Fortnightly, 12 July 2017

Fortnightly, 12 July 2017

July 12, 2017


12 July 2017
18 Tamuz 5777
18 Shawwal 1438




1.1  Indian Prime Minister Modi Holds Historic 3-day Visit to Israel
1.2  Finance Minister Wants NIS 1.12 Billion Ministries Budget Cut


2.1  Israeli Startups Raise Over $400 Million in June
2.2  Safe-T Group Admission to Trading on the OTCQB Venture Market
2.3  Microsoft to Acquire Israeli Startup Cloudyn
2.4  Intel’s Israel Procurement Worth NIS 5.76 Billion in 2016
2.5  Dow Chemical Formally Establishes a Tel Aviv Office
2.6  UVeye Raises $4.5 Million to Use Computer Vision to Inspect Underside of Vehicles
2.7  DBmaestro Raises $4.5 Million to Drive Market Adoption of DevSecOps for Databases
2.8  Wipro & TAU Partner for Joint Research in Emerging Technologies
2.9  Oramed Announces Dual-Listing on Tel Aviv Stock Exchange
2.10  Symantec to Buy Israeli Cybersecurity Firm Fireglass
2.11  EL AL Announced the Acquisition of Israir
2.12  Amazon to Lease 11 Floors in Tel Aviv’s Azrieli Sarona Tower
2.13  Israel’s First Vegan Supermarket Opens in Tel Aviv
2.14  Intuition Robotics Raises $14 Million Series A Investment Led by Toyota Research Institute


3.1  Middle East Online Education & E-Learning Market 2016 – 2023
3.2  Dubai Named Among World’s Most Expensive Airbnb Markets
3.3  Neuro Spinal Hospital in Dubai to Acquire Accuray CyberKnife and Radixact Systems
3.4  Air Canada Celebrates the Inauguration of Montréal-Algiers Flights
3.5  Indonesian & Turkish Aviation Firms Agree to Collaborate on N245 Commuter Aircraft


4.1  Bee’ah & Masdar Launch JV to Develop the First WTE Plant in the UAE
4.2  Green Police to Battle Tunisia Trash Scourge
4.3  Morocco Secures $25 Million Loan from Clean Technology Fund for Hybrid Solar Project
4.4  World Largest Seawater Desalination Plant to be Built in Agadir


5.1  Lebanon’s Trade Deficit Narrowed by 0.58% y-o-y in the First Five Months of 2017
5.2  Number of Tourists to Lebanon Rises to a 5-year High As of May 2017
5.3  Jordanians Exports to Countries of North America & Asia Rising
5.4  Jordan Starts Implementing ‘Sustainable Growth 2030’ Program
5.5  Jordan Signs $52.8 Million Deals with World Bank & Others for Projects

♦♦Arabian Gulf

5.6  UAE Economic Growth Forecast to Slip to 2% This Year
5.7  Dubai, Abu Dhabi & Sharjah Becoming ‘More Affordable
5.8  Dubai Says 12 New Private Hospitals to Open by 2020
5.9  UAE Remittances to India, Pakistan and the Philippines Soared Ahead Of Eid Holiday
5.10  Saudi Arabia’s Private Sector Employs 11.1 Million Expats
5.11  Expats in Saudi Arabia Hit With Fees as They Leave for the Summer

♦♦North Africa

5.12  Egypt’s Annual Headline Inflation Remains Stable at 30.9% in June
5.13  Egypt’s Parliament Approves 2017/18 Budget, Which Targets 4.6% Economic Growth
5.14  Dollar Rate Drops Below EGP 18 for First Time in Months
5.15  Egypt’s Foreign Reserves Continue to Rise to $31.3 Billion in June
5.16  Egypt Signs $4 Billion Deal with Bombardier to Build Cairo Metro’s Line 6
5.17  Morocco’s National Economic Growth Reached 3.8% in First Quarter
5.18  Morocco Signs 17 Agreements with Automotive and Aeronautic Industry Pioneers


6.1  Russian Tourist Arrivals in Turkey Rises by 1.384% in May
6.2  Russia & Turkey Agree To S-400 Contract, Still Need to Settle Funding
6.3  Turkey Adds 7.8% Tax to Alcoholic Beverages and Further Price Hikes Are Expected
6.4  Turkey’s Crude Steel Production Soars in 2017
6.5  IOBE Says Greek Economy to Grow By Up to 1.5% This Year
6.6  Greece Aims for €6 Billion in Privatizations Revenues in 2017-18
6.7  Greek May Industrial Output Rises 5.4% Year-On Year



7.1  17 B’Tammuz, Observed on 11 July, Begins the Three Weeks Mourning period


7.2  Jordan Sees 3,955 Register as Candidates for Elections
7.3  Saudi Arabia Sees Record Temperature in Central and Eastern Parts of Kingdom


8.1  Stockton’s Timorex Gold Receives BioGro Listing in New Zealand
8.2  Celltrion & Teva Announce FDA Acceptance of Biologics License Application
8.3  Cannabics Pharmaceuticals Receives Positive Results in Drug Sensitivity Tests on CTCs
8.4  Tristel to Invest $750,000 in Mobile ODT
8.5  Theranica Raises $6 Million to Combat Migraines
8.6  Stockton’s First Hybrid Fungicide Now Available in Guatemala
8.7  Dune Medical Completes $12.3 Million in Financing
8.8  Baxter, Ramot and Sourasky Partner to Bring New Surgical Innovations Worldwide
8.9  Evogene Achieves Important Milestone in Monsanto Crop Disease Collaboration
8.10  Genoox Raises $6 Million
8.11  CURE & Therapix Signs MOU with Assuta Medical Center to Develop Therapeutic Products
8.12  ReWalk Robotics Announces French Distribution Agreement with Harmonie Medical Service


9.1  BIRD Foundation to Invest $7 Million in Eight New Projects
9.2  Demisto Introduces First Machine Learning Incident Response Platform That Gets Smarter
9.3  GuardiCore Wins Gold in Cloud Security & Bronze in Startup of the Year at IT World Awards
9.4  DMG Launches A.I. Brand Safety Tool BrandX
9.5  ECI Recognized for Best Optical Test & Measurement Product at NGON Europe 2017
9.6  Flash Networks Teams with ZTE to Deliver Fully Virtualized Network Optimization Solution
9.7  Intelsat & Gilat Mobile Reach Solar 3G Solution for Mobile Network Operators in Remote Areas
9.8  Foresight Demonstrates Its Multispectral Advanced Driver Assistance System
9.9  IBM QRadar & Waterfall Unidirectional Security Gateway Deployed Jointly at Dorad Energy
9.10  IAI Expands JV with Kalyani Group to Build New Maintenance Center in India
9.11  Mellanox’ Spectrum-2 – World’s Most Scalable Gigabit Open Ethernet Switch Solution
9.12  AudioCodes Announces CCE Hub Solution for Microsoft Cloud PBX Environments
9.13  Komodo, RoboTiCan’s Multipurpose UGV Robot Reveals Seamless Quadcopter Integration
9.14  GPSdome Conducted Successful Airborne Tests of its GPS Anti-Jammer & Anti-Spoofer


10.1  Israeli Exports to India Rise by 60% Over Past 10 Years
10.2  Israel’s Incoming Tourism Increases 28% in June
10.3  OECD Finds Life Expectancy in Israel High Although Health Care Needs Improvement


11.1  ISRAEL: High-Tech Exits Totaled $1.95 Billion in 57 Deals in the First Half of 2017
11.2  ISRAEL: India and Israel: A Strategic Alliance?
11.3  LEBANON: Election Deal Shows Gradual Political Progress
11.4  QATAR: Moody’s Changes Qatar’s Rating Outlook to Negative, Affirms Aa3 Rating
11.5  SAUDI ARABIA: Mohammed bin Salman as Crown Prince: Ramifications for Riyadh
11.6  EGYPT: Despite Taboo, Hebrew Classes Open Doors for Young Egyptians
11.7  MOROCCO: IMF Completes Second Review Mission of the Precautionary & Liquidity Line
11.8  TURKEY: EU Parliament Votes to Halt Accession Talks With Turkey


1.1  Indian Prime Minister Modi Holds Historic 3-day Visit to Israel

Indian Prime Minister Narendra Modi landed in Israel on 4 July at Ben Gurion International airport for an historic first-ever visit to the country by an Indian prime minister.  Modi, who visited for three days, began by visiting a flower farm near Beit Dagan and then the Yad Vashem Holocaust Memorial and Museum in Jerusalem.  Modi’s visit marks 25 years since the establishment of diplomatic relations between India and Israel.

During the visit, Israel and India signed a series of sweeping trade, commerce, and research and development treaties.  The Israel Space Agency and the Indian Space Research Organization signed a first-of-its-kind agreement to collaborate on adapting Israeli technologies, such as electric propulsion systems for small satellites and the creation of an accurate system for measuring time, to the extreme conditions of outer space.  The agencies will also explore jointly developing a system for the transfer of data between satellites.  Another treaty signed will see Israel and India collaborate on a unique social initiative: the establishment of an international network aimed at cultivating young leaders worldwide.

Representatives from a number of large Indian corporations signed eight trade agreements with leading Israeli firms in the fields of industry, security, energy and medicine, among them defense contractor Elbit Systems and Israel Aerospace Industries.  An agreement also signed was between the Asher Space Research Institute at the Technion — Israel Institute of Technology and the Indian Institute of Space Science and Technology.  The agreement aims to facilitate cooperation among Israeli and Indian research and development centers and establish joint study and research exchange programs.

The agreements are expected to expand bilateral trade and bolster existing economic ties between Israel and India, which due to India’s size and vast inherent potential make it a strategic market for Israel in a number of industries, such as information technologies, agriculture and agrotech, pharma, biotech, and medical devices.  India is Israel’s 10th largest trade partner worldwide, and is its second largest trade partner in Asia, after China and Hong Kong. In 2016, trade between Israel and India amounted to $4 billion.  (Various)

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1.2  Finance Minister Wants Ministerial Budgets Cut by NIS 1.12 Billion

Minister of Finance Moshe Kahlon is asking the Knesset Finance Committee to approve a NIS 1.12 billion across-the-board cut in ministerial budgets for 2017.  At the same time, NIS 1.2 billion will be used to finance a series of activities approved after the state budget was passed in December 2016.  The Ministry of Finance sent to the Finance Committee motions including the lengthening of maternity leave by one week (NIS 230 million) and special grants for Holocaust survivors (NIS 246 million).  NIS 150 million is needed to pay the defunct Israel Broadcasting Authority’ debts that have been approved by the official receiver, NIS 45 million is needed for armored protection in the vehicles of Jews living in Judea and Samaria, and NIS 70 million was allocated for establishing a temporary residential site for those forcibly removed from Amona and the nine homes demolished in Ofra.  Budget allocations totaling NIS 28.9 million were promised to coalition MKs for their vote in favor of the state budget, and NIS 350 million was allocated for the Ministry of Defense’s contingent expenses, which are not itemized for reasons of state security.

The cut, which is designed to pay for this additional spending, amounts to 1% of ministerial budgets, excluding salaries and payments to suppliers and services providers, including the Ministry of Defense (NIS 218 million), transportation development budgets (NIS 202 million), and the Ministry of Education (NIS 114 million).  (Globes 04.07)

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2.1  Israeli Startups Raise Over $400 Million in June

Israeli startups have raised over $400 million in June, according to Globes, nearly half of the total amount in Q2/17.  With just over $1 billion raised by startups in Q1/17, according to both Globes and IVC-Research, the country’s startups have raised nearly $2 billion since the start of the year.  In 2016, Israeli startups raised a record $4.8 billion.

Recently, there has been a flood of companies announcing that they have closed large financing rounds.  For example, image recognition company Trax announced that it had raised $64 million (including $32 million in equity sold by shareholders) while digital post-print company Highcon raised $20 million.  Earlier this week, e-commerce fraud prevention company Riskified raised $33 million, neurological therapy company Mitoconix Bio raised $20 million and personalized nutrition company DayTwo raised $12 million from Johnson & Johnson.

The largest financing in June was cyber security company Cybereason, which closed a $100 million financing round.  Two companies have expanded financing rounds in June.  Connected vehicle company Autotalks raised $10 million more to bring its financing round to $40 million, while Eloxx Pharmaceuticals raised $6 million more, to bring its latest financing round to $30 million.  (Globes 29.06)

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2.2  Safe-T Group Admitted to Trading on the OTCQB Venture Market

Safe-T Group announced that its American Depositary Shares (ADSs) have been approved for trading on the OTCQB Venture Market.  Safe-T will commence trading on the OTCQB today under the symbol “SFTTY”, where each ADS represents four ordinary shares of the Company.  The OTCQB Venture Market is for early-stage and developing U.S. and international companies that are current in their financial reporting, pass a minimum bid price test and undergo an annual company verification and management certification process.  The OTCQB Market’s quality standards provide a strong baseline of transparency, as well as the technology and regulation to improve the information and trading experience for investors.  BNY Mellon serves as Depositary to the Company’s Level 1 ADR program.

Herzliya’s Safe-T Data is the provider of solutions designed to mitigate attacks on business-critical services and data for a wide range of industries, including financial, healthcare, government and more.  Safe-T’s High-risk Data Security (HDS) Solution mitigates data threats: un-authorized access to data, services, networks, or APIs, as well as data related threats, including data exfiltration, leakage, malware, ransomware and fraud.  Companies and governments around the world trust Safe-T to secure their data, services, and networks from insider and external data threats.  Focused on providing security solutions for the enterprise market, Safe-T enables organizations to benefit from enhanced productivity, efficiency, heightened security, and improved regulatory compliance.  (Safe-T 28.06)

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2.3  Microsoft to Acquire Israeli Startup Cloudyn

Microsoft announced that it will acquire Israel-based cloud management company Cloudyn in a transaction that also provides an exit to Indian software major Infosys on its year-old investment.  Microsoft signed a definitive agreement to acquire Cloudyn, which fits squarely into Microsoft’s commitment to empower customers with the tools needed to govern their cloud adoption and realize the strategic benefits of a trusted, intelligent cloud.

While the financial details of the deal were not disclosed, it is reported to be around $50 – $70 million.  According to a company statement, Infosys has agreed for divestment of its entire investment in Cloudyn for a total consideration of approximately $4.4 million.

In August last year, Infosys has invested $4 million to pick up a minority stake in Cloudyn marking the Bengaluru headquartered firm’s second investment in an Israel-based cloud-computing start-up from the company’s $500 million innovation fund.  Rosh HaAyin’s Cloudyn, which was founded in 2011, provides enterprise customers tools to identify, measure and analyze consumption, enable accountability and forecast future cloud spending.  Cloudyn has raised $20.5 million in four rounds from its investors.  Cloudyn’s other investors include Carmel Ventures, RDSeed and Titanium Investments, according to Crunchbase.  (Various 03.07)

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2.4  Intel’s Israel Procurement Worth NIS 5.76 Billion in 2016

Intel Israel announced on 4 July its corporate responsibility report for 2016 that procurement by Israel’s largest high-tech company totaled NIS 5.76 billion, 75% of it from small and medium-sized suppliers.  This was down from 11% of Intel Israel’s exports in 2015, totaling $4.1 billion but the amount is expected to rise sharply this year as the Fab at Intel’s Kiryat Gat plant begin full operations.  Intel continued its recruitment of employees in Israel, and currently has 10,200 employees in the country.  Some 67% of Intel Israel’s employees work in development and the rest in production.  Of the employees, 21% are women, who constitute 30% of Intel Israel’s management.  The number of women recruited rose 7.5% in 2016, and 28% of the new employees who have joined the company are women.  Intel has allocated $300 million globally until 2020 to accelerate diversity among its staff.

The report places great emphasis on environmental matters.  Intel says that recycling of chemical waste at Intel Israel increased from 83% in 2015 to 93% in 2016.  The 270,000 cubic meters of water recycled in production processes is the equivalent of 87 Olympic-sized pools.  Intel saved 14 million kilowatt hours of electricity last year, equal to the energy consumed by 900 homes in a year.  The company reduced its production of greenhouse gasses by 16,000 tons, equivalent to the emission value of 5,500 average cars.  (Intel 04.07)

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2.5  Dow Chemical Formally Establishes a Tel Aviv Office

On 3 July, the Dow Chemical Company announced that it is expanding its footprint in Israel by establishing a local Dow entity in Tel Aviv.  The company says that the decision comes amid unprecedented growth in Israel’s GDP and the positive trend across many economic indicators.  Executive Vice President and President of Dow Europe, Middle East, Africa & India, Heinz Haller, who recently visited Tel Aviv to meet with key industry and government groups, said Dow is uniquely positioned to support Israel’s innovation environment, as a solution provider of choice for all materials needs across Dow’s portfolio.  Dow recognizes that Israel is home to over 300 large multinational corporations and 4,000 local companies developing next generation products.  (Globes 03.07)

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2.6  UVeye Raises $4.5 Million to Use Computer Vision to Inspect Underside of Vehicles

UVeye has raised $4.5 million in seed funding.  The round was led by Ahaka Capital, with participation from angel network SeedIL.  Initially being applied to roadside security — such as stopping car bombs or drugs smuggling — UVeye’s tech claims to be able to analyze any vehicle from underneath to identify and detect threats that would otherwise be concealed to the human eye, even as it is moving, up to 28 MPH.  It does this using “strategically angled and synchronized hi-res cameras” to build a 360 degree digital model, and says that three seconds after a vehicle passes over UVeye’s ground installed device, the system is able to process multiple images to create a 3D model of the undercarriage and provide high resolution full color visuals to rule out any security risks.

This is also where UVeye’s combination of vehicle manufacture-supplied data and machine learning kicks in, which can compare and track characteristics of different vehicle models for differentiators, such as weight and part placement.  It claims to even be able to recognize a foreign object (or otherwise) the size of a USB stick. The system also uses audio to “listen” for anything unusual.

The startup is also finding a second market for its tech: the wider automotive market.  In the era of Mobility-as-a-Service, companies such as car rental companies, fleets, car dealerships, vehicle repair shops, and OEMs all rely on seamless vehicle operation.  UVeye’s machine learning system can detect vehicle leaks, wear and tear, and any damages that would previously go unnoticed.  Detecting any of these damages can save companies the time and costs involved in conventional inspection methods.

