Fortnightly, 17 April 2019

Fortnightly, 17 April 2019

April 17, 2019


17 April 2019
12 Nissan 5779
12 Shaban 1440




1.1  Canadian Prime Minister Trudeau Announces Even Closer Cooperation with Israel


2.1  WATEC Israel 2019 Focuses on Water Stewardship and Innovation
2.2  Israel Electric Agrees to Interim Natural Gas Deal with Leviathan Field
2.3  Teridion Raises $9 Million to Meet Global Demand for Cloud Networking & WAN Services
2.4  Pagaya Raises $25 Million Series C Funding Round Led by Oak HC/FT
2.5  Digital Horizon Invests in Market Beyond, Supplier of Market Intelligence to eBay & Walmart
2.6  Epitomee Closed $8 Million Equity Financing
2.7  Octopai Partners With Microsoft to Expand Its Metadata Management Automation Offering
2.8 Raises $13 Million for its Distributed Machine Learning Platform
2.9  Safe-T to Acquire NetNut – a Business Proxy Network Solution Provider
2.10  MIT-Lockheed Martin Joint Venture to Scout for Israeli Innovation
2.11  SpaceIL Commits to Second Beresheet Lunar ‎Mission
2.12  Armis Raises $65 Million to Address Massive Enterprise IoT Security Exposure
2.13  Vimeo to Acquire Magisto to Power Video Creation for any Business
2.14  Amenity Analytics Raises $18 Million
2.15  3DSignals Completes $12 Million A Round Investment Led by State of Mind Ventures
2.16  Splitty Receives $6.75 Million in Series A Funding Led by Fosun RZ Capital


3.1  Badir Program Signs MoU with Jordan’s Propeller for Startup Collaboration
3.2  Textron Wins $15 Million Iraq FMS Contract
3.3  UAE Health Insurance Market Trends, Size, Growth and Opportunities (2019-2024)
3.4  UAE’s Mubadala Opens New York Office Amid US Push
3.5  PointCheckout Raises $600,000 to Let Users Pay Online with Their Reward Points
3.6  Seed Funding Round for YaLLa Esports Oversubscribed
3.7  Vertex Aerospace Establishes Headquarters in UAE
3.8  Shedul Raises $20 Million in a Series B Funding Round
3.9  ProTenders Secures $3 Million for Pre-Series A Funding
3.10  Saudi Arabia’s Health Insurance Market 2019-2024
3.11  iSchemaView’s RAPID Approved for Use in the Kingdom of Saudi Arabia
3.12  Saudi’s SALIC Makes First Australian Farming Acquisition
3.13  International Finance Corporation Launches Program to Support Egypt’s Fintech Space
3.14  Egyptian AI Startup MerQ Closes its Seed Funding Round
3.15  Egypt’s Brimore Raises $800,000 in Seed Funding Round
3.16  Royal Air Maroc Launches Casablanca-Miami Direct Flight
3.17  Honda to End Production in Turkey After 2021


4.1  Shikun & Binui to Launch Negev Energy Thermo-solar Power Plant at Ashalim
4.2  Construction of Phase 4 of Giant Dubai Solar Park on Schedule


5.1  Lebanon’s Trade Deficit Decreased by 14.41% to $2.23 Billion in February 2019
5.2  Lebanon’s Gross Public Debt Up to $85.25 Billion in February 2019
5.3  Jordan Seeks $1 Billion World Bank Loan to Cut Debt Burden
5.4  Jordan’s Net Public Debt Hits JOD 28.6 Billion by the End of February 2019
5.5  U.S.-Jordan Joint Military Commission (JMC) Holds 41st Meeting
5.6  Iraq GDP Growth to Hit 8.1% in 2020

♦♦Arabian Gulf

5.7  Dubai Attracts Dh38.5 Billion Worth of FDI in 2018
5.8  UAE Named as Fintech Hotspot in the Middle East
5.9  Dubai Private Sector Grows at Fastest Rate in Nearly a Year

♦♦North Africa

5.10  IMF Expects Egypt’s Growth Rate at 5.5% in 2019 – Praising Economic Reform
5.11  IMF Says Egypt on Track to End Fuel Subsidies
5.12  Egypt’s Economic Growth Hits 5.5% – Highest in a Decade
5.13  ILO Cites Egypt’s Explosive Population Growth Which Outpaces its Job Creation Rate
5.14  Libya GDP Growth Forecast for 4% in 2019, 6% in 2020
5.15  Tunisia Aims To Be a Pioneer in Blockchain Technology
5.16  IMF Predicts 4.5% Economic Growth for Morocco by 2024


6.1  IMF Lowers Economic Growth Forecast for Cyprus
6.2  US Senators Introduce Eastern Mediterranean Security & Energy Partnership Act of 2019
6.3  More Doctors Register into Cyprus’ General Health Scheme



7.1  Israel’s Election Results Look to Keep Prime Minister Netanyahu and the Likud in Power
7.2  Knesset Has More Religious and Gay Members, But Less Women
7.3  Passover to be Celebrated Starting on 19 April


7.4  JUST Ranks First in Jordan and Fourth in Middle East on Times’ University Index
7.5  Sudan President Bashir Ousted Amidst Military Coup
7.6  Algerian Leader Bouteflika Resigns Amid Protests


8.1  Evogene Develops Next Generation Medical Cannabis Products via New Canonic Subsidiary
8.2  Groundbreaking Israeli Holoscope Technology Revealed at Toronto’s University Health Network
8.3  Zebra Medical Vision Adds a 3rd Patent to Its Growing Bone Health Portfolio
8.4  Gordian Surgical Surpasses 2,000 Surgeries with TroClose1200 Access-Closure System
8.5  Feminine Probiotics in a Delicious Format – Anlit Embraces Its Feminine Side
8.6  FILLMED and NanoPass Launch NANOSOFT Microneedles for Aesthetics
8.7  Galmed Completes Phase 2 Meeting with FDA and Plan for Start of Phase 3
8.8  Equinom App Opens Seed-to-Fork Dialogue
8.9  SEEDO to Establish Medical Cannabis Farm in Moshav Brosh, Israel
8.10  Check-Cap Initiates U.S. Pilot Study of C-Scan for Colorectal Cancer Screening
8.11  Israeli Researchers Print 3D Heart Using Patient’s Own Cells
8.12  China’s Thalys and iCan Sign MOU for Cannabis and Hemp Related Startup Investments
8.13  Alpha Tau Awarded ISO 13485 Certificate for Quality Management of Medical Devices
8.14  Biomica Initiates Pre-Clinical Studies in its Immuno-Oncology Program


9.1  Endor Launches Predictions Protocol to Democratize Access to AI and Data Science
9.2  Exaware Releases ExaNOS Operating System for Mobile & Fixed Networks
9.3  Sync.ME Reinvents the Incoming Call Experience with Personalized Video Ringtones
9.4  Beamr Makes Bitrate Solution Available to Video Developers as Discrete Technology
9.5  CipherTechs & Cymulate Bring Breach and Attack Simulation to U.S. Customers
9.6  SCADAfence and NRI Secure Join Forces to Secure OT Networks in Japan
9.7  YouTube Partners With to Make Great Video More Accessible to SMBs
9.8  WhiteSource Releases New Bitbucket Server Integration
9.9  Exaware Adds Disaggregated Cell-site Routing Capabilities to Its ExaNOS System
9.10  StoreDot & Nissan Partner to Advance Environmentally-Friendly Solution for TV Displays
9.11  CyberArk Named Top Security Solution for Government Agencies
9.12  New Version of Sapiens IDITSuite for Property & Casualty, with Automatic Claims Payments
9.13  Camilyo Launches SmartSite, an AI-powered Website Creation Platform


10.1  Israel’s CPI Increases by 0.5% in March 2019
10.2  Foreign Investments in Israel Increased by 30% from 2015 to 2017
10.3  Israel’s 2018 Government Debt Increased by NIS 40 Billion
10.4  Foreign Exchange Reserves at the Bank of Israel, March 2019
10.5  Israel’s Record Tourism Continues in First Quarter of 2019
10.6  Study Finds Israel Has Lowest Rate of Diet-Related Deaths in the World


11.1  ISRAEL: Bank of Israel Research Department Staff Forecast for April 2019
11.2  ISRAEL: High-Tech Companies Raised $1.55 Billion in 128 Deals in First Quarter 2019
11.3  ISRAEL: A New Eastern Mediterranean Friendship, with US Support
11.4  LEBANON: Russia Expands Ties in Lebanon’s Oil & Gas Sector
11.5  KUWAIT: IMF Executive Board Concludes 2019 Article IV Consultation
11.6  OMAN: IMF Staff Concludes 2019 Article IV Visit to Oman
11.7  ALGERIA: Bouteflika Resigns: Next Steps in Uncharted Territory
11.8  MOROCCO: Morocco ‘BBB-/A-3’ Ratings Affirmed; Outlook Negative
11.9  TURKEY: The Economic Balance Sheet of Turkey’s Local Elections
11.10  CYPRUS: Fitch Affirms Cyprus Ratings at BBB- Maintaining a Stable Outlook


1.1  Canadian Prime Minister Trudeau Announces Even Closer Cooperation with Israel

Canadian Prime Minister Justin Trudeau met in Ottawa with the President of Israel, Reuven Rivlin, to celebrate the 70th anniversary of diplomatic relations between Canada and Israel, and the two countries’ long history as close friends, steadfast allies, and partners in international organizations.  During the visit, Prime Minister Trudeau and President Rivlin discussed the benefits of progressive trade and how the updated Canada-Israel Free Trade Agreement (CIFTA) will help grow their economies and create good jobs and new opportunities for people and businesses in both countries.  CIFTA will allow for expanded bilateral trade and investment and support Canada’s efforts to diversify its export markets.

In addition, Canada and Israel have launched discussions on a youth mobility agreement.  The agreement would allow young people from both countries to work when they travel to each other’s country, which would deepen our countries’ strong people-to-people ties and help more young people gain valuable international work experience.  Prime Minister Trudeau and President Rivlin agreed on the need to always speak out in the strongest possible terms against anti-Semitism wherever it occurs and to confront and counter all forms of hatred.

On 11 May 1949, Canada officially recognized and established diplomatic relations with the State of Israel.  Today, Canada and Israel have a healthy commercial relationship.  In 2018, Canadian exports to Israel totaled almost $500 million.  Imports from Israel totaled almost $1.4 billion.  Since CIFTA’s entry into force, two-way merchandise trade between Canada and Israel has more than tripled, totaling $1.9 billion in 2018.

In addition to CIFTA, a key element of the commercial relationship is collaboration in science, technology and innovation.  Bilateral science, technology and innovation relations are strong, developed through more than 20 years of close collaboration.  The 2014 Canada-Israel Strategic Partnership Memorandum of Understanding facilitates deeper cooperation in areas including energy, security, international aid and development, innovation and the promotion of human rights globally.  (PMO 02.04)

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2.1  WATEC Israel 2019 Focuses on Water Stewardship and Innovation

The 8th biennial WATEC international event will be held this year, from the 18 to 21 November 2019 at the Peres Center for Innovation and the David InterContinental Hotel in Tel Aviv, with hundreds of exhibitors and thousands of visitors from all parts of the world.  According to experts, the world is on the brink of a global water crisis, which can only be prevented through advance preparation.  Therefore, the upcoming WATEC conference will not only address the latest water innovations, but will also look forward at the future of water around the world and how the impending crisis can be managed.

Israel’s reputation as the startup nation is already well-established as a global leader in a range of water usage and technology, such as desalination, monitoring and irrigation.  This year the emphasis will be on True water technology development and execution (Digital Water, Water Urbanization, Innovation as a Policy and Innovative Policy Making, Women and Water Industry, Multi-Disciplinary Collaborations, Water Pricing, Water Ownership, Water Security and more).

This year, Cleanvest, an Investor Summit will be held on 18 November, bringing together investors, entrepreneurs, technology providers, users, consumers and integrators, while uniting all with the goal to create a new eco-system through unique roundtable discussions, workshops and brain-storming sessions where water transformation occurs every single day in the water field.  This Investor Summit will provide a unique platform to leverage these opportunities to accelerate water technologies for providing fresh water to future generations.  During the Event, participants will be given a real and hands on experience of the Israeli solutions deployed on sites with customized tours.  (WATEC 10.04)

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2.2  Israel Electric Agrees to Interim Natural Gas Deal with Leviathan Field

Israel Electric Corp has chosen the Leviathan natural gas field off Israel’s Mediterranean coast for a short-term natural gas supply deal, saying it would lower its costs by up to $175 million.  Leviathan will supply about 4 billion cubic meters of gas once production begins this October until June 2021, although the IEC said there was no minimum purchase requirement.  The deal with Leviathan, which is subject to various approvals, will apply to gas quantities that exceed the minimum it is obligated to buy from the Tamar gas field.

The IEC noted that it has been working to reduce its fuel costs as well as electricity rates and the new deal will save an estimated $145 million to $175 million.  Gas supply after 2021 will come from the Karish field – owned by Energean – once that field comes online.  Leviathan, discovered in 2010 about 120 kilometers (75 miles) off Israel’s coast, is one of the world’s largest gas discoveries of the past decade.  The project operator, Texas-based Noble Energy, owns a 39.66% stake. Delek Drilling holds a 45.34% stake.  The nearby Tamar gas field began producing in 2013.  (Delek 07.04)

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2.3  Teridion Raises $9 Million to Meet Global Demand for Cloud Networking & WAN Services

Teridion has closed $9 million in financing, led by Jerusalem Venture Partners (JVP), with participation from existing investors Magma Ventures and SingTel Innov8.  The financing, an addition to its Series B round of funding, brings the company’s total funding to $35 million.

Teridion delivers Teridion for Enterprise, the industry’s first and only public cloud-based WAN service to deliver carrier grade, SLA-backed performance and reliability with the agility, elastic scale, and global reach of the public cloud.  Teridion’s cloud-based WAN service is powered by Teridion Curated Routing, an innovative and cloud native approach to routing that draws on the power of deep learning that brings hierarchical and centralized routing to enterprise networking to radically improve WAN, application and SaaS performance.

Petah Tikva’s Teridion enables faster and more reliable Internet with Teridion Curated Routing, radically improving Internet performance up to 2X – 20X, anywhere in the world.  Teridion for Enterprise combines the performance, reliability, and SLAs of legacy WAN technologies such as MPLS with the agility and elastic scalability of the cloud.  The company is backed by leading venture investors including Jerusalem Venture Partners, Magma Venture Partners and Singtel Innov8, and is relied on by leading SaaS providers such as Atlassian, Box, Egnyte, Merrill Corp. and others.  (Teridion 04.04)

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2.4  Pagaya Raises $25 Million Series C Funding Round Led by Oak HC/FT

Pagaya announced a $25 million Series C funding round.  Oak HC/FT led the round with participation from Pagaya’s seed investor Viola Ventures, Clal Insurance, GF Investments, Harvey Golub (Pagaya board member and former Chairman and CEO of American Express) and Siam Commercial Bank (through its Digital Ventures arm).  The funding follows Pagaya creating the first-ever $100 million consumer credit asset-backed security (ABS) fully managed by AI, which the company announced in February.

In the three years since launch, Pagaya has grown to manage $450 million for banks, insurance companies, pensions funds, asset managers and sovereign wealth funds all looking to find new sources of attractive risk-adjusted returns and capitalize on the efficacy and efficiency of Pagaya’s AI.  Pagaya’s asset management team of 30 data scientists and AI specialists uses proprietary machine learning techniques to conduct the most comprehensive bottom-up analysis and risk management of assets.  The company analyzes hundreds of millions of data points and captures economic and market data to perform asset underwriting and better risk assessment compared to what traditional asset management firms can achieve.  As a result, Pagaya generates a competitive investment edge for institutional investors.

Pagaya is a financial technology company reshaping asset management using machine learning and big data analytics to manage institutional money.  With a focus on fixed income and alternative credit, Pagaya offers a variety of discretionary funds to institutional investors, including pension funds, insurance companies and banks.  Pagaya’s unique technology platform, Pagaya Pulse, runs on a suite of artificial intelligence technologies and state-of-the-art algorithms to deliver a high and scalable performance edge consistently.  Founded in 2016 by seasoned finance and technology professionals, Pagaya has offices in New York and Tel Aviv.  (Pagaya 03.04)

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2.5  Digital Horizon Invests in Market Beyond, Supplier of Market Intelligence to eBay & Walmart

Digital Horizon, an international venture fund headquartered in Tel Aviv and Moscow, has participated in the seed investment round of high-tech startup Market Beyond.  This round totaled $4 million with UK’s Hetz Ventures and Yahal Zilka, one of Israel’s leading venture capitalists, also participating in this round.  Digital Horizon invested $1 million.

Tel Aviv’s Market Beyond, a B2B tech company, has developed an e-commerce tool, which allows online retailers to increase sales and expand their market share.  Market Beyond uses artificial intelligence to process data on billions of online transactions in order to pinpoint weaknesses in product assortment, pricing models, and other conversion factors and suggest how deficiencies can be corrected.  Industry giants including eBay, Walmart and other Fortune 500 companies are among Market Beyond’s clients.  (Digital Horizon 04.04)

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2.6  Epitomee Closed $8 Million Equity Financing

Caesarea’s Epitomee Medical, a bio-medical company developing treatments for the overweight and obese population, including treatment of  glycemic control, weight reduction and hypertension based on its unique swallowable-device gastric retention platform, announced the closing of an $8 million equity financing led by XT Hi-Tech.  Other investors in the round included GCB and Dr. Shimon Eckhouse.

The Epitomee Capsule is an orally taken capsule that contains a shape-shifting scaffold. It works on the stomach itself by direct mechanosensory stimulation.  Taken twice a day, the Epitomee Capsule helps the body to have an early sensation of fullness and prolonged gastric emptying, which results in lower daily caloric intake and subsequent weight loss.

The initial clinical study on the Epitomee Capsule, which is equivalent to a Phase 2A drug clinical trial met its goals and demonstrated weight loss and improvement in glycemic control, ameliorating blood pressure levels with no safety concerns within 12 weeks of treatment.  The Phase 2B study is designed to show the power of the technology in overweight, obese and pre-diabetic patients over a 24 week trial period.  (Epitomee Medical 09.04)

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2.7  Octopai Partners With Microsoft to Expand Its Metadata Management Automation Offering

Octopai has earned Microsoft’s coveted Co-Sell Ready designation through the Microsoft One Commercial Partner Program.  Octopai now joins an elite group of global independent software vendors that Microsoft has selected for intensive joint sales, support, and go-to-market initiatives to ensure that organizations can optimize their metadata management across Microsoft platforms.

One of the greatest barriers to proper metadata management is that current tools are often siloed, designed to be on-premises, require a high level of customization, and take months to integrate.  Octopai’s cloud-based solution enables organizations to automatically manage and control cross-platform metadata, providing actionable insights about the data flow from across the Microsoft BI Stack.  Requiring less than an hour to set up, Octopai’s automated metadata management platform provides unprecedented data lineage and data discovery capabilities so BI groups can help drive the business forward.

Octopai packages full stack data discovery and lineage capabilities across all Microsoft BI tools, including SSIS, MS-SQL, Tabular, OLAP, SSRS and Power BI and increases productivity of day to day operations by providing increased visibility across the entire BI landscape.

Rosh HaAyin’s Octopai was founded in 2015 by BI professionals who realized the need for dynamic solutions in a stagnant market.  Octopai’s SaaS solution automates metadata management and analysis, enabling enterprise BI groups to quickly, easily and accurately find and understand their data for improved operations, data quality and data governance.  (Octopai 08.04)

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2.8 Raises $13 Million for its Distributed Machine Learning Platform has come out of stealth and also announced that it has now raised a total of $13 million.  This includes a $3 million seed round from TLV Partners and a $10 million Series A round led by S Capital and TLV Partners.  It’s no secret that building deep learning models take a hefty amount of GPU power or access to specialized AI chips.  Run.AI argues that the virtualization layers that worked so well for in the past don’t quite cut it for training today’s AI models.  At its core, what Run.AI offers is a new virtualization layer for distributed machine learning tasks that can across a large number of machines.

That’s only one part of the company’s solution.  In addition, the company’s tools also analyze the model in order to break it down into smaller models that can then run in parallel across these servers. With that, the service can understand how many resources a workload would need and what machines to best send the given workloads to.  In doing this, the system takes into account everything from available compute resources to network bandwidth, as well as the data pipeline and size.  The company also argues that this allows it to train large models that are bigger than the individual GPU memory capacity of a single machine.

Tel Aviv’s run:ai helps you run deep learning experiments at maximum speed and cost efficiency.  They optimize, distribute and manage training workloads transparently, allowing data science groups to stop worrying about compute-related inefficiencies and experiment in shorter, more cost efficient cycles.  (run:ai 03.04)

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2.9  Safe-T to Acquire NetNut – a Business Proxy Network Solution Provider

Safe-T Group signed an agreement to acquire NetNut, a Tel Aviv-based company focused on business proxy network solutions.  Safe-T will purchase the entire share capital of NetNut from its shareholders, and the assets required for NetNut’s ongoing operations from its parent corporation, in consideration of $9.7 million, which will be paid in a combination of equity and cash (approx. 40%-60% split, respectively).  The consideration may include an additional earn-out payment in 2020, subject to the level of increase of NetNut’s revenues during 2019 compared to 2018.  The closing of the transaction is subject to Safe-T’s shareholders’ approval and other closing conditions which are customary to such transactions.  Further details of the agreement will be provided in a notice to shareholders, convening a shareholders meeting for approval of this transaction.

NetNut provides expertise in the fast-growing market of cloud services, and is offering exclusive, wholly-owned global proxy network services based on a unique partnership model and technology with Internet Service Providers worldwide which are used by both cyber and web intelligence companies.  NetNut complements Safe-T’s current services and has the potential to introduce opportunities in new markets and industries while increasing revenue and cash flow.

The acquisition is aimed to allow Safe-T to offer its customers a cloud-based Software Defined Access service by combining its Software Defined Perimeter (SDP) technology with NetNut’s globally-located independent cloud-based service.  With the ability to use an anonymous IP address, Safe-T’s customers are expected to further enhance security and control of all incoming access to internal services and outgoing web browsing.

Herzliya’s Safe-T Group is a provider of software-defined access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data.  Safe-T solves the data access challenge by masking data at the perimeter, keeping information assets safe and limiting access only to authorized and intended entities in hybrid cloud environments.  Safe-T enhances operational productivity, efficiency, security, and compliance by protecting organizations from data exfiltration, leakage, malware, ransomware and fraud.  With Safe-T’s patented, multi-layer software-defined access, financial services, healthcare, utility companies and governments can secure their data, services, and networks from internal and external data threats.  (Safe-T 10.04)

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2.10  MIT-Lockheed Martin Joint Venture to Scout for Israeli Innovation

Lockheed Martin and MIT’s International Science and Technology Initiatives (MISTI) program announced the creation of the MIT-Lockheed Martin Seed fund on 14 April, promoting partnerships between the Massachusetts Institute of Technology and universities and institutions public research in Israel.  The MIT-Lockheed Martin Seed Fund, which will also operate in Germany during its pilot period, will be sponsored by Lockheed Martin for $150,000 and will support two or four early-stage research projects in Israel.  During the inaugural year of the fund, it will focus on the proposals that adapt to the advanced manufacturing priorities of Lockheed Martin to identify emerging innovative technologies.  These include the fields of control of manufacturing processes, modeling of materials and processes, new materials for extreme environments and automation of the factory of the future.

