Fortnightly, 18 May 2016

Fortnightly, 18 May 2016

May 18, 2016


18 May 2016
10 Iyar 5776
11 Shaban 1437




1.1  PM Netanyahu & Finance Minister Agree On Two-Year Budget
1.2  Israel Military Industries Privatization to Proceed


2.1  Ontario Delegation Visits Israel
2.2  Zooz Closes $24 Million Investment Round
2.3  Simplee Raises $20 Million from Social Capital and American Express Ventures
2.4  OurCrowd Releases New Social Investor App At Finovate Spring 2016
2.5  E8 Storage Raises $12 Million Series B to Create a New Standard for Storage
2.6  Avanan Raises $14.9 Million Series A Financing Round
2.7  illusive networks Raises $3 Million
2.8  HP Launches Investment Arm in US & Israel


3.1  Cubic Showcases Integrated Solutions at SOFEX 2016
3.2  Oshkosh Defense Showcases Highly Transportable JLTV at SOFEX
3.3  Omeros Exclusive Middle East Distribution Agreement for OMIDRIA
3.4  UAE Cities Named Among World’s Fastest Growing Retail Markets
3.5  Do it Best Corp Plans Debut & Expansion in Saudi Arabia


4.1  Renewable Sources to Constitute 20% of Jordan’s Energy Mix in 2020


5.1  Lebanon’s Balance of Payments Deficit $644.2 Million in First Quarter
5.2  Lebanon’s Number of Registered Cars Improved 4.29% by April
5.3  Figures Show Slight Decline in Jordan’s Inflation Rate
5.4  Jordan Ranks First Among Arab Countries in Open Budget Index
5.5  Jordan to Acquire Raytheon’s TOW Missiles

♦♦Arabian Gulf

5.6  GCC Faces Teacher Shortage as Student Numbers Grow
5.7  Qatar’s Population Climbs 9% to 2.5 Million
5.8  Qatar’s HMC Said to Open Seven New Hospitals by 2018
5.9  IMF Says Oman’s Growth to Slow Further Despite $4.5 Billion Savings
5.10  Oman to Build Six Water & Electricity Projects By 2019
5.11  Saudi’s King Salman Replaces Oil Minister Ali Al-Naimi in Cabinet Shuffle

♦♦North Africa

5.12  Egypt’s Urban Consumer Inflation Hits 10.3% in April
5.13  Egypt’s Jobless Rate Falls To 12.7% in First Quarter of 2016
5.14  Ministry Says Egypt to Launch 4G Mobile Network in 2 Months


6.1  Ankara Vows to Maintain Fiscal Discipline After Budget Posts Surplus in April
6.2  Greek Deflation Persists For Another Month
6.3  Athens to Vote on Multi-Bill of Remaining Bailout Measures



7.1  Israel’s Jewish Population Numbers Over 6,000,000 Seven Decades After the Holocaust
7.2  Israel’s Population Passes 8.5 Million Mark


7.3  Jordanian Independence Day
7.4  Turkey Marks Ataturk Day on 19 May


8.1  Israeli App Uses IDF Technology to Detect Skin Cancer
8.2  Pluristem Awarded $3.3 Million Grant by Israeli Government
8.3  MarginProbe Preserves More Breast Tissue & Reduces Need for Additional Surgery
8.4  Kitov Reports KIT-302 Study Successfully Meets U.S. FDA Standards
8.5  Chief Scientist Approves $13.7M for Kadimastem in 2016
8.6  Evogene & Marrone Bio Disclose Positive Results in Insect Control Collaboration
8.7  BioLineRx & MaRS Innovation Sign Framework Collaboration Agreement
8.8  Arkin Holdings & Primera Capital Lead Investment in BioSight for Leukemia
8.9  Lycored’s Cardiomato Named Winner at 2016 NutraIngredients Awards
8.10  ReWalk Collaboration with Harvard University’s Wyss Institute Announced


9.1  CallVU’s New Mobile Digital Engagement Platform for Financial Institutes
9.2  WhiteSource/Checkmarx Testing Solution for Proprietary & Open Source Code
9.3  Asiasoft Solutions & Stratoscale to Bring Cloud Capabilities to the Data Center
9.4  Utab’s Algorithm Enhances Music Information Retrieval
9.5  Silicom Awarded Design Win from Tier-1 Network Monitoring Player
9.6  Earnix Version 8 to Introduce R Integration and Machine Learning Capabilities
9.7  New mobiliBuy App Ushers in Shopping at the “Speed of Selfies”
9.8  RADWIN Boosts Capacity for Public Safety and Video Surveillance
9.9  SECDO Named a 2016 Gartner “Cool Vendor” in Security for Technology
9.10  2breathe Unveils First Smart Device to Induce Sleep
9.11  Magal Wins $10 Million in Orders to Secure Critical Power Utility Sites
9.12  Stratasys Launches Bold 3D Printing Software Strategy – GrabCAD Print
9.13  MinuteLab Raises $2 Million from Glilot Capital Partners
9.14  Saguna Networks Named a “Cool Vendor” in Report by Gartner
9.15  CellMining Selected as a “Cool Vendor” by Gartner


10.1  CPI Rises by 0.4% in April
10.2  Israel Economy Grows 0.8% in First Quarter
10.3  Israel’s Exports Fall by 22% During 2016


11.1  ISRAEL: Taub Center Says Israeli Wages Static for Fifteen Years
11.2  JORDAN: Changes to Jordan’s Constitution Raise Concerns
11.3  UAE: Truck Market Sales Set to Grow at 8% CAGR till 2021
11.4  LIBYA: The Story Behind the General Who Will Likely Shape Libya’s Future
11.5  TUNISIA: Is Homophobia at All-Time High in Tunisia?
11.6  EGYPT: Arab Republic of Egypt Outlook Revised To Negative; ‘B-/B’ Ratings Affirmed
11.7  TURKEY: Outlook Revised To Stable; ‘BB+/B’ Ratings Affirmed
11.8  TURKEY: TURKEY: Erdogan’s Secret Economic Weapon
11.9  TURKEY: Erdogan After Davutoglu
11.10  TURKEY: Turkish Military Faces Secularism Test


1.1  PM Netanyahu & Finance Minister Agree On Two-Year Budget

On 8 May, a two-year budget for Israel in 2017-2018 was finally agreed in a second meeting in Jerusalem between Prime Minister Netanyahu and Minister of Finance Kahlon.  Kahlon, who initially objected to a two-year budget, accepted after he was promised that the 2018 budget could be changed in November 2017, leaving direction of Israeli economic policy in his hands.  The Governor of the Bank of Israel reiterated her position at the meeting that she did not oppose a two-year budget, provided that measures were taken to ensure its durability in the face of unexpected events.

Representatives of the budget department reiterated their opposition to a two-year budget, due to the difficulty in predicting revenue a year in advance.  It was also argued that the government’s ability to make spending decisions will be even more limited than in the past, due to the use of the numerator – a restraining mechanism, which on the one hand prevents the government from assuming uncovered liabilities, while on the other hand reduces flexibility in budgetary decision-making when there is an urgent need, for example a security or economic crisis.

It was agreed at the meeting to establish an assessment and control mechanism at the end of 2017 that would facilitate changes in the event of a deviation from the revenue forecast.  Definition of the mechanism’s authority will be formulated in the coming days by joint Ministry of Finance-Prime Minister’s Office work teams.  (Globes 08.05)

Back to Table of Contents

1.2  Israel Military Industries Privatization to Proceed

The Government Companies Authority will order a third valuation and ask the Antitrust Authority to explore the potential sale to Elbit.  The Ministry of Finance and the Government Companies Authority will continue the process of privatizing Israel Military Industries, now known as IMI Systems, and will order another valuation of the company.  Elbit is the only company left in the bidding for IMI.  In addition, the Government Companies Authority will ask the Antitrust Authority to explore the consequences of Elbit acquiring IMI.  In the past, sources involved in the matter warned of the effect the purchase would have on the domestic defense market the creation of a new monopoly.  (Globes 08.05)

Back to Table of Contents


2.1  Ontario Delegation Visits Israel

The Premier of Ontario, Kathleen Wynne, arrived in Israel at the head of a delegation of over 130 Canadian politicians and business leaders on 15 May.  Included in the delegation is Ontario Minister of Health and Long-Term Care Eric Hoskins and Ontario Minister of and Development Reza Moridi, amongst others.  Ontario is the most populous province in Canada, and is also home to Toronto, the most populous city in Canada. Ten of the world’s largest tech companies have their research and development centers in the province, and the information technology sector provides over 250,000 jobs.  Ontario is represented in Israel by Atid, EDI, who coordinated important aspects of the Premier’s visit.

Back to Table of Contents

2.2  Zooz Closes $24 Million Investment Round

Zooz closed a $24 million new funding round, led by Target Global Ventures, and included Fang Fund, iAngels, Kreos Capital and existing investors Blumberg Capital, lool ventures, Rhodium, Claltech (Access Industries’ Israeli tech vehicle), XSeed Capital, CampOne Ventures and angel Eilon Tirosh.  Zooz will use the funding to accelerate its growth, develop new products, open new markets, and increase its presence in existing markets.  Zooz has grown considerably since its last round in July 2014 and has opened offices in London, Berlin and San Francisco.  The new funding will help the company to continue building its global customer base, enhancing and evolving its products which serve some of the world’s leading companies.

In today’s age of global commerce, relying on a single payments provider can lead to high international credit card fees and decline rates.  However, integrating with multiple solutions has always been difficult, expensive and time-consuming.  The Zooz platform overcomes these obstacles by connecting merchants to multiple financial and technological entities and payment methods, and Smart Routing each payment to the most appropriate provider for that transaction.  Zooz’s merchant customers also benefit from its Insights offering, which provides intelligent analysis based on customer transactional data.

Ra’anana’s Zooz provides a payments platform designed to help merchants maximize their payments performance.  It offers the flexibility to connect with multiple financial institutions, seamlessly integrate acquirers, e-wallets, alternative payment methods, fraud management and other third-party services, and intelligently route transactions through the entire payment process.  Zooz consolidates and analyzes all payment data to provide valuable information to merchants, enabling them to personalize customer experiences online and in-store.  (Zooz 03.05)

Back to Table of Contents

2.3  Simplee Raises $20 Million from Social Capital and American Express Ventures

Social Capital and American Express Ventures backed Simplee, a startup that aims to facilitate medical bill payments, in its latest $20 million funding round.  Simplee says it works with over 900 hospitals and physicians and helps process “over $1 billion in annual payments” in the U.S.  83North and Heritage Group also participated in the investment, which including its seed round brings funding up to at least $37.8 million for Simplee.

Tel Aviv’s Simplee is helping healthcare providers engage with the 21st century patient on financial matters.  Founded in 2010, their mission is to make healthcare consumer friendly.  They offer providers a financial engagement platform that engages patients with a unified experience across the healthcare journey.  From pre-service to billing to financing, the company focuses on building rapid trust and paving a path to payment (ultimately loyalty).  Their customers enjoy higher patient satisfaction, lower costs and better payment success.  (Simplee 10.05)

Back to Table of Contents

2.4  OurCrowd Releases New Social Investor App at Finovate Spring 2016

OurCrowd announced a significant expansion of its leading global equity crowdfunding platform with its new social investor app at FinovateSpring 2016 in San Jose, with a demo alongside some of the world’s top Fintech startups.  OurCrowd’s new app gives investors the ability to make informed investment decisions ranging from $10,000 to $10M right from their mobile phone.  Private deal rooms will harness the power of the crowd, providing access to OurCrowd’s 12,000-strong (and growing) member community to collaborate and receive input on investments from friends and experts in their social networks.

Jerusalem’s OurCrowd is a leading equity crowdfunding platform for investors from around the world to invest in global startups.  OurCrowd vets and selects opportunities, invests its own capital, and brings companies to its accredited membership of global investors.  OurCrowd provides post-investment support to its portfolio companies, assigning industry experts as mentors and in some cases takes board seats.  OurCrowd has raised over $220 million for its 100 portfolio companies, generating six exits in three years.  (OurCrowd 11.05)

Back to Table of Contents

2.5  E8 Storage Raises $12 Million Series B to Create a New Standard for Storage

E8 Storage announced a $12 million Series B financing round led by Accel, with participation from existing investors Magma Venture Partners and Vertex Ventures.  The investment will help the company to launch its next-generation flash storage with a rack-scale architecture for the enterprise and software-defined cloud.

As new generations of high-performance enterprise applications come to market, businesses are trying to find ways to improve the performance and latency of their data centers.  This has led to the introduction of NVMe (Non-Volatile Memory Express), a new standard of flash storage which is significantly faster than previous generations of flash storage.  NVMe has the potential to unlock massive performance improvements and enable a new generation of applications to emerge.  However, existing flash array architectures were not designed with NVMe devices in mind.  Because of this, enterprises are missing out on NVMe’s huge potential to make high-performance applications run much cheaper and faster.

As the first shared, software-defined NVMe solution in the industry, E8 Storage’s rack-scale flash architecture has been designed to maximize the performance of NVMe for high-performance enterprise applications.  The solution performs 10x faster than existing all-flash arrays with lower total costs. In live beta tests, E8’s appliance has delivered unprecedented performance (10M IOPS) and latency on par with local NVMe flash (100us/50us of read/write).  E8 combines these performance metrics with the benefits of software-based centralized storage, making it an ideal choice for use in high-performance enterprise applications such as real-time market data analytics, hyper-scale data centers and high-performance computing.

Tel Aviv’s E8 Storage provides the next generation of flash storage with a rack-scale architecture for the enterprise and software-defined cloud, delivering 10 times the performance for half the cost of existing storage products, while using only off-the-shelf hardware.  E8 Storage’s appliance eliminates storage need projections, is easily upgradeable and expandable, enables converged networking, and increases SSD utilization to over 90%.  With E8 Storage, data centers can enjoy unprecedented storage performance density and scale, delivering on the promise of software-defined storage without compromising on reliability and availability.  (E8 Storage 10.05)

Back to Table of Contents

2.6  Avanan Raises $14.9 Million Series A Financing Round

Avanan has raised $14.9 million in Series A financing. Greenfield Cities Holdings, L.P. (GFC), a TPG Growth portfolio company, led the round, with participation from both of Avanan’s existing investors, Magma VC and StageOne Ventures.  The round brings the company’s total capital raised to $16.4 million and will allow Avanan to support its rapidly growing customer base and the fast pace of market adoption.

Avanan’s Cloud Security Platform is a new way to secure the cloud. With a click of a button, enterprises can protect Amazon AWS, Box, Google, Office 365, or any other Software-as-a-Service (SaaS) or Infrastructure-as-a-Service (IaaS) product, using preconfigured cloud-based versions of security technology from more than 60 leading vendors such as Check Point, Symantec, McAfee, Palo Alto Networks, Sophos and Kaspersky.

Avanan protects data in the cloud with the same industry-leading security one trusts in their datacenter.  The cloud-based platform is completely out-of-band, requires no proxy, and can be deployed in just 10 minutes.  It provides seamless policy governance across users and data in the cloud.  Company headquarters are in New York City with R&D in Tel-Aviv.  Avanan was founded in 2014 by the team that led ForeScout’s successful pivot to Network Access Control.  (Avanan 17.05)

Back to Table of Contents

2.7  illusive networks Raises $3 Million

Israeli cyber security company illusive networks announced extending the Series B funding by a further $3 million to $25 million.  The investors are New Enterprise Associates (NEA), Bessemer Venture Partners, Cisco Investments, Marker LLC, Citi Ventures, and Eric Schmidt’s Innovation Endeavors.  The company is at the forefront of deception technology.  illusive networks’ solutions are deployed across leading financial institutions, insurance, retailers, law firms, healthcare providers, and energy and telecommunication companies in both the US and EMEA.  illusive networks’ detection by deception technology has identified numerous advanced attacks that went undetected by other solutions, thereby securing its customers’ networks from Advanced Persistent Threats (APT).