Tel Aviv’s UVeye’s flagship Under-Vehicle Inspection System provides the perfect solution for automatically identifying concealed threats in the undercarriage of any vehicle entering or exiting a secured compound.  The system occupies multiple high-speed, high-resolution cameras that generate a super-crisp 3D image of the vehicle’s undercarriage in less than 3 seconds.  Using advanced patent-pending image-processing algorithms, the system scans the images to identify concealed weapons and other contraband.  With a built-in LPR camera, the system automatically reads the license plate number of the vehicle and stores all its information in a secure database for later inquiry.  (Various 06.07)

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2.7  DBmaestro Raises $4.5 Million to Drive Market Adoption of DevSecOps for Databases

Petah Tikva’s DBmaestro announced a $4.5 million financing led by Vertex Ventures, with participation of existing investors StageOne, Lool Ventures and iAngels.  The investment will help the company to launch its next-generation database automation solutions and extend its global sales and marketing reach.  DBmaestro technology ensures operational integrity of release automation, versioning, and policy control, increasing productivity and automation, delivering a fast ROI.  DBmaestro has experienced exceptional growth, doubling revenues year over year.  Major Global 2000 enterprises, such as banks, insurance companies, energy, and technology companies, use DBmaestro for continuous delivery for databases within DevOps and DevSecOps environments.  (DBmaestro 05.07)

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2.8  Wipro & TAU Partner for Joint Research in Emerging Technologies

Bangalore, India’s Wipro Limited, a leading global information technology, consulting and business process services company and Ramot, the Business Engagement Center at Tel Aviv University (TAU), announced a partnership for joint research in emerging technologies.  The partnership envisages the creation of joint research capability at TAU, supported by Wipro to pursue core as well as applied research in fast-developing technologies in the Artificial Intelligence (AI) space.  Wipro has a strong tradition of investing in innovation, and collaboration with academia for advanced research and development is a key element of their innovation programs.  Wipro seeks to partner with Tel Aviv University to jointly develop innovative IP in core AI technologies that will help build advanced and differentiated solutions and services.

Ramot is the Business Engagement Center at Tel Aviv University, Israel’s largest research and teaching university. Founded in 1956, Tel Aviv University is located in Israel’s cultural, financial and industrial center. Rooted in both academic and corporate arenas, Ramot is uniquely positioned to cultivate the special relationships between these two compelling worlds, creating win-win connections that support fertile, groundbreaking research while providing companies with discoveries that give them a crucial competitive edge.  (Wipro 05.07)

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2.9  Oramed Announces Dual-Listing on Tel Aviv Stock Exchange

Jerusalem’s Oramed Pharmaceuticals, a clinical-stage pharmaceutical company focused on the development of oral drug delivery systems, announced that it has received approval from the Israel Securities Authority to dual-list its common stock on the Tel Aviv Stock Exchange (TASE).  Oramed common stock will commence trading on the TASE on 12 July 2017 under the ticker ORMP.  Based on the current market capitalization of the Company, it is expected that Oramed will be included in the TA SME-60 index.  Oramed common stock will continue to be listed and traded on the NASDAQ Capital Markets and the Company will continue to comply with the regulations of the U.S. Securities and Exchange Commission.  Per the TASE’s listing requirements and Israel’s Dual Listing Law, U.S. listed companies may dual-list on the TASE without any additional regulatory reporting or requirements.  (Oramed Pharmaceuticals 05.07)

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2.10  Symantec to Buy Israeli Cybersecurity Firm Fireglass

Symantec Corp is acquiring Israeli cybersecurity startup Fireglass, in a small deal designed to boost its products that protect corporate email and web browsing from threats.  Symantec is paying an undisclosed sum for the Israeli company of about 40 employees.  Fireglass specializes in an area of security called “browser isolation,” a technology that creates virtual websites allowing users to browse any content without having viruses touch their network.  The deal will also increase the company’s footprint in Israel, a hotbed for cybersecurity, where Clark said Symantec has been looking to expand. Israel, which has more than 400 cybersecurity startups, attracts about 20% of private global cyber investment.  The deal is expected to close in the third quarter of the calendar year.

Tel Aviv’s Fireglass, founded in 2014 by a former Check Point Software Technologies executive, was backed by investors such as Lightspeed Venture Partners and Norwest Venture Partners.  It had raised $20 million in early 2016 and competes with Menlo Security.  (Symantec 06.07)

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2.11  EL AL Announced the Acquisition of Israir

EL AL reported its Board’s approval for the acquisition of Israir Aviation and Tourism through its subsidiary Sun D’or, from IDB Tourism.  IDB Tourism will transfer to Sun D’or 100% of Israir shares in return for the allotment of 25% of Sun D’or shares, and in cash, equal to the value of the equity on the transaction’s Closing date, in a total amount of up to $ 24 million.  After completion of the transaction, Israir will become a fully-owned subsidiary of Sun D’or, and Sun D’or will be jointly owned as follows: 75% by EL AL as the controlling shareholder and 25% by IDB Tourism.  The transaction is subject to a number of conditions, mainly the approval of the Antitrust Authority.  Simultaneously with the acquisition agreement, a service agreement will be signed between EL AL, Sun D’or and Israir, defining the types of services to be provided by EL AL to Sun D’or and Israir following completion of the transaction.

Israir is an Israeli private company, engaged in international and domestic flights as well as wholesale of vacation packages to international destinations, organized tours, package tours, skiing and more, under several brands.  Israir is also engaged, through a holding in Diesenhaus Unitours – a fully-owned subsidiary of Israir – in the sale and wholesale marketing in Europe of Israeli hotels (incoming tourism). In the course of its aviation operations, Israir mainly operates charter flights as well as scheduled flights to a number of destinations.

The acquisition of Israir is a key step in El Al’s strategy to expand its income resources and Non-Core Business, as well as diversify its operations by acquiring a prominent tourism activity, with extensive experience and professional knowledge.  (El Al 06.07)

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2.12  Amazon to Lease 11 Floors in Tel Aviv’s Azrieli Sarona Tower

Globes reported that Amazon, the world’s largest internet retailer and cloud services provider, is expanding its business in Israel.  Amazon signed a lease with Azrieli Group to rent 25,000 square meters on 11 floors of the new Azrieli Sarona Tower in Tel Aviv.  The deal includes 300 parking spaces at NIS 1,200 per space.  Amazon will pay Azrieli NIS 37 million a year, including the parking spaces, but not including management fees.  The deal is the largest in the tower and the largest in the Tel Aviv offices market in recent years.

Amazon was founded in 1994.  From operating a selling website, initially mainly for books, Amazon became the world’s largest retailer, and later expanded into other sectors, such as cloud computing services.  Its current market cap is $463 billion.  The company is continually expanding its business in Israel.  (Globes 02.07)

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2.13  Israel’s First Vegan Supermarket Opens in Tel Aviv

A vegan-only supermarket has opened in Tel Aviv, which is recognized as Israel’s capital of veganism and one of the world’s top vegan-friendly cities, with countless vegan bars and restaurants.  The new supermarket, Gal Hayarok (Green Wave), strives to emulate the German Veganz supermarket chain, which has branches in Berlin, Hamburg and Frankfurt.  The founders say they intend to open up five more branches across Israel by 2018.

The first store, which opened in the heart of the Carmel Market, fills 100 square meters and contains some 4,000 vegan products.  The inventory includes cereals and legumes (from yellow peas to green lentils to black rice); spices (black cardamom and Philadelphia barbeque seasoning), various types of flour (including gluten-free); tehina and oils; substitutes for milk, cheese and sugar (catering also to diabetic vegans); snacks and delicacies; vegan TV dinners, sauces, spreads, bakery goods, cookies and ice cream (including a kind made from coconut milk).  There are also imported foods, including Indian snacks, Japanese sushi products and Thai purees.  They even have body building products, like protein bars – all, without exception, vegan.  The supermarket is the only business in Israel publicly pledged to being 100% vegan.  The owners say they are committed to conducting stringent checks regarding vegan purity and will bring in only products that accord with vegan principles.  In other words, they promise they will not sell any products that involve any exploitation of animals.  (Various 10.07)

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2.14  Intuition Robotics Raises $14 Million Series A Investment Led by Toyota Research Institute

Intuition Robotics announced a $14 million A-round investment today led by the Toyota Research Institute (TRI).  TRI joins early A-round investors OurCrowd and iRobot as well as existing seed investors Maniv Mobility, Terra Venture Partners, Bloomberg Beta, and additional private investors who participated in the round.  The investment in Intuition Robotics marks TRI’s first outside investment in robotic technology specifically for older adults.  Toyota is regarded as one of the leading companies in home/human-assist robotics research, and the move underscores the shared vision between the two companies.  Intuition Robotics’ active aging companion, ElliQ, is currently being tested and developed to proactively promote an active and engaged lifestyle, with the goal of helping older adults benefit from technology that’s intuitive and easy to use.

Ramat Gan’s Intuition Robotics is developing social companion technology to positively impact the lives of millions of older adults by connecting them seamlessly with family and friends, making technology accessible, intuitive and proactively promoting an active lifestyle.  The company’s multidisciplinary team of roboticists, industrial designers, full stack developers, Android developers, gerontologists, and machine learning experts, is currently developing Elli•Q, the Active Aging Companion.  (Intuition Robotics 11.07)

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3.1  Middle East Online Education & E-Learning Market Overview for 2016 – 2023 Issued

Research and Markets has announced in the “Middle East Online Education & E-Learning Market Size, Demand, Opportunity & Growth Outlook 2023” that the market was valued at $ 558.1 million in 2016 and is expected to register a 9.8% CAGR over the forecast period.  The market growth is likely to be driven by the huge government investment and rapid adoption of online education and e-learning by educational institutes and corporate organizations.

Geographically, the online education & e-learning market of Kingdom of Saudi Arabia is holding the largest market share and is expected to garner $ 237.1 million by 2023.  The Saudi Arabia education sector has seen a transition from the traditional teacher-centered approach to a learner-centered approach.  Further, adoption of distance and mobile learning practices is expected to spur the market of online education & e-learning in Kingdom of Saudi Arabia.

UAE is anticipated to hold second position and to grow at a CAGR of 10.3% over the forecast period.  The UAE online education and e-learning market is expected to experience high growth on the back of increasing government investment to digitize the education sector.  Apart from this, the demand for online education & e-learning is rising in UAE on account of heavy adoption and positive student attitude towards e-learning.  Moreover, Oman’s online education and e-learning market is anticipated to showcase significant growth over the forecast period.  This is mainly because the government of Oman is interested in issues relating to education and computer literacy and is investing heavily in the sector.  (R&M 05.07)

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3.2  Dubai Named Among World’s Most Expensive Airbnb Markets

Dubai is ranked as one of the most expensive destinations in the Bloomberg World Airbnb Cost Index of more than 100 cities.  At $180, prices in Dubai rose by more than 7% year-on-year to be named the third most expensive in the world, behind Miami and Reykjavik.  The Bloomberg index also revealed that hotel room rates in Dubai over the same period fell by 28% to $175.  This backed up research by Knight Frank which said prices in Dubai’s hotel market are being hit by more than 4,200 active short-term lets available in the city on  The research, published late last year, said that while hotel operators had previously been dismissive of competition in the form of short-term letting websites, many were now recognizing the ‘Airbnb effect’ and in some markets had lobbied aggressively against it.

In April last year, Dubai Tourism signed an agreement with Airbnb to allow homeowners to apply for licenses without having to commission a third party as a management operator.  Bloomberg compiled the data for its latest index based on the average daily cost of lodging in private dwellings, regardless of accommodation type, for two guests.  Elsewhere in the Gulf region, Riyadh was ranked 26th ($109), down 25.3% on an annual basis, while Kuwait ($107) was placed 28th and Doha ($92) was ranked 39th.  (AB 28.06)

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3.3  Neuro Spinal Hospital in Dubai to Acquire Accuray CyberKnife and Radixact Systems

Sunnyvale, California’s Accuray Incorporated announced the signing of an agreement with the Neuro Spinal Hospital (NSH) in Dubai, United Arab Emirates, for the acquisition of one CyberKnife M6 System and one Radixact System.  The CyberKnife M6 System will be primarily used by the hospital to treat neurological indications such as arteriovenous malformations and trigeminal neuralgia, and secondarily for extracranial cases such as prostate, lung and spine.

Dedicated to making quality healthcare available to patients in the region, Neuro Spinal Hospital was established in 2002 as the first specialized neuroscience hospital.  For more than a decade, it has been internationally recognized as a center of excellence and referral for neurosurgical, spinal and neurological treatments.  It will now also provide advanced radiotherapy and radiosurgery treatments.

Accuray Incorporated is a radiation oncology company that develops, manufactures, and sells precise, innovative tumor treatment solutions that set the standard of care with the aim of helping patients live longer, better lives.  The company’s leading-edge technologies deliver the full range of radiation therapy and radiosurgery treatments.  (Accuray 11.07)

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3.4  Air Canada Celebrates the Inauguration of Montréal-Algiers Flights

With the departure of Air Canada Rouge flight AC1920 to Algiers on 1 July, Air Canada marks the launch of non-stop service to Algeria’s capital city, its second destination in North Africa from its Montréal hub.  This new seasonal route will be operated by Air Canada Rouge with a 282-seat Boeing 767-300ER aircraft, featuring a choice of three customer comfort options: Economy; Preferred seating offering additional legroom; and Premium Rouge with additional personal space and enhanced service.  Flights are timed to optimize connectivity to and from Air Canada’s Montréal hub.  All flights provide for Aeroplan accumulation and redemption and, for eligible customers, priority check-in, Maple Leaf Lounge access, priority boarding and other benefits.

Air Canada is Canada’s largest domestic and international airline serving more than 200 airports on six continents.  Canada’s flag carrier is among the 20 largest airlines in the world and in 2016 served close to 45 million customers.  Air Canada provides scheduled passenger service directly to 64 airports in Canada, 57 in the United States and 95 in Europe, the Middle East, Africa, Asia, Australia, the Caribbean, Mexico, Central America and South America.  (Air Canada 30.06)

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3.5  Indonesian & Turkish Aviation Firms Agree to Collaborate on N245 Commuter Aircraft

PT Dirgantara Indonesia (PTDI) and Turkish Aerospace Industries (TAI) signed a “Framework Agreement” on 6 July calling upon bilateral collaboration between the two aviation vendors.  The agreement will see TAI collaborate with PTDI on the latter’s CN-235-based N245 commuter aircraft and N219 utility aircraft.  Besides technical support, activities will also include joint marketing and other business initiatives.  PTDI and TAI will also cooperate in unmanned aerial vehicles (UAV), aero-structures and development in other areas of aeronautics.  The Framework Agreement follows a memorandum-of-understanding (MoU) signed by PTDI and TAI at the 2017 International Defence Industry Fair (IDEF), which took place in Istanbul in May.

Being a development and co-production partner of the CN-235, PTDI is aiming to convert the venerable lightweight transport into a cost-effective commuter airliner.  Under the N245 program, the CN-235 will eschew its rear-ramp and incorporate a new T-tail as well as Pratt & Whitney PW127 turboprop engines.  The N245 will have a capacity of 50 passengers and an internal payload of 5,500 kg.  It will retain the CN-235’s versatility in hot-and-high conditions and rugged environments, such as incomplete runways.  PTDI aims to have the N245 compete against the industry incumbent ATR-42.

Derived from the PTDI NC212, the N219 is being developed to compete with lightweight turboprop transports such as the Cessna Grand Caravan EX.  In fact, the N219 will be a twin-engine design – using two Pratt & Whitney PT6A-42 turboprop engines.  The N219 will have a 19 passenger capacity and be positioned for both civil and military requirements.  Like the N245, the N219 will be optimized for use from unprepared runways, enabling it to operate from remote and inaccessible areas.  Turkey had also hoped for building a domestic airliner.  (Quwa 11.07)

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4.1  Bee’ah & Masdar Launch JV to Develop the First WTE Plant in the UAE

Bee’ah, the UAE’s leading environmental management company, and Masdar, Abu Dhabi’s renewable energy company, have formally established the joint venture Emirates Waste to Energy Company (EWEC) to develop waste-to-energy plants across the region.  In line with the vision of the Ruler of Sharjah, around environmental challenges and ways of maintaining a pollution free environment, the first project will be the Sharjah Multi-Fuel Waste-to-Energy Facility.  The plant will be the first in the region and will treat, within its first phase, more than 300,000 tonnes of municipal solid waste (MSW) each year and have a power capacity of around 30 megawatts (MW).  Bee’ah set the ambitious target for Sharjah to achieve zero waste when the company was created back in 2007.  At present, the emirate diverts 70% of its waste away from landfill.  With the completion of this new facility, Sharjah will soon become the first city in the Middle East to achieve the target of 100% diversion of waste from landfill.  (Bee’ah 11.07)

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4.2  Green Police to Battle Tunisia Trash Scourge

Environment Tunisia has launched a special “green police” unit aimed at dealing with the proliferation of waste, a scourge that has worsened dramatically since the 2011 revolution.  The North African country’s rubbish woes have worsened because municipalities are not dealing with the problem in advance of local elections slated for December.  There is also a lack of equipment, treatment centers and landfills, Environment Minister Riadh Mouakher said.  Nevertheless, he also pinpointed a lack of awareness among the general public.  For a month, the environment police will be responsible for raising that awareness.

After that, from mid-July, throwing trash outside dumpsters or burning waste will incur fines of between 40 and 60 dinars (€14.5 and €21).  If an offence is deemed to be damaging to the public health, a prison term can be or higher fines of between 300 and 1,000 dinars can be imposed.  Initially, the new force will deploy 163 officers in 34 municipalities across greater Tunis.  In mid-July, an additional 136 officers will patrol another 40 municipalities across the country.  The “green police” will come under the authority of municipalities, but will also be monitored by the environment ministry.  (AFP 14.6)

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4.3  Morocco Secures $25 Million Loan from Clean Technology Fund for Hybrid Solar Project

Morocco has received approval for a $25 million loan from the Climate Investment Funds’ Clean Technology Fund (CIF CTF).  The loan is meant for a project to generate solar power through an innovative hybrid Concentrated Solar Power (CSP) and Photovoltaic (PV) solution.  The Midelt Phase I Concentrated Solar Power Project is being supported by the African Development Bank (AfDB) and the World Bank with an additional allocation of $ 25 million in CTF resources.  The project consists of two separate CSP plants, each with 150-190 MW CSP capacity and a minimum of 5 hours of thermal storage.  The envisaged installed capacity of the PV component could reach approximately 150-210 MW, making the total capacity of each of the proposed plants 300-400 MW and the total capacity of this first phase 600-800 MW.

The project’s innovative hybrid solar design is also built on a unique Public-Private Partnership between the Moroccan Agency for Sustainable Energy (MASEN) and private sector sponsors – with a Build, Own, Operate and Transfer project structure and implementation approach.  Selected sponsors are expected to form a Special Purpose Company to build and operate the plants and sell the generated electricity to MASEN under a 25-year Power Purchase Agreements (PPAs). The process will be designed to allow the award of the plants to different bidders.  The support from the CTF and AfDB is critical in driving down the cost of the project’s capital and lowering the Levelized Cost of Electricity.

