Fortnightly, 20 March 2019

Fortnightly, 20 March 2019

March 20, 2019


20 March 2019
13 Adar Bet 5779
13 First Rajab 1440




1.1  President of Israel’s State Visit to Canada Announced by Governor General
1.2  Israeli Army Chief Wants to Set Up New Innovation Division


2.1  NVIDIA to Acquire Mellanox for $6.9 Billion
2.2  New $25 Million Fund Focuses On Disruptive Israeli Tech Ready for US & Latin America Markets
2.3  Brodmann17 Raises $11 Million to Bring Automated Driving Tech to the Mass Market
2.4  Samsung SDS Invests in Iguazio to Boost Cloud Services
2.5  SAP.iO Foundry Tel Aviv Open for Applications
2.6  OurCrowd Celebrates $1 Billion Raised for 170 Companies, 18 Funds and 29 Exits
2.7  Cymulate’s Breach and Attack Simulation (BAS) Platform Raises Series A Funding
2.8  Hibob Announced Its $20 Million Funding Round
2.9  Lightbits Labs Raises $50 Million
2.10  Rail Vision Receives $10 Million Strategic Investment from Knorr-Bremse
2.11  I.D. Systems to Acquire Pointer Telocation for $140 Million in Cash and Stock
2.12  Eyesight Technologies Closes New China Auto Deal with Hefei Zhixin Automotive
2.13  Lear Invests in Maniv Mobility Venture Capital Fund
2.14  El Al to Offer Direct Flights Between Tel Aviv and Chicago


3.1  Speed Raises New Funding to Improve Future Acceleration for Startups
3.2  HyperPay Responds to Merchant Needs by Introducing New Account Management App
3.3  Cofe App Secures Funding to Support Expansion Plan
3.4  UAE Healthcare Firm Signs Deal to Accelerate Saudi Expansion Plan
3.5  Emaar Malls Announces Full Stake Acquisition of Namshi
3.6  Mrsool Completes Series A Funding Led by STV and Raed Ventures
3.7  Fatburger and Buffalo’s Express Open Newest Co-Branded Location in Tunisia


4.1  Egypt Converts 270,000 Vehicles into Gas-Powered Ones


5.1  Lebanon’s Balance of Payments Records a Deficit in January 2019
5.2  Lebanon’s Trade Deficit Narrowed Yearly to $1.17 Billion in January 2019
5.3  Gross Public Debt in Lebanon Hit $85 Billion in January 2019
5.4  Total Number of Lebanese Registered New Cars down by 22 % in February 2019
5.5  Jordan’s Inflation Rate for February 2019 Rises by 0.2% Compared with February 2018
5.6  Jordan’s Tourism Revenue Jumps 10% in Two Months
5.7  Jordan & Iraq Begin Studies to Create New Free-Zone

♦♦Arabian Gulf

5.8  US FDI Inflows to Dubai Reach $3.9 Billion
5.9  Dubai Non-Oil Trade Reached $353 Billion in 2018
5.10  Dubai to Create its Own Version of Hollywood’s Walk of Fame
5.11  Abu Dhabi Crown Prince Approves $272 Million for AgTech Incentives
5.12  Sheikh Hamdan Approves Plan to Turn Dubai Universities into Free Zones
5.13  UAE Cabinet Adopts National Space Strategy 2030
5.14  Growth in UAE’s Non-Oil Private Sector Slows to 28 Month Low
5.15  Dubai Closes Nearly 14,000 Social Media Accounts for Selling Fake Goods
5.16  Sheikh Mohammed Announces $272 Million Fujairah Infrastructure Projects
5.17  Dubai Home to 30% of Middle East Free Zones
5.18  Oman Vision 2040 Drives Sultanate’s IT Market to $379 Million by 2021
5.19  Jadwa Says Saudi Arabia to See Economic Momentum in 2019
5.20  US Set to Overtake Saudi Arabia as the World’s Biggest Energy Exporter

♦♦North Africa

5.21  Egyptian Pound Appreciates to Highest Exchange Rate in Over Two Years
5.22  Inflation Rises in Egypt, Influencing Prospects for an Interest Rate Cut
5.23  Egypt’s Non-Oil Exports Reach $2.043 Billion in January
5.24  World Bank Puts $700 Million Towards Digital Transformation in Morocco
5.25  Moroccan & Canadian Tourism Ministries Push for Direct Flights


6.1  EU Parliament Calls For Freeze on Turkey’s Membership Talks
6.2  Turkey’s Economy Slides Into Recession
6.3  Cyprus Seeks €150 Million in EIB financing for Natural Gas Infrastructure
6.4  Greece Sees Best Job Growth in February



7.1  Israel & World Jewry Celebrate Purim Holiday


7.2  Jordan has Highest Number of Smokers in the Middle East
7.3  Canada-UAE Business Council Hosts First Indigenous Delegation to the UAE
7.4  UAE Offers More Public Holidays to Private Sector Workers
7.5  Algeria’s Bouteflika Defies Pressure to Step Down Immediately


8.1  OurCrowd Launches New $50 Million Fund Focused on Disruptive Medical Tech
8.2  aMoon Closes $660 Million Israeli Health-Tech VC Fund
8.3  OurCrowd, Qure Ventures & PETstock Launch Pet Health Innovation Labs (PHIL)
8.4  European Commission Backs elminda’s Breakthrough in Depression Treatment
8.5  Wize Pharma Closes Deal to Launch Joint Venture With Cannabics
8.6  India-Israel Innovation Fund (I 4 F) Approves New Initiative
8.7  Galmed Reports Positive Results from Pharmacokinetic Split Dose Study of Aramchol
8.8  Inspecto Hooks Food Contamination with Real-time Results
8.9  Lumenis’ Clinical Breakthroughs Using Its MOSES Technology
8.10  OrthoSpace Acquired by Stryker
8.11  Ben-Gurion University Opens National Autism Research Center
8.12  Theranica Raises $35 Million to Bring Innovative Migraine Device to the USA
8.13  Nuvo Group Presents Data on Remote Monitoring in Pregnancy
8.14  Via Surgical Receives FDA Clearance for Its FasTouch Absorbable Fixation System
8.15  Endospan receives CE Mark Approval for Its NEXUS Aortic Arch Repair System


9.1  IAI Unveils ADA-O to Enable Land Platforms to Deal with GNSS Anti-Jammers
9.2  Eye-Net Mobile Successfully Completes Additional Trial of its Accident Prevention Solution
9.3  Cytegic and Phoenix Insurance Partner for Cyber Risk Underwriting
9.4  Smilebox Launches New, Intuitive eCard Add-On for First-Ever Gmail Implementation
9.5  Pcysys Chosen as a 2019 Red Herring Top 100 Europe Winner
9.6  ParaZero SafeAir for DJI’s Phantom 4 Complies With New ASTM Standard
9.7  Prisma Photonics Wins GCA Challenge for Securing Natural Gas Infrastructure in Israel
9.8  CEVA Computer Vision Technologies Power DJI Drones
9.9  PointGrab’s Smart Sensing Solution is Deployed at Deloitte’s London Headquarters
9.10  Asigra & Secret Double Octopus Provide Authentication for Cloud-based Data Backups
9.11  nsKnox Establishes First Cooperative Network to Bolster Cyber Security and Prevent Fraud
9.12  Taranis Unveils Enhanced Platform for Aerial Imagery Insights into Farming
9.13  Arbe 2019 Red Herring Top 100 Europe Winner & TheNextWeb TECH5 Hot Scale Up
9.14  Votiro Wins iCyberCenter International Pitch Competition at RSA 2019
9.15  NICE Actimize Selected by IDB Bank NY to Innovate Anti-Money Laundering Compliance


10.1  Israel’s Inflation Rate Rises by Only 0.1% in February
10.2  Record $158.3 Billion in Worldwide Debts Owed to Israel
10.3  Finance Ministry Finds Stronger Home Purchasing Trend Continued in January
10.4  Tel Aviv is the Tenth Most Expensive City in the World
10.5  SIPRI Finds Israel is the World’s 8th Largest Arms Exporter


11.1  ISRAEL: Israeli Artificial Intelligence-Based Companies See ‎Major Growth
11.2  JORDAN: Jordan Ratings Affirmed At ‘B+/B’; Outlook Remains Stable
11.3  JORDAN: Jordan Economic Report –2019
11.4  BAHRAIN: IMF Staff Completes 2019 Article IV Mission to Bahrain
11.5  OMAN: Moody’s Downgrades Oman’s Rating to Ba1, Outlook Negative
11.6  SAUDI ARABIA: New Economic Ties Deepen the Saudi-Pakistani Strategic Partnership
11.7  EGYPT: Egypt’s First Sovereign Wealth Fund to Tap Unused Assets
11.8  TUNISIA: Ghost Workers Sap Tunisia’s Phosphate Wealth
11.9  ALGERIA: How Bouteflika Lost Algeria’s Business Class
11.10  TURKEY: Turkish Economy Faces Grim Outlook for 2019
11.11  TURKEY: Turks Fire Back as Trump Ends Preferential Trade Status
11.12  TURKEY: Is Erdogan’s Airport Dream Turning Into Nightmare?
11.13  GREECE: IMF Concludes First Post-Program Monitoring Discussions with Greece


1.1  President of Israel’s State Visit to Canada Announced by Governor General

On 18 March, the Right Honorable Julie Payette, Governor General of Canada, is announced that Reuven Rivlin, President of the State of Israel, will undertake a State visit to Canada from 31 March to 2 April 2019.  During this visit, the Israeli president will visit Toronto, Niagara Falls and Ottawa.  The detailed schedule of events will be issued at a later date.  The last Israeli State visit to Canada was in 2012 by President Rivlin’s predecessor, the late Shimon Peres.  (Governor General of Canada 18.03)

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1.2  Israeli Army Chief Wants to Set Up New Innovation Division

Globes reported that IDF Chief of Staff Lt. Gen. Aviv Kochavi is promoting a plan to establish a new IDF division for innovation and development of technological systems for branches of the army according to their future operational needs.  The plan is still being formulated and a number of discussions have been held on the matter with professional parties.  The planned division would direct plans for developing future weapons systems in accordance with the IDF’s dynamic operational and intelligence needs, in order to meet the threats and challenges likely to face the IDF in the coming years.

Founding the division will change the existing situation in R&D of security technologies, currently spread around special technology units in branches of the army and the IDF R&D unit, which is subordinate to the Administration for the Development of Weapons and Technological Infrastructure in the Ministry of Defense.  Many other R&D activities are conducted by the defense industries, which frequently directly coordinate their actions with the Administration for the Development of Weapons and Technological Infrastructure and conduct joint development programs with it, as in the case of the development of the Iron Dome system and the system for detecting tunnels and underground spaces, which led to the uncovering of dozens of terrorist tunnels from the Gaza Strip and Lebanon leading into Israel.  The new division will deal with aspects relating to innovation, connectivity, and development of future technologies under a single roof and from a perspective transcending all of the IDF’s branches.  (Globes 18.03)

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2.1  NVIDIA to Acquire Mellanox for $6.9 Billion

On 11 March, Santa Clara, California’s NVIDIA and Mellanox announced that the companies have reached a definitive agreement under which NVIDIA will acquire Mellanox.   Pursuant to the agreement, NVIDIA will acquire all of the issued and outstanding common shares of Mellanox for $125 per share in cash, representing a total enterprise value of approximately $6.9 billion.  Once complete, the combination is expected to be immediately accretive to NVIDIA’s non-GAAP gross margin, non-GAAP earnings per share and free cash flow.  The acquisition will unite two of the world’s leading companies in high performance computing (HPC).  Together, NVIDIA’s computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker.

An early innovator in high-performance interconnect technology, Mellanox pioneered the InfiniBand interconnect technology, which along with its high-speed Ethernet products is now used in over half of the world’s fastest supercomputers and in many leading hyperscale datacenters.  With Mellanox, NVIDIA will optimize datacenter-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating cost for customers.

The companies have a long history of collaboration and joint innovation, reflected in their recent contributions in building the world’s two fastest supercomputers, Sierra and Summit, operated by the U.S. Department of Energy.  Many of the world’s top cloud service providers also use both NVIDIA GPUs and Mellanox interconnects. NVIDIA and Mellanox share a common performance-centric culture that will enable seamless integration.  Once the combination is complete, NVIDIA intends to continue investing in local excellence and talent in Israel, one of the world’s most important technology centers. Customer sales and support will not change as a result of this transaction.

Yokneam’s Mellanox is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase datacenter efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  (NVIDIA 11.03)

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2.2  New $25 Million Fund Focuses On Disruptive Israeli Tech Ready for US & Latin America Markets

StartUp Nation Ventures (SUNV), an Orlando, Florida-based crowd-backed investment firm that specializes in early-stage startups, announced the launch of a new $25 million fund (SUNV Fund) focused on disruptive Israeli technology startups ready to break into US and Latin American markets.  The fund is part of a collaboration between StartUp Nation Ventures and the Israel Innovation Authority (IIA), which established the Israel-Florida Innovation Alliance, an initiative launched in 2017 to support Israeli innovation companies in the discovery and selection of Florida as their destination to establish US headquarters.

The SUNV Fund was launched in partnership with private equity firm Merging Traffic and will focus on investment in Israeli technology startups aligned with Florida’s high-tech clusters like cybersecurity, tourism, blockchain, medical technologies, financial technologies, smart cities, eSports and gaming.

The selected companies will have a minimal viable product or working prototype and may be approved for a grant by the Israel Innovation Authority of up to 50% to support R&D and market validation costs to  expanding their solutions into the US and Latin America.  (NoCamels 04.03)

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2.3  Brodmann17 Raises $11 Million to Bring Automated Driving Tech to the Mass Market

Brodmann17 raised an $11 million Series A funding round from both new and existing investors, including OurCrowd, who led the round, Maniv Mobility, AI Alliance, LLC, UL Ventures, Samsung NEXT, lool ventures, and Sony Innovation Fund.  With the funding, Brodmann17 will expand partnerships, accelerate integration of its deep learning solution with customers, and continue its mission to put efficient, powerful automated driving capabilities in every vehicle.

As the advanced driver-assistance systems (ADAS) market, a crucial element of automated driving, is projected to reach over $90B by 2025, there is a growing need for highly reliable AI-based vision technology.  While other companies are relying on hardware that is bulky, costly, and power-inefficient to meet this demand, Brodmann17 is focusing on software, offering game-changing deep learning perception technology so efficient that it can run on any hardware, including low-power processors.

The split-second data processing required for automated driving necessitates edge computing, a market poised to be worth $34B by 2023.  Brodmann17’s patent-pending software is able to run on the edge while increasing ADAS resolution, frame rate, and accuracy.  The solution is easily integrated to quickly provide ADAS capabilities and meets the automotive industry’s toughest standards.

Founded in 2016, Tel Aviv’s Brodmann17 is a provider of vision-first technology for automated driving.  Brodmann17’s lean, patent-pending software architecture delivers state-of-the art accuracy while consuming only a fraction of computing power, opening up the world to the benefits of deep learning vision.  The solution is built from the ground up and designed against the industry’s toughest standards for the world’s largest OEMs and Tier 1 automotive suppliers.  (Brodmann17 11.03)

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2.4  Samsung SDS Invests in Iguazio to Boost Cloud Services

Iguazio is partnering with Samsung SDS, a global software solutions and IT services company, to accelerate and streamline the delivery of intelligent applications.  Samsung SDS has invested in Iguazio and will incorporate its platform into Samsung’s cloud services portfolio, powering serverless agility and data science operations for cloud native and AI-driven applications.

Iguazio’s platform includes data services and AI tools, empowering end-to-end serverless agility in the enterprise and real-time applications to improve performance, security, collaboration and the scalability of machine learning.  Iguazio’s Nuclio is the leading open source serverless framework, enabling the development of modern applications over Kubernetes without having to manage infrastructure.

The Iguazio platform accelerates the delivery of intelligent applications from data science to production and derives fast time to value for application development based on machine learning.  It combines real-time action and AI across a variety of data sources and types in high volumes, while eliminating infrastructure management. Herzliya’s Iguazio powers applications for manufacturing, healthcare, pharma, insurance, financial services and telcos.  In addition to Samsung SDS, Iguazio is backed by Pitango Venture Capital, Verizon Ventures, Robert Bosch Venture Capital GmbH (RBVC), CME Ventures, Magma Venture Partners, Jerusalem Venture Partners and Dell Technologies Capital.  (Iguazio 07.03)

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2.5  SAP.iO Foundry Tel Aviv Open for Applications

SAP announced the launch of its first SAP.iO Foundry for Tel Aviv.  The Tel Aviv location is designed to help and support early stage business-to-business (B2B) startups build innovative software and deliver high value for SAP customers.  The 12-week startup accelerator program commences in July 2019 and will comprise of up to 10 start-ups focused on deep technology and the intelligent enterprise to deliver incremental value to SAP’s customers.  The SAP.iO Foundry Tel Aviv will be located in the gravity center of the startup scene in Tel Aviv.

The SAP.iO Foundries are SAP’s global network of top-tier startup programs, including accelerators that enable startups to build innovative software that deliver value for SAP customers.  Today, there are SAP.iO Foundries in 6 strategic startup hubs, including Paris, Berlin, Munich, New York City, San Francisco and Tokyo.  The SAP.iO Foundries were formally launched early 2017 and to-date have accelerated the growth of over 100 startups of the early stage intelligent enterprise ecosystem.

The SAP.iO program is fueling an early-stage ecosystem of innovation for SAP by investing in and accelerating entrepreneurs building great software.  The SAP.iO Fund directly invests in visionary, early-stage startups that leverage SAP’s unique assets, including data, APIs and platform technologies from SAP, to deliver extraordinary value for SAP customers.  The SAP.iO Venture Studio helps internal talent build successful businesses that enable customers to solve big problems.

The SAP R&D center in Israel (Ra’anana and Tel Aviv) was established in 1998 and is a vital part of SAP’s global development network.  The center leads SAP Cloud Platform development for the company, while also specializing in Machine learning and user identity management.  The center injects disruptive innovation into SAP through strategic partnerships, ecosystem engagements, startup acquisitions and internal innovation initiatives.  (SAP 07.03)

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2.6  OurCrowd Celebrates $1 Billion Raised for 170 Companies, 18 Funds and 29 Exits

OurCrowd raised a total of $1 billion for 170 companies and 18 funds in just six years.  Of those portfolio companies, 29 of them have achieved exit.  The OurCrowd network consists of 30,000 registered investors from over 150 countries.  Geographically, the company’s primary investor base remains the United States, followed by Asia.  The average number of investments made by individuals was seven, with an average portfolio size of over $350,000.

Last year alone, OurCrowd underwent enormous growth, solidifying its place in the venture capital ecosystem.  Highlights from 2018 include investment in 24 new companies, including:

-AlphaTau Medical: New radio therapy for solid cancer tumors

-C2A: Cybersecurity for connected vehicles

-Beyond Meat: Develops and manufactures a plant-based meat substitute

-Insightec: MR-guided focused ultrasound for non-invasive surgery

-MeMed: Preventing misuse of antibiotics

-skyTran: New form of urban travel

-ThetaRay: AI-based detection and protection against financial fraud Enables users to easily collect and integrate data

In 2018, OurCrowd also saw 11 of its companies achieve exit, notably Corephotonics’ acquisition by Samsung; Jump Bikes’ acquisition by Uber; Invertex’s acquisition by Nike; BriefCam’s acquisition by Canon; MST’s acquisition by TransEnterix and NooBaa’s acquisition by Red Hat /IBM.  It expanded operations with 3 new offices in Israel including Tel Aviv, Herzliya and Jerusalem, bringing the total to 11 offices worldwide from London, Madrid, Toronto, New York, San Diego, Singapore, Sydney and Hong Kong

It also launched Labs/02 seed stage incubator, which invested in 6 early-stage companies including ForceNock, which was acquired by CheckPoint Software. Labs/02 partnered with South Korea’s leading venture capital firms DTNI and Yozma Group Korea.

Jerusalem’s OurCrowd is a global investment platform, bringing venture capital opportunities to accredited investors worldwide.  A leader in equity crowdfunding, OurCrowd is managed by a team of seasoned investment professionals.  OurCrowd vets and selects companies, invests its own capital, and invites its accredited membership of investors and institutional partners to invest alongside in these opportunities.  OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships.  OurCrowd has raised over $1 billion and invested in 170 portfolio companies and funds.  (OurCrowd 07.03)

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2.7  Cymulate’s Breach and Attack Simulation (BAS) Platform Raises Series A Funding

Cymulate announced an A funding round of $7.5M  led by Vertex Ventures and Dell Technologies Capital, the investment arm of Dell Technologies; additional funds came from Susquehanna Growth Equity (SGE) and Eyal Gruner, who previously led the Seed rounds.  The company has now raised $11 million in total.

Cymulate’s BAS platform enables organizations to automatically assess their overall security posture, continuously validating that security measures and controls are working as expected.  The Cymulate platform is deployable within minutes and the simulated attacks provide immediate results that include vulnerabilities and mitigation procedures to close each gap.  The platform offers the largest range of attack vectors in the industry covering pre- exploitation, exploitation and post-exploitation stages of an attack kill-chain: Email, Web Gateway, Web Application, Phishing, Endpoint, Lateral Movement, Data Exfiltration and Immediate Threats.

Cymulate will use the funding for expanding its operations in the United States, adding key leadership positions and investing further in the research team to enhance the platform’s functionality.  In 2018, Cymulate was recognized as a Cool Vendor in Application and Data Security by Gartner.  In addition, Cymulate was distinguished in 2018 with the Gold Global Excellence Award from Info Security Products Guide, the Fortress Cyber Security Award, and Winner of the InfoSec Awards from the Cyber Defense Magazine.

