15 June 2016
9 Sivan 5776
9 Ramadan 1437
TOP STORIES
- Israeli Startups Raise $237 Million During First Week of June
- UAE Signs Deal with NASA in Bid to Reach Mars
- Eni & BP Declare New Egyptian Offshore Gas Discovery
- Nano Textile Introduces Novel Technology to Fight Hospital-Acquired Infections
- PointGrab Partners with Tyco Innovation Tel Aviv
- MIDDLE EAST: MENA Imported 10% of Internationally Traded Lumber in 2015
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Energy Ministry Approves Leviathan Development Plan
1.2 Finance Ministry Agrees to Two-Year Budget Mechanism with Prime Minister
1.3 Herzliya to Issue Tender for Two Islands
1.4 New Defense Minister Recognizes Bereaved Same-Sex Families
1.5 Jerusalem Light Rail to Double Capacity
2: ISRAEL MARKET & BUSINESS NEWS
2.1 IBM to Acquire EZSource
2.2 Israeli Startups Raise $237 Million During First Week of June
2.3 Israel California Water Conference Sets the Stage for California’s Water Stewardship
2.4 Hibob Raises $7.5 Million
2.5 Israeli Bank Branch Closures Below International Average
2.6 Microsoft Opens Third Research & Development Center In Israel
2.7 Sekindo Expands Its AdTech Operations to the US Opening a New York Office
2.8 SundaySky Raises $30 Million to Accelerate Its Sector Leadership
2.9 Trax Image Recognition Raises $40M in Series C Funding
2.10 TechForGood Accelerator Seeks Social-Tech Startups
2.11 DeepSense Raises $2 Million
2.12 Armeron Raises $2 Million from Glilot Capital Partners
3: REGIONAL PRIVATE SECTOR NEWS
3.1 Boston Market Bringing Restaurants to Seven Middle Eastern Countries
3.2 US’ Dream Hotel GroupPlans First Middle East Property in Doha
3.3 DP World Says Not Ruling Out Another Push for US Port
3.4 Air Canada’s New Service from Montreal to Casablanca Begins
3.5 Turkcell Opens Turkey’s Largest Data Center
3.6 TAI Signs $3.5 Billion in Deals with Sikorsky for Helicopters
4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Jordan Signs Deal for Coal Fueled Power Plant
4.2 Saudi Aramco & GE to Install First Wind Turbine in Saudi Arabia
5: ARAB STATE DEVELOPMENTS
5.1 Moody’s Affirmed B2 Rating for Lebanese Government Bonds
5.2 Lebanon’s Eurobonds Assigned ‘B-‘ Ratings by S&P
5.3 Lebanon’s Fiscal Deficit Increased by 36% to $1.44 Billion in First Quarter
5.4 Number of Lebanese New Car Registrations Inched Up 1.36% by May
5.5 Lebanon’s Balance of Payments Deficit $899 Million by April 2016
5.6 Jordan Drops One Place in World Competitiveness Report
5.7 Jordan’s JBSP Border Security Program
♦♦Arabian Gulf
5.8 Kuwait’s Fuel & Gas Subsidies Budget Reduced to $787 Million
5.9 Kuwait’s Foreign Trade Surplus Shrinks 76% to $1.3 Billion in First Quarter
5.10 Kuwait’s Capital Spending to Reach $8.9 Billion this Year, Up $1.8 Billion
5.11 Qatar’s Foreign Trade Surplus Shrinks to $1.3 Billion in April
5.12 Qatar Spends $18 Billion to Remain Region’s Most Peaceful Country
5.13 UAE & Saudi Arabia Named Among World’s Top Developing Retail Markets
5.14 The Cost of Keeping the Peace in the UAE Put at $29.8 Billion
5.15 UAE Signs Deal with NASA in Bid to Reach Mars
5.16 Saudi Arabia Aims to Attract 1.5 Million Tourists by 2020
5.17 Saudi Arabia Plans New ‘Balanced’ Saudization Scheme
5.18 Expats & Employers Worried Over Uncertain Saudi Tax Proposal
♦♦North Africa
5.19 Eni & BP Declare New Egyptian Offshore Gas Discovery
5.20 Egypt Parliament Approves Saudi King’s Sinai Development Program
5.21 Investment Ministry Pledges Quarterly Report to Parliament on Work Program
5.22 Egypt’s Trade Deficit Falls 44% in March
5.23 Egypt to Create Database of Expatriates
5.24 Egyptian Business Activity Down for 8th Month in a Row
5.25 Tunisia Gets $2.9 Billion IMF Loan for Job Creation & Economic Growth
5.26 Daoudi Renews Commitment to Transition to English in Moroccan University
6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS
6.1 Turkish Industrial Output Drops In April
6.2 TUPRAS Named as Turkey’s Biggest Firm
6.3 Turkish Defense Minister Meets Pakistani Counterpart
7: GENERAL NEWS AND INTEREST
♦♦ISRAEL:
7.1 Knesset Sees Record Number of Women MKs After Latest Reshuffle
♦♦REGIONAL:
7.2 Nearly 60% of Qatari Population Lives in Labor Camps
7.3 King Fahd Security College and the University of New Haven Sign Collaboration Agreement
7.4 Egyptian Population Reaches 91 Million
8: ISRAEL LIFE SCIENCE NEWS
8.1 NeuroRx Awarded First Prize in Annual Israel BIOMED Startup Competition
8.2 BioTime Gets $2.2 Million Grant for Further Development of Dry-AMD Program
8.3 Nano Textile Introduces Novel Technology to Fight Hospital-Acquired Infections
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Check Point Selects Mellanox Ethernet Solutions to Enhance Security Appliances
9.2 Mellanox New BlueField Family of System-on-Chip Programmable Processors
9.3 CellMining Wins GTB Telecoms Innovation Award
9.4 VisIC Technologies GaN Device provides Highest Efficiency at Highest Frequency
9.5 Rheinmetall Canada and IAI/ELTA Bring MF-STAR Radar to the CSC Program
9.6 PointGrab Partners with Tyco Innovation Tel Aviv
9.7 Allot Helps VOO Belgium to Deliver a Better Customer Experience
9.8 $17,000 Super-Secure Smartphone Solarin Will “Break the Rules”
9.9 IAI’s Bird Eye 650D STUAS Enters Serial Production
9.10 IAI Introduces RoBattle – a Combat Maneuvering & Support Ground Robot
9.11 LightCyber Selected as Red Herring’s 2016 Top 100 North America Winner
9.12 Silicom Secures 1st Design Win with Fast-Track Cyber Security Company
9.13 Sierra Wireless & OriginGPS Partner for Industry’s Smallest 2G Solution for IoT Devices
9.14 Mellanox Enhances Cloud Efficiency With 25Gb/s Ethernet Connectivity
9.15 SECDO Partners with Tel-Networks USA to Provide Powerful Investigation Solutions
10: ISRAEL ECONOMIC STATISTICS
10.1 OECD Lowers its 2016 Israel Growth Forecast
10.2 Israel’s Exports Continue to Decline
10.3 Investments in Israel Achieve Record Levels
10.4 Israel’s Record New Car Sales Defy Economic Slowdown
11: IN DEPTH
11.1 MIDDLE EAST: MENA Imported 10% of Internationally Traded Lumber in 2015
11.2 BAHRAIN: Moody’s Maintains Negative Outlook On Bahrain’s Banking System
11.3 OMAN: Moody’s Assigns Baa1 to Oman’s Dollar Bond Issuance
11.4 EGYPT: New Legislation to Bolster Services For Egypt’s Disabled
11.5 TURKEY: Turkey’s Latest ‘Civilian Coup’
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Energy Ministry Approves Leviathan Development Plan
The Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water Resources has informed the partners in the Leviathan gas reservoir (Delek Drilling – 22.67%, Avner Oil & Gas – 22.67%, Noble Energy – 39.66%, and Ratio – 15%) that the plan for development of Leviathan submitted to him three months ago has been approved. Under the plan, which is for the largest infrastructure project in Israel’s history, the reservoir will be developed according to an accelerated timetable that enable the gas from it to reach Israeli users by the end of 2019, earlier than the date set in the gas framework agreement between the state and the gas exploration companies. The Leviathan partners aim to approve a final investment decision this year.
The development plan calls for the drilling of eight production wells (of which two have already been drilled) to be connected by a submarine pipeline to a fixed maritime platform on which all the systems for treating the gas will be installed. The gas will flow from the platform to the shore at the northern entry point of the Israel Natural Gas Lines network.
The production, treatment and transportation capacity of the wells, the platform and the pipeline between them is planned to be 21 BCM a year, while the capacity of the pipeline from the platform to the connection point with Israel Natural Gas Lines is panned to be 12 BCM a year. The gas supplied to Israel Natural Gas Lines will serve the local Israeli economy and neighboring countries. The platform will also have an additional outlet for connection to a submarine pipeline with a capacity of 12 BCM a year, mainly for exports to countries of the region.
The Ministry of National Infrastructures, Energy and Water Resources estimates the amount of gas that can be produced from the reservoir at 17.6 TCF. This estimate will be updated if further data are received, particularly after the Leviathan-5 drilling, and in accordance with data obtained in the course of production, for the purposes of calculating the amount of gas that may be exported. (Globes 02.06)
1.2 Finance Ministry Agrees to Two-Year Budget Mechanism with Prime Minister
An agreement has been reached by the directors-general of the Ministry of Finance and the Prime Minister’s Office on the mechanism for the two-year budget for 2017-2018, as per the prime minister’s demand. The mechanism, created to allay the reservations of Minister of Finance Moshe Kahlon, provides the Knesset with the power to deny the approval of the second-year budget, thereby dissolving the parliament and leading to new elections. Ministry of Finance officials said such a scenario was extremely unlikely.
The agreed-upon mechanism is one of the lessons drawn from the missteps of the only two-year budget fully implemented until now – in 2011-2012 – as well as a numerator and the decision to leave a NIS 3.5 billion reserve for adjustments for the second budget year. The agreement will be anchored in a special bill which will be distributed in the coming days ahead of accelerated legislation procedures. The mechanism essentially removes the last barrier posed by the professionals handling the budget and leaves the rest of the work for the political establishment, where the battle should be easily decided after Yisrael Beitenu joined the coalition.
The economists’ main concern is of a dramatic decrease in state revenue compared with the forecast on which the second year of the biennial budget is based, as occurred in 2012. In that year, the deficit was twice the expected figure – almost NIS 40 billion – which forced the government to undertake extreme measures to close the fiscal hole.
The new mechanism sets the date for estimating the potential of such a gap for 2018 much earlier, in November of 2017. If it turns out that the forecasts of the Ministry of Finance were overly conservative and revenue is higher than expected, nothing happens. But if a gap is discovered, its size will determine the course of action: if it is minor, the government can deal with the difference; but if it is significant, it must turn to the Knesset for help.
If the deficit gap is larger than the government can handle – more than NIS 15 billion – the Ministry of Finance will be forced to turn to the Knesset for help with a request for extraordinary measures including tax raises or significant spending cuts. In a more extreme scenario, the Ministry of Finance could ask to change the framework of the budget – in other words, increase the deficit target beyond the existing figure. (Globes 07.06)
1.3 Herzliya to Issue Tender for Two Islands
The Herzliya municipality will soon issue an international tender to examine the feasibility of building artificial islands along Israel’s coastline. The tender will include consideration of two islands: one for housing and the other for an airport for internal flights. Japanese delegations that visited Israel in May said that the islands were feasible. At the same time, the Tel Aviv municipality is preparing another plan for an artificial island on which an international airport and other infrastructure will be built.
An airport on an artificial island is common in wealthy and densely populated areas in the Far East. Almost all the airports built in recent years in Hong Kong, Macau and Japan are on artificial islands. Discussion of such an artificial island in Israel began 20 years ago, when Israel and the Netherlands signed a memorandum of intent for cooperation in the construction of artificial islands in the Mediterranean Sea.
Nothing has happened since then other than talk. In 2002, the government approved the construction of two artificial islands off the Mediterranean coast: one for an airport off the Tel Aviv shore and one residential island opposite Bat Yam. In 2006, then-Minister of Transport Mofaz declared that his ministry would promote the construction of an artificial island and that the feasibility check would take place in Q1/07. In 2012, the government approved the forming of an inter-ministerial steering committee for considering the technological feasibility of an island. (Globes 31.05)
1.4 New Defense Minister Recognizes Bereaved Same-Sex Families
New Defense Minister Avigdor Lieberman issued an official document on behalf of the Defense Ministry on 1 June declaring that the ministry “views same-sex and heterosexual families of fallen soldiers equally, and operates in accordance with this equality so that there is no difference in recognition and rights.” With the document, Lieberman reiterated the policy formulated by his predecessor, Moshe Ya’alon, who recently made a similar declaration. Since bereaved families are eligible for financial benefits, the distinction has far-reaching implications. (Various 02.06)
1.5 Jerusalem Light Rail to Double Capacity
The Jerusalem Light Rail is to double its capacity. After nearly two years of discussions between the Ministry of Finance and the Ministry of Transport on the one hand and Jerusalem Light Rail concessionaire CityPass and works contractor Alstom on the other, the sides reached understandings on extension of the Light Rail lines. The works are valued at NIS 3 billion. Of this, CityPass will carry out works to the tune of some NIS 1.5 billion. The work on extending the lines is expected to be complete by early 2020 at the latest.
The dispute was over the extension to the existing Red Line, currently 14 kilometers long. According to the plan, the line is supposed to continue southwards from Mount Herzl to Hadassah Ein Kerem Hospital and northwards from Pisgat Ze’ev to Neve Yaakov. Two branch lines, known as “the campus lines”, are supposed to reach the Hebrew University’s Mount Scopus and Givat Ram campuses. The extensions mean laying eight kilometers of track, making the line 22 kilometers in total. The contract between the parties obliges the state to conduct negotiations first of all with the existing concessionaire. The works include track laying, doubling the number of cars from 46 to 90, and the supply of systems to the project.
