Fortnightly, 11 July 2018

Fortnightly, 11 July 2018

July 11, 2018


11 July 2018
28 Tammuz 5778
27 Shawwal 1439




1.1  Israel Postal Service Privatization Underway
1.2  Governor of the Bank of Israel Karnit Flug Will Not Stand as a Candidate for an Additional Term


2.1  US-Israel BIRD Foundation to Invest Over $6 Million in Seven New Joint Projects
2.2  Guardian Optical Technologies Raises $3.1 Million
2.3  M12 Leads $8 Million Codefresh Funding Round
2.4  Cynet Raises $13 Million to Provide Solution to Organizations Looking to Make Security Easy
2.5  Preempt Secures $17.5 Million in Series B Funding
2.6  Trax Closes $125 Million Investment Round Led by Boyu Capital
2.7  ThetaRay Raises Over $30 million
2.8  Hyundai Invests in Autotalks to Develop Connectivity Technology
2.9  Syte Named a Cool Vendor in AI for Retail by Gartner
2.10  Planck Re Announces $12M Series A to Empower Commercial Insurers With AI Driven Insights
2.11  Delta Galil Completes Acquisition of Eminence Group Ahead of Plan
2.12  Ethernity Networks to Offer Complete Networking Solutions with Aricent’s Software Suite
2.13  Weizmann Institute of Science is Ninth in the World in Research Quality
2.14  McDonald’s Reports Record Sales in Israel


3.1  USAID and Berytech Celebrate Launch of LED Project
3.2  First Dedicated Stem Cell Treatment Center Opens in Dubai
3.3  Carrefour Named Best Value Supermarket Chain in Dubai
3.4  Ecommerce Startup Raises $400,000
3.5  Equinix and Omantel Enter Agreement to Build New Equinix Data Center in Oman
3.6  Egypt’s Sawari Ventures to Close $55 Million VC Fund
3.7  Egypt to Sign $10.9 Billion Contract for Middle East’s Largest Petrochemical Complex


4.1  Waste-Sorting Project Under Experimentation in Irbid
4.2  Cairo Approves Tariff for Purchase of Energy Produced from Waste
4.3  Plastic Bag Charges Take Effect in Cyprus


5.1  Lebanon’s Trade Deficit Declined to $6.64 Billion by May 2018
5.2  The World Bank & Lebanon Work to Boost Employment Opportunities
5.3  Amman Begins Discussions on Income Tax Bill
5.4  Amman Says it is Committed to the IMF Supervised Reform Plan
5.5  EU Rejects Jordan’s Request for Extra Facilities Under Deal
5.6  Jordan Did Not Shelve Plan to Build Nuclear Power Plant
5.7  New Jordanian Government Maintains Position on Turkish FTA Agreement
5.8  UAE & Saudi Economies to be Stronger in 2018 Despite VAT Impact
5.9  UAE Further Delays Launch of First Nuclear Reactor

♦♦Arabian Gulf

5.10  Saudi Economy Returns to Growth in First Quarter
5.11  Egypt’s Annual Urban Consumer Price Inflation Rises 14.4% in June
5.12  Egypt Implements 2018/19 Budget with More Expenditures on Health & Education
5.13  Suez Canal Records Highest Ever Revenues in 2017-18

♦♦North Africa

5.14  Egypt Says it Has Primary Budget Surplus as it Seeks to Revive Economy
5.15  Egypt to Start Building First Nuclear Plant in Dabaa in Next Two Years
5.16  US Government Removes Sudan Sanctions Regulations


6.1  Turkey’s Inflation Rate Rises to 15.39% in June
6.2  Turkey’s EU Exports & Imports Grow in First Five Months of 2018
6.3  Turkey’s Defense Industry Exports Reach $900 Million in 2018
6.4  Turkey Adds 15.5% Tax to Alcoholic Beverages
6.5  Turkish Automotive Market Contracts 39% in June
6.6  Central Bank of Cyprus Revises 2018 Growth Forecast Upwards to 4.1%
6.7  Number of Cypriot Unemployed Drops in June to 23,808



7.1  Tisha B’Av to Be Observed on 21/22 July


7.2  New Egyptian Educational System to Be Implemented Next September
7.3  Erdoğan Confirmed Winner of Turkey Presidential Vote


8.1  Entera Bio Announces Pricing of Initial Public Offering
8.2  InnovationQuarter (NL) visits the Hebrew University BioGiv “Excubator”
8.3  Cannabics Pharmaceuticals MoU to Focus on the Treatment of Ophthalmic Disorders
8.4  OWC Completes First Part of Cannabis-Based Ointment Safety Study
8.5  Extended Medicare Coverage Authorized for INSIGHTEC’s MR-Guided Focused Ultrasound Treatment
8.6  Cannabics’ Conclusion of Clinical Trial for Cancer Anorexia Cachexia Syndrome
8.7  Cellect Collaboration Agreement signed with Dresden University denovoMATRIX Team
8.8  Teva Planning to Move its US Headquarters to New Jersey from Pennsylvania
8.9  Vidac Begins Phase 2 Trial of VDA-1102 Ointment in Patients with Actinic Keratosis
8.10  Teva Announces Launch of a Generic Version of Uceris in the United States
8.11  Tefen Concludes $23 Million Local Cannabis Sales Deal
8.12  Evogene’s Positive Yield Results in its Bio-Stimulant Program for Wheat
8.13  Cornell & Volcani Center to Research Impacts of Climate Change on Crop Growth


9.1  Windward Adapts Market-Leading Intelligence Platform to Marine Insurance Industry
9.2  Ecoppia Expands Bhadla Park Cloud-based Robotic Cleaning Footprint
9.3  Foresight Signs MoU with Leading Car Importer in Israel for First Sales of Eyes-On System
9.4  RADWIN’s New OSS Applications Transform Wireless Network Deployment
9.5  Gilat Awarded $153.6 Million by Fitel Peru for Regional Telecommunications Projects
9.6  Cyberbit Provides Enhanced Visibility Into OT Networks With Release 6.0 of SCADAShield
9.7  ECI and Siscotec Chosen for COTAS Network Expansion Across Bolivia
9.8  Skyline AI & Greystone Bring AI Advantages to Commercial Real Estate Finance
9.9  IAI Unveils Barak MX Modular Air Defense Solution
9.10  Telesat & Gilat Develop Broadband Satellite Modem Technology
9.11  temi Robot Selects Newsight’s NSI3000 CMOS Image Sensor for Personal Robot 3D Vision System


10.1  Israeli Startups Raised Over $850 Million in June
10.2  Despite Shortcomings, Israeli Health Care Praised by OECD
10.3  Israel’s Average Wage Continues to Rise
10.4  Foreign Exchange Reserves at the Bank of Israel, June 2018


11.1  ISRAEL: Research Department Staff Forecast, July 2018
11.2  JORDAN: Future of the Jordanian Defense Industry
11.3  OMAN: IMF Executive Board Concludes 2018 Article IV Consultation
11.4  OMAN: Fitch Affirms Oman at ‘BBB-‘; Outlook Negative
11.5  EGYPT: IMF Approves Fourth $2 Billion Tranche of Egypt’s Loan
11.6  TUNISIA: Credit Challenges Include Weak Fiscal Position & Limited Budget Flexibility
11.7  ALGERIA: The Future of the $11.9 Billion Algerian Defense Industry: 2018-2023
11.8  TURKEY: Post-Election Turkey – The Birth of an Islamist-Nationalist Alliance
11.9  GREECE: IMF Staff Concluding Statement of the 2018 Article IV Mission


1.1  Israel Postal Service  Privatization Underway

On 2 July, the ministerial privatization committee approved the privatization of Israel Post.  Privatization was approved after feverish efforts to reach understandings between the Ministry of Communications, the Government Companies Authority and Israel Post on a series of matters that were introduced into the privatization proposal but were not acceptable to Minister of Communications Ayoob Kara.  Among them was the separation between Israel Post and the Postal Bank that the Ministry of Finance wanted but which in the end will not happen, despite the fact that the Postal Bank will become a social bank.

Under the outline submitted by the Government Companies Authority, 20% of the shares will initially be auctioned to an Israeli or foreign strategic investor.  In the second stage, after two years, a further 20% of the shares will offered to the public, and Israel Post will become a public company listed on the Tel Aviv Stock Exchange.  The offering will assist the company in becoming transparent, efficient and profitable in the long term.  The state’s holding in the company will not fall below 60%.  The private investor buying the shares in the initial privatization stage will be assured preferential rights.

An agreement will be signed between the state and the buyer giving the latter a say in the selection of the CEO.  The buyer will undertake to keep his stake in the company for seven years. The proposal includes the possibility of selling 40% of the company to the public in the event that the sale to a private investor does not materialize.  In consultation with the Ministry of Finance, the Ministry of Communications, and the Israeli Security Agency, the Government Companies Authority will formulate the vital interests of the state in Israel Post and the Postal Bank and how they will be maintained. In that context, the possibility will be examined of restricting the holding of a stake of 5% or more in the company without prior approval.  (Globes 02.07)

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1.2  Governor of the Bank of Israel Karnit Flug Will Not Stand as a Candidate for an Additional Term

On 5 July, Governor of the Bank of Israel Dr. Karnit Flug spoke with Prime Minister Benjamin Netanyahu and informed him that she has decided not to stand as a candidate for an additional term as Governor of the Bank of Israel.  Her five-year term in office will end, by law, on 12 November 2018.  She noted, among other things, that “I was privileged to head an organization of the highest quality, which works with professionalism, dedication, and loyalty, and that on a daily basis lives up to the vision it set for itself – to be among the most advanced central banks and to contribute to the prosperity of Israel and the welfare of its citizens.  This is not the time for summing up, but I can already say that I will end my tenure with a feeling of great satisfaction, as the Bank of Israel has a marked role in the robust state and the stability displayed by Israel’s economy in recent years, as well as in the analysis and the promotion of discussion regarding the considerable challenges we will face in the coming years.”  The Governor emphasized that she will continue to lead the Bank of Israel in all of its functions, particularly the conduct of monetary policy, until the day her term ends and the term of the next Governor begins.  (BoI 06.07)

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2.1  US-Israel BIRD Foundation to Invest Over $6 Million in Seven New Joint Projects

The Israel-US Binational Research and Development (BIRD) Foundation announced that it will invest $6.3 million in seven new joint projects between Israeli and American companies dealing with areas such as medical devices, sports tech, and drone security systems.  The seven projects are as follows:

-Israeli radar systems manufacturer ARTsys360 and the New Jersey-based security system supplier ECSI International will develop a 3D-360 multi-sensor counter-UAV / Drone system.

-Jerusalem-based predictive analytics company Correlor Data Science Intelligence will partner with Colorado-based power solutions firm Advanced Energy to develop a Connected Power (IIoT) Data System with analytic and machine learning applications geared for semiconductor and thin-film manufacturing markets.

-Israel’s Diamond Valley will team up with New Hampshire’s Ion Beam Milling to develop heat spreaders for high power applications.

-Tel Aviv flavor company DouxMatok and Florida’s American Sugar Refining will develop improved flavor delivery for sugar reduction in food.

-Caesarea software solutions firm Manam Applications and Las Vegas drone services company AviSight will develop tech for unmanned aerial system bridge survey and remote analysis.

-Israeli wearable medical device company Oxitone Medical will partner with Connecticut’s Cigna Corporation to develop a digital continuous care platform.

-Petah Tikva sports filming Pixellot and Massachusetts-based sports technologies firm HockeyTech will partner to develop a next-generation multi-angle, automatic remote system for ice hockey game production.

The seven projects approved by the Board of Governors are the latest of 967 projects which the BIRD Foundation has approved for funding during its 41-year history.  BIRD’s total investment in joint projects has been approximately $350 million to date. This has generated direct and indirect sales of over $10 billion.

The BIRD Foundation, which was created in 1977 to foster collaboration between Israeli and American industries, said that the projects will also have access to private sector funding, which will bring the total amount of all projects to approximately $19 million.  The organization works with both companies to identify strategic partners.  The projects are reviewed by evaluators from the Israel Innovation Authority and the US National Institute of Standards and Technology (NIST).  (BIRD 28.06)

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2.2  Guardian Optical Technologies Raises $3.1 Million

Guardian Optical Technologies received an investment of $3.1 million from Mirai Creation Fund, Goldbell Investments and TransLink Capital as part of a pre-B round aimed to fuel the growth of the breakthrough in-vehicle sensor platform that helps automakers increase safety and improve the travel experience.  Investors and automakers recognize the importance of the innovative single-sensor vehicle occupancy detection solution that utilizes advanced 2D, 3D, and motion analysis to track passengers and objects anywhere inside a vehicle whether a car is turned on or off.  Guardian developed the only optical technology that detects motions as faint as one micro-meter, enabling drivers to be alerted to forgotten objects and occupants, including small children.  The technology also has life-saving functionality and in the event of a collision can detect the size of each passenger in the vehicle, and allow airbags to be deployed according to the mass of each person.

Guardian’s cutting-edge technology can potentially customize the travel experience of autonomous cars to automatically set favorite radio stations as well as preferred seat and steering wheel positioning.  The advanced system is designed to seamlessly adapt to future progressions in the automotive industry, especially in autonomous vehicles.

Tel Aviv’s Guardian Optical Technologies is dedicated to enabling “passenger aware” cars with cutting-edge sensor technology that makes cars safer and more convenient.  Just one sensor combined with advanced 2D, 3D and motion analysis protects drivers and passengers by constantly scanning and tracking occupants and objects anywhere in the vehicle. These technologies work with a car’s seatbelts and airbags to sound immediate alerts.  The system deploys machine-learning, including image analysis on the sensor’s video feed, as well as “big data” analysis.  (Guardian Optical Technologies 27.06)

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2.3  M12 Leads $8 Million Codefresh Funding Round

Codefresh completed an $8 million series B funding round led by M12, Microsoft’s venture fund, with participation by Viola Ventures, Hillsven and CEIIF. Early investors include UpWest Labs and Streamlined Ventures, bringing the total investment in Codefresh to $15.1 million.  Kubernetes adoption is skyrocketing, with nearly every enterprise working on adopting Kubernetes but struggling with the last mile because existing CI/CD tools are not designed for Kubernetes.  By investing in Codefresh, M12 signals a strong interest in container orchestration and believes Codefresh has the ability to accelerate Kubernetes adoption.  Codefresh eases Kubernetes adoption and allows developers to automate their application deployment to Kubernetes in as little as 10 minutes. Once migrated, teams experience up to 24X faster development times.

Founded in 2014, Tel Aviv’s Codefresh is the first Kubernetes-native CI/CD.  After GA in 2017, Codefresh has already gained over 20,000 users.  Unlike legacy solutions, Codefresh pipelines are uniquely designed for cloud-native technologies like Kubernetes and Helm.  (Codefresh 27.06)

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2.4  Cynet Raises $13 Million to Provide Solution to Organizations Looking to Make Security Easy

In order to keep fueling development, Cynet has raised $13-million in Series B funding, led by Norwest Venture Partners, serial cyber investor Shlomo Kramer and returning investor Ibex Investors.  The investment will bolster Cynet’s rapid growth as it continues to share new and increasingly powerful ways to help organizations, from small to large, looking to make cybersecurity easy.

Cynet 360 is a holistic software platform that secures the internal network of organizations, providing them with enterprise-grade security, regardless of their size.  In under two hours, the Cynet platform implements, analyzes and begins detecting across tens of thousands of endpoints, giving security teams full visibility into traffic and communications.  Cynet’s 24/7 personalized CySoc provides frontline security expertise, all day, every day, preventing and responding to threats as they occur, giving an organization the confidence to go about its daily business with complete peace of mind.

Rishon LeZion’s Cynet is a pioneer in advanced threat detection, prevention and response.  The Cynet 360 platform empowers organizations with a single enterprise-grade solution meeting all their security needs including Endpoint Detection & Response, User & Entity Behavior Analytics, Network Analytics, Deception and a 24/7 SOC.  Cynet 360 covers thousands of endpoints in minutes, with no installation and minimal investment of time and resources.  Providing unique visibility across the internal network, Cynet protects against attacks including ransomware, malware, insider threats and other previously unknown threats.  (Cynet 27.06)

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2.5  Preempt Secures $17.5 Million in Series B Funding

Preempt raised $17.5 million in a Series B round supported by ClearSky, Blackstone, Intel Capital and General Catalyst.  Preempt is the first company to deliver Identity and Access Threat Prevention, which allows enterprises to preempt threats in real time based on identity, behavior and risk.  The funding will help Preempt in expanding operations to accelerate product innovation and go-to-market strategy.

The adaptive nature of Preempt’s approach helps enterprises stop real threats before impact and ensures all transactions are verified, so business can remain fluid.  Preempt has scaled to support some of the largest and most complex organizations and is now deployed in major Fortune 500 enterprise organizations, along with strong success in the finance, retail, healthcare and legal industries.

The new investment follows an $8 million Series A round in 2016 led by security leaders and innovators including: General Catalyst, Mickey Boodaei and Rakesh Loonkar, the founders of Trusteer; and Paul Sagan, former CEO of Akamai Technologies.  This brings Preempt’s total funding to $27.5 million.

Ramat Gan’s Preempt was founded in 2014 by global security and networking experts with a passion for making IT security teams more effective in protecting their organizations from breaches and internal threats.  Preempt protects organizations by eliminating insider threats and security breaches. Threats are not black or white and the Preempt Platform is the only solution that delivers adaptive threat prevention that continuously preempts threats based on identity, behavior and risk.  This ensures that both security threats and risky employee activities are responded to with the right level of security at the right time. The platform easily scales to provide comprehensive identity based protection across organizations of any size.  (Preempt 27.06)

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2.6  Trax Closes $125 Million Investment Round Led by Boyu Capital

Trax has completed its largest investment round to date, raising $125 million.  The transaction was led by Boyu Capital, one of the largest private equity investment firms in Greater China.  DC Thomson, a leading media organization from the UK, also joined the investment round.  A portion of the transaction will be used to buy some early investors’ shares.