Collaborations between MIT and Israeli research faculties will be carried out under a structured framework with the support of Lockheed Martin and may result in additional investigations sponsored under separate agreements.  The collaborating faculties will also have the opportunity to benefit from the Lockheed Martin facilities in both the United States and Israel.

Lockheed Martin runs a network of STEM (Science, Technology, Engineering and Mathematics) schools called MadaKids (Mada in Hebrew means science), which runs educational programs for preschoolers in kindergarten and pre-kindergarten in the southern Israeli cities of Beer Sheba and Kiryat Malachi.  Last year, it announced the opening a science- and tech-focused preschool in Jerusalem in collaboration with Israel’s Ministry of Education, Ministry of Science and Technology and the Rashi Foundation.  (Various 14.04)

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2.11  ‎SpaceIL Commits to Second Beresheet Lunar ‎Mission

In an announcement on 13 April, the chairman of SpaceIL, Morris Kahn, said that the leaders of ‎the group behind the Beresheet launch would begin meeting to find a new group of donors for ‎another run at a lunar landing.  On 11 April, the first Israeli mission to the moon ended in failure when the organization’s ‎spacecraft Beresheet (which means Genesis in Hebrew) crashed on the lunar surface.‎

At a cost of $200 million the Beresheet mission would have been among the cheapest lunar ‎landings ever attempted — and the first legitimate attempt by a private organization to make it ‎to the moon (even though the SpaceIL organization had significant backing from the Israeli ‎government).‎  The project started as an attempt to claim the Google Lunar Xprize, which was announced over ‎ten years ago and was not awarded because no team could make an attempt at a landing within ‎the timeframe specified.  But, Beresheet’s developers labored on with help from Israel ‎Aerospace Industries — the country’s state-owned aviation business.  Part of the cost of the lunar landing was defrayed by using existing launch technologies. ‎ Beresheet started its voyage by hitching a ride on a SpaceX Falcon 9 rocket.‎

The final maneuver was an engine burn that would slow the spacecraft’s descent onto the lunar ‎surface so that it could park on the Moon’s Sea of Serenity.  The unmanned robotic lander suffered periodic engine and communications failures during the 21 minutes or so of the landing sequence, the support team said, and the spacecraft descended in a freefall, crashing into the moon’s surface.  Scientists are still trying to figure out the cause of the failure.

The mission, which involved a four-year construction process at Israel Aerospace Industries and SpaceIL, and a six-week space trip, aimed to see Israel join the US, China and the Soviet Union as the only countries to have safely landed a craft on the moon. (Various 13.04)

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2.12  Armis Raises $65 Million to Address Massive Enterprise IoT Security Exposure

Armis has raised $65 million in Series C funding, bringing the company’s total funding to $112 million.  The round was led by Sequoia Capital, with participation from Insight Venture Partners and Intermountain Ventures joining.  Bain Capital Ventures, Red Dot Capital Partners, and Tenaya Capital also participated as return investors.

The company will use the Series C funds to accelerate investments in sales, marketing and engineering, as it looks to expand the only effective cross-industry solution built to address the security exposures of Enterprise IoT devices.  Armis offers companies unprecedented visibility across managed and unmanaged devices during a time when the number of IoT devices is exploding.  As every industry and market segment faces the issue of identifying and securing these devices, Armis is providing the best solution with their easy to install, agent-less platform.

Armis is the only enterprise-class agentless security platform to address the growing problem of unmanaged and unprotected IoT devices.  Leveraging insights from its cloud-based Device Knowledgebase, which monitors over 80 million devices worldwide, the Armis platform delivers comprehensive visibility of every device across an enterprise environment, analyzes and classifies devices and their behavior in order to identify risks or attacks, and protects critical information and systems.

Armis is the first agentless, enterprise-class security platform to address the new threat landscape of unmanaged and IoT devices.  Fortune 1000 companies trust our unique out-of-band sensing technology to discover and analyze all managed, unmanaged and IoT devices – from traditional devices like laptops and smartphones to new unmanaged smart devices like smart TVs, webcams, printers, HVAC systems, industrial robots, medical devices and more.  Armis is a privately held company and headquartered in Palo Alto, California and an office in Tel Aviv.  (Armis  11.04)

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2.13  Vimeo to Acquire Magisto to Power Video Creation for any Business

Vimeo announced an agreement to acquire Magisto, a video creation service with over 100 million users. Terms of the deal were not disclosed.  Ness Ziona’s Magisto enables simple and intuitive short-form video creation for any medium.  The combination of Magisto’s professional video creation capabilities with Vimeo’s suite of video hosting, distribution and monetization tools will extend Vimeo’s position as the industry’s most complete video SaaS solution.

Following the acquisition, Vimeo and Magisto will work together to develop entirely new short-form video creation capabilities for the Vimeo platform, with the goal of helping any individual or business tell their stories with professionalism and ease.  Magisto users will also be able to seamlessly access Vimeo’s full suite of workflow tools, so they can deploy their videos across platforms with a click of a button and measure performance all in one place.  The transaction is expected to close by the end of the second quarter.  (Vimeo 15.04)

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2.14  Amenity Analytics Raises $18 Million

Amenity Analytics has closed an $18 million Series B financing round led by insurance industry leader STARR Companies.  The deal also includes a new investment from Allstate and participation from existing investors Intel Capital and State of Mind Ventures.

Amenity uses natural language processing (NLP) to help institutional investors, insurance companies, media organizations, and others to rapidly process and comprehend complex text documents and uncover real-time, actionable insights.  Amenity can quickly identify key commentary and determine the critical indicators and statements that help executives make business decisions, drive company performance, and gauge sentiment among a given audience.

Amenity Analytics develops cloud-based text analytics solutions using natural language processing (NLP) and machine learning.  Founded in 2015, Amenity currently has more than 50 employees.  Headquartered in New York City, Amenity also has an R&D office in Tel Aviv. Gartner named Amenity Analytics a 2018 “Cool Vendor” in AI for Banking and Financial Services.  (Various 15.04)

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2.15  3DSignals Completes $12 Million A Round Investment Led by State of Mind Ventures

3DSignals announced completion of a $12 million A Round, bringing the total investment in the company to $17 million to aid in the acceleration of manufacturing industry digitalization.  This round was led by early-stage venture capital fund State of Mind Ventures, known for backing technology-driven, game-changing companies.  The funding is testament to the early success of 3DSignals’ innovative Asset Performance Monitoring solution, and further strengthens the startup’s position and mission to bridge the gap to manufacturing digitalization, otherwise known as ‘Industry 4.0’.

3DSignals’ acoustic-based technology, coupled with AI and machine learning, powerfully bridges this shortfall by extracting operational performance parameters such as availability, speed, and health of industrial machines, and generates insights that improve utilization and increase machines’ productivity.  The 3Dsignals solution can be installed in less than an hour, works with a variety of machines from different vendors, both old and new, and shows immediate value.

Founded in 2015, Kfar Saba’s 3DSignals‘ groundbreaking solution has already achieved worldwide recognition for its ability to monitor and maintain industrial equipment and processes.  Named “Cool Vendor 2018” by Gartner and awarded “Entrepreneurial Company of the Year 2017” by Frost & Sullivan, 3DSignals pioneers acoustics-AI for industrial machines. Our patented, award-winning APM solution, collects and transforms high-resolution acoustic data into invaluable operational insights, resulting in increased Overall Equipment Effectiveness.  (3DSignals 15.04)

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2.16  Splitty Receives $6.75 Million in Series A Funding Led by Fosun RZ Capital

Splitty has raised $6.75 million in a series A round of funding led by Fosun RZ Capital, the VC investment arm of Fosun International.  2bAngels, Techstars Ventures, Cockpit Innovation and 11-11 ventures also participated, enabling Splitty to expand its team and accelerate its global market growth in the coming years.

Fosun RZ Capital launched its Israel office in 2018 and is already represented in five other countries with global teams.  Their investment strategy in Israel will be more focused on high-end technology, which aligns strategically with what they have in the China market.  Splitty will be a landmark in Fosun RZ Capital’s travel tech distribution.  With its ‘Split & Match’ technology, Splitty has driven the innovation of the traditional OTA model and provided the best solution for both users and hotels.  Fosun has been centered around its worldwide family customers and created an ecosystem of ‘Health, Happiness and Wealth’.  Splitty will play a connecting role between Fosun and other platforms in the tourism industry, while diversifying traveling options for family customers as part of Fosun’s ‘Happiness’ ecosystem.

Rishon LeZion’s Splitty offers unique hotel prices, by taking advantage of splitting and combining multiple bookings under one reservation.  Splitty analyzes and splits over 1.5 million transactions to create the exclusive deals in one second.  They provide their services for more than 500,000 properties in 127 countries.  Founded in 2015, Splitty has been focusing on developing its technology and was launched in the market in 2018.  (Fosun RZ Capital 15.04)

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3.1  Badir Program Signs MoU with Jordan’s Propeller for Startup Collaboration

King Abdulaziz City for Science and Technology (KACST), represented by Badir Program for Technology Incubators and Accelerators, and Propeller, Inc., a Jordan-based startup accelerator focused on technology, product and design, signed a Memorandum of Understanding (MoU) to boost startup collaboration between the Kingdom of Saudi Arabia and the Hashemite Kingdom of Jordan.

The MoU was signed by Nawaf Al Sahhaf, CEO of the Badir Program for Technology Incubators and Accelerators and Tambi Jalouqa CEO of Propeller Inc.  The partnership will allow Badir Program and Propeller to provide access to the local market, network and investors to technology startups in their respective countries.

Additionally, the two entities will support the tech startups within the context of this cooperation through a legal set up for operation in the local market, advising and coaching startups in technology development as well as support services to approved startups.

Badir Program was established in 2007 to improve and support technical entrepreneurship throughout the Saudi Arabia by helping the strategic policy applied in entrepreneurship and incubators in collaboration with government agencies, universities and the private sector.  The Badir Program is steadily moving to achieve its objective of creating 600 startups and 3,600 jobs by 2020 by focusing on expanding its innovation and entrepreneurial hubs across the Kingdom.  (Badir 10.04)

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3.2  Textron Wins $15 Million Iraq FMS Contract

Kansas based Textron Aviation Defense has been awarded a $15.35 million contract for continued support for the completion of the reconstitution of 15 T-6A aircraft.  This modification provides for a schedule extension to complete the reconstitution of 15 T-6A aircraft and procure cartridge actuated devices and propellant actuated devices.  Work will be performed at Imam Ali Air Base, Iraq and is expected to be complete by July 31, 2019.  This modification involves 100% foreign military sales (FMS) to Iraq and brings the total cumulative face value of the contract to $35,338,422.  Foreign military sales funds in the full amount are being obligated at the time of award.  Air Force Life Cycle Management Center, Training Aircraft Division, Wright-Patterson Air Force Base, Ohio, is the contracting activity.  (US DoD 10.04)

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3.3  UAE Health Insurance Market Trends, Size, Growth and Opportunities (2019-2024)

The “UAE Health Insurance Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024” report has been added to‘s offerings.  This latest report says that the UAE health insurance market is presently witnessing strong growth.  With a population of around 9.6 million, the UAE is among the GCC region’s fastest growing economy.  Moreover, the government is also playing a major role in increasing the penetration of health insurance in the region.

In Abu Dhabi and Dubai, the government provides health insurance for all its citizens.  Similarly, the government of Ajman provides all its employees with health insurance.  Additionally, both Abu Dhabi and Dubai also mandate employers to provide health insurance coverage to their employees.  Moreover, due to the country’s increasing economic diversification and continued inward migration, the per capita expenditure on health care services have increased.  Other factors such as increasing occurrences of lifestyle diseases and rising costs of medical treatments are also driving the market positively.  AXA Gulf Insurance, Abu Dhabi National Insurance Company (ADNIC), Emirates Insurance Company, Oman Insurance Company, etc. are among the key health insurance providers in the UAE.  (RandM 15.04)

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3.4  UAE’s Mubadala Opens New York Office Amid US Push

Mubadala Investment Co has opened an office in New York as the Abu Dhabi wealth fund builds on its presence in the United States.  The firm now has offices in San Francisco, as well as Rio de Janeiro, Moscow and Hong Kong.

Mubadala plans to invest in technology companies in the US after opening a Silicon Valley office to manage its $15 billion commitment to SoftBank Group Corp’s Vision Fund.  The wealth fund merged with International Petroleum Investment Co in 2017 and absorbed Abu Dhabi Investment Council last year, making it one of the world’s largest with about $225 billion of assets.  (AB 10.04)

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3.5  PointCheckout Raises $600,000 to Let Users Pay Online with Their Reward Points

Dubai’s PointCheckout, an online payment method for reward points and miles, has closed a seed round of $600,000 to allow users to pay with their reward points and miles online at over 1,000 leading online merchants across the MENA region.  The fintech’s funding round includes Arzan VC, 500 Startups, Dubai Angel Investors, Hala VC and DTEC Ventures.  This also marks the first time these investors co-invest together in the same startup.

PointCheckout gives reward programs the advantage of a large redemption network across the MENA without having to handle any integration or change in existing loyalty infrastructure, yet with the added benefit of almost double user engagement.  Online merchants benefit from a new customer acquisition channel and gain access to more than 1 million consumers regionally.  PointCheckout is already live in Jordan and will be launching in 2019 in the GCC.  (PointCheckout 04.04)

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3.6  Seed Funding Round for YaLLa Esports Oversubscribed

Dubai’s YaLLa Esports, one of the leading esports organizations in the MENA region, has completed and secured a seed funding round from a group of strategic investors, led by angel investor Kushal Shah.  YaLLa Esports will use the funding to search and develop the best talent in the region; to build great team facilities and to help with travel costs to compete on a global scale, as well as for expansion across the MENA region.  The startup aims to nurture regional talent through an organized personal growth structure, championing the gaming culture and building an environment for aspiring professional gamers to flourish and make esports a viable career.

YaLLa Esports aims to add key people on the management side to support the rapid growth.  The focus will be on content creation, sharing the stories of home grown esports talent on a journey, catering to the dedicated fan base.  YaLLa Esports’ business model is driven by sponsorship and advertisement in light of the fast-growing and significant viewership of millennials tuning into highly entertaining esports content.  YaLLa Esports has already partnered with leading brands including ASUS Republic of Gamers, Logitech G and Western Digital.  (YaLLa Esports 09.04)

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3.7  Vertex Aerospace Establishes Headquarters in UAE

Madison, Mississippi’s Vertex Aerospace has expanded its global presence by establishing a regional office in Abu Dhabi, United Arab Emirates.  The company received its license to practice business in the UAE in March 2019, under its Vertex Global Aerospace business line.  Vertex Global Aerospace, or VGA, was formed in January 2019 to globally offer Vertex’s complete solution for aftermarket aerospace services for government and commercial clients.  The leadership of the newly established VGA business line held a soft opening at its Abu Dhabi location and attended the city’s International Defense Exhibition and Conference in the same week.

New York-based private equity firm American Industrial Partners purchased Vertex Aerospace in June 2018 to operate as a standalone company.  The Company now has the capability to provide full-spectrum aerospace support worldwide and has grown its annual revenue to over $1.2B.

Vertex Aerospace is a global defense company that provides all aftermarket aerospace services for government and private sector customers.  The Mississippi-based company has over 4,200 employees at its 65 U.S. and 35 international locations and proudly employs a 50% veteran workforce.  (Vertex Aerospace 03.04)

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3.8  Shedul Raises $20 Million in a Series B Funding Round, a Dubai based booking platform for salons and spas backed by MEVP since its inception, has successfully raised a $20 million Series B funding round, valuing the company at $105 million.  The round was led by Partech Ventures, an investment firm with hubs in Paris, San Francisco and Berlin, along with participation from Berlin-based Target Global, Dubai-based BECO Capital and New York-based FJ Labs.  Additionally, the round included personal investments from entrepreneur Niklas Östberg, Founder and CEO of Delivery Hero AG.  The issue was oversubscribed with additional secondary transactions of $3 million.  The Series B round brings the total amount raised by the London-headquartered company to $32 million to date. is an intuitive, free SaaS-enabled marketplace that salons and spas around the world use to streamline their business operations.  In just a few years since launch, the company has captured a vast customer base of merchants in more than 120 countries, mainly in the US, UK, Australia and Canada.  Recently, the company launched its consumer marketplace, which connects merchants using the free business software to consumers online.  The marketplace unlocks revenue potential for merchants by leveraging the power of online bookings and automated marketing through mobile apps and integrations to Instagram, Facebook and Google.  The company plans to use the investment to accelerate product development and support the ongoing worldwide rollout of its consumer marketplace.  (Shedul 14.04)

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3.9  ProTenders Secures $3 Million for Pre-Series A Funding

Abu Dhabi’s ProTenders, the construction intelligence and procurement platform, has successfully completed a Pre-Series A funding by a prominent group of UAE-based investors.  The investment will focus on the growth of ProTenders operations across customer success, sales, marketing and research regionally and in Asian markets, as well as strengthening the product offering to include blockchain and smart contracts.  ProTenders’ e-Tendering solution provides insights on $2.62 trillion worth of GCC projects to their online product catalog directory.  ProTenders seeks to empower every property developer and every construction company to build more sustainably in the Middle East and globally.

The Pre-Series A financing follows an exceptional last 24-months for ProTenders which includes winning distinguishing awards for its innovative technology, an increasing customer base across the region and globally, and the signing of a 3-year e-Tendering deal with DAMAC Properties.  (ProTenders 08.04)

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3.10  Saudi Arabia’s Health Insurance Market 2019-2024

The “Saudi Arabia Health Insurance Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024” report has been added to‘s offerings.  This latest report says the Saudi Arabia health insurance market is currently exhibiting strong growth.  The key health insurance providers in Saudi Arabia are Bupa Saudi Arabia, Tawuniya and MedGulf Arabia.

The increasing population and diversification of the nation’s economy are among the key factors driving the Saudi Arabia health insurance market.  Resulting from the growing industrialization and increasing job opportunities, expatriates from all around the globe are migrating to the country, catalyzing the growth of the healthcare and health insurance sector.  Health insurance in Saudi Arabia is oriented towards easing the financial stress that comes with having to pay exorbitant medical bills due to unexpected illness or injury.  Additionally, the Saudi Arabian government mandates health coverage for all nationals and non-nationals.

The country began implementing the mandatory unified health insurance scheme in July 2016, with the system completely in place since 2017.  It is compulsory for all private sector organizations to provide health insurance to their employees as well as their dependents – this includes spouse, unmarried daughters and male children below 25 years of age.  Furthermore, factors such as rising population, increasing healthcare expenditures, growing prevalence of various life style diseases, improving healthcare infrastructure, etc. are also catalyzing the growth of the health insurance market in Saudi Arabia.  (RandM 15.04)

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3.11  iSchemaView’s RAPID Approved for Use in the Kingdom of Saudi Arabia

Menlo Park, California’s iSchemaView, the worldwide leader in advanced imaging for stroke, has received approval from the Kingdom of Saudi Arabia’s Ministry of Health (MOH), for the use of the RAPID imaging platform across the Kingdom of Saudi Arabia.  RAPID is designed to provide physicians with fast, fully automated, and easy-to-interpret imaging that facilitates clinical decision-making around stroke.  Hospitals and clinics that treat ischemic stroke in the Kingdom of Saudi Arabia will now have access to RAPID’s automated CTP, MR, CTA and ASPECTS solutions, as well as their unique mobile app that accelerates the provision of information to support treatment decision making.  RAPID’s expansion into Saudi Arabia represents continued market growth across the Middle East and is further confirmation that RAPID has become the de facto standard for stoke imaging around the world.  (iSchemaView 16.04)

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3.12  Saudi’s SALIC Makes First Australian Farming Acquisition

A unit of the Saudi Agricultural and Livestock Investment Company (SALIC) has announced the acquisition of Baladjie, an aggregation of over 200,000 hectares of farming in Western Australia’s wheat belt that also carries a 40,000-head Merino sheep flock.  The aggregation comprised John and Julie Nicoletti’s farming interests and other third-party options. The transaction closed on Thursday after receipt of non-objection approval from Australia’s Foreign Investment Review Board (FIRB).

SALIC Australia is a wholly owned subsidiary of SALIC, a Riyadh-based investment company 100% owned by sovereign wealth fund, the Public Investment Fund (PIF).  It aims to be a food security-focused agribusiness investment company.  SALIC said that the local team will build on the legacy of John Nicoletti with plans to manage the livestock and grain production enterprise for the long term with a focus on sustainability, profitability, environmental responsibility and support for the local rural community.  (AB 05.04)

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3.13  International Finance Corporation Launches Program to Support Egypt’s Fintech Space

The International Finance Corporation (IFC), a member of the World Bank Group, launched a program supporting the development of Egypt’s fintech space.  The project will help startups extend crucial financial services; it comes as part of IFC’s efforts to support Egyptian innovation and entrepreneurship.  The two-year program will support two private sector fintech-focused accelerators improve their offerings to startups in fields such as mentorship, business development and technical training in order to help them attract investor funding.  It will be implemented jointly by Pride Capital/Startup Bootcamp, Egypt’s first international venture capital fund focused on financial technology, and the AUC Venture Lab housed at the American University in Cairo – Egypt’s first university-based incubator.  Both accelerators possess extensive experience in the financial technology, or fintech, space.

Fintech could reshape the banking industry as it grows rapidly in light of Cairo’s commitment to financial inclusion.  There are approximately 45 active fintech startups in Egypt, a number expected to increase.  This is important in Egypt, where only 32% of individuals aged 21 years and older have a bank account.  Innovative solutions like mobile payments and online banking provide easy and affordable access to financial services.  By supporting innovative fintech startups, the program aspires to support IFC’s efforts to expand financial inclusion across the country.

The program also complements the World Bank Group’s ongoing efforts to enhance and improve the environment for digital finance to support the growth of the fintech startups in Egypt.  It is supported by IFC’s development partners: Germany’s Kreditanstalt für Wiederaufbau (KfW), Norway’s Ministry of Foreign Affairs and the Netherlands’ Ministry for Foreign Trade and Development Cooperation.  (Egypt Independent 09.04)

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3.14  Egyptian AI Startup MerQ Closes its Seed Funding Round

Egypt-based artificial intelligence (AI) company MerQ has closed its seed financing round from Ahmed Kamal Selim, a financial investor, with a minority stake in the company valued at $800,000.  MerQ will use the investment to develop its products, mainly Sally, a chatbot through Facebook that introduces Egyptians to all credit card systems within the country.  The company aims to cover various topics of financial literacy in banking and non-banking services and to help in financial inclusion by assisting the Egyptian public in making financial decisions through raising awareness on banking and financial sectors.  MerQ is targeting another round of financing during Q3/19 to launch two new products within the framework of financial services that support the state’s vision for financial inclusion and the use of technology to increase the penetration of financial and banking services among Egyptians.  Sally’s service “@SallyCreditCard” provides users with comprehensive information when deciding on different credit cards available across various banks through its artificial intelligence chatbot offered through Facebook messenger.  (Wamda 14.04)

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3.15  Egypt’s Brimore Raises $800,000 in Seed Funding Round

Brimore, the direct-selling distribution platform that connects manufacturers with consumers, announced that it has raised $800K in a seed funding round co-led by Algebra Ventures and Endure Capital, with participation from 500 Startups, Flat6labs and angel investors.