Launched in June 2015, Tel Aviv’s illusive networks raised a $5 million Series A round from cybersecurity foundry Team8.  The $25 million Series B round is aimed at further fueling the startup’s global expansion through significant expansions of sales and marketing, as well as expansion of engineering and support teams for the company’s patent-pending deception technology.  (illusive networks 17.05)

Back to Table of Contents

2.8  HP Launches Investment Arm in US & Israel

With offices in Palo Alto and Tel Aviv, HP Tech Ventures will invest in 3D printing, virtual reality, IoT, artificial intelligence, smart machines and more.  US technology and printing giant HP is launching HP Tech Ventures, a corporate investment arm that will develop cooperation and investments in early stage technology companies.  The business of HP Tech Ventures will focus on strategic investments and cooperation in areas such as 3D printing, virtual reality, hypermobility, the Internet of Things (IoT), artificial intelligence, and smart machines.  HP will try to provide the startups in which it invests with added value by leveraging its infrastructure and network of partners in development, production, and distribution channels.  (Globes 10.05)

Back to Table of Contents


3.1  Cubic Showcases Integrated Solutions at SOFEX 2016

San Diego’s Cubic Global Defense (CGD), a business unit of Cubic Corporation (NYSE: CUB), exhibited various training and Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) products and capabilities at Special Operations Forces Exhibition and Conference (SOFEX) held in Amman, Jordan, from 9 – 12 May.  Founded in 1996, the biennial event gathers Special Operations and homeland security experts from around the world to discuss a range of topics related to current counter-terrorism and homeland security issues.  For the first time, Cubic displayed its comprehensive C4ISR products and solutions, including technologies from the company’s newly acquired subsidiaries: DTECH LABS (DTECH), GATR Technologies (GATR) and TeraLogics.  These integrated capabilities include “internet on-the-move,” end-to-end Full Motion Video (FMV) management and satellite-based communications operating in a network-centric environment that can interact with virtually all modern Combat Net Radio systems.  Cubic also demonstrated mission readiness solutions – from training to tactical operations – including tactical vehicle laser engagement training and advanced special operations skills for defense and security organizations.  (Cubic Corporation 04.05)

Back to Table of Contents

3.2  Oshkosh Defense Showcases Highly Transportable JLTV at SOFEX

Wisconsin’s Oshkosh Defense featured its Joint Light Tactical Vehicle (JLTV) at the Special Operations Forces Exhibition (SOFEX), which took place 10 – 12 May in Amman, Jordan.  The Oshkosh JLTV is the next-generation light tactical wheeled vehicle with an unprecedented combination of protection, mobility, transportability, and net-ready systems integration that delivers the network capability of a mobile command center.  Weighing less than 6,350 kg at curb weight, the JLTV maintains MRAP levels of protection.  The JLTV uses the TAK-4i intelligent independent suspension system, the next-generation of Oshkosh’s advanced TAK-4 independent suspension system, to deliver 25% improved wheel travel while providing improved ride quality for soldiers.

Based on the Oshkosh Light Combat Tactical All-Terrain Vehicle (L-ATV) platform, the Oshkosh JLTV is the U.S. Department of Defense’s choice to replace the U.S. fleet of up-armored HMMWV for the Army and Marine Corps.  The Oshkosh JLTV has the latest in automotive technologies, as well as the Oshkosh Core1080 crew protection system, which is an occupant-centric, comprehensive systems engineering approach that considers every inch of the vehicle with respect to crew protection in case of blast events.  (Oshkosh Defense 09.05)

Back to Table of Contents

3.3  Omeros Exclusive Middle East Distribution Agreement for OMIDRIA

Seattle’s Omeros Corporation, a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system, announced entry into an exclusive supply and distribution agreement for the sale of OMIDRIA (phenylephrine and ketorolac injection) 1% / 0.3% in Saudi Arabia, the United Arab Emirates and other countries in the Middle East with ITROM Trading Drug Store (ITROM).  ITROM is Dubai-based and an internationally recognized pharmaceutical marketing and distribution company specializing in ophthalmology.  Under the agreement, ITROM will be responsible for obtaining marketing authorizations for OMIDRIA within the licensed territory and for marketing, selling and distributing product supplied by Omeros.  Existing ophthalmology medical sales representatives employed by ITROM are expected to be reinforced with additional medical sales representatives that will be dedicated to OMIDRIA.  (Omeros 10.05)

Back to Table of Contents

3.4  UAE Cities Named Among World’s Fastest Growing Retail Markets

Abu Dhabi and Dubai have together ranked among the top 20 of the most active cities for shopping center development, according to CBRE’s latest Global Shopping Center Development report.  The cities currently have a total of 626,887 m2 of total retail space under construction, an 11% rise on last year’s figures.  Dubai accounts for 361,127 m2 and Abu Dhabi for 265,760 m2 of retail space.  In the global rankings for shopping centers delivered over the last year, Dubai, along with Muscat, ranked in the top 30, with Muscat leading the way for the GCC region.

According to the 2016 report, the Middle East retail market remains a very attractive proposition for international brands.  Dubai ranks second for international brand presence, with high per capita incomes, significant growth potential, and a high spending consumer base.  Within the Middle East, the UAE’s development pipeline is significant with a number of major malls set out for delivery over the next three years.

The report also said that Doha is currently witnessing a transformation of its retail sector amidst an ongoing construction boom, which could see around 1.2 million m2 GLA delivered over the next three years alone, with the government striving to modernize the city in the build up to the 2022 Qatar World Cup.  (AB 09.05)

Back to Table of Contents

3.5  Do it Best Corp Plans Debut & Expansion in Saudi Arabia

Indiana’s Do it Best Corp is set to make its debut in Saudi Arabia under an agreement with Attken International, part of Saudi Arabia-based Albawardi Group.  The company will open the first Attken Do It Best in the eastern province of Dammam at the end of May.  As part of the company’s expansion programs, Attken Do It Best is planning to open three stores per year throughout Saudi Arabia.  The company said the opening of the new Attken Do It Best is “a big step in the home improvement industry” in Saudi Arabia.  It will display over 40,000 products and will encourage customers to follow the concept of “Do It Yourself” by providing counselling and advice from its experts, engineers and technicians who will be present at the store.  (AB 07.05)

Back to Table of Contents


4.1  Renewable Sources to Constitute 20% of Jordan’s Energy Mix in 2020

Jordan has attracted solar and wind energy projects worth $1.6 billion at a total capacity of 1,000 megawatts (MW), of which 500 MW will be connected to the grid by the end of this year, Prime Minister Abdullah Ensour announced.  The premier made his remarks at the opening of the Jordan International Energy Summit, where he said the renewable energy contribution to the overall power generation is expected to reach 20% by 2020.  It currently ranges from 3-4%, according to official figures.

At the event, Jordan signed several agreements including one with Algeria in the field of oil, gas and exchange of expertise and training in addition to another between the National Electric Power Company (NEPCO) and the Jerusalem District Electricity Company on providing electricity to Jericho.  Another agreement was signed with Al Manaseer Group to explore copper in the south of Jordan.

Under the deal with memo signed with Algeria, the country is expected to start providing Jordan with liquefied natural gas and liquefied petroleum gas as of September this year.  Jordan also signed an agreement with the Jordanian-Egyptian Fajr for Natural Gas Transmission and Supply to provide industries in Jordan with natural gas.

According to Ensour, Jordan will produce 48% of its electricity using nuclear power by 2025 once the project is implemented in cooperation with Russia’s Rosatom.  The premier added that the country’s first oil shale fueled power plant at a total capacity of 470mw and a total investment of $2.2 billion will be ready by 2019, thus reducing energy costs.  The available reserve of oil shale in Jordan, according to official estimates, is around 70 billion tonnes.  (JT 17.05)

Back to Table of Contents


5.1  Lebanon’s Balance of Payments Deficit $644.2 Million in First Quarter

Lebanon’s Balance of Payments (BoP) revealed a deficit of $644.2m in Q1/16, compared to a higher deficit of $850.2m in the same period last year.  In spite of the relative improvement, the overall weakening in European and regional economies might be still weighing on the remittances and Foreign Direct Investments (FDIs) to Lebanon.  Up until March, Net Foreign Assets (NFA) of the Central Bank (BDL) dropped by $407.1m, while that of commercial banks fell by $237.1m.  In March alone, Lebanon’s BoP also registered a deficit of $287.9m, compared to a surplus of $362.6m in February 2016.  (Blom 13.05)

Back to Table of Contents

5.2  Lebanon’s Number of Registered Cars Improved 4.29% by April

According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars improved by 4.29% year-on-year (y-o-y) to number 11,909 cars by April 2016.  This was triggered by the 3.33% yearly increase in the number of newly registered passenger cars to 11,099 and the 19.47% rise in newly registered commercial vehicles to 810.  Japanese cars were the most demanded cars in Lebanon in the first 4 months of 2016, grasping a 37.3% share of total passenger cars.  Korean cars came second with a market share of 34.7% by April 2016, while European cars maintained their third rank with a market share of 21.89%.  In terms of brands, Kia kept its largest share of newly registered passenger cars (20.09%), followed by a 14.42% stake for Hyundai.  Toyota and Nissan came next in the ranking, as Toyota held 14.04% of newly registered passenger cars, while Nissan held 9.91%.  (BlomInvest 13.05)

Back to Table of Contents

5.3  Figures Show Slight Decline in Jordan’s Inflation Rate

Jordan’s inflation rate in the first four months of 2016 went down by 1.2%, compared to the same period of 2015, the Department of Statistics (DoS) announced.  This decline was attributed to the drop in consumer prices in main item groups including transportation, meat and poultry, fuel and lightening, vegetables and fruits and nuts.  An increase occurred in prices of items including rents, culture, recreation, clothes and education.  The statistics also revealed that average prices went down by 1.2% in April 2016, compared to the same month of 2015.  On monthly basis, the average consumer prices went up by 0.8% in April 2016 compared to the previous month, the report said.  (Ammon 12.05)

Back to Table of Contents

5.4  Jordan Ranks First Among Arab Countries in Open Budget Index

Jordan scored 55 out of 100 in the 2015 Open Budget Index (OBI), according to the results of the International Budget Partnership organization (IBP) Open Budget Survey.  The OBI assigns a score to each country based on the information it makes available to the public throughout the budget process.

Jordan’s score was 10% higher than the average figure of the index which covered 102 countries.  The Kingdom ranked first among Arab countries, followed by Tunisia, Morocco and Yemen which scored 42, 38 and 34 respectively.  The country’s 2015 OBI is very much as its 2012 result, when it scored two notches higher, according to the survey results carried on the IBP website.

In terms of budget transparency, the survey’s results said the government provides the public with “limited” budget information.  With regard to public participation, the survey said the government is “weak” in providing the public with opportunities to engage in the budget process.  In its recommendations, the survey said Jordan should prioritize the following actions to improve budget transparency.  These include producing and publishing a mid-year budget review and increasing the comprehensiveness of the executive budget proposal by, for example, presenting more details on macro-economic forecasts and on issues beyond the core budget.  It also suggested increasing the comprehensiveness of the end of year report by, for example, presenting more details on planned versus actual performance.  (JT 15.05)

Back to Table of Contents

5.5  Jordan to Acquire Raytheon’s TOW Missiles

Jordan’s Ministry of Defense signed an agreement with the U.S. Department of Defense to acquire tube-launched, optically tracked, wireless-guided, or TOW, missiles made by Raytheon Company.  Raytheon will begin deliveries this year.  TOW is in service in more than 40 international armed forces and integrated on more than 15,000 ground, vehicle and helicopter platforms worldwide.  Raytheon has delivered more than 690,000 TOW missiles to U.S. and allied warfighters. The TOW weapon system will be in service with the U.S. military beyond 2025.  (Raytheon 10.05)

Back to Table of Contents

►►Arabian Gulf

5.6  GCC Faces Teacher Shortage as Student Numbers Grow

The total number of students in the GCC education sector is projected to reach 15 million in 2020 but the region faces a shortage of teachers and an overdependence on expats.  Alpen Capital said the number is set to increase from an estimated 12.6 million in 2015 as an expanding base of school and college age population is likely to drive the growth.  The number of students at private schools is projected to grow at a 5.1% compound annual growth rate (CAGR) to 2020 while enrolments at public schools are anticipated to increase at an annual average of 2.6%.

Alpen’s report said Saudi Arabia will continue to dominate the education market in the GCC by 2020.  From an estimated 9.2 million in 2015, the total number of students in Saudi is projected to grow at an annualized rate of 3.5% to 11 million in 2020.  In terms of annualized growth from 2015 to 2020, the number of students in Oman, Qatar, and the UAE are projected to grow faster than the other member nations, it added.  The GCC governments’ investments coupled with private sector participation have resulted in a spate of projects in the region’s education sector.  More than 500 educational projects collectively worth above $50 billion are under various stages of development across the member nations.

The GCC population is projected to reach close to 60 million in 2020, of which, the number of people below 25 years of age is likely to surpass 22 million.  A large and increasing base of school and college going population is fostering the demand for education in the region.  Furthermore, a diversified expatriate community is increasing the demand for international curricula, thus attracting several international schools and colleges to the region.  (AB 07.05)

Back to Table of Contents

5.7  Qatar’s Population Climbs 9% to 2.5 Million

Qatar’s population grew another 216,000 people last month, reaching a total of 2,559,267 residents as of 30 April 2016, a 9% jump from April 2015, according to figures released by the Ministry of Development, Planning and Statistics (MDPS).  There was a 1.27% increase in the population of 32,000 from the end of March this year, most likely due to the late return of residents abroad on spring break.  Generally, May and November have shown to be the most populated months for Qatar.  The number of residents is likely to increase again this month before dropping for the summer, as residents leave for good while others leave for holiday.  The population drop is expected to drop around Eid al-Fitr in early July.  Despite recent reports of numerous job layoffs, some sectors in Qatar are still bringing in people to the country, notably employees in the construction and hospitality sectors, as hotels and projects continue to be developed in preparation for hosting the World Cup in 2022.  (MDPS 02.05)

Back to Table of Contents

5.8  Qatar’s HMC Said to Open Seven New Hospitals by 2018

Hamad Medical Corporation (HMC) has announced plans to open seven new hospitals in Qatar over the next 18 months, creating more than 1,100 hospital beds.  In the biggest boost to hospital bed numbers in Qatar in recent years, the equivalent of almost 60 new beds each month will be created in specialties where there is high demand for services, a statement said.  The seven hospitals include a 65-bed Communicable Diseases Centre, a Women’s Wellness and Research Centre with capacity for up to 15,000 births per year, an Ambulatory Care Centre, a Qatar Rehabilitation Institute with 193 beds, and three new Industrial Area Hospitals in Doha, Al Khor and Mesaieed Industrial Areas – each with 112 beds.  (HMC 06.05)

Back to Table of Contents

5.9  IMF Says Oman’s Growth to Slow Further Despite $4.5 Billion Savings

Oman’s economic growth is projected to slow further this year despite authorities taking “bold measures” to limit the impact of declining oil prices, according to the International Monetary Fund (IMF).  It applauded the government’s action in cutting spending on wages and benefits, subsidies, defense and capital investment, saying these measures are projected to reduce expenditures in 2016 by $4.5 billion, 8% of GDP.  However, the IMF added that these savings will be largely offset by the projected drop in hydrocarbon revenues, resulting in a deficit broadly unchanged at 17.1% of GDP.

The IMF said the sustained impact of the cost-cutting measures, combined with the planned increase in corporate income tax from 2017 and the introduction of VAT in 2018, will narrow the fiscal deficit over the medium-term.  The current account deficit, estimated at 18.7% of GDP in 2015, is also expected to persist, though declining, through the medium-term.  (AB 10.05)

Back to Table of Contents

5.10  Oman to Build Six Water & Electricity Projects By 2019

Six water and electricity projects, including four desalination schemes, are set to open in Oman by 2019 and 2020.  The projects, headed by Oman Power and Water Procurement (OPWP) Company, include the Salalah Independent Water Plant (IWP), located opposite the existing Salalah IWPP, which will have a capacity of 100,000 cubic meters per day (m3/d), the Al Sharqiyah IWP at Al Ash’kharah, which has a capacity of 80,000 m3/d, the Al Duqm IWP with a capacity of 60,000 m3/d, and the Khasab IWP with a capacity of 16,000 m3/d.

According to OPWP, renewable energy projects such as solar energy projects and wind farms are expected to complement gas-fired power plants in the country.  The company is set to sign a deal for two gas-fired power plants in Ibti and Sohar Industrial Port with Mitsui & Co, ACWA Power and Dhofar International for Development and Investment Holding.  It will purchase the full production of the two plants, which have an investment cost of $2.3 billion (RO885 million), for the duration of 15 years.  OPWP will also sign a power purchase agreement with Rural Area Electricity Company (RAEC) for a wind-operated power plant in Dhofar, which will produce 50 megawatts per year. It is expected to start operations in 2017.  In addition, it will implement two independent water desalination projects in Salalah and southern Al Sharqiyah.  (AB 15.05)

Back to Table of Contents

5.11  Saudi’s King Salman Replaces Oil Minister Ali Al-Naimi in Cabinet Shuffle

On 7 May, Saudi Arabia’s King Salman replaced his veteran oil minister and restructured some big ministries in a major reshuffle apparently intended to support a recently unveiled wide-ranging economic reform program.  The most outstanding move was the creation of a new Energy, Industry and Natural Resources Ministry under Khaled al-Falih, chairman of the state oil company Aramco.  He replaces the 80-year-old oil minister Ali al-Naimi, in charge of energy policy at the world’s biggest oil exporter since 1995.

Major changes were also made to the economic leadership, with Majed al-Qusaibi named head of the new Commerce and Investment Ministry, and Ahmed al-Kholifey made governor of the Saudi Arabian Monetary Agency (SAMA), the central bank.

These changes, announced in a series of royal decrees, go far beyond Salman’s previous reshuffles since he became king in January last year, and also put the stamp of his son, Deputy Crown Prince Mohammed bin Salman, author of the Vision 2030 reform program, on the government.

The new SAMA governor, Kholifey, is promoted from deputy governor for research and international affairs.  He replaces Fahd al-Mubarak, who has held the post since December 2011.  A veteran of SAMA and graduate of King Saud University in Riyadh and Colorado State University, Kholifey had also served from 2011 to 2013 as executive director for Saudi Arabia at the International Monetary Fund in Washington.