Whereas the state was prepared to pay €310 million for the works, Alstom demanded €380 million. After prolonged negotiations, the sides compromised on a payment of €350 million, or NIS 1.5 billion. (Globes 02.06)
2: ISRAEL MARKET & BUSINESS NEWS
2.1 IBM to Acquire EZSource
On 1 June, IBM announced that it plans to acquire EZ Legacy (EZSource), an Israel-based application discovery company, to help developers quickly and easily understand and change mainframe code based on data displayed on a dashboard and other visualizations. Today’s applications can be made up of millions of lines of code, and to update this code can take days or weeks. EZSource provides a visual dashboard to quickly and easily show developers which applications have changed to ease the process of modernizing applications, exposing APIs and more efficiently leveraging development resources. The planned acquisition is expected to close in the second quarter of 2016 subject to completion of governmental review and customary closing conditions.
A key step in this evolution is to understand what assets already exist in the enterprise. IBM’s current DevOps offerings, such as IBM Application Delivery Foundation for z Systems and IBM Rational Team Concert, coupled with EZSource’s application discovery technology, are designed to enable developers to evolve those legacy assets at the speed of business with reduced risk to the enterprise. EZSource alerts developers to the number of sections of code that access a particular entity, such as a database table, so they can easily check them to see if updates are needed. Without the advanced analytics in the EZSource solution, developers would need to manually check thousands or millions of lines of code in hopes that they would find the ones that need to be changed, putting all entities at greater risk of error.
Established in 2003, Modiin’s EZ Legacy (EZSource) is a leader in enterprise application understanding and management with offices in Israel, UK, US, Switzerland, Japan and Romania. The EZSource suite dramatically reduces the enterprise’s applications management costs, improves its application development and maintenance speed, flexibility and quality of its deliverables and lowers the risk involved in application development and maintenance. (IBM 01.06)
2.2 Israeli Startups Raise $237 Million During First Week of June
Despite a slowdown in global high-tech, Israeli companies continue to close large financing rounds. During the first week of June 2016 alone, 13 Israeli startups raised an impressive $237 million. All this follows a creditable May for Israeli startups, when among other things ridesharing app Via raised $100 million and taxi hailing app Gett (formerly GetTaxi) brought in a $300 million investment from Volkswagen. Website guide developer WalkMe has led the way in June with a $50 million financing round. Not far behind was image retail recognition company Trax, which raised $40 million and data storage company Weka.IO, which raised $32 million. Smart video company SundaySky raised $30 million and mobile cyber security developer Zimperium raised $25 million. In the healthcare center, patient monitoring device company EarlySense raised $25 million.
The smaller financing rounds included $10 million raised by big data analysis company Signals Group and $8 million raised by human resources B2B platform developer Hibob. Oribi, which analyzes business intelligence data raised $5 million, as did Twiggle, which has developed a search engine for shopping sites. CallVU, which has developed a mobile platform for customer service centers raised $3 million and business information company Unomy raised $2 million. Appfront, which has developed an app for ordering food raised $1.5 million. (Globes 09.06)
2.3 Israel California Water Conference Sets the Stage for California’s Water Stewardship
The Israel Economic Mission to the West Coast, Israel NewTech, and The Israel Export Institute will host the first Israel California Water (ICWater) Conference on 29 June in Los Angeles and on 30 June in San Diego. The ICWater Conference will focus on initiating and strengthening water technology partnerships and pilot projects between California and Israel to help meet California’s water needs. New financial models will help water users in California’s agricultural, industrial, and municipal sectors make the case for water-saving projects. The conference grew out of the Memorandum of Understanding (MoU) signed by Governor Brown and Prime Minister Netanyahu in 2014. Participants include California and Israel business leaders, water technology experts, researchers, policy leaders, regulators, and public authorities. Over twenty Israeli water technology firms will be present, along with customers and business partners from the municipal, agricultural, and industrial sectors in California. Both days of the conference will feature structured B2B meetings to discuss specific challenges, custom solutions, and partnerships with companies specializing in such areas as desalination, water reuse, drip-irrigation, and water monitoring and management. (ICWater 13.06)
2.4 Hibob Raises $7.5 Million
Human resources management software developer Hibob has closed a $7.5 million financing round from Bessemer Venture Partners, LocalGlobe and angel investors. Hibob also launched its cloud-based system, which integrates human resources, benefits, pension, auto enrolment and data in one secure online data storage platform. The company says its technology provides insights and helps businesses make better decisions, improving staff engagement and retention,
Hibob was formed in 2015 and its platform is aimed at HR departments for companies employing up to 300 people, with its market focus on the UK. The company’s most unique feature is an automated function that identifies employees in need of pension consulting or advice on health insurance. Hibob has 40 employees half of whom are in Tel Aviv and half in London. Despite its focus on the British market, Zehavi said the company planned to expand its Israel R&D operations. (Globes 07.06)
2.5 Israeli Bank Branch Closures Below International Average
The Bank of Israel’s annual Supervisor of Banks report announced that over the past three years, only 5% of the country’s bank branches have closed, leaving 1,152 active branches. The Israeli closings follow seven years in which banking corporations expanded their branch network and increased their access to customers, primarily from the retail segments and households. The decline derives from banking service consumption habits, such as from new financial technology that allows the provision of banking products and services online. In addition, the decline also stems from processes aiming to increase efficiency being carried out by some banks. The survey found that the number of branches in Israel today has returned to the level of six years ago and is 15% higher than the number of branches 10 years ago.
The Bank of Israel also found that there has been a sharp rise in the number of branches in the Arab sector. This increase is part of a long-term trend in the number of bank branches in Arab towns. Between 2004 and 2015, the total number of branches in Arab municipalities increased by about 83%, compared with about 11% in Jewish municipalities and about 9% in mixed municipalities. As of December 2015, the number of branches in Arab towns was 108, compared with 58 in 2004. This change derives from business considerations and specific policy that led many banks to expand their retail activity in the Arab sector.
Israel’s outlying regions have seen their number of bank branches grow over the past three years by 30%. (BoI 06.06)
2.6 Microsoft Opens Third Research & Development Center In Israel
Software giant Microsoft has inaugurated a research and development center in the Galilee city of Nazareth, Israel, its third in the Startup Nation. The new center is joining those in Herzliya and Haifa, which employ more than 1,000 people. Developers at the new Nazareth center – a few dozens in the initial phase – will work on major projects involving cyber-security, big data, business intelligence, cloud storage, and personalization.
Microsoft opened its first R&D center outside the US in 1991, in Israel. The company’s R&D centers in Israel are among the few strategic global development centers the company operates outside the US, and are home to some of the company’s most innovative technologies, including some components of IBM Watson, its flagship artificial intelligence technology. Microsoft also operates a local startup accelerator-venture capital combo called Microsoft Ventures in Israel. Over the past years, the software behemoth has acquired several Israeli companies, including security startup Aorato and software companies Equivio and N-trig. Last year, Microsoft acquired Israeli cloud-security startup Adallom for $250 million. (NoCamels 07.06)
2.7 Sekindo Expands Its AdTech Operations to the US Opening a New York Office
Sekindo, a digital platform for online video, display, and mobile advertising, officially announced the opening of a New York office for the first time. The opening of an office located within the US marks a significant advance in Sekindo’s position as a global solution for both advertisers and publishers. The expansion to New York demonstrates the prevailing influence of the company in the AdTech field. The opening of a New York office not only strengthens Sekindo’s established status as a major player in the United States industry, but it also provides Sekindo with a better platform to provide its clients and publishers with the best service possible.
Sekindo is a technologically advanced digital platform for video, online display and mobile advertising. With our proprietary technology, we bring high quality traffic in the most transparent way to deliver the best monetization and results possible. Part of the Universal McCann family, Sekindo has access to all UM resources. Sekindo was established in 2007 by three programming entrepreneurs who had a vision to automate the digital landscape. In 2012, Sekindo joined the Universal McCann family and have grown substantially since. (Sekindo 01.06)
2.8 SundaySky Raises $30 Million to Accelerate Its Sector Leadership
SundaySky completed its Series D financing round and raised an additional $30 million, bringing total investments in the company to $67 million. New investor Viola Private Equity led the round and was joined by existing investors Carmel Ventures, Globespan Capital Partners, Norwest Venture Partners, Comcast Ventures and others. NTT DOCOMO Ventures – the venture capital arm of NTT DOCOMO, Japan’s leading mobile operator and a SundaySky customer – also participated as a strategic investor. The funding will scale global growth and support continued product innovation and a rapidly expanding customer base as SundaySky builds upon its position as the pioneer in the personalized video engagement market.
By 2020, SundaySky expects all Fortune 500 business-to-consumer companies will adopt data-driven, personalized video storytelling to engage with and communicate to their customers. SundaySky has seen year-over-year SmartVideo program growth of 130% and is on track to reach 1 billion cumulative SmartVideo views by the end of the year, as companies respond to growing consumer demand for relevant and personalized experiences. Enterprises that implement SmartVideo at one stage of the customer lifecycle – such as video billing, acquisition or onboarding – are now adopting it for multiple applications across their businesses for holistic SmartVideo strategies.
Tel Aviv’s SundaySky is transforming the relationship between brand and customer through personalized video. Their platform, built on proprietary SmartVideo technology, combines the power of video with personalized storytelling at scale to foster long-term customer relationships. The SmartVideo Platform lets marketers communicate to an audience of one and easily create, manage and optimize real-time personalized video programs throughout the customer lifecycle. (SundaySky 08.06)
2.9 Trax Image Recognition Raises $40M in Series C Funding
Trax Image Recognition (Trax) raised $40 million in a Series C round from existing shareholders to support the growth, new product development and technical innovation of the company. Trax turns shelf images into real-time actionable insights by delivering a unique image recognition platform for the retail industry. Recognizing over 8 million images (with more than 1 million store visits) every month, Trax provides the highest accuracy of data, intelligence, insights and recommendations to consumer good companies and retailers in over 40 countries. Trax will use its latest round of investment, which is its largest to date, to expand its global operations with a focus in North America and a new product line for top tier retailers. Trax has over 220 global employees, 130 of which are based in the company’s R&D and Computer Vision Centre of Excellence in Tel Aviv, Israel.
Trax is the world leader in image recognition for retail. Leveraging the company’s leading image recognition platform, they provide market data solutions and services to tier one manufacturers and retailers globally. With Trax, customers can easily control performance gaps, identify category opportunities and immediately increase revenue at all points of sale. (Trax 12.06)
2.10 TechForGood Accelerator Seeks Social-Tech Startups
TechForGood has announced registration for the third cycle of its Israeli accelerator program, which supports startups that leverage technology in order to address social issues. Over the past few months, TechForGood has mobilized funds which it plans to invest in social-tech ventures to create additional momentum to the startup companies as well as the entire social-tech area in Israel. This year will also see close collaboration between the Israeli ventures and their peers and mentors in TechForGood Singapore, a sister-accelerator which TechForGood has established in Singapore in order to develop the social-tech area in Asia. The Asian market offers great opportunities for Israeli startups thanks to its proximity to large and diversified markets, as well as access to large funds of impact funds that are looking for innovative ideas for social problems.
TechForGood is currently the leader of Israel’s social-tech industry. The company’s Tel Aviv accelerator targets technological entrepreneurs who seek to generate a favorable social impact with economic value. The accelerator program provides the participants with a framework of professional experts in technology, social activism, business and finance, legal and more. It also connects the graduates with investors and key personalities in the local and global industry.
TechForGood is a global organization operating both in Tel Aviv and in Singapore. Social-tech entrepreneurs, who use technology to tackle social problems, have what it takes to make the world a better place. TechForGood supports them with everything they need to scale up and build successful, profitable and impact-generating global companies. (Globes 05.06)
2.11 DeepSense Raises $2 Million
DeepSense has completed a $2 million financing round. The round was led by AfterDox, an active angels fund in the Israeli market, with JANVEST Capital Partners and SeedIL, and follows a Chief Scientist grant to the company earlier this year.
Haifa’s DeepSense’s system collects immense amounts of data at very high speed from dozens of sites (hundreds of machines and thousands of sensors) and streams the data to the Cloud in real-time. Using unique, advanced neural-network architectures, the DeepSense analytic engine autonomously learns how similar groups of machines behave. This engine then interlinks events with components within the machines, and with various systems at the industrial site. It is thereby able to detect abnormal events, to find correlations between such events, and ultimately to predict evolving failures. Once it detects the evolution of an abnormal pattern, the system generates alerts about the upcoming failure, and provides valuable information about the remaining time to the failure, its origin in the system, and, on the basis of past occurrences, even recommends the best known solution to it. (Globes 14.06)
2.12 Armeron Raises $2 Million from Glilot Capital Partners
Armeron recently secured funding of $2 million by Glilot Capital Partners, a venture capital fund specializing in Enterprise Software. Armeron’s isolation platform is a drastic departure from today’s filtering-based approach to web application protection such as Web Application Firewalls. These first generation approaches rely on a mix of signatures and complex rules which administrators setup and retune every time the application changes. In contrast, Armeron’s isolation technology disregards any manipulation attempts on the request sent to the application, which renders all known or unknown application attacks irrelevant. The company has been testing early versions of its products with select design partners and plans to launch its beta program later this year. With headquarters in Maryland and a development center in Israel, Armeron currently employs a team of 13, mostly in Israel. (Glilot Capital Partners 14.06)
3: REGIONAL PRIVATE SECTOR NEWS
3.1 Boston Market Bringing Restaurants to Seven Middle Eastern Countries
Boston Market IP Company, an affiliate of Golden, Colorado’s Boston Market Corporation, has signed an area development agreement with Al-Ghunaim Trading Co. Ltd. that will open dozens of Boston Market restaurants in the Middle East. Al-Ghunaim Trading Co. has agreed to develop Boston Market restaurants in Kuwait, Oman, Bahrain, Saudi Arabia, Lebanon, Qatar and Jordan. The agreement is part of a plan by Boston Market to open 25 – 30 restaurants across the Middle East over the next few years.