To date, the company has raised approximately $235 million in total funding and operates in over 50 countries with more than 175 client engagements.  Trax provides in-store execution, market-measurement and data-science solutions for CPG brands and retailers by harnessing its cutting-edge computer vision platform to process photos taken in store with mobile devices to deliver real-time, granular shelf- and store-level insights.  In an alliance last year with Nielsen, the leading global information and measurement company, Trax introduced Shelf Intelligence Suite, offering brands an unprecedented level of shelf insights to continuously measure and improve their shelf strategy and execution.

Tel Aviv’s Trax is the leading provider of computer vision solutions and analytics for retail, recently ranked in the top 25 Fastest Growing Companies on Deloitte’s Technology Fast 500 list.  The company enables tighter execution controls in-store and provides clients with the ability to leverage competitive insights through its in-store execution tools, market measurement services and data science to unlock revenue opportunities at all points of sale.  Many of the world’s top brands and retailers leverage Trax globally in more than 50 countries to manage in-store execution and increase revenues at the shelf.  (Boyu Capital 29.06)

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2.7  ThetaRay Raises Over $30 million

ThetaRay completed a fund-raising round of over $30 million. With the latest investment, the company has raised more than $60 million. The round was significantly oversubscribed.  Investors include Jerusalem Venture Partners (JVP), GE, Bank HaPoalim, OurCrowd, SVB Investments and others.

ThetaRay has shown rare growth in its five years of operation, doubling in size every year.  The company will use the capital to expand its presence in Europe, Asia and the US, significantly increase its workforce and scale operations to meet the growing demand for systems that fight financial crime and money laundering.

ThetaRay machine learning and artificial intelligence technology helps financial institutions identify the earliest signs of money laundering. It is based on patented algorithms developed by world-renowned mathematicians over a decade, and can detect anomalies in real-time, radically reduce false positives, and uncover “unknown unknowns”.  The company recently won The Asian Banker Risk Management Award for the best technological solution to comply with regulation of financial institutions.

Hod HaSharon’s ThetaRay is a leading Artificial Intelligence and big data analytics company, helping financial organizations, cybersecurity divisions and critical infrastructure become more resilient and seize opportunities.  Its advanced analytical solutions operate with unprecedented speed, accuracy, and scale, enabling clients to manage risk, detect money laundering schemes, uncover fraud, expose bad loans, uncover operational issues and reveal valuable new growth opportunities.  (ThetaRay 03.07)

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2.8  Hyundai Invests in Autotalks to Develop Connectivity Technology

Hyundai Motor announced its strategic partnership with Autotalks, a leading technology company specialized in the manufacturing of Vehicle to Everything (V2X) communication chipsets.  Hyundai Motor formed a strategic partnership with Autotalks through a direct investment to accelerate the development and deployment of the next generation chipset for connected cars.  Hyundai is expanding partnerships in the connectivity field to further strengthen connectivity technology vital to autonomous driving and explore new business opportunities within smart city infrastructure.  V2X technology allows vehicles to communicate with one another, with other road users and road infrastructure, enhancing road safety and mobility.  The main focus of any V2X solution is safety. As a reliable non-line-of-sight sensor working in all environments and weather conditions, it helps prevent road collisions and avoid dangerous situations. In manned vehicles, V2X systems convey important information to the driver in the form of alerts and notifications and can also actuate the vehicle in dangerous situations.  Prior to the current investment by Hyundai, Autotalks completed four funding rounds with a total of more than $80 million in investments.

Kfar Netter’s Autotalks is a fabless semiconductor company devoted to vehicle-to-vehicle (V2V) communications in autonomous driving.  Founded in 2008, the company is privately held with strong financial backing from leading global venture capital funds.  Autotalks chipsets deliver the highest performance and reliability, and are executing in numerous exciting autonomous-driving projects worldwide.  Compliance with international and national standards and interoperability with a wide variety of devices, protocols and applications have been demonstrated in multiple events and labs. We are working with OEMs and Tier1s on multiple pre-development projects that extend the capabilities of autonomous driving.  (Hyundai 03.07)

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2.9  Syte Named a Cool Vendor in AI for Retail by Gartner

Syte announced that Gartner named Syte a Cool Vendor in its 2018 Cool Vendors in AI for Retail report.  Each year Gartner selects companies in varied fields to be recognized as a Cool Vendor.  Syte’s offerings are all powered by our proprietary deep learning AI technology.  Syte is powering the future of retail by automating processes on the retailer’s backend while improving shoppers’ experience.  Syte provides image search technology, inspiration curated from social media, and in-store solutions to create a more seamless shopping experience.

Tel Aviv’s Syte enhances retailer’s online & in-store experience with next-generation visual AI.  Syte’s mission is to curate a user’s personal shopping experience, making every inspiration in their world immediately discoverable and shoppable.  Companies like Boohoo, Marks & Spencer, Farfetch, Kohls, Etam and more are using Syte’s solutions to automate internal processes and create a more accurate and interactive user journey.  (Syte 03.07)

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2.10  Planck Re Announces $12M Series A to Empower Commercial Insurers With AI Driven Insights

Planck Re announced their first funding round of $12 million to empower commercial insurers by generating insights that streamline the commercial underwriting process – enabling insurers to instantly and accurately underwrite any policy.  The round was led by Arbor Ventures and includes Viola FinTech and Eight Roads.  Founded in 2016, Planck Re is pioneering the commercial insurance data industry, providing an Artificial Intelligence (AI) driven data platform.  Leveraging deep industry expertise and breakthrough data science, Planck Re streamlines the commercial underwriting process by aggregating small and medium businesses’ digital footprint to help insurers acquire a comprehensive understanding of customer risk.  The end result is a frictionless underwriting process with greater insurance carrier visibility into risk factors, leading to improved conversion, retention and reduced loss ratios.

Planck Re will initially focus on the U.S. commercial insurance market.  Based on pilots conducted with several top-tier insurance carriers in the U.S., Planck Re’s platform manages to automatically and accurately complete over 90% of the fields in the onboarding questionnaires.

Tel Aviv’s Planck Re empowers insurance companies with a commercial insurance data platform.  Leveraging deep industry expertise and breakthrough data science, it generates insights that streamline the commercial underwriting process – enabling insurance carriers to instantly and accurately underwrite any policy.  Planck Re was founded by a team of serial entrepreneurs with an extensive background in insurance and technology.  (Planck Re 03.07)

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2.11  Delta Galil Completes Acquisition of Eminence Group Ahead of Plan

Delta Galil Industries announced that following the approval of the transaction by the workers council it has completed its previously disclosed acquisition of Eminence SAS and its subsidiaries, which includes leading French underwear brands for men, women and children: Eminence and ATHENA and the Italian brand Liabel.  Delta Galil expects the deal to be accretive to its 2019 earnings per share by approximately $0.40 to $0.45.

Eminence brings to Delta Galil a men’s premium French brand, which has the second largest men’s underwear market share in France, with products ranging from undergarments to polo and technical shirts to Eminence Tech+.  ATHENA adds a sporty and athletic, family mass market French undergarment brand that is modern and cool.  In addition to the French brands, the transaction includes Liabel, an Italian brand, founded in 1851, which stands on heritage and tradition and brings strong brand awareness as a mass market Italian t-shirt and underwear brand for the entire family.

Caesarea’s Delta Galil Industries is a global manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually strived to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; extensive lines of underwear for men; babywear, activewear, sleepwear and leisurewear.  (Delta Galil 09.07)

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2.12  Ethernity Networks to Offer Complete Networking Solutions with Aricent’s Software Suite

Ethernity Networks will now provide comprehensive networking solutions by adding Aricent’s Carrier Ethernet Switch Router (CESR) software suite to Ethernity’s portfolio of FPGA-based ACE-NICs and systems-on-chip (SoCs).  As part of its goal to move up the value chain and deliver end-to-end networking solutions, Ethernity now offers its OEM and system integrator customers high-performance solutions that include the company’s patented ENET Flow Processor firmware and Aricent’s CESR software, a part of Aricent’s ConvergedOS software framework portfolio.  This new offering removes the barriers to entry, reduces the effort for telecom and enterprise vendors, and accelerates time-to-market for network core and edge applications, including broadband gateway (BNG), cell site router (CSR), wireless and broadband access, and other Carrier Ethernet appliances.  This recent collaboration is a result of a long-term cooperation in which the two firms have designed joint solutions incorporating Ethernity’s data processing and Aricent’s ConvergedOS software framework on a number of leading OEM hardware platforms.

Lod’s Ethernity Networks is a leading provider of data processing solutions and technology for high-end Carrier Ethernet applications across the fixed and mobile telecom, security and data center markets.  The Company’s core technology, which is populated on programmable logic, enables data offloading at the pace of software development, improves performance and reduces power consumption and latency, therefore facilitating the deployment of virtualization of networking functionality.  (Ethernity Networks 05.07)

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2.13  Weizmann Institute of Science is Ninth in the World in Research Quality

The Weizmann Institute of Science has been placed ninth in a ranking of research quality.  This is the second time that the Institute has ranked in the top ten best research institutes in the world.  In the previous ranking, in 2015, the institute placed tenth.  The placement comes from the annual CWTS Leiden Ranking, based in Leiden University in the Netherlands.

The Leiden ranking, which includes nearly 1000 of the top universities worldwide, bases its list on a number of bibliometric indicators, rather than subjective survey questions.  These include published scientific research, citations and more.  Among other things, the ratio of citations to published papers is considered to be an indication of the quality of the research.

The Weizmann Institute of Science’s high place in a ranking that assesses research quality is evidence of the continual, significant improvement in the already excellent research of Institute scientists.  A decade ago, the Institute placed 19th in a ranking of research quality (and one of the top three in the non-American list); in a report published in 2015 it had risen to tenth (and the only one outside of the US in the top ten). In the present ranking (which is based on figures from 2013-2016), the Institute has risen to ninth place in the world.

In addition, 20% of the scientific articles published by Weizmann Institute scientists were included in the list of the top 10% for scientific impact.  Some 2.1% of the Weizmann Institute scientific articles were in the top 1% of the highest impact scientific articles, and 67% were in the top half for impact.  (Weizmann 07.07)

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2.14  McDonald’s Reports Record Sales in Israel

McDonald’s in Israel marked 2017 as a good year and 2018 may just be better.  The company has reached a peak of NIS 870 million (over $240.5 million) in sales last year and is expecting to reach NIS 1 billion (approximately $276.6 million) in 2018, Alonyal Ltd., the owner of the global fast-food chain’s Israeli franchise, announced on 8 July.

McDonald’s began operating in Israel in 1993 with a first restaurant in Ramat Gan, and was met with competition from several local and international fast food chains, most of which have since lost their grip on the local market.  MacDavid, founded in 1978 in Tel Aviv, was sued by McDonald’s in a Tel Aviv district court in 1979 for name infringement.  With 28 branches nationwide in its peak in 1989, as of July 2018, MacDavid has only one remaining restaurant in Haifa.

Burger King was active in Israel between 1994 and 2010 when it was shut down by its local operator, A. Orgad Holdings Company, and its branches were rebranded as Burger Ranch, a veteran local chain owned by Orgad.  Burger King reentered the Israeli market in 2016, led by French businessman Pierre Besnainou, and currently has eight branches in the country.  Following Burger King’s relaunch in the country, customers lined up outside of the chain’s first location in Tel Aviv’s Ibn Gabirol Street for several days.

McDonald’s has opened six new locations in Israel in 2018 and plans to open two additional restaurants by the end of the year, bringing its total number of branches in the country to 188.  Like in its other locations, McDonald’s offers unique items for the Israeli market, which are mostly health oriented and include freshly-cut salads, chicken wraps, and baby carrot snacks.  In the past, the local franchise also offered wraps with traditional Middle Eastern dishes such as falafel, kebab and Shawarma.  Every McDonald’s branch in Israel comes equipped with digital self-service stands allowing customers to order and pay using a touchscreen interface.  (Calcalist 09.07)

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3.1  USAID and Berytech Celebrate Launch of LED Project

On 26 June, the United States Agency for International Development (USAID) launched the Lebanon Enterprise Development (LED) project, a business promotion partnership with Berytech to provide business development services in Beirut, Mount Lebanon, South Lebanon and the Bekaa.  The LED is a 3 year project funded by the USAID with the goal of increasing employment opportunities for Lebanese citizens.  Through LED’s activities and impact, USAID aims to advance socioeconomic development, empower youth and women, and spur economic growth and stability.

With a project budget of $14 million over 3 years (including possible option period of $24.3 million over 5 years), it will work with BIAT, Berytech Foundation, business associations, syndicates, and chambers of commerce, business consultants and consulting firms, other business service providers, other development partner projects/programs and others

LED will apply a problem-solving buyer-led approach to help Lebanese SMEs increase their sales and hire more Lebanese citizens.  The project will prioritize support for businesses that produce goods and services for a known buyer or market and will assist selected enterprises to identify specific buyer/s and understand their requirements, diagnose the key enterprise-level constraints that hinder the signing of sales contracts with the buyer/s, and address these constraints using tailored solutions

Over time, LED will also prioritize selected business enabling environment problems and work with the private sector to analyze these issues and propose the needed solutions.   (ArabNet 27.06)

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3.2  First Dedicated Stem Cell Treatment Center Opens in Dubai

Emirates Hospital Jumeirah, an Emirates Healthcare company, has partnered with ReGen Medical Management Dubai to launch a new stem cell and regenerative medical center.  Emirates Hospital Jumeirah is the first to receive approval from Dubai Health Authority and will be the first to offer a range of specialty regenerative services in the UAE region at ReGen at Emirates Hospital.  The opening follows more than 600 successful stem cell therapy treatments by ReGen Medical in the US.

ReGen at Emirates Hospital is certified for the medical tourism market and will operate under US Federal Drug Administration (FDA) standards.  (AB 06.07)

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3.3  Carrefour Named Best Value Supermarket Chain in Dubai

Carrefour has emerged as the best value for money supermarket in Dubai, according to a survey by, the biggest personal finance comparison website in the UAE and Saudi Arabia.  It said Carrefour’s total bill for 11 everyday essentials including milk, white bread, eggs, chicken, onions and potatoes was 11% lower than the average bill across all the six supermarkets surveyed.  Union Coop and Lulu Hypermarket bagged second and third spot, while Al Maya was revealed to be the most expensive grocery retail chain.  For this particular analysis, Choithram – Dubai Marina, Al Maya – Dubai Marina, Spinneys – Al Furjan, Carrefour –Discovery Pavilion, LuLu Hypermarket – Al Qusais and Union Coop – Al Barsha were put under the microscope. said that as grocery retailers battle for market share, the average consumer gets the benefit of broad selection of groceries and lower prices.  It added that in a bid to sustain growth and strengthen their brand, supermarkets are increasingly offering their house brands alongside name brands.  The analysis revealed that while there is a smaller difference in the price of name brand items between different supermarkets, the price of house brand items varies significantly.

While major UAE supermarket chains have not yet resorted to aggressive price wars and price-matching schemes as seen in other global markets, it remains to be seen if this will change in the near future.  (AB 07.06)

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3.4  Ecommerce Startup Raises $400,000, the Dubai-based lifestyle and healthcare tech startup, has announced it has successfully raised $400,000 in funding from GCC-based investors as part of its seed round.  souKare’s investment comes from a diverse set of well-established angel investors from UAE and KSA including CEOs, partners and senior management from strategy consulting, private equity and startup firms.

The ecommerce website, which leverages technology and artificial intelligence, provides fast and hassle-free offerings to customers through its online platform.  Currently live in the UAE and KSA, offers a full range of leading contact lenses and fitness brands from as Acuvue, Bella, Solotica, Optimum Nutrition, Jym and many others.  souKare’s primary goal is to provide 90 minute delivery service within Dubai, for all in-stock items.  (ArabNet 02.07)

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3.5  Equinix and Omantel Enter Agreement to Build New Equinix Data Center in Oman

Redwood City, California’s Equinix, the global interconnection and data center company, and Oman Telecommunications Company (Omantel) have entered into a joint venture to deliver data center and interconnection services to customers in the Middle East through the development of a new network-dense data center that will be located in Barka, near Muscat, the capital of Oman.  This joint venture will establish the first world-class, carrier-neutral hub in Oman where carriers, content providers and cloud providers co-locate critical IT infrastructure.

Oman is strategically positioned between Asia, Africa and Europe, and the new Equinix International Business Exchange (IBX) data center will create a regional interconnection hub with ultra-low latencies between global business markets.  Based on demand and requirements, customers in the GCC and wider MENA region can also leverage other Equinix data centers in the region for dual access to content providers, allowing carriers, content providers and cloud providers to further build resilience into their IT and network infrastructure.  The new IBX data center in Oman will benefit from connectivity to strategic cable landing stations (CLS) and subsea cable systems that terminate directly inside the facility.  It will also benefit from the investments by Omantel in multiple strategic subsea cable systems throughout the region and world.  This subsea cable connectivity will provide customers with significant cost savings and an increase in performance and security.

Under the terms of the agreement, Equinix and Omantel will both fund equity contributions in an amount of $10 million for the joint venture representing a 50% shareholding each, and additional funds will be raised through debt financing assumed by the joint venture company.  (Equinix 09.07)

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3.6  Egypt’s Sawari Ventures to Close $55 Million VC Fund

Sawari Ventures, one of the oldest VC firms in Egypt, is expected to close a $55 million VC fund to new investors before year end.  The fund opened last month at an international investment conference in the Red Sea resort of Sharm el-Sheikh where Egypt signed deals worth $36 billion, and has the National Bank of Egypt (NBE) and Banque Misr among its limited partners who have contributed around $7 million.  The fund also has the European Investment Bank as one of its backers.

Sawari Ventures aims to invest the money in 15 to 20 startups in the fields of education, energy-generation, and healthcare, with ticket sizes in the range of $2.5M, which suggests that it might be interested in making these investments in growth-stage startups only.  The fund, which will be raised from foreign investors, plans to invest in Egypt, Tunisia and Morocco.  Sawari Ventures also plans to add another $15M through a second tranche that will take place 18 months after closing the first one.