Finance Minister Ibrahim Alassaf, who has held the post since 1996, remains in place.  However, other economic departments have over the past year taken over some of his ministry’s responsibilities.  The decrees broke up the Water and Electricity Ministry, with the water portfolio added to a new Environment, Water and Agriculture Ministry, and electricity added to the new energy ministry.  Those changes may help Saudi Arabia to cut subsidies, reduce domestic power and water consumption, make sure that energy pricing meshes clearly with industrial development goals, and that nuclear and solar policy are more carefully integrated.  (Reuters 07.05)

Back to Table of Contents

►►North Africa

5.12  Egypt’s Urban Consumer Inflation Hits 10.3% in April

Egypt’s urban consumer inflation jumped in April after easing since the end of last year, CAPMAS said on 10 May, putting pressure on the government to raise subsidies with Ramadan approaching in June.  Food demand normally spikes during the Muslim holy month because of heavy consumption following the dawn to dusk fasting period.  Ramadan this year begins on 6 June.  President al-Sisi is under increasing pressure to revive the economy and keep prices under control to avoid any backlash from the public whose mantras in the 2011 revolution included “bread, freedom and social justice”.  Army trucks have distributed cheap food and Sisi has promised to protect the poorest in a society where tens of millions rely on subsidies.

Urban consumer inflation rose to 10.3% in April from 9% in March, data from the CAPMAS statistics agency showed, the first time since November that inflation has risen.  Core inflation, which excludes items such as fruit and vegetables as their prices fluctuate widely, also jumped in April to 9.51% from 8.41% in March.  The government said in November that it would control prices of 10 essential commodities to help restrain inflation with the country short of foreign hard currency, and price movements subsequently eased.

But inflationary pressure resurged when the central bank devalued the pound in March by about 13% in order to close the gap between official and black-market rates for the U.S. dollar.  The bank later hiked interest rates by 150 basis points at its monetary policy committee (MPC) meeting on March 17 to curb expected inflationary pressures.

Egypt has been struggling to revive its economy since a 2011 uprising drove away tourists and foreign investors who are major sources of hard currency, eroding its foreign reserves.  Reserves diminished by more than half to $17 billion in April.  The central bank has been rationing its dollars, focusing on imports of essential goods.  A black market for dollars has seen the pound weaken to about 11 a dollar, far from the central bank’s official rate of 8.78.  (CAPMAS 10.05)

Back to Table of Contents

5.13  Egypt’s Jobless Rate Falls To 12.7% in First Quarter of 2016

Egypt’s unemployment rate inched downward to 12.7% in Q1/16 compared to 12.8% registered in both the first and last quarters of 2015, CAPMAS announced.  Egyptian officials hope to reduce unemployment to less than 10% and are targeting a growth rate of at least 6% by the end of the 2018/19 fiscal year.  According to the ministry of planning, Egypt’s GDP growth rate slowed to 2.2% in Q4/15, compared to 3.7% during the same period a year earlier.   Unemployment among 15-29 year olds reached 27.3% of the workforce.  Compared to Q1/15, the Egyptian workforce grew 2.6% to a record 28.4 million people in the first quarter of 2016.  The CAPMAS report noted that unemployment among females is 25.7%, while unemployment among males is 8.9%.  Urban unemployment amounted to15.2%, compared to 10.9% in rural areas.  (CAPMAS 15.05)

Back to Table of Contents

5.14  Ministry Says Egypt to Launch 4G Mobile Network in 2 Months

 Egypt will launch 4G licenses for the four mobile operators in the country within two months, and the value will depend on each company’s needs of available frequencies, communications and information technology ministry said in a statement.  Legal drafting will be completed shortly.  Earlier in May, the cabinet approved a mandate for the National Telecommunications Regulatory Authority (NTRA) to launch high-speed 4G mobile network.  According to the cabinet statement, the decision aims to increase government resources and improve services provided to citizens.  The fourth generation of mobile technology (4G) succeeds 3G by providing higher speed internet access.

There are currently three mobile operators in Egypt: Orange, Vodafone Egypt and Etisalat Misr.  A long delayed fourth license for a mobile operator is expected to be issued for state-run fixed line monopoly Telecom Egypt.  Egypt has around 94 million subscribers to mobile services, according to Ministry of Communications and Information Technology data.  (Ahram Online 09.05)

Back to Table of Contents


6.1  Ankara Vows to Maintain Fiscal Discipline After Budget Posts Surplus in April

The Turkish government will maintain fiscal discipline for the rest of the year, Finance Minister Naci Agbal vowed on 16 May, adding that positive budget data for the first four months of the year was a result of that discipline.  Turkey’s government ran a TL5.4 billion ($1.83 billion) budget surplus in April.  According to economists, the profit transfer of over TL9.5 billion ($3.2 billion) by the Central Bank to the Treasury played a leading role in the hike of tax revenues in April.  The Central Bank posted TL13.7 billion ($4.6 billion) in profit in 2015.  Some TL9.5 billion of this amount was expected to be transferred to the Treasury’s accounts.

According to official data from the Finance Ministry, the Turkish government budget, which ran a deficit of TL4.1 billion ($1.39 billion) in the first four months of last year, saw a budget surplus of TL5.4 billion ($1.83 billion) this April.  (CBT 16.05)

Back to Table of Contents

6.2  Greek Deflation Persists For Another Month

Greece’s annual European Union-harmonized inflation rate stayed negative in April for the second month in a row after a positive reading in February.  The reading in April was -0.4%, easing from -0.7% in March.  Consumer prices were led lower by housing costs, durable goods, foods and non-alcoholic beverages, apparel and footwear.  The data also showed the headline consumer price index fell 1.3% year-on-year, with the annual pace of deflation easing from -1.5% in March.

For years an inflation outlier in the Eurozone, Greece has been in deflation mode for the last two and a half years as wage and pension cuts and a protracted recession took a heavy toll on Greek household income.  Deflation in Greece, which signed up to its first international bailout in 2010, hit its highest level in November 2013, when consumer prices registered a 2.9% year-on-year decline.  (Reuters 11.05)

Back to Table of Contents

6.3  Athens to Vote on Multi-Bill of Remaining Bailout Measures

A multi-bill containing the remaining measures Greece has to pass to conclude its bailout review and receive its next tranche of funding is due to be submitted to Parliament on 18 May, with the aim of MPs voting the legislation through on the 22nd.

The omnibus bill will include €1.8 billion in fiscal measures, mostly increases to indirect taxes, provisions for the sale of non-performing loans, the framework for the new privatization agency and the legislation for the fiscal mechanism to trigger automatic cuts if Greece misses its primary surplus targets in the coming years.  The multi-bill will be table under the emergency procedure, meaning a curtailed debate at committee level before it goes to the full assembly for an equally brief discussion before the vote.  If the legislation is passed, a meeting of technical experts that advise Eurozone finance ministers is expected to approve the Eurogroup to disburse a minimum of around €6 billion for Greece.  (eKathimerini 16.05)

Back to Table of Contents



7.1  Israel’s Jewish Population Numbers Over 6,000,000 Seven Decades After the Holocaust

Seventy-one years after the end of World War II and the Holocaust, Israel’s population stands at roughly 8,502,900, including some 6,374,400 Jews, the Central Bureau of Statistics announced on 1 May.  The figures do not include foreign workers, who numbered just over 190,000 in 2014.  The figures also show that Israel’s general population growth rate is 13,500 per month, which includes a Jewish population growth rate of about 10,000 per month.  Jews make up some 74.8% of the population, according to the figures.  Some 1.76 million Arabs live in Israel, representing more than 20% of the population.

There are about 400,000 people in Israel who do not fall under any religious group under the criteria set by the bureau.  They are mostly from the former Soviet Union and Ethiopia and arrived in Israel during the large immigration waves from those areas.  They were granted citizenship under the Law of Return, which allows Jews and people with Jewish ancestry to immigrate to Israel provided they meet certain conditions.  (CBS 01.05)

Back to Table of Contents

7.2  Israel’s Population Passes 8.5 Million Mark

Upon the re-establishment of the State of Israel in 1948, the population stood at about 806,000.  68 years later on Yom HaAtzmaut (Independence day) 2016, Israel’s population stood at approximately 8.522 million, according to the Central Bureau of Statistics.  The Jewish population numbered approximately 6.377 million (74.8% of the population), the Arab population is approximately 1.771 million (20.8%) and the rest of the population (non-Arab Christians, other faiths and no religious affiliation by registering in the Population Registry) is approximated at 374,000 (4.4%).  Since last Independence Day, Israel’s population grew by approximately 182,000, an increase of 2.2%.  During this period, Israel welcomed approximately 195,000 babies, and about 47,000 people died during that same period.  The number of new immigrants coming to Israel was 36,000.

About 75% of the Jewish population was born in Israel and more than half are second generation in the country, compared to only 35% in 1948.  In 1948 there was only one city in Israel with more than 100,000 residents – Tel Aviv-Jaffa.  Today, there are 14 cities with more than 100,000 residents.  Of those, 8 cities have more than 200,000 residents: Jerusalem, Tel Aviv, Haifa, Rishon LeZion, Petah Tikva, Ashdod, Netanya and Beersheba.  According to population projections, the State of Israel’s population is expected to reach 11.3 million by 2035.  (Arutz7 09.05)

Back to Table of Contents


7.3  Jordanian Independence Day

On 25 May, Jordan will celebrate its 70th independence day.  Jordan was granted its full independence from the British mandate and was declared a Kingdom on 25 May 1946.  Celebrations marking the 1916 Great Arab Revolt anniversary and Army Day, which falls on June 10, customarily begin on Independence Day.

This year’s celebrations will be highlighted by the centennial of the Great Arab revolt of 1916-1918.  Sharif Hussein, the emir of Mecca and king of Hijaz, launched the Great Arab Revolt in June 1916 with the objective of establishing an independent and unified Arab state.  The Great Arab Revolt secured Arab rule over most of the Arabian Peninsula, Syria and all of modern Jordan, founded by Sharif Hussein’s son, the late King Abdullah I.  All Jordanian ministries, public departments and institutions will observe a holiday.

Back to Table of Contents

7.4  Turkey Marks Ataturk Day on 19 May

The Commemoration of Ataturk, Youth and Sports Day, or simply Ataturk Commemoration (Atatürk’ü Anma) or Youth and Sports Day (Gençlik ve Spor Bayramı), is an annual Turkish national holiday celebrated on 19 May to memorialize the start of the Turkish War of Independence.  Specifically, 19 May 1919 is the day Mustafa Kemal Ataturk, then Mustafa Kemal, who would become independent Turkey’s first president, landed on the main peninsula of Turkey to begin leadership of the liberation effort.  In early 1920, Kemal convened the first Turkish Grand National Assembly in Ankara, and by 1922 all of Anatolia was freed from foreign rule.  The independent Republic of Turkey was declared a year later.  During the course of his term as president, Ataturk himself proclaimed 19 May as “Youth and Sports Day.”  In the aftermath of Ataturk monumental legacy the day serves to honor the country’s founder.

Back to Table of Contents


 8.1  Israeli App Uses IDF Technology to Detect Skin Cancer

Emerald Medical Applications’ DermaCompare is a free smartphone app that can detect changes in marks and moles over time.  The app alerts the user to changes that ought to be screened for cancer.  The public company, founded in Petah Tikva in 2013, has distribution agreements in Israel, Australia (where one out of seven people get skin cancer), the United Kingdom, Germany, Italy, Sweden, New Zealand, and Brazil.  In April, the Brazil Chamber of Commerce selected DermaCompare as the Israeli technology “most likely to succeed in Brazil.”  A Spanish-language version of the app was recently launched for Puerto Rico, Mexico and Argentina, with more South American locations to come.

To use the free iOS or Android app, you strip down to your underwear and have someone take smartphone or digital camera photos of your moles and lesions according to instructions explained by a friendly avatar.  DermaCompare’s algorithm then analyzes the photos. If any suspicious moles or changes are found, the app recommends contacting a doctor for evaluation, and can automatically link you to a dermatologist near your location.  The app harnesses the power of the crowd.  As users upload photos of their skin to the cloud, they are building a database toward more accurate identification and comparison of moles and lesions.  Machine learning and artificial intelligence can use this crowdsourced data to predict which kinds of moles are most likely to become cancerous, “and by using that we can prevent melanoma in advance.”  (ISRAEL21c 03.05)

Back to Table of Contents

8.2  Pluristem Awarded $3.3 Million Grant by Israeli Government

Pluristem Therapeutics announced that its wholly owned subsidiary, Pluristem, Ltd., has been awarded NIS 12.7 million (approximately $3.3 million) from the Israel Innovation Authority (previously the Office of the Chief Scientist – OCS) of the Israeli Ministry of Economy & Industry.  The grant will support Clinical trials and R&D activities for calendar year 2016.

The Israeli Innovation Authority, empowered by the Law for the Encouragement of Industrial Research & Development – 1984, oversees all government sponsored support of R&D in the Israeli hi-tech and bio-tech industries.  This broad-spectrum support stimulates the development of innovative, state-of-the-art technologies, enhances the competitive power of the industry in the global hi-tech market, and creates employment opportunities.

According to the Israeli Innovation Authority grant terms, Pluristem Ltd. is required to pay royalties of 3% – 4% on sales of products and services derived from technology developed using this and other Israeli Innovation Authority grants until 100% of the dollar-linked grants amount plus interest are repaid.  In the absence of such sales, no payment is required.

Haifa’s Pluristem Therapeutics is a leading developer of placenta-based cell therapy products.  The Company’s patented PLX (PLacental eXpanded) cells release a range of therapeutic proteins in response to inflammation, ischemia, hematological disorders, and radiation damage.  PLX cells are grown using the Company’s proprietary three-dimensional expansion technology and are an “off-the-shelf” product that requires no tissue matching prior to administration.  Pluristem has a strong intellectual property position, Company-owned, GMP-certified manufacturing and research facilities, strategic relationships with major research institutions, and a seasoned management team.  (Pluristem 09.05)

Back to Table of Contents

8.3  MarginProbe Preserves More Breast Tissue & Reduces Need for Additional Surgery

According to a new research study from Mercy Medical Center in Cedar Rapids, IA, and the University of Iowa Hospitals and Clinics, the use of Dune Medical Device’s MarginProbe, a tool for assessing clear margins during lumpectomies, led to a 75% reduction in the number of second surgeries needed by breast cancer patients.

Traditionally, one-in-four women who undergo a lumpectomy require additional surgery to remove cancer missed during the initial procedure.  The study is the latest research to show how MarginProbe, the first and only FDA-approved technology, offers surgeons a real-time detection of cancer at the surface of excised tissue specimens during surgery.

Caesarea’s Dune Medical Devices proprietary tissue characterization technology offers surgeons and radiologists the real-time ability to identify cancerous tissues and react immediately.  This technology holds the potential for a broad range of surgical and diagnostic applications.  (Dune Medical Devices 11.05)

Back to Table of Contents

8.4  Kitov Reports KIT-302 Study Successfully Meets U.S. FDA Standards

Kitov Pharmaceuticals announced that KIT-302 has successfully completed its pharmacokinetic (PK) bioequivalence (BE) study and successfully met the U.S. FDA standards for establishing bioequivalence to the reference drugs.  The study compared the PK of Kitov’s drug product of KIT-302 which is a fixed dose combination consisting of celecoxib (200 mg), indicated for osteoarthritis pain, and amlodipine (10 mg), indicated for high blood pressure, to off-the-shelf branded 200 mg celecoxib capsules and 10 mg amlodipine tablets.  These evaluations were conducted under both fed and fasted conditions.  The results demonstrated that for both the Cmax (the maximum blood level achieved) and Area Under the Curve (the area under the concentration time curve for drug levels), the 90% confidence intervals for both the amlodipine and celecoxib components of KIT-302 were documented to be between 80% and 125% of the values obtained with the off-the-shelf drugs.  These results mean Kitov has fulfilled the FDA standard for demonstrating BE under both fed and fasted conditions.

According to FDA requirements, a similar PK bioequivalence study for the KIT-302 product, containing a lower dosage (2.5 mg) of amlodipine will be conducted by the end of this year.  The FDA has indicated that KIT-302’s final approval will not be dependent on this study’s results.

Jerusalem’s Kitov Pharmaceuticals is an innovative biopharmaceutical company focused on late-stage drug development.  Leveraging deep regulatory and clinical-trial expertise, Kitov’s veteran team of healthcare professionals maintains a proven track record in streamlined end-to-end drug development and approval.  Kitov’s pipeline currently features two combination drugs intended to treat osteoarthritis pain and hypertension simultaneously, including one that achieved the primary efficacy endpoint for its Phase III clinical trial.  Lowering development risk and cost through fast-track regulatory approval of novel late-stage therapeutics, Kitov delivers rapid ROI and long-term potential to investors, while making a meaningful impact on people’s lives.  (Kitov Pharmaceuticals 09.05)

Back to Table of Contents

 8.5  Chief Scientist Approves  $13.7M for Kadimastem in 2016

Kadimastem announced a yearly budget approved by the OCS in the total amount of NIS 13.7m, which is an increase of more than NIS 2m over the previous year.  The funding is intended to accelerate the company’s two primary fields of activity which are based on pluripotent stem cells, ALS and diabetes, including the advancement towards the company’s clinical trial in ALS patients.