Estimated greenhouse gas savings for the Noor-Midelt Phase 1 project is about 1.2 million tCO2 equivalent per year and 36 million tCO2 equivalent over the project’s 25 year-lifetime.  (CIF 03.07)

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4.4  World Largest Seawater Desalination Plant to be Built in Agadir

The largest renewable energy-run desalination plant designed for drinking water and irrigation will come to fruition in Agadir for a budget of MAD 2.6 billion.  In partnership with the National Office of Electricity and Drinking Water (ONEE) and BMCE Bank, Spanish company Abengoa will help create this project.  Abengoa is an international company that applies innovative technology solutions for sustainability in the energy and environmental sectors.  The project is valued at MAD 4 billion in its two components (drinking water and farm water) and ultimately aims to secure the drinking water supply of the Grand Agadir region and provide water for high value-added irrigated agriculture in the Chtouka area.

Overall, the project involves the construction of a desalination plant with a 275,000 m3 total production capacity of desalinated water per day, which will make it the largest plant designed for drinking water and irrigation.  The contract signed provides for the possible capacity expansion to up to 450,000 m3/day.

In addition to the initial MAD 2.6 billion investment for the drinking water component of the desalination plant , ONEE will dedicate additional investments of MAD 600 million to the installation of 44 km of pipes, the construction of a drinking water tank with a capacity of 35,000 m3, the installation of three high voltage power lines measuring over 55 km from the source station of Tiznit to the solar complex Noor Ouarzazate, and the construction of two pumping stations and two loading tanks.  For the drinking water component, the seawater desalination project is expected to secure the supply of drinking water for 2.3 million inhabitants by 2030, 20% of whom live in rural areas.  (MWN 01.07)

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5.1  Lebanon’s Trade Deficit Narrowed by 0.58% y-o-y in the First Five Months of 2017

Lebanon’s trade deficit contracted by 0.58% year-on-year (y-o-y) in the first five months of 2017 to stand at $6.72B.  Accordingly, total imports grew by an incremental 0.77% y-o-y to $7.92B.  However, exports rose by 9.06% y-o-y to $1.21B on the back of an annual 28.9% increase in the volume of exported goods to 0.82M tons.  The top products imported to Lebanon were Mineral products with a share of 20.46%, followed by 10.98% for products of the Chemical and allied industries, 9.91% for Machinery and electrical instruments and Vehicles, aircraft, vessels, transport equipment, which grasped a stake of 9.49% of total imports.  The value of imported Mineral products contracted by 15.31% to settle at $1.62B by May 2017, while each of the value of Products of the Chemical and allied Industries, Machinery and electrical instruments, as well as Vehicles, aircraft, vessels, transport equipment climbed by an annual 0.4%, 3.45%, and 9.17% to $870.41M, $785.12M, and $751.87M, respectively over the same period.

China, Italy, Germany and Greece were Lebanon’s top import destinations in the month of May 2017, with the respective shares of 11.68%, 9.11%, 7.33%, and 6.21%, respectively.  As for exports, the top products exported from Lebanon were Pearls, precious stones and metals with a stake of 23.17% of total exported products, followed by Prepared foodstuffs, beverages and tobacco grasping a share of 16.85% of total exports, Base metals and articles of base metal, as well as Machinery and electrical instruments with respective stakes of 11.07% and 11.01% of the total.  In details, the value of Pearls, precious stones, & metals rose by 33.76% to $279.69M by May 2017 as their volume substantially increased by 66.67% while the average price of gold rose only by an incremental 2.16% y-o-y to stand at $1,234.93/ounce by May 2017.  As for Prepared foodstuffs, beverages and tobacco as well as Base metals and articles of base metal, they recorded upticks of 4.96% and 20.23% y-o-y, to reach $203.47M and $133.70M, respectively, in the same period.  However, the value of Machinery and electrical instruments declined by a yearly 11.13% to $132.93M in the first five months of 2017. It is worthy to mention that Switzerland made it again among the top three export destinations in May 2017.  Specifically, exports to South Africa constituted 10.73% of the total, those to Saudi Arabia grasped a 9.44% stake, and Switzerland absorbed a 7.67% share of Lebanon’s total exported goods. In the month of May 2017, the deficit fell from $1.39B to stand at $1.32B, as exports rose by 1.09% y-o-y to $239.69M while Imports decreased by an annual 4.35% to $1.56B.  (CAS 06.07)

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5.2  Number of Tourists to Lebanon Rises to a 5-year High As of May 2017

According to the Ministry of Tourism, the number of tourist arrivals rose by a yearly 12.81% to 649,841 by May.  This rise was due to the increase in the number of tourist arrivals from the Arab countries, Europe, and America, which altogether took up 82% of the total number of tourist arrivals in Lebanon.  In details, the number of visitors from Arab countries, representing 35% of the total, increased by a yearly 20.24% to 227,402.  The number of Iraqi visitors rose by an annual 23.15% to 104,404, while the number of Egyptians decreased by an annual 1.48% to 32,477 by May 2017.  However, given that the GCC governments lifted the ban about visiting Lebanon, the number of incomers from Saudi Arabia and Kuwait almost doubled to stand at 23,515 and 15,246 by May 2017 compared to 12,446 and 7,884, respectively, by May 2016.  Nevertheless, Emirati tourists plunged by 26.39% to 873.  Moreover, European tourists, grasping a share of 32% in total, grew by 10.98% y-o-y to 209,952 by May this year.  French tourists saw their number rise by an annual 19.59% to 58,578, and visitors from Germany and Italy also rose in number by 15.96% and 14.83% to 29,426 and 13,369, respectively, by May 2017.  American tourists (constituting 15% of total tourists), also increased by an annual 5.47% to 94,363 by May 2017.  This rise was mainly due to the growth in the number of visitors from the US and Canada which rose from 44,827 and 31,820 to 52,964 and 35,571 by May 2017, respectively.  (CAS 01.070

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5.3  Jordanians Exports to Countries of North America & Asia Rising

Jordanian exports to the countries of the North America Free Trade Agreement (NAFTA) increased by 6.9% in Q1/17, the Department of Statistics (DoS) said on 8 July.  The US accounted for the biggest share of these exports, standing at 7%.  The DoS report showed that national exports to non-Arab Asian countries rose by 24%, including India by 4.6%, while exports to the Grand Arab Free Trade Zone dropped by 8%.  The biggest share of decline in export accounted for Saudi Arabia, which fell by 20%, followed by EU countries by 10%.  Imports from the Grand Arab Free Trade Zone and the NAFTA countries rose by 13 and 71% respectively.  Other figures revealed that imports from non- Arab Asian countries regressed by 6% , including South Korea which dropped by 17% and EU countries by 15%, including Germany which fell by 8%.  (Petra 08.07)

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5.4  Jordan Starts Implementing ‘Sustainable Growth 2030’ Program

Jordanian Planning and International Cooperation Minister Fakhoury said his country has started the implementation of “Sustainable Growth 2030 Agenda” in accordance with the national priorities.  According to the minister, a roadmap including social awareness, integration plans on the national and domestic levels, capacities’ building in this field, along with the calculation of costs to fulfill sustainable growth’s goals, building of monitoring and assessment system, and enhancement of the national statistics system through the department of general statistics has been set.

He added that the comparison applied on performance indices in the country showed that the available data with clear calculation mechanisms cover only 40% of goals, which expose Jordan to a major challenge in the coming phase.  He saw that approaches should be adopted to provide data to cover the remaining 60% of calculation indices, and empower the role of statistics department so it becomes the only reference to adopt the quality of statistics data, which is a worldwide challenge.

Speaking at the opening of the second workshop for drafting the National Strategy for the Development of Statistics (NSDS) 2018-2022, the minister explained that statistical data reflect the economic, social and demographic conditions, and represent one of the main pillars in setting politics, plans, and correct decision making on the national level.  He also pointed out that the national strategy of statistics is a cornerstone to set and evaluate plans and politics, and to take the right decisions in the economic, social, and demographic fields, in order to serve the goals of sustainable growth.

The strategy is the base in fulfilling the Jordan Paper 2025 and its executive developmental program 2016-2019, in addition to the sustainable growth indices adopted by the United Nations in 2016, and to which Jordan has been committed.  The national volunteering show will be introduced to implement the Agenda 2030 in the high-level political forum set to be held in the United Nations this month.  (Asharq Al Awsat 04.07)

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5.5  Jordan Signs $52.8 Million Deals with World Bank & Others for Projects

Jordan has signed $52.8 million soft loan and grant agreements with the World Bank and Japan Social Development Fund (JSDF) to support the state budget and finance social projects targeting youths in the Kingdom.  The two agreements were signed during a recent visit by Minister of Planning and International Cooperation Imad Fakhoury to Washington.  During the visit, the minister discussed the planned US aid to Jordan in 2018.  He also discussed renewing the Jordanian ­ US memorandum of understanding for 2018­22, governing the military and economic aid to Jordan.

Fakhoury said the first agreement is a $50 support to the Kingdom budget, of which $36.1 million were granted as a soft loan, while the remaining $13.9 million were a grant within the Concessional Financing Facility (CFF), which was launched last year and is run by the World Bank.  The second agreement is a $2.8 million grant by the JSDF, which aims to provide integrated social services for youth in the Kingdom.  The minister stressed the importance of increasing aid to Amman in the upcoming period to help the country overcome great challenges.  (AMMONNEWS 29.06)

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►►Arabian Gulf

5.6  UAE Economic Growth Forecast to Slip to 2% This Year

The UAE economy grew by 3% in real terms last year, according to provisional data released by the country’s Federal Competitiveness and Statistics Authority.  The growth rate was exactly in line with a forecast by Emirates NBD and slower than the 3.8% growth recorded in 2015.  Emirates NDB also said it has revised down its 2017 UAE real GDP growth forecast to 2% from 3.4% previously on the back of OPEC’s decision in May to extend production curbs through March 2018 which means that the UAE’s crude output will decline.  It added that its expectation for a rebound in the UAE’s non-oil sectors this year remains unchanged.

The 2016 figures, cited by Dubai’s biggest bank in a new report, said mining and quarrying, which includes crude oil and gas extraction, expanded 3.8% in 2016, while the non-oil sectors grew 2.7%.  The non-oil growth represented a slowdown on 2015 when it grew by 3.2%, Emirates NBD noted.  It added that the fastest growing non-oil sector – and the biggest contributor to overall growth last year – was transport and storage which expanded 7.4% on an annual basis.  Manufacturing and construction were the other key drivers of the UAE’s growth last year, up 6% and 3% respectively.

The wholesale and retail trade sector, which alone accounts for more than 10% of GDP, expanded just 0.5% in real terms in 2016, although this was an improvement from 2015.  Accommodation and food services grew 5.7% in 2016, after remaining flat in 2015, confirming a recovery in the travel, tourism and hospitality sectors last year.  According to the report, only two sectors contracted in 2016 – financial & insurance activities (down 2.7%) and public administration, defense and social security (down 0.3%), as private sector credit growth slowed and the government curbed spending on the back of lower oil revenues.  (AB 28.06)

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5.7  Dubai, Abu Dhabi & Sharjah Becoming ‘More Affordable’

Three UAE emirates – Dubai, Abu Dhabi, and Sharjah – are becoming “more affordable” cities this year, according to Numbeo’s latest report.  In its mid-year 2017 cost of living index, the consultancy, which claims to have the world’s largest database of user-confirmed data about cities and countries worldwide, ranked Dubai 206th in the list of 511 cities, with Abu Dhabi and Sharjah taking the 278th and 302nd rank, respectively.  In the first list of 2017 cost of living index, issued in January, Numbeo put Dubai, Abu Dhabi and Sharjah at 190, 252 and 273 position on their list.

When divided by continent, the latest report found Dubai to be the 11th costliest city in Asia and the costliest city in the Middle East.  The cost of living index rate reached 73.95 points, compared to 67.76 points and 62.75 points, respectively, for Abu Dhabi and Sharjah.  The three UAE cities continue to rank far behind other major expatriate hotspots such as London (44), San Francisco (16), New York (19), Washington (23), Perth (35), Adelaide (62), Sydney (31), Singapore (50), Wellington (84), Auckland (36), Hong Kong (136), and Toronto (220).  In the latest Numbeo rankings, Swiss cities remained the most expensive cities, while Indian cities were amongst as the world’s most affordable ones.

In May, however, the Worldwide Cost of Living (WCOL) 2017 index compiled by the Economist Intelligence Unit ranked Amman as the most expensive city in the Middle East followed by Abu Dhabi, Dubai, and Istanbul.  (AB 04.07)

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5.8  Dubai Says 12 New Private Hospitals to Open by 2020

Twelve new private hospitals will open in Dubai by 2020, taking the total number of private hospitals in the emirate to 38, Dubai Health Authority (DHA) has announced.  The authority’s Health Regulation Department said that there will be 12 new private hospitals in the next three years adding 875 beds.  Another seven hospitals are undergoing expansion to include an extra 750 beds.

Earlier, the authority said that the number of private medical health facilities in Dubai grew by 4% to more than 3,000 in the second quarter of this year compared to the first quarter.  They include hospitals, fertility centers, one-day-surgery centers, specialized and general medical complexes, dental treatment centers and laboratories, pharmacies and health examination and house nursing facilities.  The Health Regulation Department also said that there are more than 36,055 licensed physicians in the medical private sector of Dubai, out of which 13,594 are new licenses.  (AB 03.07)

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5.9  UAE Remittances to India, Pakistan and the Philippines Soared Ahead Of Eid Holiday

Remittances from UAE expatriates rose by 15% a week ahead of Eid Al Fitr, according to a senior Al Ansari Exchange executive.  Al Ansari said the highest remittances were recorded for India, Pakistan, the Philippines, Egypt and Jordan during the Ramadan, adding, the average remittance grew higher by 30%.  While the average remittance amount throughout the year is around AED1,600 per transaction which increases to a little over AED2,000 during the holiday seasons.

According to the World Bank, India remains the world’s largest remittance recipient though inflows fell by 8.9% to $62.7 billion in 2016 from $68.9b in 2015.  Other countries making it to the top five list were China ($61b), the Philippines ($29.9b), Mexico ($28.5b) and Pakistan ($19.8b).  (AB 05.07)

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5.10  Saudi Arabia’s Private Sector Employs 11.1 Million Expats

According to the Saudi Arabia Interior Ministry’s National Information Centre, 11,119,370 expatriates are employed in the private sector.  They are accompanied by 2,221,551 family members, bringing their total number to 13,340,921.  The overwhelming majority of the expatriates (10,976,854) are aged between 20 and 64.  They have 1,689,874 relatives with them.  As many as 9,646 expatriate workers are less than 20 years old while 132,870 are above 64 years old.  According to the latest figures posted by the General Authority for Statistics, the total population of the Saudi Arabia is 31,742,308.

Saudi Arabia has embarked on an ambitious campaign to boost employment among its native population, mainly women and graduates.  Several programs have been launched to empower women economically and help them secure jobs despite stiff resistance from conservatives who have been openly against allowing women to work, especially in places where genders can mix, including supermarkets.

According to a study based on figures provided by the Ministry of Labour and Social Development in March, the number of Saudi women working in the private sector has increased by 130% in the last four years.  From 215,000 in 2012, the number of women in the private sector jumped to 496,000 in 2016, an average of 8,500 jobs per month.  Women now represent 30% of the total Saudi work force in the private sector, up from 12% in 2011, the study said.  The ministry is working on increasing the percentage of women in the Saudi total workforce to 28% by 2020.  (GN 04.07)

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5.11  Expats in Saudi Arabia Hit With Fees as They Leave for the Summer

Expatriates in Saudi Arabia have been hit with new charges for having dependents including a maid, driver, wife or children.  The new fee came into effect on 1 July and caught some expats leaving the kingdom for summer holidays by surprise.  Expats will have to pay SR1,200 ($320) per dependent each year.  The fee is payable either at the time of the dependent’s visa renewal, or when they seek a visa to exit and re-enter the kingdom, such as for holidays abroad.  The charge was implemented as thousands of people began departing the kingdom to avoid the scorching summer months.  It is part of the kingdom’s budget shake-up to fill a burgeoning deficit due to sustained lower oil prices. The dependents’ fee is expected to raise $260m annually.  Critics have suggested the additional financial burden on expat families will make the kingdom less attractive for professionals.  Authorities are also attempting to reduce the number of expats working in the kingdom by encouraging more locals to join the private sector.  (AB 03.07)

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►►North Africa

5.12  Egypt’s Annual Headline Inflation Remains Stable at 30.9% in June

Egypt’s annual headline inflation rate registered 30.9% in June, showing no change on May, state statistics body CAPMAS said in a statement on 10 July.  However, the country’s Consumer Price Index (CPI) continued to decline in June, registering 0.8%, compared to 1.6% in May and 1.8% in April.  CAPMAS said that food and beverage prices had increased by 40.8% year-on-year, making them the highest contributors to this month’s inflation rate.  Cooking oil increased by 58.2% year-on-year, seafood increased by 55.1%, while sugar and sugar-related products such as jam increased by 56.4%.  Gold, meanwhile, rose by 67.6% over the past year.

In November, the Central Bank of Egypt floated the Egyptian pound in an attempt to stabilize an ongoing loss in its value.  The move saw the currency fall to EGP 18 to the dollar from an official rate of EGP 8.8, although it had been trading at over EGP 18 on the black market prior to the floatation.  Egypt, which relies heavily on food imports, has been suffering from an ailing economy and an acute foreign-currency crisis since the 2011 uprising that overthrew Mubarak.  The decision to float the Egyptian pound was part of an economic reform program begun in 2014.  The program also cut subsidies and imposed new taxes such as the value-added tax, in an effort to reach a higher growth rate and reduce the budget deficit to 9.1% of GDP in the 2017/18 fiscal year.  (CAPMAS 10.07)

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5.13  Egypt’s Parliament Approves 2017/18 Budget, Which Targets 4.6% Economic Growth

Egypt’s House of Representatives approved on 4 July the state budget for the 2017/18 fiscal year.  The Egyptian government is targeting 4.6% in economic growth in 2017/2018, compared to the 3.8% growth in 2016/17.  Egypt is also targeting a 9.1% deficit for 2017/2018, although estimates predict a deficit of 10.8%.  The government is also targeting EGP 818 billion in revenue in 2017/18, compared to EGP 644 billion in revenue in 2016/17.  The expected expenses in the 2017/18 budget are EGP 1.2 trillion, compared to the EGP 994 billion in the 2016/17 budget.  The 2017/18 budget is expected to be ratified by President Abdel-Fattah El-Sisi in the coming days.  (Ahram Online 04.07)

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5.14  Dollar Rate Drops Below EGP 18 for First Time in Months

The official exchange rate of the US dollar has slipped to under EGP 18 for the first time in several months.  The dollar has dropped to an average rate of 17.95 at Egypt’s largest private bank, the Commercial International Bank (CIB), and 17.91 at the state-owned National Bank of Egypt (NBE) and Banque Misr, according to a survey conducted by Ahram Online on 3 July.  The Central Bank of Egypt (CBE) still maintains an average rate of EGP 18.08.  Experts say that the availability of the greenback in banks is on the rise, with some banks facing a drop in liquidity in domestic currency amid growing demand.