Al-Ghunaim Trading Co. Ltd. has vast experience developing and operating casual dining restaurants in the Middle East and South Asia. The multinational casual dining restaurant company owns and operates a variety of brands including Chili’s, Johnny Carino’s Italian Grill, The Pizzeria, The Coffee Bean and Tea Leaf, Cinnamonster and Which Wich. Al-Ghunaim Trading Co. was named one of the top companies making an impact in Kuwait by Forbes Middle East. The company plans to open its first restaurant in Kuwait as part of this agreement in 2016 or early 2017. (Boston Market 06.06)
3.2 US’ Dream Hotel Group Plans First Middle East Property in Doha
NY-based hospitality management company Dream Hotel Group has announced the signing of its first hotel in the Middle East. The company signed an agreement with Qatar-based Al Alfia Holding to develop a Dream Hotel in Doha. Dream Hotel Group said the Doha signing is part of a $1.5 billion investment in new hotel development including future US locations. Dream Doha will open in late 2019 and will feature 325 rooms, nine dining and nightlife venues, and is the third overseas property for the company after Dream Phuket Hotel & Spa and Dream Bangkok in Thailand. (AB 06.06)
3.3 DP World Says Not Ruling Out Another Push for US Port
Dubai-based DP World is still reportedly keen to make another attempt to acquire a US port terminal despite being forced to back out of a plan to acquire terminals in 2006 amid backlash from lawmakers in Congress. The company’s general manager for Canada said in an interview published by the Wall Street Journal that since 2006 DP World has made significant investments in Canada. Maksim Mihic said DP World could attempt another US acquisition if a “good value proposition” comes along but added that Canada is a better market because “you have terminals not operated by the shipping lines”. Canadian volumes dipped in the first quarter of 2016, but DP World expects them to rebound. DP World owns the Centerm terminal at the Port of Vancouver and recently acquired the Fairview terminal at the Port of Prince Rupert. In December, DP World announced plans to study a further expansion at Fairview to increase its annual container handling capacity to 2 million 20-foot containers, or TEUs, from about 1.35 million. (AB 01.06)
3.4 Air Canada’s New Service from Montreal to Casablanca Begins
The arrival of flight AC1936 at Casablanca’s Mohammed V International Airport marked the successful launch of non-stop service between Montreal and Casablanca, Air Canada’s first African route and the only scheduled non-stop service to North Africa by a North American carrier. Flights between Montreal and the famed Moroccan city will be operated until 29 October 2016 by Air Canada Rouge with a Boeing 767-300ER aircraft. Service is scheduled to resume on 1 May 2017. Air Canada Vacations offers vacation packages to Casablanca which include a variety of hotels ranging from three to five stars, as well as car rentals, tours and excursions.
The new service will be operated by Air Canada Rouge, Air Canada’s leisure carrier, with a 282-seat Boeing 767-300ER, featuring a choice of three customer comfort options available: Economy; Preferred seating offering additional legroom; and Premium Rouge with additional personal space and enhanced service. 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 04.06)
3.5 Turkcell Opens Turkey’s Largest Data Center
Turkcell unveiled Turkey’s largest data center in Gebze, near Istanbul. With its new building, Turkcell aims to turn Istanbul into a regional hub of data, and serve global internet companies such as Google and Facebook, as well as Turkish public and private sectors. Turkcell’s new data center is spread over a total area of 33,000 m2. The active area – known as the “white space” – consists of 20 rooms of 500 m2 each. The building has 33 thousand meters of fiber connections. The infrastructure is supported by a 30 MW energy capacity and 25 generators of 2500 KVA each. Security is maintained with retina-scanning technology, 146 cameras and 6400 control sensors.
As the leading provider of fiber services in Turkey, Turkcell cooperates with international partners like Deutsche Telekom, Telecom Italia, Telekom Austria Group, KPN and Tata Communications. Turkcell network supports more than 2 Tbps bandwidth in its international connections. In addition to the data traffic of Turkey, 50% of the data traffic to Georgia, Iraq and Iran goes through the Turkcell network. In addition to serving its local customers, Turkcell now aims to expand its international collaborations into providing cloud services for global content companies and act as a node for international data traffic.
Turkcell is a converged telecommunication and technology services provider, founded and headquartered in Turkey. It serves its customers with voice, data, TV and value-added consumer and enterprise services on mobile and fixed networks. Turkcell launched LTE services in its home country on 1 April 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. In 2G and 3G, Turkcell’s population coverage is at 99.85% and 95.05%, respectively, as of March 2016. It offers up to 1 Gbps fiber internet speeds with its FTTH services. (Turkcell 03.06)
3.6 TAI Signs $3.5 Billion in Deals with Sikorsky for Helicopters
Turkish Aerospace Industries (TAI) has signed agreements worth $3.5 billion with Sikorsky Aircraft and three domestic contractors to make helicopters for Turkey’s Armed Forces. Under the deal, 109 utility helicopters will be built for the Turkish land, air, gendarmerie and police forces by TAI as the prime contractor, Sikorsky as the major subcontractor and Turkey’s Aselsan, TEI and ALP as other subcontractors.
In the framework of the project, TAI will manufacture all main parts of the T70 helicopters, undertake all montage works, make all tests and offer integrated logistics support. Aselsan will be responsible for the development and the integration of basic avionics while assuming responsibility together with Sikorsky for the development of the helicopter cockpit. TEI will manufacture the helicopter’s engine, while ALP will undertake the production and montage of the landing gear, as well as the dynamic parts of the helicopter. (HDN 07.06)
4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Jordan Signs Deal for Coal Fueled Power Plant
On 14 June, the Energy Ministry announced that Jordan signed an agreement to build its first coal fueled power plant. The plant will run on coal and petroleum coke. Under the deal, signed by the ministry and Al Manaseer Group, construction of the 30MW plant will begin in July. It will be located in Qatraneh, in the south of Jordan, and will be built to the “highest standards” to preserve the environment. The plant is one of the government’s initiatives to diversify energy resources to meet the rising demand for power. The project is part of Jordan’s energy strategy, under which 5% of power will be generated by coal by 2025. (JT 14.06)
4.2 Saudi Aramco & GE to Install First Wind Turbine in Saudi Arabia
Saudi Aramco and GE have announced they are partnering to install Saudi Arabia’s first wind turbine at the Turaif Bulk Plant, located in the north-west of the Gulf kingdom. The initiative is in line with Saudi Vision 2030 that has set an initial target of generating 9.5 gigawatts (GW) of renewable energy. The project marks the first regional installation of GE’s 2.75-120 Wind Turbine, which has been specifically customized for climatic conditions in Saudi Arabia.
Several studies have confirmed the potential for wind energy generation in the kingdom, particularly in the northern region. According to the Renewable Energy Atlas, higher wind speeds near 8.0 m/s and above occur in the northeast and central regions of Saudi Arabia, as well as near mountains in the western region.
GE recently announced the launch of 10 initiatives with strategic partners including Saudi Aramco, that support the goals of Saudi Vision 2030, including economic diversification, localized manufacturing, human capital development as well as productivity and efficiency enhancement across the energy, aviation, healthcare and digital sectors. (AB 10.06)
5: ARAB STATE DEVELOPMENTS
5.1 Moody’s Affirmed B2 Rating for Lebanese Government Bonds
In June 2016, Moody’s affirmed Lebanon’s government bond rating at B2 and maintained a negative outlook. The rating mirrors Lebanon’s fiscal flexibility and solid liquidity position, while the outlook takes into consideration the risks accompanying the deferral in policy action to narrow fiscal deficit. Moody’s determination of government bond rating is based on four factors: Economic Strength, Institutional Strength, Fiscal Strength and Susceptibility to Event Risk. Lebanon’s Economic Strength is “low”. The Lebanese economy is small and volatile but has continued to grow despite external shocks, such as domestic political deadlock and geopolitical developments. This growth was supported by strong remittances, which reached $3.6B in 2015, the availability of credit, and lower oil prices. However, insufficient public investment and low competitiveness would continue to hamper Lebanon’s economic growth. Similarly, Lebanon’s Institutional Strength is also “low”. Lebanon’s governance framework is impaired by political deadlock and the Syrian crisis. However, this factor is supported by effective financial regulations and monetary policy. The Lebanese government has never failed to service its debt in a timely manner, despite political and economic shocks. As for its Fiscal Strength, Lebanon recorded a “very low” score. This is due to the large fiscal deficit, of around 8% of GDP, and high debt burden reaching 126.4% of GDP in 2015. Finally, Lebanon scored “moderate” on the Susceptibility to Event Risk factor. Political risks are partly offset by a strong consensus among parties to prevent violent spillovers from Syria. Moreover, high foreign reserves and the pegged currency limit economic and balance of payments risks. (Moody’s 14.06)
5.2 Lebanon’s Eurobonds Assigned ‘B-‘ Ratings by S&P
S&P Global Ratings said on 2 June that it has assigned its ‘B-‘ long-term issue ratings to the Eurobonds issued by the Republic of Lebanon (B-/Negative/B) on 27 May 2016. The bonds are related to the purchase or early redemption and cancellation of local currency treasury bills held by Banque du Liban, the central bank, into $2 billion worth of Eurobonds. The bonds were issued in three series ($500 million 6.25% notes due 2022, $500 million 6.40% notes due 2023, and $1 billion 6.85% notes due 2029). (S&P 02.06)
5.3 Lebanon’s Fiscal Deficit Increased by 36% to $1.44 Billion in First Quarter
According to the Ministry of Finance, the fiscal balance recorded a deficit of $1.44b in the first three months of 2016 compared to a deficit of $1.06b in the same period in 2015. In Q1/16, total revenues grew by an annual 17% to $2.43b while total expenditures grew at a faster rate of 23% to $3.87b. The fiscal balance is in deficit even when Lebanon’s debt payments are excluded. Accordingly, the primary deficit widened from $138m in Q1/15 to $400.9m in Q1/16. In terms of revenues, total tax revenues increased by a yearly 9% to $1.67B with customs revenues rising by an annual 4% to $321.97M and with VAT revenues rising by an annual 7% to $528.21M.
Telecom revenues, which represent around 60% of non-tax revenues, grew from $241M in Q1/15 to $347.50m in Q1/16. In terms of expenditures, the heavyweights are usually transfers to EDL and debt repayments. However, given the continuous slump in oil prices since mid-2014, the value of transfers to EDL registered an annual drop of 52% from $315.47M in Q1/15 to $152.32M in Q1/16. As for the debt service, it grew by an annual 13% from $924M in Q1/15 to $1.04B in Q1/16. (BLOM 09.06)
5.4 Number of Lebanese New Car Registrations Inched Up 1.36% by May
According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars added 1.36% year-on-year (y-o-y) to 15,300 cars by May 2016. This growth was prompted by the 0.3% yearly increase in the number of newly registered passenger cars to 14,264 and the 18.8% surge in newly registered commercial vehicles to 1,036. Japanese cars were the most demanded cars in Lebanon during the first 4 months of 2016, grasping a 36.5% share of total passenger cars. Korean cars followed, with a market share of 35.4% by May 2016, while European cars maintained their third rank with a market share of 21.4%. In terms of brands, Kia grasped the largest share of newly registered passenger cars (19.52%), followed by a 15.75% stake for Hyundai. Toyota and Nissan came next, with a 13.38% share for Toyota, while Nissan held 10.3%. In terms of sales per importer, Natco acquired the biggest stake of newly registered cars with 18.20% of the total, followed by BUMC (14.21%), Century Motor Co. (14.95%) and Rasamny-Younis Motor (11.50%). (BLOM 13.06)
5.5 Lebanon’s Balance of Payments Deficit $899 Million by April 2016
Lebanon’s Balance of Payments (BoP) revealed a deficit of $899.1 million in the first four months of 2016, compared to a deficit of $714.2 million in the same period last year. The widening deficit is the result of a lesser flow of Foreign Direct Investments and remittances since regional economies are now facing their own set of economic and political woes. Up until April, Net Foreign Assets (NFA) of the Central Bank (BDL) dropped by $902 million, while that of commercial banks rose by $2.9 million. In April alone, Lebanon’s BoP also registered a deficit of $254.9 million, compared to a surplus of $136 million in April 2015. The NFAs of BDL decreased by $494.9M and that of commercial banks inched up by $240 million, from the prior month. (BLOM 06.06)
5.6 Jordan Drops One Place in World Competitiveness Report
Jordan ranked 53 among 61 economies in the latest world competitiveness report by Switzerland’s International Institute for Management Development (IMD) – the Kingdom ranking dropped from 52nd place in 2015 to 53rd in 2016. Jordan was regional countries included in the ranking, with Qatar which came in the 13th place and the United Arab Emirates, which ranked 15. Israel was ranked in 21st place. Hong Kong topped the list in the ranking, followed by Switzerland and the United States. (AmmonNews 04.06)
5.7 Jordan’s JBSP Border Security Program
On 2 June, Defense Industry Daily reported that in May 2008, the U.S. Army’s Communications and Electronics Command (CECOM) chose DRS Technologies, Inc. in Gaithersburg, Maryland (since acquired by Italy’s Finmeccanica) for the initial phase of the Jordan Border Security Program. The overall system will include Distant Sentry(TM) mobile and fixed surveillance towers that utilize a variety of Commercial Off-The-Shelf (COTS) sensors, communications between the towers and mobile and fixed Command and Control (C2) Centers, and electronic infrastructure, software, and computing systems for the centers themselves. The Iraqi border is reportedly the focus of the JBSP program, but that country’s borders with Syria are also a concern.