Rishon LeZion’s Cymulate helps companies to stay one step ahead of cyber attackers with a unique breach and attack simulation platform that empowers organizations with complex security solutions to safeguard their business-critical assets. By mimicking the myriad of strategies hackers deploy, the system allows businesses to assess their true preparedness to handle cyber security threats effectively.  (Cymulate 13.03)

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2.8  Hibob Announced Its $20 Million Funding Round

Hibob announced its latest round of funding to support their next phase of hyper-growth, accelerate their US presence, expand to more countries across Europe and hire more tech talent.  Hibob received $20 million in Series A+ funding from our existing investors: Bessemer Venture Partners, Battery Ventures, Fidelity Ventures, Eight Roads, Arbor Ventures, and Presidio Ventures. This investment is an extension of our company’s Series A, announced in April of 2017.

Tel Aviv’s Hibob was founded in late 2015 with a mission to create the first HR platform built for the workplace of the future.  This revolution required a deep understanding of today’s most valuable employees: those who seek daily engagement, feedback, and meaning; they work in tribes and seek opportunities for growth.  They demand personalization with a soul. In parallel, HR needs to be data-driven and democratized, creating consumer-friendly new tools for attracting, retaining and growing valuable employees – and making them available more broadly across the organization.  (Hibob 13.03)

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2.9  Lightbits Labs Raises $50 Million

Lightbits Labs has raised $50 million in funding led by DellEMC and with the participation of Cisco, Micron, Square Peg Capital and Walden International.  This is the company’s third financing round after a seed round of several million dollars in 2016 and more than $10 million in 2017.  One of the company’s founders and investors is serial entrepreneur Avigdor Willenz.

With its NVMe/TCP standard, the company says it has launched its solution for bringing hyper-scale agility and simplicity to data center storage.  Lightbits’ solution helps enterprise private clouds, Software as a Service (SaaS) and Infrastructure as a Service (IaaS) providers save time and money while enabling higher application performance and public cloud grade hyper-scalability.  Lightbits Labs combines newly-available affordable Flash solutions with high-performance standard networks.  The company’s LightOS software and LightField storage acceleration card are the first NVMe/TCP solutions to provide a Global Flash Translation Layer (GFTL) running over high-performance standard networks.

Unlike previous NVMe over Fabrics approaches, Kfar Saba’s Lightbits’ NVMe/TCP separates storage and compute without requiring any changes to network infrastructure or datacenter clients.  With NVMe/TCP, you can transition smoothly from inefficient Direct-Attached SSDs (DAS) to a low-latency, shared pool of NVMe SSDs.  You can realize the cost efficiency of storage disaggregation while enjoying the same IOPs as direct-attached NVMe SSDs and up to a 50% reduction in tail latency.  The best part of NVMe/TCP is that your application teams won’t even notice the infrastructure transition.  Once you unleash NVMe/TCP, applications are free to grow exponentially with consistently better user experience.  (Lightbits Labs 12.03)

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2.10  Rail Vision Receives $10 Million Strategic Investment from Knorr-Bremse

Foresight Autonomous Holdings announced that its affiliate, Rail Vision, and Knorr-Bremse Systeme fuer Schienenfahrzeuge, an affiliate of Knorr-Bremse, executed an agreement whereby Knorr-Bremse, a $14 billion European-based group, the global market leader for braking systems and a leading supplier of other rail and commercial vehicle subsystems, will invest $10 million, in two installments, in Rail Vision in consideration of a 21.3% share of Rail Vision.  Knorr-Bremse has also been issued warrants to purchase additional shares in Rail Vision and to maintain its approximately 20% share on a fully diluted basis, against an investment of up to an additional $3.6 million, and will appoint a director and two non-voting observers to Rail Vision’s board of directors.  The collaboration with Rail Vision is expected to allow Knorr-Bremse to take a further step to providing system solutions for automated driving in the railway sector by integrating Rail Vision’s obstacle detection capabilities into Knorr-Bremse’s future automatic train operation (ATO) product offering.

Rail Vision is a leading provider of cutting-edge cognitive vision sensor technology and safety systems for the railway industry.  Rail Vision’s solutions offer detection and classification of objects or obstacles (e.g. humans, vehicles, signals), rail path recognition (i.e. switch state detection), distance measurement and opportunity infrastructure condition monitoring, required for ATO.

Ness Ziona’s Foresight Autonomous Holdings, founded in 2015, is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems for the automotive industry.  Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing, and sensor fusion.  The company, through its wholly owned subsidiary Foresight Automotive, develops advanced systems for accident prevention which are designed to provide real-time information about the vehicle’s surroundings while in motion.  The systems are designed to improve driving safety by enabling highly accurate and reliable threat detection while ensuring the lowest rates of false alerts.  (Foresight Autonomous Holdings 14.03)

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2.11  I.D. Systems to Acquire Pointer Telocation for $140 Million in Cash and Stock

Woodcliff Lake, New Jersey’s I.D. Systems, a leading provider of enterprise asset management and Industrial Internet of Things (IoT) technology, and Pointer Telocation have entered into a definitive agreement whereby I.D. Systems will acquire all of the outstanding shares of Pointer in a cash and stock transaction valued at approximately $140 million.

The acquisition will be effected through a newly-created holding company structure, whereby I.D. Systems and Pointer will each become wholly-owned subsidiaries of PowerFleet, Inc.  In the acquisition, Pointer shareholders will receive $8.50 in cash and 1.272 shares of PowerFleet common stock for each share of Pointer common stock they own, implying approximately 50% cash and 50% stock consideration, and total consideration valued at approximately $16.44 per share based on I.D. Systems’ closing stock price on 12 March 2019.  As part of the transactions, each share of I.D. Systems will be exchanged for one share of PowerFleet common stock, which is expected to be dual listed on NASDAQ and the Tel Aviv Stock Exchange.

For more than 20 years, Rosh HaAyin’s Pointer has rewritten the rules for the MRM market and is a pioneer in the Connected Car segment.  Pointer has deep knowledge of the needs of the MRM market and developed a full suite of tools, technology and services to address them.  The company’s innovative cloud-based SaaS platform extracts and captures an organization’s critical mobility data points, analyzes it and provides customers with actionable insights to improve their bottom lines.  (Pointer Telocation 13.03)

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2.12  Eyesight Technologies Closes New China Auto Deal with Hefei Zhixin Automotive

Herzliya Pituah’s Eyesight Technologies, leading provider of computer vision solutions, signed a strategic cooperation agreement with Chinese Tier 1 automotive manufacturer Hefei Zhixin Automotive Technology (HZAT).  The initial deal marks the start of a broader strategic partnership between the two companies.  Eyesight Technologies produces advanced in-cabin computer vision solutions for motor vehicles, including the DriverSense Driver Monitoring System.  The DriverSense system watches a driver’s eyes, pupils, head and gaze to determine if the driver is paying attention to the road or is drowsy or distracted.  This vital information can be used by a vehicle to prevent accidents.

The agreement marks the beginning of a strategic partnership between HZAT and Eyesight Technologies, with further deals expected as Driver Monitoring technology rapidly becomes accepted as a gold-standard safety feature.  Hefei Zhixin Automotive Technology is a respected Chinese Tier 1 automobile vendor with a particular focus on Advanced Driver-Assistance Systems and related technologies.  It has relationships with major China OEM auto brands including JAC Motors and bus manufacturer Anhui Ankai Automobile Co.  (Eyesight 12.03)

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2.13  Lear Invests in Maniv Mobility Venture Capital Fund

Southfield, Michigan’s Lear Corporation, a global automotive technology leader in Seating and E-Systems, has invested in an Israel-based venture capital fund managed by Maniv Mobility that is focused on advancing mobility technology.  The investment, which is being made through Lear Innovation Ventures (LIV), enables future collaboration and deepens Lear’s involvement in the mobility technology ecosystem.  Maniv Mobility’s portfolio and investing activities are largely focused on Israeli start-up companies in the connected, autonomous, ridesharing and mobility sectors, as well as on investments in the U.S. and other markets.

The partnership is not Lear’s first mobility investment in Israel.  In 2017, Lear acquired EXO Technologies, an Israeli developer of high accuracy vehicle positioning technology designed to meet the demands of the industry and drive change through increased accuracy, reliability and functional safety for ADAS and Autonomous driving applications.

Tel Aviv’s Maniv Mobility is a leading venture capital fund dedicated exclusively to a new mobility future.  Investing in early-stage startups, Maniv seeks out ideas around automotive connectivity and data, autonomous vehicle technologies such as sensors and software, and novel business models.  With deep connections throughout the global automotive industry, policy and technology communities, Maniv leverages its network to provide hands-on support to its growing portfolio.  (Lear Corporation 11.03)

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2.14  El Al to Offer Direct Flights Between Tel Aviv and Chicago

El Al will be offering direct flights between Tel Aviv and Chicago starting in 2020, Israel’s national carrier announced recently in its quarterly earnings report.  This development comes as the airline will acquire additional Boeing 787 Dreamliners, having already acquired eight of the 16 it ordered.

In North America, El Al currently flies out of New York; Newark, New Jersey; Los Angeles; Boston; Miami; and Toronto.  That will soon expand as the airline offers flights from San Francisco starting on 13 May, Las Vegas beginning on 14 June and Orlando, Florida, as of 2 July.  (IH 19.03)

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3.1  Speed Raises New Funding to Improve Future Acceleration for Startups

Speed, the Lebanese tech accelerator based out of the Beirut Digital District (BDD), has raised new funding from the Central Bank of Lebanon to run its acceleration cycles for the next 3 years.  Startups that will be accelerated by Speed will continue to receive the same high quality support for a reduced equity of 5% instead of 10%.  The recent funding round was led by the Central Bank of Lebanon through Blom Bank, Bank Audi, and BankMed, Speed’s new shareholders, who injected Circular 331 funds in the accelerator for the upcoming 3 years.

Founded in 2015 by Lebanese investment funds and entrepreneurship support organizations Middle East Venture Partners (MEVP), Berytech Fund Il (BFII), IM Capital, Lebanon for Entrepreneurs (LFE), and Bader, Speed ran 5 acceleration cycles, invested in 34 startups who raised more than $2.2M, and created +500 jobs in the country so far.  The accelerator offers software startups $30,000 in financial support, an intensive 3-month mentorship-driven program that includes in-house mentorship, mentorship from experts, workshops, access to a network of investors, and a free working space at BDD.

Startups also receive lifelong support from a network of over 100 local and international mentors, the opportunity to be sponsored by Speed for a 2-week immersion program in Silicon Valley in partnership with LebNet, technology perks worth $1M+ through the accelerator’s partnership with the Global Accelerator Network, and a fast-track referral to the 47 Techstars programs around the world. In exchange for this offering, Speed now receives 5% equity in each startup, which is half of the equity it took in previous cycles.  (ArabNet 25.02)

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3.2  HyperPay Responds to Merchant Needs by Introducing New Account Management App

HyperPay announced an extension to its services with the launch of a new mobile app, allowing merchants to closely monitor all activities that occur throughout the day, on their business accounts.  Developed as part of HyperPay’s commitment to understanding their customers’ needs and quickly responding to user feedback, the mobile app will ensure optimum tracking and monitoring of transaction details on merchants’ business accounts.  Establishing itself as a frontrunner in the online payments and services industry, HyperPay processes payments for more than 600 merchant accounts across the region, and expects this most recent expansion of its services to encourage merchants to realize the potential of what the platform has to offer.

Whilst HyperPay merchants already have access to a web-based control panel that affords users the opportunity to monitor their accounts online – the introduction of the new HyperPay app will not only allow remote anytime-access but will enable merchants to better manage their business accounts and witness their growth as they go.  Along with access to account details, the new app will offer facilities to receive notifications of transactions as well as the capacity to detect and manage fraud, which will enhance HyperPay’s current leading standards in security and risk management.

Launched in 2014, Amman’s HyperPay is a trusted payment service provider in the MENA region, offering a wide range of smart online payment processing solutions, backed by cutting-edge technology platforms, to businesses ranging from the smallest to the largest enterprises.  Their ability to easily integrate with any platform, allows merchants to start accepting and optimizing their payments quickly.  (HyperPay 13.03)

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3.3  Cofe App Secures Funding to Support Expansion Plan

Kuwait-based Cofe App, a coffee-centric marketplace app, announced that it has secured $3.2 million in their Pre-Series A funding, attracting a multi-national cross-sector base of entrepreneurs and venture capital (VC) funds from the Middle East and Silicon Valley.  The round was led by KISP ventures, a fund established by KFH Capital (Kuwait) with Cedar Mundi (Lebanon), Towell Holding International (Oman), Takamul Capital and Dividend Gate Capital (Bahrain), and Nizar AlNusif Sons Holding and Arab Investment Company (Kuwait). The investment was facilitated by FTL Legal Services.  Conceptualized in Kuwait and developed in Silicon Valley, COFE App connects coffee house chains and independent coffee roasters with coffee lovers via a seamless, easy, and efficient user-interface.

COFE App was founded in the summer of 2017 by Mr. Ali Al Ebrahim. Early funding for the app was generated by him and other investors who are coffee enthusiasts.  The app was beta launched in February 2018. Since then the app has been featured in Forbes Middle East annual list of “Top 50 startups to watch for in the Arab world” and was chosen among the most promising 100 Arab Start Ups by The Arab Youth Centre in Dubai, UAE.  (COFE App 13.02)

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3.4  UAE Healthcare Firm Signs Deal to Accelerate Saudi Expansion Plan

UAE-based healthcare operator NMC Health announced the signing of definitive documents to form a joint venture in Saudi Arabia to “significantly” increase its pace of expansion in the kingdom.  The joint venture has been with Hassana Investment Company, the investment arm of the General Organisation for Social Insurance in Saudi Arabia, one of the largest pension funds in the world by assets under management.  All commercial terms and agreements have been finalized between NMC and Hassana, with both parties working towards customary closing requirements.

The JV is formed by NMC’s contribution of its five assets in Saudi Arabia and an additional cash injection at closing, and GOSI’s contribution of 38.88% stake in Tadawul-listed National Medical Care Company at a price of SR54 per share.  At the closing of the transaction, NMC will own a 52% stake and GOSI will own a 48% while NMC will have operational control, the statement added.  NMC and GOSI said they have agreed to a “well-defined long-term sustainable growth plan” for the JV while NMC has also set up an independent corporate team in the kingdom.  (AB 05.03)

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3.5  Emaar Malls Announces Full Stake Acquisition of Namshi

Dubai’s Emaar Malls, the shopping malls and retail business majority-owned by Emaar Properties PJSC, has fully acquired Namshi, the regional fashion ecommerce retailer.  This follows the previous acquisition of the remaining stake of Global Fashion Group (GFG) in Namshi, in an all-cash transaction of $129.5 million.

Founded in 2011, Dubai’s Namshi provides an online lifestyle destination for fashion and beauty to the MENA region, introducing a world of possibilities for millions of people, at the click of a button.  Namshi showcases a selection of 700 brands including global names, exclusive in-house labels, sports collaborations, beauty, active-wear, kids-wear and more, all carefully curated to meet the aspirations of the customers.

GFG and Emaar Malls entered into a strategic partnership in 2017 when Emaar Malls acquired a 51% stake in Namshi.  Over the past 2 years, GFG has worked together with Emaar Malls and the Namshi team to strengthen the company’s offering by bringing global expertise in ecommerce and shared resources such as global brand acquisitions and technology innovations to the platform.  Emaar Malls’ full acquisition of Namshi is a natural evolution of the company’s digitally-driven strategy to leverage the growing ecommerce market in the MENA region.  The full acquisition reinforces the position of Emaar Malls in the rapidly growing online market in the Middle East, complementing its physical retail assets portfolio.  (ArabNet 26.02)

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3.6  Mrsool Completes Series A Funding Led by STV and Raed Ventures

Mrsool has completed a multimillion-dollar series A investment round led by STV and Raed Ventures.  This transaction marks Mrsool’s 1st fundraising to tap the on-demand delivery industry – a sector with significant growth potential in a region driven by increasing consumer adoption of digital and mobile commerce.  The capital will be used to expedite Mrsool’s expansion plans in KSA and the wider region.

Founded in 2015, Riyadh’s Mrsool is an on-demand delivery network, with a total of 4M registered users at the end of 2018.  Mrsool can deliver anything, from anywhere, in just minutes, crowdsourcing delivery by matching shoppers with couriers.  Users place orders for items from any store in their city, which can then be fulfilled by any other user willing to act as courier by purchasing and delivering the items.  Mrsool processed more than $270M in transactions in 2018.

The app’s potential hinges on rapidly growing consumer demand for fast delivery services and Mrsool’s user-friendly experience.  It fulfils orders to include instant delivery, targeting merchants, local groceries and department stores in addition to food deliveries.  (ArabNet 12.03)

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3.7  Fatburger and Buffalo’s Express Open Newest Co-Branded Location in Tunisia

FAT (Fresh. Authentic. Tasty.) Brands, parent company of Fatburger, announced the opening of its newest international location in Tunis.  This co-branded Fatburger and Buffalo’s Express, located within the Food Court of the Manar City Mall, officially opened its doors on 11 March, marking the third location for the brands in Tunisia.

Fatburger is best known for its burgers made famous by founder Lovie Yancey in Los Angeles more than 70 years ago.  Each burger is made-to-order with traditional toppings along with delicious add-ons including bacon, egg, chili, and onion rings.  To complement Fatburger’s all-American menu, Buffalo’s Express offers fresh, never frozen, boneless and bone-in chicken wings ranging in heat and flavor.  The new co-branded Fatburger and Buffalo’s Express location will be open 7 days a week in Tunis.  (FAT 11.03)

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4.1  Egypt Converts 270,000 Vehicles into Gas-Powered Ones

Egypt converted a total of 270,000 vehicles into natural gas-powered ones instead of fueled ones since the onset of the conversion activities until March 2019, according to the Natural Gas Vehicles Company.  The country transformed around 2,600 vehicles per month into the gas-power system; pumping natural gas into vehicles is done via 200 gas stations across the country.

The Egyptian oil and gas sector plans to increase the number of stations responsible for the conversion system to reach 80 stations during fiscal year FY 2019/20.

Egypt seeks to make natural gas a substitute for diesel, gasoline and butane to decrease the dependence on those products and reduce its imports as the country’s natural gas production grew to around 6.5 billion cubic feet per day (bcf/d).  (EO&G 17.03)

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5.1  Lebanon’s Balance of Payments Records a Deficit in January 2019

January 2019 witnessed the highest monthly BoP deficit of $1.380 billion since 1993; only July 2006 (launch of the Second Lebanon war) came close to it with a deficit of $1.188 billion.  The political tensions ahead of the formation of a new Lebanese government, following previous attempts in 2018 combined with the lost confidence by investors were the main trigger behind this large deficit.  Some outflows of deposits along with a decline in FDIs were the result of the economic and political environment.  According to the Central Bank of Lebanon (BDL), Lebanon’s Balance of payments (BoP) recorded a $1.380 billion deficit in January 2019, compared to a surplus of $236.9 million in January 2018.  In details, BDL’s Net Foreign Assets (NFA) and commercial banks’ NFAs slipped by $395M and $984.6M, respectively by January 2019.  (CBL 07.03)

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5.2  Lebanon’s Trade Deficit Narrowed Yearly to $1.17 Billion in January 2019

Lebanon’s trade deficit for the first month of 2019 stood at $1.17B, narrowing from the $1.42B registered in the same month last year.  Total imports declined by 17.63% year-on-year (y-o-y) to $1.40B and exports slumped by 16.83% y-o-y to $235.71M.  The top imported goods to Lebanon were Mineral products with a share of 18.79%, followed by 13.06% for Machinery and electrical instruments and 12.04% for Products of the chemical and allied industries.  The value of imported Mineral products decreased by 4.50% y-o-y to $263.9M noting that their imported volume grew yearly by 10.04%.  Moreover, the value of Machinery and electrical and Products of the chemical and allied industries declined yearly by 24.41% and 12.65% to $183.38M and $169.17M, respectively.  In January, the top three import destinations were China, Italy and Greece with shares of 10.94%, 7.65% and 7.08%, respectively.  As for exports, the top exported products from Lebanon were Pearls precious stones and metals with a share of 33.32% of the total followed by shares of 11.52% for prepared foodstuffs; beverages, tobacco and 10.46% for products of the chemical or allied industries.  In details, the value of Pearls, precious stones and metals shrunk in January 2019 to stand at $78.55M, compared to $110.67M in January 2018.  The value of Prepared foodstuffs; beverages, tobacco rose by 3.67% to $27.16M, and the value of products of the chemical or allied industries dropped by a yearly 10.34% to $24.65M.  In January, the top three export destinations were UAE with 17%, Switzerland with 11.97%, followed by the South Africa with a share of 7.99%.  (BoS 12.03)

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5.3  Gross Public Debt in Lebanon Hit $85 Billion in January 2019

Figures released by the Ministry of Finance show that Lebanon’s gross public debt reached $85.32B during the first month of 2019, up from $80.39B in January 2019.  On an annual basis, gross public debt widened by 6.13% on the back of the rise in both, local currency debt and foreign currency debt.  In details, local currency debt (denominated in LBP) grasped a stake of 60.57% of total gross debt and recorded an annual 3.72% rise to stand at $51.68B by January 2019.  Following the same trend, debt in foreign currency rose significantly by a yearly 10.06% to settle at $33.64B, equivalent to 39.43% of Lebanon’s gross debt.  As for the net public debt, that excludes public sector deposits at commercial banks and BDL, it increased by 9.15% year-on-year to reach $75.95B by December 2018.  (MoF 19.03)

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5.4  Total Number of Lebanese Registered New Cars down by 22 % in February 2019

According to the Association of Lebanese Car Importers, the total number of newly registered commercial and passenger cars fell by 21.9% year- on- year (y-o-y) to 3,966 cars by February 2019.  In details, the number of registered commercial cars dropped by 33.23% y-o-y, from 334 by February 2018 to 223 by February 2019.  Following the same trend, the number of registered passenger vehicles went down by 21.1% to reach 3,743 during the same period.  In terms of car brands, Kia maintained its top rank, with the largest share of 14.11% of newly registered passenger cars, Nissan came in the 2nd position with 13.44% of the total, followed by Toyota and Hyundai with shares of 11.3% and 8% respectively.  As for sales per importer, RYMCO acquired the largest stake of newly registered cars with 17.07% of the total, followed by Natco with 13.31%, BUMC and Century Motors with 11.93% and 7.67%, respectively.  (ALC 10.03)

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5.5  Jordan’s Inflation Rate for February 2019 Rises by 0.2% Compared with February 2018

The monthly report on inflation in Jordan issued by the Department of Statistics indicates that the Consumer Price Average (Inflation) reached 123.7 in Feb 2019 against 123.5 during the same month of 2018, recording an increase by 0.2%.  The main commodities groups, which contributed to this increase, were Vegetables, Dried and Canned Legumes by 0.58%, Rents by 0.23%, Education by 0.12%, Cereals and its products by 0.09% and fuel and lighting by 0.05%%.  Meanwhile, the main commodities groups which witnessed a decrease in their prices were Meat & poultry by 0.39%, Transport by 0.30%, Dairy and its products and eggs by 0.14% and clothes by 0.09%.

