In other words, in the event that this disagreement within the CHP leadership will deepen there is a danger that it will split the secular votes, which will in turn help the Turkish president.

    Despite the above, the internal power struggles are not only the headache of the CHP, they also create serious problems for the ruling AKP. In this regard the former Prime Minister Ahmet Davutoğlu and former Foreign and Economy Minister Ali Babacan could steal a huge number of votes from the AKP. While Davutoğlu may attract those Islamist AKP supporters with his Neo-Ottomanist political discourse, Babacan will most probably appeal to those who are displeased with Erdoğan’s son-in-law’s economic policies. However, Babacan, as one might expect, is not limiting his scope to economics. In a recent TV interview with Habertürk, Babacan openly criticized the AKP for leaving the democratic path it initiated back in 2002, and openly criticized the Erdoğan-Davutoğlu oriented Neo-Ottomanist Turkish foreign policy while advocating for an end to Turkey’s isolation in the region. Babacan moreover expressed his desire to strengthen the relations with the United States and the West while normalizing Turkey’s relations with Middle Eastern actors, namely Syria, Egypt and Israel – but refrained from giving the specific names of these countries in the interview. Babacan’s criticism of the isolation of Ankara in the Eastern Mediterranean gas question can also be seen in the same frame. Despite this ambitious stance, it seems that Babacan lacks the charismatic charm that the Turkish president and İmamoğlu have. For instance, during the Habertürk interview, Babacan kept using the term “we” instead of “I” that most Turkish leaders tend to use to emphasize their authority in the party. Thus it seems that Abdullah Gül’s external support for Babacan has also some side effects. Despite this, thanks to Davutoğlu and Babacan conservative Turkish voters, who had complained for years that there is no real alternative to Erdoğan, finally began to see a different reality.

    Since his ascent to power President Erdoğan has found himself in a political siege where the above mentioned players can pose a real threat to his office. Nevertheless, there is a concern that Erdoğan may see the new AKP-rooted opposition as his party’s offspring. It means that neither Davutoğlu nor Babacan will declare a total war against Erdoğan, rather they will likely adopt a moderate opposition stance which the Turkish president could tolerate to some extent. This will eventually pave the way for partial future parliamentary voting collaborations in the parliament that will threaten Erdoğan’s chair less directly. However, as far as the CHP is concerned, the threat seems to be more direct. In case of the formation of a consolidated leadership, the CHP will attempt to replace Erdoğan at all costs. The party head Kılıçdaroğlu appears to act as an auxiliary force in this battle as he did in the last presidential elections, where he supported İnce. The undeclared rivalry between İmamoğlu and İnce for CHP leadership will not only shape the future of the party but also Turkey’s destiny in the 2023 elections. Now Erdoğan is once again hoping for, and may be helping to create a new political miracle, which would occur if the ego wars inside the CHP pave his way to the victory – in the shadow of a “tamed opposition” that split from his own party.

    Dr. Hay Eytan Cohen Yanarocak is a researcher at the Moshe Dayan Center for Middle Eastern and African Studies (MDC) at Tel Aviv University. He serves as the Turkey analyst for the Doron Halpern Middle East Network Analysis Desk’s publication, Beehive, and is the editor of Turkeyscope. (MDC 16.12)

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    11.10 TURKEY: Turkey’s Energy Miscalculations Have Hefty Cost

    Mustafa Sonmez posted in Al-Monitor on 19 December that more than a third of Turkey’s installed power capacity remains idle after an ill-calculated rush for energy that has had a hefty financial and environmental cost.

    After a drastic expansion in recent years, Turkey’s power-producing sector is in dire straits, hit by a falling energy demand in the ailing economy. Atop the financial woes, the rush for energy — driven by overly optimistic projections on economic growth — has left major environmental scars, with numerous hydropower projects wreaking havoc on river basins, and coal plants operating without filters have come to threaten human health. The toll also includes historical and cultural heritage such as the unique town of Hasankeyf, which is now submerged due to a large dam on the Tigris River.

    Turkey, whose gross domestic product is in the region of $750 billion – $800 billion, has an energy consumption of about 145 million TOE (ton of oil equivalent) per year. Three-fourths of the country’s energy needs are met through imports, the bill of which has fluctuated around $43 billion in recent years, depending on the pace of economic growth and global energy prices. Energy products account for more than 20% of Turkey’s imports, with Russia and Iran standing out as the country’s main suppliers of natural gas and oil.

    Nearly a fourth of Turkey’s import-reliant energy consumption goes to power production. Gas-fueled plants have the largest share, contributing about 30% of the total electricity output.

    To reduce its reliance on imports, Turkey aims at energy conservation in all realms, especially in industry, the transport sector and households. Therefore, it wants to boost its power production while gradually reducing the use of imported resources and increasing that of domestic ones, including water, coal and renewable sources such as wind and sunlight, which currently account for about 15% of power production.

    The power generation and distribution industry, dominated by public enterprises until the 1990s, saw an extensive privatization drive after the Justice and Development Party (AKP) came to power in 2002. At present, the public share is 21% in terms of installed power capacity and about 15% in terms of actual production.

    The supremacy of the private sector owes not only to the privatizations but also to the new power plants that have mushroomed across the country. The building spree has been so dizzying that Turkey has ended up with huge investments that dwarf its energy demand, which, as it turns out, leaves more than a third of the installed capacity idle. On top of it, the companies are now saddled with costly foreign debt, owing to the loans they lavishly used to build the plants.

    The investment redundancy owes to bold growth projections and corresponding estimations on energy needs. The AKP government had set rather ambitious growth targets in the 2007-2013 period, averaging 7% per year, but the outcome was only about 5% per year. Similarly, the 2014-2018 period saw an average growth rate of 4.9% per year, falling short of the 5.5% target.

    Turkey today has an installed power capacity of 90,000 megawatts, but actual production accounts to only 65% of the capacity. Moreover, the dramatic depreciation of the Turkish lira since last year has meant a big cost increase for the investors, who used mainly foreign currency loans to build the plants.

    Ahmet Eren, the head of Eren Holding, a major investor in the energy sector, offers the following account on what went wrong: “First, when licensing the investments, the government had to follow a micro-plan and make adjustments according to needs. Second, the banks had to make the same considerations when issuing us the loans. On our part, we failed to make accurate forecasts. The abundance of loans emboldened us. Now there is a surplus. How long will it take to deplete the surplus? No doubt, it will take four or five years. Companies are incapable of new investments anyway.”

    Birol Erguven, the CEO of the energy branch of Limak Holding, another heavyweight in the sector, concedes that misguided projections are at the core of the problem, with the electricity demand falling behind the steady increase in supply. As a result, prices remain low, having an adverse impact on the investments, he argued. According to Erguven, a solution should be sought jointly by companies, policymakers and banks.

    Loans to the electricity sector total about 200 billion Turkish liras ($34 billion), according to September figures by the Banks Association of Turkey. The rate of nonperforming loans has reached as much as 7%.

    Along with the construction sector, where bad loans are also rife, the energy sector has received various forms of support, including loan restructuring by banks and certain government incentives. But just as in the case of some construction firms, some energy companies are reportedly expecting an outright lifesaver from the country’s sovereign wealth fund, which is run by President Recep Tayyip Erdogan and Finance Minister Berat Albayrak, the president’s son-in-law.

    Kalyon Energy is said to be the first company in which the fund might buy a stake to keep it afloat. Hit by financial and partnership problems, the company has struggled to make progress on two government-awarded projects involving wind and solar facilities of 1,000 megawatts and 500 megawatts, respectively.

    Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question. (A-Monitor 19.12)

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