Fortnightly, 12 December 2018

Fortnightly, 12 December 2018

December 12, 2018


12 December 2018
4 Tevet 5779
5 Rabi Al Akhar 1440




1.1  Israel Becomes a Member of the FATF
1.2  Israel to Invest Billions to Upgrade Transportation Infrastructure
1.3  The Bank of Israel Commends the Establishment of the Financial Stability Committee
1.4  Israel & Brazil Sign R&D Collaboration Agreement


2.1  Israeli Auto Supplier Plans to Triple Hoosier Workforce in Indiana’s Wayne County
2.2  Israeli Gas Line to Jordan Lauded as Boost for Peace
2.3  Skoda Partners with Three More Israeli Startups
2.4  Israel Aerospace Signs Strategic Agreement with Boeing
2.5  Vietnam Airlines to Launch Tel Aviv – Hanoi flights
2.6  Newater Technology to Acquire AMS Technologies Int. to Expand into the Global Market
2.7  Playtika Buys German Games Company Wooga
2.8  WakingApp Announces a New Round of Funding
2.9  BIRD Energy to Invest $6 Million in Cooperative Israel-U.S. Clean Energy Projects
2.10  InnovoPro Raises $4.25 Million in Round Led by Swiss Retailer
2.11  TAL Education Group Buys Codemonkey for $20 Million
2.12  Jerusalem Leads World Cities in Tourism Growth for 2018
2.13  PepsiCo Completes Acquisition of SodaStream International
2.14  SOOMLA Raises $2.6 Million to Lift the Hood on the Black Box of In-app Advertising
2.15  El Al to Launch Tel Aviv – Las Vegas Flights
2.16  OpenLegacy Raises $30 Million from Worldwide Strategic & Financial Investors
2.17  TechSee Announces $16 Million Series B Led by Scale Venture Partners


3.1  Hyatt Regency Aqaba Ayla Resort Opens as the First Hyatt Regency Hotel in Jordan
3.2  Little Thinking Minds Raises $1.26 Million in Series A
3.3  FORBES Middle East Says COFE App “One of the Top 50 Startups to Watch For”
3.4  Tabeeby Secures $777,000 From Ground One Ventures
3.5  OnCost Cash and Carry Acquires Gulfmart
3.6  UAE’s Mubadala Invests in Leading Russian Fitness Center Brand
3.7  $4 Million in Fake Toyota Parts Seized in Raids Across the UAE
3.8  Dubai-Based Mobile Wallet App Beam Eyes Global Expansion
3.9  Nike Opens Largest Middle East Shop in Dubai
3.10  Competition Heats Up For Cairo’s Ride-Hailing Apps


4.1  Dubai Tests New Bus Shelters Powered By the Sun
4.2  UAE Installs Hundreds of Artificial Caves to Boost Fishing Industry
4.3  Reverse Vending Machines to Boost Recycling In Malls Across Turkey by 2021
4.4  Morocco Ranks 2nd in Climate Change Performance Index


5.1  Lebanon’s Trade Deficit Widened by 3.93% y-o-y t $12.96 Billion in September 2018
5.2  Lebanon’s Balance of Payments Registered a Deficit of $5.62 Billion by October 2018
5.3  Number of Tourists Visiting Lebanon Rose 5% in October
5.4  Jordan’s Unemployment Rate Rises to 18.6%
5.5  Jordan’s First Nanosatellite Launched
5.6  Jordan’s PM Razzaz Opens Bashir Hospital’s New USAID Funded $25 Million Emergency Building

♦♦Arabian Gulf

5.7  Qatar to Leave OPEC and Focus on Gas
5.8  More Than Three Million Cars on UAE Roads
5.9  Dubai Welcomes 11.58 Million Visitors During First Nine Months of 2018
5.10  Dubai South to Host Fish Farm as UAE Scales Up on Aquaculture
5.11  Saudi Arabia Launches Two New Satellites into Space

♦♦North Africa

5.12  Fruits, Vegetables & Poultry Push Egypt’s Headline Inflation Down to 15.6% in November
5.13  After Poultry, US Beef to Start Entering the Moroccan Market


6.1  Turkey’s Annual Inflation Rate Declines to 22% in November
6.2  Turkish Economy Grows by 1.6% in Third Quarter
6.3  Turkish Companies’ Arms Sales Rose 24% Last Year
6.4  Greek Inflation Rises by 1% in November



7.1  Fast of the 10th of Tevet‎


7.2  UAE Cabinet Adopts New Policies to Empower Emirati Women
7.3  Egypt’s Growing Population Reaches 98 Million
7.4  Some 2.6% of Egyptians Had Disabilities in 2017
7.5  Egypt Approves Legalization of 168 New Churches
7.6  Greek Children Among the Most Overweight in Europe


8.1  WeedMD Exports Cannabis Genetics to Israel’s Pharmocann
8.2  OWC Reports Progress in Clinical Trials for Ointment Care for Skin Diseases
8.3  Cannabics Files New Provisional Patent Application for Magnetic Targeting of Cannabinoids
8.4  Hadassah & IBM Establish Digital Health Accelerator
8.5  EZbra Breast Dressing Makes US Debut at Premier Aesthetic Surgery Conference
8.6  CLEW & UMass Memorial Medical Center Bring Predictive Analytics to Tele-ICUs
8.7  NRGene Announces Expanded Licensing Agreement with Bayer for the GenoMAGIC™ Platform
8.8  Phibro Animal Health Acquires Fish Vaccine Business of KoVax
8.9  Leviticus Cardio Announces Success of Groundbreaking Six Month Chronic Animal Study
8.10  CollPlant’s Vergenix STR Demonstrates Significant Clinical Improvements in Tennis Elbow
8.11  Successful First in Humans for ZygoFix’s Spinal Facet Joint Fixation System
8.12  dayzz Launches Personalized Sleep Training App Based on Big Data Analysis


9.1  Silverfort’s First Holistic AI-Driven Authentication Engine for Securing Corporate Identities
9.2  eyeSight and Exsun Partner to Bring Life-saving AI Vision to China’s Trucking Industry
9.3  K2 OEMs Safe-T Data’s Software Defined Access to Securely Connect Cloud Services
9.4  Ecclesiastical Insurance Selects Sapiens’ Property Insurance Suite as Its New Core Platform
9.5  RFOptic Launches Its Latest Generation of 40GHz RFoF and ODL Solutions
9.6  SafeRide Technologies Joins GENIVI Alliance to Help Ensure Vehicle Security
9.7 – Tech for Traders: Artificial Intelligence to Predict Market Reaction
9.8  Syte Partners with Farfetch to Power Their New ‘See it, Snap it, Shop it’ Feature
9.9  Karamba Collaborates with Ficosa to Secure Smart Mobility Against Cyberattacks
9.10  Mellanox Ethernet Adapter Facilitates High Performance Network Solutions at Alibaba
9.11  Vayyar Launches New mmWave 3D Imaging System on a Chip (SoC) Evaluation Kit
9.12  Tracxpoint Signed a Major Agreement to Deploy its Artificial Intelligence Cart at CONAD
9.13  Finscend Wins Multiple Accolades at MoneyLIVE
9.14  Guardian’s Advanced Sensor Technology Now Helps Keep Driver’s Attention on the Road


10.1  UN Finds Wages in Israel Rising Faster than World Average
10.2  Israeli Startups Raised $600 Million in November
10.3  Israeli Home Sales Continue to Fall in Third Quarter


11.1  ISRAEL: A New Phase in Israel-Gulf Relations
11.2  JORDAN: Anger Simmers Again In Jordan Over Controversial Legislation
11.3  BAHRAIN: Bahrain ‘B+/B’ Ratings Affirmed; Outlook Remains Stable
11.4  EGYPT: Egypt Grapples With Economic Decisions Amid High Inflation Rates
11.5  TURKEY: Turks Cannot Pay Back Lavish Consumer Debts
11.6  TURKEY: Will China buy Turkey on the Cheap?
11.7  CYPRUS: IMF Executive Board Concludes 2018 Article IV Consultation with Cyprus


1.1  Israel Becomes a Member of the FATF

On 10 December, Israel became a full member of the FATF with immediate effect, following the publication of its mutual evaluation report.  Israel became an observer to the FATF in February 2016 and since then it has already been closely involved in the work of the FATF through its participation in the FATF-style regional body MONEYVAL.  Since the start of its observer status in February 2016, Israel has worked to meet the requirements for full membership of the FATF, which include undergoing a successful mutual evaluation, which it has now done.

Israel has undergone a rigorous assessment of its measures to combat money laundering and terrorist financing.  During this demanding process, the country demonstrated its commitment to protect the integrity of the financial system.  Israel has established a robust anti-money laundering and counter terrorist financing framework that is achieving good results in identifying and responding to the risks the country is facing.

At the October 2018 Plenary, delegates discussed and adopted the joint FATF/MONEYVAL mutual evaluation report of Israel.  In line with FATF’s procedures, the report underwent a quality and consistency review before publication on 10 December.  With the publication of its mutual evaluation report, Israel became the 38th member of the FATF.  (FATF 10.12)

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1.2  Israel to Invest Billions to Upgrade Transportation Infrastructure

To unclog the developed world’s most congested roads, the Netanyahu government will partner with private contractors and banks, both Israeli and foreign, marking a shift in policy after a series of transport projects were criticized for delays and mismanagement.  Finance Ministry Accountant General Hizkiyahu, who oversees government spending, said the infrastructure push could double investment to some $16 billion a year.  Projects like a Tel Aviv subway, expanding Jerusalem’s light rail system and construction of highways and toll roads are drawing interest from banks and global contractors.

Israel is a high-tech powerhouse but years of underinvestment and bungled state management have left its transport network lagging.  Road traffic density, measured by the number of vehicles per kilometer of road, is three times the average among the 36 industrialized countries of the OECD.  Road users lose on average an hour a day in traffic congestion, a hit to productivity that costs the economy about 1.5% of the annual GDP, according to the IMF.  That is valued at some $5 billion.  The new strategy, officials said, relies on the private sector to deliver efficiency.  Until now the government has preferred to finance most projects through the state budget, giving it more control and access to cheaper financing than the private sector.

Last month, Israel chose Italy’s Impresa Pizzarotti and local engineering firm Shapir to build, fund and operate a new entry road into Jerusalem for more than $260 million.  Bids for the $2.7 billion expansion of Jerusalem’s light rail will be taken in the first quarter of 2019.  The Finance Ministry has already screened groups that include Canada’s Bombardier and Greece’s GEK Terna.

With the $4.6 billion first line of the Tel Aviv metro delayed and over budget, the next two lines, a combined investment of $7.6 billion, will be built in partnership with the private sector. Bidding is open until the end of January.

Israel says it will now consider public private partnerships, or PPP, for all projects over $67 million.  Foreign banks are studying the market, with many willing to participate in a syndicate of lenders but not yet as arrangers.  With only a limited number of Israeli institutional investors able to handle big projects, the sector is seeing growing interest from banks in Germany, Italy and Japan.  Deutsche Bank tested the waters a few years ago when it helped finance some of the cross-Israel toll highway.  (IH 29.11)

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1.3  The Bank of Israel Commends the Establishment of the Financial Stability Committee

The Bank of Israel commended the legislative amendment that was passed by the Knesset on 26 November, which established the Financial Stability Committee headed by the Governor of the Bank of Israel.  This step, which the IMF recommended several years ago and which the Bank of Israel has worked consistently to carry out, is particularly important in view of the financial system reforms being formulated.  The numerous participants in the credit market and the division of responsibility among the various regulators require a view of the overall system and close coordination among regulators. This is one of the lessons from the global crisis, with the ultimate contagion of the financial risk that materialized in certain financial institutions to the overall system in the US and other economies.  The establishment of the Committee is an important to maintain financial stability and serves the economy.

In accordance with the law, the Financial Stability Committee members will be the Governor of the Bank of Israel (who will serve as Chairperson), the Director General of the Finance Ministry (alternate Chairperson), the Deputy Governor, the Finance Ministry’s Accountant General, the Supervisor of Banks, the Commissioner of Capital Markets, Insurance, and Savings, the Head of Payment System Oversight at the Bank of Israel, and the Israel Securities Authority Chairman. The Head of the National Economic Council will serve as an observer on the Committee.  (BoI 27.11)

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1.4  Israel & Brazil Sign R&D Collaboration Agreement

On 10 December, the Israel Innovation Authority and the Brazilian Agency for Industrial Research and Innovation (EMBRAPII) announced the establishment of a new partnership that would see the two countries cooperate on technological innovation and industrial R&D.  According to the memorandum of understanding, the collaboration between Israel and Brazil will promote activities in each country’s respective industrial sector, deepen cooperation in the fields of science and technology and facilitate specific projects between entities toward innovative processes and products.  Both countries allocated a budget of $5 million over the next five years for the initiative which issued a first call for proposals late last month. The program will support large-scale collaboration projects in the fields of IoT, life sciences, energy, and agriculture.

Israel and Brazil are leaders in many rapidly advancing fields such as IoT, life sciences, energy and agriculture, and within these fields there are a great number of opportunities for collaboration between Israeli and Brazilian companies.  This agreement is an important first step on the path of technological cooperation, and we envision an increase in joint Israeli-Brazilian technological collaboration in the coming years.  (IIA 10.12)

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2.1  Israeli Auto Supplier Plans to Triple Hoosier Workforce in Indiana’s Wayne County

Omen USA, a subsidiary of the Israel-based Omen Casting Group and a manufacturer of aluminum parts for the automotive industry, announced plans to expand its manufacturing operations in Richmond, Indiana, creating up to 200 new jobs by 2022.  Indiana Governor Holcomb met with Israeli government officials and business executives like Omen Casting Group Owner Ben-Haim in Tel Aviv last spring to show the state’s appreciation for their contributions to the state.

Omen USA will invest more than $15 million to increase its production in Wayne County, expanding its 76,000 sq. ft. facility by an additional 21,000 sq. ft. and adding new production lines.  The company, which announced plans in 2016 to locate its first North American operations in Indiana, plans to start work on the addition next spring in order to meet growing demand from automotive original equipment manufacturers in the U.S. and Germany for its aluminum drivelines, steering components and oil pumps.  The company, which employs 100 associates in Indiana, plans to begin hiring for all levels of manufacturing positions in the spring of 2019.

Omen Casting Group, which is headquartered in Kibbutz Hatzor, Israel, was established in 1946 and now has operations in Israel, Portugal and Indiana.  The company produces aluminum parts primarily for the automotive industry, providing steering, engine and driveline needs to manufacturers located across the U.S., Mexico, South America, Europe and Asia.

The Indiana Economic Development Corporation offered Omen USA up to $1.6 million in conditional tax credits based on the company’s job creation plans.  These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives.  The Economic Development Corporation of Wayne County will provide a $237,000 general purpose grant for the company to use to offset expenses in building improvements, the purchase of new equipment or for the training of new employees.  Omen USA will also seek real and personal property tax abatement.

Omen USA is one of eight Israeli business establishments with operations in Indiana, joining companies like Resin Home Design Products, ICL Performance, MCP USA, Taditel Automotive Electronics and Polyram Compounds.  Together, these firms employ more than 500 Hoosiers around the state.

The Indiana Economic Development Corporation (IEDC) is represented in Israel by Atid, EDI, a Jerusalem based business consulting firm and it was through EDI’s efforts that this project was brought to Indiana.  (IEDC 10.12)

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2.2  Israeli Gas Line to Jordan Lauded as Boost for Peace

Work on the natural gas pipeline running from Israel to Jordan is expected to conclude in the coming weeks, allowing for Israeli gas to be pumped into the Hashemite Kingdom and potentially from there to other countries in the region.  In late September 2016, Israel and Jordan signed a landmark 15 year, $10 billion natural gas deal.  Work on the pipeline is headed by Israel Natural Gas Lines.  The project is expected to go online in late 2019, coinciding with the expected date that Israel’s Leviathan offshore natural gas field, which is slated to feed the pipeline, is also to become fully operational.

The work aims to both double the length of an existing pipeline running inside Israel along its border with Jordan, and add a new line running directly through the two countries’ mutual border.  The plans are to extend the existing pipeline by some 32 kilometers (19 miles), essentially doubling it.  The new, additional pipeline is expected to stretch across 23 kilometers.  (IH 10.12)

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2.3  Skoda Partners with Three More Israeli Startups

Skoda’s Digilab Israel in Tel Aviv has formed partnerships with three more Israeli startups: Chakratec, Anagog and UVeye.  Digilab was opened last year by Skoda in partnership with Champion Motors.

Chakratec has developed an innovative kinetic energy storage technology, with unlimited high-power charge and discharge cycles.  In July 2018, Skoda acquired a stake in Anagog, which processes data from more than 100 smartphone apps with up to 10 million monthly active users by using Artificial Intelligence (AI) and then works out mobility patterns.  With the use of this technology, Skoda AUTO DigiLab wants to offer services such as recommendations for parking spots. In cooperation with Anagog, Skoda AUTO wants to provide best dealership experience and personalized insurance to its customers.

Skoda is also collaborating with UVeye, which uses a 360-degree camera to scan the body, undercarriage and tires for damage and anomalies, producing a high-resolution 3D image within seconds.  UVeye has significant potential to ensure vehicle safety in the vehicle return process at dealers, maintenance, car rental or leasing companies and is soon to be operating in the Czech Republic.  (Globes 02.12)

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2.4  Israel Aerospace Signs Strategic Agreement with Boeing

On 28 November, Israel Aerospace Industries announced it signed a strategic agreement with Boeing, setting out principles of cooperation between the two companies in commercial and military aviation, in Israel and other markets around the world.  According to the agreement, Boeing is expected to provide IAI with work packages totaling potentially billions of shekel, relating to potential future Boeing sales of defense products to Israel, including new tanker aircraft.  The agreement also covers cooperation in other transactions Boeing expects to participate in worldwide.  The term sheet agreement reflects Boeing’s commitment to the State of Israel and its activities here.  The Israeli Air Force is evaluating the procurement of Boeing platforms that could total more than $10 billion, including the sale of fighter aircraft, helicopters, and tanker aircraft.  IAI and the State of Israel have already cooperated for many years with Boeing in the development and manufacture of the Arrow system, production of parts for commercial airplanes, and a wide array of service activities.  (IAI 29.11)

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2.5  Vietnam Airlines to Launch Tel Aviv – Hanoi flights

Vietnam Airlines is planning to launch two weekly flights between Tel Aviv and Hanoi starting September 2019.  Sources inform “Walla” that flights will be scheduled for two months starting from the Jewish holidays and the Asian airline will then assess whether it is economically worthwhile to continue the flights.  “Walla” reports that Vietnam Airlines CEO Thanh Tri Duong recently visited Israel the beginning of November for meetings about the inauguration of flights when he also signed a code-sharing agreement with El Al Israel Airlines.  Israel’s Ambassador to Vietnam said his embassy had been contacted by Vietnam Airlines regarding what takeoff and landing time slots they could be allocated by Israel’s Civil Aviation Authority.  (Globes 29.11)

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2.6  Newater Technology to Acquire AMS Technologies Int. to Expand into the Global Market

Yantai, China’s Newater Technology, a service provider and manufacturer of membrane filtration equipment and related hardware and engineered systems that are used in the treatment, recycling and discharge of wastewater, announced it acquired 100% of the equity of AMS Technologies.  The Company was listed on the Nasdaq Capital Market in 2017 and believes this is a significant step to expand into the global market.