On the monthly level, the Consumer Price index for February 2019 has decreased by 0.3% compared with the previous month (Jan) 2019.  The report also shows that the Consumer Price Average for the first two months of 2019 has increased by 1.1% compared with the same period of 2018.  The main commodities groups which contributed to this increase were Vegetables, Dried and Canned Legumes by 0.68%.  (DoS 14.03)

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5.6  Jordan’s Tourism Revenue Jumps 10% in Two Months

Jordan’s tourism revenues in January and February increased to JOD 573.9 million, up by 10% compared with the same period in 2018, the monthly statistical report of the Ministry of Tourism and Antiquities revealed on 17 March.  Minister of Tourism and Antiquities Shweikeh said that the performance index of the tourism sector is constantly improving due to the increase of visitors from different countries to Jordan in general and to the Dead Sea in particular.  The Ministry’s report shows that the sector’s statistical index has seen a rise in the numbers of group tourists, reaching 74,193, up by 18.4%, and the numbers of overnight tourists rose to 633,246 visitors, up by 6.4% compared with the same period in 2018.  Shweikeh said that the numbers of overnight tourists have shown an increase and they are mostly from European countries with 48.8%, Asia and the Pacific with 31.1%, the United States with 25.8%, and African countries with 13.6%, in addition to the Jordanian living abroad which increased by 3.9%  (Roya 19.03)

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5.7  Jordan & Iraq Begin Studies to Create New Free-Zone

Jordan and Iraq have reportedly started studies to create a joint free industrial zone on their shared border.  A Jordanian government official said that an Iraqi delegation visited Jordan recently to check the capacity of factories that will benefit from a decision by Iraq to exempt commodities — including plastics, pharmaceuticals, detergents, chemical materials and food products — from custom duties.  It is expected that the new free-zone will create allow Iraqi businesses to benefit from exemptions and advantages under free trade agreements that Jordan has signed with several countries.  It will also help to increase Jordanian exports to Iraq, which rose by 26.7% in 2018 to JOD465.9 million ($3.9 million).  (IITN 14.03)

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►►Arabian Gulf

5.8  US FDI Inflows to Dubai Reach $3.9 Billion

Inflows of foreign direct investment from the US to Dubai totaled more than $3.9 billion in 2018, making it the emirate’s topmost foreign investor, according to statistics from the Dubai Investment Agency (Dubai FDI).  According to the data, there were 121 total projects in 2018 focused on accommodation and food services, retail and wholesale trade, administration and support services and software publishing.

Between January and November 2018, the total trade volume between the US and UAE was valued at $21.8 billion, with $17.2 billion in American exports to the UAE and $4.6 billion from the UAE to the US.

On 9 March, Dubai FDI began a seven-day series of visits in the US aimed – part of its global promotional investment program – aimed at strengthening bilateral relations with the US and opening new markets.  The mission visited Los Angeles and Denver, Colorado.  During the mission to the US, Dubai FDI will work to showcase opportunities in Dubai to foreign investors, its business friendly environment and the benefits of using the emirate as a regional or sub-regional business hub.  (AB 10.03)

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5.9  Dubai Non-Oil Trade Reached $353 Billion in 2018

Dubai’s external non-oil trade reached AED 1.3 trillion ($353 billion) in 2018 despite a global growth slowdown, according to new statistics from Dubai Customs.  According to the statistics, trade through free zones in 2018 grew 23% to AED 532 billion ($144 billion), while direct trade reached AED 757 billion ($206 billion).  Re-exports grew 12% to AED 402 billion ($109 billion), while imports totaled AED 770 billion ($209 billion) and exports AED 127 billion ($34.5 billion).

Dubai Crown Prince Sheikh Hamdan bin Rashid Al Maktoum added that Dubai is also working to develop a first-of-its kind commercial zone that will allow investors to open bank accounts and grant e-residencies.

The statistics also show that China maintained its position as Dubai’s biggest trading partner in 2018, with AED 139 billion ($37.8 billion) worth of trade.  China was followed by India with AED 116 billion ($31.5 billion) in trade and the US with AED 81 billion ($22 billion).  (AB 10.03)

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5.10  Dubai to Create its Own Version of Hollywood’s Walk of Fame

Downtown Dubai will be home to a walkable tribute to stars and influencers from all over the world – similar to Hollywood’s Walk of Fame, Emaar announced.  Dubai Stars, located along Sheikh Mohammed bin Rashid Boulevard, will kick off with a global social campaign asking people from all over the world to nominate their favorite celebrities and influencers for the first 400 stars.

The first phase of Dubai Stars will be unveiled in October at an event to be attended by the 400 featured celebrities who will launch their respective star.  Dubai Stars will pay tribute to eminent personalities who have positively influenced the world through their work in various fields including music, film, art, architecture, sports, and literature as well as social influencers.  Dubai Stars at its completion will have over 10,000 stars, about four times the number of stars than Hollywood Walk of Fame.  Dubai Stars by Emaar is expected to become one of the most-visited tourist attractions in the city.  (AB 18.03)

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5.11  Abu Dhabi Crown Prince Approves $272 Million for AgTech Incentives

Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, has approved a series of incentive packages totaling up to AED1 billion ($272 million) for local and international agriculture technology (AgTech) firms.  The incentives aim to encourage the companies to build and grow a presence in Abu Dhabi, establishing the emirate as a global center for desert environment agriculture innovation.  The AgTech packages being launched by the Abu Dhabi Investment Office (ADIO) are also expected to generate over AED1.6 billion ($450 million) of GDP contribution and create more than 2,900 jobs in the emirate by 2021.

The initiative, led by ADIO is part of the Abu Dhabi Government’s economic accelerator program Ghadan 21.  Ghadan 21 is a three-year AED50 billion Abu Dhabi Development Accelerator Program anchored around four main pillars – Social, Economic, Liveability and Knowledge.  (AB 11.03)

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5.12  Sheikh Hamdan Approves Plan to Turn Dubai Universities into Free Zones

The Crown Prince of Dubai has approved a new strategy to create economic and creative free zones in universities.  Sheikh Hamdan bin Mohammed Al Maktoum said the plan will allow students to carry out business and creative activities as an integrated part of their higher education.  The aim is to support students with education and research, and funding and pave way for the universities to graduate not students, but successful entrepreneurial employers.  Sheikh Hamdan said the announcement was part of the 50-Year Charter to ensure a sustained development march that will turn Dubai into the best city in the world.

Sheikh Hamdan highlighted the importance of supporting graduates in their quest to create progress and how that supports Dubai’s approach to become a leading global hub for entrepreneurship and investment in knowledge.  The new strategy was prepared by the Dubai Future Foundation in collaboration with other government entities that will play an integral role in assuring a successful implementation of this ambitious plan.  The strategy prioritizes collaboration with top international research institutions and universities to achieve its goals.  (AB 09.03)

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5.13  UAE Cabinet Adopts National Space Strategy 2030

On 11 march, the UAE Cabinet, chaired by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has adopted the National Space Strategy 2030 during its meeting at the Presidential Palace in Abu Dhabi.  The National Space Strategy seeks to establish a major global hub for space science and technology, through investing in building capabilities and creating a scientific, legislative and financing environment that is stimulating and attractive for space projects.  The strategy sets the general framework for UAE’s space industry and activities, including government activities related to space, commercial activities, and scientific activities carried out by public and private sector operators and academic institutions and R&D centers.

The National Space Strategy includes 36 objectives and 119 initiatives, which translate into focus areas and programs benefiting more than 85 entities in the UAE.  The Emirates Space Agency is responsible for following up the implementation of the strategy in cooperation with strategic partners and more than 20 agencies and space centers abroad.  The strategy aims at achieving UAE’s vision in the field of space exploration, technologies, and applications.  (AB 11.03)

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5.14  Growth in UAE’s Non-Oil Private Sector Slows to 28 Month Low

Operating conditions in the UAE’s non-oil private sector economy dropped to a 28 month low in February, according to the seasonally adjusted Emirates NBD Purchasing Managers Index.  According to Emirates NBD, anecdotal evidence suggested that the slowdown reflected market conditions and competitive pressures, which collectively led new orders to rise to the least extent since October 2018.  Additionally, the rate of output growth also eased in February and was softer than that seen on average through 2018.  The data suggests that companies responded to signs of weaker new order inflows by reducing staff levels, with the rate of job shedding the most marked in the survey’s history.

Efforts to limit increases in operating expenses were generally successful as both purchase prices and staff costs rose only marginally, which allowed companies some leeway on selling prices.  Anecdotal evidence also suggested that competition led many to offer discounts.  Despite the slowdown in new orders, backlogs of work increased at an accelerated pace in February, with some pundits reporting difficulties in obtaining payments from customers which led to delays in project completions.  Supply chain issues were also evident as vendor delivery times improved to the least extent in the survey’s history.

The rate of expansion in purchasing activity was found to have accelerated, which led to the first rise in inventories in three months.  However, stocks of purchases increased only slightly.  As well, the current market environment led to a sharp drop in sentiment regarding the 12 month outlook among UAE non-oil companies.  (AB 05.03)

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5.15  Dubai Closes Nearly 14,000 Social Media Accounts for Selling Fake Goods

The Department of Economic Development in Dubai (DED) closed down 13,948 social media accounts in 2018 as part of protecting trademarks and the integrity of e-commerce.  The Commercial Compliance and Consumer Protection (CCCP) of the DED said its actions were taken in line with the strategy to enhance competitiveness and sustainable business growth in Dubai.  The accounts were closed after they were found to be selling counterfeit goods; together the accounts had 77.9 million followers.  An overwhelming majority of the accounts closed down were on Instagram – 13,529 accounts – followed by 419 on Facebook.

CCCP said round-the-clock surveillance and continued co-operation with trademark owners as well as law firms also helped it unearth 45 websites that were selling counterfeit goods.  The electronic surveillance team of CCCP has been able to track counterfeits of more than 48 international brands, which primarily included bags, watches and phone accessories, in addition to perfumes, cosmetics, and clothing.  (AB 05.03)

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5.16  Sheikh Mohammed Announces $272 Million Fujairah Infrastructure Projects

Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, on 5 March announced the allocation of AED1 billion ($272 million) for infrastructure projects in Fujairah.  The announcement – made during his visit to Fujairah and Khor Fakkan – is part of the 2017 – 2021 five-year plan being implemented by the Ministry of Infrastructure Development on the eastern coast.  Sheikh Mohammed also approved the allocation of AED400 million to build a residential complex in Khor Fakkan as part of the same plan.  This will be executed by the Sheikh Zayed Housing Programme.

Sheikh Mohammed also visited the AED50 million court project in Khor Fakkan, which spans an area of 16,500 square meters and reviewed the renovation and maintenance of Hamad bin Abdullah Road in Fujairah, which is set to be completed in the first half of 2020 at a cost of AED200 million.  He also reviewed the progress of a number of projects related to the renovation and development of federal road E88 which links Sharjah, Al Dhaid and Masafi as well as a number of education projects that include the construction of schools.  (AB 05.03)

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5.17  Dubai Home to 30% of Middle East Free Zones

Dubai accounts for 30% of free zones of the Middle East’s 160 free zones, according to statistics revealed ahead of the Dubai’s Annual Investment Meeting (AIM).  Around the world, Asia had the largest number of free zones in the world, followed by North America, South America and the Middle East.

In December, the Dubai Free Zones Council announced that its total trade volumes grow by 22% year-on-year in the first nine months of 2018.  Free zone trade topped $107 billion (AED 394 billion), making up 41% of Dubai’s total trade during the period, said the authority which oversees the emirate’s 24 free-trade areas including Dubai Media City, Dubai International Financial Centre (DIFC), Jebel Ali Port zone and others.

China ranked first as Dubai’s most significant free-trade partner with a total trade volume of $16b (AED59b) during the time period, following by Saudi Arabia with $9.3 billion (AED34.2 billion) and India with $9.2 billion (AED 34 billion).  (AB 17.03)

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5.18  Oman Vision 2040 Drives Sultanate’s IT Market to $379 Million by 2021

Oman’s government-led nationwide digitization with Oman Vision 2040 is driving the Sultanate’s IT market to $379 million (OMR 146M) by 2021, industry experts announced with the opening of COMEX Oman, running from 17-19 March 2019.  Oman Vision 2040 is guiding an advanced technological infrastructure foundation to transform the economy, society, government, as well as enable all sectors.  As Oman’s organizations digitally transform, the Sultanate’s IT market will grow by 8% to $379 million by 2021, according to BMI Research.  (ArabNet 18.03)

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5.19  Jadwa Says Saudi Arabia to See Economic Momentum in 2019

Saudi Arabia will see a continued improvement in the health and direction of its economy in 2019, according to new research from Jadwa Investment.  Its report said that during 2019, it expects to see a consolidation of efforts in striving towards the goals of the Vision 2030, as well as the targets set under the National Transformation Program.  This effort will be aided by the largest ever budgeted expenditure, for the second successive year, of SR1.1 trillion, it noted.

Jadwa said that while economic reform is still currently underway, latest full year GDP data for 2018 shows that the economy was able to absorb most of the disruptive effects of necessary economic reform enacted last year.  Although the oil sector’s output will be partially trimmed by Saudi Arabia’s commitment to the OPEC and partners (OPEC+) agreement, Jadwa noted that it does see the non-oil sector exhibiting marginally higher year-on-year growth.

According to its forecasts, Saudi Arabia’s economy will grow by 2% in 2019, compared to 2.2% in 2018, with the decline in yearly growth entirely due to lower oil sector GDP as the kingdom complies with the OPEC+ production agreement.  That said, Jadwa still sees oil sector growth being boosted by a rise in gas output and the opening of the Jazan refinery.

Jadwa’s research also said that the non-oil sector will continue to benefit from an expansionary fiscal policy, which not only includes a 20% yearly rise in capital expenditure, but also a number of targeted support measures.  Specifically, payments under the Citizen’s Account will be continued, annual allowances for public sector workers will be reinstated and there will be a rolling over of inflation allowances, as per a Royal decree.  In addition, a recently approved scheme will allocate SR11.5 billion to help eligible companies with expat fees.  All these measures combined will contribute to raising non-oil growth to 2.3%, up from 2.1% in 2018, Jadwa added.  (Jadwa 09.03)

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5.20  US Set to Overtake Saudi Arabia as the World’s Biggest Energy Exporter

For the first time since Saudi Arabia began selling oil in the 1950, the United States is set to overtake the kingdom as the world’s largest energy exporter, according to a new report by Rystad Energy.  Rystad Energy estimated that Saudi Arabia exports around seven million barrels of oil per day, along with two million barrels of natural gas liquids and additional petroleum products.  The US currently exports around three million barrels on a daily basis, with another five million barrels per day of natural gas liquids and other petroleum products.  Rystad Energy forecasts that the US will continue to grow at a fast pace and will overtake Saudi Arabia later this year.

The news comes as it was reported recently that Saudi Arabia was already producing less oil than it is allowed under the quota agreed under the deal with the Organization of the Petroleum Exporting Countries (OPEC).  A Saudi official told S&P Global Platts that the kingdom produced 10.1 million barrels per day in February, below the 10.31 million barrels per day agreed with OPEC.  Around 70% of this is usually exported.  This figure is likely to decrease as Saudi energy minister Khalid Al Falih said last month that production in March would fall to 9.8 million barrels per day, with around 6.9 million barrels exported, even lower than the figure stated in the Rystad Energy report.  (AB 11.03)

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►►North Africa

5.21  Egyptian Pound Appreciates to Highest Exchange Rate in Over Two Years

The Egyptian pound strengthened on 17 March to its highest exchange rate in over two years, boosted by an increase in the flow of foreign funds into the country.  The currency was trading at EGP 17.34 to the dollar on 17 March, up more than 3% from 17.86 on 22 January when it began its latest round of strengthening.  Factors contributing to this trend include tourism, exports, substitution of natural gas imports with domestic production and foreign remittances that are at a peak, while FDI is also improving slightly.  The higher inflows were also due in large part to Egypt scrapping a mechanism that guaranteed foreign currency for investors exiting the government securities market.

Since the central bank floated the currency in 2016, economists say it has closely controlled the value of the pound, which was last seen this strong in March 2017.  Egypt, which now exports 1.1 bcf of natural gas per day, became a net exporter in late 2018, a significant turnaround for a country that spent about $3 billion on annual LNG imports as recently as 2016.  (Ahram Online 18.03)

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5.22  Inflation Rises in Egypt, Influencing Prospects for an Interest Rate Cut

The Central Bank of Egypt (CBE) said Egypt’s annual headline inflation rose to 14.4% in February, compared to 12.7% in January, a three-month high.  Month-on-month inflation rose by 1.7% in February, compared to 0.6% in January.  The rise was mainly driven by higher food prices, particularly of vegetables.  Vegetable prices increased by 28.9% in January and 39.9% in February this year.

The hike in inflation could make it harder for the CBE to continue its easing cycle on interest rates, calling into question any further cut at the Monetary Policy Committee’s (MPC) meeting later this month.

The CBE resumed its easing cycle in last month’s MPC meeting, lowering the overnight deposit and lending rate by one% to 15.75% and 16.75%, respectively.  The cut was the first in almost a year, and it came as a surprise to many economists who had expected the CBE to leave rates unchanged because the headline inflation rate had increased in January.  However, despite the hike in the inflation rate, it remains within the CBE’s target of 13% plus or minus three% for the first half of 2019.

The Finance Ministry has embarked on a comprehensive debt-reduction strategy that aims to reduce debt to 80% of GDP by 2022.

The CBE had placed growing emphasis on core price pressures, which remained relatively subdued, and foreign capital inflows had continued to hold up well.  Foreign investors have remained net purchasers of Egyptian stocks and government bonds in recent weeks.  The CBE may also want to lower interest rates before attention turns to upcoming subsidy cuts, it said, predicting a 50 basis points reduction in interest rates at this month’s MPC meeting.  The CBE had left interest rates unchanged since May 2018 due to inflationary pressures resulting from subsidy cuts in 2017/2018.  The first cut came last month.  (Al-Ahram 14.03)

5.23  Egypt’s Non-Oil Exports Reach $2.043 Billion in January

Egypt’s non-oil exports reached $2.043 billion in total by the end of January, according to a statement released by the General Organisation for Export and Import Control (GOEIC) on 11 March.  Non-oil manufacturing exports amounted to $1.611 billion during the same month, whereas food exports registered $432 million.  Egyptian exports to Arab countries amounted to $747 million, followed by those to EU at $637 million, the US at $131 million, Africa at $117 million, and others at $410 million, the organization said.  (GOEIC 11.03)

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5.24  World Bank Puts $700 Million Towards Digital Transformation in Morocco

Morocco’s Ministry of Economy and Finance signed on a $700 million loan from the World Bank on 14 March, launching extensive reforms for Morocco’s digital economy.  The program is the World Bank’s latest project in Morocco, part of their five-year “Country Partnership Framework,” which the two launched in February.  The framework laid out the World Bank’s priorities for Morocco of job creation and human capital.  The release of the plans came at a “critical juncture” for Morocco economically, the World Bank said, pointing to the kingdom’s deepening reforms and upward—if sluggish—economic growth.  Now, its newest loan has brought the digital economy to the center of development efforts in Morocco.

Less than one-third of Moroccans have access to a bank account (29%), substantially lower than the 44% average across the MENA region.  A lack of access to such basic financial services—financial exclusion—hinders entrepreneurship and holds back economic growth.  The World Bank’s project will address the issue in part through digital transformation. Its reforms will expand the range of broadband internet and scale up the use of electronic transactions.  The intended result, it said, is an “inclusive digital ecosystem” for Morocco.