Ness Tziona’s Kadimastem is a biotechnology company, operating in the field of regenerative medicine – a groundbreaking field in which the malfunctioning of organs which leads to diseases is repaired by external cells, tissues or organs.  The company specializes in the development of human stem cell-based medical solutions for the treatment of diabetes and neurodegenerative diseases, such as ALS and Multiple Sclerosis.  Based on the company’s unique platform, Kadimastem is developing two types of medical applications: A. Regenerative medicine, which repairs and replaces organs and tissue by using functioning cells differentiated from stem cells.  The company focuses on transplanting healthy brain cells to support the survivability of nerve cells as cell therapy for ALS, and transplanting insulin-secreting pancreatic cells for the treatment of insulin-dependent diabetes; B. Drug screening platforms, which use functional human cells and tissues to discover new medicinal drugs.  The company has two collaboration agreements with leading global pharmaceutical companies.  (Kadimastem 09.05)

Back to Table of Contents

8.6  Evogene & Marrone Bio Disclose Positive Results in Insect Control Collaboration

Evogene and Davis, California’s Marrone Bio Innovations, a leading global provider of bio-based pest management and plant health products, successfully met an important milestone in their multi-year collaboration focused on discovery and validation of novel genes for insect control.  In diet-based insect assays, certain proteins demonstrated control activity against several target pest insects, including fall armyworm, a devastating pest that causes annual damage of approximately $1 billion worldwide.  Based on these results, selected bioactive proteins are now being advanced by the two companies to plant validation.

The collaboration, initiated in July 2014, and supported by funding from the Binational Industrial Research & Development (BIRD) Foundation, aims to bring to market new insect control solutions – seed traits and bio-insecticides – through leveraging the expertise and distinct assets and capabilities of each party.  Utilizing Evogene’s proprietary computational platform BiomeMiner and other predictive discovery capabilities, the two companies were able to pinpoint candidate proteins out of over tens of thousands of proteins identified from MBI’s extensive and proprietary microbial collection.  The proteins’ bioactivity for pest control were then validated in diet-based insect assays by both companies, and a subset of the candidates showed positive insecticidal results.

Based on the positive results announced today, the parties agreed to advance several novel insecticidal protein candidates, which have met the required test criteria, to model plant validation and to be followed by target crop validation.  Successful candidates will then be further developed by Evogene, potentially in collaboration with a seed company, for insect control in crops such as corn, soybean and cotton, while MBI may commercialize the microbials as sprayable bio-insecticide products.  The parties have agreed to share revenues from any products that may result from this collaboration.

Rehovot’s Evogene is a leading biotechnology company for the improvement of crop productivity.  The Company has developed a proprietary innovative technology platform, leveraging scientific understanding & computational technologies to harness Ag ‘Big Data’ for developing improved seed traits (via: GM and non-GM approaches), as well as innovative ag-chemical and novel ag-biological products.  (Evogene 16.08)

Back to Table of Contents

8.7  BioLineRx & MaRS Innovation Sign Framework Collaboration Agreement

BioLineRx signed a framework collaboration agreement with MaRS Innovation, the commercialization agent for fifteen of Toronto’s top academic institutions.  Under the terms of the agreement, BioLineRx intends to review innovative projects and assets of startup companies originating from MaRS Innovation’s members, in order to identify in-licensing, co-development or other partnering opportunities.  MaRS Innovation represents and invests in early stage assets derived from 15 institutions in Ontario, Canada, including the University of Toronto and its 9 affiliated teaching hospitals.

Jerusalem’s BioLineRx is a clinical-stage biopharmaceutical company dedicated to identifying, in-licensing and developing promising therapeutic candidates.  The Company in-licenses novel compounds, primarily from academic institutions and biotech companies based in Israel, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization.  (BioLineRx 16.05)

Back to Table of Contents

8.8  Arkin Holdings & Primera Capital Lead Investment in BioSight for Leukemia

Karmiel’s BioSight, an Israeli pharmaceutical development company focused on the development of innovative chemotherapy pro-drugs with reduced toxicity, announced the closing of an investment of $13m led by Arkin Holdings and the US based venture firm Primera Capital.  Proceeds of the financing will be used to fund a multi-center phase IIb clinical trial with the company’s lead product, Astarabine, for the treatment of AML.  According to the investment terms, Arkin Holdings and Primera Capital will invest $5M each, and additional $3M will be invested by existing shareholders including Michael Ilan Management & Investments.  The investment is made in two steps, the first is immediate and the second is expected in the upcoming year, upon completion of a milestone by the company.

Astarabine is an innovative compound of the chemotherapy drug cytarabine (Ara-C) and the amino acid asparagine. Cytarabine is the first-line treatment for AML and relapsed/refractory Acute Lymphoblastic Leukemia (ALL).  The use of cytarabine is accompanied by high toxicity and severe side effects such as cerebellar toxicity and bone marrow suppression.  Therefore, despite the effectiveness of cytarabine as an anticancer drug, its toxicity significantly limits its use, especially for older patients and for patients with comorbidities, who constitute a significant percentage of AML patients.  BioSight is in preparations for a multi-center Phase IIb trial in the US, Europe, and Israel, to further evaluates the efficacy and safety of Astarabine in the treatment of AML.  (BioSight 16.05)

Back to Table of Contents

8.9  Lycored’s Cardiomato Named Winner at 2016 NutraIngredients Awards

Lycored announced that its hero supplement, Cardiomato, has taken home the NutraIngredients Award for Best Finished Product of the Year – Heart Health.  Cardiomato, Lycored’s nutrient complex for heart health, stood out to judges in the first round of over 120 high-quality products entered, again in the second round of over 33 stand-out products, and then in final judging amongst two other competitors.  To be awarded the win, judges determined that Cardiomato met and exceeded all eligibility requirements including viability, fitting into an emerging category, validated through research, unique and innovative, distinct health and lifestyle application, unique packaging, and creatively marketed.

Lycored’s Cardiomato is scientifically proven to support cardiovascular health and contributes to normal heart and vascular function, with measurable results in just six weeks.  Supported by numerous clinical trials, Cardiomato manages and improves various conditions that affect heart health, including reducing oxidized LDL cholesterol, lowering systolic blood pressure already within the normal range, and preserving the endothelium, which lines artery walls and supports the proper functioning of blood vessels among healthy population.

Committed to ‘Cultivating Wellness’, Beer Sheva’s Lycored is an international company at the forefront of unearthing and combining nature’s nutrition potential with cutting edge science to develop natural ingredients and products.  Established in 1995, Lycored is the global leader in natural carotenoids for food, beverage and dietary supplement products.  The company develops and supplies natural ingredient formulations into four main business areas: active health ingredients for wellness; colorings; ingredients for taste & texture improvement; and nutrient premixes for fortification.  (Lycored 13.05)

Back to Table of Contents

8.10  ReWalk Collaboration with Harvard University’s Wyss Institute Announced

ReWalk Robotics announced a collaboration with Harvard University’s Wyss Institute for Biologically Inspired Engineering for the licensing of Intellectual Property (IP), and development of concepts and designs of lightweight exoskeleton system technologies for lower limb disabilities.  This exclusive licensing and collaboration agreement will focus on the development of “soft suit” systems for the treatment of stroke, Multiple Sclerosis (MS), mobility limitations for the elderly and other medical applications.

The majority of Stroke and MS patients as well as the elderly do not require the structural support of current market rigid exoskeleton systems for individuals with spinal cord injury.  The soft suit prototypes from the Wyss Institute transmit power to key joints of the legs with cable technologies powered with software and mechanics that are similar to the technologies used in the ReWalk system.  The cables are connected to fabric-based designs that attach to the legs and foot, thus lending the name “soft suit.”

Yokneam Elite’s ReWalk Robotics develops, manufactures and markets wearable robotic exoskeletons for individuals with spinal cord injury.  Their mission is to fundamentally change the quality of life for individuals with lower limb disability through the creation and development of market leading robotic technologies.  (ReWalk 17.05)

Back to Table of Contents


9.1  CallVU’s New Mobile Digital Engagement Platform for Financial Institutes

CallVU showcased its flexible multichannel suite which addresses customers’ transformation to digital at Finovate Spring 2016 in San Jose, California.  CallVU’s platform enables financial enterprises to improve digital engagement beyond the regular web and mobile users, and offers all callers a rich media customer journey.  Financial institutions can improve service availability, ensure that a higher percentage of customers benefit from their digital content investment, reduce call volumes and enhance customer experience.

Regardless of the channel the customer is using to connect to the bank, CallVU offers a single, unified, digital communication channel. The blending of interactive visual content with voice calls creates an engaging, collaborative and more efficient customer experience.  CallVU offers banks a platform for moving customers who are not used to using digital services to the digital world. CallVU’s engaging and intuitive customer journey ensures a high rate of digital self-service and facilitates greater digital engagement through an omni-channel user experience journey.

Tel Aviv’s CallVU has developed an innovative Mobile Digital Engagement platform, which combines rich digital and interactive media with the voice channel. CallVU delivers a highly engaging and collaborative customer experience and creates a new customer service channel for smartphone users.  (CallVU 03.05)

Back to Table of Contents

9.2  WhiteSource/Checkmarx Testing Solution for Proprietary & Open Source Code

Checkmarx and WhiteSource announced a partnership, providing Checkmarx users with a comprehensive Open Source Analysis (OSA) solution.  The new capability adds full visibility of the open source components used by developers.  It reports known security vulnerabilities contained in the open source code and suggests available fixes. It also highlights licensing and compliance issues in any used open source components.  The new version of Checkmarx’s application security testing platform combines best-of-breed source code analysis and open source component analysis in a single product.  Checkmarx’s platform is the only one to provide a comprehensive solution that covers all code security aspects in all major coding languages and is available both on-premises and on-demand.

Tel Aviv’s Checkmarx develops solutions used by developers and security professionals to identify and fix vulnerabilities in web and mobile applications early in the development lifecycle.  It provides an easy and effective way for organizations to automate security testing within their Software Development Lifecycle (SDLC) which systematically eliminates software risk before applications are released.

Bnei Brak’s WhiteSource allows engineering, security and compliance officers to effortlessly manage the use of open source components in their software, allowing developers to focus on building great products.  WhiteSource fully automates all open source management needs: component detection, security vulnerability alerts, license risk and compliance analysis along with policy enforcement and new version alerts.  (Checkmarx 03.05)

Back to Table of Contents

9.3  Asiasoft Solutions & Stratoscale to Bring Cloud Capabilities to the Data Center

Singapore’s Asiasoft Solutions, a leading IT solutions provider that specializes in cloud technologies, announced a partnership with Stratoscale to deliver comprehensive, flexible and scalable data center cloud solutions to its customers.  Stratoscale’s 360 degrees partner program, PartnerFirst, was created with an all-inclusive approach to maximize partner’s technology, products and services with the goal of bringing mutual benefits to customers and partners.  By partnering with Stratoscale, Asiasoft Solutions is bringing new innovation to market and delivering value to its customers by leading them into the next generation of private cloud data centers.  Stratoscale has brought the control back to IT by providing unparalleled private cloud capabilities in the data center in a way that’s faster and simpler than legacy infrastructure, and doesn’t require specific expertise or expensive services.  Offered through its channel partners, Stratoscale’s hardware-agnostic, easy-to-use software platform, Stratoscale Symphony, delivers cloud-scale economics to data centers of all sizes with efficiency and operational simplicity.

Herzliya’s Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution.  With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere, IT is empowered to take control of their data centers.  Stratoscale is offering a hyper-converged cloud supporting OpenStack out of the box.  (Stratoscale 05.05)

Back to Table of Contents

9.4  Utab’s Algorithm Enhances Music Information Retrieval

Tel Aviv’s Utab has developed a social music platform for music enthusiasts that can analyze a chord in under 15 seconds.  Utab’s new algorithm is so smart that it is capable of analyzing and establishing a chorded timeline to every song in the world in just under 15 seconds – regardless of the record quality, release year and music genre.  Once any song from practically any platform is added to utab’s database, the server analyzes the song and extracts the chords and tempo from it.  The website will then prompt the user to the editor and will show the chords and beats.  The company that created the original code for utab’s algo’ (zplane.development audio technology) utilizes intelligent signal processing solutions, dealing with extraction of high level musical information from the music signal like tempo, rhythm, melody and key.  These features are already incorporated within the chord analyzer and in the near future there will be more advanced twik-abilities such as switching from sharp to flat key, showing more advanced chords and tablature containing four or more noted chords and the option to re-analyze certain parts of the song, allowing users to get the best suitable option.  (Reuters 10.05)

Back to Table of Contents

9.5  Silicom Awarded Design Win from Tier-1 Network Monitoring Player

Silicom has been awarded its first Design Win from a Tier-1 Network Monitoring company, a new customer for the Company.  This Design Win is for Silicom’s 40 GBPS Time Stamping and Packet Processing card, representing the successful conclusion of a multi-year evaluation and product definition process that was carried out by the combined team of Silicom and Fiberblaze, the Application Acceleration company that Silicom acquired in late 2014.

To date, the customer has placed orders totaling approximately $500,000 for both the product for which it has awarded the Design Win and for another Time Stamping product which is currently in the process of evaluation, indicating its intention to design-in this additional product, following full compliance with the customer’s requirements.  In parallel, the customer continues to evaluate additional Silicom products based on a variety of technologies and speeds.  As such, Management believes that this customer will give Silicom many additional Design Wins over time, and that it will eventually become a multi-million dollar account.

Kfar Saba’s Silicom is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the performance and availability of networking appliances and other server-based systems.  (Silicom 09.05)

Back to Table of Contents

9.6  Earnix Version 8 to Introduce R Integration and Machine Learning Capabilities

Earnix announced the release of Earnix version 8, the newest edition of its software solution.  Earnix V8 delivers a new level of sophistication in modeling and decision analytics with the ability to directly operationalize these decisions online.  Earnix V8 integrates models built in the R and Python statistical environments into the Earnix optimization framework.  This new capability enriches the Earnix decision making environment with advanced machine learning algorithms and mathematical tools.  The new version introduces a state of the art graphical user interface, designed to improve the user’s concentration while reducing cognitive fatigue over long periods of time.  The new interface also allows for better management, access and organization of a large number of models.

Ramat Gan’s Earnix integrated customer analytics software empowers financial services companies to achieve optimal business performance through data science and predictive analytics.  The Earnix analytical solutions drive superior product, pricing and marketing decisions, while ensuring alignment with changing market dynamics.  Earnix combines predictive modeling and optimization with real-time connectivity to core operational systems, bringing the power of analytic-driven decisions to every customer interaction.  (Earnix 11.05)

Back to Table of Contents

9.7  New mobiliBuy App Ushers in Shopping at the “Speed of Selfies”

Caesarea’s mobiliBuy, the creator of a free, simple to use, iOS and Android app that allows users to scan product images from magazines or screens and then instantly buy the product, announced that the app is now available for download and is compatible with the entire June issue of COSMO magazine.  Users will now be able to see, scan and buy any product directly from the pages of the magazine with the touch of a button, saving them time spent searching for the products they see in the magazine.  The product is then shipped directly to the users’ home. In addition to magazines, mobiliBuy enables users to see, scan & buy any product across numerous mediums, including print, online and TV.  Following the rollout with COSMO, mobiliBuy is planning to expand the service to additional magazines and media.  (mobiliBuy 10.05)

Back to Table of Contents

9.8  RADWIN Boosts Capacity for Public Safety and Video Surveillance

RADWIN announced that RADWIN 5000 JET beamforming PtMP and RADWIN 2000 D+ PtP solution now support the 4.9GHz Public Safety band.  RADWIN’s award-winning, smart beamforming PtMP JET Base Station in 4.9GHz Public Safety band, provides Municipalities and Public Safety agencies a much-needed boost in capacity, essential for video surveillance, leased line replacement and other bandwidth-demanding applications.  RADWIN 5000 JET delivers ultra-high capacity in 4.9GHz with up to 600Mbps per cell when using two 20MHz channels, and up to 3Gbps per cell in unlicensed frequencies.  JET also enables deployment flexibility with multiband support (4.9GHz – 5.8GHz range) and is capable of providing outstanding uplink capacity (up to 90%) and SLA for video-centric applications.

Tel Aviv’s RADWIN is a leading provider of Point-to-Multipoint and Point-to-Point sub-6 GHz broadband wireless solutions.  RADWIN also offers solutions specifically geared for non-line-of-sight (NLOS) small cell backhaul.  Incorporating the most advanced technologies such as a Beam-forming antenna and an innovative Air Interface, RADWIN’s systems deliver optimal performance in the toughest conditions including high interference and obstructed line-of-sight.  (RADWIN 10.05)

Back to Table of Contents

9.9  SECDO Named a 2016 Gartner “Cool Vendor” in Security for Technology

SECDO has been named a “Cool Vendor in Security for Technology and Service Providers, 2016” by Gartner, the world’s leading information technology research and advisory company.  Gartner’s 2 May 2nd report notes that, “The shortfalls of established security technologies along with the mounting pressure coming from sophisticated attackers is creating opportunities for innovative startups in the areas of security intelligence and detection of advanced targeted attacks.”  SECDO provides advanced alert validation, investigation and remediation capabilities.  The platform dramatically improves the efficiency of the Security Operations Center (SOC) by automatically validating alerts from the SIEM using unique thread-level endpoint activity data to identify false positives and prioritize true positives.