NEWA acquired 100% equity of AMS, a company that develops and markets chemically and thermally stable and resistant ultrafiltration and nanofiltration special membrane materials used in wastewater treatment.  The total contract amount for this acquisition is approximately $13.5 million.  The Company will acquire AMS with its working capital.  The acquisition agreement was signed on 28 November 2018.  All the due diligence has been completed and closing of the transaction is expected to occur in March 2019.

Or Yeuda’s AMS develops and markets chemically and thermally stable ultrafiltration (UF) and nanofiltration (NF) membranes.  These membranes represent a technological breakthrough through significant improvement in the economics of inorganic compounds recovery. AMS offers a complete product line of extreme acid, alkaline, solvent, thermal and pressure stable membranes.  Its core technology adds significant value in various applications and industries through cost savings, improved recovery rates, greater acid/alkali/solvent supply reliability and clear environmental benefits.  (Newater Technology 01.12)

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2.7  Playtika Buys German Games Company Wooga

Berlin-based casual games maker Wooga has been acquired by Playtika.  With the move, half of Playtika’s titles will now be casual games, as the company seeks to diversify into new genres.  Terms of the acquisition were not disclosed, but Venturebeat reports that the purchase price is north of $100 million.  Wooga recently restructured after unveiling a new strategy with a focus on narrative-driven games, resulting in a round of lay-offs.

The company still has 180 employees, which will be joining Playtika.  Wooga’s founder and CEO Jens Begemann will continue to lead the games studio out of Berlin.  Wooga was backed by the likes of Balderton Capital, Highland Capital Partners, Holtzbrinck Ventures and Tenaya Capital.

Herzliya’s Playtika was founded in 2010 and eleven months later, it was bought by US company Caesars Interactive Entertainment for $130 million, and in July 2016 is was again sold, this time to a private equity group from China led by Giant Interactive, for $4.4 billion.  The company’s management headquarters nevertheless remain in Israel, and it employs some 500 people in the country, about a quarter of its global workforce.  Most of its development work, however, is carried out at sites in Eastern Europe.  Development in Israel focuses on data use and artificial intelligence tools.  (Playtika 03.12)

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2.8  WakingApp Announces a New Round of Funding

WakingApp has secured $2.6M in funding led by Globis Capital Partners.  This is in addition to the $9.5M in capital raised during their 5-year history.  This comes on the heels of Vuzix’s signing last month of a multi-year strategic partnership with WakingApp.  In addition to Vuzix also participating in the recent funding round, WakingApp will support Vuzix’s augmented reality (AR) Smart Glasses products, and Vuzix will distribute copies of limited term licenses of the ENTiTi AR Creator platform to Vuzix developers and customers.

Rosh HaAyin’s WakingApp has created an Augmented Reality (AR) toolset designed for and used by leading app design studios, social media app developers, architecture and construction firms.  The WakingApp creator has been designed with the power to rapidly produce outstanding AR experiences as stand-alone apps or integrated into existing mobile apps (SDK).  WakingApp has developed one of the industry’s most powerful 3D engines with physical based rendering (PBR) that has been specifically optimized for mobile.  WakingApp has also developed ENTiTi 3.0 with image and QR tracking.  (WakingApp 03.12)

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2.9  BIRD Energy to Invest $6 Million in Cooperative Israel-U.S. Clean Energy Projects

The U.S. Department of Energy (DOE) and Israel’s Ministry of Energy (MoE) along with the Israel Innovation Authority have selected seven clean energy projects to receive $6 million under the Binational Industrial Research and Development (BIRD) Energy program.

BIRD Energy began in 2009 as a result of the Energy Independence and Security Act of 2007.  Since then, BIRD Energy has funded 43 projects, with a total investment of about $34 million, including the seven selected projects announced today which are valued at $12.4 million.  Each project is conducted by a U.S. and an Israeli partner. Selected projects address energy challenges and opportunities of interest to both countries and focus on commercializing clean energy technologies that improve economic competitiveness, create jobs and support innovative companies.  The seven approved projects are:

-Beam Semiconductors (Rehovot, Israel) and BannerSolar (Eagle, Idaho) will develop a 60 GHz active phased array module for wireless gigabit applications with autonomous solar power supply & storage.

-Brightmerge (Jerusalem, Israel) and Introspective Systems (Portland, Maine) will develop and test dynamic grid pricing with edge load responsive device control.

-mPrest Systems (Petah Tikva, Israel) and Southern Company (Atlanta, Georgia) will develop integrated primary and secondary volt VAR control and conservation voltage reduction for the distributed grid.

-Nostromo (Even Yehuda, Israel) and Centrica Business Solutions US (Bellevue, Washington) will develop IceBrick – shifting the electricity grid’s peak demand using disruptive ice-battery technology.

-OneOPI (Herzliya, Israel) and Presidio (Albany, New York) will develop an automated simulation system and service for intelligent microgrid systems.

-RazorLabs (Tel Aviv, Israel) and Exacter (Columbus, Ohio) will develop an AI based grid resiliency forecasting system.

-Technion Research and Development Foundation (Haifa, Israel) and Primus Power (Hayward, California) will develop a high energy density grid-scale storage battery.

Projects that qualify for BIRD Energy funding must include one U.S. and one Israeli company, or a company from one of the countries paired with a university or research institution from the other.  The companies must present a project that involves innovation in the area of energy and is of mutual interest to both countries.  BIRD Energy has a rigorous review process that selects the most technologically meritorious projects along with those that are likely to commercialize and have significant impact.  Qualified projects must contribute at least 50% to project costs and commit to repayments if the project leads to commercial success.  (BIRD F 03.12)

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2.10  InnovoPro Raises $4.25 Million in Round Led by Swiss Retailer

InnovoPro has raised $4.25 million in a funding round led by the investment arm of Migros, Switzerland’s largest retailer, and Jerusalem Venture Partners (JVP) founder and chairman Erel Margalit.  Additional investors included Bits x Bites, China’s first venture capital fund that invests in food technologies, and Ran Tuttnauer, former owner of the Tuttnauer Group, ID Capital from Singapore and Yara ventures from Spain.

InnovoPro, which developed a 70% protein concentrate from chickpeas, said it will use the new capital to scale its production, support sales and expand into strategic global markets.  InnovoPro has created sustainable food products made from the plant-based protein, including dairy and meat alternatives, snacks such as dairy-free pudding and ice cream, and condiments like egg-free mayonnaise.  Its products are non-GMO, non-allergenic and gluten-free.

The market for plant-based protein is estimated today at $40 billion.  However, InnovoPro is targeting the even-larger, $900-billion market of meat, fish and poultry, which is searching for new opportunities for providing protein-rich products.  The first products based on chickpea proteins are being developed and will be launched in 2019.

Rishpon’s InnovoPro is committed to bringing unique plant-based protein ingredients to the global food market in order to create nutritious, tasty, safe, and sustainable food products.  With an excellent nutritional profile, “free from” properties and wide usability in the food industry, InnovoPro’s chickpea protein is the best choice for the growing plant-based protein market.  InnovoPro has been recognized as an innovator of disruptive technology in the food industry.  (InnovoPro 04.12)

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2.11  TAL Education Group Buys Codemonkey for $20 Million

Nasdaq-listed, Beijing-headquartered educational service company TAL Education Group has bought Israeli game-based learning startup Codemonkey Studios Inc. for $20 million.  TAL Education Group is an education tech company running learning centers in more than 40 cities in China which serve more than 2.3 million students.  TAL also operates an online learning platform with more than 18 million users.  The company is traded with a market capitalization of $16.7 billion.

Tel Aviv based Codemonkey develops game-like computer programming tutorials for children and markets its products in Israel, the U.S. and ten other countries in Asia, Europe and South America.  In Israel, its tutorials have been incorporated into the national education system, with 250,000 students learning to code through the Codemoneky platform each year.  Founded in 2013, the company raised $2 million to date.  Codemonkey employs a team of 15 people.  (Codemonkey 04.12)

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2.12  Jerusalem Leads World Cities in Tourism Growth for 2018

Jerusalem is poised to become the world’s leading city in tourism growth, according to a new report by leading market research firm Euromonitor.  According to the report, the number of tourists around the world will hit 1.4 billion in 2018, an increase of 5% over last year.  Jerusalem is set to lead in growth, with an expected 37.5% following a more modest increase of 32% in 2017.  According to the report, Jerusalem owes its increasing popularity to relative stability and a strong marketing push.  The Indian cities of Chennai and Agra took second and third place on the list, with 30.4% and 24.3% increase in growth, respectively.

The increase in tourism to Jerusalem is due to in part to a global marketing effort by the Tourism Ministry.  According to the data, the ministry’s decision to offer special Black Friday discounts led to a 20% increase in inquiries to travel agents about purchasing plane tickets to Israel.  The Black Friday digital campaign received over 157 million views, over 500,000 clicks and saw some 70,000 inquiries from points of sale about purchasing a ticket to Israel.  Some of the deals offered on tourism to Israel on Black Friday included flights from Germany to Eilat for €9.90 ($11.20).  Discount flights were also on offer from Vienna and London to the southern resort city.  Tourism Ministry officials expect the 4 millionth tourist to arrive in Israel in 2018 to arrive this month.  Israel is also expected to see Israel break its previous record for inbound tourism in 2018.  (IH 05.12)

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2.13  PepsiCo Completes Acquisition of SodaStream International

PepsiCo announced that it has completed its acquisition of SodaStream International, as previously announced, acquiring all outstanding shares for $144 per share.  The transaction is another step in PepsiCo’s Performance with Purpose journey, supporting health and wellness through environmentally friendly, cost-effective and fun-to-use beverage solutions, and the company’s Beyond the Bottle strategy to form a more sustainable beverage ecosystem.  PepsiCo’s strong research and development capabilities, global reach, design and marketing expertise, combined with SodaStream’s differentiated and unique product range position SodaStream for further expansion and breakthrough innovation.

Israel’s SodaStream is the #1 sparkling water brand in volume in the world and the leading manufacturer and distributor of Sparkling Water Makers.  They enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds.  By making ordinary water fun and exciting to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks.  (PepsiCo 05.12)

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2.14  SOOMLA Raises $2.6 Million to Lift the Hood on the Black Box of In-app Advertising

SOOMLA announced a Series A investment of $2.6 million led by JAL Ventures with additional funds coming from existing investors.  The financing will be used to fund SOOMLA’s continued global expansion and for further investment in its proprietary technology platform.

Founded in 2012 in Tel Aviv, SOOMLA provides needed visibility into in-app advertising, helping mobile app publishers be data driven in areas they previously could not.  Using its innovative ad tracking technology, SOOMLA delivers granular, impression level data, on more than 30 ad-networks and gives app publishers the flexibility to connect the data to their internal data warehouse as well as to a growing number of 3rd party analytics and attribution platforms.  SOOMLA is already working with the top mobile app publishers and have analyzed more than 500M unique users in 180 countries since the beginning of the year.

Founded in 2012, SOOMLA is a market leader in monetization measurement. Its technology gives mobile app publishers insight into the revenue they are generating from advertising as well as critical visibility into what ads are placed in their app. The platform makes these insights accessible to customers specifically by tracking revenue per user, per segment, per cohort and per traffic source. SOOMLA is used by 8 of the top 50 game publishers, enabling them to make better monetization decisions.  (SOOMLA 04.12)

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2.15  El Al to Launch Tel Aviv – Las Vegas Flights

El Al Israel Airlines is to launch a weekly non-stop flight from Tel Aviv to Las Vegas starting 14 June 2019.  The new route will earn El Al the €250,000 grant paid by the Ministry of Tourism to carriers who inaugurate a direct route to a destination not yet serving Israel.  Return fares on the new route begin at $1,300.  Fares for a one-way ticket from Tel Aviv to Las Vegas on June 21 or 28 are $668 but jump to $1,000-1,400 on other dates.  A single fare return from Las Vegas to Tel Aviv cost $630 on 3 July but can rise as high as $1,300 on other dates.  The flights will operate using the recently delivered Boeing Dreamliner aircraft with tourist, premium and business class options.

The weekly flights will leave Ben Gurion airport on Friday mornings at 7 am and arrive at 11.15 in Las Vegas after a 14 hours 15 minutes flight.  The return flight will leave Las Vegan on Saturday nights at 23.45 and arrive in Israel on Sunday at 22.15 after a 13 hours 30 minutes flight.

El Al also announced that it will launch its direct flights from Tel Aviv to San Francisco starting 13 May 2019.  It will compete on the route with United Airlines, which operates daily flights between Tel Aviv and San Francisco.  With the start of flights to Las Vegas and San Francisco, El Al will be operating direct flights to seven destinations in North America – New York (JFK and Newark), Boston, Miami, Toronto and Los Angeles as well as Las Vegas and San Francisco.  (Globes 10.12)

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2.16  OpenLegacy Raises $30 Million from Worldwide Strategic & Financial Investors

OpenLegacy has closed a funding round of $30 million. The investment will further strengthen its premier market position of enabling established enterprises to go truly digital.  OpenLegacy is mission critical for organizations with complex legacy environments, as experienced by its global tier 1 customers.  It helps organizations quickly launch digital innovations by automating and standardizing the process of creating digital services using microservices-based APIs.  With OpenLegacy, legacy systems can be integrated, leveraged, and extended in a fraction of the time compared to other solutions, all without changing the underlying systems.

The funding round brings together major global investors with added value in both funding and promoting the technology. Round participants include: Silverhorn Investment Advisors (lead investor); CommerzVentures, the VC unit of Commerzbank; C. Entrepreneurs, the VC created by BNP Paribas Cardif with Cathay Innovation; Leumi Partners; O.G. Tech Ventures – Eyal Ofer’s VC arm; Prytek-GFS Group; and RDC, a major investor from the seed stage, which is a joint venture between Elron and Rafael.

Petah Tikva’s OpenLegacy helps organizations quickly launch innovative digital initiatives by automating and standardizing the process of creating digital services.  With OpenLegacy’s microservice-based APIs, even the most complex organizations can accelerate the delivery of new innovations without changing their back-end systems.  OpenLegacy is a flagship company of “The Floor,” a global innovation platform, in partnership with leading banks such as HSBC, Santander, RBS, Intesa SanPaolo, Deutsche Bank, and SMBC alongside Intel, and Accenture.  (OpenLegacy 28.11)

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2.17  TechSee Announces $16 Million Series B Led by Scale Venture Partners

TechSee closed a $16 million Series B funding round to further accelerate its global business growth and strengthen its breakthrough computer vision and augmented reality-powered visual customer assistance platform.  The investment round is led by Scale Venture Partners, with participation of existing investors including Planven Investments, OurCrowd, Comdata Group and Salesforce Ventures.

TechSee bridges the visual gap in customer experience by enabling consumers to receive augmented reality-based visual guidance through their smartphones from a virtual technical assistant or a human agent.  The TechSee Live platform delivers an interactive visual customer experience along the customer journey – from purchase, to product unboxing, usage, guidance and support.  The platform not only enhances customer experience, but also enables scalable customer operations, increased sales and reduced cost of service.

As the pioneer in visual customer engagement, TechSee has established itself as the de-facto market leader.  The new capital will help the company widen its competitive gap by fueling ongoing product development for its breakthrough platform, expanding marketing and sales efforts in the U.S. and other key markets, and accelerating rapid corporate growth to support customer demand.

Herzliya’s TechSee revolutionizes the customer experience domain by providing the first intelligent visual engagement solution powered by artificial intelligence and augmented reality.  TechSee empowers enterprises across the globe to deliver a better customer experience and reduce costs.  TechSee is led by industry veterans with years of experience in mobile technologies, computer vision, machine learning and big data.  (TechSee 11.12)

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3.1  Hyatt Regency Aqaba Ayla Resort Opens as the First Hyatt Regency Hotel in Jordan

Chicago’s Hyatt Hotels Corporation announced the official opening of Hyatt Regency Aqaba Ayla Resort, Jordan’s first Hyatt Regency hotel and second Hyatt-branded property, joining Grand Hyatt Amman.  Hyatt Regency Aqaba Ayla Resort is the debut hotel to open within the prestigious Ayla development on the northern shores of Aqaba, marking an important step for Hyatt as it grows its brand footprint of resort hotels in the region.  Each of the hotel’s 286 guestrooms and suites offer picturesque views of the azure lagoons, Aqaba’s towering mountains and the surrounding marina.  Guests can take advantage of a myriad of retail, dining and entertainment venues and enjoy access to Jordan’s first 18-hole golf course.  (Hyatt Hotels 01.12)

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3.2  Little Thinking Minds Raises $1.26 Million in Series A

Jordan-based Little Thinking Minds has raised $1.26 million in a Series A round led by Egypt’s Algebra Ventures with participation from Mindshift Capital and Al Turki Group.  The education technology (edtech) company creates platforms and Arabic content aimed at school children across the Middle East and North Africa (Mena) region.  Founded in 2004, it has launched several ‘edutainment’ apps and videos focused on early literacy and numeracy.  The company’s digital platforms are currently used by more than 200 schools and 80,000 students across Mena.  The investment will be used to expand Little Thinking Minds’ product portfolio and improve its current platform.  (Various 09.12)

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3.3  FORBES Middle East Says COFE App “One of the Top 50 Startups to Watch For”

COFE App, an online coffee-centric marketplace, was the only Kuwait-based startup listed as one of the “Top 50 Startups to Watch in the Arab World” by FORBES Middle East.  Conceptualized in Kuwait and developed in Silicon Valley, the app connects coffee house chains and specialty coffee roasters with coffee lovers through a seamless, easy and efficient user-interface.  Created by a multinational team of technology professionals who are also coffee enthusiasts, the app has quickly penetrated the market.  COFE App has carved itself a niche among coffee lovers and early adopters in a marketplace where coffee is an essential part of daily life and local culture.

The startup scene in Kuwait has witnessed a rise in venture capital (VC) investments led by local, regional and international investors.  The recent $100 million acquisitions of local tech startups, such as Talabat and Carriage by Berlin-headquartered Rocket Internet/Delivery Hero, reflects the strength and potential of Kuwait’s startup scene.  COFE App was Beta launched in February 2018 in Kuwait, and will soon be available in other countries.  (COFE App 02.12)

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3.4  Tabeeby Secures $777,000 from Ground One Ventures

Tabeeby, a Kuwait-based social health network, secured a strategic investment of $770,000 from Ground One Ventures, a private investment company based out of United Kingdom.  Tabeeby connects patients, doctors and health care providers across GCC anytime anywhere.  Already with millions of users under its belt, Tabeeby has succeeded in raising the standard of medical and health awareness among the regional population.