The World Bank scaled up its work in Morocco in 2010 and have since lent the country an average of $748 million annually, through projects that have addressed everything from pollution management to rural infrastructure.  Only Egypt receives more money from the World Bank than Morocco, of MENA region countries.  The World Bank also approved an MAD $700 million loan in February to help Morocco fight unemployment—one of the 18 other World Bank projects presently active in Morocco.  (WB 19.03)

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5.25  Moroccan & Canadian Tourism Ministries Push for Direct Flights

Moroccan Minister of Tourism, Air Transport, Crafts, and Social Economy Mohamed Sajid held talks with Samuel Poulin, Canadian parliamentary assistant to the minister of tourism, on 11 March in Rabat to discuss tourism.  The meeting confirmed ongoing efforts to set up direct flights between Moroccan cities and Quebec. Sajid stressed the need for direct flights to expand tourist traffic, especially for Moroccans living in Canada.

Montreal and Casablanca are connected with two daily non-stop flights, operated by Air Canada and Royal Air Maroc.  The two companies said in August 2018 that they will each serve two flights a day staring in the summer of 2019.  The two sides also agreed to improve cooperation in professional hotel training and tourism in general.  The minister also said it was important to reopen the office of the Moroccan National Tourist Office in Montreal to promote Morocco as a destination for Canadian tourists.  The Quebec government announced the plan to open a representative office in Rabat in June 2018.

While Morocco was Canada’s 55th bilateral trade partner in 2016, the country has close ties with Quebec with many years of bilateral relations, cooperation and immigration.  Morocco has a consulate and in Montreal and Morocco is regularly listed among the five countries that send the most immigrants to Quebec.  The province had a relatively large Moroccan community of over 73,000 people in 2016.  (MWN 11.03)

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6.1  EU Parliament Calls For Freeze on Turkey’s Membership Talks

On 13 March, EU lawmakers voted to formally suspend Turkey’s negotiations to join the bloc.  Forging a common European Parliament position on Turkey’s long-stalled EU bid, lawmakers voted 370 in favor and 109 against, with 143 abstentions, for an official freeze of the membership process, which would jeopardize some EU funding.  EU governments have the final say in any suspension.  Ankara dismissed the vote as meaningless, calling it “worthless, invalid and disreputable”.  Turkish foreign ministry said it expected the EP to take objective decisions and to adapt a constructive stance to contribute to Turkey’s EU accession process.

The EU process is not formally frozen but was faltering even before Erdogan’s purge of suspected plotters of a failed coup attempt in 2016 and his broadsides against Europe in 2017, comparing the Dutch and German governments to Nazis.  The negotiations, launched in 2005 after decades of Turkey seeking a formal start to an EU membership bid, dovetailed with Erdogan’s first economic reforms in power as prime minister from 2003.  Today, EU officials say limits on press freedoms, mass jailing and shrinking civil rights make it almost impossible at the present time for Turkey to meet EU joining criteria.  Lawmakers acknowledged that the bloc relies on Turkey as a NATO ally on Europe’s southern flank, while an EU deal with Ankara has halted the influx of Syrian refugees into the bloc.  (Various 13.03)

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6.2  Turkey’s Economy Slides Into Recession

Turkey went into recession at the end of last year, according to TurkStat.  The Turkish Statistical Institute said the economy shrank by 2.4% in the fourth quarter of 2018, from the previous quarter.  It followed a 1.6% drop the previous quarter, making two quarters of falling growth – the definition of recession.

A trade war with the US sparked a steep fall in Turkey’s currency, making imports far more expensive.  The two countries are opposed on a range of issues including how to fight the Islamic State group in Turkey’s neighbor Syria, Turkey’s plans to buy Russian missile defense systems and how to punish the alleged plotters of a failed coup in Turkey in 2016 which attempted to topple President Recep Tayyip Erdogan.  Turkey also wants the extradition of a Turkish cleric now living in the US who it has charged with terrorism and espionage.

Turkey’s lira fell by 30% against the dollar last year, making imports on average a third more expensive.  That prompted the central bank to raise interest rates, making borrowing more expensive.  Car and housing sales suffered as a result and industrial production was also hit.  The final quarter’s data leaves economic growth of 2.6% overall for 2018, the slowest since 2009, and a marked reverse from 2017’s growth rate of 7.4%.

The news comes as President Erdogan, fights to keep his party in control of key cities Ankara and Istanbul in nationwide local elections.  Rising prices, especially for food, and high unemployment, are major election issues.  Turkey’s finance minister, Berat Albayrak, said the worst was over and he expects the economy to return to growth by the end of this year.  But analysts at Capital Economics expect the economy to perform poorly this year.  It adds, though, that is it more gloomy than other commentators.  (Various 11.03)

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6.3  Cyprus Seeks €150 Million in EIB financing for Natural Gas Infrastructure

Cyprus is in talks with the European Investment Bank (EIB) for over €150 million in financing for the construction of infrastructure to transport natural gas to the island, according to Finance Minister Georgiades.  EIB President Hoyer appeared optimistic that the credit institution will be able to take part in the project.  Nicosia aims to maintain and expand on financing programs for small and medium size enterprises.  However, Georgiades pointed out, “we are also interested in cooperating, financing, for a project of strategic importance, that of funding infrastructure for natural gas to be transported and used in Cyprus.”  Negotiation for this large and important project is underway, said Georgiades adding that “we are interested in financing up to €150 million and I hope that in the context of our cooperation we will have a positive outcome.”  (FM 19.03)

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6.4  Greece Sees Best Job Growth in February

Private-sector salaried employment increased by 27,840 jobs in February, a month which not only saw a rise in the minimum wage but also the growth of part-time positions compared to full-time work, figures from the Labor Ministry’s Ergani database showed.

The February statistics from Ergani revealed that almost half of the new jobs were in the sectors of food service, hotels, education and wholesale commerce.  On the other hand there were net layoffs in the areas of transport equipment manufacturing, arts and entertainment, and water and power services.

New hires outnumbered departures in February – for the sixth month in a row.  There were 11,212 more new hires than the same month last year. The increase in job numbers by 27,840 last month made it the best February since 2001.  Minister Effie Achtsioglou stated that the monthly high in job creation at the same time the minimum wage increase was introduced proves that those who had warned of negative consequences on the labor market were wrong.  In the first two months of 2019, new hires numbered 322,251, while departures numbered 316,744.  (GN 15.03)

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7.1  Israel & World Jewry Celebrate Purim Holiday

On 20/21 March, most of Israel and Jewry around the world will mark the holiday of Purim.  Purim is one of the most joyous and fun holidays on the Jewish calendar.  It commemorates a time when the Jewish people living in Persia were saved from extermination.  The story of Purim is told in the Biblical book of Esther.  The heroes of the story are Esther and her cousin Mordecai, who raised her as if she were his daughter.  Esther was taken to the house of Ahasuerus, King of Persia, to become part of his harem.  King Ahasuerus loved Esther more than his other women and made Esther queen, but the king did not know that Esther was a Jew, because Mordecai told her not to reveal her nationality.  Haman, an arrogant, egotistical advisor to the king, hated Mordecai because Mordecai refused to bow down to Haman, so Haman plotted to destroy the Jewish people.  Mordecai persuaded Esther to speak to the king on behalf of the Jewish people.  Esther fasted for three days to prepare herself and then went into the king.  She told him of Haman’s plot against her people.  The Jewish people were saved and Haman was hanged on the gallows that had been prepared for Mordecai.

The Purim holiday is preceded by a minor fast, the Fast of Esther (18 March), which commemorates Esther’s three days of fasting in preparation for her meeting with the king.  The primary commandment related to Purim is to hear the reading of the book of Esther.  The book of Esther is commonly known as the megillah, which means scroll.  It is customary to boo, hiss, stamp feet and rattle noisemakers whenever the name of Haman is mentioned in the service.  The purpose of this custom is to “blot out the name of Haman.”  Jews are also commanded to eat, drink and be merry.  In addition, they are commanded to send out gifts of food or drink, and to make gifts to charity.  The sending of gifts of food and drink is referred to as mishloach manot (lit. sending out portions).  Purim is not subject to the Sabbath-like restrictions on work that some other holidays are; however, some sources indicate that Jews should not go about their ordinary business on Purim out of respect for the holiday.  Purim is also celebrated a day later (21/22 March) in Jerusalem.

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7.2  Jordan has Highest Number of Smokers in the Middle East

The Director of King Hussein Cancer Centre announced on 18 March that Jordanians are the biggest smokers in the Arab region and rank third in the world.  The announcement was made during the inauguration of a program to tackle cigarette addiction, which was attended by representatives from the UAE, Saudi Arabia, Egypt, Tunisia, Qatar, Oman, and Morocco, on the importance of facing this “catastrophe”.  The Al-Hussein Centre works hard to fight addition which has a direct relationship with cancer, heart, and chronic diseases.  (Roya 19.03)

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7.3  Canada-UAE Business Council Hosts First Indigenous Delegation to the UAE

The Canada-UAE Business Council (CUBC) hosted the first ever visit to the UAE of a delegation of Indigenous political, business and youth leaders from Canada.  The mission head was Chief Billy Morin, a youth himself at 31-years-old.  Chief Morin is the elected leader of Enoch Cree Nation, located in Alberta, Canada, adjacent to Edmonton.

Enoch’s visit to the UAE followed a six-month dialogue with the CUBC and the Embassy of the United Arab Emirates in Ottawa about opportunities between Canada and the UAE for economic and cultural exchange.  In September 2018, the UAE Ambassador to Canada welcomed former Chief Brenda Vanguard of the Kehewin Cree Nation, Alberta to the UAE Embassy in Ottawa.  The visit was the first to the Embassy by a First Nations leader. He then invited First Nations leaders to attend the UAE National Day Celebration in Ottawa in December 2018.

Chief Morin is a both a political and business leader.  Enoch owns and operates one of Alberta’s largest resorts.  Enoch is interested in further developing its cultural tourism and diversifying its economy with an emphasis on youth education and capacity building.  The visit was designed with this goal in mind.  (CUBC 07.03)

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7.4  UAE Offers More Public Holidays to Private Sector Workers

The UAE Cabinet has announced that private sector employees will benefit from the same public holidays as the government sector from this year.  On 5 March, it approved a list of public holidays for the public sector for the years 2019-2020, stressing that it granted the same number of days off for the private sector.  2018 holidays for the private sector used to be 11 days but will now be 14 days for both sectors.

The holidays include the Islamic New Year, Eid Al Fitr, Eid Al Adha, Hijiri New Year, Commemoration Day and National Day.  It added that the decree aims to achieve a balance between the two sectors and supporting the national economy.  The move comes as the UAE is keen to encourage more Emiratis to join the private sector as part of its Emiratization policy.  (AB 05.03)

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7.5  Algeria’s Bouteflika Defies Pressure to Step Down Immediately

On 18 March, Algerian President Abdelaziz Bouteflika again defied mass protests calling for his immediate resignation, insisting on a plan to elect a successor only after a national conference and new constitution is approved.  Bouteflika, 82, last week bowed to demonstrators who say he unfit to run Algeria by announcing he had reversed a decision to stand for another term.  But he stopped short of stepping down and postponed elections due in April, in effect extending his current term until a new constitution can be prepared.  The veteran leader repeated an earlier plan for a national conference to reform the political system, which would be held shortly.  The scenario broadly reflects a timetable for change that Bouteflika mapped out on 11 March.

The ailing leader has ruled for two decades but has rarely been seen in public since suffering a stroke five years ago.  Demonstrators say Bouteflika is no state of health to run the country, and they want to see a new generation of leadership tackle deep-seated economic problems and corruption.  His comments were published shortly after the chief of staff, Lieutenant General Ahmed Gaed Salah, said the army should take responsibility for finding a quick solution to its political crisis, in the most overt signal of potential military intervention since demonstrations erupted three weeks ago.

So far, the powerful army has remained in barracks during the demonstrations, with the security forces mainly monitoring mostly peaceful demonstrations in Algiers and other cities.  The army has generally wielded power in Algeria behind the scenes, but has intervened publicly during pivotal moments.  In the early 1990s, generals cancelled elections which an Islamist party was set to win, triggering almost a decade of civil war that killed some 200,000 people.

Newly-appointed Deputy Prime Minister Ramtane Lamamra is expected to start a tour on 19 March of some of Algeria’s main allies abroad to explain the new political roadmap, said a foreign ministry official.  The tour will begin with a visit to Moscow, Algeria’s most important military ally.  It will also include EU countries and China, which has invested billions of dollars in Algeria.  (Reuters 18.03)

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8.1  OurCrowd Launches New $50 Million Fund Focused on Disruptive Medical Tech

OurCrowd announced the launch of a new $50 million fund focused exclusively on disruptive medical technologies (medtech).  OurCrowd said the medtech fund was its first dedicated to a rapidly developing market projected to reach nearly $600 billion by 2024 and will aim to invest in startups and companies focused on medical devices, therapeutics, medical robotics and other new developments in the medical industry.

Currently, OurCrowd’s portfolio companies include Alpha Tau Medical, an Israeli medical technology company that developed breakthrough radiation cancer therapy now in clinical trials, Sight Diagnostics, an Israel-founded company that develops lab-grade blood testing systems for results in minutes and which recently raised close to $30 million, and Syqe Medical, an Israeli medical cannabis device firm that developed the world’s first selective-dose, pharmaceutical grade medicinal plants inhalers.

OurCrowd said the new fund positions the firm as a continuing market leader in medical technology investment while also offering the opportunity to fund companies that are even earlier stage with hugely disruptive technologies.  (OurCrowd 07.03)

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8.2  aMoon Closes $660 Million Israeli Health-Tech VC Fund

Israel-based healthcare fund aMoon II said on 6 March that it had received commitments of $660 million from investors.  This is up from $600 million reported in January in an earlier investor document.  The fund is investing in mid- to late-stage companies in digital health, medical devices and biopharma in Israel, the United States and Europe.  Launched in 2018, aMoon II said in May it had secured a $250 million investment commitment from Credit Suisse’s asset management and private banking divisions.

This amount makes it the biggest venture capital fund operating in Israel today, as well as the largest life sciences and healthcare fund ever set up in Israel and one of the largest outside of the US.  This is aMoon’s second fund.  There was only one investor in the first $200 million fund and after proving it could earn successful returns, the second fund has attracted investors from Israel and abroad, with Credit Suisse responsible for raising about $250 million of the amount.

The fund already began operating before the official closing and has already invested in four companies in Israel, as well as a fifth company founded by an Israeli entrepreneur in Silicon Valley.  The four Israeli companies invested in are cartilage treatment company CartiHeal, drug development company Biolojic Design, targeted therapy company Ayala Pharmaceutical and deep learning software company Zebra Medical Vision.

The first aMoon fund invested in Apos Therapy, BiondVax, Mapi Pharma, DayTwo, Medial EarlySign, Pharma Two B, Regenera, and others.  There has not yet been a significant exit from aMoon I’s portfolio, but several of the companies have had successful follow-up financing rounds.  (aMoon 06.03)

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8.3  OurCrowd, Qure Ventures & PETstock Launch Pet Health Innovation Labs (PHIL)

OurCrowd, a global leader in equity crowdfunding, PETstock, a leading operator of integrated pet retail stores and veterinary hospitals in Australia, and Qure Ventures, Israel’s first exclusively-focused digital health fund, are collaborating to form Pet Health Innovation Labs (PHIL), an Israeli hub for innovative pet health technology.  PHIL will be a global leader in the field, bringing together the best of the digital health technology and pet industries to deliver disruptive digital health pet solutions.  PHIL’s “hub” model will consist of self-established new ventures, adaptation of existing human digital health solutions, and partnerships with brilliant entrepreneurs through investment and mentoring.

The rise in consumer spending on pet care coincides with increased venture capital invested in the pet tech sector.  According to PitchBook, venture capital funds had invested $579m in pet tech deals over 2018.  This was a record-breaking year for funding pet tech innovation, which almost doubled the $311m invested in the sector in 2017.

Jerusalem’s OurCrowd is a global investment platform, bringing venture capital opportunities to accredited investors worldwide.  A leader in equity crowdfunding, OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships.

Qure is Israel’s first exclusively focused digital health fund, concentrating on early-stage deep-tech solutions.  Qure investments include companies that have developed disruptive solutions using machine vision, neuro-tech, digital therapeutics, artificial intelligence, cybersecurity and big-data analytics.  (OurCrowd 07.03)

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8.4  European Commission Backs elminda’s Breakthrough in Depression Treatment

elminda was awarded by the European Commission to bring its breakthrough technology to European patients suffering from depression.  Selecting the right treatment for depressive patients presents an enormous challenge for doctors and success rate is less than 50%.  elminda’s brain analytics product, the BNA-PREDICT, was developed to predict responsiveness to both antidepressants and neurostimulation treatments and help physicians select the most effective anti-depressant treatment and monitor treatment effect directly in the brain for patients suffering from depression.  The use of BNA-PREDICT increases treatment effectiveness, reduces healthcare costs as well as reduces mortality from the disease.

The two-year award was granted to elminda through the prestigious Horizon 2020’s phase 2 Small and Medium-sized Enterprise (SME) instrument, which targets ground breaking innovations that have the potential to profoundly impact the EU economy and global healthcare.  Phase 2 requests had a success rate of 3.6%.  The award will be used to solidify further development of elminda’s BNA-PREDICT technology and product, as well as to deploy a multi-center clinical study focused on optimization of anti-depressant treatment decisions for patients suffering from depression.  The clinical study will be conducted in collaboration with leading research and clinical centers in Israel, Germany, Switzerland and Italy.

Herzliya’s elminda is an emerging biotechnology company dedicated to paving a path to better brain health by integrating big-data repositories AI and machine-learning algorithms with its proprietary BNA platform.  BNA is an electro-physiology based functional brain mapping, imaging and monitoring technology for the early detection of potential abnormalities due to aging or incidence, as well as for monitoring the progress and impact of interventions, including lifestyle changes.  elminda’s BNA technology is enabling the creation of new standards for the assessment and treatment of brain disorders such as AD, Depression and chronic pain.  BNA is available for commercial and clinical use in the U.S., EU, and Israel per specific intended usage per region.  (elminda 07.03)

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8.5  Wize Pharma Closes Deal to Launch Joint Venture With Cannabics

Wize Pharma closed a deal with Cannabics Pharmaceuticals to form a new entity focused on the research and development of cannabinoid formulations to treat ophthalmic conditions across a range of disease and illness categories.  As a condition of closing, the companies engaged a third-party expert to evaluate and make recommendations for a viable development and regulatory pathway for eye drops containing cannabinoids or cannabinoid strings.  Additionally, upon effectiveness, Wize shall issue 900,000 shares of its common stock to Cannabics.   The agreement shall expire if the parties have not approved a business plan by 30 June 2019.

Hod HaSharon’s Wize Pharma is a clinical-stage biopharmaceutical company currently focused on the treatment of ophthalmic disorders, including dry eye syndrome.  Wize Pharma has in-licensed certain rights to purchase, market, sell and distribute a formula known as LO2A, a drug developed for the treatment of DES and other ophthalmological illnesses, including conjunctivochalasis (“CCH”) and Sjogren’s Syndrome.

Headquartered in Tel-Aviv, Israel, Cannabics Pharmaceuticals is developing a platform which leverages novel drug-screening tools and artificial intelligence to create cannabinoid-based therapies for cancer that are more precise to a patient’s profile.  By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move cannabinoids into the future of cancer therapy.  The company’s R&D is based in Israel, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and cancer.  (Wize Pharma 06.03)

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8.6  India-Israel Innovation Fund (I 4 F) Approves New Initiative

HealthNet Global (HNG), a part of the Apollo Hospitals Group, India and Zebra Medical Vision announced a new collaboration that will focus on validating and deploying AI based tools at scale across India.  The companies shall jointly receive support from India-Israel Industrial R&D and Technological Innovation Fund (I4F) for their $4.9 million project to co-develop and to provide clinical validation, and evidence of the efficacy of radiology Al based tools in India as per I4F norms.

The grant will aid the partners to focus on development of India specific algorithms tool which would be of immense benefit to patients across India and other emerging nations.  The project will also modify existing algorithms to make them suitable for the Indian population.  The final product will assist provide high quality radiology access to remote locations by alerting the presence of critical findings immediately.  This will help provide timely, cost-effective, quality care to patients in remote and rural locations.

Kibbutz Shefayim’s Zebra Medical Vision uses deep learning to create and provide next generation products and services to the healthcare industry.  Its Imaging Analytics Platform allows healthcare institutions to identify patients at risk of disease, and offer improved, preventative treatment pathways to improve patient care.  (Zebra Medical Vision 12.03)

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8.7  Galmed Reports Positive Results from Pharmacokinetic Split Dose Study of Aramchol

Galmed Pharmaceuticals announced positive results from a pharmacokinetic (PK) study showing that dose splitting of Aramchol 600mg to twice daily 300mg significantly increased plasma levels.   The aim of this Phase I, open-label, two-period, randomized, crossover PK study was to assess whether dose splitting of Aramchol 600mg to twice daily 300mg will significantly increase plasma levels.  Sixteen healthy subjects took part in two study periods.  Eight subjects received each regimen in the first period and the alternate regimen in the second period.  A PK profile was obtained over the dosing interval at steady state on day ten of each period.

Results of the study showed that the administration of Aramchol 300 mg twice daily resulted in 24-hour plasma concentrations significantly greater than those observed with the administration of Aramchol 600 mg once daily (P<0.0001).  The average plasma levels (exposure) were 53% higher and exposure was greater in all 16 subjects with the twice daily dosing.  The treatment in both dosing regimens was similar in terms of safety and was well tolerated.

Aramchol (arachidyl amido cholanoic acid) is a novel fatty acid bile acid conjugate, inducing beneficial modulation of intra-hepatic lipid metabolism.  Aramchol’s ability to modulate hepatic lipid metabolism was discovered and validated in animal models, demonstrating down regulation of the three key pathologies of NASH; steatosis, inflammation and fibrosis.  The effect of Aramchol on fibrosis is mediated by down regulation of steatosis and directly on human collagen producing cells.  Aramchol has been granted by the FDA Fast Track designation status for the treatment of NASH.