Tel Aviv’s SECDO is a groundbreaking provider of Security Investigation and Response solutions.  The SECDO platform combines alert validation, interactive visual investigation and automated remediation to transform the way security operations centers work.  Security Operations teams are overwhelmed by alerts but at the same time, do not have the data and intelligence to investigate and remediate efficiently.  Using patented technology, SECDO automatically validates alerts to weed out false positives.  For suspicious activity, SECDO visualizes the attack chain timeline and provides deep visibility into all endpoint activity so analysts immediately understand the “who, what, where, when and how” behind the incident.  Then, based on an analysis of exactly how endpoints were compromised, SECDO surgically remediates the incident with minimum user impact.  (SECDO 10.05)

Back to Table of Contents

9.10  2breathe Unveils First Smart Device to Induce Sleep

2breathe Technologies announced that 2breathe, a new smart, connected device tackling sleeplessness via a patented guided-breathing technology, is now publicly available.  2breathe broadly-patented technology grew out of a FDA-cleared device for non-drug treatment of hypertension and stress, RESPeRATE, used by hundreds of thousands of doctors and patients.  RESPeRATE’s one “side effect” was that users reported dozing off during the session and improved sleep.  The Company adapted the technology for smartphones and created the 2breathe platform to induce sleep.

2breathe uses smart, connected technology to deliver the ancient wisdom of sleep-inducing breathing exercises in an easy and effective manner.  A sensor worn around the torso picks up the user’s inhale and exhale movements sending it to an iOS app via low energy Bluetooth.  The app transforms, in real time, the breathing into tones that gradually guide the user to prolonged exhalation and slow breathing.  Within minutes, neural sympathetic activity is reduced, the user begins to disassociate from both external and internal stimuli, and the mind and body relax into sleep.  Once sleep is detected, 2breathe automatically shuts off and generates a report showing the falling asleep process breath-by-breath.

2breathe Technologies ( and its founders are pioneers in the development of the digital therapeutic devices field, first in hypertension and now in sleeplessness.  The original product, RESPeRATE, is the world’s first FDA-cleared, non-drug hypertension treatment device now used by hundreds of thousands of patients and featured in the American Heart Association statement on non-pharmacological treatments.  The new product, 2breathe, adopts RESPeRATE guided-breathing technology for individuals who have difficulties falling asleep. 2breathe is not a medical device and is not intended to diagnose or treat medical conditions.  (2breathe 10.05)

Back to Table of Contents

9.11  Magal Wins $10 Million in Orders to Secure Critical Power Utility Sites

Magal Security Systems received orders amounting to $10 million for new security systems for four critical power utility sites and the maintenance of another thirteen existing secured sites.  The sites belong to a major national power supplier in Latin America, a customer for which Magal already provides integrated security solutions.  The orders include hundreds of surveillance cameras, high-end thermal imaging cameras and smart access control and gate systems.  In addition, the physical security network will be reinforced by Magal’s cyber security solution.

Yehud’s Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management.  Over the past 42 years, Magal S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions.  Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G – their 4th generation, cutting-edge hybrid PSIM with SEIM (Physical Security Information Management system integrated with Security Information & Event Management).  The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced CCTV / IVA technology and Cyber Security solutions.  (Magal Security Systems 10.05)

Back to Table of Contents

9.12  Stratasys Launches Bold 3D Printing Software Strategy – GrabCAD Print

Stratasys unveiled a bold, new software strategy designed to make 3D printing significantly easier, more intuitive and highly accessible.  The approach is powered by a new, open architecture “design-to-3D print” workflow application, GrabCAD Print* – residing on the popular GrabCAD SaaS platform and supported by a community of more than 3 million designers, engineers and students.  3D printing techniques are typically characterized by significant “model fixing” time which forces businesses to devise costly, manual solutions to construct an acceptable workflow.  GrabCAD Print is designed to make 3D printing fast and easy-to-use, while reducing errors by eliminating requirements to translate and repair computer-aided design (CAD) files.  Product designers, engineers, and 3D printer operators can now send native CAD files to a Stratasys 3D Printer or service bureau directly from their familiar CAD environments.  Further bolstered by an extensive new business intelligence environment, the application also accelerates data-driven decision-making.

GrabCAD Print works with a variety of Stratasys FDM and PolyJet 3D Printers and can natively read several popular CAD formats from PTC Creo, Dassault Systemes’ SOLIDWORKS, Siemens PLM Software’s NX software, CATIA and Autodesk Inventor.  The application also facilitates data sharing related to job scheduling, print queue status, material usage and historical usage.  All information is readily available via standard Web browsers, mobile applications or locally installed clients while securely managed through the GrabCAD Platform.

For more than 25 years, Stratasys has been a defining force and dominant player in 3D printing and additive manufacturing – shaping the way things are made.  Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing.  The company’s solutions provide customers with unmatched design freedom and manufacturing flexibility – reducing time-to-market and lowering development costs, while improving designs and communications.  (Stratasys 16.05)

Back to Table of Contents

9.13  MinuteLab Raises $2 Million from Glilot Capital Partners

Minute Lab has recently secured funding of $1.75 million by Glilot Capital Partners, who specialize in the area of Enterprise Software.  The first round of financing allows Minute Lab to improve its existing product and expand sales.

Setting up a fully functional, production-like lab environment for developers to interactively execute their newly written code has been a critical component of their daily work.  Minute Lab intends to capitalize on offering developers and DevOps teams a way to save a significant amount of time and resources in building and maintaining their software.  The company will offer its virtual lab solution as a service for a variety of team sizes and projects.

Over the past 12 months, Minute Lab has built an alpha release of its product, enabling individual developers to setup their own labs locally or remotely on co-tenant servers.  Aligning with development best practices, Minute Lab allows swift spin-up and teardown of lab environments on demand, for development teams to efficiently manage as many lab environments as needed to deliver better quality code faster thus reaching the continuous integration phases better prepared.

Tel Aviv’s Minute Lab offers a powerful, containers-based virtual labs for developers to enable true agile development by making interactive and automated code development in a live environment, easy.  The company will offer its solution for free for individual developers and open source projects.  It will offer software as a service, delivered as virtual clustered servers running multiple dev/test labs in the cloud, as well as on premise software for enterprises that demand it.  (Minute Lab 17.05)

Back to Table of Contents

9.14  Saguna Networks Named a “Cool Vendor” in Report by Gartner

Saguna has been named in the Cool Vendors list of the Gartner “Cool Vendors in Communications Service Provider Infrastructure, 2016” report.  The report states that elastic provisioning of network capacity and services to multiple CSP customers, based on their dynamic needs, are emerging, leading to virtual network solutions such as bandwidth calendaring on demand, mobile-edge computing (MEC) and Internet of Things (IoT) offerings.  It also recommends CSP CIOs/CTOs and network planners should look to newer MVNOs for innovative offerings, such as industrial IoT solutions, MEC and video caching solutions closer to the radio edge of the network.

The Saguna Open-RAN MEC platform creates an open ecosystem and long-term growth engine inside the mobile RAN.  With fully virtualized software architecture, the solution promotes network agility and the adoption of NFV.  Based on the ETSI MEC standard, Saguna Open-RAN enables mobile operators to quickly and effectively deploy new revenue generating services for content delivery, Internet-of-Things (IoT) connectivity, retail and enterprise applications and more.

Yokneam’s Saguna Networks, a pioneer of Mobile Edge Computing (MEC), makes mobile broadband faster, simpler and more economical with smart NFV software solutions.  Based on the ETSI MEC standard, the Saguna Open-RAN platform enables mobile operators to quickly and effectively deploy new revenue generating services.  The Mobile Edge Computing platform has fully virtualized software architecture providing cost effective scalability and flexibility.  (Saguna 17.05)

Back to Table of Contents

9.15  CellMining Selected as a “Cool Vendor” by Gartner

CellMining has been included in the list of vendors whose products and services are evaluated in the “Cool Vendors in Communications Service Provider Operational and Business Infrastructure, 2016” report by Gartner.

Founded in 2013, Caesarea’s CellMining closed a Series A funding round in December 2015 with a total value of $5 million, to help fund the further development of its pioneering subscriber-centric mobile network optimization capabilities, and expansion into new markets.  In February 2016 it was announced that Bosnian mobile network operator M:tel had selected CellMining’s SON solution to enhance its network performance and deliver a superior subscriber experience, following a detailed evaluation on the live M:tel mobile network.  (CellMining 17.05)

Back to Table of Contents


10.1  CPI Rises by 0.4% in April

The Consumer Price index rose in April after five straight months of declines, the Central Bureau of Statistics announced on 15 May.  The rise was lower than expected with some analysts predicting that the CPI would rise 0.6% last month.  Over the past 12 months, the CPI fell 0.9% and it has fallen, fueled by the fall in world oil prices.  This is well below the government’s inflation target range of between 1% and 3% although with oil prices now recovering, the CPI is likely to rise again in May.  Outstanding price rises in April included culture and entertainment (2.1%), clothing and footwear (3.7%), and transport (1.7%).  Outstanding price falls in April included furniture and household equipment (0.8%).  (CBS 15.05)

Back to Table of Contents

10.2  Israel Economy Grows 0.8% in First Quarter

The Central Bureau of Statistics announced on 16 May that Israel’s economy grew at an annualized rate of 0.8% during Q1/16.  This is in an initial estimate for the first quarter in comparison with the fourth quarter of 2015, seasonally adjusted.  This is also a much lower growth rate than the Ministry of Finance forecast for the year as a whole.  The ministry’s forecast stands at 2.8%.  The Central Bureau of Statistics states that, at annualized rates, private sector gross product fell by 0.4%, private consumption rose 4%, investment in fixed assets rose 7.5%, exports of goods and services fell 12.9%, and public spending fell 1.7% in Q1/16 in comparison with Q4/15.  (CBS 16.05)

Back to Table of Contents

10.3  Israel’s Exports Fall by 22% During 2016

The Central Bureau of Statistics announced that Israel’s trade deficit in goods (excluding ships, airplanes, diamonds, and energy materials) since the beginning of the year totaled NIS 8.6 billion.  These figures indicate a continuation of the slowdown in exports of goods from Israel, which fell by 21.7% in January-February, following an annualized 13.7% decline in November 2015-January 2016.  The figures also indicate that the trade deficit widened to NIS 13.4 billion in January-April 2016, compared with a NIS 6.6 billion deficit during the corresponding period last year.  The figures further show that imports excluding ships, airplanes, diamonds, and energy materials, grew by an annualized 0.1% in February-April 2016, following 5% growth in November 2015-January 2016.  (CBS 10.05)

Back to Table of Contents


11.1  ISRAEL:  Taub Center Says Israeli Wages Static for Fifteen Years

The just released Taub Center‘s “A Picture of the Nation Report” provides a statistical analysis of Israeli society and the Israeli economy as at the end of 2014.

The booklet presents a picture of Israel across various topics, such as the cost of living, housing, inequality, labor force trends, wages, education and health.  Among the new findings in this publication: transfers between educational streams, industries that cause productivity gaps and the share of young adults who own their home.  The publication, based on Taub Center research, presents an overall picture of the socioeconomic situation in Israel, highlighting areas in which Israel performs well, those where improvement can be seen, and those in which a change of course is needed.

For the first time, this booklet presents infographics designed by students from HIT (Holon Institute of Technology), which are based on findings from selected Taub Center studies.

Among the most striking findings in the Taub Center’s A Picture of the Nation 2016:

* After controlling for the national security component of taxes and expenditures, the share of taxes in Israel is among the lowest in the OECD countries – a fact that attests to government policy of less involvement in market activities.  The relation between the sources of revenue and their use, though often ignored, is critical in understanding public policy.  Tax receipts as a share of GDP in Israel are much lower than the OECD average.  As a result, Israel’s revenues are lower, and so, too, is the country’s ability to invest in a variety of areas, including infrastructure and welfare programs.

* Old-age pensions have risen while child allowances have decreased.  Between the years 2000 and 2014, among all the cash benefits of the National Insurance Institute, the vast majority of expenditure was for those benefits earmarked for the elderly – the Old-age and Survivors allowance and the Long-term Care allowance.  Over the years, there has been a clear, increasing trend in spending devoted to this population, a fact that primarily reflects the demographic trend of an aging population.  In contrast, there has been a decline in child allowance payments, following changes in the legislation between 2002 and 2004 that reduced this benefit.

* The majority of the population purchases supplementary health insurance or commercial insurance in addition to the health coverage provided by the state.  Out of 20 OECD countries, Israel ranks third in the share of citizens holding private health insurance.  In 2012, about 80% of the population had supplementary insurance offered by the health funds, and slightly over 40% held commercial insurance.  Many Israelis are double-insured, as almost everyone who has private insurance is also insured through supplementary insurance.  The share of those purchasing supplementary insurance increased by almost 60% between 1999 and 2012, and the share of commercial insurance holders grew by almost 80% in the same years.  Almost all households with high income have supplementary health insurance, while only about half of households in the lowest income levels have such coverage.  These figures indicate inequality in access to high-quality, timely medical care – an issue that has raised concerns in the past few years.

* Trends in pupil transfers between education streams show evidence of a move away from more religious educational settings.  Among Jews, movement from more religious schools to less religious ones is greater than movement in the opposite direction.  That is, more pupils transfer from Haredi schools to state and state-religious schools and from state-religious to state schools than move from the state schools to the more religious schools.  The largest number of transfers was from state-religious education to state education, a figure which is even more notable given the small share of state-religious schools in the education system (about 15%).

* Across all sectors, women are more educated than men.  Across population groups, the share of women who hold a bachelor’s degree is greater than men.  The difference is especially large in the Haredi sector, where the share of women with a first degree (about 26%) is about twice as high as that of men.  The low share of degree holders among Arab Israelis indicates the importance of accessibility to higher education for this population sector.  The group with the highest share of degree holders is secular Jews, followed by Jews who consider themselves national-religious.

* Seven industries are responsible for about 75% of the labor productivity gap between Israel and the OECD.  Labor productivity is an important factor in determining workers’ wages.  Productivity in Israel is low relative to the OECD, and the gap is widening over time.  The majority of the productivity gap between Israel and the OECD stems from seven industries where the productivity gap is particularly large – the majority of them in the service sector.  The “other business services” sector (which includes legal and accounting services) is responsible for a gap of about $3.32 per work hour, which is about 27.7% of the total gap between Israel and the OECD.  Additional industries that contributed substantially to the total productivity gap are wholesale trade (16.4%), hotels and restaurants (9.0%), retail trade (5.7%), food and tobacco (5.4%) and land transport (5.4%).  In contrast, it appears that those industries that were opened to imports and exposed to meaningful competition from abroad (like the textile industry) were forced to become more efficient in order to survive; this is manifested via a rise in their productivity levels and a narrowing of their gap relative to the OECD.

* In general, men earn higher wages than women, except among Haredim and Arab Israelis.  Among Haredim, and in contrast to other population groups, women’s wages are higher than men’s; among Arab Israelis the gap between men and women is relatively low.  The difference between population groups is explained by different levels of education and participation rates in the labor force.  In the Arab Israeli population, the majority of women holding a bachelor’s degree are working while those women without a degree are employed at much lower rates.  In contrast, the majority of Arab Israeli men work regardless of their education level.  Thus, the wages of women in this group are heavily weighted by those with a high education level, while the wages of men in this group are heavily weighted by those with a lower education level.

* The price of housing and rental properties has risen sharply since 2007, while real wages have not risen since 2000.  Since the beginning of the millennium, nominal wages have risen in parallel with the consumer price index, such that real wages have not risen for at least 15 years.  Housing prices and rental prices have risen much faster than the CPI – although each has risen at a different rate, in contrast to theoretical projections.  The shortage of affordable, long-term housing in the rental market allows housing prices to move even further away from the expected level of prices in a balanced market.  This situation underlies the importance of the creation of an organized rental market in Israel.

* Among young couples, the home ownership rate has decreased.  As long-term rentals are not viable options in Israel, young couples tend to dream of home ownership, even at a high price.  It is not surprising that a very high share of over 45-year-old Israelis live in a home they own – primarily because these homes were purchased before the sharp rise in prices at the end of the past decade.  Younger populations, though, have been greatly influenced by the rise in prices.  Among those aged 35-44, the share of singles who do not live in a flat they own rose to about 36% in 2014 in contrast to less than 30% in 2004.  Among those aged 25-34, the share rose more than 10 percentage points during the same period, with more than 60% living in a flat they do not own.

The Picture of the Nation Report covers a variety of additional areas, including new research on topics such as the employment of mothers, tax receipts, and poverty rates in Israel.  To read the full publication on the Taub Center website, click here.