Hany Farahat, a senior economist at Cairo-based CI Capital, told Ahram Online that there have been several developments that have had a positive impact on the rate of the EGP.  Farahat says that banks are seeing a greater inflow in foreign currency and an almost nine-fold increase in foreign investment in domestic debt instruments since the floating of the pound in November 2016.  On 3 July, the CBE said there was $54 billion in foreign inflow and a surplus of $8 billion since November’s flotation.  In June, the CBE lifted the limits on foreign currency transfers set in January 2014 to control a dollar shortage.  Fitch Ratings said that the removal of foreign-currency transfer limits increases the availability of foreign currency, which allows banks to provide loans needed by foreign currency borrowers, particularly importers.

The drop in the exchange rate comes after Egypt announced a new cut in energy subsidies under the government’s five-year plan to gradually scrap its fuel subsidy bill from the state budget.  Fuel subsidy cuts were part of an economic reform package adopted in July 2014 that aimed to ease the country’s growing budget deficit and secure a $12 billion loan package from the IMF.  (MENA 03.07)

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5.15  Egypt’s Foreign Reserves Continue to Rise to $31.3 Billion in June

Egypt’s foreign reserves continued to climb registering $31.305 billion at the end of June and edging closer to pre-2011 levels of $36 billion, the Central Bank of Egypt (CBE) stated.  The reserves, which have increased from $28.641 billion at the end of April to $31.125 billion at the end of May, have been climbing since Egypt signed a three-year $12 billion loan from the International Monetary Fund (IMF) in November 2017.  The IMF has endorsed Egypt’s economic reform program, which includes cutting subsidies, raising taxes as well as floating the pound.  Egypt received an initial $2.75 billion tranche from the IMF last November, with a second tranche expected this month.  (Ahram Online 05.07)

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5.16  Egypt Signs $4 Billion Deal with Bombardier to Build Cairo Metro’s Line 6

Egypt signed an agreement with the Canadian company Bombardier for the financing and construction of Line 6 of Greater Cairo’s metro.  The new route will be 20 kilometers in length, with a total of 24 stations, 12 of them underground, with an initial cost estimate of $4 billion.  The deal, which was signed between the Egyptian Company for Metro Management and Operation (ECMMO) and Bombardier, stipulates that at least 40% of the materials used must be produced in Egypt, thereby promoting local production.  The proposed line will run from northern Cairo, near the ring road, then head south, passing through Greater Cairo’s Shubra El-Kheima and New Maadi, ending at the start of Ain El-Sokhna Road.  According to estimates by the country’s national tunnels authority, over 3.5 million of Greater Cairo’s 21 million inhabitants rely on the metro for their daily travel, partly due to its low cost.  (Ahram Online 11.07)

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5.17  Morocco’s National Economic Growth Reached 3.8% in First Quarter

According to Morocco’s High Commission for Planning (HCP), the recovery of the National Accounts showed an improvement in growth of 3.8%, compared to 1.6% over the same period in 2016.  This growth is due in particular to the significant rebound in agricultural activity, which reached 14.2% by the end of March 2017 compared to the 10.9% decrease a year ago.  After an acute decline of 9.1% in the first quarter of 2016, seasonally adjusted primary sector value added in volume increased by 12.1% over the same period in 2017, noted the HCP in its latest briefing note on the national economic situation in Q1/17.

At current prices, GDP grew by 4.1%.  As a result, the increase in the general price level was 0.3% instead of 0.1% as seen the previous year.  Nonetheless, the value added of non-agricultural activities marked a modest increase of 2.4%, the same rate as in the first quarter of 2016.  The value added of the service sector grew by 3% in the first quarter of the current year, instead of 2.4% in the same quarter of 2016, noted the HCP.  Almost all components of the sector were able to generate positive growth, with the most remarkable increase being observed in hotels and restaurants at 7.7%.

By contrast, the value added of the secondary sector experienced a slowdown in its growth rate this year, falling from 2% in Q1/16 to 1.7%.  The HCP explain this slight decrease by the poor growth of the value added in the sector activities, and by a drop in electricity and water activities, as well as construction and public works.  Exports of goods and services also fell, to 4.6% in the first quarter of 2017 from 6.3% in the previous year.  Imports did grow, but this was at a considerably slower rate of 7% compared to 12.5% in 2016.  (HCP 01.07)

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5.18  Morocco Signs 17 Agreements with Automotive and Aeronautic Industry Pioneers

Seventeen agreements on investment projects totaling MAD 2.4 billion were signed in Rabat on 6 July, in connection with the implementation of industrial ecosystems launched in the automotive and aeronautical sectors.  The Industrial Acceleration Plan is attracting new investors.  These investment agreements, which are expected to generate a turnover of MAD 7.62 billion and 14,230 direct jobs, were signed by Minister of Industry, Investment, Trade and the Digital Economy Elalamy and by the managers of the companies involved in these projects, 14 of which are in the automotive sector and three in the aeronautics industry.

Through these agreements, world automotive pioneers are setting up in Morocco, like the Chinese Xiezhong which will manufacture air conditioning systems and Electroplast.  Already present in Morocco, Lear Corporation Automotive will develop new technologies in embedded electronics, while the German Knauf and Spanish Hispamoldes will operate in plastic injection, a new domain for the Kingdom.  The other projects launched in the automotive industry concern fast-growing sectors such as tempered glazing, metallic structures or even hydraulic subassemblies.

On the aeronautical front, Figeac Aero is establishing itself for the first time in Morocco and will specialize in the machining and assembly of aeronautical parts and surface treatment to serve Airbus and Bombardier.  With an investment amount of nearly MAD 289 million, this project will create 535 jobs.  The other two aeronautic companies, ADF Technologie Morocco and Tecaero Maroc, will be involved in the design and manufacture of tools and pipelines.

In 2016, the number of jobs generated by the automotive sector amounted to nearly 150,000 jobs, an increase of about 80% compared to 2014.  The turnover generated grew from MAD 40 billion to 60 billion during the same period, recording a 50% increase.  As for the performance of the aeronautics sector, the turnover of the sector amounted to MAD 9.2 billion in 2016, rising by 12.5% compared to 2015.  The workforce employed by the sector experienced for its part, an increase of 19%, between 2014 and 2016, rising from 12,600 to 15,000 employees.  (MWN 10.07)

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6.1  Russian Tourist Arrivals in Turkey Rises by 1.384% in May

The number of Russian tourists visiting Turkey rose by 1.384% in May compared to the same month last year, pushing up total foreign arrivals to the country.  According to data released by the Tourism Ministry on 26 June, 608,472 Russians visited Turkey in May, even higher than pre-jet crisis figures back in May 2015, thanks to the normalization in bilateral ties between Ankara and Moscow.  The number of foreign arrivals into Turkey surged by 16.3% to 2.89 million in May, after a tough year in which the country’s tourism sector was hit badly due to a series of bomb attacks, a diplomatic crisis with Russia and a failed coup attempt.   Arrivals from Europe, however, continued to decline in May, as around 1.1 million Europeans visited Turkey in May, marking a year-on-year decrease of around 20%.

In the first five months of the year, a total of 8.8 million foreigners visited Turkey, a 5.5% increase compared to the same period of 2016.  In May, Russia became the top tourist market for Turkey, with a 21% share in total arrivals. Russia was followed by Germany, which took 10.2% share in total arrivals and Georgia, which had an 8.1% share.   They were followed by Britain and Bulgaria.  In May, the number of arrivals from Germany, once Turkey’s top tourism market, saw a 31% year-on-year decrease, falling to 295,007.  (HDN 29.06)

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6.2  Russia & Turkey Agree To S-400 Contract, Still Need to Settle Funding

Moscow and Ankara have reportedly agreed upon a contract outlining the supply of Almaz-Antey S-400 long-range surface-to-air missile (SAM) systems to Turkey.  Russia’s Presidential Advisor for Military and Technical Cooperation noted that while the technical aspects have been settled, funding – namely Ankara’s request for a credit or loan mechanism to back the deal – is still being addressed. Commercial and political issues also need to be settled before a final contract can be inked.

Turkey requested the S-400 SAM system in November 2016, in the backdrop of a thaw in Turkish-Russian relations, which briefly collapsed following the downing of a Russian Su-24 by the Turkish Air Force.  Talks began in February and progressed through March.  In June, Russian President Putin confirmed to Turkish media that S-400 talks with Turkey were in the final stages.

In parallel with its efforts to acquire the S-400, the Turkish Undersecretariat of Defence Industries (SSM) also commissioned the development of an indigenous long-range SAM system.  The head of the SSM stated that development of Turkey’s long-range SAM system would require from five to seven years.  Turkey also appears to be tying the purchase of S-400 systems with Russian assistance towards its homegrown system.  If successful, the S-400 would be the largest bilateral defense program between Turkey and Russia.  In fact, it would also likely be Russia’s biggest export to a NATO power and, in turn, raise Turkey as one of Russia’s leading defense importers.

The main draw of the S-400 system is the 40N6 missile – with a range of 400 km, it offers the S-400 a markedly broad coverage area against many aerial threats, especially combat aircraft.  However, the S-400 is a multi-layered system, and thus, it also carries shorter-range missiles, namely the 250 km 48N6, 120 km 9M96E2 and 40 km 9M96E.  Currently, China and India are the sole export-users of the S-400.  (Quwa 30.06)

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6.3  Turkey Adds 7.8% Tax to Alcoholic Beverages and Further Price Hikes Are Expected

An additional 7.8% special consumption tax has been added for alcoholic beverages in July, automatically in line with Turkey’s producer price index in the first half of the year.  The government announced that tobacco products would not see any tax hike in the second half of the year over inflationary concerns, but it did not mention alcoholic beverages.  In this vein, the special consumption tax over such products has automatically gone into effect.  As a result, an average increase of TL 4 – 4.5 is expected for a 70 cc bottle of the anise-flavored alcoholic drink raki.  Turkey makes price hikes in alcohol products and tobacco products twice a year according to their share in the domestic producer price index.  While the share of tobacco products in the inflation basket is 5.87%, the share of alcohol products is nearly 0.4%.  (Dogan 04.07)

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6.4  Turkey’s Crude Steel Production Soars in 2017

Turkey’s crude steel production rose 11.5% on an annual basis in the first five months of 2017, reaching 15.1 million tons, the Turkish Steel Producers’ Association (TCUD) said on 4 July.  Turkey was listed as the world’s eighth largest crude steel producer, contributing to about 2.2% of global crude steel output, according to TCUD data.  Global crude steel production climbed 4.7% in the first five months of the year compared to the same period in 2016, reaching 694.9 million tons.

Turkey’s steel export volume also surged 22.5% annually to reach 8.5 million tons in the first five months of 2017.  The value of steel exports ballooned 33.7% to $5.7 billion in the same period.  In the same period, steel imports to Turkey fell 20.3% to 6.4 million tons yearly, while the value of these imports dipped 0.2% to $4.6 billion.  Meanwhile, Turkey’s steel consumption lost 10.3% year-on-year to 12.22 million tons in the same period, while output rose between January and May.  (AA 04.07)

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6.5  IOBE Says Greek Economy to Grow By Up to 1.5% This Year

Greece’s economy will grow by 1.5% or slightly lower this year, the leading IOBE think tank forecast, sticking to a previous forecast in April.  IOBE projects slower economic growth this year compared to the 1.8% forecast by the government.  The government had also lowered its projections because delays in concluding its latest bailout review had increased uncertainty.  The conclusion of the review last month would help restart stalled investments, the think tank said in its quarterly report.  IOBE expects Greece’s unemployment rate, the Eurozone’s highest, to continue to decline for the fourth consecutive year in 2017 to 22.2%, but at a slower pace than last year.  (Reuters 06.07)

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6.6  Greece Aims for €6 Billion in Privatizations Revenues in 2017-18

Greece aims to raise €6 billion in privatization revenues through 2018, the head of its privatizations agency said.  Chairwoman Lila Tsitsogiannopoulou told reporters Greece was targeting €2 billion from privatizations this year and about €3.5 billion next year from the sale of stakes in telecoms group OTE and the Athens International Airport, among other assets.  Privatizations have been a key part of the country’s three international bailouts since 2010 but Athens has raised just €4.4 billion so far due to political resistance and red tape.  (Reuters 06.07)

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6.7  Greek May Industrial Output Rises 5.4% Year-On Year

Greek industrial output rose 5.4% in May compared to the same month a year ago, after a downwardly revised 0.8% increase in April, statistics service ELSTAT said on 10 July.  An index component breakdown showed manufacturing production expanding 4.2% from the same month in 2016, while mining output rose 6.8%.  Electricity production increased 12.6%.  (Reuters 10.07)

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7.1  17 B’Tammuz, Observed on 11 July, Begins the Three Weeks Mourning period

The Jewish fast day of the 17th of Tammuz was observed this year from sunup to evening on Tuesday, 11 July.  The fast day itself commemorates five tragedies:  1. Moses descended from meeting G-d and receiving the Torah on Mount Sinai, saw the Jews celebrating with the Golden Calf and broke the two tablets G-d had given him.  2. The daily offering, which had been brought regularly in Temple in Jerusalem, was halted during the Babylonian siege before the Temple was destroyed.  3. The Romans breached the walls of Jerusalem, prior to destroying the second Temple, in 70 CE.  4. A Greek or Roman official named Apostemos held a public burning of the Torah.  5. Idols were set up in the Temple itself; it is not clear what year this happened.  The 17th of Tammuz is the second of the four fasts commemorating the destruction of the Temple and the Jewish exile.

In later years this day continued to be a dark one for Jews.  In 1391, more than 4,000 Jews were killed in Toledo and Jaen, Spain and in 1559 the Jewish Quarter of Prague was burned and looted.  The Kovno ghetto was liquidated on this day in 1944 and in 1970 Libya ordered the confiscation of Jewish property.

The 17th of Tammuz also marks the beginning of the “Three Weeks,” which ends with the fast of the 9th of Av.  Some customs of mourning, which commemorate the destruction of Jerusalem, are observed from the start of the Three Weeks.  Jewish mourning customs restricts the extent to which one may take a haircut, shave or listen to music, though communities and individuals vary their levels of observance of these customs.  No Jewish marriages or other major celebrations are allowed during the Three Weeks, since the joy of such an event would conflict with the expected mood of mourning during this time.  The Three Weeks can be thought of as having a variety of increasing levels of mourning.  Some restrictions begin on the 17th of Tammuz, some from the beginning of the month of Av, and some only come into effect the week in which Tisha B’Av occurs.

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7.2  Jordan Sees 3,955 Register as Candidates for Elections

On 2 July, the first day of candidacy registration for the upcoming local twin elections, 3,955 Jordanian men and women registered across the Kingdom, the Independent Election Commission (IEC) said.  A total of 824 candidates including 63 women registered to run for governorate council membership, while the number of candidates for the membership of municipal and local councils (elected as sub-councils to run the municipal affairs of districts within the same municipality) reached 2,687, including 496 women.  Meanwhile, 444 Jordanians registered to compete for mayoralties, including only one woman.

The candidacy registration for the 15 August elections continue until 4 July, with registration forms available for candidates from the IEC’s website.  Candidates can withdraw their candidacy until 14 days prior to the voting date, in order to allow the candidates’ lists to take their final shape.  3 July also marked the beginning of the legal period for election campaigns.  (JT 03.07)

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7.3  Saudi Arabia Sees Record Temperature in Central and Eastern Parts of Kingdom

The temperature in central and eastern parts of Saudi Arabia has reached 53 degrees Celsius for the first time.  Surpassing 50 degrees is rare; in Jeddah, the temperature reached 52 degrees in 2015 and 2010.  The Presidency of Meteorology and Environment (PME) has issued daily warnings about prolonged exposure to the sun.  The extreme heat caused the Ministry of Labor and Social Development to ban working under the sun from 12:00 until 15:00 between 15 June and 15 September.  The ministry deploys inspection teams, which have detected several companies violating the ban.  (Arab News 07.07)

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8.1  Stockton’s Timorex Gold Receives BioGro Listing in New Zealand

Stockton STK announced that its biologic fungicide Timorex Gold is now listed by BioGro Certification Programme as compliant for use in organic production.  BioGro is New Zealand’s largest and best-known certifier for organic produce and products.  Timorex Gold, a two-time winner of the AGROW Awards, meets the demand of modern agriculture without compromising environmental integrity so that the farmer can safely produce sustainable, healthy and high-quality food.  This bio fungicide provides growers with more targeted and effective disease-management options, reducing stressful conditions that occur during the various stages of infectious diseases.

Petah Tikva’s Stockton STK specializes in the development and marketing of botanical-based bio pesticides. Its core focus is on the incorporation of these bio pesticides into integrated agriculture spraying programs that use conventional chemical products, thus creating a balanced, cleaner and sustainable agricultural environment.  STK is a global company and was established in 1994.  It has an active R&D center for the development of future natural products for crop protection.  Its unique research and development center in Israel invests substantial resources in developing ‘green’ products.  Stockton has a variety of products adapted to different agro ecological areas, biological parameters and regulatory guidelines.  (Stockton STK 28.06)

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8.2  Celltrion & Teva Announce. FDA Acceptance of Biologics License Application

 Incheon, South Korea’s Celltrion, a global biopharmaceutical company, and Teva Pharmaceutical Industries announced that the U.S. FDA has accepted for review the Biologics License Application (BLA) for CT-P10, a proposed Monoclonal Antibody (mAb) biosimilar to Rituxan1 (rituximab), which is used to treat patients with non-Hodgkin’s lymphoma (NHL), chronic lymphocytic leukemia (CLL), rheumatoid arthritis (RA), granulomatosis with polyangiitis and microscopic polyangiitis.  The BLA for CT-P10 includes data for CT-P10 and reference rituximab in terms of efficacy, safety, immunogenicity, pharmacodynamics (PD) and pharmacokinetics (PK).  These trials were conducted in over 600 patients and include up to 104 weeks of data. CT-P10 was approved by the European Commission in February 20172 and has launched in the U.K., Germany, Netherlands, Spain and the Republic of Korea.

Celltrion and Teva entered into an exclusive partnership to commercialize CT-P10 and CT-P6, a biosimilar to Herceptin (trastuzumab), in the U.S. and Canada in October 2016.  As part of the agreement, Teva is responsible for all commercial activities in the U.S. and Canada, pending regulatory approvals for both products.  Celltrion has responsibility for completing all clinical development and regulatory activities.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by approximately 200 million patients in 100 markets every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,800 molecules to produce a wide range of generic products in nearly every therapeutic area.  In specialty medicines, Teva has the world-leading innovative treatment for multiple sclerosis as well as late-stage development programs for other disorders of the central nervous system, including movement disorders, migraine, pain and neurodegenerative conditions, as well as a broad portfolio of respiratory products.  (Teva 29.06)

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8.3  Cannabics Pharmaceuticals Receives Positive Results in Drug Sensitivity Tests on CTCs

Cannabics Pharmaceuticals received positive results from screening necrosis (cell death) of circulating tumor cells, from cancer patients, treated with the cannabinoids CBD and CBDA.  These results greatly strengthen the company’s previously accumulated data on cannabinoid anti-tumor activity.  In addition, the screening results which indicate varied effectiveness of the tested cannabinoids upon different tumors (colon, breast, prostate) reaffirm the use of our proprietary technology in providing supportive data for personalized treatments.