Tel Aviv’s Galmed is a clinical-stage biopharmaceutical company focused on the development of Aramchol, a first in class, novel, oral therapy for the treatment of NASH for variable populations.  Galmed recently announced top-line results of the ARREST Study, a multicenter, randomized, double blind, placebo-controlled Phase 2b clinical study designed to evaluate the efficacy and safety of Aramchol in subjects with NASH, who are overweight or obese, and who are pre-diabetic or type-II-diabetic.  Galmed is currently preparing for an end of Phase 2b meeting with the FDA to discuss the results of the ARREST Study and a Phase 3/4 study protocol, with a view to initiating a Phase 3/4 clinical study of Aramchol in 2019.  (Galmed 12.03)

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8.8  Inspecto Hooks Food Contamination with Real-time Results

Inspecto introduced a new device that detects chemical contamination in food in real-time.  The portable scanner can detect contaminants at concentration levels as required by regulators, guaranteeing traceability and complete transparency.  Inspecto’s innovative device brings lab testing to the farmers, food manufactures, and retailers without time-consuming, high-cost lab testing.  The Inspecto solution is fast, accurate, affordable, and saves unnecessary costs.  This high-tech solution offers the food industry the ability to tailor contaminant testing to their needs and location.  The Inspecto device can be tuned to identify almost any chemical contaminant, in any product, liquid or solid. The advantage of Inspecto is the ability to identify and magnify the unique spectral fingerprint of each contaminant.

Ashdod’s Inspecto was established in 2016 to revolutionize the food industry by taking food contaminant testing out of the lab.  Reports on the discovery of high levels of contaminants in vegetables inspired the co-founders to seek a comprehensive, fast solution for detecting contaminants.  (Inspecto 11.03)

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8.9  Lumenis’ Clinical Breakthroughs Using Its MOSES Technology

Lumenis released new clinical evidence and advantages in lithotripsy and benign prostatic hyperplasia (BPH) treatments using the MOSES Technology at the 34th annual European Association of Urology Congress (EAU19) in Barcelona.

For the last 30 years, holmium lasers and fibers have been clinically proven as the gold-standard modality for the treatment of urinary stones and BPH.  Released by Lumenis two years ago, MOSES is a revolutionary, patent-protected technology.  MOSES utilizes a proprietary combination of holmium lasers and fibers that optimize holmium energy transmission using a unique pulse modulation.  Significant clinical evidence highlighting the benefits of MOSES in lithotripsy has already been released, demonstrating that lithotripsy procedures conducted with the MOSES technology result in 20% faster procedures, 25% more efficient fragmentation, and 60% reduction in stone retropulsion.

Yokneam’s Lumenis is the world’s largest energy-based medical device company for surgical, aesthetic and ophthalmic applications in the area of minimally invasive clinical solutions.  Regarded as a world-renowned expert in developing and commercializing innovative energy-based technologies, including Laser, Intense Pulsed Light (IPL) and Radio-Frequency (RF).  For nearly 50 years, Lumenis’ ground-breaking products have redefined medical treatments and have set numerous technological and clinical gold-standards.  Lumenis has successfully created solutions for previously untreatable conditions, as well as designed advanced technologies that have revolutionized existing treatment methods.  (Lumenis 15.03)

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8.10  OrthoSpace Acquired by Stryker

Caesarea’s OrthoSpace has been acquired by Stryker, in an all cash transaction.  The terms of the transaction include an upfront payment of $110 million and future milestone payments of up to an additional $110 million.   OrthoSpace was founded in 2009.  Its InSpace product provides a highly differentiated technology for the treatment of massive irreparable rotator cuff tears.  In the US, InSpace is currently under clinical study and not approved for use.

InSpace is a biodegradable sub-acromial spacer, which is designed to realign the natural biomechanics of the shoulder.  The technology has a long clinical history with patients treated across 30 countries.  The InSpace balloon is a simple, outpatient solution that can be deployed minimally invasively, and improvements in patient pain and function are documented in numerous peer-reviewed publications.  (OrthoSpace 14.03)

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8.11  Ben-Gurion University Opens National Autism Research Center

Ben-Gurion University of the Negev and Soroka University Medical Center announced the opening of the National Autism Research Center at Ben-Gurion University.  The Center, funded partly by the Ministries of Health and of Science and Technology will serve as Israel’s leading information and research center on the subject of autism and will be the coordinating body to assemble national studies on autism.  The Center will provide access to research for scholars seeking new treatment methods, create shared national databases and distribute information to decision makers, healthcare professionals and the general public.

The Ministry of Science and Technology selected BGU to host the national center last summer and announced its opening during the first national conference for the study of autism, held on at the University’s Marcus Family Campus in Beer-Sheva.  The two-day conference brought together 120 doctors, academics, NGOs and mental health professionals to discuss a treatment methods and research in mid-February.   (BGU 17.03)

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8.12  Theranica Raises $35 Million to Bring Innovative Migraine Device to the USA

Theranica announced the closing of its round B of financing of $35 million, led by aMoon, Israel’s largest healthcare VC.  All existing investors of the company – Lightspeed Venture Partners, LionBird, Corundum Open Innovation and Takoa – participated in the round.

erivio Migra, the company’s novel remote neuromodulation device for acute treatment of migraine, is currently under review of the FDA.  In October 2018 the company completed a pivotal study with the device, the largest-ever clinical study conducted with a migraine device to support FDA clearance, spanning 12 clinical sites in the US and Israel, with almost 300 migraine patients.  The study met its primary endpoint with high statistical significance, and demonstrated high efficacy, safety and tolerability.  The Nerivio Migra is an investigational device, currently limited by federal law to investigational use only in the United States.

Netanya’s Theranica is a medical device company, founded in 2016, with the vision of combining advanced neuromodulation therapy with modern wireless technology to develop proprietary electro-ceuticals that address prevalent medical conditions and diseases.  (Theranica Bio-Electronics 18.03)

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8.13  Nuvo Group Presents Data on Remote Monitoring in Pregnancy

Nuvo Group, an emerging leader in maternal-fetal connected health, presented positive results for its investigational remote monitoring technology (Invu by Nuvo) as compared with cardiotocographs (CTG), the current standard of care (SOC), at the 66th Annual Society for Reproductive Investigation (SRI) Scientific Meeting in Paris, France.

Invu is a pregnancy monitoring and management platform equipped with a proprietary wearable device and fueled by data algorithms.  It was compared to CTG – the most widely-used fetal monitoring system – in a multi-center study of 149 women.  The study revealed that the remote use of Invu could extract both fetal and maternal heart rates comparable to CTG.  Analysis also showed positive preliminary results for Nuvo’s device as a reliable method for monitoring uterine activity (UA).  These results indicate that Invu has the potential to offer a safe, non-invasive, accurate and augmented fetal and maternal monitoring in the comfort of a patient’s home.

The study was conducted in partnership with Hadassah Medical Center in Israel; University Hospital in Heidelberg, Germany; The Perelman School of Medicine at the University of Pennsylvania; and the Eastern Virginia Medical School.

Tel Aviv’s Nuvo Group is committed to transforming pregnancy care for a new generation.  Proprietary software solutions combined with innovative product design utilize big data analytics to optimize pregnancy healthcare on a global scale.  Nuvo Group leadership is comprised of dedicated data engineers, medical professionals, software designers, and proud parents who share a collective vision to create new solutions for both patients and doctors, creating an immediate impact on maternal care worldwide.  Nuvo’s initial product offering for healthcare providers has completed clinical investigation to support FDA De Novo clearance and is not yet available for sale in the United States.  (Nuvo Group 18.03)

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8.14  Via Surgical Receives FDA Clearance for Its FasTouch Absorbable Fixation System

Via Surgical announced U.S. Food and Drug Administration 510(k) clearance of the FasTouch Absorbable Fixation System.  The FasTouch enables for the first time an automated lockable surgical mesh fixation that is strong and stable yet easily and consistently delivered.  The FasTouch Absorbable Fixation System is intended for fixation of prosthetic material to soft tissues in various minimally invasive and open surgical procedures such as hernia repairs.

Amirim’s Via Surgical provides lockable fixation solutions for soft tissue repairs.  Realizing that soft tissue tends to move, shift, contract and expand Via Surgical’s products are designed to lock into the tissue, providing a closed loop, stable and reliable fixation.  The company was founded in 2012 by a dedicated team with successful track record in the hernia space.  (Via Surgical 18.03)

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8.15  Endospan Receives CE Mark Approval for Its NEXUS Aortic Arch Repair System

Endospan has received CE-marking for its NEXUS Stent Graft System.  With no other off-the-shelf solution available, the approval of NEXUS now provides specialists with a “ready to treat” technology solution to repair the aortic arch from inside the aorta without the need to open the patient’s chest or cut the aorta.  The procedure is performed entirely via minimally invasive access through the small blood vessels in the arm and groin, significantly reducing patient recovery time.

The CE mark approval for NEXUS represents a major milestone being the first low-profile branched endovascular stent-graft to be available off-the-shelf to cardiovascular specialists in Europe, enabling them to now perform standardized minimally invasive repair of the aortic arch.  NEXUS was designed and engineered specifically for the aortic arch to allow ease of deployment whilst achieving a durable effective repair and importantly minimizing the risk of stroke and other cardiovascular complications.

Privately held Endospan, headquartered in Herzliya, is a pioneer in the endovascular repair of Aortic Arch Disease, both aneurysms and dissections.  With CE-marking in Europe, the NEXUS Stent Graft System is the first endovascular off-the-shelf system to treat Aortic Arch Disease: a greatly underserved group of patients diagnosed with a dilative lesion in, or near, the aortic arch.  (Endospan 19.03)

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9.1  IAI Unveils ADA-O to Enable Land Platforms to Deal with GNSS Anti-Jammers

Israel Aerospace Industries (IAI) is introducing ADA-O, a variant of the ADA system that addresses GPS jammers to ensure GPS availability for land platforms.  The land platform can be integrated into a range of platforms, providing operational response capabilities for telecom, navigation and C2 systems.  The system supports end users such as armored vehicles, artillery, C2 centers, and communication carriers.

In addition, IAI recently won a contract to provide the ADA system to an Asia-Pacific country in a contract estimated at tens of millions of dollars.  The systems to be supplied will be mounted on a range of airborne platforms in the client’s various arms.  IAI was chosen for this project following a lengthy assessment process of the avionics integration and in-depth technical review of the ADA system.  The contract comes on the heels of a recently-signed agreement signed by IAI’s MLM Division with Honeywell for the co-development of a jam-resistant Embedded GPS INS system (EGI).

At the beginning of 2017, IAI won an Israeli Ministry of Defense tender for integration of anti-jam systems in one of the key platforms of the Israeli Air Force.  In this project, IAI provides the IAF with a comprehensive solution based on a multi-element antenna array, implementing CRPA technology.  The system’s integration allows the avionics systems that rely on satellite navigation to persist in their mission despite jamming or disruption attempts with GPS jammers or other systems designed to block satellite navigation.  (Israel Defense 04.03)

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9.2  Eye-Net Mobile Successfully Completes Additional Trial of its Accident Prevention Solution

Foresight Autonomous Holdings announced that its wholly owned subsidiary Eye-Net Mobile successfully completed a controlled trial of its Eye-Net accident prevention solution in collaboration with the municipality of Netanya.  Eye-Net is a cellular-based vehicle-to-everything (V2X) accident prevention solution designed to provide pre-collision alerts in real time to pedestrians and vehicles by using smartphones and relying on existing cellular networks.

The trial was conducted at a central intersection in Netanya, the 7th largest city in Israel, and was carried out in collaboration with the National Road Safety Authority and the municipality of Netanya.  The purpose of the trial was to create a reliable, real-time communication channel between road users, in order to protect vehicles and pedestrians from oncoming collisions.  In addition, the trial tested the Eye-Net application’s communication layer that was recently installed with the assistance of a leading Israeli cellular provider, as reported in January this year.  The activity with the cellular provider may improve Eye-Net’s efficiency, allowing phone subscribers who register for the application service to receive more accurate alerts.

During the trial, Eye-Net Mobile tested several accident-simulated scenarios between vehicles and/or pedestrians that had no direct line of sight.  In all cases, the parties used the Eye-Net application installed on their cellular phones and received real-time alerts in order to prevent an oncoming collision.  In all scenarios, Eye-Net Mobile met the pre-defined objectives and indicators for real-time use of the Eye-Net system in a manner that enabled all vehicles to brake safely and on time.  During the trial, the information was streamed in real time to the on-site control center, where a dynamic dashboard accurately displayed the location and time of occurrence of the simulated collisions on a map, as well as the classification of the road users involved.  Using a real-time dynamic dashboard for traffic monitoring and “red zone” alerts may provide valuable insights to municipal authorities and city planners in order to improve road infrastructure and safety and reduce accidents.

Ness Ziona’s Foresight Autonomous Holdings is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems for the automotive industry.  Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing and sensor fusion.  The company, through its wholly owned subsidiary Foresight Automotive Ltd., develops advanced systems for accident prevention which are designed to provide real-time information about the vehicle’s surroundings while in motion.  (Foresight 06.03)

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9.3  Cytegic and Phoenix Insurance Partner for Cyber Risk Underwriting

Cytegic and The Phoenix Insurance Company announced a partnership leveraging Cytegic’s platform to automate cyber insurance risk analysis and underwriting for the Israeli market, making cyber insurance accessible and relevant for small and medium-sized enterprises and not just large corporations.  The Phoenix Insurance, the fastest growing insurance company in Israel and a leader in special coverages, together with Cytegic, the leading automated comprehensive cyber risk management and quantification platform powering the cyber insurance revolution, will also work together to fuel growth and manage portfolio risk in new markets outside of Israel.

Tel Aviv’s Cytegic’s revolutionary cyber risk platform is the industry’s first automated end-to-end solution that encompasses the entire scope of cyber risk management and financial impact analysis across the entire insurance and risk value chain.  After +25 man-years of R&D and 4 granted US patents, Cytegic has made groundbreaking steps in the highly challenging task of quantifying cyber risk at any level of scale, from SMB’s to Fortune 500 enterprises.  Utilized globally by insurers, enterprises and global consulting partners, Cytegic’s Automated Cyber Risk Officer (ACRO), leverages forward-looking, contextual and quantified global threat intelligence with internal, technologically validated defensive capabilities, to automatically identify risks to an organization’s business assets and financial impact at any degree of granularity.  (Cytegic 05.03)

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9.4  Smilebox Launches New, Intuitive eCard Add-On for First-Ever Gmail Implementation

Perion Network announced that Smilebox, its consumer apps division that enables users to share their stories – through personalized online greeting cards, invitations, slideshows and more – has launched its new Smilebox for Gmail Add-On.  This add-on is the first of its kind, enabling users to customize and send animated eCards to their family and friends directly from their Gmail accounts, without any extra steps or clicks.  This add-on sets up 2019 to be a breakthrough year for Smilebox.  Having spent 2018 transitioning their product from a downloadable software to a web-based application, the mission of Smilebox in 2019 is to become a one-stop-shop for people to tell all their life’s stories from the invitations that start the story to the slideshows that help people remember them.  The Gmail add-on is a win/win, bringing convenience and fulfillment to the sender, and joy and recognition to the recipient.

Founded in 2005 and acquired by Perion Network in 2011, Holon’s href=””>Smilebox enables people to tell the stories of their lives—big and small—in fun, simple and creative ways with fully customizable eCards, slideshows, invitations, collages and more.  (Perion Network 07.03)

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9.5  Pcysys Chosen as a 2019 Red Herring Top 100 Europe Winner

Red Herring included in its Top 100 Europe award winners at the Top 100 Forum Pcysys, the automated penetration testing company, as part of the cyber security sector.

Petah Tikva’s Pcysys‘s automated penetration-testing platform, PenTera, assesses and validates corporate cybersecurity risks.  By applying the hacker’s perspective and performing machine-based penetration testing, our software identifies, analyzes and prioritizes remediation of cyber defense vulnerabilities and instrumentation.  Security officers and service providers around the world use Pcysys to perform continuous, machine-based penetration tests to improve their immunity against cyber attacks across their organizational networks.  (Pcysys 07.03)

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9.6  ParaZero SafeAir for DJI’s Phantom 4 Complies With New ASTM Standard

ParaZero Technologies is having continued success enabling safe and legal UAS flights over people.  Using ParaZero’s SafeAir System, North Dakota UAS operator, Botlink, was able to secure the first ever FAA waiver for flight over people with a DJI Phantom 4.  To provide this ability to the rest of the commercial UAS industry, ParaZero announced that it is releasing the ASTM compliant, SafeAir Phantom System to the market for sale on its website.

For the past year and a half ParaZero together with the Federal Aviation Administration, DJI and others, have worked to create a standard for sUAS parachutes that would enable flight over people.  The standard (ASTM F3322-18) was released in September 2018 and defines the requirements for the design, manufacturing and testing of sUAS parachute systems.  This past December, ParaZero, together with the Standard Institute of Israel (SII), completed the strenuous process with a series of 45 aerial deployments to test and prove the reliability and effectiveness of the system.  Based on the measured descent rate, a Phantom 4 equipped with a SafeAir Phantom is expected to meet the requirements for flight over people in the FAA’s recently published draft rule.

The SafeAir Phantom System is a smart parachute system that monitors UAS flight in real time, identifies critical failures and autonomously triggers a parachute, a flight termination system and an audio-warning buzzer.  The DJI Phantom 4 is one of the most popular drones in the world. Commercial operators use the UAS for construction, inspections, news and media and more.  The certificate of compliance including the SII testing validation report are critical components of a waiver application. These will enable operators to expand their use of Phantom 4 drones for more efficient operations in areas that were previously restricted.

Kiryat Ono’s ParaZero was founded in 2014 with the vision to enable the global drone industry to realize its greatest potential.  ParaZero offers smart and intuitive solutions for commercial and professional consumer drone markets to enable drone industry growth by designing, developing and providing best-in-class autonomous safety systems.  (ParaZero 07.03)

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9.7  Prisma Photonics Wins GCA Challenge for Securing Natural Gas Infrastructure in Israel

Prisma Photonics announced it has won the Israeli Government Companies Authority (GCA) Challenge for detecting unauthorized activities by monitoring the 700 kilometers of high-pressured natural gas lines of the Israeli Natural Gas Lines (INGL), the leader in natural gas distribution in Israel.   Prisma Photonics was chosen after participating in an extensive technical competition organized by the Israeli GCA at the end of January 2019, where the participating teams were asked to develop a system that would detect unauthorized activities at any point along the 700 kilometers of gas lines spread across the country.  Participants were judged on four criteria: feasibility regarding implementation of the solution, cost-effectiveness, ability of the team to run a pilot within the INGL, and innovation in the form of a new concept or perspective.

Founded in 2017, Tel Aviv’s Prisma Photonics provides the next-generation fiber sensors for smart infrastructure, enabling a new level of monitoring sensitivity that generates unparalleled data quality for better detection and target classifications capabilities with low false alarm rates. The platform is suitable for a wide range of sectors, including smart roads, railways, powerlines, optical-networks and pipelines. With its proprietary approach, Prisma Photonics provides ultra-sensitive detection and intelligent learning detection using the pre-existing optical communication fibers as sensors.  (Prisma Photonics 06.03)

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9.8  CEVA Computer Vision Technologies Power DJI Drones

CEVA announced that the latest generation of Mavic 2 camera drones from DJI, the world’s leader in civilian drones and aerial imaging technology, deploy CEVA DSPs and platforms to enable on-device artificial intelligence, advanced computer vision and long-range communication capabilities.  The Mavic 2 is the most advanced series of camera drones ever built by DJI, designed for professionals, aerial photographers, content creators.  Incorporating the iconic folding design of the world’s most popular Mavic Pro, the Mavic 2 is a powerful platform with new gimbal-stabilized cameras and advanced intelligent features like Hyperlapse and ActiveTrack for easier and more dynamic storytelling.  With an impressive flight time of up to 31 minutes and a more stable video transmission system, Mavic 2 delivers the optimal flight experience for capturing epic shots.

Herzliya’s CEVA is the leading licensor of signal processing platforms and artificial intelligence processors for a smarter, connected world.  They partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT.  Their ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and cellular IoT (NB-IoT and Cat-M) enabled devices, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets.  (CEVA 12.03)

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9.9  PointGrab’s Smart Sensing Solution is Deployed at Deloitte’s London Headquarters

PointGrab has been selected by Deloitte to deploy its smart sensing platform at Deloitte’s new UK and North West Europe headquarters in London.  Deloitte’s UK headquarters is the largest office building in the world to achieve leading certifications for being both an exemplary “green” building and one ergonomically designed to enhance the wellbeing of its occupants.

PointGrab’s solution enables Deloitte to analyze and optimize the utilization of its work spaces.  The PointGrab system deploys thousands of ceiling-mounted sensors, which cover the entire workspace and provide Deloitte with accurate information about the location and number of people in each space.  The PointGrab system preserves the building occupants’ privacy, as it doesn’t transmit or store data that enables personal identification.  PointGrab sensors feed Deloitte’s building management applications with real-time data about how people are using the workspace.

PointGrab’s Virtual Traffic Line feature uses foot traffic data to assist in more efficient building maintenance management.  For example, the system can alert cleaning crews to attend to spaces that have hosted a certain amount of traffic.  This project has created interest in additional facilities of Deloitte within the EU, and similar projects are already being planned for 2019.