The $100 million program aims to secure the Hashemite Kingdom against infiltrators from the Islamic State and other extremist organizations operating beyond its border with Syria and Iraq. Under the program, Raytheon and Jordanian subcontractors have been deploying and testing the sensor-fused border barriers while, in parallel, training other Jordanian partners to maintain and operate the system. As well as the barriers, patrol paths and watchtowers, the system is integrated with day and night cameras, ground radars, and a full command, control and communications suite. The system will be completed by the end of next year. (DID 02.06)
►►Arabian Gulf
5.8 Kuwait’s Fuel & Gas Subsidies Budget Reduced to $787 Million
Kuwait has allocated a reduced figure of $787 million (KD 238 million) towards fuel and gas subsidies for 2016/2017. The figure is significantly lower than that the “billions of dinars” of previous years, when oil prices were over $100 a barrel. The decision is in line with reports that the government could increase petrol prices between 14 to 83% next month during the parliamentary summer break. In 2015, Kuwait fully lifted subsidies on grades of fuel such as diesel and kerosene.
As for the new budget, it includes over $1 billion (KD 310 million) in ration card subsidies, $880 million (KD 266 million) in aid to ‘friendly and sisterly countries’, and $993 million (KD 300 million) in social aid to divorced women or those married to stateless people and others. The budget also dedicates $413 million (KD 125 million) to patients receiving medical treatment abroad. The same figure was estimated at $993 million (KD 300 million) last year.
The government was asked to review the roles of semi-government and independent government bodies which use up over $15.2 billion (KD 4.6 billion) of state funding – the main source of the budget deficit valued at over $36.4 billion (KD 11 billion) in 2016. (AB 06.06)
5.9 Kuwait’s Foreign Trade Surplus Shrinks 76% to $1.3 Billion in First Quarter
Kuwait’s foreign trade surplus shrank 76.6% from a year earlier to KD402 million ($1.33 billion) in Q1/16, data from the Central Statistical Bureau has showed. In the previous quarter, the surplus reduced by 68.7% to KD1.05 billion ($3.5 billion) as low oil and gas prices affected the local economy. In March, Kuwait’s central bank governor warned that authorities may have to change monetary policy if the government does not act urgently to cut a budget deficit caused by low oil prices. Mohammad al-Hashel said the legislative and executive branches of the government needed to prove to the rest of the world that public finances were sustainable.
In January, Kuwait’s finance ministry said that the Gulf oil exporter’s 2016-17 draft budget forecasts a deficit of KD12.2 billion, nearly 50% higher than the previous year, due to falling crude prices. The ministry said expected revenues will be KD7.4 billion while expenditures are expected to be KD18.9 billion. The deficit for the fiscal year, which runs from April 1 to end of March, includes KD0.7 billion contribution to the Generations Fund, a nest egg for when oil supplies diminish or the economy suffers other shocks. Kuwait is planning to develop five islands off its coastline into business free zones, part of the country’s bid to diversify its economy away from its focus on energy. The free zone plans will be based on international models and will depend on foreign investment to bring to fruition. (AB 11.06)
5.10 Kuwait’s Capital Spending to Reach $8.9 Billion this Year, Up $1.8 Billion
Capital spending in Kuwait is set to reach $8.9 billion, a rise of $1.8 million over the past year. MP Adnan Abdulsamad, Kuwaiti head of the National Assembly budgets committee, said the arrangement of the 2016/17 budget had been changed and the distribution of expenditures had also been modified. The committee has asked ministries and government departments to restructure their procedures of reviewing, awarding and implementing development contracts in a bid to cut expenditures. There have been calls for the dismissal of senior officials who failed to perform their duties with regards to development projects.
During the committee meeting, MP Saleh Ashour, head of the women’s affairs committee in the assembly, said a law would soon be issued to give priority for government jobs to children of Kuwaiti women married to expats after they receive citizenship. The assembly’s priorities committee said the upcoming session would result in the approval of new laws including one that would stiffen penalties against violations of laws in the private sector. (AB 02.06)
5.11 Qatar’s Foreign Trade Surplus Shrinks to $1.3 Billion in April
Qatar’s foreign trade surplus shrank by nearly two-thirds from a year earlier to QR4.78 billion ($1.31 billion) in April, according to data from the Ministry of Development Planning and Statistics. The surplus slumped by 64.7% from more than QR10 billion in the year-earlier period because of low natural gas and oil prices. Exports of petroleum gases and other gaseous hydrocarbons fell 45.1% to QR8.63 billion ($2.37 billion). Qatar recently cut its planned spending on building healthcare facilities by about two-thirds this year following the drop in energy prices.
The world’s top liquefied natural gas exporter is one of the richest countries per capita but it faces a QR46.5 billion ($12.8 billion) budget deficit this year because of the continued lower oil and gas prices. Like other Gulf states, it is turning to international markets to bridge the gap but it is also having to reduce and prioritize state spending. (AB 01.06)
5.12 Qatar Spends $18 Billion to Remain Region’s Most Peaceful Country
Qatar has had to spend $18 billion to remain the Middle East’s most peaceful country, revealed the Global Peace Index report. The country was ranked 34th most peaceful out of 163 independent states in the report published by The Institute for Economics and Peace. The countries’ peacefulness levels were measured using 23 indicators across three main themes, including level of safety and security in society, extent of domestic or international conflict and degree of militarization.
Qatar scored well in terms of internal peace and low levels of crime, but it scored the worst mark, a 5/5, for weapons importing. It spent 7% of its 2014 GDP ($18.24 billion) towards “costs related to violence, armed conflict and spending on military and internal security services,” revealed the report. Other Middle Eastern countries, such as Kuwait, came in 51st place, while the UAE and Oman came in 61st and 74th respectively. Saudi Arabia and Bahrain ranked 129th and 132nd consecutively. (AB 12.06)
5.13 UAE & Saudi Arabia Named Among World’s Top Developing Retail Markets
The UAE and Saudi Arabia have been named among the world’s top 10 developing retail markets, according to AT Kearney’s 2016 Global Retail Development Index (GRDI). The UAE, led by Dubai, was ranked seventh in the list and remains an attractive and relatively low-risk market for retailers, with highest sales per capita in the region, said AT Kearney.
Its report said mall activity remains strong in the UAE, with Dubai’s Mall of the Emirates opening its 36,000 sq. m. extension and Majid Al Futtaim’s latest shopping mall City Centre Me’aisem being completed, alongside phase two of City Walk. It added that plans for the second half of 2016 remain equally ambitious with numerous additions to the retail landscape expected, such as My City Centre Al Barsha and The Pointe Mall at Palm Jumeirah. Notable investments from international retailers include the opening of the first Apple store in the Middle East in Dubai – and the largest Apple store in the world at an estimated 10,000 sq. ft.
Saudi Arabia, ranked in eighth position in the report, saw retail sales continue to grow in 2015 despite the Gulf kingdom’s GDP falling by 15%. It added that recent policy changes which allow single-brand retailers 100% foreign ownership in retail and wholesale look set to push Saudi’s position as an international hub for distributing, selling and re-exporting products. (AB 07.06)
5.14 The Cost of Keeping the Peace in the UAE Put at $29.8 Billion
Violence impacted the UAE’s economy by $29.81 billion in 2015, 6% of its GDP, or $3,280 per person, according to the latest Global Peace Index (GPI). The figure represented a decrease of 18% from 2008 and at 6% of GDP this was ranked 110th in the world. The UAE was ranked as the 61st country in the Global Peace Index (GPI) and third out of the 20 countries in the Middle East and North Africa region. The study said the UAE ranked last in weapons imports in the world despite seeing an improvement in this indicator over the decade. However there have been notable improvements in UN peacekeeping funding military funding and violent crime.
The global deterioration in peace in 2015 was driven by increased terrorism and higher levels of political instability. While the majority of terrorist activity is highly concentrated in five countries – Syria, Iraq, Nigeria, Afghanistan and Pakistan – the breadth of terrorism is spreading, with only 23% of countries in the index not experiencing a terrorist incident. Europe was once again ranked the most peaceful region in the world. The largest improvement since last year occurred in Central America and the Caribbean, while South America also made progress in its levels of peacefulness. (AB 08.06)
5.15 UAE Signs Deal with NASA in Bid to Reach Mars
The UAE and NASA have signed a deal to work together in a mission to reach Mars. The agreement could see the two parties sharing spacecraft, scientific instruments, research facilities and information in a bid to explore the Red Planet. UAE Space Agency Chairman Dr. Khalifa Al Romaithi and NASA Administrator Charles Bolden signed the agreement at a meeting in Abu Dhabi. The deal strengthens the long-standing relationship between the US and UAE. The two countries will continue to identify areas of mutual interest for possible future cooperative programs or joint activities on Earth, in airspace or in outer space, said the report. (AB 13.06)
5.16 Saudi Arabia Aims to Attract 1.5 Million Tourists by 2020
The Saudi Vision 2030 development initiative announced by Deputy Crown Prince Muhammad Bin Salman aims to increase the revenue generated from tourism to 18% in the next 14 years. The vision also aims to establish an Islamic museum, which will draw a large number of tourists, including foreign pilgrims who visit the kingdom for Haj and Umrah. Analysts expect that by 2020, the number of tourists visiting the kingdom would increase from 200,000 to 1.5 million. It is felt that the investment of every $1 million in the tourism sector would create 167 direct and indirect jobs. (AB 05.06)
5.17 Saudi Arabia Plans New ‘Balanced’ Saudization Scheme
Saudi Arabia is preparing to launch a revised Saudization program called “the balanced Nitaqat.” The program, details of which were revealed earlier this year, does not only impose quotas for numbers of Saudi nationals within an organization, but also takes into account new factors such as the average wage and percentage of women. The Ministry of Labour and Social Development devised the new program after decades of Saudization policy failed to adequately reduce unemployment rates among citizens, Saudi Gazette reported. The minister had already amended the employment quota system in the private sector in 2011, including by imposing stricter penalties on companies that did not follow the system and obligating certain sectors to hire women. However, it has been drawing up a new plan as part of the national strategy for employment and the kingdom’s Vision 2030, which aims to increase the contribution of women in the labor market from 22% to 30%. (AB 12.06)
5.18 Expats & Employers Worried Over Uncertain Saudi Tax Proposal
Expatriates in Saudi Arabia and their Saudi employers alike voiced unease about a proposal the government is studying to impose income tax on foreign workers to make up for falling oil revenues. Around a third of the 30 million inhabitants of the world’s top oil exporter are foreigners, many of them drawn, despite ultra-conservative social restrictions, by the absence of tax and the lure of salaries higher than they could secure at home. A National Transformation Plan of economic reforms, released on 6 June, said 150 million riyals ($40 million) had been set aside for preparing and implementing tax on expats, but Finance Minister Alassaf said no decision had yet been taken.
Still, the news that such a proposal was being formally studied by the government was enough to alarm some foreign workers. No further details have been released on what such a tax might entail for residents – a category that includes all non-Saudi citizens. Among the unanswered questions: whether it would cover all income levels and all professions, or how long it would take to introduce.
The collapse in oil prices after mid-2014 has pushed Saudi Arabia to contemplate a radical overhaul of all parts of its economy, including new taxes, privatizations, a changed investment strategy and sharp cuts in government spending. However, the new Saudi reform plans depend partly on strong private sector growth, already fragile thanks to lower state expenditure and cuts to energy subsidies, and which could be further weakened if labor costs were to rise.
Increasing the cost of foreign workers through the imposition of an income tax – which the government has promised will not be levied on Saudi citizens – will help make locals, who typically command higher wages, more competitive hires. Opposition from Saudi businesses scotched a previous plan to tax expatriates in the 1990s, but with a much bigger push for economic reforms this time, it is possible the government will be more willing to take them on. (Reuters 08.06)
►►North Africa
5.19 Eni & BP Declare New Egyptian Offshore Gas Discovery
On 9 June, BP and Eni today announced the discovery of a sizeable natural gas reservoir off the Egyptian coast. The new discovery is located in the Baltim exploration region, near the eastern part of the Nile delta, about 10 kilometers north of the Nooros gas reservoir discovered in July 2015. The announcement by Italian company Eni said that it estimated that the new discovery contains 70 – 80 billion cubic meters (BCM). BP said that additional operations were required to estimate the size of the reservoir.
The new discovery is not Eni’s first in Egypt. Less than a year ago, Eni, which owns 50% of the rights in the Baltim exploration license, announced the discovery of the Zohr gas reservoir, one of the world’s largest. Eni recently predicted that 30 trillion cubic feet (TCF) could be produced from Zohr (for the sake of comparison, 22 TCF can be produced from Israel’s Leviathan). While the new discovery is small, it comes on top of the series of gas discoveries in Egypt in recent years, which is liable to intensify competition in the region. (Globes 09.06)
5.20 Egypt Parliament Approves Saudi King’s Sinai Development Program
On 5 June, Egypt’s parliament approved a report prepared by the legislative and constitutional affairs committee on a Saudi-Egyptian loan agreement aimed at developing the Sinai peninsula. The agreement, titled King Salman’s program for the development of the peninsula of Sinai, was signed by government officials from the two countries in Riyadh in March. The agreement was aimed at giving Egypt a $1.5 billion soft loan to help it develop Sinai and buy Saudi oil products needed for development purposes.