Tabeeby is empowering patients to enjoy a better healthy lifestyle by providing a unique and innovative communication and engagement tool that allows direct and unlimited patient–to-doctor interactions.  By using the state-of–the-art technology and real time social media innovations to highlight the concept of prime health, Tabeeby ensures easy, swift and fast access to thousands of verified and trusted doctors, medical entities and health events.  The investment from Ground One Ventures will be used to further enhance Tabeeby’s healthcare technology platform and deliver new innovations to highlight the concept of prime health in our modern-day life.  (Tabeeby 10.12)

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3.5  OnCost Cash and Carry Acquires Gulfmart

OnCost Cash and Carry, the first wholesale membership retail store in Kuwait, announced that it had acquired Gulfmart, the well-known supermarket chain that has been operating in Kuwait since 1999.  Announcing the change in ownership, OnCost Cash and Carry said that once the transfer of shares process has been completed , Gulfmart and OnCost would merge and begin operating as a single entity within the span of the next six months.  Once the merger is completed, Oncost will have a total of 20 branches spread across the country.  Over the next 5 years, Oncost plans on increasing the number of branches to 35 and looks forward to entering the Saudi and the UAE markets through strategic partnerships with professional retail groups in those countries.  With the acquisition of Gulfmart, the total market share of Oncost in the local food market would reach 4%.

Oncost, with its distinctive strategy of selling products to customers at wholesale prices in a household focused retail environment, has a pricing policy that focuses on competitive and wholesale prices.  Oncost was established in 2010 as Kuwait’s first professional membership based wholesale center.  It leveraged their strength in owning slaughter houses and operating Kuwait’s Central Vegetables and Fruits Market in Sulaibiya.  The first branch opened in Alforda Market and became the first central market to provide everything and anything from fresh vegetables, fruits, meat and fish, to household cleaning and washing products to customers at wholesale prices all under one roof.

In addition to brick-and-mortar stores, they also have a ‘Baqal’ service that receives and delivers online orders from customers exclusively through the Talabat or Baqal mobile app.  This service, which has nearly 30 delivery vehicles, promises to deliver orders within a maximum of 30 minutes of placing the order.  (Oncost Cash & Carry 28.11)

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3.6  UAE’s Mubadala Invests in Leading Russian Fitness Center Brand

A consortium of investors including Abu Dhabi’s Mubadala Investment Company have announced investments in Russian Fitness Group (RFG), which manages the largest chain of fitness clubs in Russia under the World Class brand.  The consortium, which also includes the Russian Direct Investment Fund (RDIF), Russia’s sovereign wealth fund, has acquired a 22.5% stake from VTB Capital.  RDIF, Mubadala and co-investors intend to strengthen its position in various markets and to promote healthy lifestyles in Russia.  Russian Fitness Group operates World Class and World Class Lite fitness clubs chains.  Today it is the largest fitness corporation in Russia operating 39 own and 46 franchised clubs in 34 cities.  (AB 28.11)

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3.7  $4 Million in Fake Toyota Parts Seized in Raids Across the UAE

Al-Futtaim Toyota, in partnership with government authorities, has completed a total of 16 raids on counterfeit car part dealers across the UAE.  The raids, mainly in Dubai, Al Ain, Umm Al Quwain, Sharjah and Ajman to date, have resulted in more than 300,000 fake Toyota parts valued at over $4 million being confiscated and destroyed.  The majority of the items were serviceable goods such as oil filters, fuel filters and spark plugs, a statement said.  In 2017 Al-Futtaim Toyota and UAE Government officials successfully executed a total of 29 raids, resulting in the confiscation of goods worth more than AED41 million.  (AB 28.11)

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3.8  Dubai-Based Mobile Wallet App Beam Eyes Global Expansion

Beam, a Dubai-based mobile payments platform, will expand in seven new markets in 2019.  Since launching in the UAE in 2012, Beam has built a user base of approximately a million users and in the next six months the company plans to expand into Belgium, the Netherlands, Luxembourg, Portugal, Ukraine, Azerbaijan and Uzbekistan.  The firm already has a presence in Sweden and Australia.

Beam enables retailers to accept mobile payments and engage with customers directly through their smartphones.  The payment and rewards platform, which already has a partner network of more than 2,000 stores in the UAE alone, will enhance shopping experience, allowing customers to pay by phone, while earning cash back on their purchases, the company said in a statement.  Beam Wallet is a global tech startup with offices in Dubai, Sydney and Gothenburg. Currently, the leading mobile wallet app in the UAE, Beam is changing the payments and rewards landscape one city at a time.  (AB 08.12)

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3.9  Nike Opens Largest Middle East Shop in Dubai

US sportswear giant Nike, in partnership with its local distributor Sun and Sands Sports, has opened its largest store in the Middle East at The Dubai Mall.  Sprawling across 3,290 square meters, Nike Dubai serves as a platform for consumers to celebrate sports and collaborate through creative workshops.  The store has a customization space that provides the opportunity to personalize Nike items all year round, with customers invited to design their sneakers and apparel with a variety of tools and accessories such as laces, straps, buttons, markers and tongue labels.

Nike Dubai also has an area that is designed specifically for women and features an intimate lounge area where women can hang out, play their own music and shop in full privacy along with their friends.  It also includes a flexible trial space which is designed as a small basketball court, inspiring Dubai youth to try out their new gear.  Nike Dubai will have a full agenda of sport and cultural events, varying from Nike+ Training Club and Nike+ Training Club sessions to athlete talks, artist sessions and stylist workshops.  (AB 04.12)

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3.10  Competition Heats Up For Cairo’s Ride-Hailing Apps

The first announcement at this year’s RiseUp Summit in Cairo came from Halan, a motorcycle and tuk-tuk-hailing app.  Competition for the market segment unable to afford taxis or private ride-hailing apps daily, has intensified in the historic city as both Careem and Uber both launched bus services to compete with local players Swvl and Buseet, both of which announced significant recent investment rounds.  Careem is targeting the 40% of Egyptian society that want to avoid public transport or driving their own cars.

With a population of almost 10 million in Cairo alone and close to 25 million in the Greater Cairo area, the city has become an attractive test-bed for ride-hailing and ride-sharing apps.  Halan launched 18 months ago in Cairo and has since completed more than three million rides across Egypt and Sudan.  Swvl, a bus-booking app closed its series B round this week valuing the company at close to $100 million. Founded last year, it operates across Cairo and Alexandria with more than a million users.  The round of recent investments concluded with Buseet, another Cairo-based bus-booking app, which raised seed investment from Saudi Arabia’s Vision Ventures.  (Wamda 09.12)

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4.1  Dubai Tests New Bus Shelters Powered By the Sun

Dubai’s transport authority has started a pilot project to build bus shelters that run on solar power.  The Roads and Transport Authority (RTA) said work has started on the construction of a model for two shelters powered by solar energy as a solution for shelters in locations off the electric power grid.  Solar power generated would be used to operate lights, air-conditioners and billboards.  The RTA has also started the construction of a further 48 air-conditioned shelters in Dubai, with another 10 in the pipeline, which would bring the total number to 884 in the city.  More than 1.2 million people current use bus shelters every month.  The new shelters cover Dubai Investment Park, Dubai Academic City – Aviation College, Higher Colleges of Technology, Dubai Industrial City, Dubai Internet City and JLT.  Over the next few months, RTA will start the construction of 10 more with each having eight seats and catering to the needs of people of determination.  (AB 04.12)

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4.2  UAE Installs Hundreds of Artificial Caves to Boost Fishing Industry

The UAE’s Ministry of Climate Change and Environment (MOCCAE) has teamed up with Fish Farm to install 20 artificial caves in Khorfakkan’s Al Badiyah Island in a bid to help replenish fish stocks in the UAE’s waters.  The step is the second part of a multi-phase agreement between MOCCAE and Fish Farm to install 500 artificial caves.

The first phase, which was carried out in May 201, saw 300 artificial caves installed at 30 sites in the UAE, including Al Badiyah Island and Sharjah’s Loulouiya Harbor.  The locations were chosen for their proximity to the UAE’s coastline, with the stated aim of bringing fishing areas closer to show to reduce the operational costs of fishing trips and eliminate the risks associated with deep-sea fishing.  The artificial caves form part of a larger MOCCAE effort to support fishing and ensure the long-term viability of the UAE’s fishing industry.  (AB 06.12)

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4.3  Reverse Vending Machines to Boost Recycling In Malls Across Turkey by 2021

Reverse vending machines will be put in shopping malls across Turkey by 2021 in order to facilitate more recycling, the head of Turkey’s Chamber of Environmental Engineers recently announced.  In line with the new regulations on packaging waste control that be become effective in the new year, shopping malls will be required to have reverse vending machines.  The reverse vending machines are automatic recycling machines that transform recyclable materials and in return give credit or money, depending on how they are designed.  Mandating the machines, it is hoped this will open a new opportunity for domestic machinery manufacturers to meet the new demand.

The Turkish government has recently supported recycling campaigns across the country as one of the goals of its environmental policy.  In late November, Parliament passed a new environmental law including a landmark restriction on plastic bags.  Under new amendments, sellers will be obliged to sell plastic bags for TL 0.25 (approximately $0.05 cents) and they will be fined if they give bags for free to customers.

Environment and Urbanization Minister Kurum said the charge will come into effect in January. He said that every Turkish citizen uses, on average, 440 bags a year, adding that Turkey aims to reduce this number to 40 by 2025.  Istanbul Metropolitan Municipality (IBB) also introduced “Smart Mobile Waste Transfer Machines” in September that put a refund for plastic bottles onto the recycler’s transportation card.  The goal is to have at least 100 machines installed across the city by the end of the year.  (DAILY SABAH 11.12)

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4.4  Morocco Ranks 2nd in Climate Change Performance Index

Morocco has moved up one place to become the second-best performing country in the Climate Change Performance Index (CCPI) for the year 2019, behind Sweden.  Germanwatch, the NewClimate Institute, and the Climate Action Network published the 2019 CCPI report Monday, December 10.

Sweden scored the highest in the annual ranking with 76.28 points, followed by Morocco (70.48) and Lithuania (70.47).  The survey showed that the UK, India, Norway, Portugal, and the European Union were also among the top countries and regions with a “high” ranking.  Saudi Arabia, the US, Iran, South Korea, and Taiwan scored very low in the overall climate change index ranking among a list of 56 countries.  In addition to Morocco, the North African countries included in the ranking were Algeria, which ranked 44th and scored low, and Egypt, which ranked 21st and rated medium.

Morocco ranks “high” in all CCPI categories, including greenhouse gas (GHG) emission, renewable energy, energy use, and climate policy.  The index, which evaluates and compares the climate protection performance of 56 countries and the EU, stated that Morocco’s renewable energy projects and goals resulted in a high rating in the climate change ranking.

The survey noted that with the connection of Noor Solar Project, “the world’s largest solar plant and multiple new wind farms to the grid, the country is well on track for achieving its target of 42% installed renewable energy capacities by 2020 and 52% by 2030.”

The index also looked at Morocco’s progress in reducing greenhouse gas emissions, energy use, and climate policies.  Since the energy sector contributes greatly to the carbon dioxide (CO2) emissions of a country, Morocco scored a low GHG emission level.  Morocco hence contributes to limiting global warming effects in the world because it is one of the 56 countries and the EU which are together responsible for over 90% of global GHG emissions.  (MWN 10.12)

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5.1  Lebanon’s Trade Deficit Widened by 3.93% y-o-y t $12.96 Billion in September 2018

Lebanon’s trade deficit widened by 3.93% year-on-year (y-o-y) to reach $12.96B by September 2018.  In fact, total imports increased by a yearly 4.86% to $15.16B by September 2018 and exports recorded a yearly uptick of 4.14% to $2.20B over the same period.

In details, the value of imported mineral products (grasping 21.14% of total imported goods) stood at $3.20B by September 2018, recording a yearly downtick of 0.87%, owing it to a 25.93% y-o-y decline in their imported volume to 5.97M tons by September 2018.  Meanwhile, the average price of oil increased by 35.51% y-o-y to $72.73/barrel over the same period.

As for the value of machinery and electrical instruments (11.7% of the total imported goods), it recorded a rise of 23.62% y-o-y to settle at $1.77B.  Moreover, the value of imported products of the chemical or allied industries (10.9% of the total imported goods) also increased by 5.93% to $1.65B over the same period.

In terms of top trade partners, Lebanon primarily imported from China, Greece, Italy and USA with shares of 10.18%, 8.48%, 7.65% and 7.34% in the total value of imports, respectively, by September 2018.

As for exports, the value of pearls, precious stones, & metals (holding 22.97% of the total export goods) rose by an annual 9.66% to reach $505.38M by September 2018. In turn,  the value of base metals and articles of base metal (holding 13.39% of the total export goods) climbed by a yearly 20.76% to $294.53M. Meanwhile, the value of prepared foodstuffs, beverage, and tobacco (holding 13.37% of the total export goods) decreased by 12.01% y-o-y to $294.  By September 2018, the UAE, followed by South Africa, Saudi Arabia and Syria were Lebanon’s top four export destinations, respectively constituting 14.54%, 7.49%, 6.92% and 6.36% of the total value of exports.  (LC 26.11)

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5.2  Lebanon’s Balance of Payments Registered a Deficit of $5.62 Billion by October 2018

According to the Central Bank of Lebanon, Lebanon’s Balance of Payments (BoP) witnessed a deficit of $5.62B by October 2018 compared to $1.07M deficit recorded during the same period in 2017.  In details, the Net Foreign Assets (NFA) of BDL and those of commercial banks slipped by $1.30B and $4.31B respectively, by October 2018.  Moreover, the BoP recorded a monthly deficit of $1.81B in October 2018 alone, compared to a deficit of $887.8M in October 2017.  In fact, the NFAs of BDL and commercial banks’ dropped by $373.9M and $1.43B respectively, in October 2018.  (CBdL 06.12)

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5.3  Number of Tourists Visiting Lebanon Rose 5% in October

According to the Ministry of Tourism, the number of tourists visiting Lebanon in the first ten months of 2018 rose by 5% year-on-year (y-o-y) progress, where the total number of tourists went up from 1,592,301 to 1,671,891.  This increase is owed to the yearly growths recorded in tourist arrivals from Europe and North America, which together comprised 54.4% of total tourists in Lebanon.  Geographically, Lebanon saw growth in the number of European tourists that constituted 35.9% of the total; growing by 9.63% y-o-y to 600,205 by October 2018 on the back of the rise of the number of tourists from the majority of the European countries.  There was growth in the number of tourists coming from UK, Italy, France, Turkey and Germany by 12.97% to 67,840, 7.06% to 30,733, 6.68% to 154,780, 5.73% to 26,342 and 4.33% to 92,195 respectively.  This was better than the drop of 3.60% recorded by entries from Sweden, which stood at 33,757.  Arab countries, representing 28.1% of all tourists, recorded a decrease of 2.63% to stand at 470,526 by October 2018.  This drop was heavily influenced by the number of Iraqi and Saudi incomers, which recorded an annual decrease of 4.76% and 16.86% to stand at 184,923 and 48,885 respectively in October 2018.  Moreover, the number of tourists from Jordan, Kuwait and the UAE dropped by 0.32% to 78,277, 12.56% to 32,897 and 20.01% to 1,415 respectively.  On the contrary, the number of incomers from Egypt recorded an annual increase of 6.51% from 70,213 to from 74,784.  As for the numbers of American and Asian travelers, they respectively rose by 8.61% and 1.49% y-o-y to 309,575 and 116,267 tourists.  (MoT 10.12)

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5.4  Jordan’s Unemployment Rate Rises to 18.6%

The unemployment rate in Jordan for Q3/18 has reached 18.6%, an increase of 0.1% compared to the same period of 2017, according to a report issued by the Jordanian Statistics Department.  The report noted that the unemployment rate among men was 16.3%, compared to 27.1% among women during the period of the study.  This indicates that unemployment among men increased by 0.9%, while it declined among women by 2.8%, compared to Q3/17.

The report also said that unemployment was high among holders of bachelor’s or higher degrees in comparison with other educational levels.  The results indicated that 58.2% of unemployed people hold a secondary education certificate or a higher degree.  Among males, who hold an undergraduate degree or higher, the rate of unemployment reached 28.1%, while among females it stood at 80.1%.  The age group which recorded the highest rate of unemployment was 15-19 years, with a rate of 46.9%, followed by 20-24 years, for which the rate stood at 37.7%.  (JSD 03.12)

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5.5  Jordan’s First Nanosatellite Launched

On 3 December, Jordan’s Crown Prince Foundation announced the launch of Jordan’s first nanosatellite, as part of its Masar initiative.  “JY1-SAT”, which orbits the Earth at 600 km above the Earth’s surface, was named in the memory of the late King Hussein, who held the call sign of JY1.  The launch of the Jordanian satellite aims firstly to achieve educational and research purposes.  It will also promote tourism in the Kingdom by broadcasting images of tourist and heritage sites, as well as wireless communication with ground stations around the world.  In addition, it will broadcast a message of peace recorded by Prince Al Hussein Bin Abdullah II, the Crown Prince, destined for the world to be available for reception by all terrestrial receivers in the world.  (Petra 03.12)

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5.6  Jordan’s PM Razzaz Opens Bashir Hospital’s New USAID Funded $25 Million Emergency Building

On 3 December, Jordanian Prime Minister Razzaz said that Amman will conduct periodical and surprise visits to Al Bashir Hospital as a measure to ensure that it becomes “an icon public hospital and a model for public health in the Kingdom”.  The new emergency building was constructed at a cost of $23 million and funded by the United States Agency for International Development (USAID).  It will be equipped with the latest and most advanced equipment, with a capacity of 147 beds.  The Health Minister highlighted that the new addition meets the urgent needs of Al Bashir Hospital due to the growing number of patients it receives, noting that the public hospital deals with some 50,000 cases per month.  The hospital, which was inaugurated in 1954 and is considered one of the ministry’s largest hospitals in the Kingdom, has 1,110 beds, employs 3,125 people and received 584,000 patients through its emergency department and 560,000 through the outpatient clinics in 2017.  (JT 04.12)

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►►Arabian Gulf

5.7  Qatar to Leave OPEC and Focus on Gas

Qatar said on 3 December that it was quitting the Organization of the Petroleum Exporting Countries (OPEC) from January to focus on its gas ambitions.  Doha is one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter.  Qatar said its surprise decision was not driven by politics but pundits feel it reflects tensions with Saudi Arabia.

Delegates at OPEC, which has 15 members including Qatar, sought to play down the impact.  But losing a long-standing member undermines a bid to show a united front before a meeting that is expected to back a supply cut to shore up crude prices that have lost almost 30 per cent since an October peak.  It highlights the growing dominance over policy making in the oil market of Saudi Arabia, Russia and the United States, the world’s top three oil producers which together account for more than a third of global output.

Riyadh and Moscow have been increasingly deciding output policies together, under pressure from US President Trump on OPEC to bring down prices.  Benchmark Brent is trading at around $62 a barrel, down from more than $86 in October.