Kfar Saba’s PointGrab is a leading machine learning and computer vision PropTech company that provides smart sensing solutions to the building automation industry. The company applies its superior deep-learning technology to the building automation ecosystem, where opportunities to gather data are abundant, but efficient real-time analytics are lacking.  (PointGrab 12.03)

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9.10  Asigra & Secret Double Octopus Provide Authentication for Cloud-based Data Backups

Toronto, Ontario’s Asigra, a leading cloud backup, recovery and restore software provider and Secret Double Octopus announced their partnership to provide a critical layer of authentication to Asigra’s advanced anti-ransomware technology, preventing malware threats from silently targeting backup data.  Protecting enterprise data is critical, requiring frequent cloud backups to guard against ransomware attacks.  One of the main sticking points with cloud-based data repositories is that sophisticated cyber-attackers can inject malware into a system prior to data backups so that data protection and recovery streams become infected.  Asigra’s cloud solution protects against such cyber-attacks, but users still have the ability to use credentials (login and password) in order to access backup repositories in the cloud.

Secret Double Octopus’ Authenticator adds a security layer to Asigra’s zero-day Attack-Loop preventative technology that eliminates the need for passwords to access backup data in the cloud.  Octopus Authenticator uses secret sharing algorithms to take the vulnerabilities caused by credentials out of the security equation, ultimately providing password-less data protection and eliminating the ability of hackers to execute ransomware attacks that delete backup repositories altogether.

Tel Aviv’s Secret Double Octopus delights end users and security teams by replacing passwords across the enterprise with the simplicity and security of strong passwordless authentication.  From being named a Gartner “Cool Vendor” in 2016, our 3rd generation platform is now serving mid-sized to Fortune 50 customers around the globe.  (Secret Double Octopus 13.03)

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9.11  nsKnox Establishes First Cooperative Network to Bolster Cyber Security and Prevent Fraud

Israel Discount Bank announced a unique new agreement with nsKnox, a leading provider of data security and corporate payment protection solutions, in which the bank will utilize nsKnox’s breakthrough Cooperative Cyber Security (CCS) technology.  As part of the agreement and of nsKnox’s new Cooperative Cyber Security paradigm, Discount Bank will take part in the network created by nsKnox for organizational customers.  This is a unique, innovative step towards leveraging the bank’s existing security capabilities as part of its efforts towards expanding customer services via innovative Fintech models.

nsKnox invented the field of Cooperative Cyber Security (CCS) to offer an innovative approach to protecting corporate payments and data.  The technology is based on a new model which combines the individual cyber security capabilities of a number of secured organizations and networks, making hacks significantly more challenging than just penetrating a single organization.

Last month, nsKnox announced the completion of a $15 million Series A funding round with the participation of Discount Capital, the investment arm of Israel Discount Bank.  The round was led by Viola Ventures and M12, Microsoft’s venture fund and included other private investors.  The agreement with Israel Discount Bank represents a significant milestone for nsKnox in its efforts to create a line of defense preventing cyber-attacks and corporate payment fraud.

Founded in 2016, Tel Aviv’s nsKnox is a fintech-security (FinSec) company which invented the field of Cooperative Cyber Security (CCS) to offer a new approach to protecting corporate payment systems against insider threats, cyber-fraud and data manipulation attempts.  nsKnox’s solution provides real-time verified payment protection and fraud detection, specifically designed to prevent financial losses due to fraudulent payments. nsKnox safeguards the payment process seamlessly across every point of the transaction journey, while enforcing payment policies and increasing Accounts Payable operational efficiency and Sarbanes-Oxley Act (SOX) compliance.  (nsKnox 13.03)

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9.12  Taranis Unveils Enhanced Platform for Aerial Imagery Insights into Farming

Taranis announced the launch of its updated, insights-centered platform.  The company has also expanded its fleet to over one hundred manned aircrafts and autonomous drones increasing reach for global customers worldwide.  The solution merges the benefits from its existing platform with the capabilities of Mavryx’s aerial imagery platform– a company acquired by Taranis in 2018.  This includes insights from Taranis’ AI2 (sub millimeter imagery samples) and UHR (high resolution full field imagery to recognize problematic zones), combined with other industry-standard technologies like satellite images and weather forecasts.  Taranis’ updated platform presents farmers with clear, summarized insights in real-time, enabling them to make quick decisions, rather than necessitating them to dig through layers of extraneous information.

The company’s enhanced platform is streamlined for the hierarchy and work flow of the farming retail chain and will seamlessly integrate with Taranis’ partner companies, such as John Deere and Veris.  Since the company’s inception, Taranis has made huge advancements in precision agriculture technology, striving to provide farmers with the best solutions, solving issues from the first step of farming – emergence – all the way to personalized prescriptions for crop threats.

Tel Aviv’s Taranis is a leading precision agriculture intelligence platform that uses sophisticated computer vision, data science and deep learning algorithms to effectively monitor fields.  The system enables farmers to make informed decisions by detecting early symptoms of weeds, uneven emergence, nutrient deficiencies, disease or insect infestations, water damage and equipment problems.  (Taranis 12.03)

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9.13  Arbe 2019 Red Herring Top 100 Europe Winner & TheNextWeb TECH5 Hot Scale Up

Arbe has been recognized with two distinguished acknowledgements from Red Herring and TheNextWeb (TNW), helping to further establish the automotive radar sensor company as a leader in the industry.  Red Herring Top 100 Europe enlists outstanding entrepreneurs and promising companies and selects the award winners from approximately 1,200 privately financed companies each year.  Additionally, Arbe was selected to be part of the TECH5 community.  Showcasing the hottest young scale-ups in Europe and Israel based on performance, growth, and potential, Arbe continues to rank among the best.  Recognized for their industry-leading advances in automotive radar technology, Arbe is one of only five companies selected from Israel to take part in 2019’s elite list.

Arbe is also a recipient of the Global Technology Innovation Award from Frost & Sullivan. Recognized for its breakthrough full-stack 4D imaging radar system for the automotive environment, along with its future business value in terms of scalability, application diversity, technology licensing and human capital.

Tel Aviv’s Arbe is the world’s first company to demonstrate ultra-high-resolution 4D imaging radar with post processing and SLAM (Simultaneous Localization and Mapping).  It is disrupting autonomous driving sensor development by bridging the gap between radar and optics with its proprietary imaging radar solution that provides optic sensor resolution with the reliability and maturity of radar technology for all levels of vehicle autonomy.  The company was founded in 2015 and raised $23 million in funding to date.  (Arbe 11.03)

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9.14  Votiro Wins iCyberCenter International Pitch Competition at RSA 2019

Votiro Cybersec Global was named the winner of the iCyberCenter International Pitch Competition held at this year’s RSA Conference.  The event was hosted by bwtech@UMBC in partnership with the Maryland Department of Commerce in an effort to support international cybersecurity companies establishing a presence in Maryland.  During the conference, Votiro presented a detailed look into the company’s background, technology and overall mission alongside fellow competition finalists.  A panel of leading venture capitalists, entrepreneurs and industry veterans judged the contest and named Votiro the winner, with second and third place honors going to Cybermerc (Australia) and Enigmedia (Spain).

Trusted by over 400 customers worldwide, Votiro File Disarmer provides protection from all malware threats, both known and unknown, with a 100% success rate to date.  The entire file sanitization process takes under a second, while retaining all file content and functionality.  Votiro File Disarmer is also fully scalable, compatible with numerous channels, and supports over 120 different file types – making it ideal for any size and type of organization. Management couldn’t be easier, thanks to the central user-friendly dashboard and SIEM integration.

Tel Aviv’s Votiro is an award-winning cybersecurity company with a mission of securing organizations throughout their digital transformation journey.  Its proprietary next-generation CDR technology allows users to safely open email attachments, download and transfer files, share content, and use removable media, while keeping performance and functionality intact.  (Votiro 14.03)

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9.15  NICE Actimize Selected by IDB Bank NY to Innovate Anti-Money Laundering Compliance

NICE Actimize has been selected by Israel Discount Bank of New York (IDB Bank), a New York State-chartered commercial bank, to spearhead improvements within its financial crime operations with innovative anti-money laundering compliance and investigation management solutions that employ artificial intelligence and machine learning technology.  To more effectively meet the needs of regulators and support its growing customer base, IDB Bank will implement NICE Actimize’s Suspicious Activity Monitoring (SAM) solution within its private banking and commercial banking portfolio, along with its Customer Due Diligence (CDD) solution.

The IDB Bank rollout will also incorporate Actimize ActOne, an investigation management system, which will be implemented as the financial institution’s next generation alert and case management platform.  Additionally, IDB Bank will invest in NICE Actimize’s Currency Transaction Reporting (CTR), Suspicious Activity Report (SAR) processing and reporting capabilities which offers complete AML coverage and transparency with automated reporting and regulatory filing that eases AML compliance requirements.  NICE Actimize CTR’s built-in validation tools and flexible capabilities enhance the quality and timeliness of completed reports.

NICE Actimize’s Suspicious Activity Monitoring (SAM) solution, which combines machine learning analytics for laser-accurate detection, virtually eliminates costly manual data gathering tasks thereby increasing team productivity and reducing investigation time.  The SAM solution introduced NICE Actimize’s innovative concept of Autonomous Financial Crime Management to the anti-money laundering category for the first time.

NICE Actimize is the largest and broadest provider of financial crime, risk and compliance solutions for regional and global financial institutions, as well as government regulators.  Consistently ranked as number one in the space, NICE Actimize experts apply innovative technology to protect institutions and safeguard consumers and investors assets by identifying financial crime, preventing fraud and providing regulatory compliance.  Ra’anana’s NICE is the worldwide leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data.  NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens.  (NICE 19.03)

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10.1  Israel’s Inflation Rate Rises by Only 0.1% in February

On 15 March, the Central Bureau of Statistics announced that Israel’s Consumer Price Index rose by 0.1% in February, bringing inflation in the twelve months to the end of February to 1.2%, which is within the government’s target range of 1-3%.  There were notable rises in prices of fresh fruit (7.4%) and furniture and home equipment (0.6%). The clothing and footwear item fell 4.3%.

The home prices index comparing prices of transactions in December-January with prices in November-December was unchanged.  The fall in home prices in the twelve months to the end of January thus reaches 0.7%.  (CBS 15.03)

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10.2  Record $158.3 Billion in Worldwide Debts Owed to Israel

According to figures published by the Bank of Israel and Central Bureau of Statistics on 11 March, Israel is owed a record $158.3 billion in debts from countries around the world.  This amount will be added to the BOI’s foreign currency reserves, which as of early 2019 stood at $115 billion, such that the bank’s “financial depth” will now stand at over $273 billion.  The sum provides a security blanket of sorts to help the country contend with potential local and global financial scenarios.

Foreign investment in Israel was also on the rise, the report said.  In 2018, according to the figures published by the BOI and CBS, foreign investment in Israel was $20.5 billion.  In 2017 the figure stood at $17.1 billion, while in 2016 foreign investments stood at $17.8 billion.

Between 2016 and 2018, the Israeli economy was injected with no less than $55.4 billion in foreign investments.  Israelis, for their part, also enjoy investing their money abroad, investing a total of $19.5 billion in other countries in 2018.  That figure, however, was far lower than in previous years.  Israelis invested $26.9 billion abroad in 2017 and $27.4 billion in 2016.  (IH 12.03)

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10.3  Finance Ministry Finds Stronger Home Purchasing Trend Continued in January

Israeli home purchases were far greater than the monthly averages in 2017 and 2018, although falling 14% short of the number of purchases in December 2018.  Young couples are dominating the housing market in Israel, accounting for 53% of the 9,200 housing units purchased in January 2019, according to a survey by the Ministry of Finance chief economist.

Total housing purchases in January continued the rising trend that began in October 2018.  Purchases were far greater than the monthly averages in 2017 and 2018, although falling 14% short of the number of purchases in December 2018.  Young couples purchased 4,900 housing units in January 2019, one quarter of which (1,200) were in the framework of the Buyer Fixed Price Plan.  This number was 10% less than in December 2018, in which housing purchases by young couples peaked, but 8% more than in January 2018.

Investors were a surprise in January 2019, buying 1,100 housing units, 12% of total sales, including 80 foreign investors, after being almost totally absent from the Israeli housing market.  Some 44% of the units purchased by foreign residents were in Jerusalem, the same proportion as in 2018 as a whole.  January purchases by foreign residents in Jerusalem were still only 3% of total purchases, but housing purchases for investment purposes accounted for 38% of total housing purchases in Jerusalem in January 2019.  Foreign residents accounted for 12% of all housing purchases in the Tel Aviv region in January 2019.

Housing purchases by foreign residents in Jerusalem in November-December 2018 were 33% higher than in the corresponding period in 2017, while purchases by foreign residents in Tel Aviv fell in November-December 2018.  (Globes 12.03)

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10.4  Tel Aviv is the Tenth Most Expensive City in the World

Tel Aviv is the tenth most expensive city in the world, according to the 2019 worldwide cost of living report published on 18 March by the Economist.  The survey compares the prices of more than 160 products and services in cities around the world, including food and drinks, clothing, household supplies, average monthly rent, utility bills, private schools, and recreational activities.

Asian cities tend to have the highest costs for general grocery shopping, while European cities tend to be the priciest in the household, recreation and entertainment categories, according to the report.  The price of a single beer bottle averaged $2.94 in Tel Aviv, making it the fourth most expensive, only trailing behind New York, Zurich and Seoul.

According to the report, the least expensive cities in the world are Caracas, Venezuela, followed by Damascus, Syria, both of which are currently embroiled in conflict. Rounding out the five least expensive cities are Tashkent, Uzbekistan, Almaty, Kazakhstan and Bangalore, India.  (Economist 18.03)

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10.5  SIPRI Finds Israel is the World’s 8th Largest Arms Exporter

Israel is the world’s eighth largest weapons exporter.  The volume of Israeli defense exports in the past five years was 50% more than in the preceding five years, a new report by the Stockholm International Peace Research Institute (SIPRI) states.  SIPRI, founded by a Swedish parliamentarian, monitors global weapons sales and notes global trends in the sector.  The report states that Israel’s largest customers in 2014 – 2018 were India, Azerbaijan and Vietnam.  At the same time, Israel’s arms procurement during this period was triple the amount in the preceding five years, mostly from the US and Germany.

The report indicates that while arms trade fell in most areas of the world, defense procurement increased 87% in the Middle East, resulting in an 8% increase in the global volume of arms trade in the past five years, compared with the preceding five years.  The leading country in weapons procurement during this period was Saudi Arabia, with 12% of total global procurement, followed by India with 9.5% and Egypt with 5.1%.  Saudi Arabia is the largest customer for the US, UK, Swedish, and Canadian weapons industry, and a leading customer of France.  Germany is also a leading supplier of weapons to Saudi Arabia, along with Spain.

The report states that Israeli private and government companies accounted for 3.1% of global weapons sales in 2014-2018, compared with 2.1% in 2009-2013.  Israel is not far behind the seventh largest weapons exporter, Spain, which accounted for 3.2% of global weapons sales in 2014-2018.  (Globes 11.03)

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11.1  ISRAEL: Israeli Artificial Intelligence-Based Companies See ‎Major Growth

As cited by No Camels, Israeli companies specializing in artificial intelligence raised nearly 40% of the total ‎venture capital funds raised by the Israeli tech ecosystem for 2018, despite accounting for ‎just 17% of the total number of innovative technology companies in the country, ‎according to a March report by Start-Up Nation Central (SNC).‎

Israel is home to over 1,000 companies, academic research centers, and multinational R&D ‎centers specializing in AI, including those that develop core AI technologies, as well as those ‎that utilize AI technologies for their vertical-related products such as in healthcare, ‎cybersecurity, automotive, and manufacturing among others, SNC noted.‎

The Amount of Equity Investments in Israel in 2018

Over the course of 2018, Israeli startups and companies raised over $6 billion in 681 ‎funding rounds, marking a 15% increase from 2017 ($5.2B) and a 140% jump ‎from 2014, according to the report.  Of this sum, $2.24 billion went to AI-focused ‎companies, accounting for 37% of the total capital raised and representing a ‎threefold increase from 2014.  In addition, 32% of all funding rounds for the year ‎went to AI firms, according to the report.‎

Prominent funding rounds raised by companies utilizing AI in 2018 included DevOps firm ‎JFrog, a company that automates software updates which closed a $165 million Series D ‎round, Trax Image Recognition which raised $125 million, eToro with $100 ‎million and Habana Labs, which develops AI processors, with a $75 million round led ‎by Intel Capital.‎

The biggest acquisition of the year was that of Datorama, which developed an AI-powered ‎marketing intelligence platform, by SalesForce for $850 million.  Other significant AI-‎related acquisitions in 2018 were of Nutrino for $100 million by Medtronic, and video ‎synopsis solutions company Briefcam for $90 million by Canon.‎

The SNC report noted that a number of events in 2018 boosted the AI ecosystem in Israel, ‎including the launch of a new Center for Artificial Intelligence by Intel and the ‎Technion-Israel Institute of Technology, and the announcement by US tech giant Nvidia ‎‎(which acquired Israel’s Mellanox Technologies for $6.9 billion) that it too ‎was opening a new AI research center.‎

A number of high-profile AI products developed by Israeli teams working for multinationals ‎were also unveiled this year.  In May, Google came out with Google Duplex, a system for ‎conducting natural sounding conversations developed by Yaniv Leviathan, principal ‎engineer, and Yossi Matias, vice president of engineering and the managing director of ‎Google’s R&D Center in Tel Aviv.  In July 2018, IBM unveiled Project Debater, a ‎system powered by artificial intelligence (AI) that can debate humans, developed over six ‎years in IBM’s Haifa research division in Israel.‎

Earlier in 2019, the Israel Innovation Authority (IIA) warned that despite industry ‎achievements, Israel was lagging behind other countries regarding investment in AI ‎infrastructures and urgently needed a national AI strategy to keep its edge.  The IIA called ‎for the consolidation of all sectors – government, academia, and industry – to establish a ‎vision and a strategy on AI for the Israeli economy.‎

Other sectors with significant funding include cybersecurity, a field in which Israel thrives. ‎ The year ended with $1.19 billion in investments for cybersecurity companies, a 47% ‎increase from 2017, in 117 investment rounds (39% more deals than 2017).‎

In healthcare, Israeli companies raised almost $900 million in investments in 2018.  Israeli ‎healthcare-related technologies accounted for 24% of the companies in the ‎ecosystem, and the same share of the total number of funding rounds and capital raised.‎

In financial tech, some $832 million in investments were raised in 82 deals, almost double ‎the total amount raised during 2017.‎

Israel’s blockchain industry also saw some growth, with 155 active companies in the field, ‎and $107 million in venture-backed capital raised in 2018 (a significant increase from the ‎‎$8.5 million raised in 2014), and $295M through initial coin offerings (ICOs).‎

The State of the Israeli Ecosystem

The SNC report gives a comprehensive overview of the Israeli high-tech ‎ecosystem, which according to SNC’s Finder database had over 6,600 active companies by ‎the end of 2018, having grown by 27% since 2014.  The year also saw some 600 ‎companies closed their doors.‎

The Number of Active Companies in Israel in 2018

The number of funding rounds also increased in 2018, at 681, just two from 2017, but still ‎six% below the 2016 peak of 721 rounds.  At the same time, the median size of all ‎round types rose from $1.5 million in 2014 to $4 million in 2018, as the median size of early-‎stage rounds more than doubled from $1 million to $2.3 million, while late-stage median ‎size grew from $12 million to $18 million.‎

According to the report, more than 430 professional investors have a permanent presence in ‎Israel, almost a quarter of which are non-Israeli.  Some 1,500 investors, from more than 30 ‎countries, invested in Israeli companies over 2018.‎

While a majority of deals had at least one Israeli investor, 43% had at least one ‎American investor.  British investors followed US investors, while German investors were ‎fourth as their participation rose steadily from two% in 2014 to five% in 2018.‎

The report also said that there were 320 multinational companies with a direct presence in ‎Israel, more than 300 with R&D activities across 360 different offices.  The majority are ‎based in the United States (246), followed by the UK, Germany, France and Canada.‎

Over the course of the year, exits totaled $3.28 billion spanning 97 Israeli high-tech ‎companies, marking a nine% decline in the number and a 49% decline in the ‎total amount, compared to 2014, (a peak year for exits over the last five years).  This trend is ‎largely due to companies staying private for longer, since they are able to raise large private ‎rounds, SNC noted.‎

US companies were the largest acquirers of Israeli start-ups with 49% of all deals.  (NoCamels 17.03)

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11.2  JORDAN:  Jordan Ratings Affirmed At ‘B+/B’; Outlook Remains Stable

On March 15, 2019, S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Jordan.  The outlook remains stable.

At the same time, we affirmed our ‘B+’ long-term foreign currency issue rating on the sovereign-guaranteed bond of senior unsecured debt issued by The Development and Investment Projects Fund of the Jordan Armed Forces.


The stable outlook balances our expectation that over the next 12 months donor funding will continue to support the government’s financing needs and keep debt-servicing costs low, against the risk that the government will significantly increase spending to alleviate social and economic challenges.

We could lower our ratings on Jordan if we saw higher debt accumulation by the central government and/or state-owned enterprises (SOEs) such as National Electric Power Company (NEPCO).  We could also lower the ratings if domestic or external funding sources were to become strained.  This could happen, in our view, if the Social Security Investment Fund’s (SSIF) holdings of government debt were to reach a level indicating restricted capacity to further increase their exposure to the government or if strong bilateral and multilateral donor support were to diminish.

We could raise the ratings if Jordan’s external imbalances were to narrow significantly, boosting foreign exchange reserves, or if previous terms-of-trade volatility stabilized.


The ratings on Jordan are constrained by its high public debt and the economy’s large external financing needs, which are driven by sizable current account deficits.  Ongoing pressures from regional conflicts have significantly increased its population through refugee inflows, while slowing its growth trajectory.