According to the report, the loan agreement is in line with Article 151 of the Egyptian Constitution that notes that the state’s foreign agreements can go into effect only after being approved by parliament and as long as these agreements do not lead Egypt to ceding part of its territory to another country. The majority of MPs voted in favor of the committee opinion as expressed in its report. (AFP 05.06)
5.21 Investment Ministry Pledges Quarterly Report to Parliament on Work Program
Egyptian Minister of Investment Dalia Khurshid pledged to present the ministry’s work program to the House of Representatives as a quarterly report. Minister Khurshid will send the investment map to parliament for review before sending it to investors for consultation. Khurshid presented proposals for amending the investment Law No.17 for 2015, noting that there are some restraints on the proposals, promoting the projects is one of them. Egypt ranked 131st out of 189 countries that are attractive for investment, compared to being ranked 106th in 2010. Khurshid said that Egypt targets to rank 60th by 2020 and 30th in 2030. (DNE 06.06)
5.22 Egypt’s Trade Deficit Falls 44% in March
Egypt’s trade deficit dropped 44.4% in March to EGP 19.9 billion, down from EGP 35.7 billion in the same month a year earlier, CAPMAS announced on 14 June. Imports fell 27.2% to EGP37.5 billion, down from EGP51.5 billion, driven mainly by a sharp decline in the import of petroleum products by 22.2%, raw materials for steel by 15.5% and passenger cars by 21.9%. The rise in the value of petroleum products, on the other hand, has contributed to an 11.7% increase in exports to EGP 17.6 billion from EGP 15.8 billion. Fertilizer prices also surged 158.4%, contributing to a higher value for exports. (Ahram Online 14.06)
5.23 Egypt to Create Database of Expatriates
The Immigration and Egyptian Expatriate Affairs Minister Nabila Makram unveiled plans to create an up-to-date database on the number of Egyptians abroad through registering all work permits of nationals working overseas. She also unveiled efforts to introduce insurance plans for Egyptian expatriates. Expatriates represent a prominent political and economic bloc for Egypt, as they send money to their relatives and have money saved in Egypt, thus representing one of the main sources of foreign currency for the country. Politically speaking, the majority of Egyptians abroad — estimated at around five million — are eligible voters. The wants and needs of Egyptians in Africa, according to Makram, are not widely known due to a skewed focus on expatriates in other regions like the Gulf. The ministry plans to boost Egypt’s ties with African countries through a strategy of public diplomacy and will focus in particular on enabling Africans to study in Egypt. (Al-Masry Al-Youm 05.06)
5.24 Egyptian Business Activity Down for 8th Month in a Row
Conditions for Egypt’s non-oil private sector worsened for the eight month in a row in May, according to businesses surveyed for the Purchasing Managers Index. The continuing fall of the Egyptian pound against the dollar was a major factor in the decline, raising costs and contributing to a liquidity shortage that dampened business activity, respondents reported. Purchase prices rose at the steepest rate since the Egypt survey began in 2011.
At 47.6, May’s overall index score improved slightly from the 46.9 reading in April, indicating that conditions deteriorated at a slower rate. Any score below 50 indicates that the business environment got worse during the month. Both output and new business fell during the month, albeit at a slower pace than the record drop recorded in March. A decrease in exports was partly responsible for the decline in new work. Employee numbers decreased for the 12th consecutive month. Combined with a lack of liquidity, low employment led to a record growth in backlog for businesses surveyed. (Mada Masr 05.06)
5.25 Tunisia Gets $2.9 Billion IMF Loan for Job Creation & Economic Growth
The IMF has approved a four-year, $2.9 billion loan for Tunisia to support the authorities’ economic agenda aimed at promoting more inclusive growth and job creation, while protecting the most vulnerable households. The program builds on the previous arrangement, which supported Tunisia in the immediate aftermath of the Arab Spring. The first program, the Stand-By Arrangement, helped Tunisia preserve macroeconomic stability during a very difficult time – prolonged political transition, increased social tensions including strikes and work stoppages and security tensions arising from conflicts with Salafists and the tragic terror attacks of 2015 that devastated the tourism industry. Amid this challenging landscape, the authorities were able to implement an ambitious reform agenda aimed at supporting private sector development, tackling high unemployment, and reducing regional disparities.
Despite significant progress, Tunisia is still facing many economic challenges: spending composition has worsened, external imbalances are high, the dinar remains overvalued, banking fragilities remain, and reforms to strengthen the business climate have been slow. That is why the authorities requested a follow-on four-year program, the Extended Fund Facility, to support their economic vision of modernizing the country’s development model and reducing existing vulnerabilities.
This longer-term program is designed to target the critical long-standing structural weaknesses of Tunisia’s economy, the ones that have resulted in slow growth and high external balances. Therefore, the main focus of this program is to consolidate the progress that has already been made on macroeconomic stability and to address remaining structural obstacles to more inclusive growth and job creation. (IMF 02.06)
5.26 Daoudi Renews Commitment to Transition to English in Moroccan University
Lahcen Daoudi, Minster of Higher Education, Scientific Research, and Training, reaffirmed his commitment to digital development and the transition to English in higher education in a conference with university officials in Rabat recently. This meeting marked the beginning of the sixth year of “Injaz al-Magrib”, a program that seeks to renew and develop the Moroccan higher education system.
This year, Daoudi and Delegate Minister Jamila Almisli emphasized technological investments. In 2016, the government will allocate MAD 230 million to provide 64,000 students with computers and tablets equipped with high-speed internet. Over the past five years, the program has provided 126,500 students with electronics for a total cost of MAD 647 million.
Daoudi also reiterated his support for the campaign to establish English as the second language in Moroccan higher education. Daoudi has backed this movement for years, citing Moroccan student’s lack of professional English as a major barrier to success in the scientific fields. The minister said in 2014 that French is no longer a useful language, especially for students studying science. Since English is now the lingua franca for academics worldwide, doctoral students that are unable to write their references in English have no value in the field. He predicts that in the coming five years university students will be required to take some of their tests in English as the higher education system refocuses linguistically.
Currently, approximately 20% of Morocco’s population speaks some English. Head of Government Adbelilah Benkirane, Dr. Daoudi, and various other politicians and think tanks have all expressed their support for the adoption of English as Morocco’s second language of the future. (MWN 09.06)
6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS
6.1 Turkish Industrial Output Drops In April
Turkey’s annually-adjusted industrial production fell 1.1% in April, compared to the previous month, the Turkish Statistical Institute (TurkStat) said on 8 June. The mining and quarrying index declined by 5% and the manufacturing index dropped 1.3% for the same period. However, the electricity, gas, steam and air conditioning supply output increased 1.8% in April 2016, in contrast to the prevailing trend. The producers of capital goods saw the largest decrease of 3.7%. The decline surprised analysts who had forecast a rise in output.
Turkey’s industrial output is focal point of interest as Gross Domestic Products (GDP) growth of country stood at 4% last year. The Turkish government aims to reach 4.5% of GDP growth and reduce consumer price inflation to 7.6% in 2016, according to the government’s national economic plan for development. However, the World Bank expected growth to slow to 3.5% in 2016 because of a more negative contribution from net exports compared to 2015, according to the April edition of the bank’s Turkey Regular Economic Brief. (TurkStat 08.06)
6.2 TUPRAS Named as Turkey’s Biggest Firm
Turkish energy giant TUPRAS has been named the country’s biggest company in 2015. The Istanbul Chamber of Industry (ISO) made the announcement in its list of Turkey’s top 500 firms. TUPRAS has been in number-one position since 2005; it earned TL 35.4 billion ($12.1 billion) of turnover in 2015. Ford Otomotiv was in second place and Arcelik — a Turkish household-appliances manufacturer — was third largest. Ford Otomotiv made TL 14.7 billion ($5 billion) of turnover while Arcelik earned TL 9.9 billion ($3.4 billion). Automotive producers Oyak Renault and Tofas followed in fourth and fifth place, respectively.
According to ISO research, Turkey’s manufacturing industry growth was under the national economic average over the last four years, with the exception of 2014. In 2015, the Turkish economy grew 4% while the manufacturing industry’s growth was 3.8%. In the same year, ISO 500 companies’ exports decreased 12.9%, from $61.3 billion to $53.4 billion. The top five exporters from among the ISO 500 list were Ford Otomotiv, TUPRAS, Oyak Renault, Tofas and Arcelik. (HDN 08.06)
6.3 Turkish Defense Minister Meets Pakistani Counterpart
Newly-appointed Turkish Defense Minister Fikri Isik and Pakistani counterpart Khawaja Muhammad Asif met in Islamabad to discuss bilateral defense cooperation. The leading issue between the two countries is a deal for T129 attack helicopters. The T129s is a multi-role attack helicopter co-developed by Turkish Aerospace Industries. The Turkish defense minister added that plans to purchase Pakistani-made Super Mushshak basic trainer aircraft were still in under discussion. Pakistani authorities, for their part, had requested the purchase of four Turkish Ada-class corvettes (which would be built in Pakistan). Turkey and Pakistan have also begun discussing details of a cooperation deal by which Turkey would help modernize the Pakistani navy’s fleet of three Agosta-class submarines. (AA 06.06)
7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Knesset Sees Record Number of Women MKs After Latest Reshuffle
Israel’s latest political reshuffle has brought the number of women lawmakers to a new record: Yulia Malinovsky was sworn in as a Yisrael Beytenu MK on 7 June, bringing the number of female MKs to 33 — an all-time high. Malinovsky was sworn in to replace Yisrael Beytenu leader Avigdor Lieberman in the legislature. Lieberman stepped down as MK when he was named defense minister, as under the stipulations of the so-called “Norwegian Law,” ministers are requires to be replaced in parliament by a candidate from their party’s Knesset roster. Malinovsky, 40, immigrated to Israel from Ukraine in 1998. She placed ninth on Yisrael Beytenu’s Knesset list, and was chosen by Lieberman to replace him last week. (Various 07.06)
*REGIONAL:
7.2 Nearly 60% of Qatari Population Lives in Labor Camps
Almost 60% of Qatar’s 2.4 million population live in what the government calls “labor camps,” figures from an April 2015 census released on 5 June, highlighting the issue of the emirate’s huge migrant workforce. The figures from the Ministry of Development Planning and Statistics (MDPS) revealed that 1.4 million people live in what the department officially designates as “labor camps.” That works out at just over 58% of the country’s population. The overwhelming majority – 1.34 million – were male, the statistics found. Since the census, Qatar’s population has grown further to just over 2.5 million.
The accommodation of migrant laborers working on Qatar’s numerous infrastructure projects has long been a contentious issue. Qatar, which will host the football World Cup in 2022, has been condemned by human rights groups, including Amnesty International, for providing “squalid and cramped accommodation” for its large migrant workforce. Qatar has responded to the criticism by building new workers’ housing complexes, including the $825 million “Labor City” south of the capital Doha, which incorporates shops, cinemas and a cricket stadium.
The population of gas-rich Qatar has soared over the past three decades as it has imported a huge migrant workforce to develop its infrastructure. In 1986, just 373,000 people lived in the emirate. (AFP 05.06)
7.3 King Fahd and University of New Haven Sign Collaboration Agreement
The General Director of King Fahd Security College, General Major Saad Abdullah Alkhelawi, and University of New Haven (UNH) President Steven H. Kaplan signed an agreement to collaborate in the development of a new four-year baccalaureate degree program in security studies. The program will be delivered at King Fahd Security College (KFSC) in Riyadh, the capital of Saudi Arabia. Under the agreement, experts from UNH’s Henry C. Lee College of Criminal Justice and Forensic Sciences will advise their counterparts at KFSC on the creation and accreditation in the Kingdom of a baccalaureate degree in security studies with three specialization tracks: criminal justice, homeland security and intelligence studies.
The Lee College is home to world-class faculty and researchers in criminal justice, national security studies, forensic science, forensic computer investigation, law enforcement, corrections, probation and parole, fire science, arson investigation, victimology studies and related areas. The agreement makes UNH’s collaboration with King Fahd Security College, the Kingdom’s premier training institution for security studies, a natural yet unique academic partnership to establish a center of excellence for security studies in the Kingdom of Saudi Arabia, enhancing security in the Kingdom, the Middle East and globally. (UNH 03.06)
7.4 Egyptian Population Reaches 91 Million
Egypt’s Central Agency for Public Mobilisation and Statistics (CAPMAS) said Egypt’s population increased by 1 million people over the past six months. On 6 December, the population stood at 90 million people. According to CAPMAS, the population growth rate is currently one of the most important and most dangerous challenges facing Egyptian society. The current growth rate of the population recorded 2.4% in 2015 – five times the rate in developed countries, double the rate in developing countries, eight times the growth rate in South Korea, and five times the rate in China.
CAPMAS stated that continued population growth at current rates would limit and heavily affect achieving significant progress in standards of living, despite the efforts of the state in various fields of economic development. The agency stressed the need to balance between population growth rates and the economic potential of the state and its available resources.
Cairo Governorate is the largest province in terms of population size with 9.51 million residents, 10.45% of the total population. Giza follows with 7.84 million and a rate of 8.6% of the population in Egypt. In third place is Sharqeya with 6.7 million residents who represent 7.4% of Egyptians in the country. According to CAPMAS, the South Sinai governorate is the least populated, with only 171,000 residents (0.18%), preceded by the New Valley Governorate with 233,000 and the Red Sea governorate with 358,000 residents. Egypt’s population resides in only 7.7% of the country’s total area. (CAPMAS 05.06)
8: ISRAEL LIFE SCIENCE NEWS
8.1 NeuroRx Awarded First Prize in Annual Israel BIOMED Startup Competition
NeuroRx was awarded first prize in the annual startup competition of the Israel Advanced Technology Industry (IATI) BIOMED forum. The company has completed a pre-investigational new drug meeting with the US FAD for a planned pivotal study expected to commence in the third quarter of 2016. The prize includes financial support from Israel’s venture community. The competition included entries from dozens of Israel’s top biotech startup companies and was judged by the chairs of IATI BIOMED, Israel’s Office of the Chief Scientist, and leaders of Israel’s venture capital community.
NeuroRx is a privately-funded, clinical stage pharmaceutical company that is developing Cyclurad, the first oral therapeutic for the treatment of suicidal crisis associated with bipolar disorder. The company is built upon 30 years of basic science and clinical expertise in understanding the role of the brain’s N-methyl-D-aspartate (NMDA) receptor in regulating human thought processes in general and in regulating depression and suicidality in specific. NeuroRx expects to initiate a Phase II/III clinical trial of Cyclurad in combination with ketamine for the treatment of acute suicidal crisis in bipolar depression in late of 2016. (NeuroRx 01.06)
8.2 BioTime Gets $2.2 Million Grant for Further Development of Dry-AMD Program
BioTime and its subsidiary Cell Cure Neurosciences announced that Cell Cure has been awarded a new grant for 2016 of NIS 8.4 million (approximately $2.2 million) from the Israel Innovation Authority (IIA, formerly the Office of the Chief Scientist) of the Ministry of Economy. The grant provides continuing funding for the development of OpRegen, a cell-based therapeutic product that consists of animal product-free retinal pigment epithelial (RPE) cells with high purity and potency. OpRegen is currently in a Phase I/IIa dose-escalation clinical study evaluating the safety and efficacy of OpRegen for geographic atrophy (GA), the severe stage of the dry form of age-related macular degeneration (dry-AMD). Dry-AMD is a leading cause of blindness in people over age 60, for which there is no currently approved therapy.