Founded in 2017, Cairo’s Brimore is a technology-powered retail distribution platform that allows manufacturers direct access to local communities who can both promote and consume their products.  The platform creates significant efficiencies for local manufacturers by dramatically optimizing their branding and distribution costs, providing them with better demand visibility, and allowing them to improve utilization.  Directly selling into local communities, Brimore creates an entirely new marketing and distribution channel that is built on data analytics and the power of social networks.  Brimore’s channel extends well into the depths of rural areas in Egypt where it is uniquely capable of moving a high volume of products seamlessly and efficiently.  (ArabNet 02.04)

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3.16  Royal Air Maroc Launches Casablanca-Miami Direct Flight

On 3 April, Royal Air Maroc (RAM) launched a Casablanca-Miami non-stop flight.  The first direct flight between the two destinations landed that night at Miami International Airport (MIA).  The company will serve the non-stop flight three days a week, Wednesdays, Fridays and Sundays.  A Moroccan delegation attended the launching ceremony.  The inaugural flight used a Boeing 787-9 Dreamliner, with a capacity of 302 seats, including 26 in business class.  The non-stop flight will also operate on a Boeing 787-800 Dreamliner, with a capacity of 274 seats, including 18 seats in business class.  Miami became the third direct destination served by Royal Air Maroc in the United States, after New York and Washington, D.C.  (MWN 04.04)

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3.17  Honda to End Production in Turkey After 2021

Honda has decided to end car production in Turkey following completion of the production of its current Civic Sedan model in 2021, the company said on 8 April.  It said it made the decision due to electrification developments in the industry globally and the need to ensure adequate production capacity.  Operations in the automobile area that include vehicle imports and distribution would continue, Honda said, adding that its motorcycle operations will not be impacted by this decision.  Honda had said earlier that it would restructure its global manufacturing network.

Honda Türkiye currently produces 38,000 units per year and employs 1,100 people.  According to data from the Automotive Distributors’ Association, Honda sold 3,410 vehicles in the first three months of 2019.  In 2018, the company sold 28,661 vehicles in Turkey when a total of 620,937 vehicles (passenger cars and light commercial vehicles combined) were sold.  (Reuters 08.04)

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4.1  Shikun & Binui to Launch Negev Energy Thermo-solar Power Plant at Ashalim

Shikun & Binui, a global construction and infrastructure company that operates in Israel and internationally, completed the construction of the largest renewable energy project in Israel and one of the largest and most complex in the world.  The Negev Energy Thermo-Solar power plant at Ashalim will now begin supplying clean energy, on a daily basis, to Israel’s National Grid.

The launch follows Negev Energy’s construction and test of the facility, and its successful completion of all the Israel Electric Company’s acceptance tests.  Following this, it received all the required approvals, including a permanent license to produce electricity from Israel Electric Authority.  In addition, the commercial operations of the thermo-solar facility, which is located near Ashalim in Israel’s Negev region, will also begin tomorrow.

Negev Energy, a company owned by Shikun & Binui Energy (50%), the Noy Infrastructure Fund (40%) and the Spanish firm TSK (10%), won the Government tender in 2013 and signed a 25-year concession agreement to plan, finance, build, operate and maintain the 110MW thermo-solar electric generation plant.  The facility will supply enough clean electricity to Israel’s National Grid, to power the needs of approximately 70,000 households.

The plant is made up of approximately 16,000 parabolic troughs and half a million concave mirrors, used to transform solar energy into steam that drives electricity-generating turbines.  In addition, the plant features a unique molten salt energy storage system that enables the plant to supply electricity at full capacity for 4.5 additional hours each day after sunset, thus achieving an especially high level of efficiency.  Investment in the construction of the power plant totaled approximately $1 billion.  The project provided employment to hundreds of workers, contractors and suppliers, most of whom were residents of Israel’s Negev region.  (Shikun & Binui 11.04)

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4.2  Construction of Phase 4 of Giant Dubai Solar Park on Schedule

Construction work on the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site concentrated solar power (CSP) project in the world, is progressing on schedule.  Saeed Mohammed Al Tayer, managing director and CEO of Dubai Electricity and Water Authority (DEWA), has inspected the construction work of the project which has a capacity of 950MW and will cost up to AED15.8 billion.  The base concrete of the CSP tower has been completed and, once built, the 260-metre tower will be the tallest solar power tower in the world.

Al Tayer was briefed on the progress of construction work by Abdul Hamid Al Muhaidib, executive managing director of Noor Energy 1, a venture formed through a partnership between DEWA, Saudi Arabia’s ACWA Power and China’s Silk Road Fund to build the fourth phase of the Park.  Al Muhaidib confirmed the completion of the concrete base that contains about 1,300 tonnes of steel rebar and concrete, equivalent to 20% of Paris’s Eiffel Tower.  Al Muhaidib added that 33% of the engineering work has been completed for the project.

The fourth phase will provide clean energy for 320,000 residences and will reduce 1.6 million tonnes of carbon emissions annually.  The Mohammed bin Rashid Al Maktoum Solar Park will generate 5,000MW by 2030 with investments of up to AED50 billion.  The 13MW photovoltaic first phase became operational in 2013. The 200MW photovoltaic second phase of the solar park was launched in March 2017.  The 200MW first stage of the 800MW photovoltaic third phase became operational in May 2018. The third phase will be completed in 2020.  (AB 05.04)

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5.1  Lebanon’s Trade Deficit Decreased by 14.41% to $2.23 Billion in February 2019

Lebanon’s trade deficit stood at $2.23B by February 2019, narrowing from the $2.61B registered by the same period last year. Total imports declined by 11.84% year-on-year (y-o-y) to $2.77B, while exports rose only by 0.78% y-o-y to $535.84 million.

Mineral products were the leading imports to Lebanon in the first 2 months of 2019, grasping an 18.36% stake of total imported goods. Machinery and Electrical Instruments followed, constituting 12.16% of the total, while Products of the chemical or allied industries grasped 12.15% of the total.  The value of imported mineral products stood at $508.50M by February 2019, down by a yearly 2.78%.  As for the value of machinery and electrical instruments, it recorded a decrease of 12.16% y-o-y to settle at $336.70M, and that of products of the chemical or allied industries also declined by 6.19% to $336.50M over the same period.

In terms of top trade partners, Lebanon primarily imported from China, Greece, Italy and Russia with shares of 11.69%, 7.75%, 6.89% and 5.09% in the total value of imports, respectively, in August 2018.

As for exports, the top category of products exported from Lebanon was pearls, precious stones and metals, which grasped a share of 37.06% of total exports, followed by a share of 12.07% for prepared foodstuffs, beverage & tobacco and 9.27% for Machinery, electrical instruments by Feb 2019.  In details, the value of pearls, precious stones, and metals rose by an annual 13.19% to reach $198.57M by February 2019. In turn, the value of prepared foodstuffs, beverage, and tobacco increased by 3.15% y-o-y to $64.65M. Moreover, the value of Machinery and electrical instruments climbed by a yearly 12.90% to $49.65M.

In February 2019, Switzerland, followed by UAE and Syria were Lebanon’s top three export destinations, respectively constituting 21.99%, 12.41% and 8.11% of the total value of exports.  (BLOM 06.04)

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5.2  Lebanon’s Gross Public Debt Up to $85.25 Billion in February 2019

Figures released by the Ministry of Finance show that Lebanon’s gross public debt reached $85.25B by the second month of 2019, thereby recording an annual rise of 4.57% when compared to the gross public debt during the same period last year, which reached $81.52B.  The local currency debt (denominated in LBP) constituting 60.41% of total gross debt rose by 1.13% year-on-year (y-o-y) to $51.5B.  Meanwhile, foreign currency (FC) debt, grasping the remaining 39.59%, grew by 10.28% y-o-y to stand at $33.75B.  In its turn, net public debt, which excludes public sector deposits at commercial banks and BDL, reached $76.55B in February 2019, climbing by a yearly 9.05%.  (MoF 08.04)

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5.3  Jordan Seeks $1 Billion World Bank Loan to Cut Debt Burden

Jordan is talking to the World Bank about a $1 billion soft loan as it seeks to cut the cost of its debt repayments and revive an economy strained by more than a million Syrian refugees.  Amman is moving on several fronts to reduce the high debt burden by considering concessional loans and focusing on triggering economic growth.  It’s seeking a 30 year facility with the World Bank and an interest rate of 4%.

Jordan, whose public debt of JOD 28.3 billion ($39.9 billion) nearly equals economic output, has been hurt by the rise in global commodity prices.  The US last year committed to give Jordan more than $6 billion in aid over the next five years, up from $1 billion annually, while Saudi Arabia and two allied Gulf nations pledged an assistance package after a proposed income tax increase sparked massive protests.

The recent reopening of Jordan’s border with Iraq after Islamic State militants were pushed from area has fueled an annual 13.6% in increase in Jordanian exports in the first quarter of this year.  Jordan will also start receiving oil from Iraq by tanker soon, according to the Jordanian premier, under a February deal for 10,000 barrels of crude per day.  He said that a planned oil pipeline from Basra in Iraq to Jordan’s Aqaba could happen within three years.  (AB 07.04)

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5.4  Jordan’s Net Public Debt Hits JOD 28.6 Billion by the End of February 2019

Jordan’s net public debt amounted to JOD28.6 billion to the end of February 2019, constituting 94.4% of the estimated Gross Domestic Product (GDP), compared to JOD28.3 billion recorded in the same period of 2018.  The Ministry of Finance showed that the National Electric Power Company (NEPCO) and the Water Authority indebtedness amount to about JOD7.4 billion.  Net public debt reached JOD27.2 billion at the end of February, representing 90% of the estimated GDP compared to JOD26.9 billion representing 89.7%.  The external public debt, budgeted and guaranteed, fell by JOD13.7 million to reach JOD12073.9 million at the end of February, accounting for 39.8% of the estimated GDP, compared with JOD12087.5 million at the end of February, representing 40.3% of the GDP by the end of 2018.  (MoF 10.04)

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5.5  U.S.-Jordan Joint Military Commission (JMC) Holds 41st Meeting

Senior delegations from the United States and Jordan met on 9 – 11 April in Amman, Jordan for the 41st meeting of the U.S.-Jordan Joint Military Commission.  The JMC is the premier bilateral forum for senior U.S. and Jordanian government and military officials to discuss ongoing security assistance and military cooperation, as well as develop plans for our robust security partnership.  The delegations discussed a broad range of diplomatic and security challenges throughout the region, including the crisis in Syria and ways to continue combatting violent extremism.  The U.S. and Jordan remain committed to a strong bilateral relationship built on common interests and mutual respect.  (JMC 12.04)

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5.6  Iraq GDP Growth to Hit 8.1% in 2020

A new report from the World Bank Group forecasts that Iraq’s economy is gradually picking up following the deep economic strains of the last four years.  Real GDP is estimated to have grown by 0.6% in 2018, thanks to a notable improvement in security conditions and higher oil prices, reversing the contraction of 1.7% seen in 2017.  The non-oil economy picked up speed and grew at 4%, while oil production was slightly less than 2017 in line with the OPEC+ agreement.  Recently, the Iraqi economy has received a boost of confidence with the signing of several trade agreements with its neighbors.

Reconstruction efforts have been proceeding at a moderate pace.  Inflation remained low at 0.4% in 2018, but slightly up from 2017, due to higher domestic demand in addition to rising food and transportation costs.

The economic outlook has improved due to higher oil prices and improving security situation, but constraints on capital spending will impede a recovery-driven growth acceleration.  Growth is expected to spike to 8.1% in 2020 due mainly to higher oil output, with OPEC+ agreement coming to an end in mid- 2019.

Non-oil growth is expected to remain positive on the back of higher investment needed to rebuild the country’s damaged infrastructure network, private consumption and investment.  However, the recently approved 2019 budget presents a sizable increase in recurrent spending, and unless there is a significant reorientation in fiscal policy to a comprehensive recovery approach, there will be limited fiscal space to sustain post-war recovery and longer-term development.  Higher spending together with easing oil prices will result in a high fiscal deficit projected at 5.4% of GDP in 2019 before narrowing down to about 3% throughout 2020-2021.  Lower oil prices and increased imports will cause the current account balance to turn into deficit, financed partially by international reserves decumulation.  (IBN 04.04)

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►►Arabian Gulf

5.7  Dubai Attracts Dh38.5 Billion Worth of FDI in 2018

Dubai remained an attractive destination globally for foreign direct investment (FDI) as it recorded 41% year-on-year growth in FDI last year to Dh38.5 billion, placing the emirate in the first position in total number of FDI projects and capital flows.  The emirate defied the global trend as FDI worldwide declined 19% in 2018 as reported by the United Nations Conference on Trade and Development (UNCTAD).

According to ‘Dubai FDI Annual Resorts and Ranking 2018’ released by the Dubai Investment Development Agency (Dubai FDI), the emirate attracted 523 FDI projects in 2018, an increase of 43% over 2017, elevating the emirate’s global ranking in the number of new investment projects to third from fourth.  More importantly, FDI projects created about 25,000 new jobs in 2018, an increase of 77% compared to 14,065 jobs in the previous year, effectively placing Dubai in 9th position globally in job creation through FDI.

The official data showed that the US retained its leading position in FDI capital flows to Dubai with a 37% share, while India came second with 12%, followed by Spain (9%), China (7%) and the UK (5%).  Together, all the five countries accounted for 70% of total FDI capital inflows and 51% of FDI projects into Dubai last year.  The fDi Benchmark, which identifies the best FDI destinations based on comparison of latest FDI data, highlighted that Dubai dominated global rankings throughout 2018, followed by London, Paris, Dublin and Singapore, as the leading city globally in foreign direct investment in 2018.

In terms of top attractive sectors, FDI flows were largely concentrated in the accommodation and food services sectors with 46% of total FDI capital, followed by commercial construction at 15%, residential buildings construction at 8%, arts, entertainment and recreation at five%, and finance and insurance at four%.  The top five sectors accounted for 78% of all FDI capital and 27% of FDI projects into Dubai in 2018.  (KT 08.04)

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5.8  UAE Named as Fintech Hotspot in the Middle East

The UAE tops the list of countries in the Middle East with the highest number of financial technology (fintech) start-ups, according to Bloomberg Intelligence.  The UAE with 67 was followed by Turkey at 44 and Jordan and Lebanon at 30 each, it said.  Overall, the number of fintech start-ups in the region is forecast to expand from 96 in 2019 to 465 by 2020.

An Accenture analysis based on CBI Insights data has predicted that investments in the fintech sector will jump to $2.28 billion by 2022 from $287 million in 2019.  The figures were made public ahead of this year’s AIM Startup taking place in Dubai in conjunction with the Annual Investment Meeting.  Excepting Israel, the country ranks first in the Middle East and North Africa and 23rd globally in the Global Connectivity Index 2018 released by Huawei.  (AB 05.04)

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5.9  Dubai Private Sector Grows at Fastest Rate in Nearly a Year

Dubai’s non-oil private sector economy expanded at a fastest rate in nearly a year in March, according to the seasonally adjusted Emirates NBD Dubai Economy Tracker Index.  It rose from 55.8 in February to 57.6 in March, the highest since May 2018.  Total business activity (output) increased at the fastest rate since January 2015 while two of the three key monitored sectors – travel and tourism and wholesale and retail – posted series record increases in activity.  With new business growth also accelerating, expectations for the next 12 months were the second-strongest on record, just shy of January’s peak, the survey showed.  It added that price discounting, particularly in the wholesale and retail sector, was likely a key driver of demand in March.

The survey said that travel and tourism saw its headline index reach a record high of 59.8, while the headline figure for wholesale and retail was 59.7, just shy of the peak set in October 2017.  In contrast, business conditions at construction firms were the softest in 28 months (51.8), as weaker new order growth weighed on the sector index.

Total non-oil private sector output increased at the fastest pace since January 2015. The rate of expansion was the fifth-strongest on record since the series began in 2010.  Workforces were expanded to support activity levels in March, although the rate of job creation was modest, the survey noted.  Inflows of new business to private sector non-oil firms in Dubai also rose in March with the rate of expansion being the fastest since May 2018.

Non-oil private sector firms in Dubai cut their prices charged for goods and services for the eleventh month running in March.  This marked the longest sequence of discounting since the series began in 2010.  The rate of price discounting was the steepest since December 2018.  (AB 09.04)

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►►North Africa

5.10  IMF Expects Egypt’s Growth Rate at 5.5% in 2019 – Praising Economic Reform

The International Monetary Fund (IMF) has forecast that Egypt’s economic growth rate during the current and next fiscal years will stand at 5.5% and 5.9% respectively.  The IMF expected Egypt’s inflation rate to register 12.8% by the end of the FY 2018/19 and 10.7% in 2019/20.  The IMF expected the inflation rate to hit 6.9% in the FY 2023/24.  The fund has maintained its forecast for the unemployment rate at 9.6% in the current fiscal year and 8.3% in the next fiscal year.

The IMF hailed the significant improvement in the country’s macro-economy since the implementation of the economic reform program in November 2016.  Meanwhile, it has lauded the significant improvement in Egypt’s macro-economy since the start of the economic reform program in November, 2016.  The report highlighted that the good economic indicators were driven by several measures adopted by the Egyptian government including the liberalization of the exchange rate, good monetary policies and proceeding with the efforts meant to control the public finances.  The IMF said Egypt’s GDP accelerated from 4.2% during the 2016-2017 fiscal year to 5.3% in 2017-2018, expecting it to hit 5.9% in 2019-2020.  The IMF forecast Egypt’s economy would grow 5.5% this year and 5.9% in the next year.  (MENA 09.04)

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5.11  IMF Says Egypt on Track to End Fuel Subsidies

Egypt is on track to end subsidies on most fuels by 15 June, as part of a reform program led by the International Monetary Fund (IMF).  The economy of the Arab world’s most populous country has suffered from political instability and security threats since the 2011 uprising.  Cairo secured a $12 billion, three-year loan package from the IMF in 2016.

Egyptian authorities “remain committed” to ending subsidies granted to limit prices at the pump, the IMF said in a new report.  The prices of liquefied petroleum gas (LPG) and fuels used in bakeries and for electricity generation would not be affected, it added.  Bread is a staple in Egypt and a price hike could spark further discontent in the face of continued economic woes.  The IMF said cutting the subsidies is “critical to encourage more efficient energy use” and to “create fiscal space for high-priority spending on health and education”.

In February, the IMF approved the next $2 billion loan payment to Cairo, citing “substantial progress” made by Egyptian authorities on reforms, which have boosted growth and cut unemployment.  IMF chief Christine Lagarde at the time also urged Egypt “to press ahead with structural reforms that facilitate private sector-led growth and job creation”.  The latest installment brought the total paid to Egypt to about $10 billion since the loan deal was signed in November 2016.  (AFP 07.04)

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5.12  Egypt’s Economic Growth Hits 5.5% – Highest in a Decade

Egypt’s economy has achieved its highest growth rate within a decade to reach 5.5%, thanks to the economic reform program adopted by the government, Planning Minister Hala el Saaed said on 6 April.  Minister Saeed made the remarks while reviewing Egypt’s economic reform program with Adviser to Pakistan’s Prime Minister on Institutional Reforms and Austerity Ishrat Hussain at the 44th annual meeting of Islamic Development Bank (IsDB) board of governors in Morocco.

The decline of the monthly inflation rate to 11.1% in December 2018, the lowest in 33 months (since 2016) is among the positive indicators combined with the notable retreat of the average inflation rate in the first half of 2018/2019 to record 14.1% compared to 30.2% in the same corresponding period of 2017/2018, Saaed said.  Egypt’s national economic and social reform program mainly targeted attaining inclusive and sustainable growth through undertaking structural reforms for several sectors, namely the sector of power through rationalizing subsidy and chiefly directing to those who deserve.

The minister pointed out to the parcel of legislative and institutional reforms implemented by the government – to enhance the competitive abilities and retain the trust of investors – like the liberalization of the exchange rate, boosting foreign currency reserve and bringing down both the deficit of state budget and public debt.  (MENA 06.04)

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5.13  ILO Cites Egypt’s Explosive Population Growth Which Outpaces its Job Creation Rate

The explosive growth of Egypt’s population from around 20 million in 1950 to over the current 95 million has far outpaced the rate of job creation, the International Labor Organization (ILO) stated in its just released annual report.  For the past 30 years, Egypt’s economy has not grown fast enough to absorb the generations completing education or vocational training, the report cited, adding that new sources of productive employment are needed.  Egypt’s economic landscape continues to be marked by regional disparities, with rural Upper Egypt showing higher poverty rates than metropolitan Egypt.

Furthermore, Egypt’s rapid population growth represents an urgent challenge in terms of how to maintain and grow sufficient numbers of jobs to welcome the vast majority of the working age population into the labor market.  Yet this challenge is a compelling opportunity, because integrating prepared and motivated women and men into the ranks of the employed will support continued economic growth and improvement in living standards.  Moreover, Egypt’s economic activity rate, which measures the success of an economy in engaging its citizens in economically productive activity, stood at a comparatively low 44.3% in 2018.  This was due in large part due to the extremely low level of workforce participation by women.

On the other hand, the unemployment rate decreased from 12% in 2017 to 10% in the third quarter of 2018, according to Central Agency for Public Mobilization and Statistics (CAPMAS).  However, female and youth unemployment remain significantly higher. Egypt’s sustainable development strategy (SDS) 2030 target rate for unemployment in 2030 is 5%.  (Various 14.04)

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5.14  Libya GDP Growth Forecast for 4% in 2019, 6% in 2020

A new report from the World Bank Group forecasts real GDP growth (at constant market prices) of 4% this year in Libya, increasing to 6% next year.  As the oil sector is the major source of growth, economic activities remain constrained by recurrent clashes around oil infrastructure aiming to control oil wealth.  The ambition of the country to raise oil production to 1.6 million barrels per day (bpd) proved overly optimistic, as this objective is systematically disrupted by political rivalries.  The associated lack of security and reforms hinders investment and development of the private sector.

The status quo scenario determined by resource competition in a context of delayed resolution of the political strife and the persistence of internal division and inoperative institutions makes stabilization unlikely.  This fragile situation is weakened further by recurring clashes around oil terminals and in large cities, mostly aiming to gain control over oil wealth.  In this context, Libya can only manage to keep oil production to a daily average of 1 million bpd during 2019 and 1.1 million bpd over the next few years, which will represent 2/3rd of potential.

GDP is projected to grow at 4% in 2019 and 6% in 2020 (a catch-up effect) and an average 1.3% over 2021-22, resulting in a real GDP per capita at 64% of its 2010 level.  (WB 05.04)

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5.15  Tunisia Aims To Be a Pioneer in Blockchain Technology

Tunisia is looking to be a pioneer in implementing blockchain as the country’s central bank explores the use of the technology for a national digital dinar, reports the Asia Times.  The Banque Centrale Tunisienne (BCT) are currently working with Walid Driss, the Tunis-based founder and CEO of DigitUS Tech, on the project.  The Tunisian central bank has set up a working group to study blockchain, digital payments and cryptocurrencies.  It is felt that a blockchain-based, central bank digital currency could combat money-laundering, decrease the country’s gray economy, and at the same time, empower women and weaker segments of the Tunisian population.