The Taub Center for Social Policy Studies in Israel, headed by Prof. Avi Weiss, is an independent, non-partisan institution for socioeconomic research based in Jerusalem.  The Center provides decision makers, as well as the public in general, with a big picture perspective on economic and social areas.  The Center’s interdisciplinary Policy Programs – comprising leading academic and policy making experts – as well as the Center’s professional staff conduct research and provide policy recommendations in the key socioeconomic issues confronting the State.  (Taub Center 16.05)

Back to Table of Contents

11.2  JORDAN:  Changes to Jordan’s Constitution Raise Concerns

On 4 May, Osama Al Sharif posted in Al-Monitor that it took Jordan’s two-chamber parliament about two weeks to overwhelmingly approve a number of constitutional amendments that the government had hastily presented on 18 April.  On 2 May, the upper house of parliament adopted the amendments a week after the lower house had done the same.

The newly approved amendments to the Jordanian Constitution will change the king’s role in appointing key officials, though observers disagree on whether this will serve or weaken the country’s parliamentary system.

In contrast to the amendments that were recommended by a special royal committee in September 2011, in the midst of the Arab Spring, this time there was no public debate.  While the 2011 amendments — which affected one third of the constitution and limited the king’s constitutional powers to postpone elections, dissolve the lower house indefinitely, keep a government in office or re-appoint a prime minister — were seen by the public as enhancing political reforms and underlining the kingdom’s status as a constitutional monarchy, the latest installment of alterations triggered controversy.

The government did not specify the reasons behind the changes, which give King Abdullah the sole power to appoint the heads of the military, security forces, police, senate and constitutional court, in addition to the regent, without the recommendation of the Cabinet of ministers, as was the case previously.  In addition, one article in the constitution was revised to allow dual nationals to run for or be appointed to senior public posts.

But when the lower house discussed the amendments over a number of sessions on 19 April, Prime Minister Abdullah Ensour defended them, saying they are “progressive” and aim to enhance the principle of separation of powers.  Speaker of the upper house and former Prime Minister Faisal al-Fayez went further, saying that the changes are intended to pave the way for the formation of parliamentary governments, in which the largest party or coalition in the lower house would form a new government.

At present the king has the sole power to appoint a prime minister from within or outside of parliament.  Fayez said the amendments are meant to keep key sovereign military and security posts from being politicized.

Refuting criticism that the amendments actually reverse the reform path and consolidate the powers of the king, Fayez responded, “A strong king means a strong Jordan.”

But the amendments elicited strong criticism from public figures, including the former speaker of the lower house, Abdel Karim al-Dughmi, who voted against them.  Addressing lawmakers on 24 April, he described the alterations as a “coup against the constitution and Jordan’s political system.”  He vowed to vote against them, adding that the king enjoys immunity under the constitution.  But how would that work when he alone appoints public figures who may still be accountable under the law?

One constitutional authority, Mohammad al-Hammouri, addressed this particular point in a 24 April article for news site JO24, saying that under the Jordanian constitution, “The king can do no wrong” and the authority comes from the people through an elected legislature and the king rules through his ministers, who are accountable when he is not.  He added, “Under these amendments, we are no longer a parliamentary system.”

The Islamic Action Front, the largest opposition party in the country, issued a statement on 24 April criticizing the amendments and described them as “leading to absolute rule and constituting a clear reversal from the reform discourse that the king had preached, especially with regard to the formation of parliamentary governments with full authority.”

But the debate has failed to spill over into the public arena.  In contrast to mass protests during the Arab Spring, there were few demonstrations in Amman and other towns following Friday prayers on 29 April.  Only the article regarding allowing dual nationals to hold public posts appeared to galvanize popular protests.

Still, the amendments were defended by prominent figures who had previously called for wider political reforms.  Former Prime Minister Taher al-Masri told Al-Monitor that the latest amendments “pave the way for the formation of parliamentary governments and strengthens political parties while distancing military and security institutions from political gravitations.”  He added that these institutions belong to Jordan’s citizens and should not be politicized.  Masri stressed that the king is still committed to political reforms and “the latest amendments point to the fact that our constitutional monarchy is maturing.”

But former deputy prime minister and head of the Royal Committee for the National Agenda Marwan Muasher disagreed.  He told Al-Monitor that it is wrong to believe that these amendments “actually serve the king or that they enhance the principle of separation of powers.”  He added, “We all know that appointing the head of the army or security cannot be done without the approval or choice of the king.  But changing the rules of the game now and altering the principle that the king rules through his minister, which has preserved the stability of the country, is a [dangerous] precedent.”

One lawmaker who is well known for advancing equal rights for citizens and defending political reforms, Mustafa Hamarneh, is critical of the recent amendments, which he said have “deformed the constitution, damaged the three branches of government and concentrated powers in the hand of the king.”  He told Al-Monitor, “The changes have taken authority from the people and distanced us from the goal of forming parliamentary governments.”

On 2 May, Ensour announced that Jordan is currently preparing to hold parliamentary elections, though no date has been specified yet.  It is not clear if the latest amendments will lead to the formation of parliamentary governments as promised by the king.

Jordan may be attempting to copy the Moroccan example of allowing political parties to form governments while keeping so-called sovereign posts in the hands of the king.  Those who defend the move say Abdullah remains the best guarantor against possible abuse of power by ruling parties or blocs.  Others are asking what will happen if the experiment fails and we end up with a monarch who wields too much power and is unaccountable for his decisions.  (Al-Monitor 04.05)

Back to Table of Contents

11.3  UAE: Truck Market Sales Set to Grow at 8% CAGR till 2021

According to a recently published TechSci Research report “UAE Commercial Vehicles Market Forecast & Opportunities, 2021” UAE truck market, which includes pickup & light duty trucks, medium and heavy duty trucks (M&HCV), is the dominating segment of the UAE commercial vehicle market.  In comparison with other Middle East countries, which derive a large chunk of their revenue from the oil and gas sector, the UAE has diversified into non-oil sectors such as manufacturing, construction, power, wholesale, retail and transportation which has reduced its dependence on oil and gas sector.

Despite of such a positive contrast, the country’s truck market witnessed negative growth during 2011-2015 due to slowdown in construction projects across the country and tight liquidity situation.  However, in 2014, $100 billion investment was allocated for the housing and transport sector in Abu Dhabi, which was in line with country’s economic vision 2030.  In addition, Abu Dhabi’s Executive Council announced investment of $89 billion, road development and other infrastructure projects in the housing sector in 2013.  Further, around $2 billion are estimated to be invested in developing state-of-the-art housing establishments in the country.  Various road construction project such as 62 km highway connecting Dubai and Abu Dhabi are also scheduled for completion by 2017.

According to TechSci analysis, the country is expected to witness investment in energy, infrastructure, residential and commercial projects over the next five years. Moreover, the country would be hosting the “World Expo 2020”. Consequently, the country is poised to witness large scale infrastructure development. Moreover, the UAE government is focusing on diversification of economy in the non-oil sector over the next decade, as per the government’s plan to trim down the share of revenue derived from the oil sector to around 20% by 2030.

Few of the prominent projects, which are likely to raise the demand for trucks in the UAE are, Abu Dhabi Metro construction, Dubai Metro rail line construction, Emirates Roads Master Plan, Etihad railway Network, Airport expansion project, Abu Dhabi Airport expansion projects, etc.

The average selling price (ASP) of trucks in the UAE is anticipated to increase at a low pace over next five years.  Garnering support from the expected growth in the volume sales coupled with anticipated price rise, market for trucks in the UAE is projected to grow by 2021, thereby exhibiting revenue growth at a CAGR of around 8.65% during 2016-2021.

The UAE truck market is dominated by Mitsubishi.  The company emerged as a leader in pickup & light truck category backed by its wide product portfolio.  The market share of Mitsubishi is estimated to further grow by 2021 backed by anticipated increase in its market share in medium and heavy duty truck markets.

On the other hand, second and third largest market shares in the UAE truck market were held by Nissan and Toyota respectively, in 2015. Nissan with its presence in the pickup & light duty truck segment and medium duty truck segment has been playing on volume sales.  However, Toyota, along with its subsidiary “Hino” accounted for third largest market share in the pickup & light duty truck category in the same year.  Hino was the largest player for medium duty trucks in the UAE in 2015.  The market share of Toyota (along with its subsidiary Hino) is further forecast to increase by 2021 according to TechSci Research report.  (TechSci Research 11.05)

Back to Table of Contents

11.4  LIBYA:  The Story Behind the General Who Will Likely Shape Libya’s Future

On 9 May Mustafa Fetouri posted in Al-Monitor that Gen. Khalifa Hifter’s star appears to be rising once again in Libya, and it is only a matter of time before we see him become a figurehead in a country that is lacking any but is eager to have one.

His enemies in Misrata and Tripoli have always questioned his motives and intentions, but it remains to be seen if he will be a uniting leader for a fragmented country or a divisive politician pushing Libya toward even more fragmentation.

During March, Hifter almost completely liberated Benghazi and started moving his troops to retake Sirte in western Libya, where the Islamic State (IS) has been in control for almost two years.  Hifter’s troops are surrounding the city, awaiting his orders to attack IS, which has launched battles west and southwest of the city, taking more territories and small villages such as Abu Grain and Zamzim.

Hifter’s declared aim is to liberate Libya from Islamists, but it is unclear what his next step will be if he takes Sirte.  The next big city on the way to Tripoli is Misrata, which has the most powerful local militia in Libya.  Misrata is already an enemy of Hifter, which means attacking it will trigger longer, more devastating war in the country.

So who is this man who has been on and off the Libyan political scene for the last 40 years, shifting positions as his fortune changed from a Moammar Gadhafi loyalist to a prisoner of war to Gadhafi’s sworn enemy and — most recently — as chief of staff of the Libyan army under the internationally recognized government in Tobruk?

Born to a big clan in the even-larger al-Firjan tribe, dominant in both Ajdabiya and Sirte, Hifter was recruited as a young officer by the late Gadhafi to join the Free Unionist Officers movement inspired by Egyptian leader Gamal Abdel Nasser.  The movement was secretly founded by Gadhafi in the 1960s and used to topple King Idris I of Libya in September 1969 and take power.

Hifter attained the rank of colonel in 1986 and became the commanding officer of Libyan ground troops in Chad’s civil war.  He was captured in 1987 when his base was overrun by Chadian forces and he was taken to Chad.  Gadhafi, denying that he had any troops in Chad, disowned Hifter and left him, along with 300 of his troops, at the hands of Chadian authorities.  Under pressure from the West, particularly France, which supported counter-Chadian factions, Gadhafi never admitted that he had any troops in Chad.

The United States, having already attempted many times to remove Gadhafi from power — including bombing his residence in April 1986 after accusing him of supporting terrorism — came to Hifter’s rescue with the hope of enlisting his aid against Gadhafi.

In return for his freedom from Chadian jail, Hifter was asked to join the newly formed opposition group, the National Front for the Salvation of Libya, which enjoyed US military and financial support.  Hifter, already angry from being left hopeless in a Chadian jail, joined the front and was flown into the United States by the Central Intelligence Agency (CIA) with troops willing to join him.  Hifter lived comfortably in Virginia, relatively close to CIA headquarters, from the earlier 1990s to 2011.  He apparently even became a US citizen, but he never forgot his grudges against Gadhafi.

It is not clear what kind of relations he had with the CIA.  Many aspects of his life in suburban Washington are hard to explain — for example, how he supported himself and his family.  It is assumed that he became the CIA’s man against Gadhafi. He maintained ties with Libyan opposition groups in exile and organized military opposition to Gadhafi from abroad, but without any success until the revolt against Gadhafi erupted in 2011.

Sensing his time had come to settle scores with Gadhafi, Hifter arrived back in eastern Libya in March 2011 and played a role in leading the rebels fighting the regime under NATO air cover.  After the regime was toppled, Hifter faded into obscurity again, only to surface in October 2012 for a brief time when the new government decided to invade Bani Walid, a town southwest of Tripoli accused of harboring former regime officials.  There are no confirmed reports of him taking part in actual fighting.

Hifter disappeared again until February 2014, when he suddenly appeared on TV, making a statement resembling an announcement by a military leader taking over power.  In the announcement, he launched “Operation Dignity” against Islamist militias in Benghazi; however, no one took Hifter seriously at the time since he had neither an official military role nor a loyal militia to fight with him.  It turned out that he was still preparing his military capabilities.

Hifter again disappeared from the scene, spending the next few months moving between al-Marj and Benghazi and trying to organize former military officers into a fighting force, counting on old loyalties among the remnants of the Libyan army and his tribal connections.  He managed to cultivate political support within the internally recognized government based in Tobruk, which named him chief of staff of its infant army in March 2015.

After he gained political and military legitimacy, Hifter concentrated on fighting Islamists in Benghazi, though with little initial success.  His most sworn enemy was Ansar al-Sharia, the dominant terror group in Benghazi at the time, which the United States had already declared a terrorist organization after it was accused of killing the US ambassador in 2012.

Hifter relied heavily on his tribal connections in eastern Libya and capitalized on the bad security situation in Benghazi.  By May 2015, he believed he had enough force to declare war on terror throughout Libya, not just Benghazi, where hundreds of former security officials, army officers and civil and political activists had been assassinated.  In a way he was defending himself since he knew that he could be next on the death list.  His offensive in Benghazi stalled for a while since the army fragments he managed to reorganize were few in numbers and lacked training and equipment.  Above all, many former professional officers did not join him because neither his motives nor his objectives were clear.

However, that changed in late 2015 and early this year.  In March 2016, Hifter established contact with a group of former professional officers and politicians exiled in Egypt.  Al-Monitor has learned that two former high-ranking regime politicians visited him and agreed to provide him with more former army officers with certain know-how, including mine expertise and maintenance technicians for military airplanes.

The agreement included unconditional return for any former official or army officer wishing to return to Libya without being prosecuted or threatened.  At least one former high-profile politician has already been welcomed back to Libya. Tyeb al-Safi, a former minister and close aid to Gadhafi, returned to eastern Libya under the protection of his own tribe.

While Hifter’s definitive military plans are unknown after Sirte, his political intentions also are not clear.  He has repeatedly distanced himself from politics, but his increasing popularity, particularly in eastern Libya, might well develop into a nationwide phenomenon pushing him to take some political role or even run for president in the next elections.  In eastern Libya today, Hifter is the de facto chieftain as he tries to extend his leadership role westward. Forces loyal to him already control parts of western and southern Libya.  One thing, however, is certain: Hifter is here to stay, and he will play a role in shaping Libya’s political scene within the Government of National Accord and beyond.  (Al-Monitor 09.05)

Back to Table of Contents

11.5  TUNISIA:  Is Homophobia at All-Time High in Tunisia?

Conor McCormick-Cavanagh posted on 4 May in Al-Monitor that homophobia has reached an unprecedented level in Tunisia, as National Guard members are posting violent threats against the gay community on social media and signs banning gays from entering are displayed in public places.

The wave of homophobia began 14 April when a Tunisian actor went on live television and blatantly made homophobic remarks.  Ahmed Landolsi appeared on the popular talk show El Hiwar Ettounsi (The Tunisian Conversation) and was asked about his views on homosexuality.  He expressed his belief that “homosexuality is a sickness” and that “Tunisia’s constitution states that the country’s religion is Islam,” so homosexuality is “against the constitution.”

Landolsi’s motivation for these comments remains unclear.  He is a key public supporter of the Esperance Football Club in Tunis and his supporters would likely not respond favorably to comments friendly to the lesbian, gay, bisexual and transgender (LGBT) community.  He may have been pandering to these soccer fans or even expressing his true beliefs.  Either way, he doubled down on his comments, expressing the same thoughts on Mosaique FM.

The LGBT activist community condemned his comments and implored him to rescind his homophobic remarks, but Landolsi refused.  Landolsi’s comments and refusal to apologize were not surprising; he expressed a belief shared by many Tunisians.  According to a survey by ELKA Consulting, 64.5% of Tunisians believe homosexuals deserve punishment.

In response to this general acceptance of such normative homophobic comments, Ahmed Ben Amor, vice president of Shams, Tunisia’s first LGBT activist organization, appeared live on El Hiwar Ettounsi to publicly condemn Landolsi’s comments and share his organization’s principles.  The talk show is not known for being a particularly thoughtful program and the episode featuring Ben Amor reinforced this idea.

To create controversy, the TV show not only invited Walid Ettounsi, a blatantly homophobic singer, but also Imam Mohamed Ben Hamouda.  They strategically placed Ben Hamouda and Ben Amor across from each other and constantly showed viewers the face of the imam while Ben Amor was speaking.

The show lasted for more than 43 minutes and Ben Amor expressed his organization’s guiding goal: the repeal of Article 230 of Tunisia’s penal code, which criminalizes sodomy.  He also spoke about the general tolerance of homosexuality in Arab-Muslim society, citing Abu Nawwas, an Arabic writer famous for his stories involving homosexuality.

The imam countered by saying that homosexuality is not just forbidden in Islam, but also in Christianity and Judaism.  Ettounsi also expressed homophobic sentiments and got the audience to laugh at Ben Amor’s ideas.