The IIA has to date provided grants of approximately $9.6 million to Cell Cure. Under the grant award agreement, Cell Cure is obligated to pay a 3.5% royalty to the IIA on revenues from OpRegen up to an amount equal to 100% of the grants received plus interest at a LIBOR rate.
Jerusalem’s BioTime is a clinical-stage biotechnology company focused on developing and commercializing novel therapies developed from what are believed to be the world’s premier collection of pluripotent cell assets. The foundation of their core therapeutic technology platform is pluripotent cells that are capable of becoming any of the cell types in the human body. Pluripotent cells have potential application in many areas of medicine with large unmet patient needs, including various age-related degenerative diseases and degenerative conditions for which there presently are no cures. In addition to the development of therapeutics, BioTime’s research and other activities have resulted, over time, in the creation of other subsidiaries that address other non-therapeutic market opportunities such as cancer diagnostics, drug development and cell research products, and mobile health software applications. (BioTime 10.06)
8.3 Nano Textile Introduces Novel Technology to Fight Hospital-Acquired Infections
Nano Textile introduced a revolutionary technology that can transfer any type of fabric to one that kills bacteria. The unique, cost effective technology, which permanently prevents the growth of bacteria on both natural and synthetic fibers, can prevent the spread of hospital-acquired infections and reduce cross contamination between patients and medical staff, thereby significantly reducing secondary infections. The revolutionary technology transforms any readymade fabric into antibacterial textile by embedding zinc-oxide (ZnO) nanoparticles onto the fabric. ZnO is known for its antibacterial properties and has been approved by the FDA as safe. Nanoparticles of ZnO eradicates even antibiotic resistant bacteria such as MRSA. The technology, which has been patented in the US and Israel, and is awaiting approval in Europe and Asia, with funding of €12 million from the EU’s FP7 program.
The novel technology enables the cost-effective creation of antibacterial fabrics using any desired fabric, without changing its appearance, since ZnO is colorless. In addition, the fabrics can withstand up to 65 wash cycles at 92 °C and up to 100 wash cycles at 75 °C, far beyond the standard requirements of medical facilities, without losing their antibacterial properties.
Ramat Gan’s Nano Textile‘s proprietary technology can apply anti-bacterial properties to any fabric. The Company was established in 2014, based on nanotechnology developed by Professor Gedanken from the Department of Chemistry at Bar Ilan University, Israel and was licensed under an exclusive world-wide agreement with BIRAD, the technology transfer office of Bar Ilan University. (Nano Textile 14.06)
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 Check Point Selects Mellanox Ethernet Solutions to Enhance Security Appliances
Mellanox Technologies has been selected by Check Point Software Technologies to include its ConnectX-4 40Gb Ethernet adapter card in Check Point’s 15000 and 23000 series of security appliances. ConnectX-4 adapters enable companies to connect their 10 GbE server uplinks to their 40 GbE core, thereby ensuring that their networks remain secure when they upgrade their data center from 10 to 40GbE. With 40GbE, Check Point can discover malicious behavior before it enters the network thanks to ConnectX-4’s flexible, high-speed connection.
Check Point security appliances protect today’s enterprise networks and data centers from even the most sophisticated attacks with uncompromising, reliable threat prevention. By adding 40Gb high-performance connectivity, platform performance can be optimized to further enhance the appliance’s ability to secure enterprise and data center environments. The ConnectX-4 adapter card offers the highest performing solution for applications requiring high bandwidth, low latency and high message rate. It features an efficient I/O consolidation that lowers data center costs and complexity and encourages scalability to tens of thousands of nodes. Mellanox adapted the ConnectX-4 card to support the Check Point GAIA operating system, and produced a unique form factor for the Check Point security appliances.
Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyperconverged infrastructure. Mellanox intelligent interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance. (Mellanox 02.06)
9.2 Mellanox New BlueField Family of System-on-Chip Programmable Processors
Mellanox Technologies announced the BlueField family of programmable processors for networking and storage applications. The BlueField family of devices addresses an increasing need in the industry for higher levels of SoC (System-on-Chip) integration to simplify system design, lower total power and reduce overall system cost. BlueField incorporates Mellanox ConnectX network acceleration offload technology together with an array of high-performance 64-bit ARMv8 CPU cores that leverages the Tilera coherent mesh interconnect technology from the recent acquisition of EZchip. The result is a device that delivers unmatched levels of integration for multiple applications, including dataplane offload for Network Functions Virtualization (NFV), advanced networking and security, and serving as the embedded storage controller of an array of solid state Flash drives.
The BlueField family features Mellanox’s latest generation ConnectX network acceleration technology integrated with an array of high-performance 64-bit ARMv.8 processor cores and multiple Virtual Protocol Interconnect (VPI) 100Gb/s networking ports supporting InfiniBand and Ethernet. The advanced SkyMesh coherent on-chip interconnect – proven in multiple generations of Tilera processors – enables scalable performance and leading power efficiency.
Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 01.06)
9.3 CellMining Wins GTB Telecoms Innovation Award
Caesarea, Israel’s CellMining, a leading provider of Self-Organizing Networks (SON) and subscriber network experience solutions, has been selected as a winner in the GTB Telecoms Innovation Awards 2016 in London in the Mobile Infrastructure Innovation category. The award recognizes CellMining’s outstanding achievement in developing and deploying a customer-experience driven SON solution for Israel’s largest mobile operator Cellcom.
CellMining has pioneered the integration of SON with CEM (Customer Experience Management), offering MNOs and MVNOs a world-class solution to optimize their networks for subscriber experience excellence: improving against network KPIs, saving on operational and engineering costs, and reducing subscriber churn. Its SONATA suite provides mobile network operators and MVNOs with a unique toolset for optimizing user experience and network performance based on real-time metrics of subscriber data. (CellMining 31.05)
9.4 VisIC Technologies GaN Device provides Highest Efficiency at Highest Frequency
VisIC Technologies is pleased to announce the availability of its new generation of ALL-Switch V22S65A (with an internal SiC diode) and V22N65A (without internal SiC diode). This new version of VisIC’s ALL-Switch significantly reduces the MILLER effect enabling readily available, standard drivers to be used in VisIC-based designs. These new devices also reduce the bill of materials required for specific applications. Extremely effective in hard switching topologies, the V22 series may be used for Zero Voltage Switching or Zero Current Switching topologies. It has the lowest Rdson among either 650V GaN or SiC MOSFET transistors, and can achieve extremely efficient power conversion with slew rate exceeding 100V/nS. In addition, since the threshold voltage exceeds 5V, the devices work well in harsh EMI environments.
Based in Ness Ziona, Israel, VisIC Technologies was established in 2010 by experts in Gallium Nitride (GaN) technology to develop and sell advanced GaN-based power conversion products. VisIC has successfully developed, and is bringing to market, high power GaN-based transistors and modules. (GaN is expected to replace most of the Silicon-based (Si) products currently used in power conversion systems.) VisIC has been granted keystone patents for GaN technology and has additional patents pending. (VisIC Technologies 06.06)
9.5 Rheinmetall Canada and IAI/ELTA Bring MF-STAR Radar to the CSC Program
Rheinmetall Canada and IAI subsidiary ELTA Systems (IAI/ELTA) have joined forces to propose the state-of-the-art, operationally proven MF-STAR radar for the Canadian Surface Combatant (CSC) program. Like this team’s success in bringing the battle-proven Medium Range Radar (MRR) of ‘Iron Dome’ fame to the Canadian Army, ELM-2248 MF-STAR will provide the RCN with a built-in-Canada, cutting-edge, fully digital, multifunctional Active Electronically Scanned Array (AESA) naval radar for long-range air and surface surveillance and tracking. The MF-STAR radar is based on the same radar technology as the MRR currently in production at Rheinmetall Canada’s plant in Saint-Jean-sur-Richelieu, Québec. (IAI 01.06)
9.6 PointGrab Partners with Tyco Innovation Tel Aviv
PointGrab has been selected as a partner in the new Tyco Innovation Tel Aviv Program. Tyco Innovation Tel Aviv offers the opportunity to collaborate with a $10b global leader in Fire & Security solutions, serving diverse verticals in over 200 countries. Tyco, tapping into the tenacious innovation in the Tel Aviv technology community, created the new program to foster collaboration and help early stage and more mature companies expedite cutting-edge technologies to the market. PointGrab’s edge-analytics IoT sensor, with its unique occupants tracking capability, is expected to be a key enabler of smarter and more connected buildings. As a program partner, Tyco will provide PointGrab with exposure and access to its customers and top clients, experienced professional counsel, and a gateway to the global marketplace through Tyco’s multi-national channels.
By embedding deep learning technology into optical sensing devices, PointGrab’s CogniPoint sensor provides indoor occupant analytics and energy savings in commercial buildings, enabling unprecedented precision in the detection of occupants’ locations, count, and movements, as well as precise readings of ambient lighting and motion sensing. The sensor is a miniature network-connected sensing device, running state-of–the-art deep learning algorithms on a low-cost embedded ARM-based processor.
Hod HaSharon’s PointGrab is a leading machine learning and computer vision company that has applied its superior technology to win over 27,000,000 installations on devices from consumer electronics giants Samsung, Lenovo, Fujitsu, Acer and others. The company is supported by world leading engineering company ABB and sector expert EcoMachines Ventures of London, and applies a joint development and market approach with global leading lighting and engineering companies. (PointGrab 06.06)
9.7 Allot Helps VOO Belgium to Deliver a Better Customer Experience
Allot Communications announced that VOO, a leading provider of broadband cable services in Belgium, had deployed Allot Service Gateway Tera, Allot ServiceProtector and Allot’s CMTS congestion management solution to protect against DDoS attacks, reduce cable network congestion and deliver an enhanced customer experience.
VOO is one of the fastest growing service providers in Europe, serving digital TV, telephony, high speed Internet and mobile services subscribers. With Allot’s technology, VOO has been able to protect the network from security threats, gain greater visibility into the cause of traffic congestion and ensure high level of quality of service for customers. VOO deployed Allot Service Gateway Tera and Allot ServiceProtector to deliver granular network traffic visibility, analytics and security alongside Allot’s CMTS congestion management solution, which provides real-time traffic monitoring and congestion analysis as well as subscriber quality of service (QoS) assurance.
Hod HaSharon’s Allot Communications is a leading provider of security and monetization solutions that enable service providers to protect and personalize the digital experience. Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks enabling service providers to get closer to their customers; to safeguard network assets and users; and to accelerate time-to-revenue for value-added services. (Allot Communications 07.06)
9.8 $17,000 Super-Secure Smartphone Solarin Will “Break the Rules”
Aimed at high powered business people, Solarin is a deluxe phone launched for consumers who highly value their privacy and security. At a cost of $17,000 – which makes it one of the world’s most expensive phones – Solarin’s military-grade security obviously doesn’t come cheap. Solarin is a 5.5-inch android smartphone designed by Sirin Labs, a luxury phone manufacturer that was co-founded in 2013 by Israeli entrepreneurs.
The phone’s target market includes financiers and executives who value – and are willing to pay for – a very secure technology. According to Sirin Labs, the Solarin smartphone delivers supreme protection against cyber-attacks thanks to the startup’s partnerships with security firms Koolspan and Zimperium, which employ the same technologies that security forces and armies around the world use to protect their communications. This technology thwarts the most advanced device, network, and mobile cyber-attacks, without compromising the functionality of the rest of the phone, Sirin claims. If Sirin Labs – which has already received $97 million in financing from private investors – will indeed provide high-performance, supreme connectivity, security and speed (4.6Gbps), it might be able to carve out a substantial niche for its pricey smartphone. (NoCamels 08.06)
9.9 IAI’s Bird Eye 650D STUAS Enters Serial Production
In response to increased orders from multiple customers, IAI has begun serial production of hundreds of Bird Eye 650D Small Tactical Unmanned Aerial System (STUAS). The Bird Eye 650D, designed for military and paramilitary intelligence, surveillance and reconnaissance (ISR), can conduct autonomous missions including point takeoff and point recovery, at ranges of up to 150 km and endurance of up to 15 hours. Commercial applications for the Bird Eye 650D include mapping, monitoring oil, gas and electrical distribution lines, management of water and pollution over land and maritime areas, and rapid surveillance of disaster areas. Designed for operations at the tactical level, the Bird Eye 650D is an affordable system that requires a small logistical footprint, simple operation, short reaction time and high mobility. Bird Eye 650D is a generic platform that can be easily configured with different payloads, including electro-optical gimbaled payloads covering different spectral bands, and passive RWR/RWL electronic countermeasures (ECM). Bird Eye 650D can conduct precision electronic warfare by deploying communications jamming (COMJAM) close to the enemy, thus minimizing interference with friendly forces.
Israel Aerospace Industries (IAI) is a globally recognized leader in the development and production of systems for the defense and commercial markets. IAI offers unique solutions for a broad spectrum of requirements in space, air, land, sea and cyber.Click here to open a digital brochure about IAI. 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 07.06)
9.10 IAI Introduces RoBattle – a Combat Maneuvering & Support Ground Robot
Israel Aerospace industries (IAI) introduced the RoBattle – an unmanned, heavy duty, highly maneuverable combat and support robotic system. The system is designed to be integrated with tactical forces in mobile, dismounted operations and support a wide range of missions including intelligence, surveillance and armed reconnaissance; convoy protection, decoy, and ambush and attack. Based on the IAI’s cutting edge technology, RoBattle, the newest member of the family of unmanned ground robotic systems from IAI, is equipped with a modular “robotic kit” comprised of vehicle control, navigation, RT mapping and autonomy, sensors and mission payloads. The system can be operated autonomously in several levels and configured with wheels or tracks, to address the relevant operational needs. Operators can equip RoBattle with different payloads including manipulator arms, Intelligence, Surveillance and Reconnaissance (ISR) sensors and radars, and remotely controlled weapons.