A recent research paper by the WEF claims that central banks are particularly interested in the potential of blockchain in areas that include digital know-your-customer (KYC) and anti-money-laundering (AML) processes, trade finance, bond auction, issuance and other lifecycle processes, information exchange and data sharing, interbank payments and settlements, among other use cases.  (CoinJournal 07.04)

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5.16  IMF Predicts 4.5% Economic Growth for Morocco by 2024

The International Monetary Fund (IMF) expects the global economy to lag next year, but predicted that Morocco will see increased economic growth.  Morocco’s real GDP growth rate, which was 3.1% in 2018, will increase to 3.2% in 2019 and reach 4.5% by 2024, the IMF projected.  That rate is higher than its predictions for any advanced economy, including the United States and European Union countries, which the IMF said will experience an overall growth rate of only 1.8% in 2019.

Stuttering growth in advanced economies is the primary reason behind the IMF’s grim economic forecast for 2019.  The global growth rate will lag to 3.3% this year – a downgrade from the IMF’s January forecast for 3.5% growth.  Though the slowdown will hit MENA region economies as well, the region’s growth rate will increase significantly by 2020, reaching 3.2% after 1.8% last year.

Morocco remains one of the region’s most robust economies, the IMF affirmed.  It is the only economy in North Africa expected to see consistently accelerated growth through 2024.  Morocco’s projected 2024 growth rate was the fourth-highest of all MENA region nations, behind only Egypt, Djibouti and Mauritania.  Morocco’s unemployment will also go down; Morocco’s expected 2020 unemployment rate is 8.9%, compared to 9.8% this year.  Morocco has long boasted one of the region’s most stable economies, and recent financial reforms and increased economic diversification have helped it regain its footing after several years of slowing growth.  (MWN 11.04)

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6.1  IMF Lowers Economic Growth Forecast for Cyprus

The International Monetary Fund (IMF) has cut its growth forecast for Cyprus, projecting GDP growth of 3.5% in 2019, down 0.7% from its earlier forecast in October, according to the fund’s World Economic Outlook (WEO).  For next year, the IMF projected an even lower growth rate for Cyprus of 3.3%.

It said inflation would decline to 0.5% from 1.8% it projected last October and 0.8% in 2018, while in 2020 inflation is expected to increase to 1.6%.  There will be a gradual reduction of unemployment to 7% this year and 6% in 2020, from 8.4% in 2018.   The forecast for 2019 is 0.4% lower than in October 2018, while the forecast for 2020 is 0.1% lower.  (IMF 10.04)

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6.2  US Senators Introduce Eastern Mediterranean Security & Energy Partnership Act of 2019

On 9 April, U.S. Senators Marco Rubio (R-FL) and Bob Menendez (D-NJ) introduced the bipartisan Eastern Mediterranean Security and Partnership Act of 2019 legislation, which aims to reshape U.S. strategy in the Eastern Mediterranean.  The legislation would allow the U.S. to fully support the trilateral partnership of Israel, Greece and Cyprus through energy and defense cooperation initiatives – including by lifting the embargo on arms transfers to the Republic of Cyprus.  The legislation also seeks to update U.S. strategy in recognition of consequential changes in the Eastern Mediterranean, including the recent discovery of large natural gas fields, and a deterioration of Turkey’s relationship with the United States and our regional partners.

The Eastern Mediterranean Security and Energy Partnership Act of 2019 would also authorize the establishment of a United States-Eastern Mediterranean Energy Center to facilitate energy cooperation between the U.S., Israel, Greece, and Cyprus; authorize $3,000,000 in Foreign Military Financing (FMF) assistance for Greece; and authorize $2,000,000 for International Military Education and Training (IMET) assistance for Greece and $2,000,000 for Cyprus.  (Various 09.04)

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6.3  More Doctors Register into Cyprus’ General Health Scheme

Cyprus’ Health Insurance Organization (HIO) has started signing up GPs to participate in the country’s landmark General Health Scheme, phase one of which will be implemented as of 1 June.  A number of doctors participating in the scheme have already prepared lists with the details of their patients and are waiting for the platform system to open so that they can submit them.  The HIO expects that the GHS to launch in June with around 1200 registered GPs on board.

HIO’s estimates are based on the fact that there are some 800 doctors in the public health system who are believed to be on board while 500 private doctors have already registered their interest to sign up for the scheme.  According to the health authorities, some 360 doctors are ready to sign contracts.  Of these, the overwhelming majority are currently practicing privately. By 1 June, more than 400 private physicians will join the national health system.  The HIO appears confident that the scheme will launch without having to deal with a shortage in doctors.

The HIO hopes to see the number grow as the organization has made improved proposals to pediatricians.  It is also expected that 35 public sector pediatricians are to join the scheme.  (FM 10.04)

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7.1  Israel’s Election Results Look to Keep Prime Minister Netanyahu and the Likud in Power

On 12 April, the official results of Israel’s general election, held on 9 April, were announced.  The final results were announced following the count of votes by soldiers who voted at their bases and others voting away from home (such as those on state service abroad) was completed.  The Likud party won a total of 35 seats, as did Blue and White, Shas – 8, United Torah Judaism – 8, Labor – 6, Hadash-Ta’al – 6, Yisrael Beiteinu – 5, Union of Right-Wing Parties – 5, Meretz – 4, Kulanu – 4 and Balad-Ra’am 4.  The voter turnout stood at 67.9% of the eligible electorate.

President Reuven Rivlin said on 16 April that a majority of parliament members had advised him to have Prime Minister Benjamin Netanyahu form a government, effectively ensuring his nomination for prime minister.  Once nominated, Prime Minister Netanyahu will have up to 42 days to form a government.  If he fails, the president asks another politician to try.  Prime Minister Netanyahu is heading toward a record fifth term in office should he be able to put together a majority bloc.  It is oreseen that this will be a slim majority against an opposition that is likely to be led by the centrist-left Blue and White party.  Historically, no single party has ever won an outright majority in the Knesset.  (Various 12.04)

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7.2  Knesset Has More Religious and Gay Members, But Less Women

The new 21st Knesset appears to have more religious and ultra-Orthodox politicians, as well as more openly gay members, but less women.  At least 29 women were elected to the parliament, most of whom via the two parties that received the greatest share of the vote – the Blue and White party and the Likud – with 10 women each.  The left-wing Labor and Meretz parties elected two women apiece, while the ultra-Orthodox parties – Shas and United Torah Judaism – didn’t have any women on their lists at all.  The number of female MKs rose to 36 throughout the 20th Knesset, according to the Israel Democracy Institute.

When it comes to a variety of ethnicities, 42 of those elected are of Mizrahi descent – more than one-third of the Knesset – 15 of whom were elected via the Likud party and nine others via Blue and White.  Most of the MKs from the Labor Party who are about to enter the Knesset are of Mizrahi origin (four out of six).

Some 31 MKs in the next parliament will be National-Religious and ultra-Orthodox – similarly to the number of female MKs – making up one quarter of the Knesset.  At least 17 out of the 31 are ultra-Orthodox, with another 14 being National-Religious.  Almost all ultra-Orthodox MKs were elected via Shas and United Torah Judaism with the exception of Omer Yankelevich – the first ever female Haredi MK – elected via Blue and White.

The 21st Knesset will also have a record number of MKs from the LGBT community, with at least three gay men joining the current parliamentarians from the community – Amir Ohana from Likud and Itzik Shmuli from Labor.  (Various 10.04)

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7.3  Passover to be Celebrated Starting on 19 April

On Friday night, 19 April, Israel and world Jewry will begin the week-long celebration of the Passover (Pesach) holiday.  Passover celebrates the liberation of the Jewish People from slavery in Egypt by the hand of G-d.  It is central to Jewish identity and Jewish practice, since the Exodus and life in the wilderness led to the true birth of the Jews as a distinct entity.  Jacob and Josef came to Egypt numbering 70 souls and Moses led 600,000 out after the defeat of Pharaoh.  Probably the most significant observance related to Pesach involves the removal of chametz (or leaven) from Jewish homes and businesses.  This commemorates the fact that the Jews leaving Egypt were in a hurry and did not have time to let their bread rise (even converts to Judaism relate to the Exodus as if their own ancestors had left Egypt).  Removing chametz is also a symbolic way of removing the “puffiness” (arrogance, pride) from our souls.  Instead of chametz, a special non-leavened bread called matzah is consumed, among a myriad of other special holiday dishes.

On the first night of Pesach (first two nights for Jews outside of Israel), there is a special family meal filled with ritual to remind Jews of the significance of the holiday.  This meal is called a seder, from a Hebrew root word meaning “order,” because there is a specific set of information that must be discussed in a specific order.  The seder is full of symbolism, all pointing to one salient point:  that Jews all remember that G-d took us out of slavery in Egypt to freedom to observe his Torah.  Pesach lasts for seven days (eight days outside of Israel).  The first and last days of the holiday (first two and last two outside of Israel) are days on which no work is permitted.  Work is permitted on the intermediate days.  These intermediate days on which work is permitted are referred to as Chol Ha-Mo’ed, as are the intermediate days of Sukkot.  Though work is permitted, many take vacations and a full work environment returns only after the holiday.  Passover ends on 26 April in Israel, 27 April in the Diaspora.

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7.4  JUST Ranks First in Jordan and Fourth in Middle East on Times’ University Index

The Jordan University for Science and Technology (JUST) was ranked first in Jordan and fourth in the Middle East on The Times’ 2019 regional university index.  The regional index was based on the same 13 standards as the international Times’ survey, covering five main fields: education and ducational environment, scientific research, citations, income from industry and global dimensions.  On the global level, JUST came in the 351-400 segment and 58th among universities in developing industrial countries.  (JT 10.04)

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7.5  Sudan President Bashir Ousted Amidst Military Coup

After months of civil unrest and anti-Bashir protests, Sudan’s Minister of Defense, Awad Mohamed Ahmed Ibn Auf, has announced the ousting of president Omar al-Bashir on 11 April.  Seated on a gold-upholstered armchair, Auf announced a state of emergency, a nationwide ceasefire and the suspension of the constitution.  Sudan’s army has also set up a transitional military council to take control of the country for a temporary duration of two years, as per a televised statement.

Although the protests were ongoing for months, the political situation bubbled over as a plethora of protesters camped outside the Defense Ministry compound, where president Bashir lived.  Sudan witnessed an outbreak of uprisings that began in the city of Atbara located in River Nile state in the northeast of Sudan in December 2018.  Since December, Sudan has been rocked by persistent protests sparked by the government’s attempt to raise the price of bread, and an economic crisis that has led to fuel and cash shortages.  The protests were aggravated by the economic crisis that has been taking a toll in the country.

The move came after months of shortage gas supply, a liquidity crunch, and an inflation in prices of basic commodities such as bread and sugar.  The chants “zanagat, zanagat”, which roughly translates to it got too tight, took over the streets of Atbara where they burned down the National Council Party headquarters.  Since the start of the demonstrations, at least 57 protesters and police officers had been killed.  Although the demonstrations began as a youth movement, gradually they have gained the support of professionals including doctors, professors and the middle-classed segment of society.

President Omar al-Bashir had maintained a tight grasp on the country’s governance for nearly three decades, having taken office in 1989.  In March 2009, he was indicted by the International Criminal Court (ICC) in The Hague over allegations of genocide in Sudan’s Darfur region during an insurgency that began in 2003 and led to death of an estimated 300,000 people.  (Various 11.04)

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7.6  Algerian Leader Bouteflika Resigns Amid Protests

On 2 April, Algeria’s President Abdelaziz Bouteflika resigned after weeks of massive street protests.  Bouteflika, who has been in power for 20 years, had earlier dropped plans to seek a fifth term as opposition to his rule grew.  The powerful Algerian army had called for the 82-year-old to be declared incapable of carrying out his duties and protesters have vowed to continue piling on pressure until the entire government is ousted.

Bouteflika, who has been ill since he suffered a stroke six years ago, has avoided public events ever since.  However, he made a rare appearance on state TV to relinquish power hours after military chief Lt Gen Ahmed Gaed Salah called on him to leave office immediately.  News of the resignation came in a statement carried on state news agency APS.  State TV then reported that this would be with immediate effect.  According to the constitution, the Senate speaker should take over as interim head of state until fresh elections are held.

Pressure had been building since February, when the first demonstrations were sparked by Bouteflika’s announcement that he would be standing for a fifth term.  Tens of thousands protested across the country on 1 March.  Bouteflika’s promise not to serve out a fifth term if re-elected, along with a change of prime minister, failed to quell the discontent.  Leaders of the protests also rejected Bouteflika’s offer that he would go by the end of his current term – on 28 April – as not quick enough.  It seems the powerful military agreed.

Elections originally scheduled for 18 April have been postponed and the governing National Liberation Front (FLN) has vowed to organize a national conference on reforms.  The FLN has ruled Algeria since the country won independence from France in 1962 after seven years of conflict.  Bouteflika, who came to power in 1999, strengthened his grip after a bloody civil war against Islamist insurgents which left 150,000 dead.  However, despite guaranteeing stability in the oil-rich nation, his government has been accused of widespread corruption and state repression.  (Various 03.04)

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8.1  Evogene Develops Next Generation Medical Cannabis Products via New Canonic Subsidiary

Evogene has established a new subsidiary – Canonic – to develop next generation medical cannabis products.  Evogene has been evaluating the medical cannabis field for more than a year, including market evaluation, obtaining governmental approvals for its research program and the establishment of a research facility, technology assessment and initial product line planning.  Canonic’s initial activities will focus on creating improved cannabis varieties by addressing the current developmental roadblocks of yield, stability and specific metabolite composition.  These development efforts will be based on the utilization of Evogene’s broadly applicable leading Computational Predictive Biology (CPB) platform, which has in the past demonstrated success in addressing similar objectives for other crops.

Evogene is uniquely positioned to provide a significant competitive advantage in the resolution of these development roadblocks through its CPB platform and its recognized capabilities as a leader in the area of plant genomics.  These capabilities have been developed and utilized for more than a decade through multiple collaborations with world leading ag-companies such as BASF, Bayer, Corteva, ICL and Monsanto focusing on crop improvement via plant genomics and are now expected to allow Evogene’s newly established subsidiary, Canonic, to not only meet the challenges but also to accelerate the product development process through its predictive science driven approach.

Canonic’s current workplan focuses on three main product types, through a non-GMO approach: (i) high metabolite yield cannabis varieties (ii) stable varieties with consistent metabolite performance and (iii) cannabis varieties with a unique metabolite profile tailored to specific medical indications.  The indications that the company will currently address are: post-traumatic stress disorder (PTSD), severe chronic pain and cancer.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and cutting-edge computational technologies.  Today, this platform is utilized by the Company and its subsidiaries to discover and develop innovative products in the following areas: ag-chemicals, ag-biologicals, seed traits, integrated castor oil ag-solutions and human microbiome-based therapeutics. Each subsidiary or division establishes its product pipeline and go-to-market.  (Evogene 03.04)

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8.2  Groundbreaking Israeli Holoscope Technology Revealed at Toronto’s University Health Network

During a state visit, President of the State of Israel Reuven Rivlin unveiled true holographic imaging technology together with cardiologists, cardiac surgeons and staff at Toronto’s Peter Munk Cardiac Centre (PMCC), University Health Network (UHN).  Cardiologists and cardiac surgeons at PMCC are the first to use true holographic imaging in real time during a medical procedure. The technology was produced in Israel and brought to Canada to be used at Toronto’s UHN.

The hologram appears as a life size, 3-D image of the heart at close range, floating in space above the patient, and allows the operating physician to explore, rotate and slice the hologram of the heart, in real time, during the procedure.  The first procedure at PMCC during which used the holographic imaging system was a valve-in-valve mitral valve procedure, a minimally invasive procedure that replaced a worn-out surgical valve.  Instead of removing the old diseased valve, the procedure replaces the valve without making an incision in the chest.  PMCC is using the hologram for other cardiac procedures, such as repairing leaking valves and closing holes in the heart.

The journey to get the holographic system to PMCC began roughly five years ago, when cardiologists from Toronto General Hospital travelled to Israel to see it in its beta form.  RealView Imaging worked with PMCC physicians to bring the technology to Toronto.

Yokneam’s RealView Imaging is pioneering the field of interactive live holography, introducing the HOLOSCOPE-i™ – the first ever medical holographic system.  The company’s proprietary Digital Light Shaping™ technology provides physicians with a unique natural viewing experience, creating the only accurate, three-dimensional holograms within hands reach, initially targeted to support interventional cardiology procedures.  (UHN 02.04)

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8.3  Zebra Medical Vision Adds a 3rd Patent to Its Growing Bone Health Portfolio

Zebra Medical Vision announces its third patent, the latest for technology that evaluates osteoporosis risk and bone mineral density (BMD) values.  Zebra-Med’s patents address statistical and machine learning methods to assess the risk, as well as the existence of osteoporotic fractures, by means of classifying and correlating various bone density scores, emulating DEXA scores, and analyzing bone structure.  The latest patent, which was received in February 2019, focuses on the volumetric analysis of bone mineral density values extracted from CT studies.  Zebra-Med’s two previous patents, received in August and October of 2018, focus on the ability to estimate DEXA scores from a representative portion of CT studies of the lumbar area of the spine.  The additional patent focuses on the volumetric analysis of CT studies to produce and estimate DEXA scores.

Zebra Medical Vision’s algorithms use existing CT scans to output a result which is equivalent to the Bone Density T-Score generated by DEXA scans and to find vertebral fractures (VCF) in the spine.  Providers can use their existing CT data to conduct pre-screening for people with increased risk of fracture, with no need for additional tests or radiation.  Detecting such fractures early could help prevent or postpone osteoporotic fractures and save health systems hundreds of millions of dollars.

Founded in 2014, Kibbutz Shefayim’s Zebra Medical Vision’s Imaging Analytics Platform allows healthcare institutions to identify patients at risk of disease and offer improved, preventative treatment pathways to improve patient care.  With a growing IP and solutions portfolio, Zebra-Med will release additional automated solutions to help radiologists and providers produce more comprehensive, accurate outcomes – faster, without compromising quality of care.  Zebra Medical Vision has raised $50 million in funding to date, and was named a Fast Company Top-5 AI and Machine Learning company.  (Zebra-Med 05.04)

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8.4  Gordian Surgical Surpasses 2,000 Surgeries with TroClose1200 Access-Closure System

Gordian Surgical announced that it has surpassed 2,000 surgeries globally with its FDA-cleared and CE-marked TroClose1200 access-and-closure system for laparoscopic surgery.  Until recently, surgeons had to either manually insert sutures in a time-consuming and sometimes difficult process at the conclusion of a lap surgical procedure, or close the lap port-site opening with an additional device. Improper lap port closure may result in an incidence of hernia up to 6%, where the intestine protrudes from a weakened abdominal muscle, necessitating additional surgery.  Now, using the TroClose1200’s innovative design, sutures are inserted into the tissue at the beginning of the procedure and anchored to remain in place throughout the operation, allowing port site incisions to be closed easily and quickly as designed upon removal of the TroClose1200 system.

Misgav’s Gordian has developed an innovative trocar that offers surgeons a simple, economical solution for opening and suturing (closing) internal incisions made during laparoscopic surgery.  The “two-in-one” trocar inserts sutures into the tissue surrounding the incision at the beginning of the procedure and anchors them to stay in place throughout the operation.  The built-in closure mechanism enables surgeons to easily close the sutures when the trocar is removed at the end of the procedure.  (Gordian Surgical 03.04)

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8.5  Feminine Probiotics in a Delicious Format – Anlit Embraces Its Feminine Side

Anlit launched a delicious, ‘feminine probiotics’ chew targeting women’s health.  Their Feminine Probiotics contains a powerful blend of beneficial live probiotic bacteria and cranberry extract working in synergy to support genitourinary tract health.  The supplement contains a blend of six different strains of live bacteria plus cranberry extract.  This all-encompassing formula is delivered in a tasty vanilla-cranberry flavored chew that melts in the mouth.

Anlit is well-known for its focus on children’s health, but in the recent years the company has recognized that adults do not want to compromise on flavor or swallow unpleasant tablets.  One of Anlit’s main challenges was to create a tasty supplement with high stability.  The company developed an innovative technology called ‘LLP, Long-Life Probiotic’ which enables the incorporation of live bacteria in fun flavorful chewy formats and at the same time ensures its high stability even under ambient conditions.  For Feminine Probiotics, Anlit’s experts also had to assess the required level of the active cranberry ingredient and select a specific cranberry extract that contains the effective dosage of this ingredient.

Feminine Probiotics contains six beneficial bacteria strains that support maintain a balanced pH level and prevent personal discomfort.  The combination of these six strains with cranberry extract is the ideal formulations for a woman’s genitourinary health. The new product is vegetarian, GMO-free, nut-free, gluten-free, and certified kosher and halal.  Feminine Probiotics is a member of Anlit’s new line of chews for women’s health.

Granot’s Anlit, a subsidiary of Maabarot Products (a public company traded on the TASE) is an innovative developer and manufacturer of a broad range of dietary supplements for children and adults.  All products are GMP, FSSC, ISO 9001:2000 and HACCP compliant, gluten-free as well as kosher and halal certified.  (Anlit 03.04)

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8.6  FILLMED and NanoPass Launch NANOSOFT Microneedles for Aesthetics

Paris, France’s Laboratoires FILLMED and NanoPass recently signed a private label agreement to co-brand NanoPass’s microneedle-based device, NANOSOFT, to be used with FILLMED’s NCTF 135 HA poly-revitalizing solution for the treatment of fine wrinkles and skin rejuvenation.  The NANOSOFT device is an innovative certified microneedle-based device which enables a nearly-painless, shallow and consistent intradermal delivery of various substances.  The aim of the collaboration is to provide dermatologists and aesthetic physicians with the least invasive microneedle device on the market today, to enable treatment of thin skin, fine wrinkles and other sensitive locations for optimal results.

NANOSOFT is an injection device with three 0.6mm, hollow, pyramid-shaped, microneedles.  It is produced using MEMS technology from silicon crystal.  FILLMED NCTF 135 HA is an injectable solution indicated for the rejuvenation of the skin, improvement of skin quality and fine lines.

Ness Ziona’s NanoPass is a pioneer in the development and commercialization of a nearly painless intradermal delivery device for aesthetics and vaccines, approved for this delivery route, and is supported by extensive clinical data.  NANOSOFT is CE Marked and is being submitted for approval in Russia, China, Korea, Brazil, Hong Kong and more.  The company is ISO13485:2016 certified.  (NanoPass 03.04)

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8.7  Galmed Completes Phase 2 Meeting with FDA and Plan for Start of Phase 3

Galmed Pharmaceuticals has completed its End-of-Phase 2 meeting with the US FDA and reached general agreement on key aspects of the Phase 3/4 development and registration plan for Aramchol and on the pivotal registration study ARMOR.  ARMOR is a Phase 3/4 multinational, multicenter, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of Aramchol in subjects with NASH and fibrosis.