Founded in 2009, Sawari Ventures’ earlier venture capital fund has made nine investments in Egypt since 2011, while Accelerator, its investment management subsidiary, has funded 75 startups, totaling around $10M.  Accelerator plans to expand to Lebanon this year and to Saudi Arabia, Tunisia and Morocco next year.  (ArabNet 20.06)

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3.7  Egypt to Sign $10.9 Billion Contract for Middle East’s Largest Petrochemical Complex

Egypt signed a deal to build the Middle East’s biggest petrochemical project as part of its planned economic zone near the Suez Canal.  The contract between the Suez Canal Authority and the privately owned firm Carbon Holdings will aim to set up a massive $10.9 billion petrochemical complex which would be the largest in the Middle East.  Carbon Holdings CEO Basil El-Baz said the project would take around three and a half years to build, according to Egypt’s state news agency MENA.  The five million square meter project in El-Ain El-Sokhna in Suez is expected to create 48,000 jobs.

Egypt aims to create economic zones around the canal, one of Egypt’s main sources of hard currency, which will make the area an international industrial and logistical hub to attract ships and generate foreign investment.  The government aims through new projects and current economic reforms to lure investors and boost growth.  (Ahram 29.06)

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4.1  Waste-Sorting Project Under Experimentation in Irbid

Jordan’s Greater Irbid Municipality implemented the first trial of a waste-sorting project, which is expected to reduce the amount of waste sent to the Akeider landfill.  Funded by the German International Cooperation Agency (GIZ), the project seeks to reduce the pressure on the Akeider landfill, which currently receives 800 tonnes of waste daily.  The project will be improved to include recycling and fertilizer production.

In 2014, the Environment Ministry signed four grant agreements with the GIZ to improve the management of solid municipal waste, adaptation to climate change and protection of ecosystems.  The agreements, which were signed on the sidelines of the Eco-Cities of the Mediterranean 2014 Forum, are worth €6.5 million and will tackle three of the Kingdom’s critical challenges.  One of the agreements seeks to address the increasing amount of solid waste generated in governorates hosting Syrian refugees, which have witnessed a surging pressure on waste collection and management, particularly in the northern region.

With over 1.3 million Syrian refugees living in the country, the amounts of waste have increased, especially in the north of the Kingdom, amounting to around 2.2 million tonnes of solid municipal waste per year.  (JT 10.07)

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4.2  Cairo Approves Tariff for Purchase of Energy Produced from Waste

Cairo has approved the tariff for the purchase of electricity produced from waste recycling projects at 103 piasters per kW, to be paid by distribution companies.  The Egyptian Electricity Holding Company (EEHC) issued a memo to distribution companies to contract with the companies that want to sell waste power.

The North Delta Electricity Distribution Company (NDEDCO) signed the first contract to buy electricity produced from waste after contracting with Empower to buy 1,000 kW produced from a biogas station in Kafr El Sheikh.  The Department of Energy Rationalisation of New and Renewable Energy at NDEDCO installed a meter to calculate the capacity purchased from the station and officially connect it to the electrical grid.  Empower announced the signing of a contract with NDEDCO to buy the energy produced from a waste recycling plant, which is worth 103 piasters per kW.

The government started thinking about generating energy from waste in 2015.  It contracted with a consultant to study the implementation of this and determine the tariff.  In 2016, a trial price for purchasing was announced.  It was 92 piasters, but investors disapproved at the time.  The value of the tariff is suitable and attractive for investment in the field of biogas and agricultural waste; however, it is not as good in the field of fuels.  Empower has allocated investments worth EGP 420m to establish energy production projects to produce energy from waste by the end of this year.  (Al Ahram 09.07)

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4.3  Plastic Bag Charges Take Effect in Cyprus

Cypriot shoppers will be charged five cents per plastic bag as of Sunday, 1 July, the Environmental Commissioner reminded the public.  The measure was being enacted as a part of the European Union framework, which seeks to reduce the use of plastic bags.  The thin plastic bags used to hold fruit, meat, or vegetables, will not be charged, the commissioner said.  The executive secretary of the Pancyprian Union of Supermarkets said that supermarkets were ready for the measure.  He added that supermarkets have already stocked up on their stores of reusable bags that customers will be able to buy at the till.  (Cyprus Mail 30.06)

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5.1  Lebanon’s Trade Deficit Declined to $6.64 Billion by May 2018

Lebanon’s trade deficit dropped by 1.1% year on year (y-o-y) hitting $6.64B by May 2018 as an outcome of a 9.7% annual increase in exports to $1.32B, which outweighed the 0.5% increase in imports touching $7.96B.  The leading imported goods to Lebanon were Mineral Products (17.17% of total imports) which decreased by 15.65% y-o-y to $1.36B on the back of a decline in the imported quantity of Mineral Products from 4.7M tons by May 2017 to 2.8M tons over the same period this year.  Products of Chemical or Allied Industries (11.84% of total imports) increased by 8.31% y-o-y to $942.76M, followed by Machinery & Electrical instruments (11.39% of total imports) which increased by 15.56% y-o-y to $907.25M.  As for Vehicles, Aircraft, Vessels and Transport Equipment (8.47% of total imports), they decreased by 10.33% y-o-y to $674.22M.

In May, the 3 main import destinations were China, Italy and Greece with shares of 11%, 9% and 8%, respectively.  In terms of exported goods, Pearls, Precious stones and Metals (grasping 25.96% of total exports) rose by a yearly 22.98%, reaching $343.96M by May 2018.  This increase may be attributed to the 12.5% y-o-y uptick recorded in the volume of Pearls, Precious stones and Metals to 27 tons over the same period. In addition, Base Metals and Article of Base Metal (13.86% of total exports) increased by 37.37% y-o-y to $183.66M.  However, Prepared Foodstuffs, Beverages and Tobacco (13.81% of total exports) decreased by 10.10% y-o-y to $182.91M. Lebanon’s top export destinations were UAE, South Africa, Saudi Arabia and Switzerland with contributions of 13%, 10%, 7% and 7%, respectively.  (Blom 10.07)

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5.2  The World Bank & Lebanon Work to Boost Employment Opportunities

The World Bank Group (WB) approved a new $400M project on 27 June which promises to create around 64,000 job opportunities in the market, of which 81% would be “permanent” jobs while the rest are “temporary” (short term) jobs.  Since the 2011 Syrian Crisis, Lebanon’s economic growth weakened, which in turn limited its job-creation capacity.  The influx of Syrian refugees into the country further strained the Lebanese labor market, namely jeopardizing the integration and well-being of vulnerable groups.  Against this backdrop, the WB’s latest project entitled, “Creating Economic Opportunities in Support of the Lebanon National Jobs Program” targets specifically young men and women in the country.  The new initiative advocates “inclusive growth that benefits everyone [through] the creation of a favorable business environment for the private sector to grow, create jobs, and invest in Lebanon’s rich human capital […]” as Saroj Kumar Jha, the WB’s regional director for the Mashreq explains.  It is crucial to highlight that the project aims to create jobs for Lebanese as well as temporary jobs for Syrian refugees, albeit abiding by Lebanon’s existing laws on the employment of Syrian refugees.  The plan also promises to particularly expand economic opportunities in the disadvantaged regions across Lebanon.  (WB 29.06)

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5.3  Amman Begins Discussions on Income Tax Bill

On 2 July, Jordanian Deputy Prime Minister Rajai Muasher met with a number of economists as a first step towards a nation-wide dialogue on the draft income tax law.  During the meeting attended by a number of ministers, Muasher expressed hope to reach a better formula of the law via intensive dialogue with all members of the society, which he started on Monday with economic affairs writers and journalists.

Muasher said the government believes in dialogue in order to reach consensus and a formula of the law that takes into account national interests and priorities, stressing that the purpose of amending the income tax law is to maintain sustainability in the state’s ability to provide all services and address indebtedness within a clear strategy.  According to Muasher, the government’s approaches included, drawing up a map showing a compatible mechanism for distributing the tax burden in a just manner, and building a basic and permanent rule of the income tax law that takes into account the national priorities that include stimulating the national economy and achieving social justice.

The Deputy Prime Minister added that resorting to a national dialogue about the law is the main way to a tax justice that takes into account the interests of all individuals and sectors, noting that increasing the tax does not mean increasing revenues.  Muasher said any draft income tax law must take into account the national economy’s interest, fairness of distribution and take into account economic and social dimensions, as well as achieving self-sufficiency and self-reliance “so that our domestic revenues cover current expenditures.”  The minister indicated that the draft law should address the issues of tax evasion and should tighten penalties.  (Petra 02.07)

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5.4  Amman Says it is Committed to the IMF Supervised Reform Plan

Jordan said on 2 July that it is fully committed to the $700 million Extended Fund Facility (EFF) with the International Monetary Fund (IMF).  Jordanian officials will soon meet with IMF representatives to brief them on the situation in Jordan and present a national economic and fiscal reform plan that will be in line with the IMF program and help realize its objectives.

In 2016, Jordan and the IMF reached the 36-month EFF program under which the two sides agreed on six conditions that aim at reducing public debt to safe levels and stimulating the economy.  Under the deal, Jordan is expected to generate around JOD520 million dinars in additional revenues this year alone.

Overall revenues generated during the first six months of 2018 are JOD400 million less than that they were forecast in the state budget, the minister said, while economic growth in Q1/18 reached only 1.9%.  Jordan needs around JOD5 billion annually in financing to cover debt and Eurobonds. “We have a strategy to reduce the overall public debt, but there are still challenges.

Grants for this year were estimated at JOD700 million, but following pledges of new grants the number is expected to reach JOD950 million.  Amman will study the overall tax burden in Jordan and will look into the impact of the sales and income tax on citizens and the various sectors.  The previous government’s decision to remove tax exemptions on hybrid cars and increase taxes on the industrial sector did not achieve desired results.  Around JOD5.2 million are generated in taxes every year, of which around JOD960 million is income tax, while the rest is sales tax.  (JT 03.07)

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5.5  EU Rejects Jordan’s Request for Extra Facilities Under Deal

On 9 July, Jordan said that the EU did not approve Jordan’s request for more facilities under the relaxed rules of origin relating to the Kingdom’s exports to Europe.  In February, Jordan submitted a request to the EU requesting the inclusion of more facilities under the relaxed rules of origin deal, which was signed with the EU in 2016.  The Kingdom also asked the EU to increase the number of zones benefitting from the agreement, and requested reviewing one of its conditions related to employing a certain percentage of Syrian refugees for a factory to be eligible to export to Europe.

Under the 2016 deal, manufacturers in the Kingdom can import up to 70% of the raw materials used in production and still label the finished products as ”Made in Jordan”, qualifying them for trade concessions.  The agreement, which is valid till 2026, designates a total of 18 industrial and developmental zones as beneficiaries, while the relaxed rules will also be applied to other industries across the Kingdom as soon as 200,000 jobs are created for Syrian refugees, after they are issued work permits.  For Jordanian industries to be able to benefit from the simplified rules of origin by the EU, each factory needs to have Syrian employees constituting no less than 15% of its manpower.  The rate will be increased to 25% in the third year of the agreement.  Tens of thousands of work permits have been issued for Syrians since the agreement was signed.  (JT 10.07)

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5.6  Jordan Did Not Shelve Plan to Build Nuclear Power Plant

On 30 June, Jordan Atomic Energy Commission Chairman Khaled Toukan denied that the Kingdom has abolished a plan to build a 1,000-megawatt nuclear power station.  Toukan said that Jordan has only terminated an agreement with the Russian side to build the reactor due to high financial cost.  Toukan said news reports quoting remarks he made at a 26 June press conference were “taken out of context with scientific errors.”  He said Jordan is currently working on two parallel tracks; the first is for the long-run, likely in 2029, regarding building the mega 1,000-megawatt nuclear reactor in Amra region.  For the short-term, discussion was held with international parties to set up a micro nuclear reactor that is likely to be built in the Industrial City in Aqaba at a capacity of 200 MW.  He said progress was made in talks to build the small reactor with China, which has a vast expertise in this field, particularly the fourth generation of reactors.  (Petra 01.07)

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5.7  New Jordanian Government Maintains Position on Turkish FTA Agreement

The new Jordanian government has upheld its predecessor’s decision to suspend the Free Trade Agreement (FTA) with Turkey, with a senior official saying that the deal will be totally scrapped, as planned, on 26 November.  Jordan has informed Turkey that the FTA between the two countries, which went into effect in 2011, will be suspended, Minister of Industry, Trade and Supply Hammouri said.  During a meeting with representatives of the commercial sector, Hammouri said that the decision to halt the FTA was made after a thorough study that found that the deal did not yield the expected benefits for the national economy.

The former Cabinet decided to suspend the FTA with Turkey in March, citing its adverse impact on the local industrial sector and the Turkish side’s failure to meet its commitments under the partnership agreement.  The Ministry of Industry, Trade and Supply announced several conditions necessary for the deal to be resumed, including Turkey’s consent to measures Jordan would devise that protect local industries, and an agreement to increase technical assistance to Jordan, as stipulated by the FTA.  Hammouri did not refer to any plans to reconsider the decision by the incumbent government.  (JT 02.07)

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►►Arabian Gulf

5.8  UAE & Saudi Economies to be Stronger in 2018 Despite VAT Impact

Non-oil GDP growth in the UAE and Saudi Arabia should be slightly stronger this year than in 2017 despite the impact of VAT and ensuing inflation, according to PwC.  PwC said that economies in the Middle East ended 2017 on a high note, with a strong Q4/17, despite some short-term weaknesses surfacing in early 2018.  It said this pattern is in part explained by the rollout of VAT in the UAE and Saudi Arabia.  Richard Boxshall, senior economist at PwC Middle East, said: “Notwithstanding the impact of VAT and inflation, if oil prices remains buoyant, as seems likely, and regional investment flows are boosted by IPOs and a rise in foreign inflows, non-oil GDP growth in 2018 should be slightly stronger than in 2017 which, combined with flat (rather than reduced) oil production, should result in stronger overall growth for the year.”

He said that while foreign direct investment (FDI) is down sharply from its 2008 peak, 2017 data is expected to show signs of recovery and lead to a rise in both FDI – owing to reforms in foreign ownership rules – as well as broader improvements in the business environment.  “Gulf countries are rethinking the role of foreign investors as they look to ease fiscal burdens and restructure their economies for the twilight of the oil era, with a strong focus on technology-intensive sectors.  This is leading to a series of new investment and companies laws and changes to capital market rules,” he noted.

He said there is a similarly encouraging story for portfolio investment, which has already benefited from market reforms and if, as expected, MSCI decides to add Saudi Arabia to its benchmark Emerging Markets Index, this could sharply increase inflows into the region as a whole.  PwC said higher oil prices are now boosting confidence in the non-oil economy.  Although adjustments such as subsidies cuts and the introduction of VAT this year have had short-term negative impacts, they should make the economy more efficient.  Longer term, PwC said the UAE economy will benefit from a wave of investment in Abu Dhabi’s oil sector and efforts by Dubai to take a lead in many new technologies.  (AB 29.06)

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5.9  UAE Further Delays Launch of First Nuclear Reactor

On 4 July, the United Arab Emirates said that its first nuclear reactor would come online in late 2019 or early 2020, further delaying the launch of the Arab World’s first atomic power station.  Construction of the first of four reactors at the $20 billion Barakah plant has been completed ahead of “operation by the end of 2019 (or) early 2020.  The first reactor had been due to come online last year, but the launch was initially delayed until 2018 to make time for regulatory approvals and complete safety checks.  No reason was immediately given for the latest postponement.

State-owned ENEC said a second reactor was 93% complete, a third is 83% finished and the fourth was 72% complete.  The nuclear plant west of Abu Dhabi is being built by a consortium led by the Korea Electric Power Corporation.  When fully operational, the four reactors should produce 5,600 MW of electricity, around 25% of the UAE’s needs, according to the energy ministry.  Nuclear and renewables are targeted to contribute around 27% of the UAE’s electricity by 2021.  The UAE says it wants 50% of its energy to be generated by clean sources by 2050.  (AB 04.07)

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5.10  Saudi Economy Returns to Growth in First Quarter

Saudi Arabia’s General Authority for Statistics announced that Saudi Arabia’s economy pulled out of recession in Q1/18, thanks to rising oil prices and a surge in the non-crude sector.  The kingdom’s economy grew by 1.15% in the first three months of the year compared to the same period last year when it shrank by 0.84%.  The body attributed the growth to a 2.7% jump in the non-oil sphere and a 0.62% rise in the oil sector, which contracted by nearly 2% in the first quarter of 2017.

Oil prices have been steadily rising since early 2016, when OPEC and non-OPEC producers struck a deal to cut output.  The cut in oil revenue – which accounts for 70% of government income – pushed the OPEC kingpin’s economy into negative territory last year for the first time since 2009, a year after the global financial crisis.

The reports of growth come as Crown Prince Mohammed bin Salman pushes a package of sweeping economic and social reforms in the kingdom.  As part of his Vision 2030 plan, the heir to the throne plans to reduce Riyadh’s dependence on oil, boost tourism and massively invest in the underdeveloped entertainment sector to increase domestic spending.  Crude prices have remained strong even after oil producers said last week they plan to increase output starting in July.

Riyadh has posted a budget deficit for the past four years, borrowing from domestic and international markets and hiking fuel and power prices to finance the shortfall.  It also introduced a 5% value-added tax at the start of 2018.  Since 2014, Saudi budget deficits have totaled $260 billion and the government is projecting a 2018 shortfall of $52 billion.  (AB 01.07)

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►►North Africa

5.11  Egypt’s Annual Urban Consumer Price Inflation Rises 14.4% in June

Egypt’s annual urban consumer inflation surged to 14.4% in June from 11.4% in May, CAPMAS announced on 10 July, after 10 months of steady decline.  The increase, which took economists by surprise, came after Egypt raised fuel, electricity and taxi fares last month.  The increases were part of efforts to meet the terms of a $12 billion IMF loan program from late 2016 that included cuts in energy subsidies and tax increases.  The government in May raised metro fares in a move that had increased public discontent, sparking a brief bout of protests.  Prices soared in particular after the import-dependent country floated its currency, the pound, in November 2016, reaching a record high of 33% in July 2017. Inflation has eased since then, slowing its lowest level in almost two years in May.  (CAPMAS 10.07)

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5.12  Egypt Implements 2018/19 Budget with More Expenditures on Health & Education

Egypt’s finance ministry announced on 1 July the implementation of the new budget for the 2018/19 fiscal year with a total of EGP 1.42 trillion in expenditures, an increase of EGP 200 billion from last year.  Finance Minister Mohamed Maeet said that the new budget includes an unprecedented increase in allocations for education and health, reaching EGP 257.7 billion compared to EGP 222 billion last fiscal year.  Maeet said that EGP 98.7 billion are allocated to the health sector, EGP 108 billion to pre-university education, and EGP 51 billion to higher education.  He also said that the budget includes a monthly increase of EGP 265 in wages for the public sector to meet price hikes caused by cuts in fuel subsidies and by other austerity measures.