This episode of El Hiwar Ettounsi kicked off the controversy in Tunisia, which continues to this day.  Never before had an entire episode of a Tunisian talk show been dedicated solely to the topic of LGBT rights.  Shams leaders, including Ben Amor, had previously gone on talk shows such as El Hiwar Ettounsi and Mamnoua min el-Bath (Forbidden to be Broadcast), but only as part of short segments.

In the days following the airing of the show, pictures spread across social media, depicting signs above doors of restaurants, internet cafes and grocery stores that homosexuals were forbidden to enter.  The window of a taxi in Kairouan displayed a sign that read “No rides for homosexual passengers.”

In addition, National Guard members posted multiple threatening photos, with guns and knives next to signs that expressed homophobic sentiments.  Many of the photos from National Guard members referred to the show as El Himar Ettounsi, meaning “The Tunisian Donkey.”  Some National Guard members even called for homosexuals to be “burned to death.”

Following these threatening and homophobic social media posts, Shams lawyer Mounir Baatour called for an “official boycott of all homophobic shops and service providers.”  He also called for the “prosecution of any service provider found guilty of discrimination based on sexual orientation.”

LGBT activists have never before expressed such profound worry about the potential for hate crime attacks. In fact, their worries are quite rational.  Baatour told Al-Monitor of three hate crimes in the past week.  He said, “A group of homophobic men attacked Shams member Bouhdid Behadi at the downtown Passage metro station.  Safwen Charfi, another man, also reported being verbally harassed with homophobic slurs in the Bardo neighborhood.  Another young man was beaten on his back in another homophobic attack in the Cite Ettadhamen neighborhood.”

Ramy Ayari, a prominent LGBT activist who caused controversy on social media in September 2015 for posting a photo of himself kissing another man, also was beaten and kicked in the face in a homophobic attack by off-duty police officers outside the Wax nightclub in Gammarth, a suburb of Tunis, on 29 April.  Speaking to Al-Monitor, Ayari said, “I can’t even move.  They attacked me and my friends because we were with transgender people.”

In response to the rise in homophobia throughout Tunisia, LGBT activists have organized a march in downtown Tunis on 15 May.  A group of counter-demonstrators have also posted a Facebook event on the same day, titled “Beat the gays.”  Neither security forces nor the Ministry of Justice have addressed the potential for violence and intimidation.

Riadh Mouakher, a member of parliament from Afek Tounes, told Al-Monitor, “Most parties aren’t saying anything about the issue of homosexuality.  They are afraid of a negative reaction.”  Afek Tounes is the one mainstream party that has been clear in its position demanding a full repeal of Article 230.

Tunisia’s LGBT community may have scored one moral victory recently.  After Ettounsi expressed his homophobic comments on TV, Shams reached out to concert organizers in Canada and the United States who had already scheduled Ettounsi for shows on 20 – 21 May.  The organization informed them of Ettounsi’s comments and according to Shams, the organizers responded by announcing a cancellation of the shows and a ban of Ettounsi from all future shows.  However, the final outcome remains unclear, as Naoufel Ourtani, a Tunisian journalist, has questioned these claims.

The path forward for LGBT activists in Tunisia remains challenging, but there are reasons for optimism.  A judge recently threw out a case of eight men arrested on charges of violating Article 230, marking the first time men arrested on charges of violating this article were found not guilty.  In addition, although most mainstream politicians either oppose repealing Article 230 or are afraid to speak about it, Afek Tounes, the party with the fifth-most seats in parliament, supports repealing the law banning sodomy.

Mouakher said, “Shams’ demand is really simple. They aren’t demanding the right to gay marriage. All they want is privacy.”  He added, “The constitution is very clear about this.  There is a minimum amount of human dignity that you have to respect.”

Conor McCormick-Cavanagh is a journalist based in Tunisia.  He writes about politics and culture of the MENA region.  (Al-Monitor 04.05)

Back to Table of Contents

11.6  EGYPT:  Arab Republic of Egypt Outlook Revised To Negative; ‘B-/B’ Ratings Affirmed

On 13 May 2016, S&P Global Ratings revised its outlook on its long-term sovereign credit rating on Egypt to negative from stable.  At the same time, we affirmed our ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Egypt.


The negative outlook reflects our view that Egypt’s external and fiscal vulnerabilities might increase further over the next 12 months.  We consider that this could dampen the country’s economic recovery and exacerbate sociopolitical tensions.

Our ratings on Egypt remain constrained by wide fiscal deficits, high public debt, low income levels, and institutional and social fragility.  We expect some Gulf States to continue to provide economic assistance to Egypt in the form of direct investment, participation in new projects and concessionary loans to purchase petroleum products, given Egypt’s strategic importance in the region.  Although financial support from some Gulf Cooperation Council (GCC) countries – namely Saudi Arabia, the United Arab Emirates (UAE) and Kuwait – may partially offset Egypt’s growing external financing pressures, we think that the slump in these countries’ oil-related revenue may make such support less forthcoming in future.

We project that Egypt’s real GDP growth will weaken to 3% in 2016, after rebounding to 4.2% in 2015.  Several factors are constraining the gradual economic recovery in the near term – in particular, the worsening of the foreign exchange shortage and the significant drop in tourism.  Business conditions in Egypt have continued to suffer from these bottlenecks and the government needs to address them to maintain the country’s growth momentum, in our view.  We anticipate that Egypt’s economic growth will average 3.8% in 2016-2019, fueled by domestic consumption and investments.  These will be underpinned by resilient remittances from Egyptians working abroad, some inward foreign investment, and an improved power supply as new natural gas developments come on-stream by end-2017.

Eni SpA has discovered a natural gas field offshore of Egypt, estimated to be capable of producing 850 billion cubic meters or 500,000 barrels of oil equivalent per day.  We consider that the discovery could support Egypt’s economic growth by encouraging investment in the oil and gas sector.  Production at the Zohr field is expected to start by end-2017 and be fully scaled-up by 2019.  It could improve the country’s energy and trade imbalances in the medium term.  However, we understand that the Egyptian General Petroleum Corp. still owes arrears of about $3 billion to foreign oil companies.  We believe that any delays in paying back foreign oil companies could discourage investment in the Egyptian oil and gas sector, particularly while oil prices remain low.

Since 2014, the Egyptian authorities have launched a number of politically sensitive fiscal and structural reforms aimed at reducing the budget deficit.  The government raised electricity prices twice and plans to gradually phase out fuel subsidies over the next five years.  The government also raised taxes on corporations and property, and introduced taxes on dividends.  Other reforms, such as introducing a tax on capital gains and raising value-added tax (VAT), have been postponed.  However, we understand that the law governing the new VAT system has been finalized and will be submitted to the parliament for its approval.  We expect it to be implemented before the end of 2016.  Overall, we expect budgetary consolidation to continue at a slower pace than we had anticipated, in light of Egypt’s social fragility.

Egypt’s fiscal deficit, which stood at 11.5% of GDP in 2015, remains one of the highest among the sovereigns we rate at ‘B-‘.  We anticipate that mild fiscal consolidation will continue as a result of subsidy reforms, new fiscal measures (including those to VAT), and low energy prices.  In our view, the government has a very limited ability to significantly cut spending, given Egypt’s shortfall in basic services, the need for social assistance to low-income individuals and families, and the country’s high debt service cost.  Spending on public wages and salaries, subsidies and social transfers, and debt service represents about 80% of the total expenditure in the 2015/2016 budget.  Moreover, the government has channeled some of the savings from subsidy reforms into higher spending on health, education, and scientific research.

We forecast that general government debt will increase to 91% of GDP in the next three years.  We estimate the annual change in general government debt will average about 11.5% of GDP in 2016-2019, down from 13.8% of GDP in 2012-2015.  We project that general government interest expenditure will reach one-third of general government revenues on average in 2016-2019.

We understand that financial assistance from official lenders such as the World Bank and some GCC countries remains an important component in the government’s debt financing strategy.  The government’s debt strategy during the upcoming fiscal year (July 2016 to June 2017) includes the possible issuance of a new Eurobond of up to $2 billion, and up to $1.5 billion from the World Bank and the African Development Bank via a development policy financing loan.  In November 2015, Egypt reached an agreement with the World Bank and the African Development Bank to receive $4.5 billion in concessional funding over the next three years.

The remaining fiscal funding will most likely be raised from the Egyptian banking system.  Domestic banks are heavily exposed to the Egyptian government debt.  Their customer deposit bases continue to grow, while private-sector credit remains relatively flat.  Egyptian banks tend to invest their excess liquidity in domestic government debt.  The Egyptian authorities have increasingly been relying on the Central Bank of Egypt (CBE) to finance budget deficits.

We forecast current account deficits to average 4.8% of GDP in 2016-2019, prompted by a widening of the overall trade deficit as import demand remains strong while export and tourism receipts are subdued.  We expect Egypt’s overall net external liability position to stand at 169% of current account receipts (CARs) in 2016.  Over time, remittances from Egyptians abroad, tourism, Suez Canal receipts and foreign direct investments are unlikely to be sufficient to fund the overall trade deficit.  In our view, the low and decreasing reserves coverage – estimated at three months of current account payments (CAPs) in 2016 – represents a key vulnerability in the near term and a limited buffer to absorb any further downward pressure on the Egyptian pound.  Although we expect some Gulf States (including sovereigns and government-related entities) will continue to provide economic assistance to Egypt, financing pressures will remain.

Over the past four years, Saudi Arabia, the UAE and Kuwait have demonstrated support to Egypt by providing substantial financing – totaling close to $25 billion – in grants, aid and concessionary loans, because they view Egypt as an important geopolitical ally.  The CBE received $6 billion in deposits from the Gulf states in April 2015, which has helped increase Egypt’s foreign currency reserves to $20.5 billion.  We understand that Egypt will receive an additional $2 billion in deposits from the UAE before end-June 2016.  Despite this support, Egypt’s international reserve position had dropped to $17 billion as of April 2016 and will remain under pressure

We assess Egypt’s monetary policy flexibility as low, reflecting our appraisal of the CBE’s intermittent interventions in the foreign exchange market and its exposure (along with that of the banking system) to the government.  Despite the CBE’s interventions, the Egyptian pound has continued to depreciate against the U.S. dollar by about 25% since January 2015.  In March 2016, the CBE carried out a 13% devaluation of the Egyptian pound.  The CBE described the devaluation as being part of a shift to a more flexible exchange-rate policy.  This leaves open the possibility of further adjustments in the foreign currency rate, in our view.  We expect the Egyptian pound to continue to weaken over the medium term.

President Abdel-Fattah El-Sisi has been in office since June 2014 and Egypt concluded its most recent parliamentary elections on 16 December 2015.  The security and sociopolitical environment in Egypt remains fragile.  Contentious issues include the transfer of islands in the Red Sea to Saudi Arabia and continued hostility between the Egyptian security forces and the terrorist group ISIS in Northern Sinai.


The negative outlook reflects our view that Egypt’s external and fiscal vulnerabilities might increase further over the next 12 months, slowing the country’s economic recovery and heightening sociopolitical tensions.

We could lower the ratings if external imbalances increase beyond our current expectations, for example, if foreign exchange reserves decreased more quickly than we currently expect. We could also lower the ratings if current account financing, including from GCC countries, became less forthcoming.

Deteriorating domestic fiscal funding options, increased political risk, or a weaker institutional environment could also lead us to lower the ratings.

We could affirm the ratings at their current levels if external and fiscal deficits reduce, and if GDP growth picks up.  (S&P 13.05)

Back to Table of Contents

11.7  TURKEY:  Outlook Revised To Stable; ‘BB+/B’ Ratings Affirmed

On May 6, 2016, S&P Global Ratings revised its outlook on the Republic of Turkey to stable from negative.  At the same time we affirmed our unsolicited ‘BB+/B’ foreign currency long- and short-term sovereign credit ratings and ‘BBB-/A-3’ local currency long- and short-term sovereign credit ratings on Turkey.

We also affirmed our unsolicited ‘trAAA/trA-1’ long- and short-term Turkey national scale ratings.


The outlook revision reflects the demonstrated resilience of the Turkish economy and our view that risks to the financing of Turkey’s still-large current account deficit and the roll-over of its external debt have moderated.  The Turkish economy has faced several challenges – escalating domestic violence following the ending of the peace process with Kurdish militants, two general elections, a sharp depreciation of the lira amid sustained portfolio outflows, heightened instability along its southeastern border and weaker demand from major export markets.  Despite these challenges, during 2015 the economy expanded by 4% versus our original expectation of 3.1% at the time of our 6 November 2015, affirmation.  Lower oil prices and net gold exports allowed a narrowing of the current account deficit, despite the weakness in demand from oil-exporting markets and a fall in tourism numbers.  We expect economic growth to average about 3% over our forecast horizon of 2016-9.  That is not to say, however, that risks do not persist.  The tourism season is expected to underperform that of past years; the government’s deficit position is projected to widen to support the economy; rising oil prices could push up the cost of imports; domestic political volatility is likely to persist; and the implementation of reforms may be sidetracked to make way for constitutional changes.  But in our base case, we do not expect that these factors will have a significant negative effect on external investors’ willingness to fund the Turkish economy.

Strong consumer demand in 2015 was supported by lower oil prices; purchases, particularly of automobiles, some of which were brought forward in order to avoid the price impact of further exchange rate declines; and the additional spending of the large migrant population (estimated at around 3 million, 4% of the population).  Consumer credit growth decelerated, owing to macro-prudential measures taken to curb excessive household borrowing, but credit card lending recovered in the second half of the year.  The negative effect of lira depreciation (24% against the U.S. dollar and about 5%-7% on a real effective exchange rate basis) on households’ purchasing power was partially mitigated, as they continue to hold more foreign currency assets than liabilities, given that foreign currency lending to households is prohibited.  The current account deficit narrowed to 4.5% of GDP in 2015 from 5.5% in 2014, largely due to the low price of energy imports and the improvement in the volatile net nonmonetary gold exports position; excluding these effects, the current account deficit widened. The general government deficit was unchanged at a modest 1.2% of GDP, with an increase in tax revenues compensating for stronger-than-budgeted spending.

We project real GDP will grow by 3.4% in 2016, slowing compared with the 4% growth in 2015, despite the government’s 30% increase in the minimum wage.  In our view, the government’s largesse in relation to its pre-election promise will be more than offset by the slowdown in credit growth, moribund private investment, volatile external demand, and a sharp decline in the tourism sector as a result of the recent terrorist attacks and Russia’s ban on the sale of package holidays to Turkey.

We expect heightened political uncertainty in 2015 to spill over into 2016, and this could also dampen economic growth prospects this year.  The implementation of the ambitious medium-term economic program for 2016-2018 is likely to stall in 2016, in our view, due to the president’s focus being directed more toward bringing about constitutional change with the end goal of achieving an executive presidency.  The reform agenda targets increasing domestic savings, reducing dependence on imports, improving educational standards, and increasing labor market flexibility, among other things.  A referendum, or parliamentary elections, could be called again in 2016 in order for the AKP party to win enough seats to enable it to change the constitution.

Under our base case, we do not expect eventual constitutional reform to result in significant policy changes.  In particular, we do not expect an intensification of intervention in the independence of Turkish institutions, including the central bank, nor the abrogation of any private sector rights such as the nationalization of private sector banks.

As well as focusing on ways to raise domestic savings – including plans to fund the private pension and severance pay systems – the government’s reform plan also aims to deepen domestic capital markets, and cut the bill for imported energy (an important contributor to the current account deficit), while increasing the currently low participation of women in the labor market and reducing the size of Turkey’s substantial informal economy.  If the pace of implementation accelerates, it could help Turkey shift away from its current economic growth model, which still depends on net debt financing from abroad and therefore to a large extent on monetary policy settings of major central banks. In the absence of such reforms, though, we believe Turkey’s external position will remain a weakness for the rating.

Gross international reserves of the central bank amounted to $111 billion in 2015.  However, foreign currency and gold reserve requirements made up about 70% of this total in 2015 (up from 37% in 2011).  Excluding these reserve requirements we estimate usable reserves at about $30 billion in 2015, an amount roughly equal to the 2015 current account deficit, providing only a limited buffer against any further exchange-rate pressure.  We estimate Turkey’s gross external financing needs will average close to 180% of current account receipts and usable reserves in 2016-9.

Between 2008 and 2015, net banking sector external debt increased to about $150 billion (21% of GDP) from less than $8 billion (1% of GDP).  External leverage for Turkey’s banking sector remains relatively high.  Nevertheless, increases to reserve requirements for short-term borrowing resulted in a sharp fall in banks’ reported short-term debt in 2015, down to about 40% of banks’ total external debt from about 55% in 2014.  At the same time we see a general trend for Turkish banks to increase the maturities of their longer-term debt.  Although we view Turkey’s banking system as generally well capitalized and supervised, the size of state-owned banks (representing about one-third of total banking system assets), and their involvement in quasi-fiscal operations, means that domestic banks’ asset quality may not be homogenous throughout the system.  Furthermore, although the banking sector is fully hedged, its foreign currency funding has risen in tandem with declining profitability.  This could represent a risk for banks if their hedges do not hold, due to counterparty risk, or because of the second-round effects of the large open foreign exchange position in the corporate sector (at about 25% of GDP) on banks’ asset quality.  We also remain concerned about the decrease in Turkish exports and tourist arrivals, as both of these will put pressure on borrowers in these industries.