Galmed previously announced results from its Phase 2b study which were subsequently presented at AASLD 2018.  Efficacy and safety data from this study included notable effects on key registrational endpoints of NASH resolution and fibrosis improvement and favorable safety supporting initiation of the Phase 3/4 study.  More recently, Galmed reported results from a study comparing once daily Aramchol 600 mg to twice daily 300 mg with a significant increase in exposure in the twice daily treatment arm and potential for additional efficacy with twice daily dosing.  General agreement has been reached with FDA on key aspects of the ARMOR study including patient population, study endpoints, study dose and treatment duration.  Galmed plans on submitting its study protocol and other design elements of its ARMOR trial to the FDA in the coming weeks with study commencement expected in the third quarter of 2019.

Tel Aviv’s Galmed is a clinical-stage biopharmaceutical company focused on the development of Aramchol, a first in class, novel, oral therapy for the treatment of NASH for variable populations.  Galmed recently announced top-line results of the ARREST Study, a multicenter, randomized, double blind, placebo-controlled Phase 2b clinical study designed to evaluate the efficacy and safety of Aramchol in subjects with NASH, who are overweight or obese, and who are pre-diabetic or type-II-diabetic.  Galmed is currently preparing to initiate a Phase 3/4 clinical study in Q3/19.  (Galmed Pharmaceuticals 09.04)

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8.8  Equinom App Opens Seed-to-Fork Dialogue

Kibbutz Givat Brenner’s Equinom launched its new Product Profiler app to help food companies select plant protein sources and characteristics from a comprehensive bank of genetically available traits in order to develop high-value protein products with better functionality.  The app also allows protein sources to be tailored to product specifications in a manner that is faster and more accurate than previous technologies allowed.  The new application toolbox provides comprehensive insight into the diverse and compelling world of seeds and crops, as well as the vast scope of their genetic makeup and inherent biological potential.

Equinom’s user-friendly app gives food companies the option to choose seed varieties with the precise desired traits and genetic specifications that are naturally present.  It draws from a limitless bank of available seeds. The app makes sourcing of high-value, non-GMO grain much more accessible and affordable for food companies and farmers alike.

The app serves as a direct communication channel that, for the first time, will strategically link a seed breeding company with food companies, creating a unified language for all stakeholders and along the supply chain from farm to fork.  This places Equinom in a superior position to supply food companies with grain varieties that precisely fit each application’s functional needs.  (Equinom 09.04)

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8.9  SEEDO to Establish Medical Cannabis Farm in Moshav Brosh, Israel

Seedo Corp. announced it will establish a second fully automated, commercial-scale, pesticide-free containerized cannabis farm in Israel.  Brosh Containers farm will be built enabling automated, closed system cultivation will be installed.  The farm’s production capacity is anticipated to reach 12 tons of dry cannabis inflorescence per year, as of the third year, in Moshav Brosh.  SEEDO will become a partner sharing in the project’s revenue and in addition to supplying the equipment, will also provide the entrepreneurs with professional guidance throughout the growth process.

SEEDO has already signed an agreement with Kibbutz Dan for the establishment of an automated growth farm, within 36 months of operation, the project is estimated to produce a minimum of 14 tons of dry cannabis bud, generating an estimated revenue of $24 million dollars.

Yokneam Illit’s Seedo is a market leading high-tech company providing the cannabis and agriculture industries with the world’s first fully automated and controlled indoor growing machine. Seedo provides growers with the freedom to cut costs while generating high yields of lab-grade, pesticide-free herbs and vegetables. Seedo’s AI-powered, turnkey systems enable anyone from average consumers to large-scale producers the ability to grow without prior experience or ample space.  (Seedo Corp. 08.04)

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8.10  Check-Cap Initiates U.S. Pilot Study of C-Scan for Colorectal Cancer Screening

Check-Cap announced the initiation of its U.S. pilot study of the C-Scan® system, following Institutional Review Board (IRB) approval and full Investigational Device Exemption (IDE) application approval by the U.S. FDA.  The first patients have ingested the C-Scan® capsule at the New York University School of Medicine.

The single-arm pilot study (NCT03735407) will enroll up to 45 subjects considered to be of average risk for polyps and colon cancer.  The study is evaluating the safety, usability and subject compliance of the C-Scan® system.

Usfiya’s Check-Cap is advancing the development of C-Scan®, the first and only preparation-free ingestible scanning capsule for the prevention of colorectal cancer (CRC) through the detection of precancerous polyps.  The patient-friendly test has the potential to increase screening adherence and reduce the overall incidence of CRC.  The C-Scan® system utilizes an ultra-low dose X-ray capsule, an integrated positioning, control, and recording system, as well as proprietary software to generate a 3D map of the inner lining of the colon. C -Scan® is non-invasive and requires no preparation or sedation, allowing the patient to continue their daily routine with no interruption as the capsule is propelled through the gastrointestinal tract by natural motility.  (Check-Cap 08.04)

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8.11  Israeli Researchers Print 3D Heart Using Patient’s Own Cells

Israeli researchers have printed a 3D heart using a patient’s own cells, something they say could be used to patch diseased hearts — and possibly, full transplants.  The heart the Tel Aviv University team printed in about three hours is too small for humans, measuring around 2.5 centimeters, or the size of a rabbit’s heart.  However, it is the first to be printed with all blood vessels, ventricles and chambers, using an ink made from the patient’s own biological materials.  Researchers took fatty tissue from a patient, then separated it into cellular and non-cellular components.  The cells were then “reprogrammed” to become stem cells, which turned into heart cells.  The non-cellular materials were turned into a gel that served as the bio-ink for printing.  Previously, only simple tissues (without the blood vessels they need to live and function) had been printed.

The next task is to provide the 3D heart with pumping capabilities and then begin developing hearts for transplanting into laboratory rats and rabbits.  (Various 15.04)

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8.12  China’s Thalys and iCan Sign MOU for Cannabis and Hemp Related Startup Investments

Thalys Medical Technology, a leading Chinese healthcare conglomerate listed on the Shanghai Stock Exchange, signed a Memorandum of Understanding (MOU) with iCAN Israel-Cannabis, Israel’s leading medical cannabis incubator.  Thalys and iCAN will come together to create a unique partnership to advance the development of early stage incubated companies that focus on the creation of medical technology, agricultural technology and general intellectual property focusing on the medical hemp industry.

According to the MOU, Thalys will have: access to all early stage companies that iCAN is evaluating for investment, funding for co-investment, and access to the Israeli market.  Thalys will have the ability to negotiate exclusive rights with any and all of the incubated companies for the Chinese market.

Beit Shemesh’s iCAN: Israel-Cannabis is building the Global Cannabis Ecosystem. iCAN is committed to accelerate Israel’s CannaTechnology industry, capitalizing on Israeli innovation and a leading cannabis regulatory environment to bring premier products to market.  iCAN is powered by CannaTech, the premier international cannabis summit held annually in Tel Aviv.  (Thalys 11.04)

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8.13  Alpha Tau Awarded ISO 13485 Certificate for Quality Management of Medical Devices

Alpha Tau Medical has obtained ISO 13485:2016 certification.  The certification was awarded following an audit by the UK’s independent national compliance body, British Standards Institution (BSI).  This certification represents an important milestone for the company. It enables Alpha Tau to continue to develop the Alpha DaRT therapy in compliance with the highest standards for safety, efficacy and product performance, and to make its commercial product available for the first patient treatment, once the Alpha DaRT medical device regulatory file will be approved.

Founded in 2016, Tel Aviv’s Alpha Tau Medical focuses on R&D and commercialization of the first alpha-radiation based cancer treatment for solid tumors, Alpha DaRT.  Initially developed in 2003, Alpha DaRT delivers high-precision alpha radiation, which is released when radioactive substances decay inside the tumor.  The short-range alpha particles effectively kill the cancer cells while sparing the surrounding healthy tissue.  Interim results from three clinical trials show that 100% of the tumors shrank following treatment and more than 70% of the tumors disappeared completely, without causing any severe side effects.  (Alpha Tau Medical 11.04)

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8.14  Biomica Initiates Pre-Clinical Studies in its Immuno-Oncology Program

Biomica, a subsidiary of Evogene, announced the initiation of pre-clinical studies for BMC-121 & BMC-127, two rationally-designed microbial consortia, in its therapeutic immuno-oncology program.  The program aims to improve current cancer therapies by modulating patients’ response to immune checkpoint blockade across various cancer types through alterations of the patients’ gut microbiome.

Biomica leverages Evogene’s computational predictive biology (CPB) platform and related technologies to analyze functional elements of the gut microbiome in high-resolution.  Applying these analyses to relevant data of patients with Non-Small Cell Lung Cancer (NSCLC) and Renal Cell Carcinoma (RCC), Biomica identified key microbial functions related to the response to immune-checkpoint inhibitors.  Through this, Biomica gained mechanistic understanding of the relationships of specific microbes with various human cellular processes believed to play pivotal roles in cancer and immune function.  Biomica’s unique approach focusing on the functional capabilities of the microbiome has resulted in the identification and development of two rationally-designed consortia, BMC-121 & BMC-127.  Biomica’s first drug candidates are designed to add a selective set of missing microbial functions in order to improve patients’ response to immunotherapy.

Rehovot’s Biomica is an emerging biopharmaceutical company developing innovative microbiome-based therapeutics utilizing a dedicated Computational Predictive Biology platform (CPB).  Biomica aims to identify and characterize disease-related microbiome entities, and to develop novel therapeutics based on these understandings.  The company is focused on the development of therapies for antibiotic resistant bacteria, immuno-oncology and microbiome-related gastrointestinal (GI) disorders.  (Biomica 16.04)

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9.1  Endor Launches Predictions Protocol to Democratize Access to AI and Data Science

After years of developing its predictive analytics platform powered by MIT’s Social Physics technology, Endor is proud to launch the Endor Protocol which enables businesses and individuals to analyze large data sets and generate automated, accurate business predictions using AI.

Founded by MIT researchers, the Endor Protocol enables users to access AI-powered business predictions and data science capabilities, formerly available only to large companies who hold the resources needed to invest in building large data science teams to process big data and build predictive models.  The instantaneous predictions help find patterns in customer behavior, which can be leveraged for a myriad of use cases in a variety of industries ranging from retail to fintech.  Endor’s proprietary Social Physics technology also has the unique capability to compute on encrypted data streams, allowing businesses to create predictions without compromising user privacy.

The data available during the first phase of the Protocol’s launch will include raw ERC-20 and Ethereum blockchain data, to be unlocked exclusively through the EDR utility token. In the future, select data partners will be added to the ecosystem, following a complete review by Endor to ensure the highest quality of data.

Tel Aviv’s Endor is the first automated predictions engine that empowers businesses with fast and accurate intelligence to make informed business decisions.  Leveraging blockchain infrastructure and Endor’s proprietary Social Physics technology, the company analyzes Big Data using artificial intelligence in order to find patterns in customer behavior with unmatched accuracy and speed.  Endor’s predictive analytics platform has the unique capability to process encrypted data, thereby guaranteeing the security of sensitive data and GDPR compliance.  (Endor 04.04)

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9.2  Exaware Releases ExaNOS Operating System for Mobile & Fixed Networks

Exaware announced the release of ExaNOS, the first high scale best in class disaggregated network operating system (NOS) for telecom service providers.  ExaNOS is a full NOS that enables the deployment of disaggregated routing across all parts of the carrier network.  The first release of ExaNOS supports peering, access aggregation and provider edge applications and is now available for white-boxes from leading vendors with 800Gbps capacity and 48 1/10GbE and 6 40GbE/100GbE ports based on Broadcom StrataDNX Qumran-MX chipset.

ExaNOS is an open carrier-grade, high scale/performance network operating system.  Exaware offers a full routing solution that integrates ExaNOS with low cost off the shelf hardware equipment (or “white boxes”) supplied from hardware partners.  ExaNOS software is the result of a decade long development by Exaware’s industry experts. The development team anticipated the need for disruption in the market, which was dominated by vertically integrated products with low flexibility and high costs.  The business model of fixed and mobile operators has been challenged by an ever-increasing pressure on prices.  ExaNOS solves this problem by providing massive scale white-box routing suited to the exponential growth in video and data at a fraction of the cost of traditional solutions.

Netanya’s Exaware is a leading provider of carrier-grade network operating systems for mobile and fixed telecom service providers.  Founded in 2007 (as Compass Networks), Exaware has redefined routing software that is engineered specifically for carrier networks.  With incredible scale potential and unprecedented rich features, Exaware’s open NOS software is ported to low-cost white-box equipment.  With extensive experience in real-world applications, the Exaware team of world-class software developers and network engineers have developed best-in-class open NOS software that is set to revolutionize the telecom routing market.  (Exaware 04.04)

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9.3  Sync.ME Reinvents the Incoming Call Experience with Personalized Video Ringtones

Sync.ME is launching its new video ringtones feature to completely personalize and reinvent the incoming call experience.  Boring, default ringtones can now be replaced by customized video clips made especially by your friends, so the connection begins before you even pick up.  Now, with Sync.ME, users can replace typical, boring ringtones with caller clips customized for each of the contacts they want to troll.  You might suddenly hear your mom’s voice screeching from your backpack “Pick up, David Joseph Rubenstein!  I gave birth to you!  Remember me?”  Had a bad day?  Suddenly, your boyfriend pops up on your screen, murmuring “Hey gorgeous, it’s me,” with a glowing mood filter and hearts showering down around him.  Does it mean your baby brother might call you with the sound and unfortunate visual of a live fart?  Yes, that too.  But the good news is, you can send one right back.

The world’s most advanced caller ID, Tel Aviv’s Sync.ME identifies incoming calls, including full names, and a photo of the caller, regardless of if they are in your phone contacts.  Sync.ME also connects contacts with social media, so contacts are always up to date, and flags spam calls to keep the call centers at bay.  Sync.ME 04.04)

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9.4  Beamr Makes Bitrate Solution Available to Video Developers as Discrete Technology

Beamr is showcasing its silicon accelerated CABR with integration to the Intel HW encoder through Intel’s Media SDK.  CABR is the technology name for Content-Adaptive Bitrate, Beamr’s foundational technology which is deployed by tier-one OTT and PayTV service providers to deliver the highest quality video at the lowest bitrate possible to millions of subscribers.  CABR works in a closed-loop, at the frame level, to guarantee video quality is never compromised while reducing the target bitrate by as much as 30% or more.

By leveraging ten years of research and development, resulting in 44 granted patents to date, silicon accelerated CABR allows Beamr to complete its original mission to optimize the network which has become overrun with video.  The Beamr CABR SDK enables video engineers to utilize the efficiency of silicon encoders to create massively scalable consumer device, cloud, and edge encoding solutions which balance encoder/density and performance, with bitrate efficiency.

Beamr’s content-adaptive encoding technology is coming first to the Intel platform while being offered as a license for integration with 3rd-party silicon encoders that support common video encoding standards such as H.264, HEVC, VP9, and AV1.  Using the Beamr CABR SDK allows for the first time, silicon video cores, integrated with CABR, to match the quality and bitrate performance of software encoders at a channel density that is unachievable by software only solutions.  Developers incorporating CABR into GPU, FPGA and hardware-based systems can fit hundreds of channels on a single board without compromising quality or TCO.

Tel Aviv’s Beamr serves the world’s top PayTV and OTT video service providers as the leading designer and developer of content-adaptive encoding and optimization solutions that enable high quality, performance, and new levels of bitrate efficiency for MSOs, OTT content distributors, broadcasters and video streaming platforms.  Backed by 44 patents, Beamr’s perceptual optimization technology extends into the codec with CABR a content-adaptive rate-control mode that enables guaranteed quality at very low bitrate.  Founded in 2009, Beamr investors include Verizon Ventures, Innovation Endeavors and Disruptive.  (Beamr 04.04)

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9.5  CipherTechs & Cymulate Bring Breach and Attack Simulation to U.S. Customers

New York’s CipherTechs announced a new partnership with Cymulate that will bring Cymulate’s breach and attack simulation technology to U.S. customers.  The alliance will combine Cymulate’s technology with CipherTechs’ offensive security expertise, enabling companies to identify security gaps in their IT infrastructure and provide actionable insights to remedy those gaps.

Rishon LeZion’s Cymulate is an award-winning breach and attack simulation platform developed by an elite team of researchers and developers previously from the Israeli Defense Forces frustrated by the time and resource inefficiencies they experienced while conducting cybersecurity operations.  The platform uses sophisticated Software-as-a-Service (SaaS) applications to simulate the – tactics, strategies and techniques employed by hackers to attack enterprise infrastructures.

CipherTechs leverages the MITRE ATT&CK framework for its offensive security engagements and sees Cymulate as an efficient tool for challenging defenses across the ATT&CK matrix.  Cymulate provides risk scoring metrics allowing security executives to measure the effectiveness of current security configurations before and after any infrastructure change or introduction of new security solutions.  Cymulate allows executives to make more informed decisions where vendor bake-offs can be qualified based on how they stand up to the MITRE ATT&CK framework rather than subjective measurements such as how well a vendor product performs in a contrived proof-of-concept environment.  CipherTechs intends to promote the Cymulate platform as a product and as a managed service to provide professional Purple Team exercises for existing MSSP customers to identify and close defensive gaps.  Equipped with Cymulate, the CipherTechs managed service team can rapidly help clients improve their defenses in a measurable and disciplined manner.  In addition, the CipherTechs offensive security team can use Cymulate on Purple Team engagements to precisely mimic the full spectrum of hacker techniques providing realistic simulations of exploitation.  CipherTechs can then provide recommendations regarding infrastructure and security product configurations to optimize a company’s defensive capabilities.

CipherTechs will offer Cymulate as a product to its customers and as a managed service within its suite of risk and vulnerability assessment solutions.  (CipherTechs 09.04)

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9.6  SCADAfence and NRI Secure Join Forces to Secure OT Networks in Japan

SCADAfence and Japan’s NRI SecureTechnologies (NRI Secure), a leading global cybersecurity firm, are partnering to secure manufacturing, critical infrastructure, and smart buildings in Japan.  The agreement extends NRI Secure’s managed IT security and security consulting services into OT security.

SCADAfence Platform continuously monitors OT networks and applies industrial-specific protocol analysis and algorithms to provide visibility, risk management, and threat detection.  The non-intrusive platform automatically discovers all assets in the OT environment and digitalizes asset inventory management.  The platform analyzes the ongoing communications and applies various algorithms to accurately understand the communication patterns within the OT environment enabling it to detect suspicious activities and deviations that can jeopardize operational continuity.

SCADAfence Platform is the only solution on the market that supports the unique requirements of complex large-scale OT networks.  By integrating SCADAfence Platform, organizations can seamlessly integrate OT security to their existing security controls and procedures.

Tel Aviv’s SCADAfence helps companies with large-scale operational technology (OT) networks embrace the benefits of industrial IoT by reducing cyber risks and mitigating operational threats.  Their non-intrusive platform provides full coverage of large-scale networks, offering best-in-class detection accuracy, asset discovery and user experience. SCADAfence seamlessly integrates OT security within existing security operations, bridging the IT/OT convergence gap.  They deliver security and visibility for some of the world’s most complex OT networks, including Europe’s largest manufacturing facility.  (SCADAfence 09.04)

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9.7  YouTube Partners With to Make Great Video More Accessible to SMBs (formerly known as Slidely) is now officially a key Google partner on YouTube’s new creative directory.  As a YouTube creative partner, is among a trained and trusted group of video production platforms empowering businesses of all sizes to create effective YouTube video ads.  This means that’s video ads are compatible with YouTube best practices and meet the highest of standards.’s unique ready-to-use templates are pre-tested and optimized to achieve superior results with YouTube ad campaigns.’s breakthrough service has changed the landscape of video content creation, and is helping both businesses and agencies to easily create unlimited professional videos to promote anything online effectively.  The newly launched creative directory of YouTube is part of their long term effort to make it easier for small and medium sized businesses to create video ads more efficiently and effectively.  It is a natural partnership with, as the platform is already being used by over one million businesses of all sizes, from solopreneurs, and freelancers, to Fortune 500 and publicly traded companies in over 200 countries.

Israel’s is the #1 video creation platform for businesses and agencies. helps businesses of all sizes to leverage great visual content to promote anything they want online in smart, effective ways. offers access to over 15 million premium video clips and images, ready-made templates, pre-edited licensed music and a user-friendly editor.  ( 08.04)

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9.8  WhiteSource Releases New Bitbucket Server Integration

WhiteSource announced a new integration with Atlassian Bitbucket Server, the on-premises version control Git repository management solution.  The new developer-focused integration issues real-time alerts within the Bitbucket UI on open source vulnerabilities and automatically generates fix pull requests (PR) to help speed up the remediation process.

The new WhiteSource Bitbucket Server Integration enables developers to find and fix vulnerable open source components early in the development process, supporting application security and speeding up the pace of development.  The new application detects open source components in each repository, alerts on vulnerable components in real-time, and combined with Code Insights for Bitbucket Server, provides detailed information about the vulnerabilities to help developers make informed decisions about remediation.  It also enforces organizational open source security policies automatically and generates automatic pull requests (PR) to fix open source security vulnerabilities.

The WhiteSource Bitbucket Server Integration is the most recent collaboration between WhiteSource and Bitbucket.  It is available on the Atlassian Bitbucket Marketplace where it joins other WhiteSource integrations with Atlassian products such as Jira, Bamboo, and Bitbucket Pipes.  This is the third developer-focused integration offered by WhiteSource, following their GitHub and Azure DevOps partner offerings.

Givatayim’s WhiteSource is the leader in continuous open source security and license compliance management. Its vision is to empower businesses to develop better software by harnessing the power of open source. Industry leaders like Microsoft, IBM, and hundreds more trust WhiteSource to secure and manage the open source components in their software.  The company has been recognized by Forrester as the best current offering in its Software Composition Analysis (SCA) Wave™ report in 2017.  (WhiteSource 08.04)

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9.9  Exaware Adds Disaggregated Cell-site Routing Capabilities to Its ExaNOS System

Exaware has added disaggregated cell-site routing capabilities to its network operating system, ExaNOS.  The disaggregated cell-site routing capabilities will be released to the market during Q3/19 and will support white-boxes from leading vendors that are based on Broadcom StrataDNX Qumran-AX/UX chipsets.  ExaNOS is the first high-scale best-in-class network operating system (NOS) for disaggregated routing. ExaNOS provides a full routing solution to fixed and mobile telecom service providers, enabling them to deploy the low-cost disaggregated router model across all parts of the network.

Exaware is a member of the Telecom Infra Project (TIP), whose goal is to accelerate the pace of innovation in the telecom industry.  Exaware supports the TIP’s efforts to promote disaggregated cell-site gateways solution.  ExaNOS works on white-box models that are based on Broadcom StrataDNX chipset, from leading vendors including Delta Networks and Edgecore.  As a result, Exaware customers have the flexibility to choose the best hardware solution according to their specific needs.  ExaNOS is a robust system that enables Exaware customer to meet their technical and business challenges.

Netanya’s Exaware is a leading provider of carrier-grade network operating systems for mobile and fixed telecom service providers.  Founded in 2007 (as Compass Networks), Exaware has redefined routing software that is engineered specifically for carrier networks.  With incredible scale potential and unprecedented rich features, Exaware’s open NOS software is ported to low-cost white-box equipment. With extensive experience in real-world applications, the Exaware team of world-class software developers and network engineers has developed best-in-class open NOS software that is set to revolutionize the telecom routing market.  (Exaware 08.04)

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9.10  StoreDot & Nissan Partner to Advance Environmentally-Friendly Solution for TV Displays

StoreDot and Nissan Chemical Corporation announced a development and licensing agreement of StoreDot’s innovative organic MolecuLED technology.  The agreement is aimed at delivering a new wide-color gamut wavelength conversion technology, suitable and optimized for next generation displays based on in-pixel wavelength conversion.