Israel Aerospace Industries (IAI) is a globally recognized leader in the development and production of systems for the defense and commercial markets. IAI offers unique solutions for a broad spectrum of requirements in space, air, land, sea and cyber. 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 08.06)
9.11 LightCyber Selected as Red Herring’s 2016 Top 100 North America Winner
LightCyber has been selected as a 2016 Red Herring Top 100 North America winner. The award recognizes the leading private companies from the region, celebrating innovation and technology from startups across respective industries. LightCyber’s innovative technology solves the growing data breach problem by using machine learning to find operational activities of active network attackers. The Magna platform profiles users and devices on an organization’s network to learn good behavior and be able to detect malicious anomalies indicative of an attack. Fast, accurate detection of an active attacker enables organizations to curtail a data breach or other dangers. At the same time, Magna can identify harmful activity from insiders – rogue or unaware employees or contractors – that is either intentionally malicious or unknowingly dangerous.
Ramat Gan’s LightCyber is a leading provider of Behavioral Attack Detection solutions that provide accurate and efficient security visibility into attacks that have slipped through the cracks of traditional security controls. The LightCyber Magna platform is the first security product to integrate user, network and endpoint context to provide security visibility into a range of attack activity. (LightCyber 13.06)
9.12
Silicom Secures 1st Design Win with Fast-Track Cyber Security Company
Silicom has achieved its first Design Win from a fast-growing Cyber Security company for Intelligent Bypass Switch (IBS) products that it will use as part of its security solution for a Fortune 500 healthcare company. Before selecting Silicom for the Design Win, both the cyber security company, which specializes in intrusion prevention solutions, and its client, the giant healthcare company, evaluated and qualified Silicom’s IBS offerings. To date, the orders that Silicom has received from this Design Win have totaled approximately $500,000, and another $500,000 order is expected to be received soon. In addition, the cyber security company has begun planning a next-generation security system that will use additional Silicom Bypass products.
Kfar Saba’s Silicom is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the performance and availability of networking appliances and other server-based systems. (Silicom 13.06)
9.13 Sierra Wireless & OriginGPS Partner for Industry’s Smallest 2G Solution for IoT Devices
Vancouver, BC’s Sierra Wireless and OriginGPS announced a partnership to deliver the industry’s smallest integrated 2G to 4G cellular and GNSS modules solution. It offers a miniaturized footprint that is one third smaller than other solutions and is targeted at the growing IoT devices market. The reference design, which is available worldwide for free and was designed by AcalBFi, combines Sierra Wireless AirPrime HL Series embedded wireless modules with the OriginGPS Multi Spider (ORG4572) GNSS module that supports GPS and GLONASS. The design is ideal for applications that require minimal power consumption and ultra-small form factors in markets such as wearables and IoT tracking, while ensuring high performance. The combined solution provides device manufacturers with the ability to serve different regions, across 2G, 3G and 4G network technologies with a single common footprint design and an easy migration path from GPS to multi-GNSS. To reach the highest integration level and shorten the time to market, GNSS modules are also available with an optional integrated antenna.
Airport City’s OriginGPS is a world-leading designer, manufacturer and supplier of miniaturized GNSS modules (Spider family), antenna modules (“Hornet” family) and antenna solutions. OriginGPS introduces unparalleled sensitivity and noise immunity by incorporating its proprietary Noise Free Zone technology for faster position fix and navigation stability even under challenging satellite signal conditions. (Sierra Wireless 09.06)
9.14 Mellanox Enhances Cloud Efficiency With 25Gb/s Ethernet Connectivity
Mellanox Technologies announced the availability of Mellanox ConnectX®-4 Lx 10/25 Gigabit Ethernet adapters. These adapters are now available on Dell PowerEdge servers. The new Dell PowerEdge 13th generation servers, equipped with ConnectX-4 Lx 25Gb/s Ethernet adapters, deliver significant application efficiency advantages and cost savings for private and hybrid clouds running demanding big data, Web 2.0, cloud, analytics, and storage workloads.
The ever increasing flow of data in private and hybrid cloud environments is driving demand for high performance, low latency networks. Dell PowerEdge servers, paired with ConnectX-4 Lx 10/25 GbE based adapters, allows clients to process large quantities of data and deliver real-time analytics and business insights in workload intensive enterprise cloud data centers. ConnectX-4 Lx 25 Gigabit Ethernet Adapters are future proof, and fully backwards compatible with existing 10GbE switches and fiber cabling plant; and thus enable the migration to higher-performance networking, without demanding costly upgrades or incurring additional operating expenses.
Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. (Mellanox 14.06)
9.15 SECDO Partners with Tel-Networks USA to Provide Powerful Investigation Solutions
Ra’anana’s SECDO, an innovative provider of next-generation detection, investigation and response solutions, announced today that it has signed a partner agreement with technology consulting firm and managed services provider Tel-Networks USA (TNUSA) to provide its solutions to the United States market. Under the agreement, TNUSA will include SECDO’s Detection, Investigation and Response Platform in its suite of services for its US-based clients; offering additional training, customer support, and installation for the platform in order to facilitate seamless integration with TNUSA’s other cyber security products and services.
SECDO is a groundbreaking provider of Security Investigation and Response solutions. The SECDO platform combines alert validation, interactive visual investigation and automated remediation to transform the way security operations centers work. Security Operations teams are overwhelmed by alerts but at the same time, do not have the data and intelligence to investigate and remediate efficiently. Using patented technology, SECDO automatically validates alerts to weed out false positives. For suspicious activity, SECDO visualizes the attack chain timeline and provides deep visibility into all endpoint activity so analysts immediately understand the “who, what, where, when and how” behind the incident. Then, based on an analysis of exactly how endpoints were compromised, SECDO surgically remediates the incident with minimum user impact. (SECDO 14.06)
10: ISRAEL ECONOMIC STATISTICS
10.1 OECD Lowers its 2016 Israel Growth Forecast
On 1 June, the Organization for Economic Cooperation and Development (OECD) published its annual forecast for Israel, predicting 2.5% growth in 2016 and 3% growth in 2017. In its previous forecast, in November 2015, the OECD predicted that the Israeli economy would grow by 3.2% in 2016. The OECD review states that an expansionary budget and low interest rates and fuel prices are likely to support domestic demand and employment. In its forecast, the OECD notes that first quarter exports were weak, but predicts that they will gradually recover in line with recovery in overseas demand.
The OECD asserts that taking into account low inflation and super-expansionary global monetary policy, the Bank of Israel’s easy money policy is essential in order to prevent shekel appreciation. The OECD’s economists write that tax cuts, combined with a cut in government spending in 2016, would support the economy in the short term, but that the government would have difficulty in the medium term in meeting the target for cutting public debt. The OECD economists state that the authorities in Israel should keep a careful watch over the constant tension in the real estate market. They add that the efforts to encourage competition in various sectors, mainly in agriculture and banking, were praiseworthy and designed to increase purchasing power. (Globes 01.06)
10.2 Israel’s Exports Continue to Decline
The downtrend in Israel’s exports is continuing in the second quarter. Updated figures for April released by the Central Bureau of Statistics on 31 May show that exports of goods were down by an annualized 21.7% in February-April 2016, following a 13.7% drop in November 2015-January 2016. High-tech exports were down 32.1% in February-April 2016, following a 22.7% decline in the three preceding months. Exports of services (excluding startups) fell 4.1% in February-March 2016, after gaining 1.3% in November 2015-January 2016.
The only positive figure was in tourism to Israel – exports of tourism services were up 6.3% in February-April 2016, following a 0.9% rise in November 2015-January 2016. Tourist overnights in tourist hotels rose by an annualized 7.9% in February-April 2016, after going up 9.2% in the three preceding months. Exports of business services, on the other hand, dipped 6.7% in February-April 2016, after inching up 1.9% in the three preceding months. Business services, which account for two thirds of total exports of services, include software and computers, research & development, communications services, engineering services, and technical, advertising, royalties, construction, commercial and other services.
In contrast to the downtrend in exports, economic activity in other sectors, such as private consumption, which was responsible for all of the economy’s growth in recent quarters, remained strong. Credit card purchases by private consumers were up by an annualized 8.3% in February-April 2016, following 10.7% growth in the three preceding months. The Revenue Index of Retail Trade, an indicator of demand in the domestic market, rose by an annualized 10.9% in February-March 2016, following a 2.0% increase in December 2015-January 2016. (Globes 31.05)
10.3 Investments in Israel Achieve Record Levels
Efforts by the boycott, divestment and sanctions movement to isolate Israel economically have failed spectacularly, with foreign investments in Israeli assets reaching an all-time peak of $285 billion last year, according to a new Bloomberg report. The report notes that nine Israeli companies with ties to the economy in Judea and Samaria — those most heavily targeted by boycott efforts — have shown the stake of non-Israeli shareholders to have increased steadily in recent years. Despite the buzz surrounding the BDS movement, with a few artists canceling concerts and a major Dutch pension fund blacklisting five Israeli banks, the Bloomberg report points out that “Israeli startups raised $3.76 billion last year from non-Israeli investors, the highest annual amount in a decade, according to data collected by IVC Research Center.” (Israel Hayom 02.06)
10.4 Israel’s Record New Car Sales Defy Economic Slowdown
Despite the sluggish performance of Israel’s economy in 2016 so far, sales of new cars have hit new heights. 25,000 new cars were delivered in May, up 23% from May 2015 and 140,000 vehicles have been delivered in the first five months of 2016, up 17.4% from the corresponding period of 2015, which was itself a record. An examination by “Globes” found that Israel’s vehicle market has shown the biggest growth in 2016 of any developed country. (Globes 06.06)
11: IN DEPTH
11.1 MIDDLE EAST: MENA Imported 10% of Internationally Traded Lumber in 2015
Northern Africa and the Middle East have become a major destination for softwood lumber produced in Europe the past ten years. In 2015, the major trade flows were from the Nordic Countries and Russia to Egypt, Saudi Arabia and Algeria, reports the Wood Resource Quarterly in its latest issue. The countries in the Middle East and Northern Africa, the MENA region, have become a major destination for European softwood lumber since mid-2000. In fact, over 10% of world trade of softwood lumber in 2015 was destined for the MENA region.
Import volumes to MENA increased virtually every year over the ten-year period leading up to the Egyptian Revolution in 2013, when shipments to Egypt fell by 15%. When the political situation stabilized in Egypt, practically all countries in the region expanded their importation of lumber. From 2013 to 2015, total import volumes to the MENA region were up 26%, reaching over 11 million m3 in 2015, according to the latest issue of the Wood Resource Quarterly (WRQ). Egypt is clearly the dominant destination for softwood lumber, accounting for 45% of the total imports, followed by Algeria and Saudi Arabia. Algeria is the market that has grown the most the past five years with a doubling of its import volume.
Finland, Sweden and Russia are the three dominant supplying countries to the MENA region; together accounting for 73% of all lumber shipped the region in 2015. Other larger suppliers in Europe include Romania and Slovakia, while shipments from North America and Latin America still account for a very small share.
Prices for lumber exported to Egypt from the two major supplying countries Finland and Sweden have dropped quite substantially the past two years. The average price for Swedish spruce has fallen the most, over 50% since 2014. The increase of lower-cost Russian lumber in the Egyptian market has pushed prices down more in Egypt than in e.g. Algeria and Saudi Arabia where Russian lumber exporters still are not a presence.
The fairly new markets for softwood lumber in countries in Northern Africa and the Middle East have grown rapidly the past ten years and this expansion continued in 2015 despite the fall in oil revenue and political instability in the region. Demand for softwood lumber, particularly in Egypt, Algeria and Saudi Arabia, can be expected to continue to grow in the coming years.
Global lumber, sawlog and pulpwood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, lumber and pellet prices, trade and market developments in most key regions around the world.
Wood Resources International (WRI), an internationally recognized forest industry-consulting firm established in 1987, publishes two quarterly timber price reports and have subscribers in over 30 countries. The Wood Resource Quarterly, established in 1988, is a 52-page market report and includes sawlog prices, pulpwood and wood chip price and market commentary to developments in global timber, biomass and forest industry. The other report, the North American Wood Fiber Review, tracks prices of sawlogs, pulpwood, wood chips and biomass in most regions of Canada and the US. (WRI 13.06)
11.2 BAHRAIN: Moody’s Maintains Negative Outlook On Bahrain’s Banking System
Moody’s Investors Service announced on 6 June that it has maintained its negative outlook on Bahrain’s banking system, reflecting the rating agency’s expectation that operating conditions for the country’s banks will continue to deteriorate over the next 12 – 18 months.
“We expect low oil prices and reduced government spending to weigh on Bahraini banks,” says Christos Theofilou, an Assistant Vice President – Analyst at Moody’s. “However, this will likely be partly mitigated by the non-oil economy’s diversity and a Gulf Cooperation Council (GCC)-funded economic support package.”
Moody’s expects economic growth to slow to 2.2% in 2016 from 2.9% in 2015 as the sharp drop in oil prices since 2014 continues to take its toll. Lower oil prices will also likely constrain government spending and weaken consumer and investor confidence.
As a result, asset quality will likely suffer as more challenging operating conditions lead to rising problem loans. “We expect problem loans for the system to rise to around 6.0%-6.5% of total loans by mid-2017, compared to an estimated 5.8% at year-end 2015,” explains Mr. Theofilou. Bahraini banks’ heavy exposure to government and other public-sector debt will likely rise further, strengthening the linkage between the banks’ credit profiles and the weakening fiscal position of the Government of Bahrain (rated Ba2, negative).