Qatar, which has been a member of OPEC for 57 years, has oil output of just 600,000 bpd, compared with Saudi Arabia’s 11 million bpd.  Doha is an influential player in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves of the fuel in the Gulf.  Doha’s move is related to the country’s long-term strategy and plans to develop its gas industry and increase LNG output to 110 million tonnes by 2024.  Doha also plans to build the largest ethane cracker in the Middle East.  (Reuters 03.11)

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5.8  More Than Three Million Cars on UAE Roads

There are almost three million cars on UAE roads, a World Health Organization report has announced.  According to the Global Status Report on Road Safety 2018, the total registered vehicles was almost 3.4 million, with cars and light vehicles accounting for the largest proportion of the figure.  The report also said that there were 725 deaths from road traffic accidents in 2016, of which more than three quarters of the victims were men, according to figures from the Ministry of Interior.

The largest number of deaths were among car drivers and pedestrians, and there were around five deaths recorded per 100,000 people.  Road deaths have dropped significantly since 2007, when there were almost 17 deaths per 100,000 people; however, WHO has targeted the UAE with getting the current figure down to three.  The report pointed out that across the world, the number of road traffic deaths has continued to increase, although it has remained relative to population growth.

The report also revealed that the UAE is among the hardest places to get away with speeding, with the highest possible rating of 10 — with eight being categorized as ‘good’ — for the enforcement of road safety laws alongside Ireland, Norway, Oman and Turkmenistan.  The UAE also scored 10s for the enforcement of drink-driving laws, the national motorcycle helmet law and seat-belt law, but scored a seven for child restraint law.  The ratings were assigned by National Data Co-ordinators who compiled the report after being nominated by their governments.  (AB 10.12)

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5.9  Dubai Welcomes 11.58 Million Visitors During First Nine Months of 2018

Visitor numbers to Dubai remained steady as it welcomed 11.58 million visitors in the first nine months of 2018, according to figures by the emirate’s Department of Tourism & Commerce Marketing (Dubai Tourism).  India retained its position as Dubai’s leading source market, followed by Saudi Arabia and the UK.  Russia, China and Germany followed suit, each recording double-digit growth compared to the same period in 2017.

Tourism from Russia grew 60% year-on-year, with visitor numbers rising to 460,000 in the first nine months of 2018.  An increase in Russian overnight guests was the result of 19% growth in air capacity across non-stop flights, as well as ease of travel following the introduction of visa-on-arrival facilities in the last two years.  China also benefited from the visa-on-arrival scheme, boasting 641,000 visitors to Dubai this year, a 12% increase from 573,000 for the same period last year.  Moreover, the number of German tourists grew 15% to reach 388,000 visitors during the first nine months.  Further visitor growth is expected thanks to initiatives including the stopover visa which exempts transit passengers from all entry fees for the first 48 hours of their stay.

The growth in tourism has led to an increase in hospitality offerings, with 706 establishments offering a total of 112,381 available rooms in Dubai as of September 2018, a 4% increase compared to 678 establishments, and 6% increase compared to 106,167 available rooms in 2017.  Average occupancy for the hotel sector stood at 75%, with establishments delivering a combined 21.89 million occupied room nights during the first nine months of 2018.  (AB 09.12)

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5.10  Dubai South to Host Fish Farm as UAE Scales Up on Aquaculture

The UAE’s Ministry of Climate Change and Environment (MOCCAE) signed a memorandum of understanding (MoU) with Dubai World Central (DWC), also known as Dubai South, to boost the local aquaculture industry by setting up a fish farm.  Under the agreement, MOCCAE will facilitate the registration and licensing procedures for the DWC fish farm and provide consultancy advice.  Following a feasibility study of proposed species with regard to their local market value, the Ministry will select the species best suited for cultivation.  The MOCCAE will identify the key challenges that the aquaculture industry faces in the UAE and share the findings with DWC.  (AB 04.12)

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5.11  Saudi Arabia Launches Two New Satellites into Space

On 7 December, two Saudi-designed satellites were launched into space from China.  The satellites, which were developed by the King Abdulaziz City for Science and Technology, will be used to provide high-resolution images of the planet’s surface from low earth orbits, help with urban planning, monitor movements and changes on the earth’s surface, and provide government agencies with services, in particular, high-resolution images.  Known as Sat 5a and Saudi Sat 5b, the satellites were launched from Jiuquan Satellite Launch Center and will join the second generation of Saudi Arabia’s high-accuracy remote-sensing satellites.

King Abdulaziz City for Science and Technology has launched 13 satellites to date, and participated in the exploration mission of “Changi 4” Satellite with the Chinese side.  KACST provided the advanced services for the remote-sensing system, and launched a developed system for satellite-tracking and controlling of commercial ships which includes a comprehensive daily coverage of ship traffic of up to 30,000 ships around the world.  The launch of the two new satellites comes as part of the Kingdom Vision 2030 aiming to localize strategic technologies, maximize local content and empower the Saudi youths gain knowledge of advanced technologies in the development and manufacture of satellites.  (AB 07.12)

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►►North Africa

5.12  Fruits, Vegetables & Poultry Push Egypt’s Headline Inflation Down to 15.6% in November

The decrease in the prices of fruits, vegetables, and poultry led to a decline in Egypt’s annual headline rate of inflation down to 15.6% by the end of November against 17.7% in October, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).  CAPMAS noted that the Consumer Price Index (CPI) recorded 309.1 points in November, down by 0.7% in November against 2.6% in October.  The CAPMAS explained that this decline in inflation is due to lower prices of vegetables, listed in the basket of goods, which measures inflation, by 3.4%; fruit prices down by 8.9%, and poultry prices down by 1.7%.

Meanwhile, the CAPMAS noted that milk, cheese, and egg prices increased by 0.6%, while the prices of clothing and shoes increased by 1.8%.

Monthly core CPI inflation, computed by the Central Bank of Egypt, recorded 0.5% in November 2018, compared to 1.0% in October 2018.  The annual core inflation rate recorded 7.9% in November compared to 8.9% in October.  The inflation outlook continues to accumulate the upwardly revised Brent crude oil prices at $76.7 per barrel during FY 2018/19, which had reflected in a rise of the inflation outlook.

International food price forecasts, relevant to Egypt’s consumption basket, were upwardly revised primarily due to of higher prices of wheat and sugar as a result of bad weather conditions affecting production prospects for both crops.

The decrease in inflation further consolidates uncertainty about the upcoming decision of the Central Bank of Egypt (CBE) on interest rates when the Monetary Policy Committee (MPC) meets on 27 December.  It added that current policy rates remain in line with achieving single digit inflation as soon as the effects of fiscal consolidation measures dissipate.  The ministry of finance is targeting to achieve a primary surplus of 2% of GDP in FY 2018/19, up from a preliminary 0.2% in the previous year.  (CAPMAS 11.12)

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5.13  After Poultry, US Beef to Start Entering the Moroccan Market

After Morocco’s agreement to allow US poultry import in August, the US will gain a new access to export its beef into the Moroccan market.  The US Trade Representative (USTR) and the US Department of Agriculture (USDA) announced that the Moroccan government “has agreed to allow imports of U.S. beef and beef products into Morocco,” under the terms of the US-Morocco Free Trade Agreement (FTA).  Earlier this year, Morocco also approved the import of Russia’s beef products and Ukraine’s beef and poultry.

Moroccan imports of agricultural products from the US exceeded $512 million as of November this year.  The Trump administration estimates the North African country would represent an $80 million market for US beef and beef products.

In August, the USDA announced that Morocco will import US poultry, opening up an estimated $10 million market.  Morocco’s agriculture ministry stated that imports of poultry meat and poultry products from the US are only frozen products.  The ministry imposed health conditions on poultry imports saying, they must be accompanied by a halal slaughter certificate and a health certificate.  The poultry and beef deals are a follow-up of the free trade agreement (FTA) between Morocco and the US being implemented, signed 15 June 2004 and effective since 1 January 2006.  (MWN 07.12)

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6.1  Turkey’s Annual Inflation Rate Declines to 22% in November

Turkey’s consumer price index has seen a 21.62% annual hike in November, the Turkish Statistical Institute (TUIK) said.  The annual inflation fell by 3.62% from 25.24% in October.  The highest price increase on a yearly basis was seen in furnishing and household equipment with 32.73% in November.  Miscellaneous goods and services with 27.87%, food and non-alcoholic beverages with 25.66%, housing with 24.76% and recreation and culture with 21.18% were the other main groups where high annual increases realized.

The economic program, announced by Treasury and Finance Minister Albayrak on 20 September forecasts that inflation would rise to 20.8% this year before dropping to 15.9% in 2019 and 9.8% in 2020.  (TUIK 03.12)

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6.2  Turkish Economy Grows by 1.6% in Third Quarter

Turkey’s economy grew by 1.6% in the third quarter of 2018 compared with the same period of last year, TUIK announced on 10 December.  The economy expanded at 7.2% and 5.3% in the first and second quarters, respectively.  Calendar adjusted gross domestic product (GDP) in the third quarter of 2018 increased by 2.1% compared with the same quarter of the previous year.  Seasonally and calendar adjusted gross domestic product decreased by 1.1% compared with the previous quarter.  TUIK data also showed that households’ final consumption expenditure increased by 1.1% in the third quarter.  Government final consumption expenditure increased by 7.5% while gross fixed capital formation declined by 3.8% in the third quarter of 2018 compared with the same quarter of the previous year.  (TUIK 10.12)

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6.3  Turkish Companies’ Arms Sales Rose 24% Last Year

The arms sales of Turkish companies rose by 24% in 2017, according to a report released on 10 December by the Stockholm International Peace Research Institute (SIPRI).  The data includes the combined arms sales of the two Turkish companies in the Top 100 lists, namely ASELSAN, which produces electronics, and Turkish Aerospace Industries, which produces aircraft.  According to SIPRI data, ASELSAN’s sales increased by 29% to $1.42 billion in 2017 while sales by Turkish Aerospace Industries stood at $1.22 billion last year, a 19% increase from 2016.

When unveiling his government’s ambitious 100-day action plan in August, President Erdogan said that 48 out of the total 400 projects to be carried out under the plan are regarding the defense industry as his government aimed to zero its dependence on foreign supplies.  (SIPRI 10.12)

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6.4  Greek Inflation Rises by 1% in November

Greek inflation, or the adjusted index of consumer prices, showed an increase of 1.1% in November over levels of a year ago, according to Greek Statistical Authority (ELSTAT) data.  The average annual inflation rate for the period between December 2017 and November 2018 shows an increase of 0.8% over the same twelve-month period between 2016 and 2017.

Average inflation in the Eurozone reached 2% in November, which was down by one fifth of a point compared to October 2018.  Greece is still below the average inflation rate of all of the 19 member states of the Eurozone.  (ELSTAT 10.12)

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7.1  Fast of the 10th of Tevet‎

 The tenth of Tevet (Asarah B’Tevet), the tenth day of the Hebrew month of Tevet, is a fast day ‎in Judaism.  Falling this year on 18 December, it is one of the minor fasts observed from before ‎dawn to nightfall.  This observance is one of four public fasts (Asarah B’Tevet, Tzom Gedaliah, Shiva Asar B’Tammuz, and Ta’anit Esther) which are alike in that there do not apply any additional physical constraints, such as the prohibition of washing or of wearing leather shoes, etc.

The fasting commemorates the beginning of the siege of Jerusalem by ‎Nebuchadnezzar II of Babylon, an event that eventually culminated in the destruction of ‎Solomon’s Temple (the First Temple) and the conquest of the Kingdom of Judah (today in ‎south-central Israel).  In the State of Israel, Kaddish (the Jewish prayer for the deceased) is recited on this day for people whose date or place of death is unknown.  Consequently, many rabbis have designated it as a day of remembrance for the Holocaust.

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7.2  UAE Cabinet Adopts New Policies to Empower Emirati Women

The UAE Cabinet has adopted a new package of new national legislative policies and initiatives aimed at empowering Emirati women.  In a special session chaired by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, the Cabinet approved the empowerment bundle in line with the directives of UAE President Sheikh Khalifa bin Zayed Al Nahyan.  The new empowerment package is based on three principal axes of Legislation and Policy, Services and International Representation.  It said all axes include resources to support the advancement of Emirati women as active partners in local, regional and global arenas.  The new initiatives will see women’s increased participating in diplomatic missions, as well as an increased representation in judicial and legal affairs.  The decision will also set legislative frameworks concerning domestic violence.  New policies will also ensure the increased participation of female diplomatic missions and representatives of international organizations, including UN peace-keeping missions.  (AB 04.12)

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7.3  Egypt’s Growing Population Reaches 98 Million

Egypt’s population, growing at an annual rate of 3.5%, mostly lives along the Nile River, poses a significant challenge to such strategic goals, and threatens the beneficial impact of economic development.  In September 2017, Egypt’s population was estimated to be 94.8 million, with another 9.4 million abroad, according to CAPMAS, the country’s official census institution.  The country’s internal population has just reached 98 million.

Experts on population studies remain skeptical on the possibility to reduce growth rates in the next decade, estimating figures to reach at least 150 million by 2050.  They point out to two further population problems besides rapid growth: geographical misdistribution, and degrading demographic characteristics.

Stalled fertility levels between 1995 and 2005 increased after the 2011 revolution, from 3 to 3.5 child per women in 2014.  A slight decrease occurred in the past year.  The state’s developmental approach is focusing on balancing population growth with the available resources, while maximizing the benefit from human resources.  Despite an increase in the GDP, people are unable to properly spend on health, education, transportation, or housing as the state’s vision aims to stop population growth from bypassing its abilities to provide services.

To address controlling population growth and fertility rates, the Egyptian government strategy is focusing on the empowerment of women, by enrolling them into the workforce and encouraging SMEs, in order to reduce birth rates, and contribute to a higher GDP.  Women represent half of Egypt’s population.  The age average for marriage was estimated by the CAPMAS in 2015, at 24.5 for women compared to 30 for men.  Female in labor force statistics were 23.6%.  The CAPMAS figures for 2016 put the illiteracy rate at 14.4% for males, and 26% for women.  Activists call for more awareness campaigns to overcome the problem of people considering children as sources of income.  Some 111,000 girls under 18 are married in Egypt.  (Various 09.12)

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7.4  Some 2.6% of Egyptians Had Disabilities in 2017

The Central Agency for Public Mobilisation and Statistics (CAPMAS) announced that in 2017, 10.67% of Egyptian s who are five years and older, have disabilities ranging from some difficulties to cannot do at all, while 2.61% of Egyptians, who are five years and older, have severe disabilities.  In terms of sexual abilities, the CAPMAS declared that 53.9% of those with disabilities are males, versus 46.1% of females.

The CAPMAS stated that the percentage of people with disabilities in Arab countries is low in general, elaborating that the highest percentage is in Morocco with 5.1%, and Sudan with 4.8%.  Meanwhile, the percentage ranged between 2-3% in Egypt, Jordan, Bahrain and Yemen, while it is less than 2% in other countries.  (CAPMAS 03.12)

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7.5  Egypt Approves Legalization of 168 New Churches

A committee headed by Egyptian Prime Minister and Housing Minister Mostafa Madbouly approved the legalization of 168 churches and buildings on 30 November.  The committee officially legalized 151 churches and the remaining 17 are still awaiting required documents to be fully legalized.  Studies were carried out over the past two months on the conditions of the churches that have requested legalization, which were reviewed by the legalization committee in a meeting attended by ministers of justice, antiquities, and parliamentary affairs, as well as other concerned authorities.

In August 2016, the Egyptian Parliament passed a new law on the construction of churches in an effort to ease the process of obtaining a license to build a church.  Egypt’s former Prime Minister Sherif Ismail recently called for the ‘speeding up’ of the process of legalizing unlicensed churches.  Yet, earlier this month, the Christian community in a Minya village faced a mob of extremists attacking their church after it received approval.

Christians are a religious minority in Egypt, most likely account for about 10 – 15% of the country’s population, yet there are only 2,869 churches in the country, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).  (ES 02.12)

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7.6  Greek Children Among the Most Overweight in Europe

According to an alarming recent study published in the Athens-Macedonian News Agency (AMNA), experts claim that Greek children are prone to obesity, anemia, and even nutrient deficiency because of improper diet.  The Pan-Hellenic Study on Nutrition and Health, which examined the habits of 4,600 individuals of all ages, showed disturbing results for the health of the entire Greek nation.

The average eating habits of most Greeks includes a great deal of fat, saturated fat and even too much protein.  Greeks overall also show a very low intake of many vitamins and minerals in their diet.  Almost none of the participants tested had enough vitamin D, and 70% had low folate levels.  Some 60% of people had low calcium and potassium levels, and about 30% of women of reproductive age had low iron levels.  Sodium intake was found to be particularly high.

The same poor eating habits applied to Greek children as well, leading to them being among the most overweight in Europe.  The experts pointed out that frequent consumption of sugar-rich beverages more than doubles the risk of obesity.  Just as importantly, it also leads to the reduction of consumption of healthier beverages such as milk, water or juice.

Internationally, four out of ten children drink sugary beverages on a daily basis.  A third of children worldwide also do not eat a single fruit daily, according to the World Health Organization (WHO).  An analysis of over 23,000 packaged food products showed that 69% of them are of relatively low nutritional value, according to the report.  (AMNA 03.12)

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8.1  WeedMD Exports Cannabis Genetics to Israel’s Pharmocann

Aylmer, Ontario’s WeedMD, a federally-licensed producer and distributor of medical-grade cannabis, has exported its cannabis genetics to Israel’s Pharmocann, a privately-held pharma-agricultural medical cannabis producer working under the authorization of Israel’s Ministry of Health and widely recognized as a pioneer in the worldwide medical cannabis industry.  Pharmocann selected WeedMD’s genetics to strengthen its robust genetics library.  Pharmocann is at the forefront of cannabis production and development, and together with WeedMD, they share a common goal of producing premium brands for their patients.  Building a genetic library with quality strains from WeedMD will help Pharmocann advance its product offerings and give its patients greater access to clinically-validated and cost-effective medicine.

Pharmocann, one of the pioneers of Israeli medical cannabis farms, was established in 2008.  Located in the valley of Jezreel, the Galilee in the north of Israel, at the height of 350 meters above sea level, it is ideally situated for the growth of cannabis.  The farm extends over 8 acres, offering hothouses for growth and flowering of cannabis plants, a research and developing hothouse for cannabis strains and all the facilities required for the cultivating, harvesting and producing the unique strands that our farm is famous for, nationwide.  Servicing a community of over 3,000 patients monthly and yielding about 2 tons of the highest quality medical cannabis yearly, Pharmocann has acquired a vast knowledge and experience that enables the firm to leap forward towards becoming a major player in the international medical cannabis market.  (WeedMD 27.11)

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8.2  OWC Reports Progress in Clinical Trials for Ointment Care for Skin Diseases

OWC Pharmaceutical Research Corp. reported that the last healthy volunteer in its first ever safety study of cannabis-based topical ointment, was recently admitted in trial which is being conducted at Sheba Medical Center, Tel HaShomer, Israel.  OWC Pharmaceutical is pleased with the progress on this trial.  Recruiting has now been completed and completion of the trial is expected by the end of December.