Today there is no other technology in the market that is able to reach the processing ability, yield, cost, efficiency and performance of StoreDot’s MolecuLED for in-pixel wide-color gamut wavelength conversion.  As the technology is fully organic, it inherently solves the issues of environmental harmful and costly metals, such as Cadmium and Indium, used by competing technologies.  Nissan Chemical and StoreDot will combine their respective expertise to adopt and improve StoreDot’s MolecuLED technology for in-pixel display solutions and bring MolecuLED organic technology into mass production.

Herzliya’s StoreDot is a battery and display materials innovation leader, developing ground-breaking technologies based on a unique methodology for the design and synthesis of both organic and inorganic compounds.  Designed to replace known technologies with enhanced electro-chemical and optical properties, StoreDot’s proprietary compounds, combined with nano-materials, are optimized for various applications including displays, mobile devices and electric vehicles.  (StoreDot 10.04)

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9.11  CyberArk Named Top Security Solution for Government Agencies

CyberArk has been named a Government Security News (GSN) Homeland Security Award winner for the third consecutive year. CyberArk is the platinum winner for “Best Identity Management Platform.”  CyberArk is recognized as the premier cybersecurity solution for government agencies and organizations to protect against the exploitation of privileged accounts, credentials and secrets across every environment – including on the endpoint and across on-premises, hybrid cloud and DevOps environments.  The CyberArk Privileged Access Security Solution helps eliminate the most advanced cyber threats by identifying existing accounts across networks, locking them down, and leveraging advanced analytics and continuous monitoring to detect and isolate anomalous behavior to stop attacks.

The CyberArk Privileged Access Security Solution is on the U.S. Department of Defense Information Network Approved Products List (DoDIN APL), has been validated and awarded an Evaluation Assurance Level (EAL) 2+ under the Common Criteria Recognition Agreement (CCRA), and has received the U.S. Army Certificate of Networthiness (CoN).  It helps federal agencies meet compliance requirements, including FISMA/NIST SP 800-53, Phase 2 of the Department of Homeland Security Continuous Diagnostics and Mitigation (CDM) program, NERC-CIP, HSPD-12 and more.  CyberArk is the only security company to be recognized across three GSN Homeland Security Award categories, including being a “Best Physical Logical Privileged Access Management Solutions” gold winner.

Petah Tikva’s CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline.  CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50% of the Fortune 500, to protect against external attackers and malicious insiders.  (CyberArk 11.04)

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9.12  New Version of Sapiens IDITSuite for Property & Casualty, with Automatic Claims Payments

Sapiens International Corporation announced the general availability of its upgraded Sapiens IDITSuite for Property & Casualty for customers and P&C insurance providers worldwide.  Sapiens’ IDITSuite – which handles policy, billing and claims – now features upgraded claims straight- through-processing capabilities, with automatic claims triage and payments functionality. P&C insurance claims can be paid instantly, regardless of channel.  This new functionality will free insurance personnel to handle more mission-critical tasks.  Automation will result in fewer errors and instant payments, with automatic triage and payment capabilities enabling a greater level of automation via Sapiens’ business intelligence solution.  These capabilities will be used by Sapiens’ customer and agent portal solutions, in addition to the core system.

Sapiens IDITSuite version 15.1 now also features “next best action”, via a rules-driven engine.  The suite can immediately identify the service provider best positioned to help insureds.  For example, IDITSuite will factor in proximity, availability and required service type to help insureds select the optimal service garage following an accident.  This personalization will enable providers to offer P&C insureds the immediate and modern customer experience they now expect across verticals.

Holon’s Sapiens International Corporation empowers insurers to succeed in an evolving industry.  The company offers digital software platforms, solutions and services for the property and casualty, life, pension and annuity, reinsurance, financial and compliance, workers’ compensation and financial markets.  With more than 35 years of experience delivering to over 450 organizations globally, Sapiens has a proven ability to satisfy customers’ core, data and digital requirements.  (Sapiens 15.04)

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9.13  Camilyo Launches SmartSite, an AI-powered Website Creation Platform

Camilyo unveiled Camilyo SmartSite, its new AI-powered platform for DIY building of SMB websites.  SmartSite enables local business owners to quickly build their own beautiful, conversion-oriented, personalized sites, even with zero design skills.  Moreover, since having a website is only one element of effective online presence, SmartSite seamlessly integrates with the SMB’s Google My Business and Facebook business pages, acting as a content hub for a consistent, fully-synced brand experience.  SmartSite is fully integrated with Camilyo’s Online-in-One SMB success platform, enabling digital vendors to deepen and expand their offering as the SMB needs evolve.  With its simplicity and speed, it can even be used as a DIFM tool for lower operational costs.

Tel Aviv’s Camilyo is a rapidly growing software company.  Since 2010, Camilyo has partnered with leading vendors worldwide to equip SMBs with white-labeled, fully-integrated presence, marketing, sales and business management tools that enable them to successfully compete online.  (Camilyo 11.04)

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10.1  Israel’s CPI Increases by 0.5% in March 2019

Israel’s CPI increased by 0.5% in March 2019 compared to February 2019.  It stood at 100.7 points compared to 100.2 points in the previous month (base: average 2018 = 100.0 points).  The CPI, excluding energy, has also increased by 0.5% and stood at 100.9 points.  The CPI excluding vegetables and fruits increased 0.6% and stood at 100.5 points.  The CPI excluding housing increased by 0.4% and was 100.4 points.

Prices of the following items increased in particular: clothing and footwear by 3.4%, culture and entertainment by 1%, transport by 1.1% and housing by 0.8%.  Since the start of the year, the CPI excluding housing and the CPI excluding energy increased 0.5%, each.  The CPI excluding fruit and vegetables increased 0.4%.

Over the past 12 months (March 2019 compared to March 2018), the CPI increased by 1.4%.  The CPI excluding energy increased 1.5%.  The CPI excluding housing increased by 1%.  The CPI excluding vegetables and fruits increased by 0.9%.

The seasonally adjusted CPI increased by 0.3% in March 2019 and the seasonally adjusted CPI excluding housing and the seasonally adjusted CPI excluding vegetables, fruit and housing increased by 0.2%, each.

Based on the trend data for the period December 2018 – March 2019, the annual pace of increase in the CPI was 1.5%, the annual pace of increase in the CPI excluding housing was 1.2% and the annual pace of increase in the CPI excluding vegetables, fruits and housing was 0.3%.

The Housing Price Index for January – February 2019 showed the price of the average deal rising 0.6% in January – February compared with December – January.  Housing prices have risen 0.1% over the past 12 months.  (CBS 15.04)

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10.2  Foreign Investments in Israel Increased by 30% from 2015 to 2017

On 7 April, the Central Bureau of Statistics announced that foreign investment in Israel jumped by 30% over two years.  The report states that foreign investments in Israel totaled $129.1 billion for 2017, a 20.2% increase compared to 2016 and 30% higher than 2015, which saw foreign investment of under $100 billion.  The figures cover investments by foreign residents or companies who bought more than a 10% stock share in Israeli companies.

In 2017, 60.4% of foreign investment went to the fields of trade and services.  The remaining investment was divided between high-tech (32.6%), industry (28.3%) and advanced technologies (15.8%).  The highest investments by foreign residents came from the U.S. ($21.1 billion), followed by the Netherlands, the Cayman Islands, Canada, China, Luxembourg, Singapore and Switzerland.

Israelis abroad were also investing more outside of Israel.  For 2017, Israelis abroad put $100.3 billion into foreign ventures, more than 65% of which went into industry.  Other prominent investment targets included companies in the oil, chemical, and pharmaceutical sectors.  The lion’s share of investment from Israelis abroad went to Europe, which received over 63% of the investments.  (CBS 07.04)

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10.3  Israel’s 2018 Government Debt Increased by NIS 40 Billion

On 15 April, the Ministry of Finance’s Accountant General published the debt management report for 2018, which showed that government debt increased by NIS 40 billion in 2018.  As a result, the ratio of debt to GDP rose for the first time since 2009.  Among the reasons cited by the Ministry of Finance for the increase were “changes in market variables, headed by a substantial shekel depreciation against the dollar and the euro and a higher inflation rate than in the preceding years.”  The Ministry of Finance did not mention the high budget deficit in 2018 – 2.9% of GDP according to the Ministry of Finance and 3.1% according to Central Bureau of Statistics, the result of a jump in government spending and stationary tax revenues.

The ratios of public debt and government debt to GDP in 2018 were 61.0% and 59.4%, respectively, compared with 60.5% and 58.8% in 2017, respectively.  The ratio of debt to GDP is a very important measure – the most important criterion in determining Israel’s credit rating.  Bringing this ratio down from 74.3% in 2009 to less than 60% in 2017 was the main consideration in raising Israel’s credit rating to an all-time high in 2018.  The Ministry of Finance pointed out that despite the increase in its debt in 2018, Israel still stands well by global comparison in the reduction of its debt-GDP ratio since the global financial crisis, with a cumulative decrease of 13.6% since 2009.

The increase in the debt-GDP ratio in 2018 did not change the rating agencies’ positive view of Israel, even though the ratio is expected to increase in 2019.  At the same time, the Ministry of Finance assumes that if the debt-GDP ratio continues rising in 2020, the rating agencies’ attitude towards Israel will change.  The 2020 budget is built on the basis of a 2.5% deficit target, the maximum ratio that will maintain the current ratio of debt to GDP. In order to meet this target, the next government will have to approve adjustments amounting to over NIS 20 billion: spending cuts and increasing revenue sources by raising taxes and reducing tax benefits.

The government debt totaled NIS 788.3 billion at the end of 2018, compared with NIS 747.1 billion at the end of 2017.  Furthermore, the trend towards extending short-term loans in the debt portfolio continued in order to reduce the rescheduling risk.  The average term to maturity rose to 7.9 years – its highest-ever level.  (Various 15.04)

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10.4  Foreign Exchange Reserves at the Bank of Israel, March 2019

Israel’s foreign exchange reserves at the end of March 2019 stood at $118,208 million, an increase of $271 million from their level at the end of the previous month.  The reserves represent 32% of GDP.  The increase was the result of government transfers from abroad totaling approximately $125 million, combined with a revaluation that increased the reserves by approximately $157 million.  In contrast, the increase was offset by private sector transfers of approximately $11 million.  (BoI 07.04)

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10.5  Israel’s Record Tourism Continues in First Quarter of 2019

A record 1.14 million overseas visitors came to Israel in the first quarter of 2019, up 14% from the corresponding period of 2018, the Central Bureau of Statistics announced.  After making seasonal adjustments, there were an average of 391,000 visitors to Israel each month over the first quarter of 2019, amounting to a record of 4.7 million tourist per year, compared with a monthly average of 374,000 per month in the final quarter 2018, which represented an annual rate of 4.5 million tourists.  In 2018, a record 4.12 million tourists came to Israel, up 14% from 2017, which was also a record, and up 42% from 2016.  (CBS 07.04)

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10.6  Study Finds Israel Has Lowest Rate of Diet-Related Deaths in the World

Israel has the lowest rate of diet-related deaths in the world, a major analysis of dietary data from around the world has revealed.  The analysis, part of the Global Burden of Disease study, was published in The Lancet on 3 April.

In Israel, it reported, just 89 people out of every 100,000 die each year in deaths related to poor-quality diet.  This differs from obesity, as these are deaths not from overeating, but from nutritional imbalance in the diet e.g. too much salt, or too few fruits, vegetables or whole grains).  Alongside Israel in the healthiest-diet category are France, Italy and other northern Mediterranean countries.

The report noted that in some poorer countries, the elements of a healthy diet are too expensive for many people to access, and urged policy changes to improve that access. It also advocated changes to the food supply chain in the West to ensure better foods are available more cheaply to a larger cross-section of the population.  (ToI 04.04)

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11.1  ISRAEL:  Bank of Israel Research Department Staff Forecast for April 2019

This 8 April report presents the forecast of macroeconomic developments compiled by the Bank of Israel Research Department in April 2019 regarding the main macroeconomic variables – GDP, inflation and the interest rate.  According to the staff forecast, gross domestic product (GDP) is projected to increase by 3.2% in 2019, slightly lower than the previous forecast, and by 3.5% in 2020.  The inflation rate in the four quarters ending in Q1/20 is expected to be 1.3%.  Inflation during 2019 is expected to total 1.5%, and 1.6% in 2020.  The Bank of Israel interest rate is expected to increase to 0.5% toward the end of the third quarter of 2019 and to continue increasing gradually to 1% by the end of 2020.


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

The Global Environment

The assessments of expected developments in the global economy are based mainly on projections by international institutions (the International Monetary Fund and the OECD) and by foreign investment houses.  These institutions’ forecasts for growth and inflation in advanced economies and imports to those economies, were revised downward since the previous forecast, and indicate an expectation of a global slowdown.  Accordingly, they assume that growth in advanced economies will be about 1.9% in 2019 and 1.6% in 2020, and that the advanced economies’ imports will increase by 3.5% in 2019 and by 3.3% in 2020.  Our assumption is that inflation in the advanced economies will total 1.8% in 2019 and 1.9% 2020.  According to investment houses’ most recent assessments before the forecast was prepared, the US federal funds rate is expected to be 2.5% at the end of 2019 and to remain at that level during 2020 (previous assessments were 3% at the end of 2019 and in 2020).  The declared interest rate in the Eurozone is expected to be 0% at the end of 2019, and 0.1% at the end of 2020.  Since the previous forecast, oil prices have increased.  The average price of Brent crude oil was about $64 per barrel in Q1/19.

Real Activity in Israel

GDP is expected to grow by 3.2% in 2019 and by 3.5% in 2020.  Growth estimates for 2018 are similar to those that were available at the time of the previous forecast.  Our assessment is that the accelerated growth of the past few years has been maximized, in view of the supply constraints in the labor market among other things.  Accordingly, our forecast is that the economy’s growth rate in 2019–2020 will be slightly higher than the long-term rate (which is estimated at about 3%), supported by the activity of a number of large companies.

The forecast of GDP growth in 2019 is slightly lower than the previous forecast, due to the expected global slowdown and its implications for the Israeli economy and due to a slight change in our assessment regarding the activity of the aforementioned large companies.  In particular, an expected moderation in world trade is expected to lower the growth rate of local exports by about one percentage point relative to the previous forecast, with most of the decline coming in 2019.

The GDP growth forecast for 2020 remains unchanged from the previous forecast, since our assessment is that the activity of the aforementioned large companies will offset the negative impact of world trade.

The forecast of private consumption for 2019 has been revised slightly upward, in view of positive developments of a number of relevant indicators, including the annual estimate of National Accounts data.  As in our previous forecast, fixed capital formation is expected to contract by 2% in 2020 as a result of the conclusion of a number of large investments in the economy (without which the increase in investment is 3.6%).  These completed investments are expected to contribute to the growth of exports.

Inflation and Interest Rate Estimates

According to the staff forecast, the inflation rate in the next four quarters will be 1.3%.  Inflation at the end of 2019 is expected to be 1.5% and inflation at the end of 2020 is expected to be 1.6%.  The Consumer Price Index readings published since the publication of the previous forecast indicate that inflation in the first quarter was higher than in the previous forecast.  We expect that inflation will revert to a lower rate in the coming quarters, and our basic assessment remains in place—inflation is expected to continue increasing gradually toward the center of the target range.

An analysis of all of the developments since the previous forecast led us to lower the inflation path in the forecast slightly, mainly due to the appreciation of the shekel in terms of the nominal effective exchange rate (the first quarter of 2019 compared with the fourth quarter of 2018) and the decline in the global inflation environment.  In contrast, the increase in oil prices partly offset these effects.  Our assessment remains that the tight labor market will continue to support wage increases and inflation.  The prices of non-tradable goods are expected to increase at a higher rate than the prices of tradable goods, further to the long-term trends in tradable goods prices and due to structural processes (including government measures to lower the cost of living and the development of e-commerce).

In summation, our assessment remains that inflation is expected to increase gradually, in view of processes that have not yet been fully maximized, including the continued growth of competition, government measures to lower the cost of living, and the development of e-commerce.

According to the Research Department’s assessment, the Bank of Israel interest rate is expected to increase to 0.5% toward the end of the third quarter of 2019, and to increase twice in 2020.  In our assessment, the forecast interest rate path supports the convergence of inflation to the midpoint of the target range and GDP growth at the potential rate.  The interest rate path in this forecast is moderate relative to the previous forecast, and consistent with the forecast inflation path, which was revised downward, and with the moderation of the forecast global interest rate path.  It is also in line with the decline in the expected interest rate path derived from market expectations (the Telbor curve flattened).

Main risks to the forecast

Several factors may lead to economic developments that differ from those in the forecast.

Regarding the global environment, the international institutions continued to note in their recent publications that the downward risks to growth and world trade remain.  The main risks include the possibility that the trade war between the US and China may worsen, uncertainty regarding the UK’s departure from the European Union and uncertainty regarding fiscal policy in a number of advanced economies.

In the domestic environment, due to the elections, there is uncertainty regarding whether and to what extent the government will change its behavior in relation to the cost of living and the housing market.  It is also difficult to assess in advance how the new government will deal with the need to make fiscal adjustments.  The various measures the government will take will affect growth and inflation.  In addition, there is uncertainty regarding the future development of the exchange rate and regarding the intensity of the effect of increased competition in the economy, as well as the effects of these factors on inflation.  (BoI 08.04)

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11.2  ISRAEL:  High-Tech Companies Raised $1.55 Billion in 128 Deals in First Quarter 2019

On 16 April, the IVC Research Center and ZAG-S&W reported that in Q1/19, Israeli high-tech companies raised $1.55 billion in 128 deals.  Following an unusually active Q4/18, the first quarter of 2019 continued the upward trend.  Israeli high-tech companies raised 28% more in capital amounts and 15% more in the number of deals compared to Q1/18.  Amount raised and deal numbers in Q1/19 were on the high end of previous quarter ranges.

The median deal size reached $6 million in Q1/19 thanks to five mega financing deals over $50 million, two of which were larger than $100 million each: Innoviz ($132 million) and DriveNets ($110 million).  The two mega-deals captured 16% of the total capital raised in Q1/19.

Chart 1: Israeli High-Tech Capital Raising Q1/2014–Q1/2019

Capital Raising by Rounds and Stages

Investment trends in the Israeli high-tech continued with the same pattern of the last quarters.  Investors preference for less risk and moderate returns drove the uptrend in late stage and bigger financial rounds in Q1, as earlier stage rounds with lower amounts kept past levels after peaking in Q4/18.

In Q1/19, seed round amounts declined to $51 million compared to $94 million and $54 million in Q4 and Q1/18, respectively.  The number of seed round deals (28) were in historical quarterly ranges of 2014 – 2018.

According to IVC’s analysis, while amounts raised in later round deals dropped to nearly $206 million in 17 deals in Q1/19, C round deals soared, raising $476 million in 17 deals – the highest figures in both deals and amounts of the past four years.  Capital-raising in deals larger than $20 million attracted 64% of the total amount in Q1/19.

Chart 2: Israeli High-Tech Capital Raising by Deal Size Q1/14–Q1/19

Shmulik Zysman, Founder and Managing Director at ZAG-S&W says that: “Israeli high-tech opened the year 2019 with momentum.  We are particularly optimistic as the first quarter of 2019 was the most successful first quarter in the past six years, both in terms of total funding and number of transactions.  Another reason for optimism is the high involvement of venture capital funds in the amount of capital invested – one of the highest in the last five years”.

According to Zysman: “In the first quarter we have seen the continued trend of “less venturous venture capital”.  This trend is evident in the increase of the amount of capital invested in mid and late stage companies.  This contrasts with a certain decline in the capital amount invested in seed and early stage companies”.

Capital Raising by Deal Type

Seventy-one VC-backed deals attracted more capital, reaching $1.3 billion in Q1/2019.  The number of VC-backed deals in Q1 was lower than the unusually high VC fund activity in Q4/18, but higher than the quarterly average of 2014 – 2018.  Non-VC-backed deals raised $247m in 57 deals, which reflects the continuing uptrend in non-VC-backed deals.  VC-backed and non-VC-backed deals kept their traditional shares in Q1/19, 56% and 44%, respectively, out of the total number of deals.

Capital Raising by Leading Sectors and Selected Technology Verticals

In Q1/2019, IT & software companies, the largest sector in the Israeli technology market, raised $660 million in 57 deals.  The communications sector saw one outstanding deal – DriveNets raised $110 million — which was responsible for the increase in the capital amount this quarter.

The life sciences sector kept up stable activity in Q1/19, with the same number of deals as in 2014 – 2018.  Life sciences companies raised $260 million, lower than the $315 million in Q4/18, but slightly higher than the historical average for this sector.

Marianna Shapira, research director at IVC Research Center points out: “Capital raising activity continued to be high, especially in artificial intelligence and big data, raising mid-size amounts ($5m to $20m) in A to C round series.  This stems from strong follow-on investment activity—approximately 60% of the deals were made in investors’ current portfolio (a growth from about 50% quarterly average in previous years). Investors mostly concentrated on cultivating their portfolio companies, and mid-stage companies which attracted 43% of total capital inflow in Q1/2019.”

AI (Artificial Intelligence) companies continued the uptrend with a record 51 companies raising $599 million in the first quarter of 2019, compared to $369 million raised by 30 AI companies in Q1/18.  Most of the investments were made in early stage financing rounds (seed + A rounds).

Other tech verticals such as cyber security and fintech kept average levels of activity during Q1/2019.

Chart 3: Number of Deals in Selected Technology Verticals in Early Rounds (seed + A rounds)


IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital, and private equity industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies, and academic and research institutions in Israel.  IVC-Online Database ( showcases over 8,400 Israeli technology startups, and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives, and local activity of multinational corporations.

ZAG-S&W (Zysman, Aharoni, Gayer & Co.) is a leading international law firm specializing in all areas of commercial and business law and is one of Israel’s leading commercial law firms.  The firm has earned its international standing due to its global presence in the US, China and England.  The firm’s attorneys specialize in all disciplines of commercial law for both publicly held and private companies, with particular expertise in hi-tech, life science, international transactions, and capital markets.  ZAG-S&W provides result-driven legal and business advice to its clients, addressing all aspects of the clients’ business activities, including penetration into new markets in strategic locations.  (IVC 16.04)

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11.3  ISRAEL:  A New Eastern Mediterranean Friendship, with US Support

Dr. George N. Tzogopoulos posted on 10 April in a BESA Center Perspectives Paper that he prospective EastMed pipeline would be the flagship project of the Cypriot-Greek-Israeli collaboration, a developing friendship that enjoys deep foundations.  The US has now made its support for that partnership official.

Cyprus, Greece, and Israel are developing a solid partnership in the Eastern Mediterranean because they share similar interests and values and are reliable allies.  They are becoming – even more than partners – friends.  The sixth tripartite summit, which took place in Jerusalem only three months after the one in Beer Sheba, put the harmonious nature of the collaboration on display.