Cannabics Pharmaceuticals, a U.S based public company, is dedicated to the development of Personalized Anti-Cancer and Palliative treatments.  The Company’s R&D is based in Israel, where it is licensed by the Ministry of Health for its work in both scientific and clinical research.  The Company’s focus is on harnessing the therapeutic properties of natural Cannabinoid formulations and diagnostics.  Cannabics engages in developing individually tailored natural therapies for cancer patients, utilizing advanced screening systems and personalized bioinformatics tools.  (Cannabics 30.06)

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8.4  Tristel to Invest $750,000 in Mobile ODT

The UK’s Tristel announced a strategic investment in Mobile ODT.  Tristel, the AIM-listed company, is a specialist in the manufacture of infection prevention products; it invested $750,000 in MODT in exchange for a 3.27% stake.  Francisco Soler, Chairman of Tristel and non-executive director Paul Barnes also participated in the fund raising round, alongside lead investor Orbimed Healthcare Advisors.  MODT raised total funding of approximately $10.7m via the cash call and Tristel will have a seat on the MODT board of directors.

Tristel’s Duo high-level disinfectant foam was considered the perfect partner for EVA – as it is portable and self-contained, has no requirement for water or power supply, requires no maintenance, and can be used with minimal training.  EVA is MODT’s proprietary smart-phone based medical device which allows any healthcare, no matter where they are in the world, to examine patients for signs of cervical cancer via a technique known as colposcopy.  EVA was approved by the US FDA in 2016.

Tel Aviv’s MobileODT develops optical-diagnostics devices and software services for a range of medical purposes, but especially for the early detection of cancer.  The company has created a full portfolio of solutions for healthcare providers screening for cervical cancer.  These include a mobile application for Android phones for remote-image capturing and tracking patient information; an online collaboration portal with image annotation and reporting; and a mobile colposcope.  MobileODT delivers its solutions at a cost that enables rapid uptake and wide utilization everywhere, but particularly in low-resource settings, where the need is most acute and the impact can be immediate.  (Various 03.07)

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8.5  Theranica Raises $6 Million to Combat Migraines

Theranica Bio-Electronics announced the closing of its round A of financing, led by Lightspeed Venture Partners.  Other investors participating in the round are LionBird venture capital firm and Corundum Open Innovation.  The funds, totaling about $6m will be used mainly to complete the regulatory process of the company’s first product, for acute treatment of migraine, and to bring the product to mass production.

This investment finds Theranica in the midst of its pivotal clinical study, which is being conducted now in 8 hospitals and clinics in the USA and Israel.  This is a major step in their regulatory pathway.  In parallel to completing this study, they are developing solutions for additional debilitating diseases.

Netanya’s Theranica is a medical device company, founded in 2016 with the vision of combining advanced neuromodulation therapy with modern wireless technology to develop proprietary electroceuticals that address prevalent medical conditions and diseases.  (Theranica 03.07)

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8.6  Stockton’s First Hybrid Fungicide Now Available in Guatemala

Stockton STK announced that its proprietary fungicide REGEV has received a product registration approval from Ministry of Agriculture in Guatemala.  REGEV is the first product of its kind formulated with a hybrid patented solution that delivers an effective long-lasting plant disease protection.  The fungicide features two modes of action in one unique formulation, belonging to 2-different FRAC groups (Group 7 and G1).  This new broad spectrum solution is based on the mixture of two active ingredients (AIs) in an easy-to-use solution that improves productivity, and efficiency of food production while reducing chemical load and the negative environmental impacts.  REGEV opens a new dimension in disease control enabling growers to protect plants from a wide range of plant diseases, including but not limited to: Powdery Mildews, Early Blight, Apple Scab, Alternaria, Cercospora and Cladosporium diseases in various fruit and vegetables, peanuts, coffee, rice, soybeans, cocoa, palm oil, ornamentals and others.

REGEV is expected to be available for growers during 2017 in Argentina, Colombia, Dominican Republic, Honduras, Nicaragua, Panama, Peru, and Serbia.  Other countries are in the registration process and will be available in the next coming year.  It is available in a liquid concentrate (LC) formulation.

Petah Tikva’s Stockton STK specializes in the development and marketing of botanical-based bio pesticides.  Its core focus is on the incorporation of these bio pesticides into integrated agriculture spraying programs that use conventional chemical products, thus creating a balanced, cleaner and sustainable agricultural environment.  (Stockton STK 05.07)

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8.7  Dune Medical Completes $12.3 Million in Financing

Dune Medical Devices announced the closing of a $12.3 million dollar financing round.  The company is based upon Dune Medical’s revolutionary and proprietary radiofrequency (RF) spectroscopy platform which will be applied to a variety of other cancers following the success of Dune’s first marketed product, the MarginProbe System.

The investment round was led by Canepa Healthcare, ATON Partners and the Kraft Group.  It is the ability of Dune to establish a new standard of care with its existing MarginProbe System and to further develop their RF spectroscopy platform into other applications that has generated the confidence of new and existing investors.  Since receiving FDA approval, the MarginProbe System for use in breast cancer lumpectomy procedures, has successfully demonstrated a consistent and significant reduction in re-excisions when women undergo breast conserving surgery after a diagnosis of early-stage breast cancer.  To date, three large randomized controlled trials and multiple additional peer reviewed publications have studied over 2500 women who have undergone lumpectomy with MarginProbe showing a reduction in re-excision rates up to 79%.  The impact of this reduction on quality, outcomes and cost is significant when data indicates that without effective margin assessment 20-30% of women who undergo lumpectomy for breast cancer will be faced with an additional surgical procedure to ensure negative margins.

Caesarea’s Dune Medical Devices believes in reducing the anxiety that waiting for pathology results places on a patient and their families.  They do this by developing innovative tissue characterization technologies that make it possible for physicians to more consistently eliminate cancerous tissue in the first procedure- improving the cancer care experience.  Their solutions, which are developed on a first-of-its-kind RF Spectroscopy platform can differentiate cancerous from healthy tissue based on electromagnetic properties, making it possible for patients and physicians to answer the question.  (Dune Medical Devices 06.07)

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8.8  Baxter, Ramot and Sourasky Partner to Bring New Surgical Innovations Worldwide

Baxter International, a global medical products company, and Tel Aviv University (TAU), through Ramot, its Business Engagement Center, announced new licensing agreements including global joint research efforts to evaluate multiple technologies currently under development at the university as well as at Tel Aviv Sourasky Medical Center (TASMC).  Baxter will collaborate with TAU and TASMC to help bring the early-stage research to commercialization with the goal of bringing to market the latest innovations in surgical care.  Under terms of the agreements, Baxter will exclusively license the TAU Technology Innovation Momentum Fund technology in one license agreement and TAU and TASMC technology in the second license agreement for use in multiple potential applications that might result from the joint research activity.

Baxter, TAU and TASMC plan to explore potential applications of multiple projects that target large, unmet needs that, if successful, will expand Baxter’s portfolio of products into new areas of surgical care for the company.  Surgical care represents a core strategic growth pillar for Baxter, and these projects have the potential to complement Baxter’s existing product offering and provide access to novel treatments.

Ramot is the Business Engagement Center at Tel Aviv University, Israel’s largest research and teaching university.  Rooted in both academic and corporate arenas, Ramot is uniquely positioned to cultivate the special relationships between these two compelling worlds, creating win-win connections that support fertile, groundbreaking research while providing companies with discoveries that give them a crucial competitive edge.

Tel Aviv Sourasky Medical Center (TASMC) is one of the largest academic medical centers, affiliated with the Faculty of Medicine at TAU, providing the most progressive full-service healthcare treatment and research institutions in Israel.  TASMC has international accreditation by JCI, as an academic medical center.  As a premier multidisciplinary, 1500-bed academic medical center, TASMC serves the general Tel Aviv population of over 430,000 plus the million or so daily visitors to the city.  R&D at TASMC involves high quality basic and translational research in dedicated facilities as well as expertise in clinical trials from phase one to efficacy trials in phases 2-4, approved by its Internal Review Board (IRB).  (TASMC 06.07)

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8.9  Evogene Achieves Important Milestone in Monsanto Crop Disease Collaboration

Rehovot’s Evogene, a leading company for the improvement of crop productivity and economics for food, feed and biofuel industries, reached an important milestone in its crop disease collaboration with Monsanto Company with the demonstration of positive Fusarium resistance results with Evogene discovered genes.  Additionally, Evogene announced the completion of the candidate gene discovery stage in the companies’ yield and abiotic stress collaboration, which mainly focuses on corn and soy.  The crop disease collaboration program is focused on the discovery of candidate genes predicted to provide resistance to Stalk Rot disease caused by multiple Fusarium species.  Fusarium is a family of fungi that causes yield loss across many of the world’s major crops, including corn and wheat.  In model plant validation testing, Evogene discovered genes were successful in showing resistance to Fusarium, and the top prioritized genes are now advancing to testing in Monsanto’s corn pipeline.

Evogene also announced that in its yield and abiotic stress collaboration with Monsanto for the development of improved seed traits primarily in corn and soy, Evogene successfully completed the gene discovery stage, and the collaboration will now focus on progressing selected gene candidates through additional testing in Monsanto’s product development pipeline.  During the recently completed gene discovery phase of the collaboration, Evogene identified approximately 4,000 genes predicted to be associated with individual plant traits.  (Evogene 11.07)

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8.10  Genoox Raises $6 Million

Genoox announced a $6 million investment led by Inimiti Capital Partners and Glilot Capital Partners.  A number of private investors from the genetic field also participated.  The new capital will be used to expedite the company’s genomic services and provide medical facilities with innovative solutions to help solve real and pressing healthcare problems in the US.  With the expansion into the U.S. market, Genoox will help medical facilities integrate clinical genetic sequencing data into their patient workflow by providing the most modern data mining and analysis technologies.  Genoox claims to be unique in its ability to simplify data management and interpretation, driving broader adoption of genomic information in patient treatment decisions by accelerating the collection, analysis and application of genetic sequencing data worldwide.  For clinicians, Genoox creates value by translating complex genetic data into specific, actionable insights that can be shared with the patient.

Founded in 2014, Tel Aviv’s Genoox is a global company founded by an experienced team of geneticists, bio-informaticians, engineers and technology experts with a passion for life science, big data, high-performance computing and a clear vision to revolutionize the way genomic data is shared, stored and analyzed.  Genoox removes the final barrier to widespread adoption of clinical NGS, enabling personalized medicine for mainstream patients.  Their platform is used in the diagnosis and treatment of genetic disorders and cancer, as well as new drug discovery and family planning.  In 2017, Genoox was chosen as a partner of the Israeli government, tapped to analyze the genetic sequencing of more than 100,000 citizens.  (Various 11.07)

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8.11  CURE & Therapix Signs MOU with Assuta Medical Center to Develop Therapeutic Products

Oxnard, California’s CURE Pharmaceutical, a leading disruptive drug delivery technology and pharmaceutical cannabinoid molecule development company and Therapix Biosciences announced that they signed a memorandum of understanding (MOU) to enter into a research collaboration with Israel’s largest and leading private medical services center, Assuta Medical Centers.  The Companies will collaborate to advance, research, develop and commercialize potential therapeutic products in the fields of personalized medicine and cannabinoids.  As agreed to in the MOU, the Companies intend to formalize the pooling of professional, scientific, financial resources and expertise, in order to benefit from each of its respective advantages and capabilities to develop new therapeutic products in the fields of personalized medicine and cannabinoids.  Specifically, CURE and Therapix will provide support and expertise in the development of pharmaceutical products, while Assuta will support the early research and development of potential projects through its research and facilities.

Tel Aviv’s Therapix Biosciences is a specialty clinical-stage pharmaceutical company focused on developing technologies and therapeutics based on cannabinoid pharmaceuticals.  The Company’s clinical pipeline assets follow a de-risked 505(b)(2) regulatory pathway benefitting from Therapix’s unique proprietary formulations based on repurposing an FDA approved synthetic cannabinoid (dronabinol).

Assuta Medical Centers is the largest private hospital network in Israel operating 8 hospitals and medical centers from north to south.  Owned by Maccabi Healthcare, the second largest HMO in Israel, Assuta accounts for about 15% of the surgeries in Israel and takes care of the health of more than 1 million patients yearly.  (CURE Pharmaceutical 11.07)

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8.12  ReWalk Robotics Announces French Distribution Agreement with Harmonie Medical Service

ReWalk Robotics has signed a new, exclusive distribution agreement in France with Harmonie Medical Service (HMS).  Through the agreement, HMS will serve as the sole distributor of ReWalk exoskeleton systems to qualifying candidates with spinal cord injury (SCI) across France.  HMS, one of the largest medical device providers in the country, will be able to distribute both ReWalk Personal systems for use in the home and community and ReWalk Rehabilitation systems in clinical rehabilitation settings of providers working with individuals with SCI.

The ReWalk 6.0 offers new medical and social opportunities to individuals with spinal cord injury.  In signing this exclusive distribution contract with ReWalk, HMS will foster the arrival of this new technology throughout France.  Established in 1789, HMS is a renowned health service provider in France, with branches throughout the country and more than 500 employees.  The distribution agreement with ReWalk will apply to all of the HMS offices across France.

Founded in 2001, Yokneam Elite’s ReWalk Robotics develops, manufactures and markets wearable robotic exoskeletons for individuals with spinal cord injury.  ReWalk’s mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies.  (ReWalk Robotics 11.07)

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9.1  BIRD Foundation to Invest $7 Million in Eight New Projects

During its meeting on 14 June 2017, held in Washington, DC, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation approved $7 million in funding for eight new projects between U.S. and Israeli companies.  In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of all projects to approximately $18.5 million.

Projects submitted to the BIRD Foundation are reviewed by evaluators appointed by the U.S. National Institute of Standards and Technology (NIST) and by the Israel Innovation Authority (formerly the Office of the Chief Scientist- OCS – at the Israel Ministry of Economy and Industry).  The eight projects approved by the Board of Governors are in addition to the 940 projects which the BIRD Foundation has approved for funding during its 40 year history.  To date, BIRD’s total investment in joint projects has been about $340 million, helping to generate direct and indirect sales of more than $10 billion.  The projects approved include:

    • -Atvio (Nesher, Israel) and Secant Group (Telford, PA): 3D culture platform of therapeutic cells manufactured using advanced biomaterials.
    • -C4 Systems (Tel Aviv, Israel) and Churchill Navigation (Boulder, CO): Airborne AR Mission System for First Responders.
    • -Check-Cap (Isfiya, Israel) and GE Healthcare (Marlborough, MA): Development of C-Scan colon cancer screening system for high volume manufacturing.
    • -Isorad (Yavne, Israel) and Synrad (Mukilteo, WA): Development of new laser technologies for industrial applications.
    • -Melodea (Rehovot, Israel) and ICL Performance Products (St. Louis, MO): Development of Cellulose Nanocrystal (CNC) based formulations for innovative environmentally friendly architectural and industrial water-based coatings.
    • -Nutrino Health (Tel Aviv, Israel) and Welltok (Denver, CO): Creation of personalized nutrition recommendations for employers and health plans to support consumers in their daily lives.
    • -OpSys Technologies (Holon, Israel) and sdPhotonics (Orlando, FL): Innovative development of solid-state miniature Lidar sensors for autonomous vehicles.
    • -Pill Tracker (Tel Aviv, Israel) and Target Health (New York, NY): Medication Tracking – Drug Compliance Saves Lives.


The deadline for submission of Executive Summaries for the next BIRD cycle is 7 September 2017.  Approval of projects will take place in December 2017.

The BIRD Foundation supports projects without receiving any equity or intellectual property rights in the participating companies or in the projects, themselves.  BIRD funding is repaid as royalties from sales of products that were commercialized as a result of BIRD support.  The Foundation provides funding of up to 50% of a project’s budget, beginning with R&D and ending with the initial stages of sales and marketing.  The Foundation shares the risk and does not require repayment if the project fails to reach the sales stage.  (BIRD 28.06)

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9.2  Demisto Introduces First Machine Learning Incident Response Platform That Gets Smarter

Demisto introduced the industry’s first Security Operations Platform that learns from analysts’ actions used to resolve incidents to optimize future incident response.  The new machine learning-based technology, called “Demisto Insights” and available in the latest version of Demisto Enterprise, helps analysts during an investigation by suggesting the best methods to resolve an incident.  Such machine learning technology marks the first time in the security industry when a solution learns from experts rather than relying only on past historical security data.

The security industry faces a significant shortage of skilled incident response (IR) analysts.  While automation is being used to help analysts reduce manual work, organizations need to be able to learn from experienced analysts’ actions to help educate and train younger analysts to solve problems faster.  With this new release, Demisto offers the industry’s most comprehensive Security Operations Platform with pre-built automation playbooks, more than one hundred integrations, incident case management, threat feed aggregation and correlation with incidents, and now machine learning that improves the analysts’ productivity.

The latest release of Demisto Enterprise enhances the playbook authoring interface and also provides a live runtime review of the playbook execution.  In addition, a new language called “Demisto Transform” has been introduced which helps IR analysts build complex playbooks for automation much faster and without writing any code.  All these capabilities enhance the experience of security analysts by making it even easier to build automations and to review the results of the investigation.  The platform highlights the findings in a single, improved view to give analysts all the details needed for decision making.

Tel Aviv’s Demisto Enterprise is the first and only comprehensive Security Operations Platform to combine security orchestration, incident management, machine learning from analyst activities, and interactive investigation.  Demisto’s orchestration engine automates security product tasks and weaves in the human analyst tasks and workflows.  Demisto enables security teams to reduce mean time to resolution (MTTR), create consistent incident management process, and increase analyst productivity.  (Demisto 28.06)

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9.3  GuardiCore Wins Gold in Cloud Security & Bronze in Startup of the Year at IT World Awards

GuardiCore announced that Network Products Guide, the industry’s leading technology research and advisory guide, has named GuardiCore as a Gold Cloud Security category winner for its GuardiCore Centra Security Platform and a Bronze winner in Startup of the Year – 2013 category in the 12th Annual 2017 IT World Awards.  Network Products Guide honors achievements and recognitions in every facet of the IT industry.

As a Network Products Guide winner, GuardiCore is recognized as an innovator in data center and cloud security focused on delivering more accurate and effective ways to stop advanced threats through real-time breach detection and response.  GuardiCore’s flagship product, the GuardiCore Centra Security Platform, is the only security product on the market today that provides a single, scalable platform that covers five critical capabilities for effective data center security and protection: flow visualization, micro-segmentation, breach detection, automated analysis and response.