Government investments financed by the General Treasury have increased by 42% from the previous fiscal year, reaching about EGP 100 billion against EGP 70 billion in the 2017/18 budget, according to the statement.  Maeet said that economic growth for the first half of the current fiscal year is expected to reach 5.8%, rising to 6.5 – 7% by mid-year, which would contribute to the Central Bank’s plan to reduce inflation rates to less than 10%.  The minister stressed that he will work on economic and social development projects to improve services for citizens.  (Ahram 01.07)

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5.13  Suez Canal Records Highest Ever Revenues in 2017-18

The Suez Canal made record revenues during the fiscal year 2017/2018.  The revenues of this year is the highest in the canal’s history, totaling $5.6 billion, compared to $5 billion during the previous fiscal year.  The increase recorded compared to the previous year was $600 million, equal to 13%.  The navigation volume increased notably. He said 17,845 vessels crossed the canal in 2017/2018, increasing by 841 vessels by 4.9% compared to the preceding year.  Total cargoes transferred through the canal in 2017/18 recorded 97.6 million tons, increasing by 9.8% compared to the previous fiscal year.

The Suez Canal Authority has taken steps to develop the canal’s navigational potentials adopted flexible marketing policies that resulted in attracting new shipping lines and enhanced the canal’s competitiveness compared to other water channels.  The new canal contributed to maintaining the Suez Canal on top of water channels globally by increasing its numerical and absorptive capacity and raising its efficiency in receiving the new generations of giant ships.  (Al-Masry Al-Youm 30.06)

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5.14  Egypt Says it Has Primary Budget Surplus as it Seeks to Revive Economy

On 5 July, Egypt said it had a primary budget surplus for the first time in 15 years and said it was committed to paying oil companies’ debts by end of 2019 as it seeks to lure investors to revive a crisis-hit economy.

Cairo has enacted a raft of tough austerity measures backed by the International Monetary Fund (IMF) since 2016, hoping for a strong financial comeback as it recovers from years of political upheaval.  President A-Sisi’s government devalued the Egyptian pound by half in 2016, and has pushed through steep fuel and electricity subsidy cuts this year, in measures praised by some economists but lamented by many Egyptians who say they are struggling with soaring living costs.  Finance Minister Mohamed Maait said Egypt achieved a 0.2% primary budget surplus, worth EGP 4 million ($223 million) in its 2017-2018 fiscal year. It is aiming for a 2% primary surplus in the current fiscal year.

The country expected its 2017-2018 budget deficit to stand at 9.8%, slightly above the 9.1% it said last year it was targeting.  Maait told reporters that revenues expected from the 2018-2019 budget were around EGP 989 billion ($55 billion), EGP 817 billion of which would be spent on debts and interest.  Foreign reserves rose by the end of June to $44.258 billion from $44.139 billion, the central bank announced separately, continuing their climb since Egypt secured the $12 billion IMF loan.

Egypt wants to woo foreign investors and increase other crucial sources of income such as tourism, which declined drastically in recent years because of political unrest and a precarious security situation, although tourism revenues.  The discovery of large amounts of offshore gas in Egyptian waters, including the giant Zohr Gas Field, has caused hope for another source of revenue with Egypt as a potential gas hub for the region.  Petroleum Minister El Molla told reporters Egypt was committed to paying off its debts to foreign oil companies by the end of 2019.  Those debts stood at $1.2 billion at the end of June, their lowest since 2010 when they were around $1.3 billion, he said.  El Molla repeated that Egypt intended to increase production from the Zohr field to 56 million cubic meters of gas per day by the end of this year — up from current levels of around 33 million cubic meters.  Discovered in 2015 by Italy’s Eni, Zohr contains an estimated 8 trillion cubic meter of gas.  (Reuters 05.07)

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5.15  Egypt to Start Building First Nuclear Plant in Dabaa in Next Two Years

On 30 June, Egypt said that construction of its first nuclear power plant, to be built by Russia, will begin in the next two to two-and-a-half years.  The 4,800 MW capacity plant at Dabaa in the north of the country, aims to be up and running by 2026.

Moscow and Cairo signed an agreement in 2015 for Russia to build a nuclear power plant in Egypt, with Russia extending a loan to Egypt to cover the cost of construction.  Egypt’s official gazette said in 2016 the loan was worth $25 billion and would finance 85% of the value of each work contract, services and equipment shipping. Egypt would fund the remaining 15%.

Last December, Egyptian President Abdel-Fattah El-Sisi and his Russian counterpart Vladimir Putin attended in Cairo the signing of the agreement, which officially marked the launching of the power plant project.  (Ahram Online 01.07)

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5.16  US Government Removes Sudan Sanctions Regulations

The Department of the Treasury‘s Office of Foreign Assets Control (OFAC) is removing from the Code of Federal Regulations the Sudanese Sanctions Regulations as a result of the revocation of certain provisions of one Executive Order and the entirety of another Executive Order on which the regulations were based.  OFAC is also amending the Terrorism List Government Sanctions Regulations to incorporate a general license authorizing certain transactions related to exports of agricultural commodities, medicines, and medical devices, which has, until now, appeared only on OFAC’s website.  (OFAC 28.06)

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6.1  Turkey’s Inflation Rate Rises to 15.39% in June

Turkey’s annual inflation rate climbed to 15.39% in June compared to the same month last year, the Turkish Statistical Institute TurkStat said on 3 July.  The June figure was up from 12.15% in May, according to the data from the national statistical body.  The consumer price index saw a monthly change of 2.61% in June and a rise from 1.62% in May.

Consumer prices over the 12-month average in Turkey saw an increase of 11.49% in June, according to official data.  The highest monthly increase was in food and non-alcoholic beverages at 5.98%, while the highest annual increase was in transportation with 24.26%.  The only monthly decrease was 1.15% in clothing and footwear.  (TurkStat 03.07)

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6.2  Turkey’s EU Exports & Imports Grow in First Five Months of 2018

Turkey’s exports to the European Union in January-May 2018 surged 21% year-on-year, the Turkish Statistical Institute (TUIK) announced on 29 June.  However the country’s overall trade gap kept growing.  According to TUIK, exports to the 28-member EU bloc account for some 51.4% of Turkey’s overall exports in the five-month period — totaling $35.6 billion — while imports from the EU were $39 billion, up 22% on a yearly basis.  Over the same period, Turkey’s overall exports totaled $69.3 billion, a 7.9% annual hike, and imports reached $104.5 billion with a 17.2% increase.

Turkey’s foreign trade balance ran a $35.2 billion deficit from January to May, marking a year-on-year rise of 41.4%.  Turkey’s largest export markets were Germany with $6.9 billion, the UK ($4.3 billion) and Italy ($4.2 billion) in the same period.  China ($9.9 billion), Russia ($9.6 billion) and Germany ($9.4 billion) stood as Turkey’s top three import sources.

The country’s top export item was vehicles and their parts — excluding railway or tramway rolling-stock — valuing some $11.6 billion.  Mineral fuels, mineral oils, and their derivative products topped the list of imported items, amounting to $17.1 billion.  TUIK also said that the share of manufacturing industries products in overall exports was 93.8 — some $65 billion — in January-May 2018, and intermediate goods claimed the top spot with 76.1% in Turkey’s overall imports.

In 2014, Turkey’s exports hit an all-time high of $157.6 billion while the figure was nearly $157 billion last year.  Over the past five years, the highest export-to-import ratio was recorded in 2016 with 71.8%, while the country’s foreign trade deficit has fallen from $99.8 billion in 2013 to $76.8 billion in 2017.

In May 2018, exports were $14.3 billion — up 5.3% — and imports were $22.6 billion — up 5.5% — over the same month last year, the institute noted.  The foreign trade deficit reached $7.7 billion, with a 5.7% yearly increase.  (TUIK 29.06)

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6.3  Turkey’s Defense Industry Exports Reach $900 Million in 2018

Turkey’s aviation and defense industry exports saw an increase of nearly 14% compared to the same period last year, reaching over $900 million in the first half of 2018.  The country’s aviation and defense industry exports also reached $1.85 billion in the most recent 12-month period.  Turkey’s exports in the first six months were $81.9 billion and in the last 12 months they were $161.5 billion.  Over 1% of all exports came from the aviation and defense sectors.

The aviation and defense industry sectors made most of the exports to the U.S. – at $342.9 million – followed by Germany with $116.9 million.  The country’s state-run and private aviation and defense companies manufacture several types of products, such as unmanned air vehicles, weapons, tanks, armored cars, and command and control systems.  Meanwhile, Turkey’s top exporting industries during the first six months of 2018 were the automotive, textile and chemicals sectors, at $16.4 billion, $8.8 billion and $8.4 billion respectively.  (AA 02.07)

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6.4  Turkey Adds 15.5% Tax to Alcoholic Beverages

An additional 15.5% special consumption tax has been added for alcoholic beverages early in July, automatically in line with Turkey’s producer price index in the first half of the year.  Turkey makes tax hikes in alcohol products twice a year according to their share in the domestic producer price index.  The special consumption tax over such products has automatically gone into effect.  As a result, an average increase of TL 10 is expected for a 70 cc bottle of the anise-flavored alcoholic drink rakı, rising from TL 102.1 ($21.7) to 112.7 TL ($23.9).

Some TL 84.3 of the expected price tag is charged by the state in the form of various taxes, included value-added tax (VAT) and special consumption tax.  One 70 cc rakı now costs more than 7% of the minimum monthly wage in Turkey.  Meanwhile, in addition to the semi-yearly automatic tax hikes on alcoholic beverages, in accordance with Turkey’s accession negotiations with the European Union, special consumption taxes for alcoholic beverages were equaled late in May.  While the taxes imposed on rakı, vodka, and gin were increased, taxes for whiskey, liquor and wine were decreased.  Following the latest increases in alcohol taxes, the number of people producing their own drinks has grown across Turkey, according to distributors.  (Various 05.07)

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6.5  Turkish Automotive Market Contracts 39% in June

Turkey’s overall auto sales market, including light trucks, contracted by 39% in June, down to 51,037 from 83,658 in the same month last year, data from the Automotive Distributers’ Association (ODD) has shown.  While some 41,225 units of cars were sold in June with a 37.7% year-on-year decline, the sales of light commercial vehicles sales were down 43.9% in June on year-on-year basis with 9,813 units.  Sales also saw an 11.92% decline in the first half of the year compared to the same period in 2017.

Total sales stood at 353,348 in the first half of 2018, down from 401,158 in 2017, the ODD said in a statement.  The number of cars sold reached 275,870 from January to June, down 9.82% from the same period last year.  A total of 77,478 units of light commercial vehicles were sold in the first half of the year, a 18.6% year-on-year decline.  Considering the whole auto market in Turkey, Renault was the top brand with over 50,000 sales in January-June, followed by Fiat and Volkswagen with sales of 39,200 and 39,000 respectively.  (ODD 03.07)

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6.6  Central Bank of Cyprus Revises 2018 Growth Forecast Upwards to 4.1%

The Central Bank of Cyprus significantly revised its 2018 economic growth forecast upward to 4.1% from a previous 3.4 citing strong exports and domestic demand.  In 2019, the economy is forecast to grow 3.9% with the growth rate slowing down to 3.5% the following year, the central bank said in its June 2018 economic bulletin.

In 2018, private consumption is expected to increase 2.5% after growing 4.2% in 2017, reflecting the increase in disposable income resulting mainly from an increase in employment and to a lesser degree higher earnings, the central bank said.  Public consumption is forecast to increase 1.8% in 2018 after growing 2.7% the year before due to the increase in wages and the increase in employment in the public sector.  The value of exports of goods and services is expected to increase 6.1% this year after growing 3.4% last year while imports are forecast to increase 5.5%, almost half as much they increased last year.

In addition to positively impacting private consumption, the increase in wages is expected to positively affect savings of households, which during the crisis years resorted to their deposits to maintain the level of consumption, and also help repayment of non-performing loans, the central bank said.

The unemployment rate is expected to average this year at 9.1%, compared to 11% last year, with employment increasing 3.5% after growing 3.4% in 2017, it said.  In 2019, the unemployment rate is expected to fall to 7.4%.  This year, nominal compensation per worker is expected to increase 1.9% after growing 0.7% last year mainly on pay rises in the public sector triggered by the re-introduction of wage indexation, compensating workers for the loss of purchasing power, and the introduction of annual pay rises, the central bank said.

The harmonized inflation rate is expected to accelerate to 0.9% this year from 0.7% in 2017, before it further accelerates to 1.4% next year, the central bank said.  (CBC 02.07)

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6.7  Number of Cypriot Unemployed Drops in June to 23,808

The number of registered unemployed fell by 6,769 or 22% in June compared to a year before and rose by 969 to 23,808 in a month, Cystat announced on 4 July.  Last month, the seasonally adjusted number of persons out of work fell by 7,078 in a year to 26,844 and by 543 in a month.  The decline in unemployment last month was mainly on a reduction in the number of jobless in trade by 1,206, in construction by 896, hospitality by 758, public administration by 732, manufacturing by 621, financial services by 256 and newcomers by 1,107.  (Cystat 04.07)

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7.1  Tisha B’Av to Be Observed on 21/22 July

 Tisha B’Av will be observed this year from evening on 21 July until the nightfall on 22 July.  Tisha B’Av (or the Ninth of Av) is an annual fast day in Judaism, named for the ninth day (tisha) of the month of Av in the Hebrew calendar.  Tisha B’Av is the culmination of a three week period of increasing mourning, beginning with the fast of the 17th of Tammuz.  The fast commemorates the destruction of both the First and Second Temples in Judaism’s holiest city, Jerusalem, which occurred about 656 years apart, but on the same Hebrew calendar date.   Accordingly, the day has been called the “saddest day in Jewish history”.  While the day recalls general tragedies which have befallen the Jewish people over the ages, the day focuses on commemoration of five events: the destruction of the two ancient Temples in Jerusalem, the sin of the ten spies sent by Moses, who spoke disparagingly about the Land of Israel, the razing of Jerusalem following the siege of Jerusalem in 70 CE and the failure of Bar Kokhba’s revolt against the Roman Empire.

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

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7.2  New Egyptian Educational System to Be Implemented Next September

Egypt’s President Abdel Fattah Al-Sisi is expected to announce in July applying the new educational system from Cairo University, Education Minister Tarek Shawky said.  The Supreme Council of Pre-University Education approved late on Saturday a new project for the high school system, another system regulating kindergarten, the first stage of preparatory school starting September 2018.  The council further approved changing the names of the new technical education secondary schools to be schools of applied technology, according to a three-year system.

The new secondary school system will be divided into two sections: one focused more on arts and one focused more on science.  The single national exam is being cancelled, and students will receive their final exams electronically on tablet devices provided to them by the ministry.

Shawky has developed several innovate initiatives, including the Egyptian Knowledge Bank, an online digital portal that includes educational, research, and cultural resources for a wide array of users, and Teacher First, a training program for teachers on using ICT techniques in education, which is now available for Egyptian teachers.

Meanwhile, Shawky was first named education minister in February 2017. Since then, he has intended to implement dramatic changes in the Egyptian educational system; some have been admired, while others have caused anger and raised concerns among Egyptian parents.

As Egypt is looking forward to making critical changes in its public educational system as part of its 2030 Vision, it signed an agreement in April with the World Bank (WB) for a five-year loan worth $500m to improve education at Egyptian public schools.  The project aims at increasing access to quality kindergarten education for around 500,000 children, training 500,000 teachers and education officials, and providing 1.5 million students and teachers with digital learning resources.  (Various 09.07(

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7.3  Erdoğan Confirmed Winner of Turkey Presidential Vote

Turkey’s election body on 4 July confirmed the outright victory of President Recep Tayyip Erdoğan in the 24 June presidential polls, saying he won almost 52.3% of the vote according to final results.  The publication of the final results began a sequence of events that culminated on 9 July with Erdoğan’s swearing-in for a second mandate with enhanced powers.  His final percentage was higher than when he was first elected as president in August 2014 with 51.79% of the vote.  The president’s chief rival from the main opposition Republican People’s Party (CHP), Muharrem İnce, won 30.64% of the vote.

In his second mandate, Erdoğan will have expanded powers under an executive presidency after constitutional changes were approved in a referendum last year.  He will also be able to directly appoint top public officials including ministers and one or more vice presidents as the post of premier is removed.  Critics say the new system will lead to one-man rule but Erdoğan argues the changes are needed to streamline decision-making and avoid chaotic governments.

The new parliament, which was sworn in on 7 July, has 600 seats, up from 550 under the old system.  But the AKP’s partner, the Nationalist Movement Party (MHP), won 49 seats, giving the ruling party-led grouping a majority in parliament.  The CHP won 146 seats in the parliament, remaining the main opposition party, while HDP retained its position as the second largest opposition party with 67 seats.  Akşener’s right-wing Iyi (Good) Party will enter parliament for the first time after it was set up in October last year with 43 seats.  (Various 05.07)

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8.1  Entera Bio Announces Pricing of Initial Public Offering

Entera Bio announced the pricing of its initial public offering of 1,400,000 units, with each unit consisting of one ordinary share and one warrant to purchase 0.5 of an ordinary share, at a combined price of $8.00 per unit.  The Company has granted a 30 day overallotment option to the underwriters to purchase up to 210,000 additional ordinary shares and/or 210,000 additional warrants to purchase up to a total of 105,000 ordinary shares.  The units will immediately and automatically separate upon issuance, and the ordinary shares and warrants are expected to begin trading today on The NASDAQ Capital Market under the symbols “ENTX” and “ENTXW”, respectively.

Gross proceeds, before underwriting discounts and commissions and estimated offering costs, are expected to be approximately $11.2 million.  The company intends to use the net proceeds from this offering to fund its R&D expenses, including clinical trials, working capital and general corporate purposes.