From the beginning, the US has favored the forging of a democratic bloc in the Eastern Mediterranean among the three countries.  In recent months, that support has become official.  US Ambassador David Friedman attended the Beersheba meeting last December and Secretary of State Mike Pompeo attended the summit in Jerusalem.  The American role in the trilateral foreign policy scheme has been clearly institutionalized.

The Americans’ interest is explained by the ongoing natural gas discoveries in the Levantine Basin.  Last month, for example, ExxonMobil found another gas-bearing reservoir, Glaucus, off the shores of Cyprus.  These discoveries can provide the US with not only business opportunities but also energy security.  Washington demands that its partners maintain a diversification policy.  The more Western countries import from what America sees as safe sources, such as the basin, the more they will reduce their dependency on Russia.

Discoveries in the Eastern Mediterranean are hampered, however, by Turkey’s aggressive policy.  It is not unusual for Ankara either to organize military exercises in the Exclusive Economic Zone of Cyprus or to disrupt drilling operations of foreign companies, such as Italy’s ENI.  That is why Pompeo’s presence in Jerusalem held special meaning.  The initial agreement on the potential construction of the EastMed pipeline frustrates Ankara because Turkey will be excluded from the proposed corridor.

There is consensus in Washington that it is no longer possible to take Turkey’s Western foreign policy orientation for granted.  The decision by President Erdoğan to buy S-400 missiles from Russia supports this reassessment.  For the time being, Erdoğan is insisting that Turkey will proceed with the purchase and defy American pressure. US support for the EastMed pipeline can function as a warning to Ankara to normalize its behavior.

The project will be very expensive and difficult.  Indeed, Italy – contrary to its previous commitments – now appears hesitant to join it.  Still, as long as the US advocates for the project’s realization, obstacles will be overcome.

Irrespective of Erdoğan’s choices, Cyprus, Greece and Israel will continue to deepen their cooperation.  This juncture is critical.  NATO is placing particular emphasis on dealing with challenges in the South and the Mediterranean Dialogue of the Alliance is being revitalized in that context.  Israel’s contribution can be beneficial for all the countries involved.  These include Algeria, Egypt, Jordan, Mauritania, Morocco and Tunisia.

Greece and Cyprus will have the opportunity to remind their partners in the EU why the security of Israel should be a fundamental priority.  It is certainly bizarre that Brussels envisages playing an active role in the Middle East when it regularly ignores the sensitivities of the only democratic state in the region.  Ironically, the terrorist attacks taking place in Europe in recent years underline the need to study the Israeli model in coping with the problem.

The three countries – Greece and Israel in particular – can benefit from the good momentum and discuss the implementation of the Belt and Road Initiative in the Eastern Mediterranean and the progress of Chinese investments.  Both Greece and Israel are of high interest to Chinese companies.  The Shanghai International Port Group (SIPG), which signed an agreement with Israeli authorities to operate the Haifa Port from 2020 onward, is teaming up with China Ocean Shipping Company to promote container shipping traffic.  In a period when China is largely seen as an adversary in the West, COSCO’s successful investment in the Piraeus Port challenges this view.

Dr George N. Tzogopoulos is a BESA Research Associate, Lecturer at the Democritus University of Thrace, and Visiting Lecturer at the European Institute of Nice.  (BESA 10.04)

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11.4  LEBANON:  Russia Expands Ties in Lebanon’s Oil & Gas Sector

Michal Kranz wrote in Al-Monitor on 10 April that Russia has gotten a huge head start on the United States in gaining access to Lebanon’s oil and gas sector, allowing Moscow to continue to strengthen its economic position across the Middle East.

During a recent Middle East tour, US Secretary of State Mike Pompeo focused primarily on Iran’s influence in the region, but on 20 March in Jerusalem he also labeled Russia an adversary of US regional allies in addition to Iran and China when speaking about energy and security in the eastern Mediterranean.  “Revisionist powers like Iran and Russia and China are all trying to take major footholds in the East and in the West,” Pompeo said, alongside Israeli Prime Minister Benjamin Netanyahu and the leaders of Greece and Cyprus.

Pompeo had also reportedly planned to set “red lines” on Russian projects in Lebanon while in Beirut on 22 – 23 March.  Yet, whatever plans Pompeo may have had to counter Russia in Lebanon, they seem to have had little effect.  Lebanese leaders have doubled down on working with Russian companies in their country’s expanding oil and gas sector in the weeks since Pompeo’s visit.

Although the United States maintains an important degree of diplomatic clout in Lebanese energy matters, Russian economic investments in the sector have far outpaced those of the Americans, and Russian officials and business leaders have expressed their desire to take further steps to cement roles as key players like the United States continue to lag behind.  “[The Russians] have an advantage over the Americans not only in Lebanon, [but] in the region as well,” Amal Abou Zeid, adviser for Lebanese-Russian affairs at Lebanon’s Foreign Ministry, told Al-Monitor.

Lebanon and Russia signed a memorandum of understanding to cooperate on oil and gas in October 2013 and since then cooperation between them has deepened.  In December 2017, the Lebanese government awarded its first contracts for offshore oil and gas exploration to a consortium of three firms that included Novatek, Russia’s second-largest gas company.

This past January, Russia’s majority state-owned oil giant Rosneft signed a deal to manage, operate and potentially rehabilitate and expand part of the oil storage terminal in Tripoli, Lebanon’s second largest city, as part of a 20-year lease.  Rosneft is also competing in a bidding process along with other consortiums, including an American company, for an offshore gas terminal off the Lebanese coast.

Days after Pompeo’s visit, Lebanese President Michel Aoun traveled to Moscow, where he met with Russian President Vladimir Putin and Rosneft CEO Igor Sechin, who said the company is interested in “elevating the oil facilities in north Lebanon.” According to Abou Zeid, Sechin is interested in building up to three additional oil storage facilities in Tripoli and potentially investing in a future refinery in the north.

Cesar Abi Khalil, a parliamentarian who served as energy minister when Lebanon signed the Tripoli deal with Rosneft, told Al-Monitor that there is “high interest” in Lebanon to work with companies, including American ones, on refinery construction and rehabilitation.  He added that ultimately, contracts will be awarded to companies that present the best proposals, as Rosneft did for the Tripoli terminal.

Russia’s interest in Lebanon is tied to its regional strategy.  Since 2016, Rosneft has steadily expanded its operations into Iraq, Egypt and Libya, and Gazprom, Russia’s state-owned gas company, has been making inroads in Syria’s gas market during the civil war there.  While Syria’s oil and gas reserves are dwarfed by those in neighboring Iraq, its location is highly strategic for Russia, which has been supporting Syrian President Bashar al-Assad in the civil conflict since 2015.  Hundreds of Russian mercenaries have reportedly been killed securing oil fields in the country and Russia has begun exploring for oil and gas off the Syrian coast.

Abou Zeid confirmed that the rehabilitation of a long-disused oil pipeline connecting Tripoli with oilfields in Iraqi Kurdistan, where Rosneft is active, was one of the topics discussed by Aoun and Sechin in Moscow.  It is likely that gaining access to oil infrastructure in Lebanon in addition to offshore reserves in the country will enhance Russia’s strategic position in Syria and across the eastern Mediterranean, but it remains possible that it could also use the Tripoli facilities to try to bypass US sanctions on fuel shipments to Syria.

Meanwhile, American companies have been unable or unwilling to secure stakes in Lebanon’s new offshore prospects, which the US Department of Energy estimates will produce almost $254 billion between 2020 and 2039.  Abou Zeid said that he had heard that ExxonMobil had entered into a consortium before the first bidding process for the offshore exploration contract began, but ultimately they and many other American companies failed to submit bids once they were eligible.  “I am certain that the Americans are interested, and they were not very happy with the Russian presence in this sector,” Abou Zeid said, speculating that political issues, like Hezbollah’s role in Lebanese politics, may have scared off potential American investors.

Mona Sukkarieh, a political risk consultant and co-founder of Middle East Strategic Perspectives, told Al-Monitor that other factors were more likely to be involved.  “Repeated delays resulting from frequent vacuums within the executive branch, an incomplete legal framework, changes in blocks offered and a change in market conditions all affected companies’ enthusiasm for the first licensing round,” she said.

Abi Khalil agreed that market forces were partially to blame for the lack of interest from the United States during the first round of bidding, but he also said that he had found ongoing interest by American firms in Lebanese oil and gas during his three official visits to the States, including in potential refinery projects across the country.

Despite these difficulties, the Novatek consortium followed through on its interest and secured rights to two blocks in Lebanon’s Exclusive Economic Zone (EEZ), one of which is in a disputed zone that Israel has claimed as part of its own EEZ since 2010.  On 4 April, Lebanese Energy Minister Nada Boustani announced the opening of a second round of bidding for contracts to five additional offshore blocks, two of which lie along the disputed border area.  Lebanese leaders have long maintained that Israel is encroaching on Lebanon’s maritime boundary.

On 1 April, parliament Speaker Nabih Berri said that Lebanon won’t give Israel “one cup” of its water.  According Berri’s office, on 22 March the speaker and Pompeo discussed the issue of Lebanon’s southern maritime border and efforts to settle the dispute with Israel.

Abou Zeid claims that all the involved parties are interested in seeing the United States play a mediating role in the boundary issue. Regardless, US influence over matters related to energy in Lebanon are quickly diminishing given American companies’ absence in the country’s oil and gas sector and the lack of trust among Lebanese leaders, who believe Washington is biased toward Israel’s geopolitical positions.  “The US is really, one, not that interested, and two, the space that the US used to have in Lebanon in terms of influence and shaping decisions, it’s been lost,” Hanin Ghaddar, a researcher specializing in Lebanon and Iran at the Washington Institute for Near East Policy, told Al-Monitor.  She added that in her view, it is unlikely that American firms will gain any offshore contracts.

So far, US efforts to counter Russian expansion in the eastern Mediterranean through diplomacy have proven inadequate.  Unless American companies get serious about acquiring stakes in Lebanon’s offshore reserves, it will likely be almost impossible for the United States to overcome the head start Russia has gotten in Lebanon’s oil and gas sector, allowing Moscow to continue to strengthen its economic position across the Middle East.

Michal Kranz is a freelance journalist who has covered politics in the United States, the Middle East and Eastern Europe.  He was formerly based in New York City, where he wrote for Business Insider, and is currently reporting on politics and society in Lebanon for a variety of media outlets.  (Al-Monitor 10.04)

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11.5  KUWAIT:  IMF Executive Board Concludes 2019 Article IV Consultation

On March 25, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the 2019 Article IV consultation with Kuwait.  The discussion included the Financial System Stability Assessment (FSSA) of Kuwait.

Growth has resumed and the current account rebounded thanks to higher oil prices.  Hydrocarbon output rose by 1.2% in 2018 after contracting a year earlier.  Buoyed by a rebound in confidence and government spending, non-oil growth has accelerated to 2.5%.  After the first deficit in more than two decades in 2016, the current account shifted back into surplus in 2017 and reached an estimated surplus of 12.7% of GDP in 2018. Inflation fell to a multiyear low of 0.7% due to falling housing rents, easing food prices and a strengthening dinar.

While the overall fiscal balance has improved, financing needs remain large.  Higher oil revenues and investment income boosted the overall balance.  However, the underlying fiscal position – non-oil balance less investment income in percent of non-oil GDP – indicates a modest loosening in FY17/18 and FY18/19.  Fiscal financing needs – overall balance after compulsory transfers to the Future Generations Fund (FGF) and excluding investment income – remain large.  Delays in the passage of a new debt law have rendered the government unable to issue debt since October 2017.  As a result, it has had to draw on the General Reserve Fund assets for financing.

The banking sector reports sound indicators, and credit is recovering from a slow start in 2018.  The system wide capital adequacy ratio reached 18% in September 2018, and liquidity ratios were comfortably within regulatory requirements.  Profits rose and asset quality improved, with NPLs net of specific provisions falling to a historical low.  The Central Bank of Kuwait (CBK) raised the repo rate, a benchmark for deposits, several times but has kept the policy lending rate at 3% since March 2018.  As a result, bank lending interest rates have risen by less than deposit rates.  Coupled with ample liquidity – a by-product of deposit growth and government debt redemption in 2018 – this is supporting a credit recovery.  Private sector loans grew 4.1% year-on-year in December 2018 on the back of household, construction, and oil sector borrowing.

Executive Board Assessment

Executive Directors noted that growth is expected to strengthen and the underlying fiscal position to gradually improve over the medium term.  Given the volatility of oil prices and the exhaustible nature of oil resources, Directors underscored the need for timely and well-sequenced fiscal and structural reforms to reduce Kuwait’s dependence on oil, boost government saving, and create more private sector jobs.

Directors called for deeper fiscal reforms to ensure adequate savings for future generations.  They encouraged the authorities to tackle spending rigidities and increase non-oil revenue while boosting capital outlays to improve infrastructure and raise potential growth.  They underscored the need to tackle the large public sector wage bill, noting that public sector wages should be gradually aligned with those in the private sector to incentivize nationals to seek private sector opportunities and support competitiveness.  Directors also encouraged the authorities to proceed with the introduction of GCC-wide excises and VAT.

Directors emphasized that a robust fiscal framework and strong fiscal governance are vital to bolstering fiscal policy credibility.  Directors stressed that enhanced fiscal transparency, an improved public procurement framework and greater spending efficiency would help increase government accountability, cut waste, and reduce Kuwait’s vulnerability to corruption.

Directors welcomed the banking system’s sound position and commended the authorities for prudent regulation and supervision.  To further enhance financial sector resilience, Directors encouraged the authorities to implement the recommendations of the FSSA.  In particular, they saw scope to further enhance the crisis management framework, notably by establishing a special resolution regime for banks and unwinding the blanket guarantee of deposits once the preconditions are met.  They also encouraged the authorities to strengthen liquidity management, bolster systemic risk oversight, and called for a gradual relaxation of the interest ceilings.  Directors encouraged the authorities to further strengthen the AML/CFT framework.

Directors stressed the need for structural reforms to improve the business environment, support entrepreneurship and foster productivity.  In particular, they saw scope for further easing of administrative procedures, facilitating trading across borders, and efforts to promote competition.  They also called for a more enabling environment for SMEs and startups, by enhancing their access to finance, facilitating participation in public tenders, and training entrepreneurs.

Directors concurred that the pegged currency regime remains appropriate, with the peg to a basket of currencies continuing to provide an effective nominal anchor.  Directors noted that the recommended fiscal adjustment would largely close the current account gap over the medium term.  (IMF 03.04)

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11.6  OMAN:  IMF Staff Concludes 2019 Article IV Visit to Oman

It was announced on 11 April that an International Monetary Fund (IMF) team visited Muscat from 26 March to 8 April to hold the 2019 Article IV consultation discussions with Oman.  At the conclusion of the visit, the IMF made the following statement:

“Economic activity is gradually recovering.  After reaching a low of 0.5% in 2017, real non-hydrocarbon GDP growth is estimated to have increased to 1.5% last year, reflecting higher confidence driven by a rebound in oil prices and higher government spending.  Oil and gas production increases brought overall real GDP growth to 2.2%.  Non-hydrocarbon growth is projected to increase gradually over the medium term, reaching about 4%, assuming efforts to diversify the economy continue.

“Preliminary budget execution data indicate an improvement in the overall fiscal balance last year.  The fiscal deficit is estimated to have declined to about 9% of GDP from 13.9% of GDP in 2017, reflecting higher oil revenues.  Nonetheless, budget implementation remained challenging, with some spending overruns and tax revenue underperformance compared to the budget.  In addition, after several years of improvement, the underlying (non-oil) primary balance deteriorated due to higher spending.

“The fiscal deficit is projected to decline to about 8% of GDP this year, as the impact of lower oil prices is more than offset by a decline in spending, one-off revenue and implementation of a new excise tax on selected products.  Further efforts to curtail spending and the planned introduction of VAT could reduce the deficit by another 2% of GDP over the next two years.  However, thereafter, assuming the IMF’s projected gradual decline in oil price and production materializes, and given the expected increase in interest payments, the fiscal deficit would increase again, pushing government and external debt up and increasing vulnerability to shocks.

“Deeper fiscal consolidation is therefore important to ensure fiscal and external sustainability.  The authorities are encouraged to lay out and implement an ambitious medium-term fiscal adjustment plan, based on reforms to tackle current spending rigidities – particularly on the wage bill and subsidies – streamline public investment, and raise non-hydrocarbon revenue.  These efforts should be implemented by prioritizing measures that help limit the impact of fiscal consolidation on growth and by placing more of the adjustment burden on those who can best shoulder it.  In the near term, expeditious introduction of VAT and measures to adjust government expenditure are of the essence.

“External buffers remain adequate.  Gross international reserves of the Central Bank of Oman increased by about $1.3 billion in 2018 to $17.4 billion.  The government’s external assets in the State General Reserve Fund, Oman’s sovereign wealth fund provide additional buffers.  The exchange rate peg to the U.S. dollar is appropriate considering the structure of the economy.

“Accelerating structural reforms is paramount to promote private investment and job creation, improve productivity and competitiveness, and advance diversification.  On the labor market front, better aligning public sector wages and benefits with the private sector and sustaining efforts to improve education and training is key.  The government recently adopted important reforms in the areas of commercial law and arbitration and licensing procedures.  Vision 2040’s emphasis on fiscal sustainability, governance and rule of law is welcome.  Further efforts to strengthen the business environment, including by reducing obstacles to foreign direct investment, fostering competition, and further easing trade barriers would help strengthen external competitiveness.  Accelerating diversification efforts under the Tanfeedh program could also help raise non-hydrocarbon exports.

“Banks benefit from high capitalization, low non-performing loans, and strong liquidity buffers.  Maintaining strong regulation and supervision will help strengthen resilience and ensure sustained growth.  (IMF 11.04)

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11.7  ALGERIA:  Bouteflika Resigns: Next Steps in Uncharted Territory

Ben Fishman posted a Washington Institute for Near East Policy Policy Alert on 3 April, noting that instability in Algeria could cause significant disruptions in North Africa, the Mediterranean, energy markets, and counterterrorism.

On 2 April, Algerian president Abdelaziz Bouteflika submitted his resignation to the Constitutional Council, a move that followed six weeks of massive demonstrations by citizens protesting his prospective fifth term and other issues.  The president’s loyalists attempted to appease the demonstrators with a series of partial concessions: postponing elections until year’s end; promising that Bouteflika would not seek another term; proposing a constitutional amendment process and transition plan led by internationally respected diplomat Lakhdar Brahimi; and reshuffling the cabinet twice.  The largely inchoate protest movement accepted none of these ideas, particularly the proposal to extend the fourth term of an infirm president who has not appeared in public since suffering a serious stroke in 2013.

Army chief of staff Ahmed Gaid Salah raised the pressure on 26 March when he called for applying Article 102 of the constitution, which would formally declare the president unable to serve.  Yet protestors greeted even that approach skeptically and began demanding change to “the system,” suggesting frustration with continued rule by a nontransparent elite.

For now, the head of Algeria’s upper house of parliament, Abdelkader Bensalah, will assume the role of interim president as mandated by the constitution – so long as the constitution remains valid.  Beyond that, what will happen next is a matter of speculation.  Yet several principles should guide how Washington approaches the situation going forward.

Beware of analogies.  As tempting as it may be to compare Algeria’s predicament to other regional developments – such as the mass protest movement and subsequent military dominance in Egypt, the Assad regime’s brutal crackdown in Syria, or the crony capitalism seen in Tunisia – the current situation should be treated on its own merits.  Many have observed that Algeria already experienced an “Arab Spring” in the early 1990s, when it experimented with open elections only to cancel them when Islamists won, setting off a civil war and “Black Decade.”  Although this is certainly a valid historical data point, assuming that it will dissuade the protestors, military, or government from escalating to violent confrontations during the present crisis may be wishful thinking.  There is simply not enough clarity about how the decision making circle and broader ruling class (i.e., “Le Pouvoir”) operate, leaving observers with little more than general speculation about how authorities might respond to the current crisis.

Watch the military.  Did Gaid Salah’s proposed constitutional solution to ousting Bouteflika signal a break within the ruling circle, or an active effort by certain elements to move beyond the ailing president while preserving their overall power?  Some observers have called his actions a coup; according to some reports, he privately demanded Bouteflika’s resignation right before the president submitted it.  How much is the military actually behind this transition, and what additional concessions is it prepared to make if protestors continue demanding free elections and systemic change?  To date, government forces have been disciplined about avoiding violence and allowing the protestors to demonstrate freely.  Whether that dynamic continues will determine the stability of the coming period, particularly if protestors happen to cross whatever redlines the military may have drawn internally.

It’s the economy, stupid.  The prospect of more than twenty years’ of life under Bouteflika may have been the proximate driver of the protests, but the underlying causes were continued economic stagnation, youth unemployment and poor public infrastructure for a ballooning youth population (44% of Algeria’s 42 million residents are under age twenty-four).  The government has been burning through its foreign reserves at a rapid rate, accumulated when the price of oil was over $100 per barrel in the mid-2000s.  The latest budget includes unsustainable social spending and subsidies.

Meanwhile, efforts to liberalize and diversify the economy have been stymied by those political and business elites who benefit from the current system (some of whom have been prevented from leaving the country over the past several days, potentially signaling plans to scapegoat some of the worst offenders or oust Bouteflika loyalists).  Further, statist economic policies limit much-needed foreign investment, especially in the energy sector, where participating companies are required to have at least 51% Algerian ownership.  Without further exploration and new technology, the country’s oil reserves and production capacity are projected to last only twenty more years. Production has not dipped during the current crisis, but the upheaval did lead Exxon Mobil to suspend talks with the government on shale gas development.

Algeria needs a stable government to address these complicated issues.  Any post-Bouteflika administration will no doubt be tempted to increase social spending and ignore long-term investments and reform, but that approach would only worsen the country’s economic health.

In the best case, a caretaker government will lead Algeria toward a constitutional reform process and fair elections, producing an elected government that can begin adopting necessary economic reforms while maintaining the military’s loyalty.  Yet the chances of that process unfolding smoothly seem dim.

A smooth transition is in the best interests of the United States given the deep security interests at stake. Algeria borders Libya, the Sahel and the Mediterranean region, all of which would suffer tremendously if local authorities cannot control the borders and keep a lid on terrorism, smuggling, and mass migration.  Accordingly, while Washington should emphasize that Algerians alone will shape internal events (as the State Department noted in a 2 April press briefing), it should also tell the parties that the transition needs to be peaceful and transparent.  That message can start with a congratulatory call from Secretary of State Mike Pompeo to the interim president, reinforced by private messages to senior military contacts and U.S. embassy messaging to the Algerian people via Twitter and other platforms.

Ben Fishman is a senior fellow at The Washington Institute and former director for North Africa at the National Security Council.  (TWI 03.04)

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11.8  MOROCCO:  Morocco ‘BBB-/A-3’ Ratings Affirmed; Outlook Negative

On 5 April 2019, S&P Global Ratings affirmed its long- and short-term foreign and local currency sovereign credit ratings on Morocco at ‘BBB-/A-3’.  The outlook is negative.


The negative outlook signifies that we could lower our ratings on Morocco within the next 18 months if the government fails to improve its budgetary position, pushing up net government debt beyond our forecasts; if real GDP growth rates materially undershoot our expectations; or if external imbalances widen further, causing a substantial increase in the economy’s gross financing needs.