However, deteriorating asset quality is likely to be partly mitigated by Bahraini banks’ ongoing initiatives to recover and write-off legacy problem loans, while earnings will be ample to absorb expected losses. The recent rebound in tourism and construction will also help to offset pressure on loan quality. Capital buffers will likely remain stable at around 10.5% of adjusted risk-weighted assets, according to the rating agency.
Funding conditions will be more challenging as deposit inflows slow amid a combination of lower government and public-sector oil revenue, lower corporate profits and falling household savings. That said, Moody’s expects banks’ funding and liquidity positions to remain resilient overall supported by high liquidity buffers and loan growth of around 4% in 2016 that will require only modest levels of new funding.
Banks’ profitability is also likely to suffer, in Moody’s view. Asset quality pressure will translate into higher loan-loss provision requirements, which will weigh on bottom-line profitability. The rating agency expects net income to decline slightly to about 1.2% of tangible assets in 2016 (2015: 1.3%). However, pre-provision income will likely remain broadly stable at around 1.7% of tangible assets, supported by modest credit growth and banks’ cost cutting initiatives.
Finally, Moody’s considers that fiscal pressure will reduce the government’s capacity to provide support to banks in the event of need. Nevertheless, the rating agency considers that willingness to provide support to failing banks remains high; creditors of retail banks have never suffered losses given authorities track record of support for troubled retail banks. (Moody’s 06.06)
11.3 OMAN: Moody’s Assigns Baa1 to Oman’s Dollar Bond Issuance
On 14 June, Moody’s Investors Service assigned a definitive Baa1 rating to the Government of Oman’s US dollar bond issuance. The issuance consists of two tranches – $1 billion due in 2021 and $1.5 billion due in 2026 – marking the first international bond issuance by the Government of Oman since 1997. Moody’s definitive rating for these debt obligations follows the provisional rating assigned on 3 June 2016.
Ratings Rationale
Oman’s Baa1 long-term government bond and issuer rating with stable outlook is supported by high levels of wealth, fiscal space offered by relatively low levels of general government debt and still sizable government financial assets, and comparatively low risk that contingent liabilities from the banking system or wider non-financial public sector will crystallize on the government’s balance sheet as growth slows. Although Moody’s expects government debt to rise to 33% of GDP by 2017 from less than 5% at the onset of the oil price shock in 2014, Oman’s fiscal buffers which the rating agency estimates at around 85% of GDP in 2015 will provide support through the process of fiscal and external adjustment.
Having said that, Oman’s heavy economic and fiscal reliance on the oil and gas sector represents a key credit challenge. Oman suffered a steeper fiscal deterioration than most Gulf Cooperation Council (GCC) peers as a result of the oil price shock. Hydrocarbon exports accounted for an average 67% of total goods exports in 2010-15, while oil and gas revenues constituted 87% of total government revenues over the same period. Despite material fiscal adjustment underway, the IMF estimates that Oman’s fiscal and external break-even oil prices remain one of the highest among GCC countries.
What Could Change the Ratings – Up/Down
Upward pressure on the rating would stem from faster-than-currently expected progress on containing government fiscal deficits and debt and diversifying the economy and government finances away from oil.
Downward rating pressure would emerge if government finances deteriorate faster than Moody’s baseline scenario currently anticipates. Greater-than-expected weakening in the balance of payments would also be credit-negative. (Moody’s 14.06)
11.4 EGYPT: New Legislation to Bolster Services For Egypt’s Disabled
Ahmed Hidji posted in Al-Monitor on 8 June that the Egyptian parliament is discussing a groundbreaking bill to guarantee the rights of Egypt’s disabled population, addressing some but not all of the obstacles that have impeded the constitutional provisions in this matter so far.
The Egyptian parliament is currently discussing a first-of-its-kind bill in support of people with disabilities submitted by the Solidarity Committee on 24 May. If passed, the bill would work to integrate individuals with disabilities into society, provide them with proper living conditions and eradicate disability-based discrimination.
According to the bill, people with disabilities will be issued identification cards that will grant them many privileges such as shorter working hours for themselves or those taking care of them at all governmental and nongovernmental institutions. Disabled ID card holders will also be provided with suitable housing and transportation. Educational institutions shall prioritize the integration of disabled individuals, and governmental and financial institutions shall be better equipped to accommodate them and facilitate their access to services.
Disability rights activist Nada Thabet expressed relief at the bill’s contents, which civic associations and civil society organizations took part in drafting along with the Ministry of Social Solidarity and the parliamentary Solidarity Committee.
Thabet told Al-Monitor, “A law governing the rights of disabled people is better than all the ministerial decrees issued previously to this end.” But Thabet was concerned that some governmental institutions would not fully comply with the new bill due to barriers such as the lack of experts in dealing with disabled people and the financial crisis the government is going through. Noncompliance for these reasons could make it harder to renovate institutional buildings to accommodate these individuals.
“I am worried that the government won’t be able to provide adequate funding for the law,” she added, explaining that monthly aid for people with disabilities will come at high cost for the treasury. Thabet argued that such aid should be limited to those who cannot work, and the government must organize professional rehabilitation programs for those who can work. She stressed that she had already witnessed people with disabilities who received professional training and then went on to work at factories where they perform their duties like everybody else, and sometimes even better.
Article 81 of the Egyptian Constitution states: “The state shall guarantee the health, economic, social, cultural, entertainment, sporting and education rights of dwarves and people with disabilities. The state shall provide work opportunities for such individuals and allocate a percentage of these opportunities to them,” as well as ensure that public facilities and other locations people with disabilities go can adequately accommodate those with disabilities. It goes on, “The state guarantees their right to exercise their political rights.”
Since educational institutions are ill-prepared to integrate people with disabilities, Thabet believes that the process will take time and require larger efforts. She pointed to previous ministerial decrees, such as the decision to integrate students with disabilities into regular schools, with which many educational institutions failed to comply for reasons including ill-equipped buildings and a shortage of disability experts. For Thabet, successful integration must first start with teacher training programs, which have yet to prepare instructors to deal with disabled students.
In this regard, Article 80 of the constitution stipulates, “The state guarantees the rights of children who have disabilities and ensures their rehabilitation and incorporation into society.”
Former Secretary-General of the National Council for Disability Affairs Housam Masah considers the new bill a minor step toward reaching the ultimate goal of making his organization a Cabinet-affiliated institution. Nevertheless, Masah admitted that the new law would grant the disabled privileges that would make their lives easier. Speaking to Al-Monitor, Masah said, “People with disabilities have yet to see the true fulfillment of their rights as guaranteed by the constitution.” He added that nearly 13 million disabled Egyptians contributed to the drafting of the constitution and approved it, but until now they haven’t been granted all the privileges supposed to have been provided them in the areas of labor, education and an independent national council to protect their rights.
In line with Article 214, the new bill stipulates the establishment of a Cabinet-affiliated national council for persons with disabilities, guaranteeing its technical, financial and administrative independence.
Although Masah deplored the daily suffering of the disabled and their need to fight for their constitutional rights, he admitted that the government has, for the past three decades, been showing increasing interest in this issue, most notably at the level of representation in parliament and local councils. “I believe that persons with disabilities will be gradually granted their rights, leading to full integration,” Masah said, adding that including deputies with disabilities in the Egyptian parliamentary delegation that met members of the European Parliament in April 2016 is indicative of the image Egypt wants to project to the West. For Masah, Egypt seeks to portray itself as a country with a plan to fully integrate people with disabilities into society.
Mansoura University law professor Salaheddin Fawzi argued that the government should have upheld the rights of persons with disabilities in vital areas such as labor, civil service, social security and representation at public institutions instead of enacting a separate law. Fawzi explained that the enacting of a separate law suggests the need for another one with regard to dwarfs.
In his interview with Al-Monitor, Fawzi argued that though the constitution provides for the rights of the disabled and guarantees them preferential treatment, this population may not see all of these rights fulfilled. Fawzi expressed concerns about barriers within public institutions, which could hinder the application of some of the bill’s clauses.
At the International Technology and Persons with Disabilities Conference on 19 March, Egyptian Social Solidarity Minister Ghada Wali stated that the constitution is not enough to guarantee the rights of people with disabilities, and that special laws would be more efficient.
For her part, Thabet called for government agencies to spread awareness on how to deal properly with persons with disabilities. She holds that the government should use all the tools at its disposal to this end, especially the state media, which currently depicts this population in a negative and derogatory way. But Thabet praised some programs that highlight the skills and potential of people with disabilities.
Thabet said, “The degree to which a certain people is considered civilized can be measured by its attitude toward people with disabilities.” She stressed that Egypt is on the right path and expressed hope that Egyptian society and institutions will build on the progress made so far until disabled Egyptians achieve full equality. (Al-Monitor 08.06)
11.5 TURKEY: Turkey’s Latest ‘Civilian Coup’
In the old days, the military staged coups in Turkey. That seems to have changed.
Metin Gurcan posted in Al-Monitor on 31 May that a civilian takeover of the top management of OYAK, a company owned by Turkish military personnel, has raised questions.
In recent months, there have been a surprising series of civilian takeovers of institutions that were the traditional domains of the Turkish Armed Forces (TSK). These new developments include the increasing input of the civilian bureaucracy in weapons procurement, supplies and services for the TSK and moves to break up the monopoly of defense companies managed by retired generals. The management changes in OYAK (Armed Forces Assistance Corporation) have been the latest “extraordinary civilian takeover.”
OYAK is a massive credit union and aid fund that all officers and noncommissioned officers (NCOs) of the TSK are required to join. About 10% of monthly salaries of all officers and NCOs are automatically deducted as their OYAK contribution. Although junior officers are generally unhappy with this compulsory reduction in their disposable incomes, they realize how beneficial it can be as their retirement age approaches. These officers and NCOs are entitled to a substantial retirement bonus from OYAK in addition to their regular retirement benefits from the state retirement fund. For example, a four-star general with 40 years of service gets about $250,000 retirement bonus from OYAK, while a colonel with 30 years gets $110,000 and an NCO about $90,000.
The true shareholders of OYAK, then, are the officers and NCOs. This naturally makes the military high command influential in shaping OYAK’s management. For example, the chief of general staff appoints three members of OYAK’s seven-person executive board. Other members are assigned from the state bureaucracy with the knowledge and approval of the chief of general staff.
Under CEO Coskun Ulusoy, who unexpectedly resigned on 13 May, OYAK has become a giant holding and international actor through its foreign acquisitions in many fields. OYAK is a major player — a dominating force to be exact — in the iron-steel, automotive and cement sectors where it has invested billions of dollars in Turkey. Its iron-steel plants in Eregli and Iskenderun, as well as Renault car and cement operations make a significant contribution to the nation’s economy. More than 30,000 people work in its 87 companies that operate in 19 countries.
As of 2015, OYAK’s total economic worth was estimated at $20 billion, with annual exports of $3.3 billion.
All these figures show that OYAK is not merely a simple credit union but a rich, big, powerful and fertile economic conglomerate for TSK personnel. Traditionally, the Turkish military usually kept foreigners out of OYAK and only granted entry to local civilians that it trusted. But major changes in its top management in May somehow did not receive much attention from Turkish media.
Unusual developments at OYAK initially came to attention at the beginning of May. The first surprise was the resignations of retired Lt. Gen. Necati Ozbahadir and his colleagues from the largely symbolic executive board. Then came the legendary CEO Ulusoy’s resignation.
Retired Maj. Gen. Mehmet Tas became chairman of the board and Suleyman Savas Erdem, who was the deputy head of the Prime Ministry Inspection Board, was appointed as CEO, the post with true powers.
The resignation of Ulusoy, who for 16 years successfully managed OYAK with a firm hand, along with four of his deputies and the CEOs of major subsidiaries, has led to questions as to whether there was a purge. According to Metin Munir of the news website T24, what happened amounts to a “civilian coup.” Munir said with this civilian coup “the TSK’s rule of OYAK has ended and the AKP [Justice and Development Party] era has started.” According to Munir, all upper-level managers appointed to work under Ulusoy with the blessings of the high command will be removed and new managers loyal to the AKP will replace them over time. He thinks that the AKP does not intend to expand OYAK with this shakeup but wants to first shrink it through privatization and eventually eliminate it.
Eyes are now on the new CEO Erdem. A 1996 graduate of political science and public administration from Middle East Technical University, Erdem began his government career in 1997 as assistant inspector at the Prime Ministry Inspection Board and rose to the post of chief inspector in 2007. Although Erdem has attended various training courses in the United States and has some managerial experience in the private sector, it is not clear how he is going to lead a mammoth holding with 30,000 employees and about 90 subsidiary companies with assets worth $20 billion.
An officer who spoke to Al-Monitor on condition anonymity said, “Now the savings of 300,000 officers and NCOs are entrusted to Erdem. Keep in mind, the money of us military people is a bit valuable.” Erdem, the young skipper of the OYAK GROUP, will now decide how to make use of all this money of TSK personnel.
Does Erdem, known to be close to President Recep Tayyip Erdogan, have a “secret agenda” to first downsize OYAK, then privatize and eradicate it? If there is such an agenda, how will the TSK react to it? Was Erdem appointed as the new CEO with the knowledge and approval of the TSK high command? Also, could Ulusoy be reassigned to an influential post in the state security and intelligence apparatus after his resignation from OYAK?
This surprising civilian takeover in TSK’s backyard is directly related to the changing nature of civilian-military links in Turkey. A prime minister and government that used to be the prime civilian interlocutor of the army is no more. Military-government relations have now turned into relations between the military and the presidential palace, making Erdogan the sole civilian counterpart of the military. How will this affect civilian-military relations in Turkey?
It may be too early to find all the answers, but we know from experience that not all civilian takeovers automatically mean democratization.
Now eyes are on Erdem and his performance. My suggestion is to watch OYAK and its new CEO’s performance closely because it will tell us much about the nature of the civilian takeover of civilian-military relations in Turkey. As a former soldier who had bought a house with his OYAK savings, allow me to remind you: “The money of Turkish soldiers is truly valuable.” This is why 300,000 soldiers will always be closely watching Erdem. (Al-Monitor 31.05)
The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as European clients.