The ratings are, however, supported by the authorities’ fiscal consolidation efforts and measures taken to reduce losses at SOEs.  We project that government debt will gradually decrease over the forecast horizon through 2022.  We expect that further international assistance, particularly from the U.S. and the Gulf Cooperation Council (GCC; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), would be forthcoming if needed.  This continues to support our rating on Jordan.

Institutional and Economic Profile: Economic growth will gradually improve

-Social pressures remain high, and we anticipate the government will prioritize growth-related spending and only gradually implement planned fiscal measures.

-We expect donors to continue to support Jordan through grants (albeit declining) and concessional funding to maintain political stability.

-We forecast that economic growth will gradually improve to 3.5% by 2022, supported by public and private investment and growth in exports.

The country’s policymaking and institutional capacity have been strained by both the regional protests and revolutions of 2011 and the Syrian crisis.  Large refugee inflows, resulting in a population increase of 50% since 2011, and security concerns have weighed on public resources. In particular, rising military, medical, and education costs have led to a deterioration in Jordan’s fiscal position and increased its debt levels, as well as heightened its dependence on donor support.

Given the challenging environment, we expect that risks to Jordan’s public finances will persist and that improvements will only gradually become visible over our forecast horizon.  While the three-year Extended Fund Facility (EFF) program from the International Monetary Fund (IMF) has provided a policy anchor, the government has slowed its pace of fiscal consolidation, compared to initial targets, to alleviate social pressures.  After the program ends in 2019, we anticipate that the government will likely continue its commitment to improving its fiscal position–but more gradually.  Renewed protests against fiscal reforms, similar to 2018, are possible, but our base case is that they will not be widespread enough to result in social upheaval.  Yet, in our view, centralized decision-making reduces the predictability of future policy responses, especially given Jordan’s changing demographics and the rising desire for more political participation among sections of the population.

We expect international support for Jordan to remain strong.  Jordan is one of the most politically stable countries in the region, and maintaining this relative stability is an important foreign policy objective for the U.S. and the GCC.  The U.S. has committed to providing economic and military aid of at least $1.275 billion annually (about 3% of 2019 GDP) over 2018-2022.  Exceptionally, U.S. Congress approved a higher disbursement of $1.52 billion in 2018.  The GCC also stepped in following the protests in June 2018, and GCC countries (excluding Qatar) pledged an aid package of $2.5 billion over five years in the form of deposits, project finance, and a very small grants portion.  Qatar has promised to provide $500 million and jobs for around 10,000 Jordanians in Qatar.

Jordan also benefits from concessional lending from bilateral partners and multilateral agencies (around 17% of GDP outstanding as of end-2018), which have been important sources of financing twin fiscal and external deficits.  In addition, the U.S. has guaranteed Eurobonds of $3.75 billion issued over 2013-2016.  Jordan has upcoming Eurobond redemptions with U.S. guarantees of $1.00 billion in 2019 and $1.25 billion in 2020.  If the guarantees are not extended, we expect that U.S. bilateral support will nevertheless continue in other forms.  We also understand that additional issuances could benefit from loan guarantees offered at the London Initiative conference in February 2019 of $1 billion from the World Bank, $250 million from the U.K. and $200 million from Saudi Arabia. Moreover, donors including the World Bank, the African Development Bank, the U.K, Japan, the European Union and the European Investment Bank pledged new multiyear concessional loans and grants in February.

We estimate that real GDP grew by 2% in 2018.  Regional developments have significantly affected foreign investment, while weakened macroeconomic activity in the GCC has reduced remittances and investment inflows.  The Syrian conflict has abated but security risks will remain high – although the authorities have reopened the border.  At the same time, the unemployment rate remains high at around 18.6%.

However, the new government under Prime Minister Omar Razzaz appointed in June 2018 has outlined an ambitious growth plan to improve competitiveness, foreign investment and exports.  We project that real GDP growth will increase over the next four years, from 2.5% in 2019 to 3.5% in 2022.  We expect key drivers of growth to be public and private investment into priority sectors such as energy, water and transport; rising exports of goods and services to Iraq; and tourism.  In February 2019, Jordan and Iraq signed several agreements, which included the restoration of customs exemptions on several Jordanian goods, export of Iraqi oil to Jordan at concessional rates, a door-to-door freight transport agreement and the establishment of a joint industrial free economic zone at the border.

Jordan’s economic growth has not kept pace with the rapid rise in its population.  We estimate GDP per capita of US$4,100 in 2019.  Including our growth forecasts through 2022, 10-year weighted-average real GDP per capita is expected to contract by about 1.7%, significantly lagging peers at similar income levels.  However, population growth has normalized because refugee inflows had slowed since the closing of the borders with Syria in June 2016.  We do not see a material risk of large Syrian refugee inflows following the border reopening, but we also do not anticipate lots of refugees returning to Syria at this time.

Flexibility and Performance Profile: The central government’s gross debt stock is high, and current account deficits will remain large but on a declining trend:

-Gradual fiscal consolidation should help slowly reduce high government net debt levels, though we expect the pace of reforms to slow compared to recent years.

-We project the government will rely more on external concessional loans to fund budget deficits as grants continue to decline.

-We expect growth in exports and tourism receipts will stabilize Jordan’s external financing needs through 2022.

Jordan’s central government debt levels have stabilized over the last three years at around 95% of GDP, reflecting a substantial increase from around 62% in 2011.  The increase stems from high central government fiscal deficits and a significant rise in government-guaranteed debt at NEPCO and the Water Authority of Jordan (WAJ).  The government has been directly servicing NEPCO’s debt payments since 2013, and is now doing the same for WAJ to reduce WAJ’s interest costs.  We therefore include the government-guaranteed debt of NEPCO and WAJ of around 11% of GDP in 2018 in our government debt stock calculations.  We also see as credit constraints the large banking exposure to public debt – of more than 20% of total assets – and the exposure to foreign currency debt of around 42% of total central government debt at end-2018.

We estimate that Jordan’s general government debt narrowed slightly to 78% of GDP in 2018.  To calculate general government debt, we deduct the SSIF holdings of government debt because the SSIF falls within our definition of general government.  However, we note that the proportion of debt held by SSIF has been steadily increasing, to around 18% of total debt in 2018, doubling from 2010.  We could decide to include this portion in our government debt calculation if we assess that SSIF’s bond purchases continue to represent a material amount of the central government’s deficit financing (averaging more than 60% in the last five years), and if this debt becomes a larger proportion of central government debt and the fund’s total assets.  This is because it would increasingly reflect insufficient voluntary domestic financing sources.

We anticipate that the government will raise more external debt, primarily on a concessional basis, over 2019-2022 to meet its funding needs and as an attempt to lengthen its debt maturity profile.  As a result, we expect debt-servicing costs to remain under 10% of total revenues over 2019-2022.

We believe that the government’s fiscal consolidation slowed in 2018.  While gross general government debt as a percentage of GDP declined slightly, there was a drawdown of 1.5% of GDP in government deposits from the Central Bank of Jordan (CBJ).  In 2018, the government raised the goods and services tax (GST) on several basic commodities to 10% (previously, exemptions had brought down rates to 0%, 4%, and 8%), eliminated flour subsidies, and increased taxes on imported cars, carbonated drinks and cigarettes.  The government also increased electricity tariffs, monthly, until July (except June) based on a formula linked to global oil prices, but revised tariffs downward in September and December.  We attribute the small deterioration in the fiscal position to some underperformance in tax administration and collection.  The lower-than-expected tax revenues were partly offset by additional grants from the U.S. and a 10% decrease in capital expenditure.

We anticipate that the pace of fiscal measures could slow further as the government prioritizes growth-enhancing policies and increases capital expenditure, while budget grants decline.  We expect fiscal gains from the implementation of the new income tax law passed in December 2018, which lowers the personal tax exemption threshold and broadens the tax base.  The government is also focused on strengthening tax data administration and reducing tax evasion.  However, we understand that the authorities do not plan to increase GST further in 2019, contrary to our prior expectation.  The government also revised down GST on basic food items to 4%, from 10% and 16%.  As increasing taxes further is politically more contentious with high social pressures, we expect central government debt will remain broadly stable through 2022.  Yet, we forecast narrowing general government debt levels to be supported by continued growth (though at a lower rate) in debt holdings by the SSIF.

The weak performance of NEPCO and WAJ in recent years has resulted in significant financial costs to the government.  Although the government started implementing an automatic tariff adjustment mechanism in 2018 linked to global oil prices, we believe that the adjustment could be insufficient to meet NEPCO’s operational breakeven.  However, the start of Egyptian gas and Iraqi oil imports in 2019 on concessional terms, and gas imports from the Leviathan Field in Israel in 2020 could help to reduce NEPCO’s input costs over the next four years.  Although losses at WAJ continue, it has a target date for operational cost recovery by 2020.

We estimate that Jordan’s current account decreased to 9.3% of GDP in 2018, from 10.7% in 2017, helped by a narrowing trade deficit and rebound in tourism.  We forecast that declining current account deficits will reduce its external financing needs to an average of 153% of current account receipts and usable reserves over 2019-2022, owing mainly to rising exports to Iraq and tourism receipts as the regional security environment stabilizes.  There could also be some upside from higher exports to Syria given the reopening of the Nassib border in October 2018.  Yet, we anticipate that normalization of trade with Syria will likely take time due to continued security concerns and infrastructure damage.  We expect current account deficits averaging 7.8% of GDP over 2019-2022 will continue to be financed by foreign direct investment and external debt issuances (mostly government external debt) and project lending.

Mainly because of the large external imbalances and lower financial account inflows in recent years, gross foreign exchange reserves (including gold) have been declining since 2015, reaching $14.6 billion at end-2018 from $15.6 billion at end-2017.  A rise in the deposit dollarization rate due to higher political uncertainty in mid-2018 and lower gold valuation also weighed on reserves.  Deposit inflows from GCC countries of $1.2 billion in 2018 were unable to offset this decline.  However, we expect foreign currency reserves to improve somewhat from 2019 on the back of higher FDI and debt inflows, along with lower current account deficits.

At the current level, we believe Jordan has sufficient external assets to uphold the currency peg to the U.S. dollar.  The Jordanian dinar’s peg supports price stability, although it also limits the central bank’s room for policy maneuver.  Despite subdued economic activity, CBJ has followed the U.S. Federal Reserve in hiking interest rates to maintain competiveness of the Jordanian dinar.  However, the CBJ continues to provide subsidized rates of 1.75% in Amman and 1% outside Amman for lending to key economic sectors including industry, tourism, agriculture, and renewable energy to support growth.  We expect inflation to slow to 2.5% – 3% over the next four years after peaking at 4.5% in 2019, supported by lower oil prices.

Nonresident deposits in the financial sector make up more than 40% of total external short-term debt. Although these deposits have steadily increased over the years, and we understand that they mainly relate to the Jordanian diaspora, we view their reversal as a potential risk.  (S&P 15.03)

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11.3  JORDAN:  Jordan Economic Report –2019

Bank Audi Group released its Jordan Economic Report – 2019 on 7 March:

Further Reforming Efforts, Amid Persistently Modest Growth Performance:  Slow economic growth relative to job creation needs Jordan continued to implement reforms and measures to maintain macroeconomic stability and reinforce the conditions for higher and more inclusive growth.  Nonetheless, economic growth remained at about 2% while inflation remained relatively steady, falling below 4% by year-end.  Within this environment, tourism provided a slight support to growth, with a 12.5% annual growth in the number of tourists to reach a 5-year high of 4.5 million tourists in full-year 2018.  But persistently modest growth and weak investment remain insufficient to generate the much needed job creation, as unemployment has reported 18%, relatively high by regional and international benchmarks.

Current Account Deficit Witnessing its First Contraction Since 2014:  Despite persistently challenging external conditions, Jordan’s external imbalances witnessed a relative improvement in 2018. In fact, the current account deficit has narrowed for the first time since 2014, on the back of a declining trade deficit, driven by contracting non-energy imports and increasing exports supported by the re-opening of the borders with Iraq. In parallel, stronger tourism receipts provided a solid support for services earnings after falling in 2015/2016 when regional political instability deterred visitors.  Within this context, the current account deficit contracted by 17.0% during the first nine months of 2018 relative to the same period of 2017 to reach the equivalent of $2.8 billion, as per the latest available statistics.

Fiscal Consolidation Measures at a Softer Pace in 2018:  After implementing wide-ranging fiscal consolidation measures in the past three years, the government relatively loosened its fiscal stance in 2018, as fiscal consolidation measures were somehow put on hold amid the tensions surrounding the income tax law in spring 2018.  Central government fiscal data for the first eleven months of 2018 point to a growth in public expenditures outpacing the increase in public revenues.  Therefore, the overall budget deficit is estimated to have exceeded 3.5% of GDP in 2018, up from 2.6% of GDP in 2017.

Continuous Monetary Policy Tightening Along with Limited Inflationary Pressures:  The year 2018 was marked by a contractionary monetary stance as the Central Bank of Jordan continued to follow the lead taken by the Federal Reserve in tightening policy, along with relatively limited inflationary pressures and an extended fall in gross official reserves.  Consumer prices in Jordan continued to trace an upward, though moderate, trajectory for the second consecutive year in 2018, as shown by a 4.5% increase in the Consumer Price Index, moving from 119.3 on average in 2017 to 124.7 on average in 2018, according to the Central Bank of Jordan.  The CBJ’s foreign exchange reserves decreased to $12.7 billion at end-2018, from $13.5 billion at end-2017, down by 5.6%, yet still cover seven months of the country’s imports, which is higher than the international standard for foreign reserves coverage.

Persistently positive banking activity growth along with satisfactory capital and liquidity buffers Jordan’s banking sector has had a satisfactory year in 2018 on the overall, amid a slight increase in economic growth and a relative amelioration in regional conditions.  Banks have continued to collect deposits, especially time deposits within the context of rising interest rates, and extend waves of loans -albeit at a slower pace- to cater to the economy’s funding needs in both its private and public sector components, while boasting adequate financial standing indicators.  Measured by the aggregated assets of banks operating in the Kingdom, total sector activity grew by 3.6% on a yearly basis to reach the equivalent of $71.8 billion at end-December 2018.  The 2018 asset growth in volumes proved to be 2.5x higher than that recorded in the previous year.

Jordan’s Capital Markets under Downward Price Pressures:  Jordan’s equity and bond markets came under downward price pressure in 2018, mainly weighed down by declines in US Treasuries amid a sustained US monetary policy tightening, emerging market weakness, and some concerns over a new taxation on stock trading profits on the Amman Stock Exchange.  (Bank Audi 07.03)

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11.4  BAHRAIN:  IMF Staff Completes 2019 Article IV Mission to Bahrain

An International Monetary Fund (IMF) mission visited Manama from 19 February to 3 March 2019 to conduct discussions for the 2019 Article IV consultation.  The mission will submit a report to IMF management and Executive Board, which is tentatively scheduled to discuss the Article IV Consultation in April 2019.

At the conclusion of the visit, the IMF issued the following statement:

“Economic activity was subdued in 2018. Oil output is expected to have declined by 1.2%, while non-oil output growth decelerated to 2.5%, driven by slowdowns in retail, hospitality and financial services sectors.  Continued implementation of GCC-funded projects has supported growth in the construction sector.  Overall growth in 2018 is estimated at 1.8%, with inflation edging up to 2.1%, mainly driven by higher food and transport prices.  With higher oil prices, the reduction in utility subsidies, and the new excise taxes, the overall deficit in 2018 fell to 11.7% of GDP, from 14.2% in 2017.  Public debt increased to 93% of GDP.  The current account deficit widened to 5.8%, while reserves remained low, covering only about one month of prospective non-oil imports at end 2018.

“Economic growth is anticipated to remain around 1.8% in 2019.  The authorities’ Fiscal Balance Program, underpinned by the 2019-20 budget, has provided a commendable framework to arrest the decline in fiscal and external buffers since 2014.  The introduction of a value-added tax in January 2019 is a particularly significant step, as are plans for cost recovery in utilities and further means-tested subsidy reforms.  The measures envisaged under the FBP are expected to further reduce the fiscal deficit over the medium term, but public debt will continue to increase.

“Thus, additional reform efforts, anchored in a more transparent medium-term agenda, will be needed to ensure fiscal sustainability and support the currency peg, which continues to provide a clear and credible monetary anchor.  Further revenue measures, including a direct taxation system such as corporate income tax, could be considered and spending reforms should be designed to protect the most vulnerable.  The implementation of the Voluntary Retirement Scheme (VRS) is expected to reduce the public wage bill over the medium term.  The ultimate impact on public service delivery and public finances should be carefully assessed based on public sector restructuring plans and contingent liabilities of the VRS.

“The banking system remains stable.  Ongoing efforts at supervisory and regulatory vigilance, and to further enhance the AML/CFT framework, are welcome.  Bahrain has been a leader in fintech, promoting opportunities while revising regulations and collaborating with other regulators.

“Sustained structural reforms would help support inclusive growth and further economic diversification.  This requires developing a dynamic private sector, while transforming the role of the government without sacrificing necessary public services.  Targeted education and labor market reforms would help promote opportunities and improve productivity.  Efforts to place greater emphasis on vocational education and retraining are welcome, particularly as technology is rapidly changing the nature of work.  Reforms to streamline regulations should further improve efficiency and catalyze private investment.  Improving access to financing for small and medium enterprises would invigorate further the private sector’s contribution to the overall economy.  (IMF 03.03)

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11.5  OMAN:  Moody’s Downgrades Oman’s Rating to Ba1, Outlook Negative

On 5 March, Moody’s Investors Service (“Moody’s”) downgraded the long-term issuer and senior unsecured bond ratings of the Government of Oman to Ba1 from Baa3.  The outlook remains negative.

The key driver of the downgrade is Moody’s expectation that the scope for fiscal consolidation will remain more significantly constrained by the government’s economic and social stability objectives than it had previously assessed.  As a result, in an environment of moderate oil prices, Oman’s fiscal metrics will weaken to a level that is consistent with a lower rating.

Notwithstanding Oman’s inherent credit strengths that provide some degree of resilience to potential future shocks, persistently wide fiscal deficits will contribute to wide current account deficits, perpetuating Oman’s dependence on steady inflows of external financing and denoting material external vulnerability.

The negative outlook reflects Moody’s view that the balance of risks to the Ba1 rating is skewed to the downside.  In particular, foreign investors’ willingness to finance Oman’s large deficits at relatively low costs could weaken, exacerbating the sovereign’s external vulnerability and raising government liquidity pressures.

Concurrently, Moody’s has downgraded the government of Oman’s senior unsecured medium-term note program rating to (P)Ba1 from (P)Baa3.  This ratings action also applies to Oman Sovereign Sukuk S.A.O.C, for which the backed senior unsecured ratings were downgraded to Ba1 from Baa3 and the backed senior unsecured medium-term note program was downgraded to (P)Ba1 from (P)Baa3.

Moody’s also lowered Oman’s long-term foreign-currency bond ceiling to Baa3 from Baa2 and its long-term foreign-currency deposit ceiling to Ba2 from Baa3.  At the same time, the short-term foreign-currency bond ceiling was lowered to Prime-3 from Prime-2, while the short-term foreign-currency deposit ceiling was lowered to Not Prime from Prime-3.  Oman’s long-term local-currency bond and deposit ceilings were lowered to Baa3 from Baa2.


Rationale for the Downgrade to Ba1:  Very Limited Prospects for Further Meaningful Fiscal Consolidation Point to High Likelihood of Material Rise in Debt Burden

The downgrade to Ba1 reflects Moody’s view that prospects for new meaningful fiscal reforms are limited, to a greater extent than the rating agency had previously assessed.  This view is underscored by delays of measures that were announced in early 2018 and that Moody’s expected would be implemented during 2018-19.  More generally, Moody’s assessment that the scope for further fiscal consolidation is very limited reflects the challenges faced by the government in introducing new non-oil revenue measures and controlling expenditure, especially in a weak growth environment, given its social stability objectives and the overarching desire to preserve the current level of living standards of the Omani citizens.

Although higher oil prices during 2018 reduced fiscal pressures, narrowing last year’s fiscal deficit by more than 5% of GDP according to Moody’s estimates, they also reduced the fiscal reform momentum.  The special excise taxes on alcohol, tobacco and sugary beverages and the 5% value added tax (VAT) have both been delayed, to no earlier than the second half of 2019 and early 2020 respectively.  Moody’s estimates that these two measures combined could raise revenues of about 1.7% of GDP, a relatively small share of the government deficits when oil prices are around current levels.  These two measures are the only substantive fiscal measures that are being targeted for implementation in the coming years.

The 2019 budget law that was approved by the royal decree in January 2019 contains few new measures that would durably stop or reverse the fiscal deterioration in an environment of moderate oil prices.  Other than some further potential revenue from state asset sales and the above-mentioned special excise taxes (up to 0.3% of GDP, depending on when will the new measure be actually implemented), the budget only plans additional revenue from the standardization of municipality fees (up to 0.1% of GDP, again depending on the implementation date).

The 2019 budget aims to cut spending by about 4% relative to Moody’s 2018 execution estimate.  Although the budget statement contains no specific announcement of spending cuts, the government has previously committed to the government sector employment freeze.  Nevertheless, based on the track record of the past six years Moody’s expects that government spending will likely exceed the budgeted amount by at least 5%, resulting in broadly unchanged expenditure in 2019 compared to 2018.

Moody’s does not expect scope for meaningful fiscal consolidation to emerge beyond this year.  As a result, and assuming that oil prices hover around current levels, it projects Oman’s fiscal deficits to remain high, ranging from 7% to 11% of GDP in the next three years.