Ramat Gan’s OWC Pharmaceutical Research Corp., through its wholly-owned Israeli subsidiary, One World Cannabis, conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD and migraines.  OWCP is also developing unique and effective delivery systems and dosage forms of medical cannabis.  All OWC research is conducted at leading Israeli hospitals and scientific institutions and led by internationally renowned investigators.  (OWC 29.11)

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8.3  Cannabics Files New Provisional Patent Application for Magnetic Targeting of Cannabinoids

Cannabics Pharmaceuticals announced that it has filed a provisional patent application with the US Patent office.  The patent covers the Company’s novel drug targeting technology accustomed to deliver cannabinoid compounds.  Utilizing magnetic delivery system, this innovative non-invasive approach allows external and internal systemic delivery of cannabinoids to the actual area of tumors within the patient.

Headquartered in Tel Aviv, Cannabics Pharmaceuticals is a U.S public company that is developing a platform which leverages novel drug-screening tools and artificial intelligence to create cannabinoid-based therapies for cancer that are more precise to a patient’s profile.  By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move cannabinoids into the future of cancer therapy.  The company’s R&D is based in Israel, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and Cancer.  (Cannabics Pharmaceuticals 28.11)

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8.4  Hadassah & IBM Establish Digital Health Accelerator

Hadassah Medical Center in Jerusalem and IBM Israel have announced the establishment of a special accelerator for startups in which the startups can develop advanced technological solutions and services in digital medicine.  Startups that have completed a post-seed financing round will be eligible for the program.  The accelerator was announced at an event launching the eighth class of the IBM Alpha Zone accelerator, which operates in all of the IBM’s fields of business in Israel.  Alpha Zone also deals with digital medicine; the 45 Alpha Zone graduates include Nutrino, acquired this week by global company Medtronic.

The new accelerator, to be built by the LR group on the premises of the Biohouse technology incubator in the Hadassah Ein Kerem Medical Center, will also be supported by the Jerusalem Development Authority.  The accelerator program, scheduled to begin in Q1/19, will last six months.  It will provide companies with easy access to hospital resources and medical and expert professional staff. IBM will provide technological advice from its experts and free access to its advanced technological tools, including hosting on IBM Cloud.

Hadassah said that it had selected IBM to lead the program because IBM Alpha was a global leader with experience in digital medicine.  For the medical center, closer ties with entrepreneurs for the purpose of promoting tomorrow’s medical innovation and development will advance treatment of patients in the future at Hadassah and other hospitals around the world, Hadassah said.  (Globes 29.11)

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8.5  EZbra Breast Dressing Makes US Debut at Premier Aesthetic Surgery Conference

EZbra Advanced Wound Care announced its official entry into the US market.  The company made its debut at the Aston Baker Cutting Edge Aesthetic Surgery Symposium, in New York, NY.  Every year, more than 13 million breast procedures are performed worldwide, for either medical or aesthetic reasons, and yet, there is no standard of care for post-op breast dressings.

EZbra™ is a proprietary sterile disposable all-in-one advanced breast dressing, offering a state-of-the-art solution to address the challenges that arise following all breast procedures (aesthetic, biopsy, lumpectomy, mastectomy, and reconstruction) – helping surgeons, both US and worldwide, address patient discomfort as well as save time in the operating room.  Additionally, the disposable and sterile qualities of EZbra may help decrease the risk of infection during recovery.  Earlier this month EZbra successfully raised $3 million in funding as part of their series A round, which will be leveraged for its US commercialization.

Tel Aviv’s EZbra, a women lead company and Femtech industry innovator, aspires to create a uniformly accepted high-quality breast dressing for the more than 13 million breast procedures performed annually. The company’s flagship product is an innovative and patented disposable post-surgical breast dressing that provides soft absorbent protection and compression. To date, the company has raised $4.7 million.  (EZbra 02.12)

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8.6  CLEW & UMass Memorial Medical Center Bring Predictive Analytics to Tele-ICUs

CLEW announced its partnership with UMass Memorial Medical Center, one of the largest academic medical centers in Massachusetts.  CLEW’s platform analyzes the hundreds of thousands of data points the average critical care patient in a US hospital provides every minute, to help clinicians make timely decisions with actionable clinical, operational and financial insights.  The company’s innovative prediction models and advanced analytics engine detects deterioration in real-time, and delivers predictive warnings during all phases of a patient’s Tele-ICU stay.  CLEW’s AI platform will provide UMass Medical with the tools to enhance its patient care, and reduce costs by preventing clinical deteriorations, while maximizing healthcare resources.

Through this partnership, CLEW will expand its advanced clinical trials for its real-time, patient-level predictions based on AI algorithms, and customized physiological models, at UMass Memorial.  These predictions will be based on clinical data leveraged from UMass Medical Center’s Tele-ICUs, monitoring five different facilities, and approximately 150 patients in real-time.

Netanya’s CLEW Medical (formerly Intensix) is a real time AI analytics platform designed to predict life threatening complications across various medical care settings, and help providers make better informed clinical decisions, improve outcomes and safety, streamline patient care, efficiently handle regulations and penalties, and lower the cost of care.  The platform uses machine learning and data science technology to develop physiological, predictive models at the level of each individual patient in order to deliver predictive warnings during all phases of a patient’s stay.  Originally developed and proven in the ICU, these models optimize scarce clinical resources and guide health care providers in predicting patient deterioration, across all care settings.  (CLEW Medical 29.11)

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8.7  NRGene Announces Expanded Licensing Agreement with Bayer for the GenoMAGIC™ Platform

NRGene announced a key milestone in its multi-year licensing agreement with Bayer for the use of GenoMAGIC™, a cloud-based big data analytics platform to support the company’s molecular breeding program within its Crop Science Division.  Bayer has completed a one-year evaluation of GenoMAGIC and has tested its usability to compare genetic makeup and select the best candidates for molecular breeding.  The licensing agreement was originally signed by Monsanto Company prior to its acquisition by Bayer.

Bayer’s R&D pipeline encompasses a broad range of solutions to help farmers mitigate the complex challenges they face on the farm – whether caused by pests, disease or weather – while improving their productivity and environmental sustainability.  GenoMAGIC™ delivers greater breadth and depth to Bayer’s ability to discover traits, enhance genomes, and for genomic selection.

Ness Ziona’s NRGene is a Genomics company that provides turn-key solutions to leading breeding companies.  Using advanced algorithmics & extensive proprietary databases, they empower breeders to reach their full potential by achieving stronger and more productive yields in record time.  NRGene’s tools have already been employed by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia.  (NRGene 03.12)

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8.8  Phibro Animal Health Acquires Fish Vaccine Business of KoVax

Teaneck, New Jersey’s Phibro Animal Health Corporation has acquired the assets of KoVax, an Jerusalem, Israel-based developer and manufacturer of vaccines for the global aquaculture market.  The acquisition strengthens Phibro’s position in fish vaccine innovation and expands its portfolio of aquaculture products.  KoVax’s research and development team has joined Phibro’s biological R&D team, and will focus on developing a pipeline of innovative vaccines for the aquaculture market.  Phibro’s first commercial aquaculture vaccine is KoVax’s “KV3” vaccine, which helps prevent Koi Herpes Virus, a highly contagious disease that can cause significant mortality in common carp farms.

Phibro Animal Health Corporation is a diversified global developer, manufacturer and supplier of a broad range of animal health and mineral nutrition products for livestock, helping veterinarians and farmers produce healthy, affordable food while using fewer natural resources.  (Phibro 06.12)

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8.9  Leviticus Cardio Announces Success of Groundbreaking Six Month Chronic Animal Study

Leviticus Cardio announces the successful completion of a 180-day preclinical chronic animal study to evaluate its CET technology in combination with a commercial heart pump.  Leviticus’ CET technology compliments a LVAD made by Jarvik Heart, which is equipped with a post auricular pedestal, acting together as a hybrid system for the subject.  The ongoing trial is being conducted at a renowned animal facility operated by the Catholic University of Leuven, Belgium.  This comes as Leviticus has raised additional funds to proceed with the first in human (FIH) trial.

Founded in 2008, Petah Tikva’s Leviticus Cardio is a medical device company dedicated to improving the clinical outcome for patients with an implanted left ventricular assist device (LVAD) for the treatment of impaired cardiac function.  The Company has received funding from The Trendlines Group, a leading Israeli early-stage investor, a consortium of acclaimed cardiovascular physicians, private investors and Israel’s Innovation Authority.  (Leviticus Cardio 06.12)

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8.10  CollPlant’s Vergenix STR Demonstrates Significant Clinical Improvements in Tennis Elbow

CollPlant announced a clinical trial published regarding its Vergenix™STR in the treatment of tennis elbow.  The peer reviewed paper titled, “First clinical experience with a new injectable recombinant human collagen scaffold combined with autologous platelet-rich plasma for the treatment of lateral epicondylar tendinopathy (tennis elbow)” was published in the Journal of Shoulder and Elbow Surgery.

Vergenix™STR is an injectable gel comprised of cross-linked bioengineered recombinant human type I collagen combined with autologous platelet-rich plasma (PRP).  Vergenix™STR forms a collagen-matrix that serves as a scaffold for cell recruitment.

The clinical trial, which was concluded in August 2016, enrolled 40 patients and evaluated three key measures of tennis elbow at 6 months post-treatment.  The mean Patient-Rated Tennis Elbow Evaluation score showed a 59% improvement (reduction) from baseline at 6 months.  Grip strength increased by 28% from 28.8 kg at baseline to 36.8 kg at 6 months.  In 68% of patients, improvements in sonographic tendon appearance were evident.  No systemic or local severe adverse events were reported.  Vergenix™STR has a CE mark and is currently sold in Europe.  CollPlant plans to conduct a pre-submission meeting with the U.S. FDA in the coming weeks.

Ness Ziona’s CollPlant is a regenerative medicine company focused on 3D bio-printing of tissues and organs, and on developing and commercializing tissue repair products for orthobiologics, and advanced wound care markets. Their products are based on rhCollagen (recombinant human collagen) that is produced with CollPlant’s proprietary plant based genetic engineering technology.  (CollPlant 10.12)

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8.11  Successful First in Humans for ZygoFix’s Spinal Facet Joint Fixation System

Misgav’s ZygoFix, a portfolio company of The Trendlines Group, announced the successful start of a first In human clinical study for its zLOCK spinal facet joint fixation system.  The clinical study comprised several procedures to date and a 6-month follow-up of the first case.  The first case, a fusion procedure using the zLOCK system, was performed on a 67-year-old female suffering from severe back and leg pain.  The patient reported a drop in her VAS (Visual Analog Scale of 0-10 for pain measurement) from 9 pre-operation, to 1 one day post-operation and to 0 at 6 months post-op.

The zLOCK implant is designed as a miniature facet fusion cage to stabilize the segment.  Its unique combination of rigid and flexible elements withstands loads and accommodates the anatomy of any facet joint.  zLOCK utilizes the natural anatomy of the spine to form a “bridge” between the two adjacent vertebrae, without screws and rods.  A percutaneous approach allows placement of zLOCK with only one small incision per side, making it significantly less invasive than the standard pedicle screw procedure.  (ZygoFix 10.12)

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8.12  dayzz Launches Personalized Sleep Training App Based on Big Data Analysis

Innovative corporate sleep solution provider dayzz launched today its sleep training app built for enterprise workforces, which will help improve sleep while reducing employer costs related to decreased productivity, accidents and inefficient health care utilization.  dayzz’s vision is to bring better sleep to everyone while significantly decreasing sleep-related costs.

Along with proper nutrition and exercise, getting quality sleep is an important pillar of health. dayzz has created a personalized sleep training app that evaluates a number of sleep issues and offers a complete, holistic sleep improvement solution.  It is a unique new service in the sleep app landscape, relying on evidence-based protocols and backed by leading physicians and therapists.  Treating sleep problems takes more than a single solution, and each one needs to be tailored to each user’s lifestyle and sleep needs.

dayzz provides a complete plan, integrating what customers need in a personalized and gradual manner using big data analysis.  The app incorporates data from a variety of sources, including mobile behavior (ex. phone usage), mobile sensors (ex. light, noise), and monitoring devices such as Fitbit®.  Analyzing the varied amount of data allows dayzz to provide users with a personalized experience, which includes appropriately timed tasks, reminders and motivation boosts based on their sleep habits, lifestyle, location, motion and activity.  Along with a human sleep trainer available for employees via chat, and an upcoming sleep support group feature, dayzz’s solution is easy to follow and adhere to.

Herzliya’s dayzz is an innovative corporate sleep solution, providing personalized sleep training plans to employees across the US.  Based on big data analysis, dayzz offers its mobile app to US employers as a way to increase productivity for their employees, enhance performance and wellbeing, optimize usage of the healthcare system, and reduce costs by allowing for fewer accidents and days off work.  The company was established in 2017 by Maabarot Products, leading Israeli nutrition and health product developer, manufacturer and marketer, and is led by an experienced team in the fields of business, technology and clinical treatment.  (dayzz 11.12)

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9.1  Silverfort’s First Holistic AI-Driven Authentication Engine for Securing Corporate Identities

Silverfort announced a first-of-its-kind AI-based risk engine that analyzes activities across all on-premises and cloud environments, to dynamically calculate the most accurate risk score per user, device and resource, and apply effective authentication policies.

Most Multi-Factor Authentication (MFA) solutions were designed as point solutions for specific systems or for certain types of assets (e.g., web applications).  As such, the risk analysis and adaptive policies they can offer are limited to the specific systems they protect.  Unlike these point solutions, Silverfort’s approach is fundamentally different.  Silverfort looks at authentication at the network level instead of integrating MFA into each individual asset.  This holistic approach enables unified authentication policies, visibility, user experience and risk analysis across all systems and environments.  Silverfort’s agentless architecture and holistic approach offer a big advantage over other solutions as they enable unparalleled visibility into all user activities, across all systems and environments, continuously analyzing risk for every authentication request with unmatched accuracy.  Silverfort’s risk engine combines 3 core components that continuously analyze authentication activities in real time to detect a wide range of malicious behaviors and threats.

Tel Aviv’s Silverfort delivers strong authentication across entire corporate networks and cloud environments, without deploying any software agents or inline proxies.  Using patent-pending technology, Silverfort enables adaptive multi-factor authentication for all sensitive users, devices and resources, including systems that don’t support it today, such as IoT devices, critical infrastructure, file systems and more.  Silverfort allows organizations to prevent data breaches and achieve compliance instantly, by preventing identity-based attacks even across complex, dynamic networks, including hybrid and multi-cloud environments.  (Silverfort 27.11)

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9.2  eyeSight and Exsun Partner to Bring Life-saving AI Vision to China’s Trucking Industry

eyeSight has teamed up with top Chinese GPS and telematics firm Exsun to make trucking safer, helping commercial trucks comply with new Chinese regulations which came into place in order to reduce accidents caused by driver drowsiness and inattentiveness.

More than a quarter of a million people a year (over 700 a day) are killed in traffic accidents in China, according to the WHO, and millions more are injured.  Chinese authorities are demanding that trucking companies combat this danger. Shenzhen, one of China’s largest and fastest-growing cities, recently passed a law requiring all heavy trucks to have Driver Monitoring Systems (DMS) installed by this coming June.  To meet these new safety requirements, Eyesight and Exsun have signed a multi-million dollar deal to produce an aftermarket Driver Monitoring System.  Eyesight’s camera and Computer Vision AI will be part of Exsun fleet management and telematics solutions, which are installed in hundreds of thousands of trucks.  Eyesight’s technology tracks the driver’s gaze direction, pupil dilation, eye openness, blink rate and head position to determine in real-time if the driver is drowsy, inattentive or unfocused on the road.

Tel Aviv’s eyeSight creates advanced edge-based Computer Vision and AI solutions that improve daily life experiences in the car, home, and with other consumer electronics.  The company’s technology uses proprietary algorithms to deliver a range of applications, from user recognition and gaze tracking to active interactions using touch-free gesture control.  With Eyesight’s technology devices both “see” and “understand” their users, unlocking a world of enhanced user experiences.  (eyeSight 28.11)

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9.3  K2 OEMs Safe-T Data’s Software Defined Access to Securely Connect Cloud Services

Safe-T announced that K2, a Washington state digital process automation platform, will bundle Safe-T’s Software-defined Access (SDA) solution with K2’s Cloud offering. Incorporating SDA will enable K2 to securely connect to customer on-premises data and resources as a cloud service and overcome the biggest cybersecurity challenge in hybrid cloud infrastructure.

Safe-T’s SDA solution closes the security gap that prevents organizations from taking a hybrid cloud approach by being tightly integrated and white-labeled into K2 Cloud for quick and easy deployment by customers, many of which are in highly regulated sectors like government, finance and healthcare.  Safe-T’s patented Reverse Access technology eliminates the need for opening ports and does not require VPNs, which often leave systems vulnerable to attacks.  The integration with K2 Cloud provides customers with a seamless experience that enables them to utilize the platform without making any changes to their security infrastructure.

Herzliya Pituah’s Safe-T®, a wholly-owned subsidiary of Safe-T Group, is a leading provider of zero trust access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data.  The company’s software-defined access (SDA) platform reduces the attack surface, empowering enterprises to safely migrate to the cloud and enable digital transformation.  With Safe-T’s patented, multi-layer software-defined access, financial services, healthcare, utility companies and governments can secure data, services, and networks from internal and external threats.  (Safe-T 28.11)

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9.4  Ecclesiastical Insurance Selects Sapiens’ Property Insurance Suite as Its New Core Platform

Sapiens International Corporation announced that Ecclesiastical Insurance Office PLC (Ecclesiastical) has selected Sapiens IDIT suite for property and casualty/general insurance and Sapiens Reinsurance to replace Ecclesiastical’s existing general insurance systems.  Ecclesiastical selected Sapiens as part of its strategic drive to transform its UK and Ireland business and grow its book.  Investing in the Sapiens general insurance suite will deliver a range of benefits for the group, enhancing the customer and broker experience.  The specialist financial services group has a strong portfolio of insurance, investment management, broking and advisory businesses in the UK, Ireland, Canada and Australia.

Sapiens IDIT is a component-based software solution suite that enables insurance carriers to meet critical and long-term business goals, with extensive multi-company, multi-branding, multi-currency and multi-lingual capabilities.  The suite is built on open technology and is backed by Sapiens’ 30+ years of unmatched delivery expertise and global presence.  Its field-proven, modular components support all core operations of personal, commercial and specialty lines of business.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry.  The company offers software platforms, solutions and services, including a full digital suite, to satisfy the needs of property and casualty/general insurers, and life, pension and annuity providers.  Sapiens also services the reinsurance, workers’ compensation, financial and compliance, and decision management markets.  The company’s portfolio includes policy administration, billing and claims, underwriting, illustration and electronic application.  The digital suite features customer and agent portals, and a business intelligence platform.  (Sapiens 28.11)

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9.5  RFOptic Launches Its Latest Generation of 40GHz RFoF and ODL Solutions

RFOptic, a leading provider of RF over Fiber (RFoF) and Optical Delay Line (ODL) solutions, has launched its latest generation of 40GHz ultra-wideband solutions.  RFOptic has launched its next generation of 40GHz RF over Fiber compact modules with superior features for telecommunications and defense applications, satellite, point-to-point remote antennas and broadcast.