Jerusalem’s Entera Bio is a clinical-stage biopharmaceutical company focused on the development and commercialization of orally delivered large molecule therapeutics for use in orphan indications and other areas with significant unmet medical need.  The Company is initially applying its technology to develop an oral formulation of parathyroid hormone (PTH) for hypoparathyroidism (EB612) and osteoporosis (EB613).  (Entera Bio 28.06)

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8.2  InnovationQuarter (NL) visits the Hebrew University BioGiv “Excubator”

InnovationQuarter (NL) visited the @BioGiv “Excubator” Infrastructure Center of the Hebrew University at the Hitech Village on the Givat Ram Campus in Jerusalem.  The visit was organized by JLM-BioCity.  The InnovationQuarter visitors received presentations from BioGiv, JLM-BioCity, @BioDesign, Brainwatch and Imagine Bio.  JLM-BioCity gave an overview of the bio ecosystem of Jerusalem and on how the synergy between companies, academia and hospitals in Jerusalem is driving the innovation in biotech and healthcare.  @Imagine Bio gave an overview of the dynamic rise of Israel as a top digital health hub and opportunities international players to collaborate and leverage the local industry.  The Dutch guests toured BioGiv and met two of the startups.

InnovationQuarter is an NGO with the mission of supporting and stimulating the innovation in West Holland in close co-operation with all major corporations, educational and research institutions – like the Erasmus MC in Rotterdam, the Delft University of Technology and Leiden University – and government organizations.

Bio-Giv ‘s Excubator offers space to early-stage biotech and Biomed startups providing access to fully certified, safety – regulated and equipped facilities for life science development.  Since the opening of the new facilities in January, they have accepted 6 startup companies and are screening four more to be accepted.  (JLM-BioCity 07.06)

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8.3  Cannabics Pharmaceuticals MoU to Focus on the Treatment of Ophthalmic Disorders

Cannabics Pharmaceuticals has entered a memorandum of understanding with a clinical-stage biopharmaceutical company focused on the treatment of ophthalmic disorders, and that has distribution rights of known medical formulae related to eye diseases.  Per the terms of the agreement, the parties shall establish a jointly-owned new Israeli entity, which will initially be controlled 50/50 by each of the parties.  The new entity will focus on exploring the potential of alleviating the effects of eye disorders and infections using cannabinoids, while reducing use of steroid based products which are currently widely used.

Cannabics Pharmaceuticals is a United States-based public company that is developing cannabinoid-based medicine and treatments focused on cancer and its side effects.  Cannabics’ approach can be used to develop cannabinoid-based therapies as preventive or primary cancer treatments – not just palliative, the way it’s being used now.  By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move medical cannabinoids into the mainstream of cancer therapies.  The company’s R&D is based in Israel, where it is licensed to conduct scientific and clinical research on harnessing the therapeutic properties of cannabinoid formulations.  (Cannabics Pharmaceuticals 29.06)

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8.4  OWC Completes First Part of Cannabis-Based Ointment Safety Study

OWC Pharmaceutical Research Corp. announced a successful completion of the first part of its Phase I, placebo controlled, maximal dose study (the “Psoriasis Study”) to determine the safety and tolerability of topical ointment containing medical grade cannabis (the “Topical Ointment”) in healthy volunteers.  The study is being performed by Professor Aviv Barzilai, Director of the Department of Dermatology at Chaim Sheba Medical Center.  Sheba is a university-affiliated hospital that serves as Israel’s national medical center and is one of the leading integrated medical centers in the Middle East.  The completed part of the study consisted of application of escalating doses of the Topical Ointment to healthy volunteers and was successfully completed with no adverse effects.  After completion of the second part of this study, the company plans to initiate a Phase II clinical study to demonstrate the efficacy of Topical Ointment in treating mild to moderate psoriasis and other inflammatory skin diseases.

OWC Pharmaceutical Research Corp., through its wholly-owned Israeli subsidiary, One World Cannabis (collectively OWC) conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD and migraines.  OWCP is also developing unique delivery systems for the effective delivery and dosage of medical cannabis. All OWCP research is conducted at leading Israeli hospitals and scientific institutions and led by internationally renowned investigators.  The Company’s Research Division is focused on pursuing clinical trials evaluating the effectiveness of cannabinoids and cannabis-based products for the treatment of various medical conditions, while its Consulting Division is dedicated to helping governments and companies navigate complex international cannabis regulatory frameworks.  (OWC 29.06)

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8.5  Extended Medicare Coverage Authorized for INSIGHTEC’s MR-Guided Focused Ultrasound Treatment

INSIGHTEC announced Medicare benefit coverage for MR-guided focused ultrasound (MRgFUS) for the treatment of essential tremor (ET) for six new states including Indiana, Iowa, Kansas, Nebraska, Michigan and Missouri.  This brings the total number of states with Medicare coverage to 16.  Earlier this year, INSIGHTEC announced Medicare coverage for this procedure in Connecticut, Maine, New Hampshire, Rhode Island, Vermont, New York, Massachusetts, Illinois, Wisconsin and Minnesota.  Additional Medicare Administrative Contractors (MAC) have issued positive Draft Local Coverage Determination (LCD) with potential to expand Medicare coverage to a total of 38 states.  There are currently 11 medical centers in the USA treating ET patients with MRgFUS on a regular basis.

Haifa’s INSIGHTEC is a global medical technology innovator transforming patient lives through incisionless brain surgery using MR-guided focused ultrasound.  The company’s award-winning Exablate Neuro is used by neurosurgeons to perform the Neuravive treatment to deliver immediate and durable tremor relief for essential tremor patients.  Research for future applications in the neuroscience space is underway in partnership with leading academic and medical institutions.  (INSIGHTEC 03.07)

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8.6  Cannabics’ Conclusion of Clinical Trial for Cancer Anorexia Cachexia Syndrome

Cannabics Pharmaceuticals has concluded its clinical trial held at Haifa’s Rambam Medical Center.  The Oncology Center at Rambam Medical Center is recognized by the European Society for Medical Oncology (ESMO) as a designated Center of Integrated Oncology and Palliative Care.  Launched in 2016, the study involved patients with advanced Cancer and Cancer Anorexia Cachexia Syndrome (CACS) with Cannabics SR 5mg, daily for 3 months.  The main endpoints that were examined were weight gain, appetite and Quality of Life (QOL).  The official results are now being evaluated by the Hospital and we expect them to be published in the next few months.

Cannabics Pharmaceuticals is a United States-based public company that is developing cannabinoid-based medicine and treatments focused on cancer and its side effects.  Cannabics’ approach can be used to develop cannabinoid-based therapies as preventive or primary cancer treatments – not just palliative, the way it’s being used now.  By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move medical cannabinoids into the mainstream of cancer therapies.  The company’s R&D is based in Israel, where it is licensed to conduct scientific and clinical research on harnessing the therapeutic properties of cannabinoid formulations.  (Cannabics 04.07)

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8.7  Cellect Collaboration Agreement Signed with Dresden University denovoMATRIX Team

Cellect Biotechnology has signed a collaboration and material transfer agreement with the denovoMATRIX group of the Technische Universität Dresden (TU Dresden).  TU Dresden and its Center for Regenerative Therapies Dresden (CRTD), is one of the leading centers for stem cell research in Germany.  The two entities believe that the combination of both proprietary technologies may result in significant enhancement of the overall stem cell selection and expansion processes.

According to the agreement, the team of denovoMATRIX employed by TU Dresden will conduct examinations into the tentative synergy between Cellect’s ApoGraft and the denovoMAtrix technology for the purpose of evaluating collaborative development of products for regenerative medicine.  To that end, a denovoMATRIX scientist will conduct a line of experiments in Cellect’s R&D facility in Israel.  In the event of successful completion of the evaluation stage, both sides agreed to negotiate in good faith a potential mutual development agreement, for the development of a stem cell related product.  Cellect will have the sole discretion on determining the level of success of the evaluation stage.

Kfar Saba’s Cellect Biotechnology has developed a breakthrough technology for the selection of stem cells from any given tissue that aims to improve a variety of stem cell-based therapies.  The Company’s technology is expected to provide research, hospitals and pharma companies with the tools to rapidly isolate stem cells in quantity and quality allowing stem cell-based treatments and procedures in a wide variety of applications in regenerative medicine.  The company’s current clinical trial is aimed at bone marrow transplantations in cancer treatment.  (Cellect 05.07)

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8.8  Teva Planning to Move its US Headquarters to New Jersey from Pennsylvania

New Jersey Gov. Phil Murphy announced that Teva Pharmaceuticals is moving its U.S. headquarters to the state from Pennsylvania.  Murphy says the move will mean 843 jobs will be transferred or created and 232 positions will be retained.  New Jersey’s Economic Development Authority in June approved about $40 million in tax credits over 10 years for Teva.

The New Jersey Economic Development Authority approved performance-based tax credits for the company at its June board meeting.  Teva Pharmaceuticals USA is the North American arm of Teva, which has offices in 60 countries, including 30 locations in the US.  (Various 08.07)

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8.9  Vidac Begins Phase 2 Trial of VDA-1102 Ointment in Patients with Actinic Keratosis

Vidac Pharma announced initiation of a Phase 2b clinical trial of VDA-1102 ointment to treat subjects with actinic keratosis (AK), an early stage of cutaneous squamous cell carcinoma (cSCC), which is a common form of non-melanoma skin cancer.  VDA-1102 is a selective allosteric modulator that triggers apoptosis in cancer cells by detaching hexokinase 2 (HK2) from the mitochondria.  VDA-1102 is being developed as a first-in-class non-irritating topical treatment for AK, addressing a major unmet medical need because currently approved AK therapies are associated with a significant degree of local skin reactions, which can be very unsightly and burdensome to patients and lead to poor adherence to therapy.

The Phase 2b trial is a multi-center, open-label, dose-ranging study evaluating the efficacy, safety, and tolerability of daily application of topical 10% or 20% VDA-1102 ointment for 12 weeks in subjects with actinic keratosis.  Subjects will be followed for one month after conclusion of treatment; the primary endpoint is a percent of subjects that achieve complete clearance.  The study is expected to enroll approximately 150 subjects in the US, in 2 cohorts.

Ness Ziona’s Vidac is a privately-held clinical oncology company developing first-in-class drugs using its breakthrough metabolic immuno-oncology platform technology. Vidac uses its proprietary HEXAGON™ bioinformatics tool to identify patients with cancers with high HK2 levels, across multiple tumor types. Vidac’s lead drug, VDA-1102 ointment is in Phase 2b for treatment of actinic keratosis (early skin SCC), and is being developed in a parenteral form for the treatment of solid tumors and hematological malignancies.  (Vidac Pharma 10.07)

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8.10  Teva Announces Launch of a Generic Version of Uceris in the United States

Teva Pharmaceutical Industries announced the launch of a generic version of Uceris1 (budesonide) extended-release tablets, 9 mg, in the U.S.  Budesonide extended-release tablets are a glucocorticosteroid indicated for the induction of remission in patients with active, mild to moderate ulcerative colitis.

With nearly 550 generic medicines available, Teva has the largest portfolio of FDA-approved generic products on the market and holds the leading position in first-to-file opportunities, with over 100 pending first-to-files in the U.S.  Currently, one in seven generic prescriptions dispensed in the U.S. is filled with a Teva generic product.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by millions of patients every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,800 molecules to produce a wide range of generic products in nearly every therapeutic area.  In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products.  (Teva 09.07)

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8.11  Tefen Concludes $23 Million Local Cannabis Sales Deal

Tefen has recently concluded two deals valued at approximately $23 million to supply 14 tons of medical-grade cannabis to a large Israeli processor and distributor over the next three years.  The growing facility will be on a 20 dunam (4.94 acres) farm in central Israel which can produce up to 20 tons of cannabis per year.

Tefen is in the process of constructing an automated cultivation facility in central Israel and will be ready to also sell internationally if the Israeli government approves the export of cannabis.  In Israel, the current forecast is that the Israeli cannabis market will grow from the current 30,000 patients to 120,000-170,000 patients, reflecting local consumption of 40-60 tons of medicinal cannabis annually.

Beit Dagan’s Tefen is a publicly traded Israeli cannabis licensed producer that specializes in the cultivation of standardized medical cannabis.  Tefen will also advance other business activities under the public entity, including the implementation of technology in the entire growth chain, and the sale and export of medicinal cannabis to groups outside of Israel if exports are approved.  Ness Ziona’s Alvit LCS Pharma is an Israeli cannabis drug delivery company established to produce safer, more convenient and more effective medicinal cannabis products for patients and their treating physicians through superior proprietary cultivation, extraction and formulation technologies.  (Alvit and Tefen 09.07)

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8.12  Evogene’s Positive Yield Results in its Bio-Stimulant Program for Wheat

Evogene announced that its Ag-Biologicals division has achieved positive yield results leading to phase advancement in its bio-stimulant for wheat program.  This phase advancement, from discovery to initial development, is based on meeting efficacy criteria in spring wheat field trials with significant yield improvements of 10% – 20%.

Evogene’s bio-stimulant candidates for spring wheat are being initially developed as seed treatments with additional application methodologies planned to follow.  Having moved to the development stage, efforts are now focused on advancement of formulation technology and fermentation protocols for the improvement of performance consistency and to reduce production costs.  Further steps will include field trials in the US in the coming season followed with expansion into Western Canada, which are the key geographies for a 1st product launch.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique predictive biology platform incorporating deep scientific understandings and advanced computational technologies.  This platform is utilized by the company to discover and develop innovative ag-chemical, ag-biological and ag-seed products (GM and non GM).  (Evogene 10.07)

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8.13  Cornell & Volcani Center to Research Impacts of Climate Change on Crop Growth

Empire State Development (ESD) announced a partnership between Cornell University College of Agriculture and Life Sciences (CALS) and the Agricultural Research Organization (ARO) in Israel, known also as the Volcani Center, to advance cutting-edge research in the agricultural and environmental sciences.  The two prestigious institutions will conduct research on critical issues confronting the environment and its effect on agriculture, specifically the impact of climate change on crop growth.

The announcement is a result of New York State’s multi-sector trade mission to Israel in December 2017, led by ESD President Zemsky, to continue the efforts initiated by Governor Cuomo in March 2017 to strengthen economic ties with Israel, create new jobs and attract additional international business investment in New York through the Global NY initiative.  The partnership is formalized by a Memorandum of Agreement that leverages CALS’s world-leading expertise in these areas and ARO’s innovative approach to agricultural research and technology.

CALS is Cornell University’s second largest college and focuses across disciplines to provide research, education and outreach that advances science in natural and human systems; food, energy and environmental resources; and social, physical and economic well-being.  The Volcani Center Agricultural Research Organization in Rishon LeZion, is the Israeli national institute for agricultural research. It is comprised of six institutes spanning plant sciences, animal sciences, plant protection, soil, water and environmental sciences, agricultural engineering and postharvest and food sciences.  ARO also operates two research stations across Israel.  ARO specializes in basic and applied research in agriculture that enable Israel to achieve high levels of agricultural output in an arid zone.  (ESD 03.07)

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9.1  Windward Adapts Market-Leading Intelligence Platform to Marine Insurance Industry

Windward announced it had raised $16.5m in Series C funding.  It brings the total raised to date to $38.9m.  The round was led by San Francisco-based insurtech fund, XL Innovate. Existing investors, Horizons Ventures and Aleph, also participated, as did a number of individuals.  Windward will use the money to strengthen its position within the marine insurance market, expediting the development and rollout of its suite of marine insurance products, hiring top talent, and expanding its London office.

Building on its success quantifying marine risk for governments, Windward adapted its technology to create a unique offering for the marine insurance industry.  Windward Insurance continuously monitors and analyzes what ships are doing, including: how they navigate; where they operate; when they operate; what they do in rough weather; and how they maneuver in ports.  The company’s models use these vessel operating patterns and behavioral traits to predict the likelihood of a ship having an accident in the year ahead.  Windward’s proprietary data and machine learning algorithms are integrated into insurers’ technical pricing models, leading to better underwriting decisions and improving profitability.

Tel Aviv’s Windward helps organizations understand maritime risk and therefore take actions to reduce it.  Since its founding in 2010, the company has raised $38.9M from investors including Aleph, Horizons Ventures, former CIA Director David Petraeus, and former BP CEO, Lord Browne of Madingley.  (Windward 02.07)

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9.2  Ecoppia Expands Bhadla Park Cloud-based Robotic Cleaning Footprint

Ecoppia announced an agreement with SB Energy, a wholly-owned subsidiary of SoftBank Group Corp., to deploy two thousand robots across its five sites in Bhadla Phase III & IV Solar Park Project in Rajasthan India.  This announcement comes on the heels of Ecoppia’s recent completion of large-scale deployments with ENGIE and Ostro Power (Actis Group) in the Bhadla Park.

Bhadla is a water-deficient region that suffers from frequent and massive dust storms, resulting in panel soiling that can reduce energy output.  To minimize the loss of production capacity due to soiling, while keeping in line with SB Energy’s focus on automation and robotics, the company chose Ecoppia’s state-of-art system to ensure efficient and intelligent module cleaning at the plant.  SB Energy’s project panels will be cleaned daily by Ecoppia robots without any human interference and will be remotely managed through a cloud-based control system.  The water-free Ecoppia solution will save approx. over 2 billion of liters of water during the 25 years of solar plant operations.  With over 1.5 GW of projects deployed or under deployment, and nearly 3 GW of secured projects with leading energy conglomerates worldwide, Ecoppia is revolutionizing the solar O&M space.

With over 3GW of secured projects, Herzliya’s Ecoppia is the world leader in robotic solutions for PV, offering a connected platform that cost-effectively maximizes the performance of utility-scale installations the world over.  Cloud-based, Ecoppia’s water-free and automated robotic systems remove dust from panels on a daily basis using advanced machine learning and IOT capabilities.

Remotely managed and controlled, the Ecoppia platform allows solar sites to maintain peak performance with minimal costs and human intervention.  Owing to proprietary algorithms and robotic solutions, Ecoppia makes day-to-day O&M solar activities safer, efficient and more reliable.  A privately-held company backed by prominent and experienced international investment funds, Ecoppia works with the largest energy companies globally, cleaning millions of solar panels every month.  (Ecoppia 02.07)

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9.3  Foresight Signs MoU with Leading Car Importer in Israel for First Sales of Eyes-On System

Foresight Autonomous Holdings announced the signing of a non-binding memorandum of understanding with a direct importer of several leading vehicle manufacturers to Israel.  The memorandum of understanding covers the terms of an agreement for the sale of Foresight’s Eyes-On system for aftermarket configuration (installation of the product in vehicles after leaving the production line) and integration into the importer’s vehicles in Israel.  As a first step, once a binding agreement is signed, Foresight and the importer will carry out a pilot project using a beta version of the Eyes-On system where the system will be integrated into a number of models from the importer’s fleet of vehicles (up to 25 vehicles).