Tel Aviv’s GuardiCore is an innovator in data center and cloud security focused on delivering more accurate and effective ways to stop advanced threats through real-time breach detection and response.  Developed by the top cyber security experts in their field, GuardiCore is changing the way organizations are fighting cyber-attacks in their data centers.  (GuardiCore 28.06)

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9.4  DMG Launches A.I. Brand Safety Tool BrandX

DMG DSNR Media Group launched BrandX, a new artificial intelligence tool that can prevent fraudulent traffic and predict the completion rates of video ads during programmatic advertising auctions.  The two most uncertain factors in video programmatic advertising are invalid traffic and brand awareness efficiency.  As real-time auctions became commonplace, advertisers endured trial and error to adjust their bidding algorithms based on past rates.  With machine learning, BrandX helps mitigate advertisers’ uncertainty in milliseconds and adds transparency to real-time bidding.  By working to block invalid traffic and predicting completion rates, BrandX offers advertisers the opportunity to raise or lower a bid accordingly.

BrandX tests the traffic originating from publishers on DMG’s SSP and assigns a traffic risk score.  The tool filters inventory through DMG’s unique quality assurance engine, which results in 3% higher filtering.  Using other tools like Forensiq and DMG’s proprietary technology, many instances of fraudulent traffic are blocked. DMG’s partners get high-quality, premium levels of clean traffic.  The new features will be part of the bid request as extensions for the Open RTB protocol.

Ra’anana’s DMG Resources is a leading digital advertising agency, providing both direct and programmatic advertisers and publishers with data-driven solutions and patented technologies.  (DMG Resources 28.06)

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9.5  ECI Recognized for Best Optical Test & Measurement Product at NGON Europe 2017

ECI, a global provider of ELASTIC Network solutions, for service providers, critical infrastructures and data centers operators, announced it won the “Best Test & Measurement Product” award during the Next Generation Optical Networking (NGON) and Optical DCI 2017 conference for its LightPULSE intelligent wavelength management tool.  The award honors innovative products that address technology, pricing, support and management in the optical networking industry, with awards judged by top experts in the industry.

LightPULSE allows service providers to accurately understand and monitor optical impairments in real time, as well as track changes and analyze trends in optical performance over time.  The unique and comprehensive LightPULSE tools make monitoring easy, all at the click of a mouse.  This includes next-generation photonic networks with CDC ROADMs, coherent technology, and 400G super-channels.  As an embedded tool it allows any wavelength, whether ECI or third-party, to be securely monitored throughout its entire optical span, without interruption or using additional equipment.  LightPULSE ensures a better quality of service, OPEX reduction with fewer truck rolls and equipment investments, and an overall reduction of errors through dynamic and ongoing readjustments and troubleshooting capabilities.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical infrastructures as well as data center operators.  Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cybersecurity solution, and a range of professional services.  ECI’s ELASTIC solutions ensure open, future-proof, and secure communications.  With ECI, customers have the luxury of choosing a network that can be tailor-made to their needs today while being flexible enough to evolve with the changing needs of tomorrow.  (ECI 28.06)

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9.6  Flash Networks Teams with ZTE to Deliver Fully Virtualized Network Optimization Solution

Flash Networks announced a new strategic global partnership for NFV – based optimization solutions with ZTE Corporation.  This partnership enables Flash Networks and ZTE to specifically address the growing need for a holistic approach to virtualized services in the mobile core.  Strong collaboration at the R&D level enabled the seamless integration of network optimization into ZTE’s virtualized EPC environment.  The unique offering includes engagement services addressing subscriber QoE, security and mobile network monetization.  Both companies expect this partnership will open new opportunities in the Chinese market and beyond.

Flash Networks’ optimization solutions improve the quality of user experience and increase RAN spectral efficiency, accelerating traffic across LTE network while reducing the volume of web and video traffic data.  The network optimization solution utilizes a multi-dimensional approach that results in measurable value from radio spectral efficiency to the mobile core.  ZTE selected Flash networks’ optimization solution following rigorous testing in a multi-vendor environment, designed specifically to verify the interoperability of different configurations of hardware resource layers, virtual resource layers and virtualized network functions (VNF) layers.

Herzliya’s Flash Networks is a leading provider of virtual and physical optimization solutions that enable operators to improve RAN spectral efficiency, boost network speed, optimize video and web traffic, secure and engage subscribers and generate over-the-top revenues from the mobile internet.  With offices in North America, Europe, Israel and Asia, Flash Networks services millions of subscribers daily and is proud to count among its customers top-tier mobile leading Global carriers.  (Flash Networks 28.06)

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9.7  Intelsat & Gilat Mobile Reach Solar 3G Solution for Mobile Network Operators in Remote Areas

Luxembourg’s Intelsat, operator of the world’s first Globalized Network, powered by its leading satellite backbone, and Gilat Satellite Networks announced a joint managed services solution to provide 3G infrastructure in the most remote locations around the globe, where terrestrial services are not feasible.  Mobile Reach Solar 3G is an end-to-end managed solution for mobile network operators (MNOs) who want to expand their service footprint efficiently into ultra-rural regions where traditional network buildouts are uneconomical.  The turnkey, solar-powered package combines Intelsat connectivity, including services from the Intelsat EpicNG high-throughput satellite (HTS) platform, bundled with Gilat’s industry proven VSAT system for small cell and cellular backhaul.  The combination provides everything an MNO needs to expand 3G service over a 2.5-kilometer radius, including power supply, mono-pole, and all satellite and cellular equipment.

Mobile Reach Solar 3G is a small-cell over satellite package that can be carried by hand and installed by just a few people. It is intended for MNOs looking to extend services and address market needs, where unreliable or non-existent power supplies requires diesel generators to provide consistent service levels. In those environments, maintaining equipment and securing fuel can be the most difficult and expensive part of keeping traditional cell towers operational.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications.  With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology.  Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC).  (Gilat 29.06)

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9.8  Foresight Demonstrates Its Multispectral Advanced Driver Assistance System

Foresight Autonomous Holdings announced that following a number of field tests conducted with a prototype, it has successfully completed proof of concept of its multispectral road traffic accident prevention system, which features both thermal and visible light cameras.  In light of the emerging market demand for such products and the successful proof of concept completion, the company has decided to continue the rapid development of the system, which will include advanced image processing algorithms, and the consolidation, control and cross-checking of all data received from the system cameras.  Foresight estimates that it will be able to complete development of a real-time demonstration within three months.

The new system is designed to provide multispectral vision capabilities, by combining four cameras operating at varying wavelengths (beyond human vision capabilities), thereby presenting a comprehensive solution for the front of the vehicle, which will detect all obstacles under any weather and lighting conditions, including complete darkness, smoke, haze, fog, rain and glare.  Currently, the company is unaware of any other commercially available systems with these capabilities.

Ness Ziona’s Foresight, founded in 2015, is a technology company engaged in the design, development and commercialization of Advanced Driver Assistance Systems (ADAS) based on 3D video analysis, advanced algorithms for image processing and artificial intelligence.  The company, through its subsidiary, develops advanced systems for accident prevention, which are designed to provide real-time information about the vehicle’s surroundings while in motion.  The systems are designed to alert drivers to threats that might cause accidents, resulting from traffic violations, driver fatigue or lack of concentration, etc., and to enable highly accurate and reliable threat detection while ensuring the lowest rates of false alerts.  (Foresight 05.07)

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9.9  IBM QRadar & Waterfall Unidirectional Security Gateway Deployed Jointly at Dorad Energy

Waterfall Security Solutions announced the successful deployment of its Unidirectional Security Gateway together with IBM’s QRadar Security Intelligence solution at Dorad Energy.  Dorad is an independent power producer serving end users throughout Israel, fueled primarily by natural gas.  The IBM QRadar SIEM Security Intelligence and Sense Analytics products protect assets and information from advanced threats by consolidating log events and network flow data from thousands of devices, endpoints and applications distributed throughout a network.  It normalizes and correlates raw data to identify security offenses, and uses an advanced Sense Analytics engine to baseline normal behavior, detect anomalies, uncover advanced threats, and remove false positives.

Waterfall’s Unidirectional Security Gateway is an evolutionary alternative to firewalls, protecting the safety and reliability of industrial systems in ways that firewalls simply cannot match.  The Gateway creates an impassable, physical barrier eliminating the possibility of external online attacks, while enabling business processes to proceed as usual.  Waterfall’s Unidirectional Gateway family of products are recognized to reduce the cost and complexity of compliance with NERC CIP, NRC, NIST, ANSSI, ISA, and other standards, regulations and best practices.

Rosh HaAyin’s Waterfall Security Solutions is the global leader in industrial cybersecurity technology. Waterfall products, based on its innovative unidirectional security gateway technology, represent an evolutionary alternative to firewalls.  The company’s growing list of customers includes national infrastructures, power plants, nuclear plants, off and on shore oil and gas facilities, refineries, manufacturing plants, utility companies, and many more.  Deployed throughout North America, Europe, the Middle East and Asia, Waterfall products support the widest range of leading industrial remote monitoring platforms, applications, databases and protocols in the market.  (WSS 05.07)

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9.10  IAI Expands JV with Kalyani Group to Build New Maintenance Center in India

As part of Indian PM Modi’s visit to Israel, executives from Israel Aerospace Industries (IAI) and Kalyani Strategic Systems (KSSL), the defense arm of a Kalyani Group, signed a Memorandum of Understanding (MOU) addressed to expand the joint venture that the companies are establishing.  The new MOU covers the establishment of a maintenance center for selected advanced air defense systems in Hyderabad in the state of Telengana in India.  The two companies have also agreed on expanding their joint operations to development, manufacturing and marketing of precise ammunition systems.  In February 2017, IAI signed an MOU with Kalyani Group establishing a joint venture that will develop, build, market and manufacture selected air defense systems and lightweight special purpose munitions, in accordance with the Indian Government’s ‘Make in India’ policy.

Israel Aerospace Industries (IAI) is a globally recognized leader in the delivery of state-of-the-art systems for the defense and commercial markets. IAI offers unique solutions for a broad spectrum of requirements in space, air, land, sea, cyber, and HLS.  IAI is the largest government owned defense and aerospace company in Israel.  Over the past 60 years IAI delivered, supplied and supported advanced systems for the Israeli Ministry of Defense as well as many demanding customers worldwide.  (IAI 05.07)

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9.11  Mellanox’ Spectrum-2 – World’s Most Scalable Gigabit Open Ethernet Switch Solution

Mellanox Technologies announced the Spectrum-2, the world’s most scalable 200 gigabit and 400 gigabit Open Ethernet switch solution.  Spectrum-2 is designed to set new records of data center scalability, more than 10 times higher than market competitors, and reduces data center operational costs by delivering 1.3 times better power efficiency.  Moreover, Spectrum-2 provides new levels of programmability and optimizes routing capabilities for building the most efficient Ethernet-based compute and storage infrastructures.  Spectrum-2 provides industry-leading Ethernet connectivity for up to 16 ports of 400GbE, 32 ports of 200GbE, 64 ports of 100GbE and 128 ports of 50GbE and 25GbE, and enables a rich set of enhancements, including increased flexibility and port density, to build a variety of switch platforms optimized for cloud, Hyperscale, Enterprise data center, big data, artificial intelligence, financial, storage and more applications.

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 Technologies 06.07)

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9.12  AudioCodes Announces CCE Hub Solution for Microsoft Cloud PBX Environments

AudioCodes announced the launch of its CCE Hub solution.  The CCE Hub solution is designed to be deployed in Microsoft Cloud PBX or hybrid cloud environments where Cloud Connector Edition (CCE) is used to provide interconnectivity with the PSTN, SIP trunks and existing PBX and IP-PBX platforms.  By eliminating the need to locate CCE servers at branch offices and locating them instead centrally at the datacenter, AudioCodes’ CCE Hub solution delivers simplified, scalable and cost-effective voice interconnectivity for multi-site Cloud PBX deployments for both enterprises and service providers.  AudioCodes’ CCE Hub solution affords distributed enterprises and service providers increased flexibility when deploying voice services based on Cloud PBX.  Through AudioCodes’ wide range of field-proven products such as session border controllers and digital and analog gateways, enterprises and service providers can choose how to deploy the solution in the most cost-effective way while maintaining existing contracts and meeting local regulatory requirements (such as for emergency calling).

AudioCodes designs, develops and sells advanced Voice-over-IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises.  AudioCodes is a VoIP technology market leader, focused on converged VoIP and data communications, and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable.  The Company provides a range of innovative, cost-effective products including Media Gateways, Multi-Service Business Routers, Session Border Controllers (SBC), Residential Gateways, IP Phones, Media Servers, Value Added Applications and Professional Services.  AudioCodes’ underlying technology, VoIPerfectHD, relies on AudioCodes’ leadership in DSP, voice coding and voice processing technologies.  AudioCodes’ High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications.  (AudioCodes 10.07)

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9.13  Komodo, RoboTiCan’s Multipurpose UGV Robot Reveals Seamless Quadcopter Integration

RoboTiCan revealed full-scale deployment of unmanned ground vehicle (UGV) robot integration with quadcopter technology using the RoboTiCan’s Komodo mobile robotic platform.  The successful project is the brainchild of Dr. Noa Agmon and Prof. Gal Kaminka from the Department of Computer Science at Bar-Ilan University, who developed the quadcopter integration process with Komondo as a key component.  The Komodo was integrated to an aerial robot in a specific environment for two purposes: to provide the ground robot and its operator a bird-eye view behind the horizon of the robot’s sensors; and for the drone to provide the Komodo an “anchor point” to improve its position and orientation.  By harnessing this technology, one aerial drone can support numerous ground robots by providing feedback of their relative position and helping control the GMV’s formation while in motion.

Beer Sheva’s RoboTiCan was founded eight years ago by mechanical engineers and computer scientists who specialized in electro-mechanics and vision technology.  After amassing years of experience in the delivery of high-end products around the world to defense organizations, academia and governments, RoboTiCan dedicated itself to become the leader in the autonomous robotic industry, while providing cutting-edge robots for special purposes and diverse environments.  (RoboTiCan 10.07)

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9.14  GPSdome Conducted Successful Airborne Tests of its GPS Anti-Jammer & Anti-Spoofer

GPSdome has performed successful airborne tests of its Cyber device for protection against GPS jamming and spoofing.  The tests were conducted jointly with Bluebird Aero Systems, which specializes in unmanned aerial vehicles (UAV).  The GPSdome was installed on a Bluebird small UAV in order to test its GPS protection during a flight under jamming conditions.  The successful tests showed that the GPSdome-protected UAV continued functioning under jamming attacks and retained its GPS reception, while the unprotected UAV lost the GPS signal.  The GPSdome is a perfect solution for small UAV and other unmanned vehicles, which require a miniaturized solution that doesn’t reduce their range of action.

Caesarea’s GPSdome developed a cyber protection solution against jamming and disruption for GPS-based systems.  Its competitive advantage is its affordable price comparing to existing solutions that were developed for military applications, while GPSdome has been better designed for civilian applications.  The company’s development team includes electronic warfare (EW) engineers who previously worked for the defense industries, and have developed the GPSdome based on advanced military technologies.  However, innovative miniaturization technologies and product adjustments to civilian applications enabled lowering its price significantly.  (GPSdome 11.07)

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10.1  Israeli Exports to India Rise by 60% Over Past 10 Years

Bilateral trade between Israel and India has risen by some 2,000% since the two countries established diplomatic relations in 1992, growing from $200 million in 1992 to $4.17 billion in 2016, the Ministry of Economy and Industry announced on 27 June.  In a special report on Israel and India’s trade ties, issued ahead of Indian Prime Minister Narendra Modi’s historic three-day visit to Israel, the Ministry stated that Israeli exports to India have grown by 60% over the past decade.  PM Modi is expected to be accompanied on his visit to Israel by a delegation of some 100 business representatives.

In 2016, Israeli exports to India totaled $1.15 billion (not including diamonds), a drop of 13%, from 2015, when they totaled $1.3 billion.  The 2015 figure was 21% higher than the previous year.  In 2016, India ranked as the ninth most important export target for Israel.  This has been attributed to increasingly warm bilateral relations between the two countries, which now collaborate closely on projects in the fields of defense, agriculture, science, health, information technology and telecommunications.  (MoE 27.06)

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10.2  Israel’s Incoming Tourism Increases 28% in June

Some 303,000 tourists entered Israel in June 2017, 28% more than in June 2016.  The 1.74 million tourists that visited Israel in H1/17 were 26% more than in the corresponding period last year and 24% more than in the corresponding period in 2015.  The number for January-June is an all-time record for incoming tourism to Israel.  The Ministry of Tourism estimates the revenue from incoming tourism in this period at NIS 9.4 billion.  The biggest increase was a 76% rise in tourism from China, while tourism from Russia rose by 30% and tourism from the US, the largest source of tourism to Israel, by 20%.  The impressive June figures trailed behind the figures for April and May, with 350,000 tourists visiting Israel in each of those months.  (MoT 10.07)

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10.3  OECD Finds Life Expectancy in Israel High Although Health Care Needs Improvement

Life expectancy in Israel is among the highest in the developed world, but the country lags behind in terms of health care infrastructure and investment, a report comparing the Israeli health care system to that of other nations in the Organization for Economic Cooperation and Development (OECD) announced on 2 July.  According to the report, which covers data from 2015, the average life expectancy in Israel is 82.1 years, compared to an average of 80.5 years among OECD countries.  Israeli men enjoy an average life expectancy of 80.1 years, while the average life expectancy for Israeli women is 84.1 years.

The countries with the highest life expectancy were Japan (83.9 years), Switzerland (83 years) and Spain (83 years). The countries with the lowest life expectancy were Hungary (75.5 years), Mexico (75 years) and Latvia (74.6 years).

Israel’s health care system, however, was found to be rather lacking.  While the OECD average of nurses per 1,000 citizens is 9.9, in Israel there are only 4.9 nurses per 1,000 Israelis.  The country with the most nurses is Switzerland, the report found, where there are 18 nurses for every 1,000 citizens.  The lowest number of nurses was found in Turkey, with only 2 nurses for every 1,000 citizens.  Another alarming finding is the number of Israelis who complete medical school.  In 2015, only 5.5 students completed medical school for every 1,000 citizens.  The only country with fewer graduates was Luxembourg.  The OECD average is 12.1 graduates for every 1,000 citizens.  The highest number of graduates was found in Portugal, with 15.9 per 1,000 citizens.

As far as the number of hospital beds, the findings are just as pessimistic.  The report describes unbearable crowding in Israeli hospitals at peak times.  The number of hospital beds in Israel is 3 per 1,000 citizens, in contrast with the OECD average of 4.7.  The report also described a particularly high patient participation in health care costs in Israel. Israeli citizens privately pay for 39% of their health care costs, whereas the OECD average is 27.5%.