This latest generation of 40GHz Optical Delay Line (ODL) modules is based provide a high performance solution for testing and calibrating radar systems or RF communication equipment.  The ODL converts analog RF signals to optical signals, and introduces an optional constant gain with true time delay ranging from nanoseconds to hundreds of microseconds.  At the output, the signals are converted back into the RF domain.  The 40GHz Optical Delay Line is a com
pact solution, which provides superb performance and includes accurate time delay and ultra-silent operation.  It can be ordered with an integral switch unit supporting up to 8 predefined additive time delay sections in a single ODL unit as well as more delay states when using a Progressive ODL architecture.

Kibbutz Einat’s RFOptic is a leading provider of RF over Fiber (RFoF) and Optical Delay Line (ODL) solutions.  For the last 20 years, its team of industry veterans has been developing, designing and integrating superior quality technology for a wide range of RFoF and ODL solutions.  The solutions are deployed at various industries, including broadcasting, aviation, automotive, and defense.  RFOptic offers its customers and OEMs various off-the-shelf products, as well as custom-made solutions optimized for a wide range of RFoF products at affordable prices and with a quick turnaround.  RFOptic makes it its mission to help its customers to turn innovation into real business by providing them with the highest quality, cutting edge RFoF solutions as well as customized solutions based on individual requests and objectives.  (RFOptic 27.11)

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9.6  SafeRide Technologies Joins GENIVI Alliance to Help Ensure Vehicle Security

SafeRide Technologies, provider of industry-leading multi-layer cybersecurity solutions for connected and autonomous vehicles, has joined the GENIVI Alliance, a non-profit alliance focused on delivering open source, in-vehicle infotainment (IVI) and connected vehicle software.  SafeRide’s vSentry cybersecurity software will be available on the GENIVI platform, joining over 140 companies in the alliance.  All members will now be able to easily implement and use SafeRide’s technology in order to secure connected and autonomous cars from both known and unknown cybersecurity threats.

Tel Aviv’s SafeRide Technologies is the provider of vSentry™, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security.  SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks, and helps to avoid financial damage, prevent reputation loss and save lives.  (SafeRide 30.11)

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9.7 – Tech for Traders: Artificial Intelligence to Predict Market Reaction

The markets react based on new information and traders lack the ability to analyze the market in real time.  A lot of new information streams into the markets all the time, digesting this information is difficult for a human.  BetterTrader’s AI can process a huge amount of data in a short period of time and generate trade ideas.  The most essential barrier is that development of AI infrastructure which is critical for effective work of AI, is extremely expensive. is an AI-powered information platform – an analysis tool that interprets market data into accurate trading decisions in real-time.  The main goal of BetterTrader is to reveal the most relevant trade ideas and new opportunities on the market.  BetterTrader AI algorithms monitor a variety of news and data sources across the world in real-time.  The data from various sources is fed into a central server, where it is analyzed by our AI engine for patterns, relationships, and opportunities. is a group of former professional day traders and statistics specialists with years of trading and coding experience.  They created this program to provide their traders with statistically back-tested trade ideas using artificial intelligence algorithms, sending you analyzed information about macro events at the exact moment they are released.’s technology then calculates the magnitude of these events using historical data and artificial intelligence to predict market reaction.  Additionally, helps traders to react to market movements with price-driven trade ideas which are detected by their own artificial intelligence algorithms.  ( 03.12)

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9.8  Syte Partners with Farfetch to Power Their New ‘See it, Snap it, Shop it’ Feature

Syte, the leading visual AI startup, has partnered with Farfetch, the global technology platform for the luxury fashion industry, to power their new in-app visual search feature on iOS.  Farfetch has innovation at its core and a key area of focus for the business is implementing new technologies to enhance customer experience. Its implementation of visual search on the Farfetch app is the next step to creating a cohesive retail environment.  By updating the Farfetch app with this new “See it, Snap it, Shop it” feature, Farfetch hopes to empower their customers to interact with, and engage with, all of the day-to-day style inspiration they come across.  Whether it’s a screenshot from social media, a photo of a friend’s envy-inducing closet, or a favorite blogger, there is a lot of style inspiration going untapped.

Tel Aviv’s Syte is a visual AI technology provider that improves retailer’s site navigation, product discovery and user experience by powering solutions that engage and convert shoppers.  With Syte, retailers can leverage shoppers’ inspiration and existing product interest to ensure they present the right products at the right time.  Partnerships with technology innovators such as Microsoft, SAP, Naver and Oracle have establish Syte as a leader in the market.  Powering the visual search within Samsung and other leading phone manufacturers allows Syte to increase the reach of their retail clients. Brands currently using Syte’s technology include Farfetch, Marks & Spencer, boohoo and more.  (Syte 07.12)

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9.9  Karamba Collaborates with Ficosa to Secure Smart Mobility Against Cyberattacks

Karamba Security announced that Spain’s Ficosa, a top-tier global provider for the automotive and mobility sectors, is partnering with Karamba Security to harden its Telematics Control Unit (TCU) and keep vehicles protected from cyberattacks when communicating with the internet.  Ficosa, through Onboard Ventures, its Open Innovation initiative, has identified Karamba Security’s Carwall solution as an effective hardening software that is seamlessly integrated into the vehicle Electronic Control Units (ECU’s), without disrupting the development process or delay the vehicle’s time to market.

Karamba Security’s software prevents in-memory cyberattacks, by hardening the ECU’s according to developers’ intentions and autonomously prevents unauthorized deviations from factory settings.  Karamba’s software introduces Control Flow Integrity (CFI) which is automatically embedded in Ficosa’s development process, not relying on source code, with negligible runtime performance impact.  Having secure, hardened ECU’s is a major differentiator for Ficosa, offering out-of-the-box, automatically secured, ECU’s.  With Karamba’s Embedded Runtime Integrity solution, Ficosa will propose self-protected ECU’s to its OEM customers that will deterministically prevent cyberattacks, without false positive alerts or major investments in costly data analytics and security updates.

Hod HaSharon’s Karamba Security provides industry-leading automotive cybersecurity solutions for autonomous and connected cars.  Its Autonomous Security software products, including ThreatHive, Carwall, and SafeCAN, provide end-to-end in-vehicle cybersecurity for the endpoints and the internal messaging bus.  Karamba Security’s award-winning solutions prevent cyberattacks with zero false positives and secure communications, including OTA updates, with negligible performance impact.  Karamba is engaged with 17 OEM and tier-1 customers and received numerous industry awards.  (Karamba 05.12)

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9.10  Mellanox Ethernet Adapter Facilitates High Performance Network Solutions at Alibaba

Mellanox Technologies announced that its RDMA over Ethernet (RoCE) 25Gbps ConnectX network adapters have been successfully deployed in Alibaba Infrastructure Services’ production network.  Alibaba, one of the world’s largest online and mobile e-commerce companies, leverages RDMA’s high throughput and low latency to accelerate the performance of a wide range of applications, including its key online services.

RDMA technology provides Remote Direct Memory Access from the memory of one host to the memory of another host without involving the operating system and CPU, therefore boosting network and host performance with low latency, low CPU load and high bandwidth.  RoCE is an industry standard protocol which allows all the advantages of RDMA on existing Ethernet infrastructures.  RoCE has been a natural choice for deployment of distributed cloud storage customers searching for solutions to take advantage of improved storage media performance and the growth of node storage capacity.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services.  (Mellanox 05.12)

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9.11  Vayyar Launches New mmWave 3D Imaging System on a Chip (SoC) Evaluation Kit

Vayyar Imaging announced the launch of its new mmWave Evaluation Kit (EVK), Walabot-60Ghz.  Walabot-60Ghz provides users with the groundbreaking capabilities of Vayyar’s high-resolution 3D imaging chip, alongside an SDK/API, facilitating rapid development, integration and scaling of products.  The kit includes a highly advanced chip with a 40 Transceivers array (40 Tx/Rx), complete with FOV embedded antennas and wide-band 60 GHz imaging radar.

The Walabot-60Ghz EVK delivers an exceptionally wide field of view along with high-resolution imaging.  This gives users unprecedented capabilities, enabling the development of advanced applications for smart home, robotics, retail, medical and many other industries.  Potential uses include obstacle avoidance, perimeter protection, ultrasonic replacement, automatic door openers, people tracking, posture detection, short range imaging and even point cloud technologies.

Yehud’s Vayyar Imaging is changing global markets with its cutting-edge 3D imaging sensor technology. Its elite, proprietary sensors quickly and easily look into objects or any defined volume and detect even the slightest anomalies and movements to bring highly sophisticated imaging capabilities to users’ fingertips.  Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost, and safe 3D imaging sensors.  (Vayyar 10.12)

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9.12  Tracxpoint Signed a Major Agreement to Deploy its Artificial Intelligence Cart at CONAD

Tracxpoint announced an agreement to roll out its Artificial Intelligence Cart (AiC®) at CONAD DEL TIRRENO, one of the seven cooperatives of CONAD’s chain with more than 3,000 supermarket stores in Italy.  This is a major milestone for the Israeli startup in its mission to establish the AiC® platform as the most powerful, accessible and comprehensive solution for self-checkout and personalized in-store engagement on the market today.  CONAD DEL TIRRENO will start implementing the AiC® ecosystem during 2019.

In direct contrast to capital-intensive and smaller store concepts like Amazon Go or its imitators that rely on ceiling cameras for location-based processing, the Tracxpoint AiC platform uses a first of its kind AI connected shopping cart that leverages on-cart cameras coupled with built-in weight sensors and powerful GPUs.  The AiC will identify each item added to and deducted from the cart and automatically process on-cart transactions and payment upon leaving the store.

Nesher’s Tracxpoint is a leading global provider of next-generation self-checkout grocery solutions. Its unique Artificial Intelligence Cart (AiC®) platform offers convenient personalized online shopping experiences to grocery shoppers like never before.  Established in 2016 by founders with a combined 80 years of experience, the company is changing the grocery shopping experience by integrating ground-breaking AI and sensor fusion technology inside a smart AIoT shopping cart architected by legendary luxury auto designers.  (Tracxpoint 10.12)

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9.13  Finscend Wins Multiple Accolades at MoneyLIVE

Finscend received top marks from industry colleagues at the MoneyLIVE Summit 2018, Europe’s leading retail banking conference, which recently concluded in London.  Finscend’s presentation was voted by peers as the “best overall pitch.”  In addition, Finscend was selected by participants as the start-up they were most likely to invest in and the start-up with the greatest chance of reaching scalability.  By deploying BDP, banks can reduce their operating costs while increasing customer satisfaction.

Headquartered in Israel, Finscend has developing a unique solution incorporating both an algorithm and software that works with the Visa®/MasterCard® scheme.  When a bank dispute or chargeback request is opened, the solution ensures that a succinct and specific dispute file is generated, which increases the likelihood of positive outcome for the client while reducing processing time and costs for banks.  The solution includes management reporting tools and an enterprise user account area, where clients can manage their entire operation.  The core technology is implemented with proprietary tools.  (Finscend 10.12)

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9.14  Guardian’s Advanced Sensor Technology Now Helps Keep Driver’s Attention on the Road

Driver fatigue and distraction are significant factors in highway accidents and fatalities.  To combat both conditions, Guardian Optical Technologies has announced it has added the position of a driver’s head to the many safety elements the company’s advanced “All in One” sensor can detect inside the cabin of an automobile.  Guardian’s stand-alone automatic sensor system is built from the ground up to work with automotive hardware and software, including all built-in safety systems, such as seatbelts and airbags.  Drivers are constantly kept aware of conditions and people in their cars, allowing them to sidestep dangerous human error, including unintentionally leaving infants behind in the car.

Guardian combines video image recognition (2D), depth mapping (3D), and optical micro- to macro-motion analysis to constantly scan and track occupants and objects anywhere in the vehicle, using low-cost, automotive-grade components.  The sensor identifies the location and physical dimensions of everyone in the car, distinguishing people from objects.  By detecting micro vibrations, the system can register, in some cases, a presence even without a direct line of sight.

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.  (Guardian Optical Technologies 11.12)

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10.1  UN Finds Wages in Israel Rising Faster than World Average

The latest Global Wage Report from the United Nations’ International Labor Organization shows that wages in Israel went against international trends to rise in 2017.  According to the report, wage growth worldwide slowed by 2.4% in 2016 and 1.8% in 2017.  Leaving out China, whose immense population and growth rate have a major influence on the global average, the rate of wage growth slowed by 1.8% in 2016 and 1.1% in 2017.

Despite the slowdown in wage growth – which is the lowest since 2008 – Israel has seen its average national wage rise consistently for the past five years: by 1.4% in 2013; 2.7% in 2014; 2.6% in 2015; 2.9% in 2016; and 3% in 2017.  The rate of wage growth in Israel also performed well when compared to some of the strongest economies in the world.  The average rate of wage growth in G-20 nations dropped to only 0.4% for 2017 (compared to Israel’s 3% increase for the same year).  Some developed countries, such as Spain and Italy, saw negative growth in their annual wages.  The U.S. saw its average wage grow by only 0.7% in 2017, the same rate the U.S. recorded in 2016.  (Various 02.12)

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10.2  Israeli Startups Raised $600 Million in November

Israeli startups raised nearly $600 million in November, according to press releases issued by companies that 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 $4.5 billion that Israeli startups raised in the first nine months of 2018, according to IVC-ZAG as well as the estimated $600 million raised in October.  This means that the country’s startups have raised a record $5.7 billion since the start of 2018, easily surpassing last year’s record of $5.24 billion.

Most of the sum in October was raised in large financing rounds led by, which has developed the world’s fastest AI chip, and raised $75 million.  Another chipmaker, Valens Semiconductor raised $63 million and app developer Lightricks raised $60 million.  Velox raised $32 million, OpenLegacy raised $30 million and SysAid raised $30 million.  (IVC 02.12)

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10.3  Israeli Home Sales Continue to Fall in Third Quarter

On 2 December, Israel’s Ministry of Finance chief economist reported that 21,700 homes were sold in Q3/18, including purchases under the framework of the Buyer Fixed Price Plan, the fewest number of deals since Q4/11.  The number was 8% less than in the corresponding quarter last year and 5% fewer than in the preceding quarter.  The Ministry of Finance announcement stated that if Buyer Fixed Price Plan sales are excluded, the number of deals was 13% fewer than in Q3/17.

The number of deals at market prices (excluding Buyer Fixed Price Plan sales) in the first nine months of 2018 totaled 65,000, the lowest figure for this period of the year since 2006.  Since the fourth quarter of 2016, the number of deals has dropped continuously in comparison with the corresponding quarter in the preceding year.  This is the longest continuous decrease since the beginning of the preceding decade.

According to the announcement, purchases by move-up buyers totaled 7,700 housing units in the third quarter, down 12%, compared with the third quarter of last year.  This is one of the lowest quarterly number for purchases by move-up buyers in recent years.  Over the first nine months of 2018, move-up buyers bought only 26,200 homes, 9% fewer than in the corresponding period last year and the lowest number since 2012.

The figures confirm many recent reports that housing investors were keeping a low profile.  The third quarter features a new low in purchases by investors for the first time since at least the beginning of the preceding decade, these purchases fell below 3,000 deals.  The proportion of investments in total deals continued to fall, reaching a low of 13%.  In comparison with the corresponding quarter last year, purchases by investors were down 35%, following the drastic fall in these proportions since the fourth quarter of 2016.

The figures for sales under the Buyer Fixed Price Plan show a rise in the number of deals.  The review found that housing units purchased under the Buyer Fixed Price Plan and the Target Price Plan totaled 2,200 in Q3/18, 60% more than in Q3/17 and 28% more than in the preceding quarter.  Sales since the beginning of the year in the subsidized programs totaled 6,400, 85% more than in the corresponding period in the preceding year.  (MoF 02.12)

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11.1  ISRAEL:  A New Phase in Israel-Gulf Relations

Seth Frantzman posted on 26 November in the ME Forum that Intelligence and Transportation Minister Israel Katz pushed for cooperation between Israel and the Gulf states in a speech in Oman on 7 November.  “In my view, cooperation between Israel and the Gulf states can and should be expanded,” he said.  “Israel also has a lot to offer when it comes to water desalination and irrigation, agriculture and medicine.”

The trip bookended several high profile visits to the Gulf by Israeli officials.  Prime Minister Benjamin Netanyahu visited Oman in late October. Culture and Sport Minister Miri Regev and Communications Minister Ayoub Kara also traveled to the United Arab Emirates, one to attend a sporting event and another for a conference.

The visits represent a significant breakthrough in connections between Israel the Gulf states.  Since the 1990s, when Israel signed the Oslo Accords and made peace with Jordan, there were increasing ties to several Gulf countries.  This included the opening of trade offices.  However, relations became frozen during the Second Intifada (2000 – 2005).

In the last decade, a thaw has taken place.  Katz said during his visit that his trip and others were “part of a wider trend of strengthening ties between Israel and the Gulf countries based on common interests and a mutual recognition of the potential benefits for both sides, both in terms of contending with common challenges and threats, as well as opportunities.”

The transportation minister’s visit to Oman coincided with his discussions about a rail link or “tracks of regional peace” that could one day foresee linking Israel with the rest of the Arab region.  He discussed the plan at the IRU Congress that met in Muscat from 6 to 8 November.

Currently, Israel has relations with Jordan and Egypt.  Jordan has been seeking to expand its very limited rail network; the Gulf states and Saudi Arabia are all laying plans for major infrastructure projects involving rail and transportation.  In the United Arab Emirates, Etihad Rail is planning a 1,200 km. line that will eventually reach the Saudi Arabian border and Oman.  A 2,400 km. line would link Riyadh to Al-Haditha on the Jordanian border.  It would give Saudi Arabia around 3,900 km. of track.

Oman, where Katz traveled, has been increasing its rail network in recent years.  In 2015, Sultan Qaboos bin Said al Said signed off on two more phases of a multi-phase rail network.  The first phase links Al Buraimi on the UAE border with the port of Sohar.  A second phase would stretch down to Ibri and another phase would go down to the port of Al Duqm.  Eventually, it could be 2,135 km. long.  With Jordan as a regional transportation hub, Israel could be hooked up to a powerful network of regional states.  This would also aid the Palestinian economy.  “It will create an additional trade route in the region, which is shorter, faster and cheaper,” Katz said.

With Saudi Arabia pioneering major economic reforms, called Vision 2030, the region is on the verge of an economic revolution after years of stagnation.  Saudi Arabia is one of the largest economies in the region, but it wants to diversify and is laying plans for nuclear energy, investments in desalination and other projects. Israel and the UAE are perfectly positioned, with roughly the same GDP, to benefit and contribute to this regional awakening.