Eyes-On is an advanced driver assistance system (ADAS) and the first product developed by Foresight. Eyes-On is a unique automotive stereo vision system based on two visible-light cameras using advanced algorithms for accurate depth analysis and obstacle detection.  The system detects many potential obstacles, including vehicles, pedestrians, cyclists, animals and more, while ensuring near zero false alerts.  The Eyes-On system is currently in advanced stages of development after being successfully evaluated in a series of extensive tests, in a number of pilot projects in various countries and following tests of its demo system by a number of vehicle manufacturers.

Ness Ziona’s Foresight Autonomous Holdings is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems and V2X cellular-based solutions for the automotive industry.  Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing and sensor fusion.  The company develops advanced systems for accident prevention which are designed to provide real-time information about the vehicle’s surroundings while in motion.  (Foresight 26.06)

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9.4  RADWIN’s New OSS Applications Transform Wireless Network Deployment

RADWIN introduced a new innovative set of OSS applications, enabling service providers to simplify end-to-end operations, effectively manage network deployments, guarantee high service performance and reduce capital and operational expenditures.  RADWIN OSS includes WINManage, a new and advanced Network Management System (NMS), R-Planner with a new built-in Service Estimation Tool and the WINDeploy, a deployment management tool that streamlines network roll-out and automates customer site installation using WINTouch smartphone application.

Tel Aviv’s RADWIN is a leading provider of Point-to-Multipoint and Point-to-Point broadband wireless solutions.  Incorporating the most advanced technologies such as a Beam-forming antenna and an innovative Air Interface, RADWIN’s systems deliver optimal performance in the toughest conditions including high interference and obstructed line-of-sight.  Deployed in over 170 countries, RADWIN’s solutions power applications including backhaul, broadband access, private network connectivity, video surveillance transmission as well as delivering broadband on the move for trains, vehicles and vessels.  (RADWIN 28.06)

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9.5  Gilat Awarded $153.6 Million by Fitel Peru for Regional Telecommunications Projects

Gilat Satellite Networks announced a new award by Peru’s Fitel (Fondo de Inversion en Telecomunicaciones) for two additional regional telecommunications infrastructure projects totaling $153.6 million.  The Amazonas region was awarded for $108 million and the Ica region for $45.6 million.  Gilat expects additional revenues to be generated by selling network capacity to cellular carriers to address the growing needs for voice, data, and internet in these regions, as well as the development of platforms for e-learning, e-health and e-government.

Fitel awarded the new regions of Amazonas and Ica to Gilat in addition to the four telecommunications projects that are nearing completion, in the regions of Huancavelica, Ayacucho, Apurimac and Cusco.  In the two additional regions, Gilat will build the infrastructure required to support the Peruvian population including connecting schools, police stations and health centers.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications.  With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology.  Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC).  Gilat’s comprehensive solutions support multiple applications with a full portfolio of products to address key applications including broadband access, cellular backhaul, enterprise, in-flight connectivity, maritime, trains, defense and public safety, all while meeting the most stringent service level requirements.  (Gilat 28.06)

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9.6  Cyberbit Provides Enhanced Visibility Into OT Networks With Release 6.0 of SCADAShield

Cyberbit announced a new release of its SCADAShield OT security platform that provides enhanced asset discovery and visibility for operational technology (OT) networks.  These capabilities provide managers of industrial control system (ICS) networks with real-time, detailed asset information and mapping, and as a result increase operational continuity, enable rapid vulnerability assessment and remediation, and increase overall cyber resilience across the converged IT and OT networks.

The latest version of SCADAShield provides OT managers with advanced asset tracking and profiling.  As a result, OT managers benefit from granular visibility into asset attributes such as serial number, device ID and software version.  The platform can now also detect asset vulnerabilities and recommend on the best way to remediate them.  This comes in addition to SCADAShield’s rich set of capabilities for industrial control network monitoring that includes advanced network mapping, anomaly detection for zero-day threats, automated policy generation and policy enforcement, and signed threat detection.

Ra’anana’s Cyberbit is the world-leading provider of cyber ranges for cybersecurity training and simulation. Cyberbit is also one of the first to provide a consolidated threat detection and response platform that includes: security automation, orchestration and response (SOAR), ICS/SCADA security (OT security), and endpoint detection and response powered by behavioral analysis.  This unique platform provides a consolidated detection and response platform protecting an organization’s entire attack surface across IT, OT and IoT networks.  Cyberbit is a subsidiary of Elbit Systems.  (Cyberbit 27.06)

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9.7  ECI and Siscotec Chosen for COTAS Network Expansion Across Bolivia

ECI and partner Siscotec, provider of next-generation telecommunications solutions, announced that they have been selected by COTAS, the largest triple-play service provider in Bolivia, to expand its current network in line with increased customer demand.  Moreover, ECI and Siscotec will continue to deliver consulting, support and training on an ongoing basis.  COTAS was looking to expand its current network capabilities to meet the ever-growing demands of business and residential customers for all services – internet, video and telephone – all while taking into consideration future improvements that will be required of its metro network.  Moreover, the network expansion will enable COTAS to improve telecommunications services in remote, underserved locations.  To enable this growth, ECI will be supporting two long-haul paths leveraging ECI’s Apollo family of optical transport and switching platforms, combined with Neptune portfolio packet transport platforms for migrating existing services and enabling end-to-end service provisioning.

ECI’s Apollo family of optical systems were chosen for the job because they interwork seamlessly to provide scalable, high-density and energy-efficient solutions from access to core.  The Apollo 9904X platform, which extends the benefits of OTN switching to metro networks with fluctuating, variable demand, played a critical role in COTAS’ choice.  Moreover, ECI’s award-winning, integrated OTDR capabilities allow COTAS to accurately understand and monitor optical performance in real time, even to help identify the location of problems within the fiber itself, which ensured ECI a higher score than any other vendor in technical aspects.

Petah Tikva’s ECI is a global provider of elastic network solutions to CSPs, critical infrastructures as well as data center operators.  Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cybersecurity solution, and a range of professional services.  ECI’s elastic solutions ensure open, future-proof, and secure communications.  (ECI 27.06)

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9.8  Skyline AI & Greystone Bring AI Advantages to Commercial Real Estate Finance

Skyline AI and Greystone, a commercial real estate lending, investment and advisory company, have announced a technological collaboration.  The joint effort combines Skyline AI’s artificial intelligence expertise, Greystone’s industry-leading real estate finance sector expertise, and the advanced AI and machine learning capabilities of Greystone Labs – Greystone’s technology innovation department – to boost deal performance and the loan underwriting process.

Leveraging its strengths in artificial intelligence and data science technology, Skyline AI will obtain key industry insights from Greystone Labs, increasing the breadth and depth of data available to exponentially boost the performance of Skyline AI’s asset performance predictions.  Greystone Labs will also receive access to Skyline AI’s technology, which will strengthen their specialized team of underwriters, empowering them to underwrite loans 10x faster and with greater accuracy.  This mutual exchange of insights will bolster both companies with the technological prowess to outperform the market in their respective endeavors.

Skyline AI uses the most comprehensive data set in the industry, mining data from over 100 different sources, analyzing over 10,000 different attributes on each asset for the last 50 years.  Powered by natural language processing and high-performance data infrastructure, all data is compiled into one large ‘data lake’, and then cross-validated to make sure the data used is accurate.  This enables Skyline AI to provide, within seconds, a deep assessment and the most accurate actionable predictions about any real estate asset in the United States.

Tel Aviv’s Skyline AI, founded in 2017, is a real estate investment technology company using proprietary machine learning to augment the performance of institutional-grade commercial real estate investments.  Skyline AI utilizes an unprecedented amount of live real estate data to provide the deepest and most accurate predictions about any commercial asset in the US, providing a clear market picture for the first time.  (Greystone & Skyline AI 03.07)

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9.9  IAI Unveils Barak MX Modular Air Defense Solution

Israel Aerospace Industries (IAI) has unveiled a new adaptive naval- and land-based air and missile defense solution centered on its family of Barak high-speed interceptors.  Barak-MX is a modular and scalable networked air/missile defense system that links various sensors, launchers and Barak effectors in a single architecture that can be scoped and optimized to meet specific customer mission requirements. IAI says that while it can provide all the required components for the system, Barak-MX can also integrate existing sensor and effector types that may already be within a user’s inventory.

The heart of the Barak-MX system is the C2.  One central battle management system that integrates sensors and effectors to match the shooter to the threat.  It also allocates which specific system addresses a specific threat (i.e. what interceptor type from what launcher).  It is known as Shoot What Is Needed (SWIN).  Barak MX is essentially a building block solution.  Users retain the central C2 capability, but can add longer-range air defense sensors and Barak effectors to scale up the system.

IAI is also able to integrate any lower cost interceptor with the Barak-MX system if required and can allocate other effector types (e.g. C-UAS [Counter-Unmanned Air Systems effectors).  Barak-MX is a modular and scalable system that links sensors, launchers and Barak effectors in a single architecture that can be scoped and optimized to meet specific customer mission requirements.  (IAI)Barak-MX is a modular and scalable system that links sensors, launchers and Barak effectors in a single architecture that can be scoped and optimized to meet specific customer mission requirements. (IAI 02.07)

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9.10  Telesat & Gilat Develop Broadband Satellite Modem Technology

Gilat Satellite Networks announced a collaborative project with Ottawa’s Telesat for development of broadband communication technology using low earth orbit (LEO) satellites.  CIIRDF will fund the project to facilitate faster and more secure data transmission over satellite.  The joint Canada-Israel innovation project will combine Telesat’s and Gilat’s engineering capabilities to do live testing, using Gilat modem technology, over the Telesat Phase-1 LEO satellite launched earlier this year.  The adaptation of Gilat’s leading-edge modem technology to support advanced LEO constellations, such as the system Telesat is developing, will highlight the benefits that a high-quality satellite broadband experience can deliver to billions of potential users worldwide who live beyond the reach of fiber networks.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications.  With 30 years of experience, Gilat designs and manufactures cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology.  Delivering high value competitive solutions, their portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid-State Amplifiers (SSPA) and Block Upconverters (BUC).  (Gilat 09.07)

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9.11  temi Robot Selects Newsight’s NSI3000 CMOS Image Sensor for Personal Robot 3D Vision System

temi, developer of advanced personal robot temi has selected Newsight’s NSI3000 line sensor for the robot’s 3D visual system.  The NSI3000 chip is embedded in the robot’s LiDAR system, which controls the essential functioning of the personal robot’s navigation.

Tel Aviv’s temi is a personal robot that aims to become an essential addition to every home.  Featuring a 10.1 touchscreen atop a 3.2-foot-tall minimalist frame, temi traverses the home without colliding with furniture, providing a host of useful, connected capabilities on demand.  Intelligent automaton offers the experience of handsfree video calls, control of all smart home devices, enjoyment of music and videos from any room in the home, a vastly superior AI assistant.  temi is an open platform for apps that interact with people, including interactive games, educational apps for fun learning, medical apps, etc.  Furthermore, when away from home, a smartphone connection to temi facilitates the owner’s continued physical presence in the home: to talk to family members, or to check that everything is OK.

Ness Ziona’s Newsight Imaging develops advanced CMOS image sensor chips, providing 3D solutions for high volume markets.  The chip’s sensor is manufactured using CMOS technology with ultra-high sensitivity pixels, replacing more expensive CCD sensors and other camera modules in LiDAR applications for robotics, automotive, drones as well as in other markets, such as mobile depth cameras, AR/VR, Industry 4.0 and barcode scanners.  (temi 10.07)

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10.1  Israeli Startups Raised Over $850 Million in June

Israeli startups raised over $850 million in June, according to press releases issued by companies that have completed financing rounds.  The figure may be more as some companies prefer not to publicize the investments they have received.  This sum can be added to the more than $1.52 billion that Israeli startups raised in the first quarter of 2018, according to IVC-ZAG, as well as the $400 million raised in April and $500 million raised in May.  The country’s startups have raised over $3.3 billion in the first six months of 2018 and are on course to beat last year’s record of $5.24 billion, according to IVC-ZAG.

By far the largest amount raised in June was $300 million by Benny Landa’s nanotechnology printing company Landa Digital Printing.  There were other large financing rounds including $80 million raised by taxi hailing company Gett, $60 million raised by cybersecurity company Claroty and $60 million raised by fintech company BlueVine.  Three companies completed $30 million financing rounds: two cybersecurity companies Cyberbit and BigID and AI medical imaging company Zebra Medical Vision.  Saas company YOOBIC raised $25 million.  (IVC-ZAG 01.07)

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10.2  Despite Shortcomings, Israeli Health Care Praised by OECD

Despite a shortage of hospital beds and nurses, Israel has a long average life expectancy and low infant mortality, according to a new report from the Organization of Economic Cooperation and Development, on health care in the organization’s 35 member nations for 2016.  The report said that while the supply of hospital beds in Israel had risen slightly, from two to 2.3 beds per 1,000 people, this was still lower than the OECD average of 3.6.  Hospital bed occupancy in Israel in 2016 was 93.8%, the second-highest in the OECD.

The report also said that Israel had 3.1 doctors and five nurses for every 1,000 people, compared to the OECD average of 3.3 doctors and 9.3 nurses.

Israel also lagged in its supply of medical equipment.  While the number of MRI machines in Israel increased by 41% from 2013 to reach 4.9 machines for every million citizens in 2016, this was the third-lowest of all OECD nations, considerably lower than the OECD average of 15.8 MRI machines per million people.  Similarly, the number of CT scanners in Israel was 9.7 per million people, in contrast to the OECD average of 24.

Despite the lack of beds, nurses, and equipment, life expectancy in Israel was higher than the OECD average.  Life expectancy for Israeli women was 84.2 years, 10 months longer than the OECD average for women.  For Israeli men, the average life expectancy was 80.7, a full two and a half years longer than the OECD average of 78.1.  Israel also had a lower infant mortality rate, with 3.1 deaths for every 1,000 births, compared to the OECD average of 3.8.  (OECD 02.07)

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10.3  Israel’s Average Wage Continues to Rise

The average wage for Israeli workers in April 2018 was NIS 10,401, according to data released on 5 July by the Central Bureau of Statistics (CBS).  The number of employee positions in the economy stands at 3.611 million.  Thirty-four percent of jobs in the economy in April were in economic industries in which the average wage per employee post was higher than the national average wage, while 66% were in industries in which the average wage per employee job was lower than the overall average wage in Israel.  The nominal average wage rose at by an annual rate of 4.9% between February and April 2018, following an annual increase of 4.8% from November 2017 through January 2018.

During the same period, the real average wage rose by an annual rate of 4%, following an annual increase of 3.8% from November 2017 through January 2018.  The financial services and insurance services sectors saw the highest wage increase during this period. The real average wage in these industries rose by an annual rate of 10% from February to April.  In contrast, in the agriculture, forestry and fishing industries, the average real wage fell by 2.8% from February through April 2018, compared with a rise of 1.4% from November 2017 through January 2018.  (CBS 05.07)

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10.4  Foreign Exchange Reserves at the Bank of Israel, June 2018

Israel’s foreign exchange reserves at the end of June 2018 stood at $114,833 million, an increase of $133 million from their level at the end of the previous month.  The reserves represent 31.8% of GDP.  The increase was the result of:

-Foreign exchange purchases by the Bank of Israel totaling $125 million. All of the purchases were made as part of the purchasing program intended to offset the effect of natural gas production in Israel on the exchange rate.=

-Government transfers from abroad totaling about $31 million.

-A revaluation that increased the reserves by about $6 million.

In contrast, the increase was offset by:

-Private sector transfers of about $29 million. (BoI 05.07)

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11.1  ISRAEL:  Research Department Staff Forecast, July 2018

 On 9 July, the Bank of Israel Research Department presented the forecast of macroeconomic developments compiled in July 2018 in terms of the main macroeconomic variables – GDP, inflation and the interest rate.  According to the staff forecast, Israel’s gross domestic product (GDP) is projected to increase by 3.7% in 2018, compared with 3.4% in the previous forecast and by 3.5% in 2019, similar to the previous forecast.  The rate of inflation over the next year (ending in the second quarter of 2019) is expected to be 1.4%, compared with 1.2% in the previous forecast.  The Bank of Israel interest rate is expected to increase to 0.25% in the fourth quarter of the year, and to increase once more in the third quarter of 2019.


The Bank of Israel Research Department compiles a staff forecast of macroeconomic developments on a quarterly basis.  The staff forecast is based on several models, various data sources, and assessments based on economists’ judgment.  The Bank’s DSGE (Dynamic Stochastic General Equilibrium) model developed in the Research Department – a structural model based on microeconomic foundations – plays a primary role in formulating the macroeconomic forecast.  The model provides a framework for analyzing the forces that have an effect on the economy, and allows information from various sources to be combined into a macroeconomic forecast of real and nominal variables, with an internally consistent “economic story”.

The Global Environment

Our assessments of expected developments in the global economy are based mainly on projections by international institutions (the International Monetary Fund and the OECD) and by foreign investment houses.  These institutions revised their forecasts for growth and inflation in advanced economies and for world trade only slightly since their previous forecasts.  Accordingly, our assessments are that growth in the advanced economies will be about 2.4% in 2018 and 2.1% 2019, and that imports to the advanced economies will increase by 5.0% in 2018 and by 4.7% in 2019.  According to the assessments of investment houses, the US federal funds rate is expected to be 2.4% at the end of 2018 and 3.0% at the end of 2019.  The declared interest rate in the Eurozone is expected to be 0.0% at the end of 2018, and 0.2% at the end of 2019.

Additionally, our assessment is that inflation in the advanced economies will reach about 2.1% in 2018 and 2.0% in 2019.  The price of Brent crude oil increased from an average of about $67 per barrel in the first quarter of 2018 to an average of about $75 per barrel in the second quarter.