We could revise the outlook to stable if the budgetary consolidation prospects materially improve.  For example, if the deterioration observed in 2018 is reversed, or the ongoing transition toward a more flexible exchange rate regime that targets inflation significantly bolsters Morocco’s external competitiveness and ability to withstand macroeconomic external shocks.  An outlook revision to stable could also arise if Morocco’s ongoing economic diversification strategy results in less volatile and higher rates of economic growth.


The ratings on Morocco are supported by a moderate level of government debt and manageable current account deficits, despite a deterioration in 2018, amid relatively stable policymaking.  The ratings remain constrained by GDP per capita lower than that of similarly rated sovereigns, significant economic reliance on agriculture, high social needs, and a relatively slow approach to budgetary consolidation.

Institutional and Economic Profile: Economic growth to broadly stabilize this year, while economic diversification is set to continue

-Morocco’s GDP per capita remains one of the lowest of sovereigns rated in our ‘BBB’ category.

-We forecast real GDP growth will be about 3.1% in 2019, absent any significant shocks in the external and domestic business environments, before gradually firming during 2020-2022.

-Economic growth remains vulnerable to the volatility of agricultural output and the ongoing economic slowdown in Europe, while it has also excluded parts of the Moroccan population in the past.

We expect real GDP growth in Morocco at around 3.1% in 2019, reflecting a slowdown in Europe, as well as likely slower growth in Morocco’s agricultural output.  The government has been reducing the economy’s vulnerability to weather shocks by investing in more efficient technologies in the agricultural sector via the Green Morocco Plan, as well as diversifying the economy.  In this context, we believe that non-agricultural output will continue to expand in line with past trends and reflecting continuous growth in foreign direct investment (FDI).  The main sources of growth are the expanding automotive, aeronautic, and electronics sectors, where substantial output growth is expected to continue at least through 2022.

Morocco has built comprehensive industrial clusters around its emerging automotive industry.  It has successfully attracted a number of foreign car manufacturers, first from France and most recently from China.  As a result, the number of vehicles produced in Morocco has increased by more than 2.5x since 2014, overtaking in value exports related to phosphates and their derivatives a few years ago.  The latter will nevertheless still represent an important share of the country’s exports, while we consider that tourism has substantial further growth potential, despite strong growth in foreign tourist arrivals over 2017-2018, at around 10% annually.

Given Morocco’s significant dependence on energy imports, FDI in the energy sector is increasingly important.  The country aims to produce 52% of its power from renewable energy by 2030.  Projects such as this, which ease the economy’s dependence on external sources of energy, are positive since they support a further reduction in current account imbalances and also further insulate Morocco from energy price volatility.  The government has also promoted several gas field exploration projects.  Although they are unlikely to come on stream over the next two years, if successful they could further reduce Morocco’s energy imports and benefit its trade balance.  In the context of the recent oil price increase and its significant negative economic and budgetary implications, the government is considering putting in place a price regulating mechanism, which would prevent the full impact of oil price increases being felt by final customers and instead it would require the supply chain to absorb part of the pressure.  If approved by the Moroccan competition authority, such a mechanism could cushion the negative impact on the economy and allow for improved predictability in terms of budgetary outcomes.

We forecast that real GDP growth will average close to 4% in 2020-2021, backed by increasing resilience in the agricultural sector, and that the business environment and external demand will remain broadly supportive of the steady pick-up in nonagricultural output.  To this end, the government is preparing a new investment charter, a small-business act, and an overhaul of the tax system to introduce more stability and policy predictability in the business environment.  Moreover, in order to improve liquidity in the economy, the government has decided to shorten its payment times to suppliers, and those of state-owned enterprises (SOEs), and to settle its payment arrears with the private sector.  We believe that these measures will help the development of the private sector.  Tackling other structural weaknesses, such payment indiscipline among private sector companies and administrative hurdles in the business environment, could support the country’s economic diversification and the resilience of its economic growth.

Unless Morocco suffers external economic shocks – for example, due to the heightened risk of global protectionism or a faster slowdown in European economies, which currently represent about 70% of its export markets – we believe that the expansion of its export capacity and its rise up the value-added ladder will contribute positively to economic growth over 2019-2022.  Importantly, we view the two-year Precautionary and Liquidity Line approved by the IMF in December 2018 (worth about $2.97 billion) as an important tool in the context of the abovementioned risks as well as a relevant policy anchor.

We believe that Morocco has largely demonstrated political and social stability, especially in the context of the Arab Spring.  It has achieved this through constitutional reforms, a rise in government spending aimed at economic development and reduction of economic inequality in less developed regions, with broad support from King Mohammed VI.  The king chairs the Council of Ministers, which deliberates on strategic laws and state policy orientations.  The king’s role in policymaking has held greater importance since 2017, when he intervened in curbing social tensions in the regions of Rif and Jerada.  In addition, in 2018 the king mandated the prime minister to appoint new ministers of finance, education, planning, housing, health and African relations to revamp the country’s development plans.

Although ethnic, tribal, religious, and regional divisions are less pronounced in Morocco than in much of the Middle East and North Africa, there are rising demands from some parts of the Moroccan population for more inclusive economic growth.  In our view, this partly stems from high unemployment among youths and the income disparities between more- and less-developed areas of the country.  While at the national level, the unemployment rate appears low, the differences among population segments are significant (higher in urban areas and for youth and women).  Moreover, we believe that a higher participation of women in the labor market (currently estimated at about 20%) could significantly increase the country’s economic growth potential.

The government has expressed its willingness to accelerate the implementation of regional development programs and decentralization of the state with devolution of competencies to regions in order to reduce income disparities, including by tackling high unemployment.  We believe that these demands will persist and constrain Morocco’s budgetary position, delaying a faster reduction in the budget deficit over our forecast horizon.  Nevertheless, to the extent they are directed toward improving education and labor market outcomes, such policies could provide a boost to the country’s growth potential in medium to long term.

Flexibility & Performance Profile: Budget deficit to slowly decline, supported by privatization proceeds

-In 2019, we expect the government to post a budget deficit of about 3.3% of GDP, including the planned privatization proceeds.

-Following a significant widening of the current account deficit in 2018, we expect the deficit to gradually decline, on the back of new exporting capacities, subject to the trends in external demand.

-We anticipate that the authorities will inch toward a more flexible exchange rate regime over the medium term.

The budget deficit widened to 3.7% of GDP in 2018 against the government’s target of 3%, reflecting mainly a sharp rise in oil prices (leading to increased cost of energy subsidies for liquefied petroleum gas), as well as lower-than-planned grants from the Gulf Cooperation Council (GCC).  We don’t expect a repeat in 2019 as the remaining amount of budgeted GCC grants is modest and our forecasts don’t suggest a similar rise in oil prices this year.  We therefore expect the headline budget deficit to be broadly stable in GDP terms in 2019.  However, given the government’s commitment to privatize some of its assets (worth approximately 4% of GDP during 2019-2024), the change in net general government debt – our preferred indicator of fiscal flows – is likely to be lower than in 2018 (i.e. 2.7% of GDP in 2019, driven by privatization proceeds of almost 1% of GDP).

The government has been addressing the rising social demands for better living standards, including education and health care, and tackling high unemployment rates in poorer parts of the country by strengthening social protection programs.  This includes the National Human Development Initiative aimed at supporting the vulnerable parts of the population, funded from public and private sector sources.  Morocco provides socially sensitive subsidies on basic goods (flour, sugar, and liquefied petroleum gas) and is implementing a subsidy registry to provide better targeted and efficient support.  On the revenue side, in the context of the upcoming tax system conference to be held in May 2019, we view favorably the government’s plans to broaden the tax base in order to improve tax collection, including by reducing numerous tax exemptions, and as an attempt to address sizable tax avoidance and evasion.

On the basis of our projected fiscal trajectory, we forecast that the gross government debt-to-GDP ratio will stabilize at about 52.5% of GDP over the medium term.  We expect net general government debt to average about 51% of GDP during 2018-2021.

Our budgetary forecast includes expected privatization proceeds for 2019, but in the absence of additional information we don’t include the planned proceeds during 2020-2022.  If they materialize, the decline in the general government debt-to-GDP ratio will be faster.  In terms of contingent liabilities, represented predominantly by the existing stock of state guarantees to SOEs, we believe that the overhaul of the role of SOEs announced by the government is positive in several ways, beyond the use of privatization proceeds in the budgetary consolidation process.  If implemented, it would contain and reduce the contingent liability risk for the sovereign balance sheet, while likely improving productivity and efficiency of business outcomes, as well as stimulating private sector activity.

Our gross general government debt data consolidate the holdings of central government debt by other branches of state, such as public pension funds, while net general government debt excludes from gross debt the government’s liquid assets. As such, according to our sovereign rating methodology, our preferred variable of fiscal flow performance, namely change in net government debt, reflects all the components affecting the government debt position and not only the central government balance.  The general government debt stock has risen significantly over the past eight years (from 32% of GDP at year-end 2010, before the Arab Spring) due to consistently large budget deficits, which we believe point to structural weaknesses of the Moroccan economy, relative to other sovereigns at this rating level.  The government’s debt profile appears favorable: At year-end 2018, the average life of outstanding debt stood at six years and five months, and the average cost of debt was 3.9%.

The Moroccan dirham is currently pegged to a currency basket comprising 60% euros and 40% U.S. dollars.  The foreign exchange (FX) peg regime limits monetary policy flexibility, in our view.  In January 2018, the Moroccan authorities and the central bank, Bank Al Maghrib (BAM), decided to increase flexibility in the exchange rate regime by widening the band of fluctuation between the dirham and the basket of currencies to 2.5% in each direction from the previous +/- 0.3%.  In our view, the measure was implemented smoothly, especially considering earlier attempts in mid-2017, when BAM’s FX reserves shrank by more than 15% in the two months before the reform was rolled out.  We attribute the decline in FX, in part, to pressure from domestic market participants due to increasing demand for hedging instruments.  As a result, a sizable portion of these reserves was transferred onto domestic banks’ balance sheets, leading to a substantial increase in foreign-currency assets and the banking system as a whole did not lose its FX reserves.  At the end of 2018, the reserve coverage was approximately five months of current account payments.

If widening the exchange-rate fluctuation bands continues to go well, we would view further widening as positive for our overall monetary assessment on Morocco.  It would likely bolster Morocco’s external competitiveness and ability to withstand macroeconomic external shocks.  However, we anticipate that the authorities will first allow the current fluctuation bands to be tested by external financial developments, and wait for other parameters like budget and current account balance to improve before moving toward further widening of the bands.  Finally, although they are moving toward a more flexible exchange rate regime, we expect the Moroccan authorities will maintain restrictions on capital accounts in the near term.  Such restrictions will be eased gradually, to avoid any potential large-scale capital outflows.

Although the banking sector appears to be moderately capitalized, it is unlikely to pose a significant risk to the wider economy, given its current adequate regulatory Tier 1 capital ratio of almost 10.5%.  Although non-performing loans comprise a relatively high proportion of the total, at 7.7% at the end of 2018, they appear adequately provisioned.  Nonetheless, the banking sector remains vulnerable to credit concentration risks.  The banks’ expansion into Sub-Saharan Africa has been so far highly profitable, but it opens new channels of risk transmission to Morocco’s banking system.

We expect Morocco’s current account deficit to narrow this year to about 3.6% of GDP in 2019, down from about 5.3% of GDP last year, which was a result of the increase in global oil prices.  Energy-related imports increased by almost 20% during 2018. In the absence of a significant decline in external demand – which could come from a rise in global protectionism or the ongoing economic slowdown in Europe – we expect the current account deficit to narrow during the forecast horizon, as rising export capacity materializes in higher value-added industries, like automotive.  Importantly, cars have become the country’s leading export product, accounting for about 24% of total goods exports and more than 5% of GDP in 2017.  Automotive exports expanded by almost 11% during 2018, with an even larger increase recorded in aeronautics (13.9%).  Furthermore, the export of phosphate and its derivatives bottomed out and will grow in line with external demand (17% growth last year).  At the same time, despite an over 10% increase in tourist arrivals, tourism receipts grew only 1.4% in 2018.  This was likely distorted by the significant increase the previous year in transfers by Moroccan citizens working abroad, ahead of the start of the exchange rate liberalization.  Meanwhile, the development of domestic energy sources should curb growth in Morocco’s energy bill, although we do not incorporate this development into our forecast yet, since it is likely to emerge only at the end of our projection horizon.  Morocco also benefits from strong remittances.

The external liabilities position will remain large over the next three years, and we forecast narrow net external debt as a proportion of current account receipts (CARs) to be 20%-30% in 2019-2022.  We also forecast that external financing requirements will remain covered by CARs and usable reserves over this period.  (S&P 05.04)

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11.9  TURKEY:  The Economic Balance Sheet of Turkey’s Local Elections

Mustafa Sonmez posted on 5 April in Al-Monitor that the Turkish ruling party’s loss of major economic centers in local elections deprived it of major resources amid a bruising economic crisis.

The ruling Justice and Development Party’s loss of big cities in Turkey’s local elections comes with important economic repercussions for the party, known as the AKP.  The loss has stymied patronage networks that have been highly instrumental in expanding the party’s voter base, all amid an economic crisis.

No wonder the AKP has refused to concede defeat in Istanbul — the country’s economic powerhouse, which the main opposition Republican People’s Party (CHP) won by a razor-thin margin — and the capital, Ankara, forcing recounts for hundreds of ballot boxes since the 31 March vote.

The opposition’s takeover of Istanbul and Ankara ended the AKP and its predecessors’ quarter century of dominion in both cities, marking the party’s worst electoral setback since it came to power in 2002.  The loss of Istanbul has had an added impact of shock since it is the city where President Recep Tayyip Erdogan began his rise to power as mayor in 1994.

In the vote, the AKP suffered another debacle in the CHP stronghold of Izmir, the country’s third biggest city, and lost hold of Antalya, the center of Turkey’s vital tourism industry, as well as of Adana and Mersin, both major economic hubs.

Given the power balance between the central government and municipal administrations in Turkey, one may suggest that the opposition’s takeover of local dominions is not of much significance.  Since last year, Erdogan has ruled the country under an executive presidency system that concentrates power not only in the central government but in his own hands.  The system has eaten into the powers and financial resources of local administrations, among others.

Only 12% of Turkey’s 4.3 million public employees work for local administrations, whose funding depends heavily on the central government.  As much as 60% of their revenues are tax revenues transferred from the central government budget.  While central budget revenues account for 31% of the gross domestic product (GDP), the share of local administration revenues is only 5%.  In sum, local administrations enjoy relatively limited means in terms of resources and spending.

Still, the loss of local administrations, especially in provinces representing the country’s main economic hubs, is akin to the AKP losing an arm.

In 2017, Istanbul alone contributed 31% of Turkey’s GDP, followed by Ankara with 9% and Izmir with 6%.  Along with the tourism capital Antalya, which contributed more than 3%, those four regions account for nearly half of the GDP.  The figure rises to about 60% with the addition of other commercial, agricultural and tourism centers such as Adana, Mersin, Aydin and Mugla, where CHP candidates won mayoral offices in provincial capitals.  The CHP triumphed in 21 out of 81 provincial capitals, with those provinces accounting for 62% of the GDP and having some of the country’s highest incomes per capita.

While Turkey’s GDP per capita was some $10,000 in 2017, Istanbul boasted $18,000, Ankara $14,000 and Izmir about $12,000.  In contrast, in provinces where the AKP retains its rule, the income per capita is well below the national average.  Worst in terms of prosperity are the Kurdish-majority eastern and southeastern provinces, which contributed only 3% to the GDP and had a GDP per capita of some $5,000 in 2017.  The pro-Kurdish Peoples’ Democratic Party (HDP) won eight provincial capitals in those regions.

During its more than 16 years in power, the AKP has reaped the fruits of the synergy spawned by its simultaneous hold of the central government and local administrations in economic hubs.  Local dominion has enabled the party to make use of lucrative urban rents, especially in Istanbul, a sprawling metropolis of 15 million people.  Istanbul has been at the heart of the government’s economic growth policy, which focused on stimulating construction and domestic demand, and, in its heyday, helped the AKP significantly expand its voter base.

Therefore, the AKP’s loss of big cities amounts to losing huge urban rents.  During their 25 years of rule in Istanbul, the AKP and its main predecessor, the Welfare Party, used the city’s urban rents without stint, giving rise to reckless construction that blighted the city’s historical silhouette and damaged its cultural heritage.  In the process, the AKP heavily favored business people from its own fold or close to the party, spawning significant capital accumulations.

The construction-driven patronage machine will now weaken, providing less benefits to the party apparatus and curbing the means of financing cadres and supporters.  Already grappling with an economic crisis, the AKP government would be deprived of an important buttress.  This explains the party’s zealous efforts to cling to Istanbul, though the recount of spoiled votes is unlikely to close the winning margin of some 20,000 votes possessed by the CHP’s Ekrem Imamoglu.

Well aware that the loss of Istanbul and other big cities would be a disaster, Erdogan had warned ahead of the polls that voters who refuse to support the AKP would see their local administrations deprived of the central government’s financial support.  Speculation is now rife that Erdogan might enact measures that would impede or effectively paralyze opposition mayors.  This, however, appears a far-fetched scenario since the denial of funds and investment to urban centers generating the bulk of the GDP would hurt the economy itself and do nothing to reduce the country’s rampant unemployment, which, ultimately, would be blamed on the government and not local mayors.

The outcome of the local elections gives Turkey a “dual administration” of sorts.  On the local level, the CHP is on the rise, having won the country’s economic hubs despite overall support of 30%.  On the central level, the AKP holds the government but is in decline, deprived of the synergy of local administrations it had long enjoyed.

The most crucial element of this outlook is the crisis environment in which it emerges.  In an alternative environment, the CHP would also have benefited from the external economies of growth, but the Turkish economy has been contracting since the second half of 2018, with lackluster prospects for 2019 and 2020 as well.  Public investments are being put on hold and the central government’s tax revenues are set to decline, meaning that the funds to be transferred to local administrations will also shrink.  On top of it, the municipalities the CHP will take over are heavily indebted. In short, the new CHP mayors are on an uphill track.

Still, by wrestling the local administrations of big cities from an authoritarian AKP that is hell-bent on not sharing power, the CHP has achieved a remarkable success that will give it a huge motivational boost in the democracy struggle.  The local administrations of big cities — with their wide-ranging authorities and responsibilities, from public transport and water and gas supply to construction permits and urban planning — are an important position in this struggle.  The main opposition now has a chance to use this position to build a model of the Turkey it envisions and to rally further popular support to challenge the central government.

Mustafa Sonmez is a Turkish economist and writer.  He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question.  (Al-Monitor 05.04)

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11.10  CYPRUS: Fitch Affirms Cyprus Ratings at BBB- Maintaining a Stable Outlook

On 15 April, Fitch Ratings affirmed Cyprus’ Long-Term Foreign-Currency Issuer Default Rating (IDR) at `BBB-` maintaining with a Stable Outlook.  Fitch noted that Cyprus’ ratings balance per capita GDP and governance indicators in line with the ‘A’ rather than the `BBB` median, a broad-based economic recovery and a substantial budget surplus with the crisis legacy of high public debt and non-performing exposures (NPEs) in the banking sector.

According to Fitch, the buoyant cyclical recovery of the economy continued in 2018, significantly exceeding Eurozone dynamics, with a GDP growth of 3.9% driven primarily by domestic demand, including large foreign-financed investment projects in real estate and tourism, and robust private consumption.

Fitch forecasts growth to slow in 2019 and 2020 to 3.5% and 2.8%, respectively, as the spare capacity in the economy has been gradually absorbed and the external environment becomes less supportive.  “The combination of prudent fiscal policy stance and buoyant cyclical recovery resulted in a further improvement in the budget balance,” Fitch said, adding the general government surplus, excluding one-off items, reached 3.2% of GDP in 2018 from 1.8% in 2017 and 0.3% in 2016.

“Cyprus has the largest budget surplus among Eurozone members and the surplus is also significant compared with a category median of a 2.3% deficit,” it added, forecasting that the budget surplus is forecast to remain above 2% of GDP in 2019 and 2020, well above the requirements of the EU fiscal rule.  The agency also noted that Cyprus’ gross general government debt (GGGD) is very high at 102.5% of GDP.

Cyprus’ debt, is on a firm downward trajectory, interrupted in 2018 by an increase (by €3.19 billion, equal to 15.5% of GDP) due to transactions related to the sale of Cyprus Cooperative Bank (CCB) to Hellenic Bank (HB), which was partly offset by a €800 million early debt repayment in December 2018.  “According to our debt dynamics simulation, although the primary surpluses are expected to decline, they will remain substantial, and combined with robust growth and contained nominal effective interest rates will reduce GGGD/GDP to 70% of GDP by 2026.”

Fitch said that court rulings on public sector wage cuts could lead to lower budget surpluses until 2022 but would not undermine the downward debt trajectory.

On the banking system, Fitch noted that following the completion of the Co-op transaction Fitch upgraded HB to `B+` from `B` in March 2019, but the Banking System Indicator (BSI), the weighted average Viability Rating of institutions in the highly concentrated banking sector, remains unchanged at `b`.  The ratio of NPEs to total loans decreased substantially from 43.7% at end-2017 to 32% at end-November 2018, but still remains among the highest in the EU.  The NPE decline in 2018 was predominantly driven by two large transactions: the transfer into a run-off entity of the Co-op’s €5.7 billion NPEs and securitization by Bank of Cyprus (BoC) of €2.7 billion gross NPEs.  Total banking sector assets were equal to 290% of GDP at the end of 3Q18.  “Addressing the legacy issues in the banking sector remains an economic policy priority,” Fitch said.

However, the agency said private sector debt and non-performing exposures remain high at 154% (excluding special purpose entities; SPEs) and 55% of GDP in Q3/18, respectively, and constrain credit growth, with the recent decline in the indebtedness stemming mostly from debt-to-asset swaps, loan write-offs and high nominal GDP growth rather than loan repayment.

On the government’s current account deficit, Fitch said the shortfall widened during the cyclical recovery as strengthening domestic demand, especially in the construction sector, has led to strong import growth.  The agency estimates an average 8.5% of GDP deficit over 2017-2019, compared with the current `BBB` median of 1.8%, pointing out that when excluding SPEs including shipping and financial companies that materially distort external statistics, the current account deficit decreases substantially, according to the Central Bank of Cyprus.

Furthermore, Fitch said Cyprus’ financing flexibility has improved substantially since the country exited the macroeconomic adjustment program in March 2016, with improved access to capital markets by issuing regular Eurobonds with increasing maturities, most recently a 15-year bond with a 2.75% yield in February 2019.  “The sovereign has a cash buffer that covers more than the government`s medium-term debt management target of prefunding the next nine months of gross financing needs.”

According to Fitch, further developments such as materially reduced contingent liabilities to the sovereign stemming from the banking sector, for example from declining NPEs, marked reduction in the GGGD/GDP ratio and reduced vulnerability to external shocks, stemming from reduced reliance on non-resident deposits may lead to positive rating actions.  Future developments that may, individually or collectively, lead to positive rating action include heightened risks in the banking sector, for example from deterioration in asset quality; and stalling of the decline in the government debt-to-GDP ratio, for example due to deterioration of budget balances, weak growth or materialization of contingent liabilities.  (Fitch 15.04)

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