On the bright side, in addition to an exceptionally high life expectancy, Israel also has a relatively low suicide rate – 5.5 suicides for every 1,000 citizens as opposed to a 12.1 suicide average among the OECD countries.  (OECD 02.07)

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11.1  ISRAEL:  High-Tech Exits Totaled $1.95 Billion in 57 Deals in the First Half of 2017

On 5 July, IVC and law firm Meitar Liquornik Geva Leshem Tal announced that In the first half of 2017, Israeli high-tech exits totaled $1.95 billion in 57 deals.  There were 46 merger and acquisition (M&A) deals in the first half of 2017, seven initial public offerings (IPOs) and four buyouts, totaling $1.51 billion, $227 million and $218 million, respectively.  The average exit deal in the first half of 2017 was only $34 million, much lower than the annual exit average of $87 million in 2016.  Exits in the first half of 2017 were at a five-year low, both in terms of deal number and total amount.

The largest deals in the first half of 2017 were the $340 million acquisition of Valtech by Edwards Lifescience (US) and $200 million acquisition of Juno LAB by Gett (Israel), followed by the $170 million acquisition of Servotronix by Midea (China).  The top three deals accounted for more than $700 million, nearly 36% of total exit deals in the first half of 2017.

IPOs showed a relative recovery in the first half of 2017, with seven IPOs grossing $227 million.  Both the number of IPOs and amounts of money were higher than last year’s figures, which reached a mere $22 million in five IPO transactions.

Meitar Liquornik Geva Leshem Tal partner Adv. Alon Sahar said that global changes, such as those related to a possible fundamental change in the US taxation regime, or regulatory changes in China related to the right of businesses to spend capital outside the country, partially explain the slowdown.

He said, “The current report, covering the first half of 2017, alongside the second half of 2016, indicate a clear trend – a decrease in the number of merger and acquisition deals, which requires an explanation.  We believe that the possible change in taxation regime in United States forces American acquirers to rethink their capital management strategies, which greatly affects modelling the deals in process.  The regulatory boundaries in China suspended significant activity by Chinese acquirers, or discouraged Israeli companies from negotiating with potential Chinese acquirers.”  Sahar added: “It is important to remember that a large portion of companies which were very active in the local acquisitions arena underwent significant organizational changes related to their core activities.  Naturally, changes delay decision making on M&A deals, regardless of the Israeli market.  When a corporate strategy matures, corporations implement it, usually through acquisitions. Sometimes the acquired company is at the core of the strategic change.  A case in point is the Mobileye acquisition by Intel, which is expected to be closed by the end of this year.  Sometimes, however, acquisitions are the missing piece in the puzzle.”

According to Sahar, in recent years, that same Microsoft performed a series of cyber security acquisitions locally after having frozen virtually all M&A activity in Israel, becoming an active acquirer locally.

Meitar Liquornik Geva Leshem Tal partner Adv. Dan Shamgar suggests an additional explanation for the decrease in the number of M&As.  “We should take into account the noticeable growth in the volume of investments and the availability of capital for growth stages.  The number of deals in which companies raise tens of millions in dollars in proceeds has never been higher.  The increasing variety of investors supporting late stage companies and the capital volume which has been available to companies for growth purposes – are the largest ever.”

Shamgar mentions often-heard suggestions, according to which private company valuations are too high, which creates an unbridgeable gap between ask and bid prices.  “Some claim this is the industry’s way to support more significant companies, and that the value creation will occur later.  Although we took part in a number of significant M&A deal negotiations that were not carried out due to price gaps, we believe that there are more mature companies in Israel than ever.  We may only hope that this fact will be translated into deals with higher prices than we have seen in the past.”

IVC Research Center CEO Koby Simana believes there are two sides to this coin.  “A healthy industry needs the right mix, including growth-stage technology companies – which strengthen the industry, but also the ability to realize investments and return money to investors, with exits being one option.  It is possible that investment trends in growth companies created an overshooting of growth investments, resulting in investor and entrepreneur reluctance to sell companies and realize their investments at current market value, in hope of possible better returns in the future.  However, I believe that the first half-year has not seen enough company acquisitions, and among the ones that were acquired, we did not see enough medium to large deals, of the type the venture capital industry is after.  We hope that the industry will regain a healthier balance in the second half of 2017.”

Israeli companies continued their local shopping spree in the first half of 2017, though at lower volumes than in previous years.  Two-sided Israeli M&A deals captured 40% of dollar volume in acquisition made by Israeli companies in 2017 so far, both in Israel and abroad.  The most prominent Israeli through and through deal was with Gett acquiring Juno LAB for $200 million (the second largest deal closed in 2017 so far).  A total of 15 such deals were recorded since the beginning of the year, garnering $256 million, which represents a 79% year-on-year decrease: in 2016, 34 deals involving Israeli companies on the both sides accounted for $1.2 billion in total. In the first half of 2017, Israeli companies spent $389 million on acquisitions of foreign companies, in 16 deals.  (IVC-Meitar 05.07)

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11.2  ISRAEL:  India and Israel: A Strategic Alliance?

Oded Eran posted in INSS Insight No. 951 on 6 July that the visit to Israel by Indian Prime Minister Narendra Modi can be seen as a milestone in an international relations process that has afforded Israel a new set of formal and informal alliances.  Israel’s ties with India and China represent a major shift in the foreign relations component of Israel’s overall strategic balance, although the two rising Asian powers are very different from each other and pose different dilemmas for Israel.  Navigating between China and India, monitoring their different economic clocks, and juxtaposing these trends with global developments requires skilled and artful coordination on diplomatic, economic, security, public and private sectors levels.  All these sectors in Israel will be heavily engaged by the country’s intricate relations with India and China.

The second decade of the twenty-first century has brought tremendous shifts in Israel’s map of international relations, amounting to a new set of formal and informal alliances.  The visit to Israel by Indian Prime Minister the Honorable Narendra Modi (4-6 July 2017) can be seen as one of the milestones in this process.

India, with its sizable Muslim community, as a founder of the non-aligned bloc trying to wean Arab states away from automatic support for its arch enemy, Pakistan, and with its dependence on Arab oil and remittances of Indian workers in the Gulf, always sided with the Arab bloc when the Israel-Arab conflict reached UN organs.  The collapse of the Soviet bloc, the 1991 Madrid Conference, which later ushered in the beginning of direct talks and agreements with Israel, and the establishment in 1992 of a center-left government in Israel, brought India, as well as the other Asian giant, China, to establish full diplomatic relations with Israel.  Over the years, the pattern of these two countries’ votes has not changed, and Israel’s major diplomatic and economic efforts were directed west – at the US and Europe.  A major exception was Israeli weapons exports, which ended in 2000 in the case of China but have even increased in the case of India.

Modi’s election as India’s Prime Minister accelerated the process of improved relations between the two countries and their exposure to the public.  When he came to power in 2014, the turmoil in the Arab world had already tarnished the perception of a cohesive bloc wielding political and economic power and influence; this helps explain the decoupling in India’s attitude to Israel and the Palestinians.  PM Modi visited Israel but did not feel the need to balance it with a visit to Ramallah, even though Abu Mazen was warmly received in Delhi.  Thus developments in the Arab world indirectly facilitated the progress, which is based on three of India’s growing imperatives: expanding the economic base and engines of growth; improving the quality of life of the Indian population; and combating terror.

The economy of India is based heavily on services and particularly IT, which accounts for almost 60% of GDP.  Industry accounts for less than of 25% and agriculture even less, although this sector is the largest employer.  If India aims at creating a more balanced economy, Israel could provide assistance, marginal but not insignificant, in water management and utilization and the development of certain crops.  Production of potable water with Israel’s advanced technology in desalination will improve the quality of life of a large part of India’s population, especially in arid zones.

In the Joint Statement summing up the visit, the two Prime Ministers referred to the “strategic partnership in water and agriculture.”  An increase in the industrial share of India’s economy will require inter alia the development of industrial R&D and the ongoing ability to maintain the innovative edge.  In both there is merit in the bilateral cooperation, and Modi and Netanyahu agreed on establishing the India-Israel R&D and Innovation Fund of $40 million.  The two countries also agreed on cooperation in atomic clocks, GEO-LEO optical links, and other scientific areas, including health.  Seven agreements were signed during the visit, creating a new, higher level for the expanding relations.

The bilateral cooperation in the security field is moving from sales from Israel to India to co-production. There is of course the danger that eventually Israeli sales will decline dramatically.  The two countries can jointly find solutions relying on Israel’s innovations in weapons design and development or finding third party markets.  A separate issue in the realm of security is the cooperation in combatting terror, which has targeted both countries.  Notwithstanding the different circumstances in the two countries, methodology and equipment are areas for Israel-India cooperation.

When Netanyahu and Modi met, there were two other leaders not present but looming in the background: Presidents Trump and Xi Jinping.  The Israeli and Indian leaders can find a common language with the new US President more easily than with his predecessor.  In the quest to re-assert itself in key regions in the world, the US may find Israel and India willing to participate in an informal “coalition of the willing.”  This willingness could, for example, start with a strategic dialogue on the region stretching from the Mediterranean to the Indian Ocean and other subjects of common interest.  Indeed, the Joint Statement speaks of an overall “strategic partnership” in describing the bilateral relations.

The Chinese factor is complicated, particularly for Israel, as it tries to expand its economic and scientific relations with China.  The broad military cooperation between India and Israel is in stark contrast to the total void in this sector of Israel-China relations imposed on Israel by the US. China has turned a blind eye to this comparison but it may not look kindly on even a tacit India-Israel dialogue related to its zone of immediate security interests, especially under the auspices of the US.

The relations Israel has forged with these two rising Asian powers represent a major shift in the foreign relations component of Israel’s overall strategic balance.  The two are very different from each other and pose different dilemmas for Israel.  While it may seem that the common language, the greater resemblance of political system, and the existence of a Jewish and Indian diaspora in the US are assets in developing relations more easily and rapidly with India, China offers Israel larger and more attractive economic opportunities in the short and medium terms.  Navigating between China and India, monitoring their different economic clocks, and juxtaposing these trends with global developments requires skilled and artful coordination on diplomatic, economic, security, public, and private sectors levels.  All these sectors in Israel will be heavily engaged by the intricate relations with India and China.  (INSS 06.07)

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11.3  LEBANON:  Election Deal Shows Gradual Political Progress

The agreement on a new electoral law for Lebanon avoids a political crisis, but highlights the limitations of the country’s sectarian-based political system, Fitch Ratings said on 26 June.

Lebanon’s parliament approved the new law on 16 June 2017, following cabinet approval of a cross-party agreement to adopt proportional representation and reduce the number of electoral districts.  Elections had been due by 20 June, but parliament will now be extended again while preparations are made for a vote under the new system in May 2018.

Changing the electoral law to facilitate elections is another step towards improving political effectiveness, following the election of Michel Aoun as president last October after more than two years without a president, and the formation of a new government, drawn from across the political spectrum, in December.  It has averted an impending political crisis, as Aoun had effectively set a 20 June deadline, and illustrates the ability of the main political factions in Lebanon to achieve compromises, albeit slowly and at the last minute.

Maintaining this modest political momentum could further improve the prospects for policy making.  The current government has largely been occupied with electoral law discussions, but it has also reinvigorated the oil and gas licensing process and agreed on a 2017 Budget, although this has not yet been approved by parliament.

But repeated delays in the political process – the 2018 elections will be the first since 2009 and the new budget is the first state budget approved by a cabinet for 12 years – illustrate the constraints of Lebanon’s sectarian political system, which have been made worse by the Syrian civil war.  The new electoral law is unlikely to significantly change this system.  Government formation after next year’s election may once again be a drawn-out process.

High and persistent political and security risks are reflected in Lebanon’s low sovereign rating, affirmed at ‘B-‘/Stable in February 2017, alongside high public debt and anemic economic growth.  Political progress since November appears to have boosted the Lebanese diaspora’s confidence in the country’s economy.  Deposit growth was 8.2% y-o-y in April 2017, sufficient to fund government borrowing, which depends on the channeling of deposits and remittances via the financial system, and ensure moderate credit growth to the private sector.  Foreign-exchange deposits were 11% higher than a year earlier, and gross foreign-exchange reserves were 7.6% higher, although they had declined from February and March levels.

Deposit growth may have been boosted by Aoun’s election and the formation of a government, having dropped to less than 5% y-o-y for much of H1/16.  However, reserves and deposits had also been boosted by a financial engineering operation by Banque du Liban (BdL), which sold Eurobond holdings and foreign exchange-denominated certificates of deposit (CD), worth around $13 billion to banks over several months last year.  At the same time, BdL offered to discount at a premium equivalent amounts of Lebanese pound T-bills and CDs held by banks.  The operation buoyed growth in non-resident deposits, as banks offered attractive conditions for foreign-exchange deposits to participate in BdL’s operation.  The risk is that as the effect of this operation wanes, deposit growth will again come under pressure.

Recent political developments can help sustain positive sentiment, but rising public debt, up 8.6% y-o-y in March 2017, means that Lebanon remains vulnerable to a recurrence of political paralysis that dents confidence and deposit and remittance flows.  Tougher US sanctions against Hezbollah could also directly or indirectly affect foreign flows into Lebanon and its banking sector, although these have not yet been formally proposed as a bill.  (Fitch 26.06)

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11.4  QATAR:  Moody’s Changes Qatar’s Rating Outlook to Negative, Affirms Aa3 Rating

On 4 July 2017, Moody’s Investors Service changed the outlook on Qatar’s rating to negative from stable and affirmed the long-term issuer and senior unsecured debt ratings at Aa3.  The key driver for the outlook change to negative is the economic and financial risks arising from the ongoing dispute between Qatar and a group of countries, including its fellow Gulf Cooperation Council (GCC) neighbors Bahrain (Ba2 negative), Saudi Arabia (A1 stable) and the United Arab Emirates (UAE, Aa2 stable).  In Moody’s view, the likelihood of a prolonged period of uncertainty extending into 2018 has increased and a quick resolution of the dispute is unlikely over the next few months, which carries the risk that Qatar’s sovereign credit fundamentals could be negatively affected.

The rating affirmation at Aa3 takes into account a number of credit strengths embedded in Qatar’s credit profile and reflects Moody’s view that the sizable net asset position of the Qatari government and exceptionally high levels of wealth will continue to provide significant support to the sovereign credit profile for the time being.  The rating action also applies to the backed senior unsecured rating of SoQ Sukuk A Q.S.C., for which the outlook was changed to negative from stable and the rating was affirmed at Aa3.

Qatar’s long-term foreign-currency bond and deposit ceilings remain unchanged at Aa3 and the short-term foreign-currency bond and deposit ceilings remain unchanged at P-1.  Qatar’s long-term local-currency bond and deposit country risk ceilings also remain unchanged at Aa3.

Rationale for Changing the Outlook to Negative from Stable

The ongoing dispute involving Qatar and a coalition of countries including three of its fellow GCC neighbors (Saudi Arabia, UAE and Bahrain) as well as some other mostly Arab nations including Egypt (B3 stable), is unlikely to be resolved soon in Moody’s view.  The coalition countries have enacted a series of measures such as severing diplomatic relations, closing land, sea and air links, and expelling Qatari nationals from their countries.  In addition, they have submitted a list of 13 demands as condition for removing these actions.  Public exchanges between the various parties in recent weeks and previous periods of heightened tensions between Qatar and other GCC countries suggest that a quick resolution is unlikely and that the stalemate may continue for some time.

Depending on the duration and potential further escalation of tensions, the dispute could negatively affect Qatar’s economic and fiscal strength.

Absent a swift resolution, economic activity will likely be hampered by the measures imposed so far.  While Qatar’s hydrocarbon exports are not affected at this stage, there have been reports of disruptions to certain non-hydrocarbon exports and a forced shutdown of helium production.  The termination of direct flights between Qatar and coalition countries will affect services trade in areas like consulting and tourism.  This will likely also affect the profitability of corporates, including government-owned or government-related entities such as Qatar Airways.

Moody’s thinks that a prolonged period of uncertainty will negatively affect business and foreign investor sentiment and could also weigh on the government’s long-term diversification plans to position the country as a hub for air traffic, tourism, medical services, education and sports through a higher risk perception among foreign investors.

Weaker economic activity could also lead to deteriorating asset quality in the banking system and together with an escalation involving sanctions against the financial sector could necessitate a step-up in government liquidity support.  No such sanction has been applied to date and activities in the banking system have returned to normalcy following a few days of volatility when the measures against the country were announced.

In addition to rising global interest rates, funding costs for the government and other Qatari-based issuers will increase further and the government’s balance sheet would deteriorate quicker in a scenario of a prolonged stalemate that extends well into 2018.  The sovereign has no external refinancing needs until Q1/18 when a $2 billion sukuk issuance made by SoQ Sukuk A Q.S.C. will mature, but corporates – including government-related entities – and banks are facing more sizable redemptions over the next 12 months.

Aside from bond and sukuk, Moody’s estimates that total short-term external liabilities amount to more than $115 billion (68% of nominal GDP projected for 2017) of which roughly one third is estimated to be due to creditors in the GCC.  Moody’s estimates that about half of this is accounted for by non-resident deposits and rollover risks would increase in a scenario of further financial sector sanctions.

Rationale for Affirming the Rating at Aa3

The rating affirmation takes into account a number of credit strengths embedded in Qatar’s credit profile, including the sizable net asset position of the government and exceptionally high levels of wealth.  Moody’s also acknowledges the fact that as long as hydrocarbon exports are not disrupted, the ongoing dispute will not affect the overwhelming majority of foreign exchange receipts in the current account balance and the bulk of government revenues.

The government has sizable asset buffers, including roughly $35 billion in net international reserves at the Qatar Central Bank and more than $300 billion of assets managed by QIA.  They will likely continue to grow in nominal terms, and the government’s net asset position, calculated as total assets at QIA less outstanding government debt, will stay above 100% of GDP over the coming years.  However, transparency at QIA is weaker than for most other Sovereign Wealth Funds in the region and globally and there is very limited visibility about size, composition, and liquidity of those assets.  In addition, this net asset calculation excludes wider public sector debt, which was close to 30% of GDP as of 2016, according to Moody’s estimates.

Nevertheless, Moody’s thinks that the government’s resources together with liquid foreign assets in the banking system — which amounted to about $30 billion as of May, according to the rating agency’s estimates — provide a strong mitigant against the rollover risks described above and credibly support the pegged exchange rate regime.

Finally, Qatar’s exceptionally high levels of wealth and one of the largest hydrocarbon endowments globally, together with the leading position Qatar occupies in the global liquefied natural gas market, are further credit strengths.  According to the IMF, GDP per capita in purchasing power terms stood at $127,660 in 2016, by far the highest in Moody’s rating universe.  This mitigates the social stability effects from the recent political dispute and associated import restrictions/potential increase in prices for certain goods and services for households.

What Could Move the Rating Up/Down

The negative outlook reflects Moody’s view that risks to Qatar’s credit profile are skewed to the downside.