Real Activity in Israel

 GDP is expected to grow by 3.7% in 2018 and by 3.5% in 2019 (Table 1). The expected growth rate for 2018 was increased, but there is no change in our basic assessments of forecast real developments in 2018 and 2019 relative to the previous forecast.  The changes in the forecast of real developments are due to the base effect of the revision of Central Bureau of Statistics data for 2017 and the beginning of 2018, which contributed to an increase in the forecast of economic activity in 2018; the delay of the update of green taxation on vehicles, which contributed to lowering the forecast of real activity in 2018 and to an increase in the forecast of real activity in 2019; and revisions in the number of large investments (import-oriented) in the economy and regarding a continued slowdown in building starts in 2018.

Exports are expected to continue increasing at a high rate relative to previous years, inter alia because the assessments in the forecasts for world trade are that growth will continue at a relatively high rate, and in view of the maturation of a number of investments in various industries.  Imports are expected to continue increasing at a rate higher than the GDP growth rate, while the labor market remains tight and the economy is around the GDP potential, exports are increasing, and import and customs barriers are lowered.  The slowdown in investment in residential construction, which is reflected in the relatively low level of buildings starts in 2017 and the beginning of 2018, is contributing to a decline in the expected growth rate of fixed capital formation.


Table 1:  Economic Indicators – Research Department Staff Forecast for 2018 to 2019 (rates of change,%, unless stated otherwise)




Bank of Israel forecast for 2018 Change from the previous forecast Bank of Israel forecast for 2019 Change from the previous forecast
GDP 3.3 3.7 0.3 3.5
Private consumption 3.3 4.0 3.5 0.5
Fixed capital formation (excluding ships and aircraft) 3.1  





Public sector consumption (excluding defense imports) 4.3  





Exports (excluding diamonds and start-ups) 5.7  






Civilian imports (excluding diamonds, ships, and aircraft) 6.9  






Unemployment ratea 3.8 3.3 0.2 3.4 0.3
Inflation rateb 0.3 1.2 0.1 1.5 0.1
Bank of Israel interest ratec 0.10 0.25 0.50
a) Annual average of unemployment in the primary working ages (25–64).

b) Average CPI reading in the final quarter of the year compared with the final-quarter average in the previous year.

c) End of the year.


Inflation and interest rate estimates

 According to the staff forecast, the inflation rate in the four quarters ending in the second quarter of 2019 will be 1.4%, inflation at the end of 2018 will be 1.2%, and at the end of 2019 it will be 1.5%.  Inflation in the past four quarters is expected to converge into the target range in the third quarter of 2018.  The forecast was revised slightly upward relative to the previous forecast, mainly due to the relative increase in average oil prices in the second quarter of 2018 relative to the average in the previous quarter.  This forecast reflects the assessment that inflation will increase moderately toward the center of the target range.  The main contribution to inflation is expected to come from the tight labor market, which has been reflected in wage increases for a number of years, although the wage increases have only been translated into an increase in the GDP labor share since 2017, and are therefore now contributing to an increase in inflation.  In contrast, the continued increase in competition and measures taken by the government to lower the cost of living are expected to continue to moderate the pace at which inflation converges to the center of the target.

In our assessment, the prices of non-tradable goods and services are expected to continue making a positive contribution to inflation, and in particular we assume that the rents item will continue to make a positive contribution.  The pace of increase in the prices of tradable goods is expected to rise due to the increase in inflation globally, particularly the increase in energy prices, assuming that the shekel’s exchange rate remains relatively stable.  However, the prices of tradable goods are expected to continue increasing at a pace slower than the prices of non-tradable goods, further to the long-term price trends in the prices of tradable goods, and due to structural processes (including government measures to reduce the cost of living and the development of Internet commerce).

According to the Research Department’s assessment, the Bank of Israel interest rate is expected to start increasing in the fourth quarter of 2018, to 0.25%.  An increase at that time is consistent with the Monetary Committee’s forward guidance, assuming that the Research Department’s inflation forecast comes to pass.  In particular, the Research Department’s assessment is that the annual inflation rate will be within the target range in the third quarter, and that inflation expectations at that time will also be within the target range.  According to the forecast, a further increase in the interest rate, to 0.5% is expected in the third quarter of 2019.

Table 2:  Inflation and interest rate forecasts for the coming year (%)
Bank of Israel Research Department Capital marketsa Private forecastersb
Inflation ratec 1.4 1.5 1.0
(range of forecasts) (0.7–1.9)
Interest rated 0.25 0.35 0.27
(range of forecasts) (0.10–0.50)
a) Average following publication of the Consumer Price Index for May. Inflation expectations are seasonally adjusted.

b) The forecasts published following the publication of the Consumer Price Index for May.

c) Inflation rate in the coming year. Research Department: average CPI reading in the second quarter of 2019 compared with the average in the second quarter of 2018.

d) The interest rate one year from now. (Research Department: in the second quarter of 2019.) Expectations from the capital market are based on the Telbor market.

Table 2 indicates that the forecasts compiled by the Research Department regarding inflation are higher than the projections of private forecasters, but for the first time in a long time, it is close to the expectations derived from the capital market, after the latter increased following the publication of the CPI for May.  The Research Department’s forecast regarding the interest rate in one year is similar to the projections of the private forecasters, and lower than the expectations derived from the capital market, after the latter increased markedly in the past two weeks.  However, while the assessment of the Research Department is that the next interest rate increase will take place in the fourth quarter of 2018, the average of the professional forecasters and expectations from the capital market attribute greater likelihood that the increase will take place only in the first half of 2019.

Main Risks to the Forecast

Several factors may lead to the domestic economy developing differently than in the baseline forecast.  These include uncertainty concerning the future development of the exchange rate; uncertainty concerning the extent to which government measures to reduce the cost of living will roll over to prices and regarding the strength of further measures of this kind that the government may take; uncertainty in quantifying the increase in competition in the economy and regarding the strength of the increase and its continued effect; and uncertainty regarding the direction and intensity of the effect of the cooling off of the housing market on rental prices.

Regarding the global environment, while the growth forecast and world trade forecast are high, recent developments in world trade may worsen to the point of a trade war that may have a significant impact on the Israeli economy, which is small and open.  (BoI 09.07)

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11.2  JORDAN:  Future of the Jordanian Defense Industry

On 28 June, the “Future of the Jordanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023” report was been added to their offering.

Jordan’s defense expenditure rose from $1.6 billion in 2014 to $2 billion in 2018, at a CAGR of 6.66% due to the country’s precarious security environment, aggravated by the responsibility of hosting a large refugee population.  Attempts to modernize its military equipment will therefore drive its defense expenditure over the forecast period, which is projected to rise from $2.1 billion in 2019 to $2.6 billion by 2023, at a CAGR of 5.60%.  Jordan will maintain its budget allocation for capital expenditure at an average of 3.3% over the forecast period, with the US providing military aid.

Due to a lack of domestic production capabilities, Jordan relies heavily on military imports.  During the historic period, defense imports comprised aircraft, missiles, and armored vehicles from the Netherlands, Russia, Belgium, the US, the UAE, South Korea and the UK – all of which were partly financed by the US.

However, with the Trump administration is seeking to curtail US military and economic aid to Jordan from $453.7 million in 2016 to $353.8 million in 2019, imports could stabilize somewhat over the next five years.

During 2014-2018, defense expenditure averaged $1.9 billion, and included an average of $404.8 million in foreign military aid. Jordan’s homeland security expenditure declined from $1.4 billion in 2014 to $1 billion in 2018, as funds were diverted to curb internal conflicts and control the overspill of refugees.  During the historic period, Jordan focused on importing armored vehicles, aircraft, missiles, and artillery, all of which will continue to be primary weapon categories over the forecast period.  Efforts to develop its domestic defense industry will present firms with growth opportunities and enhance the country’s market attractiveness.  (RandM 28.06)

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11.3  OMAN:  IMF Executive Board Concludes 2018 Article IV Consultation

On 20 June 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Oman.

Reflecting the lower oil price environment, Oman has posted double-digit fiscal and current account deficits over the past few years, leading to large increases in government and external debt and a decline in external buffers.  Against this backdrop, the authorities have launched reforms to bolster the fiscal position and boost private sector-led growth and diversification.

Non-hydrocarbon economic growth is estimated to have picked up modestly in 2017 to about 2%, from 1.5% in 2016, as higher confidence in the wake of the rebound in oil prices helped offset the impact from fiscal consolidation on economic activity.  However, overall real GDP growth turned negative (-0.3%) because of a significant contraction of oil output (-2.8%) due to the implementation of the OPEC+ agreement.  The government’s diversification efforts and the planned completion of major infrastructure projects are expected to gradually raise non-hydrocarbon growth to about 4% over the medium term.

Preliminary budget execution data point to a significant improvement in the fiscal position last year as higher oil prices and spending restraint brought the overall deficit down to below 13% of GDP.  Nonetheless, budget implementation proved challenging, with some spending overruns and tax revenue underperformance compared to the budget.  At the same time, the current account deficit is estimated to have improved by about 3% of GDP.  The government is undertaking further reforms to raise non-hydrocarbon revenue, such as introducing value-added and excise taxes, and intends to continue with spending restraint.  This would bring the deficit to around 4% of GDP in the next two years.

The banking sector appears sound, with banks featuring high capitalization, low non-performing loans, and strong liquidity buffers.  Although private sector credit growth has somewhat moderated, and interest rates are likely to increase as U.S. monetary policy normalization continues, credit growth is expected to remain healthy.

Executive Board Assessment

Executive Directors noted that fiscal and current account deficits since 2014 had pushed government and external debt up and reduced external buffers.  Directors concurred that ongoing reforms and the recovery in oil prices would help reduce fiscal and external deficits significantly over the next couple of years.  While non-oil growth is expected to recover gradually and there is a potential upside from the recent increase in oil prices, persistent twin deficits are expected to lead to further increases in government and external debt over the medium term.  Directors also highlighted risks to the outlook from possible fiscal underperformance, tighter financing conditions, and heightened regional political uncertainty.  Against this backdrop, Directors welcomed the authorities’ efforts to bolster the fiscal position and encouraged implementation of structural reforms to boost private sector led growth, increase economic diversification, create jobs and foster inclusive growth.

Directors encouraged the authorities to accelerate reforms to bolster fiscal and external sustainability, maintain confidence, and support the exchange rate peg.  Deeper fiscal adjustment is critical to put public finances on a sustainable trajectory.  Directors called for steadfast efforts to implement ongoing reforms, including the introduction of a VAT and excise taxes, under the planned timeline.  Additional reforms are needed for more rapid reductions in the fiscal deficit and debt, through measures to tackle current spending rigidities, streamline capital outlays and enhance efficiency, while further raising non hydrocarbon revenue.  In this context, Directors recommended the introduction of a formal medium term fiscal framework and improvements to budget planning and expenditure controls.

Directors concurred that the exchange rate peg had delivered monetary policy credibility with low and stable inflation.  They also noted that fiscal adjustment is key to ensure external sustainability over the long term.

Directors commended the authorities for the soundness of the financial system and encouraged them to maintain robust banking sector regulation and supervision.  Continued efforts are also required to identify and closely monitor any emerging pressures on asset quality and any potential build up in financial sector risks.  Directors stressed the need to ensure that the prudential framework and financial sector buffers remain strong.  They encouraged the central bank to strengthen its liquidity and crisis management and preparedness frameworks to further bolster resilience.  Efforts to enhance the AML/CFT framework and its effective implementation are also important.

Directors underlined the need for structural reforms to promote private sector development and productivity to enhance competitiveness, diversification, and job creation for nationals.  They recommended addressing labor market inefficiencies by better aligning public sector wages and benefits with the private sector, making the labor market for nationals more flexible, and tackling skill mismatches through better education and on the job training.  Directors emphasized the importance of enhancing the business climate, including through reforms to modernize the insolvency framework, lowering the burden of administrative procedures and enacting planned legislations on FDI and public private partnerships.  They encouraged the authorities to accelerate their program to boost private sector investment.  (IMF 06.07)

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11.4  OMAN:  Fitch Affirms Oman at ‘BBB-‘; Outlook Negative

On 26 June 2018, Fitch Ratings has affirmed Oman’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Negative Outlook.

Key Rating Drivers

Oman’s ratings balance its undiversified economy and still-high fiscal and external deficits against relatively high GDP per capita and a public sector balance sheet that remains, for now, stronger than that of other ‘BBB’ category sovereigns.

Higher oil and gas prices have brought a temporary reprieve to Oman’s public finances, but the authorities have not yet identified a policy mix consistent with debt stabilization in the medium term, in our opinion.  We forecast Oman’s budget deficit at 6.3% of GDP in 2018.  Although this will represent a sharp narrowing of the deficit compared with 13.5% of GDP in 2017, the deficit will still be more than twice the ‘BBB’ category median.  We expect the budget deficit to widen again in 2019 under the baseline assumption that oil prices will moderate to an average of $65/bbl from $70/bbl in 2018.  We estimate that Oman’s fiscal break-even Brent price will stay high at $86/bbl in 2018 and fall only gradually.

There are near-term upside risks to public finances from higher hydrocarbon production and prices.  If oil prices stayed at an average of $70/bbl in 2019, the budget deficit would narrow to 5.3% of GDP.  Our forecasts are based on the assumption of no change in oil production volume from 970,000 bbl/day in 2017.  A 2.5% increase in average volume, for example as a result of a change in Oman’s voluntary commitment to OPEC to cut production, would reduce the deficit by around 0.7% of GDP in 2018.  The pass-through from higher hydrocarbon revenue to the government budget could be greater than we expect.

Higher oil prices present a key test of the government’s commitment to improving its structural fiscal position.  The government continues to face significant spending pressures, including providing economic opportunities for a young and rapidly growing Omani population.  The budget deficit in 2017 was 25% wider than budgeted, despite oil prices averaging well above the government’s assumption of $45/bbl, largely due to under-performance of non-hydrocarbon revenue.

We expect spending to increase by 7% in 2018 (after a broad-based cumulative decline of 19% since 2014), as higher expenditure on subsidies, debt interest and oil and gas exploration offsets continued moderation in defense, capital and civil ministries spending.  Completion of long-running infrastructure projects and a freeze on public sector hiring and wages have contributed to spending reductions so far, but it is not clear whether this is sustainable.

Deficit reduction will be helped by measures to boost non-hydrocarbon revenue, although our assumptions on this are conservative.  We expect non-hydrocarbon revenue to increase by 0.4% of non-oil GDP between 2017 and 2019 (a cumulative 16% in nominal terms). Implementation of excise and value added tax has been delayed until H2/18 and H2/19, respectively.  Although non-oil revenue rose 15% in 2017 (excluding OMR287 million of one-offs in 2016), tax revenue registered a slight decline on account of falling corporate profitability and the implementation of free trade agreements leading to lower collection of customs fees.

Oman’s sovereign balance sheet strengths are dwindling.  We forecast government debt will rise to 48% of GDP by end-2019, up from just 5% of GDP at end-2014 and above the ‘BBB’ median of 36% of GDP.  Sovereign net foreign assets (SNFA) will fall to 10% of GDP by end-2019, down from a peak of 65% of GDP at end-2014 but still better than the ‘BBB’ median of 2% of GDP.  This reflects government external borrowing and the use of the State General Reserve Fund (SGRF) for financing.

We estimate that the government’s $6.5 billion Eurobond issue in early 2018 will cover its financing needs for the rest of the year and allow some pre-financing of the 2019 deficit.  This is in addition to the budgeted $1.3 billion drawdowns from the SGRF (which the government has not spent so far in 2018), and some domestic bond issuance.  We expect a similar level of SGRF drawdowns in 2019, along with over $4 billion of foreign issuance, including refinancing of maturities.

Our forecasts have SGRF foreign assets declining to $17.7 billion by 2019 from $19.5 billion as of the end of 2017, excluding assets held at the Central Bank of Oman (CBO) and local commercial banks.  Asset market returns boosted the value of SGRF foreign assets in 2017, while SGRF deposits at the CBO fell.  Just as investment returns were supportive in 2017, any correction in global asset markets could reduce the government’s fiscal cushion.

The country’s broader external position is also deteriorating.  Current account deficits and the draw-down of non-resident deposits at the CBO will continue to put pressure on foreign exchange reserves, which are separate from SGRF assets but are included in SNFA.  We estimate that the country’s net external debt will rise to 38% of GDP in 2019 from a net creditor position of 35% of GDP in 2014, partly reflecting borrowing by state-owned enterprises (SOEs).  The ‘BBB’ median net external debt is 6% of GDP. SOE debt reached 30% of GDP in 2017, of which nearly 21% of GDP was foreign and 5% of GDP was guaranteed by the government.

We expect a pick-up in real GDP growth, to 3.6% in 2018 (led by an expansion of LNG output related to gas production at the Khazzan field) and 2.5% in 2019, from 0.2% in 2017.  In 2017, a reduction in oil output in line with Oman’s commitment to OPEC reduced real hydrocarbon GDP by about 2.5%, while the non-oil economy grew 2%. Further oil and gas expansion, including Phase 2 of the Khazzan gas field, and investments in the country’s capital stock such as ports, airports and roads support Oman’s long-term growth potential, even as they strain government finances in the near term.  A strong pipeline of hotel projects and the opening of the new Muscat airport should unlock new tourist flows.

Most structural indicators are in line with the ‘BBB’ median, including World Bank governance indicators. Fitch views the banking system as relatively strong, with regulatory capital at around 16% of risk-weighted assets and non-performing loan ratios in the low single digits (despite a recent up-tick).  The low employment rate of young Omanis is creating economic and social pressure.  The domestic political scene remains stable, but uncertainty continues to surround the eventual succession to 77-year old Sultan Qaboos, who has not publicly designated a successor.  The constitution stipulates that the ruling family must choose a new Sultan within three days of the post becoming vacant, otherwise a letter containing the sultan’s recommendation is opened.

Rating Sensitivities

The main factors that could lead to a downgrade are:

– Failure to stabilize government debt/GDP or halt the drawdown in assets, for example due to a relaxation of fiscal consolidation measures amid temporarily high oil prices.

– Failure to stabilize net external debt/GDP.