Eight years since the Arab Spring began at the end of 2010, the Middle East is still recovering from the instability and terrorism that became the dark side of the spring.  Out of the chaos and instability came the extremism of Islamic State.  The defeat of ISIS has now led to a new struggle by Iran and its adversaries for regional hegemony.  All of this has overshadowed Israel’s important role in regional security and relationships.  Katz’s visit shows that attitudes are changing.  “This is the first time an Israeli minister has been formally invited to participate in an international conference in Oman,” his office noted.  He described Qaboos as an experienced and impressive leader.  “I was moved to receive such a warm welcome in Oman as an Israeli minister and take part in Oman’s traditional sword dance.”

It is a sign of Israel’s growing strength.

Katz’s vision of a network of rail links may take decades to come to fruition, but it is an important symbol of the way the region may trend towards stability.  A stable Middle East, as has been illustrated by the last decades of conflict, is essential for global stability.

Seth J. Frantzman spent three years in Iraq and other countries in the region researching the war on terror and Islamic State.  He is executive director of the Middle East Center for Reporting and Analysis.  A former assistant professor of American Studies at Al-Quds University, he covers the Middle East for The Jerusalem Post and is a writing fellow at the Middle East Forum.  He is writing a book on the state of the region after ISIS.  (MEF 26.11)

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11.2  JORDAN:  Anger Simmers Again In Jordan Over Controversial Legislation

Osama Al Sharif posted on 29 November in Al-Monitor that public unrest is looming, given the Jordanian parliament’s passage of an income tax bill after the previous version sparked nationwide protests over the summer and discussing another law that would restrict freedom of speech.

Jordan’s upper house, the Senate, passed an income tax bill on 26 November, a day after the House of Representatives rejected amendments it proposed.  Instead of holding a joint session of both chambers, the senators opted to approve the draft law as it was passed by the lower house, which had lowered tax rates on a number of commercial and industrial sectors.  On 21 November, the Senate voted to revert to tax rates originally suggested, stirring negative reactions from some legislators, the media and various business sectors in the kingdom.

The government of Prime Minister Omar Razzaz has crossed a major hurdle by passing new income tax legislation, the issue that brought down its predecessor last June.  In contrast to the popular protests that forced the resignation of Hani al-Mulki’s government, the Jordanian street has been eerily quiet this time.  But the general mood remains both critical of the proposed law and skeptical of the government’s promises that it will not target the middle and low-income classes.

While the kingdom’s influential Professional Unions Association that led this summer’s strikes and protests remained silent as the House debated the income tax bill earlier this month, the Jordan Times reported on 25 November that the syndicates once again opposed the controversial bill, saying that “escalatory yet democratic measures” may be taken to push for its cancelation.  On the same day, a small number of union members held a protest in front of the Professional Unions compound.

Passing the law, which is intended to prevent tax evasion and widen the tax base, is part of an economic reform plan that the government is undertaking in an agreement with the International Monetary Fund.  The adoption of the law will allow the government to receive additional loans from the IMF and other creditors to deal with its budget deficit as it continues to restructure the economy.

But representatives of various commercial and industrial sectors say provisions in the bill will cripple the local economy further and raise prices of essential goods.  President of the Amman Chamber of Industry Fathi al-Jaghbir told Al-Monitor that additional taxes will hurt Jordanian industries and weaken their competitiveness.  He pointed to an amendment that canceled an exemption of income tax on exports while another raised the income tax rate on the industrial sector from 15% to 20%.

Jaghbir said that other sectors, such as agriculture, will also be adversely affected.  He added that the chamber will take a number of escalatory steps against the law including holding peaceful protests and launching a social media campaign.

Economic columnist for Ad-Dustour Khaled al-Zubaidi also believes the new law will hurt the local economy and chase off foreign investors.  He told Al-Monitor that an amendment proposed by the Senate to impose a 10% tax on capital gains and another 10% on profits earned from trading in securities will kill an already weak financial market.  “The government is working against its own interest because as economic sectors become sluggish as a result of this law, its earnings from taxes will decrease accordingly,” Zubaidi said.  He added that when annual economic growth is at a humble 2%, the government should introduce incentives such as lowering taxes.

But while the government has avoided mass protests over the income tax law, it may still face public wrath over another piece of controversial legislation it wants to pass.  Last summer, the previous government had sent an amended cybercrime law to the House.  The proposed draft was criticized by the Jordan Press Association, journalists, activists and political parties for imposing heavy penalties including jail on those found guilty of incitement under a vague hate speech article.

The controversial article loosely defines hate speech as a “statement or act that is prone to fuel religious, sectarian, ethnic or regional sedition; calls for violence or justifies it; or spreads rumors against people with the aim of causing them physical harm or damage to their assets or reputation.”

But even as Razzaz himself concurred that the definition is too broad, he has refused to withdraw the bill, leaving it to the legislature to make needed changes.  He was quoted on 20 November as saying that Jordan needs such a law to fight blackmail, fraud, character assassination and hate speech as well as pornography.

Activists fear that legislators, who are constantly criticized for their poor performance on social media outlets, will cooperate with the government to pass the draconian law.  A growing number of Jordanians have joined a social media campaign against the cybercrime bill.

An opponent of the law, House of Representatives member Khaled Ramadan, told Al-Monitor that the government is now attempting to restrict criticism and people’s right to free speech.  “I believe the law will pass and that deputies will seek to impose harsher penalties,” he said.  He added that current laws are more than enough to deal with hate speech.  Head of Jordan’s Center for Defending Freedom of Journalists Nidal Mansour believes that if the cybercrime law is passed, Jordan’s ranking in various international freedom indices will decline significantly.

He told Al-Monitor that Article 11 of the bill allows for the imprisonment of journalists and social media activists and that the loose definition of hate speech will make any kind of criticism in any medium culpable, facing up to three years in prison.  “It’s not an issue of more laws but one of culture and changing people’s behavior,” Mansour said.  “It has to do with instilling free speech values and social responsibilities in schools so that future generations can exercise their right responsibly.”

Osama Al Sharif is a veteran journalist and political commentator based in Amman who specializes in Middle East issues.  (Al-Monitor 29.11)

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11.3  BAHRAIN:  Bahrain ‘B+/B’ Ratings Affirmed; Outlook Remains Stable

On 30 November, S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Bahrain.  The outlook is stable.  The transfer and convertibility assessment on Bahrain remains at ‘BB-‘.


The stable outlook reflects our expectation that the Bahraini government will use the window of opportunity provided by the pledged financial support from other Gulf Cooperation Council (GCC) sovereigns to accelerate the pace of fiscal consolidation against remaining external risks, exacerbated by the very low central bank reserves.

We could raise the ratings if Bahrain’s budgetary position improves significantly beyond our current expectations. We would also consider raising the ratings if GDP per capita trend growth strengthens.

We could lower the ratings if external pressures intensify, for example, if the exchange rate peg were to come under pressure due to a sharp increase in demand for foreign currency.


Our ratings on Bahrain are supported by the country’s net external asset position.  The ratings are also supported by our expectation of financial assistance from countries in the GCC, $10 billion of which was announced in October 2018.  We expect this recently announced support to partly meet the Bahraini government’s funding needs over the coming years, partly replacing other external funding.  The ratings are constrained by our view of Bahrain’s continued budgetary dependence on oil revenues, its high stock of government debt, and its unresolved domestic political tensions, which in our view hamper the effectiveness of the sovereign’s policymaking.  The ratings are also limited by the economy’s weak trend growth in real GDP per capita.

Flexibility and Performance Profile: Financial support from other GCC sovereigns will help Bahrain implement budgetary consolidation

  • Bahrain has received pledges of financial support of $10 billion over the next four years from GCC sovereigns. This money will partially cover the government’s funding needs and support Bahrain’s exchange rate arrangement.
  • The government has also enacted fiscal measures which aim for a balanced budget by 2022. We have lowered our estimate of Bahrain’s fiscal deficits as a result, but we do not expect a balanced budget within our forecast period.

In October 2018, Bahrain received pledges of $10 billion (26% of 2018 GDP) of support from Kuwait, Saudi Arabia and United Arab Emirates.  We expect disbursements to take place over the length of the government’s 2019 – 2022 budgetary consolidation program and that initial disbursements will begin before the end of 2018.  The exact nature of the support package, in terms of whether or not the funds will be conditional on Bahrain achieving specific fiscal targets and the type of funding to be provided, for example, grant or debt funding, has yet to be announced.  We have assumed that support will come in the form of debt.  In our view, the support package provides the government with time to enact further budgetary consolidation measures with a reduced need to fund its ongoing deficits externally, thus easing financial market pressures.  Nevertheless, the replacement of one source of external debt financing with another means that our forecast for the level of central bank international reserves is largely unchanged.

The recently announced pledge is on top of the $10 billion announced in 2011 ($7.5 billion excluding Qatar).  We estimate about $2.5 billion of the amount pledged in 2011 has been disbursed so far.  This slow pace of disbursement relates to the package being targeted at infrastructure projects, and the related administrative delays in fund absorption.  We expect the new support will cover budgetary expenditure and will be disbursed more quickly within the next four years.

At the same time, the government has announced an ambitious plan to balance its budget by 2022.  The plan includes revenue-increasing measures focusing on increasing revenue capture from the non-oil sector of the economy.  Currently, fiscal revenues are heavily oil-dependent, despite the oil sector contributing less than 20% to GDP.  On the expenditure side, the government is planning on reducing the government workforce by about 15% through a voluntary retirement scheme, which will require an initial outlay we estimate at around 2% of 2018 GDP.  We expect that the cost of the scheme will not be funded from the state budget, and assume it will be paid for with government assets.  The government also plans to reduce expenditure through a centralized procurement structure, and to balance the revenues and expenditures of the Electricity and Water Authority (EWA), which would reduce government transfers.

Taking into account the government’s new plan, we now expect Bahrain’s fiscal imbalance to narrow at a faster pace, reaching 5% of GDP by 2021 from close to 10% of GDP in 2017.  We expect increases in non-oil revenues, especially from the introduction of the value-added tax (VAT) in 2019.  Though implementation will be gradual, we assume on average that the VAT introduction could have a revenue-raising impact equal to 3% of nominal consumption a year.  In our view, government revenues will remain dependent on oil over the forecast period.  For our forecasts, we assume an oil price of $65 per barrel in 2019, $60 in 2020, and $55 in 2021.  We expect expenditures to continue to decline over our forecast period, driven by the government’s new expenditure reduction measures.  Government interest payments are a growing item of expenditure, and now comprise almost 17% of total expenditures, up from around 6.5% in 2014.  Though the financial support package, if concessional in nature, could help reduce interest costs, we believe it will remain a large component of expenditure.

We consider the $10 billion fiscal support from GCC sovereigns as government debt in our projections.  We estimate that the government’s gross debt stock will increase toward 87% of GDP by 2021, down from our earlier projections of 100% of GDP by 2021.  In our view, the high level of debt remains a constraint on the government’s fiscal flexibility.  Our forecasts include an additional 1% of GDP in addition to the budget deficit in annual government debt accumulation, in relation to the government’s historical off-budget spending on defense and the Royal Court.  We do not expect government debt to reach the legislated debt ceiling, currently at 102% of GDP, within the forecast period.  We estimate debt on a net basis at about 60% of GDP in 2018 and forecast net debt at 69% of GDP by 2021.  To derive net government debt, we net off cash and available-for-sale securities at the social security system and the Future Generations Fund from gross debt.

Bahrain’s gross international reserves are low, covering less than one month’s current account payments and about 40% of the monetary base, according to our estimates.  Gross international reserves were just under $2 billion as of September 2018.  We expect reserve levels at $2.6 billion at the end of 2018.  They have also been volatile, in the absence of a substantial and sustained net inflow of foreign currency.  Nevertheless, we note that the Central Bank of Bahrain (CBB) receives daily foreign currency inflows from the sale of oil (through the national oil companies).  Previously, the main support for the CBB’s gross international reserve position was government external bond (and sukuk) issuance.  We expect that financial assistance from other GCC sovereigns will, to some extent, replace these sources of funding.  We forecast year-end reserves to be broadly flat over the next few years.

Deducting Bahrain’s monetary base from reserves – because we view currency convertibility into foreign currency as a requisite for pegged arrangements – results in negative usable reserves.  In our view, monetary policy flexibility is limited because the Bahraini dinar is pegged to the U.S. dollar.  In addition, we consider the CBB has limited credibility regarding its ability to maintain its exchange rate arrangements, given its low and volatile level of gross international reserves.

We expect a modest narrowing in Bahrain’s current account deficit this year based on higher oil prices than 2017.  However, we assume a decline in oil prices over the forecast period, which should lead to increasing current account deficits. Increased exports of aluminum from the expansion of Aluminium Bahrain should support exports.  Although we expect Bahrain to remain in a net external creditor position over the forecast period, we expect that the coverage of external liabilities by liquid external assets (narrow net external debt) will fall slightly.  Gross external financing needs remain high due to Bahrain’s large banking sector.

For our banking sector contingent liability assessment, we refer only to the resident retail banks because, in our view, the cost of the wholesale banks’ potential financial distress would not be fully borne by the government, given the high share of foreign ownership.  This is not the case, however, in our external risk analysis, where the international investment position contains both resident retail and resident wholesale banks.  Despite Bahrain’s large financial sector (domestic retail banks) with gross assets estimated at 236% of GDP and a large number of companies majority-owned by the government, we consider the government’s contingent liabilities to be limited.  On average, banks display high regulatory capital positions.  Our Banking Industry Country Risk Assessment for Bahrain is ‘7’ (on a scale of 1-10, with ‘1’ being the lowest risk and ’10’ the highest).

Domestic liquidity remains healthy, as shown by the increase in domestic deposits during 2017, coupled with a stable amount of funds from the government and related entities.  Most of the asset price correction has worked its way through the banking system, as shown by the decreasing cost-of-risk of most banks operating in the country.  We do not expect a significant negative impact on the asset quality of the local banking system.  We also note that the exposure to the construction and real estate segment has stabilized at about 19% of gross loans, though it still stands at a high 35% of commercial loans.  We consider that the overbanked status of the Bahraini banking system – with a small bankable population and economy – fosters intense competition and squeezes interest margins.  High shares of customer deposits, including from local and foreign owners, and limited reliance on external debt, feature prominently in retail banks’ funding profiles.  Excluding the external assets and liabilities of the wholesale sector, Bahrain’s narrow net external asset position would likely turn to a liability position in the region of 30% of current account receipts, rather than the creditor position we currently present.

Institutional and Economic Profile: We expect the economy to expand, but fiscal consolidation could act as a constraint

* We expect real economic growth to average 2.5% over 2018-2021, supported by GCC-funded infrastructure investment, but fiscal consolidation could weigh on growth.

* We estimate trend growth in real per capita GDP at -0.6% over 2012-2021, below that of peers at similar levels of development.

* There were no reported incidences of political violence or protests in the run-up to the November elections.  However, we expect political decision-making to remain centralized.

Bahrain’s economy and financial system have performed well, despite the government’s weak fiscal position and low level of gross international reserves at the CBB.  However, the sharp increase in fiscal consolidation could weigh on growth over the forecast period.  Our forecast for average real GDP growth over 2018 – 2021 is 2.5%.  In addition to the boost provided by GCC-funded infrastructure investment, a number of large ongoing projects should support growth.  About $2.5 billion (6% of 2018 GDP) of the GCC infrastructure support fund has been disbursed since 2013, with a sharp increase in disbursements taking place in 2016 ($675 million) and 2017 ($530 million).  We expect about $870 million to be disbursed over 2018 and further annual disbursements of about the same over the next five years.

Bahrain’s relatively diversified economy benefits from its proximity to the large market of Saudi Arabia, strong regulatory oversight of the financial sector, relatively well-educated work force, and low-cost environment.  We expect population growth to average around 3% a year over the forecast period.  When GDP performance during 2012-2021 is adjusted for population levels, real growth is negative, suggesting that labor supply is a key driver of growth.

We anticipate that Bahrain’s political tensions will continue.  In our opinion, there are still risks from the entrenched polarization between the Shia and Sunni communities, and internal communal divisions.  We consider that the implementation of sensitive fiscal austerity measures has the potential to stoke unrest, thereby constraining the government’s policy choices.  We note, however, that fiscal consolidation measures already introduced have not had any security-related repercussions.  There were also no reported incidences of political violence or protests surrounding the November 2018 election.  In our view, the overall transparency of policymaking is constrained and accompanied by variable disclosure of information.

Bahrain is a member of the coalition of Arab states, which has imposed a boycott on Qatar, cutting diplomatic ties as well as trade and transport links with the country on 5 June 2017.  The boycott has had a minimal impact on Bahrain’s economy (except for the forgone $2.5 billion formerly pledged to Bahrain from Qatar), though political tensions within the GCC could persist, in our view.  (S&P 30.11)

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11.4  EGYPT:  Egypt Grapples With Economic Decisions Amid High Inflation Rates

Muhammed Magdy posted on 30 November in Al-Monitor that the Monetary Policy Committee of the Central Bank of Egypt decided to hold key interest rates for the fifth consecutive quarter, which raised questions about the government’s ability to lower the high inflation rate.

The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided on 15 November to leave key interest rates steady, keeping the deposit rate at 16.75% and the lending rate at 17.75% for the fifth consecutive quarter amid a rising inflation rate that stood at 17.7% in October, compared to 16% in September.  This raised questions about the bank’s ability to reach the target inflation rate of 13% (± 3%) during the fourth quarter of 2018.

The CBE acknowledged the increasing risks resulting from a higher-than-forecast increase in the prices of some fresh commodities such as potatoes and tomatoes.  However, it said that its restrictive monetary policy has managed to contain core inflationary pressures, allowing the annual core inflation rate to continue to fall to an average of 8.7% between July and October 2018.  The CBE said that “current policy rates remain in line with achieving single-digit inflation as soon as the effects of fiscal consolidation measures dissipate.”

Mohamed Abu Basha, a macroeconomic analyst at Cairo-based investment bank EFG Hermes, told Al-Monitor that the CBE’s decision to hold interest rates until the end of this year was “expected.”  He added, “There was no need to raise interest rates this year, but there is a need to contain inflationary pressures and monitor the global deflationary trend.”

Global markets have recently witnessed confusion due to the trade war between the United States and China, the performance of Eurozone countries, Japan and the United Kingdom, and the increasing interest rates, which have been putting emerging markets under further stress.  This has been evident after the International Monetary Fund (IMF) cut its global growth forecasts for 2018 and 2019 to 3.7%, down from its July estimate of 3.9%.

Abu Basha noted that the increasing inflation rate witnessed in recent months was the result of an increase in the prices of some agricultural commodities, such as potatoes and tomatoes, by more than 90%.  However, the CBE Monetary Policy Committee, according to him, saw that the rise in the prices of those goods is a seasonal trend that would eventually come to an end, thus placing downward pressure on inflation.

Tomatoes in Egypt caught a virus that destroyed most crops.  Also, there was a shortage in the supply of potatoes because they were out of season and because some traders decided to monopolize the stored harvest, which led to an increase in the prices.  Potato and tomato prices rose by 146.7% and 43.9%, respectively, in October year over year, thus spiraling out of government control.