The uncertain global economic environment, particularly a possible reversal in historically low U.S. interest rates could, in our opinion, raise real interest rates in Turkey.  This could exacerbate any slowdown and in turn reduce the risk appetite of nonresident investors in Turkey’s government debt and equity markets, which have been important destinations for external financing inflows over the past several years.  Further increases in the prices of oil and other energy products could also exacerbate any slowdown, given Turkey’s large net energy import bill.

Mitigating its external vulnerabilities to some degree, Turkey has deep local currency capital markets that have benefited the sovereign’s access to and cost of financing.  Two-thirds of government debt is funded in local currency and at fixed rates.  Furthermore, we view the treasury’s policy of meeting net public-sector financing needs by issuing in local currency at longer maturities as a positive rating factor.

Central government expenditures exceeded budgetary expectations in 2015 as big ticket current spending items, such as personnel expenditure, current transfers and purchases of goods and services all accelerated by more than 10%.  Meanwhile, capital spending and transfers also accelerated.  However, the central government balance narrowed marginally to 1.2% of GDP in 2015, from 1.3% in 2014, as budget revenues increased by 14%, largely due to a 16% increase in tax revenues, and non-tax revenues increased by 2%.

In our base-case scenario, we anticipate that the government will continue running modest deficits, averaging 2.4% of GDP in 2016-2019.  This widening in the deficit from 1.2% in 2015 results from the implementation of election pledges alongside our lower economic growth forecasts when compared with those in the government’s medium-term plan for 2016-2018.  We expect the government’s debt stock to remain largely flat in the absence of external shocks that could weigh further on growth prospects, the exchange rate, and on budgetary performance.

Under our fiscal assumptions, we also incorporate our view that the contingent liabilities of the Turkish general government are limited.  Specifically, we consider that Turkey’s domestic banks–the intermediators of the country’s external deficit–will remain well regulated and amply capitalized.  Nevertheless, we expect asset quality to gradually deteriorate, evident from the 9% increase in domestic nonperforming loans (NPLs) in the system during the first 16 weeks of 2016 versus 2% credit growth.  The stock of outstanding NPLs is at about 3.3% as of the end of April 2016.  We expect a sharp decline in tourism receipts in 2016, following the terrorist attacks in 2015 and 2016, to result in higher, but manageable, NPLs for the banks.

Anecdotally, we understand that system wide NPLs could be about 2% higher, when including large Turkish banks’ sales of NPLs and large restructurings that are classified under Group II performing loans.  We understand that the latter is attributable to clients who can’t pay owing to the 2015 lira depreciation and who have requested an extension of the original maturity.

We foresee the general government’s interest burden at about 5% of revenues and net general government debt at about 27% of GDP over 2016-2019.  Since 2009, the weighted average maturity of Turkish government domestic borrowing has more than doubled to six years.  One risk to the central government’s funding profile remains the high stock of domestic debt held by nonresidents.  It stood at 17% of total domestic debt in 2015. In the event of external instability, this stock could become an outflow, putting pressure on balance-of-payments financing.

Turkey’s low domestic savings rate results in a low level of investment and high interest rates to attract capital flows to Turkey, some potentially flighty. This is also partly due to a lack of confidence in the Turkish lira.  More credible monetary policy could reduce inflation expectations and result in a higher level of savings.  Overall, we think the central bank’s challenged credibility has diminished the status of the Turkish lira as a reliable transactional currency, making it more vulnerable to shifts in investors’ portfolios of cross-border holdings.  We think this poses greater risks to the refinancing of Turkey’s considerable stock of external debt.  Although we consider that Turkey’s relatively deep capital markets benefit its monetary flexibility, we view the complex monetary framework – with multiple interest rates and an unusually broad interest rate corridor – as relatively ineffective, given the high pass-through of exchange rate depreciation into headline inflation.  We note the central bank’s recent efforts to simplify the monetary policy framework.  However, the cuts to the upper range of the interest rate corridor loosen monetary policy settings at a time when core inflation remains stubbornly above 9% and inflation expectations are around 7.5% in one year’s time and 7% in two years’ time.


The stable outlook reflects our expectation that Turkey’s economic growth prospects will remain resilient to external shocks and domestic political risks and that the government will post modest fiscal deficits, against lingering geopolitical risks and still-high external financing needs.

We could lower our ratings if Turkey’s fiscal performance and debt metrics were to deteriorate beyond our current expectations.  This could occur, for instance, following a sudden drop in government revenues, higher government expenditures, or the materialization on the government’s balance sheet of contingent liabilities from financial-sector instability.

We could also lower our ratings if we were to view the ability of the Turkish economy to roll over its external debt as weakening, for instance resulting from a change in investor sentiment in relation to regional or domestic instability, the perception of a deterioration in monetary policy credibility, tightening global policy rates, or a sharp rise in external debt.  In our view, such an outcome would have broad negative macroeconomic effects.

We could raise our ratings if a sustained rebalancing of the source of economic growth resulted in much lower external borrowing needs.  (S&P 06.05)

Back to Table of Contents

11.8  TURKEY:  Erdogan’s Secret Economic Weapon

Ufuk Sanli posted on 4 May in Al-Monitor that during his first decade in power, Turkish President Erdogan won widespread respect as a mediator working to resolve international issues.  He largely settled Turkey’s problems with neighboring countries, advocated democratic values and presided over a dynamic economy, cashing in on the reputation he had earned.  From 2002 through 2012, Turkey’s exports increased fourfold, from $36 billion to $152 billion, boosting economic prosperity and employment in the country.

In recent years, however, the tide has turned.  Erdogan’s new problems with neighbors sounded alarm bells for exports, which have dropped to $144 billion. In a medium-term economic program announced at the end of 2015, the government’s projection for this year’s exports was $155.5 billion.  The data from the first four months of 2016, however, show that this target is nothing but a dream, with Turkish companies destined to sell even less to international markets this year compared with 2015.  According to figures from the Turkish Exporters’ Union (TIM), exports for the period January-April dropped 8.4%, or $4.2 billion, compared with the same period last year.

Yet, one sector stands out in this otherwise gloomy picture: the defense and aviation industry.  Exports by Turkish defense companies reached $556 million in the first four months of the year, a 23% increase, up from $460 million for the same period last year, according to TIM.

Latif Aral, head of the Defense and Aviation Industry Exporters’ Union, told Al-Monitor, “I guess we’ll go over the $2 billion mark this year, setting an all-time record.”  The revenues of Turkish defense companies have risen from $800 million to $1.6 billion over the past five years.

“The Turkish defense industry provides a wide range of products and services, from advanced satellite systems to boots,” Aral said.  “Investment in the sector has increased product variety, thanks to which new export items are being added to sub-product groups. With the advantage of such a broad portfolio, we are able to enter new markets more easily.”

The Stockholm International Peace Research Institute lists Turkey, which has NATO’s second-largest standing army, as the world’s seventh-largest arms importer and the world’s 16th-largest arms exporter in terms of sales.  The country’s arms imports total $2 billion to 2.5 billion per year.  As recently as 15 years ago, Turkey spent much more on such imports.  A comprehensive drive to expand the local defense industry since the early 2000s has led to a significant reduction in money spent on foreign-made weapons and equipment.

In a 30 April ceremony in Istanbul marking the start of construction on Turkey’s first assault ship, the TGC Anadolu, Erdogan said, “Our reliance on [defense imports] has decreased to about 40%, from 80% in 2002.  Our target is to bring this down to zero at the centenary of the republic [in 2023].  We’ll not only be meeting our own needs, but we’ll also become the main supplier of friendly and brotherly countries.”

Turkey’s defense industry bureaucracy adopted quite a simple road map in its drive to reduce spending on imports and produce critical weapons and equipment domestically: Instead of buying weapons, manufacture them in Turkey when possible, and if not, ensure technology transfers through joint production.

Turkish defense companies have teamed up with Italian counterparts to produce assault helicopters and with Spanish counterparts for cargo planes and the assault ship, and talks on air defense systems are underway with US and European firms.  The Turkish defense sector has already put a domestically produced warship to sea and is preparing to put a main battle tank in the field.  A domestically produced infantry rifle and a drone have been tested successfully and are being showcased at international fairs.

Figures place the United States at the top of the Turkish defense companies’ client list, with the Americans paying $30 out of every $100 the industry earns from exports.  Turkish defense exports to the United States amount to $500 million a year, while such Turkish imports from the United States stand at about $1.5 billion.  Hence, Ankara can hardly be satisfied with the current state of trade.  The picture is more or less the same vis-a-vis other Western countries, including Britain, Germany, France and Spain, from which Turkey buys more than it sells.  According to 2015 figures, Western allies bought more than half of Turkey’s defense exports, while supplying all its imports in the sector.

Azerbaijan, Pakistan and Central Asian republics form the second-largest group of Turkey’s clients. Located in conflict-torn regions, these countries have quite high defense expenditures and naturally tend to prefer the much cheaper Turkish products over their Western-made equivalents.

Meanwhile, conflict and tensions in the wake of the Arab Spring have boosted Turkish arms sales to the Middle East and North Africa, according to data compiled from TIM figures.  In this regard, Saudi Arabia, the United Arab Emirates (UAE) and Lebanon are Turkey’s leading clients in the Middle East, while Tunisia is its top trade partner in North Africa.  The state-owned Aselsan, Roketsan, Machinery and Chemical Industry Corporation and armored vehicles producer BMC, owned by the Sancak Group, which is known to have close ties to the Erdogan family, have all emerged as winners from the Arab Spring’s fallout.

Turkish sales of arms and military equipment to MENA

(in millions of dollars)

Compiled from Turkish Exporters Union data

Africa is another market that Turkish defense companies have recently targeted.  TIM figures reveal some remarkable Turkish sales of arms and equipment to African countries on a seasonal basis.  Few are willing to talk about the nature and content of exports to Rwanda, Nigeria, Djibouti and Kenya.

Turkish Sales of Arms & Military Equipment to Sub-Saharan Africa

(in millions of dollars)


Compiled from Turkish Exporters Union data

The number of defense company owners and executives taking part in Erdogan’s foreign trips grows by the day.  With his personal charisma and strong relationships, Erdogan is cutting paths for arms companies to new markets, providing an important boost for the Turkish economy.  It remains unclear, however, whether arms sales are a better remedy for the Turkish economy than peace.  (Al-Monitor 04.05)

Back to Table of Contents

11.9  TURKEY:  Erdogan After Davutoglu

Soner Cagaptay posted in the Washington Institute on 8 May that Turkish Prime Minister Ahmet Davutoglu’s 5 May resignation at the request of President Recep Tayyip Erdogan is a further consolidation of power in the hands of a man who is already the most powerful politician in Turkey since the country became a multiparty democracy in 1950.  Erdogan has ruled since 2003, first as prime minister and head of the ruling Justice and Development Party (AKP) and then as president, a constitutionally non-partisan office in Turkey’s parliamentary system.  When Erdogan became president in 2014, Davutoglu took over as AKP chair and became the country’s new prime minister.  Davutoglu had risen in politics as Erdogan’s chief adviser, finally becoming Erdogan’s foreign minister in 2009.  The two men were colleagues in conceiving and executing Turkey’s foreign policy pivot to the Middle East. Accordingly, when Erdogan offered Davutoglu the prime minister position that was sure to be somewhat neutered, Davutoglu happily obliged.

To the extent that Davutoglu was a compliant partner of Erdogan, for instance, working closely with him on Syria, where the two have tried for years to oust the Bashar al-Assad regime, Davutoglu never completely satisfied Erdogan.  This is because Davutoglu is a household name both in Turkey and overseas, which irked Erdogan, who seeks to consolidate and personalize political power.  Erdogan was reportedly upset, for instance, when Davutoglu wanted to visit Washington to meet with President Barack Obama only weeks after the Turkish president himself had visited Washington in March 2016 to do the same.

Having now fallen from grace, Davutoglu is likely to become a quiet observer of Turkish politics, following the path of previous cast-off AKP officials, including former President Abdullah Gul, who have chosen not to confront Erdogan after he ejected them from the AKP leadership.  For his part, Erdogan is set to pick a new, more compliant politician as AKP chair at the party’s 22 May convention.  This person will then take office as the country’s new prime minister, and after some months, few will even recall the name of the new leader, much like in Jordan or Morocco, where all-powerful kings overshadow little-known prime ministers.

Soner Cagaptay is the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute.  (TWI 08.05)

Back to Table of Contents

11.10  TURKEY:  Turkish Military Faces Secularism Test

Turkey’s imam-hatip schools are vocational schools that educate state-employed imams and preachers.  These schools offer primary school graduates the traditional secondary school curriculum in addition to vocational courses related to Islamic theology.  The Justice and Development Party (AKP) government has been working hard to increase the number of imam-hatip schools.  Over the past 13 years, the number of these schools went up from 450 in 2003 to 940 today, and the number of students rose from 70,000 to more than 500,000 in the same period.

Metin Gurcan posted in Al-Monitor on 9 May that as the popularity of religious vocational schools increases, the ban on the enrollment of imam-hatip graduates into military schools is being questioned.

The activities of the imam-hatip schools have been receiving more extensive coverage of late. President Recep Tayyip Erdogan, who is an imam-hatip graduate along with his children, called these schools, “The hope of Turkey and the entire Muslim nation.”  Imam-hatip graduates can go to any university they want and become a police officer, doctor, lawyer, engineer or bureaucrat.  But there is only one career that is off-limits to these students: the military.  Military training regulations stipulate that imam-hatip graduates are not allowed to enroll in military academies to train as officers and noncommissioned officers.

In fact, the military academies that train officers for the Turkish Armed Forces (TSK) do not accept graduates of the imam-hatip schools, or any technical or medical schools.

The pro-AKP media, however, has undertaken an intensive campaign to promote the enrollment of imam-hatip graduates in vocational schools that train noncommissioned officers.  According to pro-AKP commentators, the current ban is illegal and reminiscent of the military era; many Turks believe this discriminatory policy has to be terminated.

The latest incident took place about a month ago, when imam-hatip graduates who passed the initial entry exams of the Gendarmerie Noncommissioned Vocational School were not allowed to take the advanced exam in health and physical education.

One student told pro-AKP daily Yeni Akit that he was not allowed to take the advanced exams. “Because I’m an imam-hatip graduate I cannot achieve my lifelong dream of becoming a noncommissioned officer.  They didn’t allow me take the advanced exams although I passed the written tests.  If they were not going to allow me to take the final exams, then why did they allow me to sit for the written tests?  Imam-hatip graduates can become president of the republic but not noncommissioned officers in the TSK.  We want an end to this secularist discrimination,” he said.

Ecevit Oksuz, chairman of Turkey’s Imam Hatip Graduates Foundation, told Al-Monitor, “Not allowing imam-hatip graduates into military schools is an ugly heritage from a foregone era.  The enrollment in the military of our children who are imam-hatip graduates will strengthen our army.  Just as the students of other schools are children of this nation, so are the students of imam-hatip schools whose parents are dignified members of this country.  Just as our graduates could serve as judges, deputies, prosecutors, prime ministers and even presidents, they should also be able to serve as captains, majors and generals.”

But TSK’s upper echelons still maintain their firm opposition to accept imam-hatip graduates.  In 2012, when Vatan newspaper published an article with the headline “Imam-hatip officers are coming,” the TSK chief of general staff issued a denial within minutes.  Behind this rigid stance is the concern that enrolling imam-hatip graduates in military schools would be perceived as a major blow to the perception that the military is the defender of secularism in Turkey, as well as pave the way to spread religion in the TSK ranks.

On the other hand, the TSK has softened its firm stand on headscarves and now accepts women wearing a headscarf to enter military institutions.

The question now raised is why the TSK cannot ease its ban on the enrollment of imam-hatip graduates in the military, at least for noncommissioned officers.  The pro-AKP media appears to be pursuing this stance, which eventually could put political pressure on the TSK.

How much longer can the TSK maintain its position on defending secularism?  The answer lies in Turkey’s focus on the current security issues related to the Syrian crisis, the increasing clashes with the Kurdistan Workers Party and the Islamic State and the public perceptions of close relations between the TSK, Erdogan and the AKP bureaucracy in general.  There are those who fear that allowing imam-hatip graduates to enter military schools could force the TSK to make a choice between this close cooperation and secularism.

The question whether the TSK high command still continues to treat secular principles as vital or whether it will at least ease the restrictions on imam-hatip graduates’ entry into the vocational schools that train noncommissioned officers for the sake of preserving good relations with the government may seem like a technicality.  But in Turkey this is actually a question related to the future of the country.  As long as the ban continues, for many it reflects the persisting sensitivity of the TSK to issues of secularism; rescinding the ban means the erosion of this sensitivity.

It will be interesting to see how the TSK command will navigate this minefield.  (Al-Monitor 09.05)

Back to Table of Contents

The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as European clients.