Having said that, a swift resolution of the ongoing political dispute accompanied by a quick lifting of sanctions would potentially support a return to a stable outlook.  In addition, the following factors could lead to upward rating pressure:

(1) A material reduction in external vulnerabilities through a lower external debt level and continued build-up of external buffers;

(2) Improved transparency about the type of financial assets held by the government, including the disclosure of details about asset composition and size;

(3) Improvements with regard to timeliness and scope of data availability; and

(4) A more diversified economic base.

Conversely, Moody’s would view the following factors as credit-negative:

(1) a further escalation in the political dispute, leading to a deterioration of the government finance position, resulting in a continued increase in government debt levels as opposed to Moody’s current expectation that debt levels will peak;

(2) signs of an emerging fiscal or balance-of-payments crisis, leading to a faster depletion of fiscal and external buffers and marked by speculative attacks on the pegged exchange rate;

(3) crystallization of sizable wider public-sector debt on the government’s balance sheet; and

(4) if the domestic or regional political environment were to deteriorate, resulting in disruption to oil and gas production and/or foreign investments in the economy.  (Moody’s 04.07)

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11.5  SAUDI ARABIA:  Mohammed bin Salman as Crown Prince: Ramifications for Riyadh

Yoel Guzansky wrote in INSS Insight No. 946 that Mohammed bin Salman, recently named as Saudi crown prince, enjoys a reformist image, and because of his young age has the potential to rule the kingdom for decades.  His official appointment lifts the fog from the question of succession and can contribute to a more energetic and active image of Saudi Arabia, even if it lends some uncertainty as to the kingdom’s policy and ability to meet the challenges ahead.  So far bin Salman’s appointment has been accepted without public protest.  But opposition could emerge from within the royal household itself – those who are unhappy with his meteoric rise, qualifications and management style.  This is therefore a charged time, testing the kingdom’s ability to manage the necessary generational transition from the sons of Ibn Saud to his grandsons, at a time that the kingdom also faces both domestic and external challenges.

As in a predictable screenplay, Saudi Arabia’s King Salman named his son Mohammed crown prince, replacing Mohammed bin Nayef, who was also stripped from his role as interior minister.  This is a part of an overhaul intended to promote princes of the younger generation allied with Mohammed bin Salman and strengthen his branch within the royal dynasty.  Bin Salman, whose path to the crown is now clear once his father no longer sits on the throne, will keep his position as defense minister and, due to his ailing father, de facto ruler of Saudi Arabia.  He benefits from a reformist image, and because of his young age has the potential to rule the kingdom for decades.  His official appointment as crown prince lifts the fog from the question of succession and can contribute to a more energetic and active image of Saudi Arabia, even if it lends some uncertainty as to the kingdom’s policy and ability to meet the challenges ahead.

The Rise to Power

The appointment of the 31-year-old bin Salman was received by an overwhelming vote of confidence – 31 out of 34 – from the Allegiance Council, indicative of his broad though not absolute support.  The Council, founded about a decade ago and charged with approving succession issues, consists of all living offspring of the kingdom’s founder, Ibn Saud.  The move, now completed, began in 2015 when the king appointed bin Salman deputy crown prince, defense minister, and head of the Economic and Development Council.  Since then, bin Salman, with his father’s help, has bolstered his status and accrued experience. In a kingdom where half of the population is under the age of 25, he enjoys – to the extent it is possible to estimate in an absolute monarchy – the support of the younger generation eager for change in the social order, both because of his age and because of his ambitious plans for changing the nation.  Bin Salman was in charge of relations with the Obama administration (which, according to reports, preferred the more experienced and level-headed Mohammed bin Nayef) and is now responsible for cultivating ties with the Trump administration.

On bin Salman’s road to the top, he has gained authority and, predictably, enemies.  In 2015, senior Saudi princes made a rare public appeal for change, expressing lack of confidence in the prince and his father. Western intelligence organizations also expressed concern about his policy, which replaced Saudi Arabia’s longstanding approach of restraint and caution, noting the dangers it presents to both regional and domestic political stability.  The closed ranks of the senior princes had for many years been a source of the kingdom’s power, and now the regime was becoming a one-man show.

External and Domestic Challenges

Saudi Arabia’s political stability bears pan-Arab ramifications, particularly while the Arab world continues to weather the difficult regional times.  To signal a smooth regime transition, the House of Saud made sure to document bin Nayef expressing loyalty to bin Salman, with the new heir apparent kissing the hand of the deposed crown prince as a sign of respect and appreciation.  Bin Nayef, who seems not to have fully recovered from al-Qaeda’s attempt on his life in 2009, understands that despite the appreciation and support he received, opposing the current move would harm him and possibly also the stability of the royal household.  The strength of the House of Saud has always stemmed from the princes’ understanding that regime continuity and stability are paramount.  However, the New York Times reported that after being deposed, bin Nayef and his close family where put under palace arrest – suggesting the transition wasn’t so smooth – apparently due to bin Salman’s wish to keep him isolated while he consolidates power.

Promoting the Vision 2030 economic plan is both a national and a personal challenge for bin Salman, who wants to stride rapidly toward a post-oil era.  At the moment, however, the public, used to the abundance generated by oil, is frustrated by the increasing cost of living and reduced subsidies.  The kingdom’s citizens feel entitled to benefits and arrangements derived from oil profits; this has been the foundation of the social order and civilian loyalty to the royal household.  Yet while the public is asked to tighten its belt, bin Salman purchased a yacht at the cost of $500 million, a move that ignited a short-lived protest in the social media. Bin Salman might also encounter enemies from within the royal household who have not accepted his appointment, and from the conservative religious establishment, as bin Salman, in his attempt to promote social reforms, is challenging this group.

Another challenge relates to Saudi Arabia’s military involvement in Yemen.  The military campaign led by the kingdom has hit a dead end, far from having achieved any of its stated objectives.  The Houthis and their ally, former Yemeni President Ali Abdullah Saleh, and his loyalists continue to hold most of northern Yemen and the capital, Sana’a, and routinely fire rockets and missiles at Saudi territory.  At the same time, international criticism of Saudi Arabia’s management of the war is rising, as the fighting has worsened the humanitarian crisis in Yemen and caused extensive harm to civilians.

Bin Salman’s appointment comes at a time of high tension between Tehran and Riyadh, caused to a great extent by his hawkish position and outspoken rhetoric on Iran.  It seems that improved relations between Saudi Arabia and the US administration and the rigid US stance on Iran encourage bin Salman to taken even more strident tones about Iran.  The heir apparent recently rejected any possibility of dialogue with Iran, noting that Saudi Arabia would fight it within Iran itself, a hint to support for regime change in Tehran.  For its part, Iran accuses Saudi Arabia of standing behind the June attack on the parliament in Tehran, even though the Islamic State assumed responsibility for the act.  Moreover, Saudi Arabia reported that it has seized three members of the Revolutionary Guards who were allegedly planning an attack in the kingdom and is holding them hostage.  In response to bin Salman’s appointment, several media outlets, identified with the Iranian regime, called the change of personnel in Saudi Arabia “a soft coup” and “a political earthquake,” and warned of a possible escalation in the conflict between the countries.

Possible Ramifications

The extent to which Mohammed bin Nayef was a moderating influence on bin Salman is unclear, and he in any case has been gradually stripped of authority.  As crown prince, bin Salman will enjoy legitimacy for his more hawkish policy, including on Iran, although this posture might jeopardize the kingdom’s interests.  The fact that Mohammed bin Salman has a hawkish view on Iran is not unusual in the Saudi royal household, but it seems that he is willing to take greater risks aimed at challenging the Islamic Republic, thus increasing the possibility of pushing the crisis to a breaking point.  As for Israel, while bin Salman reportedly does not rule out normal relations with Israel in the future, expectations among many in Israel that the kingdom will start to normalize relations with Israel before there is real progress in the political process do not match the current Saudi position.

So far bin Salman’s appointment to heir apparent has been accepted without public protest.  But opposition could emerge from within the royal household itself – those who are unhappy with his meteoric rise, qualifications, and management style.  This is therefore a charged time, testing the kingdom’s ability to manage the necessary generational transition from the sons of Ibn Saud to his grandsons while the kingdom also faces both domestic and external challenges.  The crisis with Qatar and the war in Yemen have weakened Saudi Arabia’s set of alliances and key allies, such as Pakistan, are trying to maintain neutrality.  So far, Qatar is resisting the pressure, partly due to help from Iran and Turkey, which might result in bin Salman – who initiated the boycott and pressure on Qatar – held responsible, should it fail.

Although over the years vital decisions in Saudi Arabia have been made after consultations and with a desire to achieve consensus among the senior princes, the king has the final word, and therefore who he is matters a great deal.  The assessment was that bin Salman would inherit the crown from his father, bypassing bin Nayef, though to this end it seems that he had to score some achievements, first and foremost in the field of the necessary economic reforms and on the question of the kingdom’s involvement in Yemen.  Therefore, and despite his early appointment, the burden of proof is still his. Thus, the final words of bin Nayef, the deposed crown prince, to his replacement still reverberate: “I will rest now.  May God help you.”  (INSS 29.06)

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11.6  EGYPT:  Despite Taboo, Hebrew Classes Open Doors for Young Egyptians

Amira Sayed Ahmed posted in Al-Monitor on 27 June that more Egyptian university students are learning Hebrew, though social and political prejudices can still make things difficult.  The number of young Egyptians who study Hebrew in universities and in private language courses is growing, despite the strained ties between Cairo and Tel Aviv.  Unlike learners of other languages, Egyptians who study Hebrew risk a long list of possible accusations, including spying, from their social circles.

Nevertheless, more Egyptians are showing interest in this language, especially in the past few years, for reasons that range from business needs to cultural curiosity. Hebrew courses are also provided in the armed forces.

Teaching Hebrew was first introduced at the University of Cairo more than 100 years ago.  Later in the 1960s, more Hebrew departments were created in other public universities nationwide, with the aim of bringing up Hebrew speakers who understood the language, as well as Israeli culture, history and political orientations.

There are presently 13 Hebrew departments in nine public universities in Egypt, including Al-Azhar University, the highest seat of Sunni Muslim learning.  A total of 2,500 – 3,000 students graduate with some Hebrew proficiency each year, and the number is increasing.  Besides public universities, many private language centers that teach Hebrew have recently found a foothold in the country.

Speaking to Al-Monitor, Eman el-Tayeb, a professor of Hebrew at the state-run Assiut University in Upper Egypt, pointed out that when the university’s Hebrew department opened in 2004, only 11 students registered.  “Now, more than 110 students enroll in the Hebrew classes annually. The number of students who decided to study Hebrew has radically increased within just 13 years,” she said.

Tayeb said that besides the language, the department offers courses in history, literature and the current affairs of Israel.  “We constantly explain to our students that this is not normalization of ties with Israel,” Tayeb said, pointing out that given the long history of strained ties, it was important to learn “your enemy’s language. …  We usually tell our students that the department has a strategic importance, as Hebrew speakers can work for military intelligence and the Foreign Ministry.”

The Hebrew professor said that as they go through the courses, the students become more comfortable with learning Hebrew and end up enjoying the nuances of the language.  “For instance, this year I have many hardworking students who translate Hebrew songs and watch many videos in Hebrew on their own, though this is not included in the curriculum,” Tayeb said.

One of the key questions on students’ minds is whether learning Hebrew will help in terms of employment.  Mounir Mahmoud, a veteran Hebrew teacher and the founder of the private Afaak Academy, which has offered Hebrew courses since 2001, told Al-Monitor, “Many young people seek to speak and study Hebrew to serve in military intelligence or to land jobs associated with Hebrew at Egypt’s Foreign Ministry, translation centers, newspapers, strategic research centers, call centers, the broadcasting authority — which broadcasts Hebrew-language television — or in the tourism sector.”

Mahmoud went on, “Despite the common political views among the public, the number of students enrolling in our Hebrew courses has increased remarkably, especially in the last six years, because there is a growing awareness that knowing Hebrew can provide an advantage in job opportunities.”  The academy divides the whole program into seven levels, starting from phonetics and progressing to basic sentence structures and finally to professional translation of Hebrew texts.

Mahmoud said that while curiosity has led many students to learn the language, some others were forced to join Hebrew departments, which have lower grade thresholds than others.  Students with lower academic scores may not qualify for their first choice in programs.  “Some of the students feel under attack because people think that choosing to study Hebrew is equivalent to feeling sympathy for Zionism,” Mahmoud said, explaining that Hebrew speakers commonly face accusations such as espionage and are made to feel that they have committed a crime just for studying the language of Israel.

To counter the various misconceptions, the academy also conducts seminars on Hebrew as a language that is not synonymous with Israel as a state.  These seminars discuss the history of Arab-Israeli political relations including diplomatic ties, cultural exchanges and negotiations.  Many Afaak Academy graduates have become successful translators, experts in Israeli affairs and educators, and some have found their place in the business sector.

Islam Fawzi is one young Egyptian who studied Hebrew and landed a job using it.  Like many students, his high school grades led him to study Hebrew.  But after graduation from university and advanced classes in the Afaak Academy to hone his Hebrew, he decided to make the best use of his education by working as a Hebrew customer service agent for the Convergys company.  “I heard many negative comments and many criticized me for studying Hebrew. I was too young to take these comments seriously, but I never thought I would pursue a career associated with Hebrew,” Fawzi told Al-Monitor.

Fawzi said Hebrew is like English, German or any other language, adding that speaking the language used by a group of people does not mean support for them or agreement with their beliefs.  “Due to my work, I and my Egyptian colleagues deal with Israeli customers.  But my inner thoughts and beliefs have never changed.  Speaking English and dealing with Americans, for instance, does not mean that you fully agree with America’s policies,” Fawzi said.  Fawzi said many students let a psychological barrier prevent them from studying Hebrew.  “On the contrary, I learned Hebrew to prove to myself that nothing can change my thoughts,” he said.  (Al-Monitor 27.06)

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11.7  MOROCCO:  IMF Completes Second Review Mission of the Precautionary & Liquidity Line

An International Monetary Fund (IMF) staff team visited Morocco from 29 June to 10 July 2017 to conduct discussions with the Moroccan authorities on the second review under the Precautionary and Liquidity Line (PLL) arrangement.  The IMF Executive Board approved the PLL arrangement for Morocco in the amount of SDR 2.504 billion (about $3.42 billion) in July 2016.  At the conclusion of the mission, Mr. Blancher made the following statement:

“Morocco’s macroeconomic policies and performance remained sound, despite volatility in agricultural output, weak growth in trading partners, and elevated external risks.  The Moroccan authorities remain committed to important fiscal, financial and structural reforms, which should strengthen the economy’s resilience to external shocks and support higher, more inclusive growth.

“Overall, macroeconomic fundamentals and the prospects for 2017 are sound: following last year’s drought, growth is expected to rebound this year to 4.8%, driven by strong recovery in the agricultural sector, while non-agricultural growth, which has remained subdued, should pick up modestly by 0.2%.  Inflation is expected to slow to 0.9% for the year.  Unemployment remains high, especially among the youth and women.

“The current account deficit should reduce to 4.0% of GDP in 2017, due to continued export growth and despite an increase in energy imports.  Gross international reserves are expected to reach about $24 billion at the end of 2017, about 6 months of imports.  The IMF team welcomes the authorities’ intention to gradually move to a more flexible exchange rate regime, which would allow the Moroccan economy to better absorb external shocks and preserve competitiveness in the future.

“The fiscal deficit is projected to narrow to 3.5% of GDP by 2017, due to stronger revenue performance and contained spending.  The IMF team welcomed the authorities’ plans to continue fiscal reforms, especially towards a more equitable and fairer tax system, and to reduce public debt to 60% of GDP by 2021.  These efforts are critical to increase the fiscal space needed to reduce poverty and to promote employment through public spending, in particular investment and social programs targeted towards the poorest segments of the population and that help to reduce inequalities.

“The IMF team welcomes the progress made in strengthening financial sector soundness, and encourages the authorities to accelerate structural reforms to improve the business climate and governance, combat corruption, reduce unemployment, particularly among the youth, lessen regional and social disparities and reform the educational system to create more skilled workers.  (IMF 10.07)

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11.8  TURKEY:  EU Parliament Votes to Halt Accession Talks With Turkey

Al-Monitor reported that the European Parliament voted 6 July to suspend accession negotiations with Turkey.  According to Reuters, the legislative body of the European Union debated the report by Turkey rapporteur and fellow parliamentarian Kati Piri and called “on the Commission and the member states … to formally suspend the accession negotiations with Turkey without delay if the constitutional reform package is implemented unchanged.”  Turkey’s April 16 constitutional referendum is set to grant President Erdogan powers that will make him as powerful as (if not more powerful than) the Turkish parliament.

In response, Turkey’s Minister of EU Affairs Omer Celik criticized the European parliamentarians. He said they had “no right to make such a call” and called upon European lawmakers to “respect the will of the Turkish people.”  Turkish Prime Minister Binali Yildirim, whose post will be abolished once the constitutional amendments come into effect in 2019, called the EU decision “null and void.”

Turkey has been an associate of the European club since 1963 and formed a customs union with the EU in 1995.  Ankara applied for full membership in 1987 and the EU agreed to consider Ankara as a candidate for full membership in 1999.  The two sides have been continuing accession negotiations since 2005 over 35 chapters that would harmonize Turkey’s laws, regulations and standards with those of the EU.

At one level, the incident is a tempest in a teapot.  The decision is not legally binding — it does not force the European Commission, the civil service organ of the EU, or the European Council, comprised of the heads of EU member states, to halt accession talks with Turkey.  At any rate, except for some areas, such as the controversial refugee deal, relations between Brussels and Ankara have been on ice for quite some time.  In 2013, Turkey’s then-EU Minister Egemen Bagis expressly said Turkey would likely never become a member.  Meanwhile, as much as he pays lip service to Ankara’s EU bid, Erdogan often signals that Turkey could turn its back on the EU and possibly reach out to Russia and China if his country is kept waiting too long on Europe’s doorstep.

But the European Parliament’s decision also raises some serious questions about what the EU stands for and what Turkey hopes to gain from the membership negotiations.  The most basic step in becoming an EU member for a candidate country is to accept the so-called Copenhagen Criteria.  These include upholding the processes and institutions of democracy and human rights, maintaining a market economy and internalizing the philosophy of European integration, where states pool their resources and agree to delegate some of their sovereign rights to the union.

Although many European leaders have found a way to work with Erdogan in the wake of the referendum, as far as European public opinion and lawmakers are concerned, investing so much power into the hands of one person fundamentally contradicts the EU’s principles — especially the political and legal dimensions of the Copenhagen Criteria.  There is hardly a point in accepting an already unpopular Turkey when from the European perspective, its political system resembles that of Russia or Belarus.  At any rate, EU countries already have trouble in coping with the rise of “soft” authoritarian regimes in EU members Hungary and Poland.

In the final analysis, even when Turkey’s constitutional amendments come into full effect in 2019 and Ankara begins a new era under an executive presidency, EU-Turkey relations will not break down entirely.  Neither side is upset enough to complete the breakup.  (Al-Monitor 06.07)

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