According to Abu Basha, there is another reason behind the CBE’s decision not to cut interest rates, namely preserving foreign investments in debt instruments.  Egypt lost about $8.4 billion in foreign investments between April and September in the wake of the crisis that hit emerging markets such as Turkey and Argentina and the unprecedentedly high US interest rates.

The US Federal Reserve raised interest rates on 26 September for the third time this year, thus attracting investors to the US market and leading to capital outflow from emerging markets such as Argentina, Brazil and Turkey.  On 30 August, the Central Bank of Argentina raised interest rates to 60% to save the currency, while Turkey raised interest rates to 24% on 14 September.  Ahmed Badra, a member of the board of the Egyptian Arab Land Bank, concurred with Abu Basha, telling Al-Monitor that the CBE is trying to preserve Egypt’s attractiveness amid the fluctuations plaguing emerging markets.

Inflation is one of the main challenges facing the government amid its attempt to implement the economic reform program it launched after it signed an agreement on 3 November 2016, with the IMF in return for a $12 billion loan.  Inflation reached 34.2% in July 2017, a level unseen in the past three decades.

Yaman al-Hamaki, an economics professor at Ain Shams University, told Al-Monitor that the government’s economic policy has cast a shadow over the Central Bank’s decision and forced it to hold interest rates.  “It had no other option,” she said.  Hamaki noted that the increase in the prices of vegetables — which placed upward pressure on inflation — was the result of the monopoly and corruption plaguing Egyptian markets amid the absence of government control.

She pointed out that the Egyptian government is carrying out its economic reform program in the absence of serious plans.  This is evidenced by the stagnant markets, the high inflation rates and low productivity. Hamaki added that the government is implementing austerity measures without undertaking concrete reforms within the industrial and agricultural sectors, which undermines the economic reform process adopted by the state.

On 31 October, the IMF agreed to release the fourth tranche of the $12 billion loan following a fourth review of the loan program.  The IMF called on Egypt to continue to implement reforms, encourage private sector investments, improve transparency in state-owned enterprises and fight corruption.  Egypt is awaiting the approval of the IMF Executive Board to get $2 billion in December, the fifth tranche of the loan.  It has thus far received $8 billion, and is expecting one final payment in June or July 2019.

The Egyptian Initiative for Personal Rights, a civil society organization, said in a report commenting on the third review of the IMF (November 2017 – May 2018) that the Egyptian government has only implemented four out of the 14 procedures stipulated by the IMF to receive the third batch of the loan.  Salma Hussein, who drafted the report, told Al-Monitor that the IMF still agreed to proceed with the loan because Egypt implemented the basic measures it had required, such as raising interest rates and lifting fuel subsidies.

Asked about the effect of holding interest rates, she said that the current interest rates are still high and the government is widely required to decrease them because high interest rates deepen the public budget deficit and lead to higher inflation rates.  Hussein warned that keeping interest rates at this level poses a threat to the Egyptian economy as it could lead to a further decline in the value of the pound during the remainder of the 2019 fiscal year, thus sending inflation above 20%.

Abu Basha expects the CBE to reach the target rate by the end of the year. He said that during its meeting scheduled for December, the CBE will once again hold interest rates.

Muhammed Magdy is an Egyptian journalist currently working as an editor for judiciary affairs at the Al-Shorouk daily newspaper and as an editor for political affairs for Masrawy.  (Al-Monitor 30.11)

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11.5  TURKEY:  Turks Cannot Pay Back Lavish Consumer Debts

Mustafa Sonmez observed in Al-Monitor of 28 November that while interest rates increase in Turkey, the country’s laborers, white collar workers and retirees struggle to pay back debts or obtain new loans.

The stable economic growth that Turkey has experienced since 2001 has come to an end.  The growth began after the financial crisis in 2001, when an International Monetary Fund program was implemented to address that crisis.  Then, in 2002, the Justice and Development Party (AKP) came to power, kicking off a period of long-term growth.  From 2003 – 2008, Turkey registered an annual growth of 5.9%.  From 2009 – 2017, the rate of growth was 4.9% a year.

This period of economic growth created more disposable income and jobs.  It also led to an increase in taxes and therefore public services, giving the AKP a steady base of voters.  As a result of this economic performance, the AKP was able to build the political Islamic regime it had aspired to.

The most important feature of the “good life” in Turkey was the country’s access to an unprecedented amount of foreign resources.  A stable internal environment combined with easily accessible global liquidity provided Turkey with abundant foreign resources.  The expansionist monetary policies of the United States and the EU to manage the global financial crisis enabled countries like Turkey to obtain foreign resources and endowed Turkey with a rate of about 5% stable growth.

But after 2014, there were signs that the good life was coming to an end.  External expansionist policies were nearing an end and interest rates were set to increase.  Turkey was able to prolong its period of growth until the end of 2017, but it couldn’t fend off the 2018 crisis.  According to the Central Bank of Turkey’s balance of payments figures, in the first nine months of 2018 there were no resources available from abroad, while $4.2 billion of foreign resources departed Turkey.

In the growth period, about one-fourth of foreign resources were used as household credits.  After 2003, the Turkish public grew used to living off credit like never before.  Consumer credit in the form of housing and car loans rapidly spread.  The use of credit cards also became routine.  Consumer loans helped keep domestic demand alive, but it also caused massive debts for low-income families who had mortgaged their financial futures.

In 2004, easily available consumer credit and borrowing on credit cards constituted 4.6% of the annual national income, which was 24% of total bank credits.  Households were encouraged to seek attractive long-term housing loans and to fill their wallets with easy installment offers of lucrative bank and credit card deals that promised easy paybacks.  Household debts that were 4.6% of the annual national income in 2004 climbed to 18% of the national income by 2013, making up 31% of total bank credits.

After 2014, household debts began to broadcast serious warning signs, as banks were not able to collect on the loans.  The AKP regime realized it had to impose some restrictions and insurance rates went up.  Until 2017, growth based on domestic demand was the most prominent leverage of the system.  It enabled about 19 million unorganized, non-unionized workers to live on loans.  According to the Confederation of Revolutionary Labor Unions, or DISK, 66% of workers were earning below $365 a month.  Since it would be practically impossible to survive on that income, it was obvious that households were adding to their incomes with easily available credit.

This way of balancing the family budget became more difficult in mid-2018.  Consumer inflation was amplified by a rapid increase in foreign currency parity and abnormal tensions with the United States.  It became imperative to increase Turkish currency interests, thus further increasing consumer credit and credit card borrowing.  The interest rate for housing loans went from 13% in the first quarter of 2018 to 29% in November.  More importantly, more households were taking out bank loans to pay credit card debts, with interest rates reaching 37%.  According to the Financial Stability Report issued by the central bank in May 2018, bank debts and credit card borrowing had reached about $153 billion, making up 56% of household debts.

Turkey’s low and middle income laborers, white collar workers and retirees were severely pressed in paying back their debts.  Facing serious delinquencies in paying back the household credits, many debtors began facing legal actions because of their arrears.  According to data issued by the Union of Banks of Turkey, 1.1 million people faced legal action in 2017.  In the first nine months of 2018, this figure reached over 3.2 million debtors.  Banks could not collect about $3.5 billion, or 21% of the debts.

Banks are still concerned they won’t be able to collect on the loans.  Some of the debtors may lose their jobs.  Those who keep their jobs may not make enough money to cope with the 25% inflation.

In a nutshell, this could mean millions of families will struggle to pay back loans.  Banks, meanwhile, will face growing risk in collecting loans all the while reducing domestic demand for them and thus prolonging the current crisis.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question.  (Al-Monitor 28.11)

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11.6  TURKEY:  Will China buy Turkey on the Cheap?

Posting in Al-Monitor of 8 December, Kadri Gursel observed that some argue China may “swallow” Turkey through acquisitions, given China’s growing interest in the region and Turkey’s economic crisis, which has cheapened its assets and left it in dire need of external funds.  But the realities on the ground speak otherwise.

Is China going to buy up crisis-hit Turkey?  The question sounds startling at first, but when a journalist begins hearing discussions revolving around this theme at almost every roundtable, panel or seminar on international relations he attends, looking for an answer to the question becomes a professional duty.

Indeed, the question is not unfounded.  Turkey is going through a deepening economic crisis marked by rising unemployment and inflation, a growing external debt burden and a highly volatile Turkish lira.  On top of it, Turkey’s problems with the United States and the European Union are worsening, and the country is drifting away from the West.  China, on the other hand, is the world’s second-biggest economic power and seeks to revive the ancient Silk Road through its ambitious Belt and Road Initiative; in this context, it takes interest in the region where Turkey sits while boasting an extraordinary increase in capital exports and a foreign trade surplus — which means an abundance of money.

Ties between Turkey and China have remained on a positive track and continue to improve.  This has become possible in part because Turkey has come to ignore the Uighur problem in the name of its economic and political interests.

In the most recent high-level contact, Chinese President Xi Jinping and his Turkish counterpart, Recep Tayyip Erdogan, held a bilateral meeting on the sidelines of the G20 summit in Buenos Aires on 30 November, expressing a willingness to take further “the strategic cooperation” and economic ties between their countries.

The Global Times, an English-language daily affiliated with the Communist Party of China, wrote that Xi spoke highly of Erdogan and said that “he and the Turkish president have kept close communication in recent years and jointly led the strategic cooperation between their countries to a higher level.”  According to the report, attributed to China’s official news agency, Xinhua, Xi said that “China supports the efforts by Turkey to maintain its steady development.”  This was a polite reference to Turkey’s economic crisis, and Xi urged the two countries to “share development opportunities.”

Erdogan, for his part, reportedly praised the Belt and Road Initiative and expressed readiness “to deepen cooperation with China in areas such as trade and economy, investment, aviation, and tourism within the Belt and Road framework.”  To put the two presidents’ words into perspective, let’s take a look at figures pertaining to economic and commercial ties, starting with a comparison of foreign direct investments (FDI).

China’s direct investments overseas increased 44% to hit $183 billion in 2016, making it the world’s second-biggest investor in this category.  When it comes to Turkey, however, Turkish central bank figures point to a downturn.  Chinese FDI in Turkey was worth $115 million last year, down from $300 million in 2016 and $451 million in 2015.  In the first eight months of 2018, Turkey attracted a mere $5 million in FDI from China.  According to figures compiled by the Economic Policy Research Foundation of Turkey, the Chinese share in the total FDI that flowed to Turkey in 2017 was 2.2%.

The trade balance between the two countries is overwhelmingly in China’s favor.  China was the largest exporter to Turkey last year, selling products worth $23.3 billion.  Turkish exports to China amounted to $2.9 billion, with Turkey ranking as the 54th largest exporter to the world’s most populous nation.  In other words, the state of trade with China is among the major sources of Turkey’s current account deficit, along with energy imports.

The giant asymmetry between the two countries has clearly emboldened those who, after the dramatic depreciation of the Turkish lira in August, have argued that “China will buy Turkey on the cheap,” and Turkey will end up as “an economic satrapy of China” and even face “Sinification.”

Some in Erdogan’s inner circle, meanwhile, attribute ideological significance to Turkey’s ties with China, viewing them in an “East versus West” context.  Take, for instance, Yigit Bulut, a senior adviser to Erdogan and a member of the Presidential Economic Policies Board.  In a 9 September column in the pro-government daily Star titled “The East-West equation is being rewritten,” Bulut argues that a new, East-centered world order is emerging around Turkey and its periphery, and this new “imperial” power will include a “Turkish-Chinese synthesis” as well.

China’s Belt and Road Initiative and Turkey’s ties with China receive coverage also in the context of widespread anti-Americanism in Turkey’s pro-government media.  Yeni Safak columnist Ibrahim Karagul proclaimed in the headline of his 1 October article that “the idea of a West-centered world has collapsed” and describes the Belt and Road project as “a new trade road that keeps the United States out.”  According to him, the project is “an overt front” in “a political power struggle under the cover of economic war.”

Amid such comments in pro-government quarters, a summit of the Belt & Road Industrial and Commercial Alliance (BRICA) convened in Istanbul on 18 – 19 October.  What was the purpose of the summit?  Was it meant to help overthrow the West-centered world order and establish trade roads that sideline the United States?  The summit was hosted by the Turkish Industry and Business Association (TUSIAD), which brings together the bosses of the country’s business community and upholds “the competitive market economy” and “participatory democracy.”  To give an idea of TUSIAD’s representative clout, its membership of 4,500 companies pays 80% of the corporate tax in Turkey and accounts for 85% of the country’s foreign trade, excluding energy imports.  The organization is known also for its substantial if soft-spoken criticism of government policies — especially those in the economic field.

The Chinese partner of the BRICA summit was the China Federation of Industrial Economics, one of the country’s leading business groups.  The aim of the BRICA Istanbul summit — the second after the group’s creation in Beijing in 2015 and the first summit in Egypt last year — was “to contribute to Turkish-Chinese economic relations.”

Asked about Chinese expectations from Turkey, a Turkish participant who closely followed the backstage of the summit offered an overview in stark contrast to the overly ideological meanings that some in government quarters attribute to relations with China.  “There is nothing like an East-West axis in this affair.  East and West are intertwined.  The largest investments to China come from the West and the largest investments to the West come from China,” said the participant, who asked not to be named.  “There is one thing the Chinese are telling Turkey: ‘Turkey’s EU [accession] process should remain on track.  We want to see assurances to that effect.’”

The participant stressed that China sees Turkey as a Eurasian crossroad opening to Europe and aims for a stronger presence in Turkey not only for its domestic market but also to open up to the region and the world.  “They are telling us to update our customs union with the EU and not drift away from the EU,” the participant said.  “They want their companies to operate under the guarantee of the law in Turkey and wish to see the EU common market standards, the market economy’s operational standards and a stable macroeconomic management in Turkey.”

According to Professor Selcuk Esenbel, a leading Turkish expert on the Far East and founder of the Asian Studies Center at Istanbul’s Bogazici University, Turkey’s trade with China is not an alternative to its economic ties with Europe but rather backs and complements them.  Esenbel’s view of the Belt and Road Initiative does not support the ideologically loaded argument of a “Chinese-Turkish synthesis” either.  “The Chinese are not of the mind that they are entitled to dominate,” she told Al-Monitor.  “Because they rule in global trade, they want to build networks for their economic interests and security.  Most of it is about trade, and secondly, they have a lot of money at hand.”

Clearly, Turkey sits in an extraordinary geographic location as to the logistical network that China is building for its global trade.  Chinese interest in Turkey’s port and railroad potential is thus natural.  The current economic crisis will no doubt leave Turkey poorer, and foreign buyers will in the meantime acquire some of its companies, resources and mines.  Yet despite its abundance of money, China could neither buy Turkey on the cheap nor become a remedy for its crisis with that money.

Kadri Gursel is a columnist for Al-Monitor’s Turkey Pulse.  His main focuses are Turkish foreign policy, international affairs, press freedom, Turkey’s Kurdish question, as well as Turkey’s evolving political Islam and its national and regional impacts.  He wrote a column for the Turkish daily Cumhuriyet between September 2018 and May 2016 and for daily Milliyet between 2007 and July 2015.  (Al-Monitor 08.12)

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11.7  CYPRUS:  IMF Executive Board Concludes 2018 Article IV Consultation with Cyprus

On 28 November 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Cyprus.

Cyprus is recovering strongly following the 2012–13 crisis.  GDP grew by 4% (yoy) in the first half of 2018, driven by tourism, professional services and foreign investment in construction as well as continued strength in private consumption.  The unemployment rate continued to decline to 7.4% in September from 10.2% a year earlier.  Inflationary pressures remain low.  Supported by subdued unit labor costs, Cyprus has maintained its export competitiveness, although the current account deficit widened last year as strong domestic demand pushed up imports.  Fiscal performance has strengthened on the economic recovery with the primary surplus widening to 4.3% of GDP in 2017.  Banks are making progress in cleaning up their balance sheets.  Nevertheless, the banking sector still faces one of the highest non-performing loan ratios in Europe, while both private and public sectors have a large debt overhang.

The near-term outlook for the economy is favorable, with growth expected to remain at around 4.2% in 2018–19, supported by the services sector and largely foreign-financed investments.  Over the medium term, economic growth is projected to slow to its long-run potential rate of around 2½%, as the transitory effects of the investment boom gradually dissipate.  Fiscal performance is expected to improve with a primary surplus of around 5% in 2018–19.  Public debt is thus expected to be on a firm declining path, falling below 70% of GDP by 2023, despite a sharp increase earlier this year following the resolution of the Cyprus Cooperative Bank.  The economic outlook could weaken if implementation of NPL resolution is delayed, while public debt sustainability could be undermined by realization of contingent liabilities or erosion of fiscal discipline.

Executive Board Assessment

Executive Directors welcomed the strong post-crisis economic recovery, which has supported large fiscal surpluses and lowered the unemployment rate.  Directors also welcomed the recent reforms undertaken to address key vulnerabilities in the banking sector, including the resolution of a large systemic state-owned bank.  Directors observed, however, that private and public debt remain large while NPL ratios are still among the highest in Europe.  They encouraged the authorities to make further efforts to address these legacy problems and strengthen economic growth over the medium term.

Directors emphasized the importance of further measures to facilitate a steady decline in NPLs on a durable basis.  They called for steadfast implementation of the amended legislative framework on foreclosure, insolvency, sale of loans and securitization, supplemented by a strengthening of the court system and removal of uncertainties related to title deeds.  Directors also stressed the need to enhance the governance and supervisory framework for the recently-established asset management company.  They recommended that to limit moral hazard, the proposed Estia scheme aimed at encouraging distressed borrowers to begin servicing their loans be better targeted and based on appropriate assessment of borrowers’ capacity to repay.

Directors highlighted the need for banks to continue efforts to strengthen their balance sheets.  They urged banks to diversify income sources and consolidate operations to improve cost-income ratios and better position themselves against increased competition.  Directors recommended strengthening regulatory guidance on loan restructuring and exercising vigilance over bank lending policies, the adequacy of provisioning, and debt-to-asset swap policies.

Directors welcomed Cyprus’s robust fiscal performance and emphasized that strict spending discipline should be maintained.  They cautioned against relying on transitory revenues from cyclical gains and one-off measures to finance permanent spending initiatives, and took positive note of the authorities’ commitment to cap expenditure increases, including the public wage bill, in line with the medium-term GDP growth rate, in order to create room for growth-enhancing spending.  Directors noted that the transition to public insurance in the health sector should be carefully managed.  They agreed that fiscal structural reforms are needed, and recommended strengthening public financial management, monitoring risks from local governments and the state-owned sector, and improving the corporate governance of commercial state-owned enterprises.

Directors stressed the need to undertake institutional reforms and further enhance the investment climate and raise medium-term growth potential.  They agreed that reforms to increase the efficiency of the courts, speed up the enforcement of commercial claims, and clear the backlog of cases should continue.  They also recommended expediting legislation to strengthen the governance and autonomy of the Central Bank of Cyprus and encouraged further efforts to mitigate AML/CFT risks.  Directors noted that active labor market policies and investment in higher value-added sectors can help reduce high youth unemployment and skills mismatch, thereby promoting more inclusive growth.  (IMF 03.12)

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