The main factors that could lead to a revision of the Outlook to Stable are:

– Sustainable narrowing of the budget deficit allowing stabilization of the government debt/GDP.

– Stabilization of net external debt/GDP.

Key Assumptions

Fitch assumes that Brent crude will average $70/bbl in 2018, $65/bbl in 2019 and $57.5/bbl in 2020.

Fitch assumes that an eventual transition of power from Sultan Qaboos will be smooth and ensure broad policy continuity.

Fitch assumes no change to the peg of the Omani rial to the US dollar.  (Fitch 26.06)

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11.5  EGYPT:  IMF Approves Fourth $2 Billion Tranche of Egypt’s Loan

On 28 June, the Executive Board of the International Monetary Fund (IMF) approved the disbursement of the fourth tranche of the IMF loan to Egypt worth $2b, as part of the extended $12b loan facility over three years.  The IMF’s approval followed the completion of the third review of the IMF’s economic reform program, during their visit to Egypt in May, where the IMF praised the reforms implemented by the Egyptian government.  This brings the total of Egypt’s loan to $8b, leaving the two parts of the third tranche to $4b.

The Minister of Finance Mohammad Moait, said that the fourth tranche of the loan comes in the light of positive economic developments witnessed by Egypt and the success of the Egyptian government in implementing the Egyptian program of economic and social reforms and its strong results especially in terms of restoring financial stability and improving economic growth rates.  The minister noted that the $8b have been funneled to improve the financial situation of the Egyptian economy and bridge the funding gap, which resulted in easing the need for foreign funding and re-generated large foreign exchange resources again.

The deputy minister of finance for fiscal policies and institutional development, Ahmed Kajok, said that the improvement in financial conditions is confirmed by the performance of the balance of payments, which continued to achieve a financial surplus worth $10.96b in the first nine months of the fiscal year (FY) 2017/2018, while the trade balance deficit dropped by 57.5%, scoring a deficit of only $5.2b, according to the Central Bank of Egypt.  He explained that this improvement also appeared in the state budget, which achieved a jump in performance during the FY 2017/18 to a surplus of 0.1% of the GDP.

Moreover, he added that the Egyptian economy’s move and improved financial performance also clearly showed a breakthrough in tax revenues that would exceed its target and reach 104%.  He also stressed that the IMF’s tribute to the conditions of the Egyptian economy is a certificate of confidence and an important message to the investment community in Egypt and abroad to continue and complete investment plans in the country and the participation of investors in this economic success.

Moeit said that the Ministry of Finance is looking for a strong performance in foreign investments, as the volume of investments of foreigners in securities reached $19b by the end of May.  He also noted that the ministry has completed a plan for tax reforms through to 2022, as a means to improve revenues and automate the system to achieve financial inclusion.  (IMF 28.06)

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11.6  TUNISIA: Credit Challenges Include Weak Fiscal Position & Limited Budget Flexibility

Tunisia’s (B2 stable) credit challenges include the structural deterioration in its fiscal strength, limited budget flexibility and deteriorating current account dynamics, Moody’s Investors Service said in an annual report on 3 July.

“Tunisia’s debt ratio increased sharply to almost 70% of GDP at the end of 2017 and higher than anticipated spending pressures and a heavy public sector wage bill limit its budget flexibility,” said Elisa Parisi-Capone, a Moody’s Vice President — Senior Analyst and author of the report. “We have also witnessed delays in the implementation of IMF reforms.”

In recent years, Tunisia’s elevated fiscal deficits have been one of the main contributors to the increase in government debt, which reached 69.9% of GDP in 2017, from 50.8% in 2014.  Adverse foreign-exchange rate dynamics have also contributed to the rise as more than 68% of Tunisia’s government debt is denominated in foreign currency.

Although fiscal consolidation will help to slow the pace of the increase, Moody’s forecasts that the government debt ratio will rise to 72% of GDP in 2018 and 73% in 2019, driven by a steady currency depreciation, persisting primary deficits and an increasing interest burden.  The improvement in the security environment since the three terror attacks in 2015, which has led to an increase in tourism revenue, and increased demand from the euro area have laid the foundations for a growth recovery. Moody’s forecasts growth of 2.8% in 2018 and 3% in 2019 from 1.9% in 2017.

Moody’s expects the recovery of the tourism industry, aided by the removal of travel agency restrictions, to have a multiplier effect for the economy and for the banking system given that many nonperforming loans, especially in public sector banks, are tied to the tourism industry.

Although the economic recovery will be contained, the growth drivers show a clear shift toward market-based growth as opposed to public sector demand that has prevailed over the past few years.  Despite a unity government and an emphasis on consensus-building, Tunisia’s institutional effectiveness is constrained by a track record of recurring delays with the implementation of its IMF structural reform program.  Tunisia’s high susceptibility to event risk is driven by banking sector risk and external vulnerability risk.

The stable outlook on Tunisia’s sovereign rating reflects Moody’s assumption that the country will continue to meet its IMF objectives and retain official sector disbursements which finance almost 50% of the government’s total funding requirements.

A sustained improvement in fiscal and external imbalances from a marked and durable economic recovery that eased demands on government spending and boosted export revenues and foreign exchange reserves would be credit positive.

Negative pressure on the rating would follow any further delays with the implementation of the IMF economic reform program that impacted Tunisia’s access to official funding sources and deterred market appetite.  In general, renewed fiscal overruns, the materialization of sizeable contingent liabilities and/or a continued erosion of foreign exchange reserves would also be negative.  (Moody’s 03.07)

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11.7  ALGERIA:  The Future of the $11.9 Billion Algerian Defense Industry: 2018-2023

On 2 July, announced the “Future of the Algerian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023” report has been added to its offerings.

Algeria’s sudden rise as a major military force in Africa can be attributed to its burgeoning economy and a desire to establish its military superiority in the region.  With a defense budget of $9.8 billion in 2018, Algeria is currently the largest military spender in Africa.  Military expenditure is strongly supported by the presence of the oil and natural gas industry, where revenues are directed towards strengthening defense and security.

The country’s capital expenditure is expected to increase from $1.9 billion in 2019 to $2.3 billion in 2023, growing at a robust CAGR of 4.56% over the forecast period.  The increased threat of terrorism from the Islamic group Al-Qaeda in the Islamic Maghreb (AQIM) operating in North Africa, an arms race with neighboring countries such as Morocco and Tunisia, and the ongoing modernization of its armed forces are key factors expected to drive military expenditure.  Furthermore, the instability in neighboring Libya, coupled with the rapid spread of Islamic State (IS) in the country, has compelled Algeria to bolster its defenses and develop a robust defense posture.  The Algerian defense industry is expected to grow to $11.9 billion by 2023 at a CAGR of 4.31%.

Algeria has observed a marked decline in instances of violent attacks perpetuated by armed insurgent groups.  The country’s political and economic measures to de-radicalize its population have succeeded to a great extent, and the country has managed to significantly limit the influence of foreign terrorist organizations such as Al-Qaeda in the Islamic Maghreb (AQIM).  As such, Algeria does not face any urgent internal threats to justify expansive spending on the homeland security sector.  Its homeland security (HLS) expenditure stands at $3.7 billion in 2019 and is expected to increase at a minimal CAGR of 1.64% over the forecast period to reach $4 billion in 2023.

Historically, Russian defense firms have entered the Algerian defense industry through government initiated foreign military sales.  The country is increasing its efforts to reduce its military dependency on foreign suppliers and, therefore, is largely concentrating on the joint development of defense systems to strengthen its domestic defense manufacturing capabilities.  Furthermore, Algeria has witnessed a number of JVs with Algerian, Russian, French, and Serbian companies in areas such as armored vehicles, unmanned aircraft, military healthcare and counter-terrorism equipment.  (RandM 02.07)

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11.8  TURKEY:  Post-Election Turkey – The Birth of an Islamist-Nationalist Alliance

Burak Bekdil posted on 29 June in BESA Center Perspectives Paper No. 878 that four decades after they emerged as marginal parties in the 1970s, Turkey’s militant Islamists and ultranationalists won a combined 53.6% of the national vote and 57% of parliamentary seats.  President Erdoğan has said in the past that he would make foreign policy “in line with what my nation demands,” highlighting the Islamist sensitivities of his voter base.  He will now add nationalist sensitivities to that foreign policy calculus. This will likely mean confrontations with nations both inside and outside Turkey’s region.

Turkey’s presidential and parliamentary elections on 24 June sent messages on many wavelengths.  The voters asserted the unchallenged popularity of Recep Tayyip Erdoğan, who is the longest-serving Turkish leader since Mustafa Kemal Atatürk, the founder of modern Turkey.  They welcomed an infant center-right party, IYI (good in Turkish); recognized the country’s Kurds as a legitimate political force; and gave a cautious nod to an emerging social democrat politician, Muharrem Ince, Erdoğan’s closest presidential rival.

More strategically, Election 2018 marked the official birth of an Islamist-nationalist alliance that will recalibrate Turkey’s foreign policy calculus in line with the strong wave of religious/nativist nationalism that brought this alliance to power.

In power since November 2002, Erdoğan easily won the presidential race with 53.6% of the national vote in the first round (any number beyond the 50% mark would have sufficed).  But his ruling Justice and Development Party (AKP) won only 42.5% of the parliamentary vote, down seven percentage points from its result in the elections of November 2015.  The AKP won 293 seats in Turkey’s 600-seat house, falling short of a simple majority of 301.

Had this been just another parliamentary election, the AKP would be unable to form a single-party government.  But legislative changes that followed the April 2017 referendum now allow political parties to enter the parliamentary race in alliance with other parties.  Erdoğan chose as his ally the Nationalist Movement Party (MHP), which has its ideological roots in the militantly ultranationalist, pan-Turkic ideology of the 1970s.  On 24 June, the MHP won 11.1% of the national vote and 50 seats, bringing up the “allied” (i.e., the governing) seats to 343 – which gives the AKP-MHP alliance a comfortable parliamentary majority.

Four decades after emerging as marginal parties in the 1970s, Turkey’s militant Islamists and militant ultranationalists won a combined 53.6% of the national vote and 57% of parliamentary seats.  Erdoğan has said in the past that he would put foreign policy “in line with what my nation demands,” highlighting the Islamist sensitivities of his voter base.  He will now be adding nationalist sensitivities to that foreign policy calculus.  This is likely to mean confrontations, perhaps bold ones, with several nations both inside and outside Turkey’s region.

Turkey’s new ruling ideology will, first of all, make it practically impossible to return to the negotiating table for peace with the Kurds.  That is an MHP red line that Erdoğan will prefer not to cross.  MHP’s militaristic posture will also boost Ankara’s desire to show more muscle in Kurdish-related disputes in northern Syria and northern Iraq (MHP’s only solution to the Kurdish dispute is military might).

Turkey’s decades-long, obsessive foreign policy goals include making Jerusalem the capital of the Palestinian state, asserting an ideological kinship with Hamas, stoking sectarian hostilities against Syrian President Bashar Assad and making threats about drilling off the shores of the divided island of Cyprus.  To these will probably be added an “Uighur cause,” a subject about which the MHP is particularly sensitive.

The AKP’s election manifesto stated an intention to “overcome problems and improve bilateral relations with the United States.”  But the manifesto also said Turkey would make an effort to “improve bilateral relations with Russia.”  It said, “We will continue our close coordination with Russia on regional subjects, especially on Syria.”

In practice, Erdoğan’s balancing act between Russia and the US resembles Brazilian dictator Getulio Vargas’s “pendulum policy” during WWII.  Vargas offered support to Hitler and Mussolini at times, but ended up siding with the Allies.  MHP’s involvement in government policy will be totally irrelevant when it comes to operating the modern-day Turkish pendulum.

Erdoğan’s relations with the US are ideologically hostile but de facto transactional.  They will remain so. His relations with Russia are largely transactional and will probably gain further ground, politically as well as militarily, as the discrepancy between Turkish and western democratic cultures widens.  Erdoğan ideologically belong to the strongmen’s club.

As Turkey’s gross democratic deficit, largely created under Erdoğan’s governance, is blended with MHP’s notoriously isolationist, xenophobic ideology, Turkey’s theoretical goal of accession into the European Union (EU) will gradually become null and void.  Erdoğan will soon announce plans to shut down the ministry dealing with accession negotiations with the EU and turn it into “a department of the Foreign Ministry.”  This should not surprise anyone.

Burak Bekdil is an Ankara-based columnist.  He regularly writes for the Gatestone Institute and Defense News and is a fellow at the Middle East Forum.  He is also a founder of, and associate editor at, the Ankara-based think tank Sigma.  (BESA 29.06)

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11.9  GREECE: IMF Staff Concluding Statement of the 2018 Article IV Mission

On 29 June, the IMF issued a Concluding Statement following its consultations under Article IV with Greece.

Greece has come a long way, but still faces many challenges.  Greece will exit the program era having largely eliminated macroeconomic imbalances.  Some important reforms have been implemented, growth has returned, unemployment is declining (though still very high), and the recently agreed debt relief package will secure medium-term sustainability.  But significant crisis legacies and an unfinished reform agenda still hamper faster growth, while membership in the currency union and high primary surplus targets limit policy options.  Boosting growth and living standards will therefore depend on improving the fiscal policy mix, repairing financial sector balance sheets, further liberalizing product and labor markets, and strengthening public sector efficiency and governance.

Growth has returned to Greece, helped by an impressive macroeconomic stabilization effort, structural reforms and a better external environment.  Greece deserves credit for substantial fiscal and current account adjustments and for implementing some key structural reforms in recent years.  These efforts, combined with substantial European support and a more favorable external environment, allowed a return to growth, with real GDP rising 1.4% in 2017 and expected to reach 2% this year and 2.4% in 2019.  As the output gap closes, unemployment is expected to drop from about 20% this year to around 14% by 2023.  External and domestic risks are significant, including from slower trading partner growth, tighter global financial conditions, regional instability, the domestic political calendar, and reform fatigue.

The debt relief recently agreed with Greece’s European partners has significantly improved debt sustainability over the medium term, but longer-term prospects remain uncertain.  The extension of maturities by 10 years and other debt relief measures, combined with a large cash buffer, will secure a steady reduction in debt and gross financing needs as a percent of GDP over the medium term and this should significantly improve the prospects for Greece to sustain access to market financing over the medium term.  Staff is concerned, however, that this improvement in debt indicators can only be sustained over the long run under what appear to be very ambitious assumptions about GDP growth and Greece’s ability to run large primary fiscal surpluses, suggesting that it could be difficult to sustain market access over the longer run without further debt relief.  In this regard, Staff welcomes the undertaking of European partners to provide additional relief if needed, but believe that it is critically important that any such additional relief be contingent on realistic assumptions, in particular about Greece’s ability to sustain exceptionally high primary surpluses.

Further efforts are needed to overcome crisis legacies and to boost productivity, competitiveness and social inclusion.  Macroeconomic imbalances have been largely eliminated, but high public debt, weak bank and other private sector balance sheets, capital controls, government arrears, and the large at-risk population weigh on growth prospects, and progress with key fiscal and market reforms has lagged.  Greece needs to continue its reform efforts if it is to achieve sustained high growth and secure competitiveness within the Euro Area, while also supporting those in greatest need.  The authorities’ growth strategy contains promising elements in this respect, and further assessment of gaps, continuity with current reforms, and implementation will be crucial.

A growth-friendly rebalancing of the fiscal policy mix is a priority.  Achieving the high 3.5% of GDP primary surplus target for 2018 – 2022 agreed with the European Institutions will require high taxation and will constrain social spending and investment.  To support inclusive growth while meeting fiscal targets, the authorities should aim for budget-neutral improvements in the fiscal policy mix, starting with the already legislated fiscal package for 2019 – 2020.  In 2019, the government should proceed with planned increases in targeted social support and investment spending, funded by savings in the pension system.  In 2020, it should reduce high tax rates, while broadening the personal income tax base in a fiscally neutral way.  These measures, backed by fiscal structural reforms to strengthen efficiency and implementation, will help reduce the poverty rate and economic distortions, and support growth.  Any delay in these reforms would seriously undermine the credibility of the assumptions underlying the debt relief measures agreed with European partners.  The authorities should be cautious in adopting permanent expansionary measures beyond those already legislated, to avoid jeopardizing their fiscal targets.

Reviving banks’ lending capacity, including by tackling very high non-performing exposures (NPE), is critical for supporting the economy.  Important legal reforms aimed at reducing NPEs have been adopted, and steps taken to develop a NPE secondary market, but further implementation efforts are needed for them to take root.  To accelerate banks’ balance sheet clean-up, more ambitious NPE reduction targets, proactive build-up of capital buffers, further steps to mitigate liquidity and funding risks, and stronger bank internal governance are needed.  Remaining capital controls need to be lifted in a prudent manner following the agreed roadmap, with the pace dictated by economic and banking sector conditions and the level of depositor confidence.

Further reforms would boost productivity and labor force participation.  Progress with product market reform has been uneven and slow in some areas, and Greece is still lagging other European countries in several competitiveness indicators.  Earlier labor market reforms contributed to the recovery of employment and competitiveness, but legislation that will reintroduce extensions and favorability of collective agreements beginning later this year risks unwinding these gains.  Fund staff strongly urges the authorities not to reverse these reforms.  Any minimum wage adjustment should be prudent and in line with productivity gains, aiming to preserve the momentum of employment recovery and avoid any erosion of competitiveness.  Improved delivery and better targeting of active labor market policies would help reintegrate the long-term unemployed to the labor market.

Public sector efficiency and governance need to be strengthened further, and the independence of the statistical authority should be protected.  Despite some important (but uneven) progress, efforts are needed to modernize public institutions, strengthen tax compliance and the payment culture, and improve licensing procedures, cash management, procurement and reporting practices.  A more effective judiciary is necessary for the success of legal reforms in all areas.  Improving governance and the independence of public institutions, including by ensuring adequate protection for officials – such as those in charge of statistical reports – is essential to increase confidence in public finances and ensure data integrity.

As it exits the program era, Greece must maintain its forward momentum and continue to pursue policies that support prosperity and inclusion.  Greece has reached this point thanks to enormous efforts during its adjustment programs.  European partners have demonstrated their support by providing further lending and additional debt relief.  Greece should now consolidate and extend its success by addressing, with determination, its remaining challenges.  (IMF 29.06)

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