The rise in the government’s debt burden may be mitigated by planned asset sales.  As the first step, late last year the government-owned Oman Oil Company sold a 10% stake in the Khazzan-Makarem gas field joint-venture to a strategic foreign investor.  A significant portion of the proceeds will be transferred to the government and used to finance the 2019 budget.  Furthermore, earlier this year, the government sold a portion of the country’s gas pipeline network to the state-owed Oman Gas Company (OGC).  While OGC borrowed externally to fund this purchase, increasing the debt burden of the broader public sector, the proceeds of the sale will likely reduce the government’s direct borrowing requirement in 2019.

Overall, in Moody’s baseline scenario which assumes the excise tax and VAT implementation by early 2020 in addition to some additional state asset sales over the next three years, Oman’s debt metrics will continue to deteriorate in the medium term, reaching around 60% of GDP and more than 170% of revenues by 2021.

Fiscal Imbalance Contributes to External Vulnerability

Given Oman’s pegged exchange rate regime that limits monetary policy autonomy, and the significant role of the public sector in the economy, the wide fiscal imbalance will contribute to current account deficits remaining wide, notwithstanding some narrowing over the medium term related to an increase in non-hydrocarbon exports as the economy diversifies — especially towards tourism, petrochemicals, commercial fishing and mining.

Moody’s expects that Oman’s current account deficits will remain around 6-10% of GDP in the next several years, elevating the sovereign’s vulnerability to external shocks.  Oman will remain reliant on continued access to external debt to maintain an adequate level of foreign exchange reserves.

High Per-Capita Incomes, Sovereign Asset Buffers and Prospects for Longer-Term Economic Diversification will Continue to Support the Ba1 Rating:  Despite expected further deterioration of government debt metrics in the medium term, the Ba1 rating is supported by Oman’s very high per capita income and moderately high, although declining, sovereign asset buffers (equivalent to around 41% of GDP at the end of 2018, including the foreign currency reserves of the central bank and Moody’s estimate of the liquid sovereign wealth fund assets), which will provide some resilience to potential future shocks.

The rating is also supported by the government’s track record of accessing international capital markets with large size issuances and by Oman’s robust banking sector which limits the scope for the contingent liabilities risk to the Omani government due to the conservative regulatory framework in the country, evidenced by strict limits on cross-border exposure, retail lending exposure, debt burden ratios and balance sheet mismatch.

Over the medium term, the rating will also be supported by the ongoing economic diversification efforts and related job creation, which Moody’s expects will reduce the economy’s reliance on hydrocarbon revenue somewhat.

Rationale for the Negative Outlook

In light of the further weakening of Oman’s fiscal metrics and ongoing external vulnerability over the next several years, there is a risk that foreign investors’ willingness to finance Oman’s large deficits at relatively low costs weakens, exacerbating the sovereign’s external vulnerability and creating government liquidity pressures.  This downside risk is particularly relevant in the context of potential further shifts in global capital flows which Moody’s expect to be volatile in the coming years.

Constraints on Oman’s access to low-cost and long-maturity external financing would put pressure on foreign exchange reserves and, if sustained, potentially on the currency peg to the US dollar.  More immediately, such constraints would manifest in rising liquidity pressure for the government.  In Moody’s baseline, which assumes a modest gradual reduction of Oman’s fiscal deficit in the medium term, the rating agency estimates that the government’s gross financing needs will rise to around 14% of GDP in 2022 from 10% of GDP in 2018. Issuance at higher costs and/or shorter maturity if investors’ appetite for Oman government’s debt diminishes would raise financing needs further and erode debt affordability.

What Could Move the Rating Up/Down

The negative outlook indicates that an upgrade is unlikely in the near term.  Prospects of a significant change in policy priorities pointing to prioritization of measures that would durably reduce Oman’s fiscal and external imbalances would likely lead Moody’s to change the outlook to stable, and possibly over time, upgrade the rating.  Evidence of sustained capacity to access financing at low costs would also likely lead Moody’s to change the outlook to stable.

Moody’s would likely downgrade the rating should the government’s ability to access affordable long-term international financing weaken.  Possibly relatedly, a material erosion of the central bank’s foreign exchange reserves, or liquid sovereign wealth fund assets, beyond Moody’s current expectations would increase the probability of a downgrade.  Such developments could result from prospects of even slower fiscal consolidation than currently assumed.  (Moody’s 05.03)

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11.6  SAUDI ARABIA:  New Economic Ties Deepen the Saudi-Pakistani Strategic Partnership

Umer Karim, a doctoral researcher at the University of Birmingham focusing on Saudi foreign policy, noted in the Fikra Forum on 27 February that Pakistan and Saudi Arabia share a long history of close bilateral ties, with bonds of religion and mutual interest dating back to the Saudi support for the independence struggle by the Muslims of the subcontinent during the 1940s.  Over the years, this bilateral relationship has matured into a strategic partnership, owing much to the blossoming of strong inter-personal ties between the ruling elites on both sides, a shared foreign policy outlook vis-à-vis both regional and international events, and collaboration in the security domain.  These ties are further strengthened by the need for regional allies due to longstanding tensions between Saudi Arabia and Iran and between Pakistan and India, while domestic political changes within the two countries have also shaped the relationship’s development.

Though originally limited to visits between top political leadership, coordination spelled out by agreements has since developed between the two countries’ military elites.  Security – in particular the agreement on defense cooperation that brought Pakistan’s military and air force trainers to Saudi Arabia – became integrated into the relationship in the aftermath of the 1967 Arab-Israel war.  This strategic alignment further took form as both sides aligned on the same side of the global political divide during the Cold War as each became key security partners of the United States on their respective regional frontlines.

In the aftermath of the Iranian revolution, the security understanding among the two sides was further regularized by the 1982 Protocol Agreement regarding Deputation of Pakistani Armed Personnel and Military Training, which paved the way for the deployment of nearly 15,000 Pakistani troops in the Kingdom.  In practice, these deputations created a unique bond between the Pakistani security institutions and Saudi Royalty.  This special relationship was made conspicuous by Saudi Defense Minister Prince Sultan bin Abdelaziz al-Saud’s visit to the Pakistani nuclear installations in 1999 – the first foreigner to visit.

This military factor has also meant that when inter-governmental ties have come under strain, military ties have remained a guarantor of the stability of the relationship.  A case in this regard has been the tenure of the Pakistan People’s Party (PPP) government of 2008-2013, which the Saudis perceived as heavily tilted towards Iran.  The Saudi leadership was visibly pleased with the departure of the PPP government and the arrival of Nawaz Sharif—head of the pro-military Pakistan Muslim League party—at the helm of affairs with whom they historically maintained a favorable association.

With a generous loan package of $1.5 billion offered in 2014, the Nawaz government appeared to have full Saudi support.  Yet ties became strained by Pakistan’s refusal to join the Saudi-led military intervention in Yemen the following year.  Again, the Pakistani military high command remained engaged with Saudi decision makers and took two vital steps to assuage the Saudi concerns.  First, the Pakistani military fully backed the Saudi initiative of an Islamic Military Counter Terrorism Coalition (IMCTC) and complied with the Saudi request that Pakistan’s former Army Chief General Raheel Sharif lead the coalition.  This apparent support was later reinforced by the military’s decision to send additional Pakistani troops under the auspices of the 1982 agreement to join 1,600 Pakistani troops already stationed in the Kingdom.  Although these measures ended the tension gripping the bilateral ties, disquiet in the relationship remained.

Imran Khan and MBS: A New Beginning?

Notably, the Saudi request for Pakistan to participate in the Yemen campaign marked the first significant political interaction between the new generation of Saudi decision makers and Nawaz Sharif’s government.  At the same time, Nawaz Sharif forged extremely cordial and longstanding ties with the ruling family of Qatar and President Erdogan of Turkey.  This state of affairs made the bilateral relationship lusterless.  As Nawaz Sharif came under increased political pressure in the wake of the Panama Papers scandal, his attempts to persuade the Saudi leadership to intervene politically within Pakistan met only with failure.

Thus, Imran Khan’s victory in Pakistan’s July 2018 elections has marked a renewed vibrancy in Saudi-Pakistani relations.  Domestically, Khan altered the nature of Pakistan’s civil-military relationship by openly expressing trust in the country’s military.  The new government’s realization that Pakistan was in dire economic straits – including a financing gap of more than $12 billion – also pushed Khan’s government to re-engage with Pakistan’s traditional allies, Saudi Arabia in particular.  Khan’s maiden trip to Saudi Arabia as his first trip abroad as Prime Minister cemented this emphasis on rebuilding ties with the Kingdom.  Meanwhile, in order to cement this personal diplomacy, Pakistan also brokered a meeting between the Taliban and the U.S. special peace envoy Zilmay Khalilzaad in Abu Dhabi, helping bring back both the Kingdom and United Arab Emirates as stakeholders in the Afghan peace process.

Unlike other Pakistani politicians, Khan does not have a previous history with the Kingdom or its older generation of royals.  This has actually helped him in forging a new and vibrant relationship with the Saudi Crown Prince Mohammad Bin Salman (MbS) both known for their discursive emphasis on curbing corruption and governance reform.

Economic Partnership

The cornerstone of this new partnership has been a re-configuration of the two countries’ bilateral relationship to further emphasize its economic components.  In his parleys with the Saudi side, Khan managed to secure a $6 billion aid package for Pakistan from Saudi Arabia—four times the size of the Kingdom’s earlier 2014 loan.  This package includes $3 billion as balance of payment support along with a one-year deferred payment facility of up to $3 billion for oil imports; it has proved instrumental in giving Pakistan breathing space in its current economic crisis.

A more interesting development is the Saudi decision to further entrench itself within Pakistan by setting up a $10 billion oil refinery in the strategically important southwestern coastal town of Gwadar, a city whose port has been developed by China as part of the China-Pakistan Economic Corridor.  This investment may very well change the regional energy and security landscape.  Additionally, the Saudi side has agreed to provide funds for power generation projects while also showing an interest to invest in the petrochemical, mining, construction, power generation and agriculture fields.  Also crucial is the institutionalization of this cooperation by constituting a coordination council to oversee the practical implementation of these projects.

Enhanced Security Cooperation

With a new emphasis on economic ties and financial agreements, the question remains over what to expect in the avenue of security cooperation, always central in the bilateral relationship.  Pakistan’s top military brass remains deeply connected to Saudi security circles: the current Pakistani Army Chief General Bajwa served in Saudi Arabia for three years on deputation while the Intelligence Chief General Asim Munir served as a Military Attaché in Riyadh.

Since the Saudi decision to support Pakistan financially, a flurry of high ranking Saudi defense officials have visited the country.  First to arrive was Saudi Assistant Minister of Defense Muhammad Bin Abdullah Al-Ayesh, followed by the Saudi Chief of General Staff General Fayyadh Bin Hamid Al Ruwaili.  The latter co-chaired the Joint Military Cooperation Committee (JMCC) meeting of Saudi Arabia and Pakistan alongside Chairman of Joint Chiefs of Staff Committee Gen Zubair Mahmood Hayat – who as CJCSC has an almost exclusive jurisdiction over nuclear forces and assets and has also notably served as the Chief of Strategic Plans Division of Pakistan overseeing the country’s nuclear arsenal.  It was reported that all aspects of military relations and regional security situation were discussed during this meeting between the two delegations.  He later on also met Army Chief General Bajwa and was also awarded the Nishan-e-Imtiaz (Order of Excellence) military award by the President.  These meetings may well suggest a drive towards diversification of Pakistani-Saudi defense interactions from conventional tiers of cooperation to more strategic ones in order to comprehensively address the changing threat perception in the region.

Yet the most critical of this series of meetings has been the visit of former Pakistani Army Chief and head of the IMCTC General (retired) Raheel Sharif to the Kingdom just days before MbS’s scheduled visit to Pakistan.  On his return, which was during the Crown Prince’s visit, General Raheel met the Army Chief and PM Khan, triggering speculation that he delivered a message from the Saudi side to increase Pakistan’s commitment to the IMCTC.  This can possibly mean an additional detachment of Pakistani troops to serve under the banner of IMCTC and a push to make it into a force engaged in kinetic operations.

It is clear that a new pattern within the Pakistani-Saudi relationship is emerging that incorporates economic initiatives of strategic nature into the two countries’ traditionally security-oriented ties.  This new strategic calculus is in essence the result of the inter-personal bond that has recently emerged between the troika of PM Khan, Army Chief General Bajwa and Saudi Crown Prince MbS.  Yet at the same time, there is a new emphasis by both sides to institutionalize the bilateral relationship and move away from relying on personal friendship between the two leaderships to preserve ties.

In many ways, the mutual benefits of this new shift are clear.  Forging a strategic connection with Pakistan furthers Saudi attempts to expand its engagement and ability to rely on partners in the East in light of the recent difficulties in its relationship with several Western states.  For Pakistan, strengthening ties with the Kingdom hold the promise of much needed economic and political support.  Yet as Pakistan continues to deepen its involvement with Saudi Arabia, the country will inadvertently alter its relationship with other stakeholders in the Middle East.  Thus, its recent efforts may ultimately create a new regional security and political order which presents significant challenges to its strategic goals.

Fikra Forum is an initiative of the Washington Institute for Near East Policy.  (Fikra 27.02)

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11.7  EGYPT:  Egypt’s First Sovereign Wealth Fund to Tap Unused Assets

Ahmed Elleithy posted in Al-Monitor on 11 March about Egypt recent announcement of the establishment of a sovereign wealth fund aimed at managing the state’s unused assets to promote development and investment projects.

Seeking an efficient mechanism to utilize the state’s unused assets, Egyptian Prime Minister Mostafa Madbouly issued regulations for the country’s first sovereign wealth fund on 2 March.  The EGP 200 billion ($11.2 billion) sovereign fund, wholly owned by the government, is aimed at contributing to the country’s sustainable development in the long run.

Minister of Planning Hala al-Saeed said that “the fund is a sovereign investment entity, which is wholly owned by the Arab Republic of Egypt.”  The fund’s authorized capital totals EGP 200 billion, while the issued capital stands at EGP 5 billion ($280 million).  “It is designed to contribute to Egypt’s sustainable development through the efficient management of its assets according to the world’s top standards and rules for the maximization of their value for the nation’s future generations,” Saeed said.

In addition to its paid-up capital, the fund will also acquire unused assets from ministries, authorities and other state-run agencies, according to the regulations approved by parliament.  To this end, Saeed further explained that the fund is authorized to cooperate and partner with Arab and foreign funds.  It can set up joint ventures and sub-funds in partnerships with the local private sector and foreign investors.

From a macroeconomic perspective, the fund is in line with the government’s drive to increase the nation’s assets and resources for the best interest of the coming generations, Rashad Abdo, head of the Egyptian Forum for Economic and Strategic Studies, told Al-Monitor.  “The fund is well-aimed at the nation’s sustainable development. It will highly serve all sectors to realize this objective. Most importantly, it is an ideal treatment for Egypt’s state budget deficit,” Abdo said.

Egypt’s budget deficit narrowed to 3.6% of GDP in the first half of fiscal year 2018/19, which began 1 July, from 4.2% in the same period a year earlier, according to Finance Ministry data.

The fund’s idea dates to 2015, when the then-minister of planning, Ashraf al-Araby, said the fund — under the name Amlak — would be the state’s investment arm.  However, it took three years for the Ministry of Planning to finalize the fund’s bill in March 2018. Egypt’s parliament passed the bill for launching the sovereign wealth fund on 16 July.

Abdo said new projects resulting from the wealth fund would increase GDP, create jobs and improve the country’s financial resources.  The fund may establish companies, partner in joint ventures, increase capital of existing firms, trade on listed securities on the stock market and invest in sovereign debt instruments, according to the law.  “An increase in the state’s revenues will definitely narrow the budget deficit.  Through the injection of investments, GDP will increase in time. The fund is like a seed for sustained economic development,” Abdo said, citing success stories in Saudi Arabia, China and Russia.  “In Arab countries such as Kuwait and Saudi Arabia, oil has been the main resource for financing the sovereign funds. In China and Russia, GDP surpluses have been the seed. In Egypt, unused assets, which are plenty here, will be the core funding resource,” he said.

There are unused public assets totaling 4,135 buildings in Egypt, Tahrir News portal cited Finance Minister Mohamed Maait as saying on 17 July.  The fund will be fully authorized to lease, sell off and acquire any state-owned properties, which include buildings and land.  “Egypt’s untapped assets are worth between EGP 1 trillion and EGP 2 trillion (between $65.1 billion and $112.3 billion).  This will provide the fund with mammoth funding in addition to its annual earnings,” Abdo said.  It is more like a family plan, according to Abdo, as the core principle is based on saving for future needs.  “Sovereign wealth funds save the future generations’ share in the present’s boom. Oil-producing countries such as Saudi Arabia and Kuwait have set up these funds for that objective,” he said.

Moreover, the fund may invest in the nation’s infrastructure projects in collaboration with the private sector.

Tarek Metwali, a member of the parliament’s industrial committee, says the fund can finance infrastructure projects, stressing the need to maximize gains from the state’s assets.  “The fund may invest in infrastructure projects. This will provide adequate funding for the nation’s investment needs,” Metwali told Al-Ahram newspaper on 5 March.  “The state owns buildings worth billions of Egyptian pounds.  These neglected buildings are not economically used.  The wealth fund will use these assets well,” Metwali added, calling for drawing on success stories in China, Singapore, Norway, the United Arab Emirates and Saudi Arabia.

Various ministries own old administrative and apartment buildings, which could be sold off or refurbished for leasing.  According to the World Bank, funding Egypt’s infrastructure projects will be a challenge in the coming years.  In a December paper titled “Enabling Private Investment and Commercial Financing in Infrastructure,” the World Bank Group urged Egypt to rely on the private sector in its infrastructure projects.  “With limited fiscal space, relying on public resources to fund much-needed infrastructure investments will no longer be a viable strategy to meet the country’s needs.  This constraint reaffirms the need for a shift in the development model, where the private sector plays a pivotal role in attracting substantial new investment across high potential economic sectors,” the World Bank paper said.

Ahmed Elleithy is an Egyptian reporter and financial columnist who has been writing for various local and international newspapers and news portals since 2004.  (Al-Monitor 11.03)

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11.8  TUNISIA:  Ghost Workers Sap Tunisia’s Phosphate Wealth

Tarek Amara posted for Reuters on 7 March that Tunisia’s state phosphate firm CPG pays Abdel-Basset Klifhi a salary of $280 a month, even though he spends most days in his favorite cafe in the southern town of Metlaoui.  He is one of 21,000 people taken on by the Companie des Phosphates de Gafsa (CPG) since Tunisia’s autocrat president Zine El-Abidine Ben Ali was toppled in 2011.

Since then, the economy has been in crisis and CPG has lost its spot as the country’s top exporter.  Unemployment, inflation and deficits have shot up and the value of the dinar currency has plummeted.  Loans from the International Monetary Fund have kept the government afloat.

CPG’s hiring spree brought its total workforce to about 30,000 and aimed to reduce the number of unemployed to stop protests destabilizing the transition to democracy.  Thousands more are still jobless, however, and some block roads to CPG daily to demand work.  Others on the payroll want pay rises and frequently go on strike.

Phosphate production has halved since 2011 and CPG’s losses have accumulated as the wage bill grew. Employees point to other inefficiencies at the company.  CPG’s declining fortunes have highlighted the government’s failure to reform the bloated state companies that dominate the economy and have put Tunisia on a collision course with international donors.  They have also deprived the government of crucial export revenues needed to turn the economy around and create real jobs to end the daily protests and unrest, which largely target CPG.  “I get 850 dinars ($279.62) a month without doing any work,” said former protestor and CPG employee Abdul-Basset.

The company spends about $70 million a year of its $180 million annual budget on salaries, Industry and Energy Minister Slim Feriani told Reuters.  His ministry oversees CPG.  “The hirings that took place after the revolution years were aimed at buying social peace but increased the suffering of the company,” he said.  “We are aware that they are not doing anything.”

IMF Delays

He said the company has lost almost $1 billion a year since 2011 because of disruption caused by the protests.  It has only had 4,500 production days out of a possible 14,000 at its five mines since 2011, according to company documents seen by Reuters.  “This…could have prevented us from borrowing from the IMF,” said Feriani.

Phosphates accounted for about 10% of Tunisia’s exports before 2011, when olive oil replaced it as the top export.  In 2018 phosphate had shrunk to about 4%.

Tunisia agreed a $2.6 billion loan with the IMF in 2016.  So far four installments worth $1.4 billion have been paid but each one was delayed because reforms fell behind the agreed program.  Public sector salaries and reform of public companies were among the sticking points with the IMF.

Analysts expect a new confrontation with the lender after the government raised salaries at public companies, including CPG, state airline Tunisair, and state energy firm STEG in November.  An IMF spokeswoman said it was “in a continuous dialogue with the authorities on the policies” in the next loan review but declined to say when it would take place.  “The IMF supports the Tunisian authorities’ economic program to reduce macroeconomic imbalances, including by strengthening external competitiveness, reducing inflation, and lowering debt, and to improve job-creating growth prospects through structural reforms,” she said.

CPG’s phosphate production fell from a record 8.2 million tons in 2010 to about 3 million tons in 2018, official data showed.

In contrast, nearby Morocco raised output to 30 million tons last year from 13 million in 2010.  A stable social climate allowed it to develop the industry including the use of a phosphate pipeline.  “Tunisia is no longer on the global phosphate production radar,” Feriani said.

Until 2011, Tunisia was one of the world’s top 5 producers but now stands in 11th place, far behind the leaders China, the United States, Morocco, Russia and Jordan.  CPG said it could raise production by between 5 and 6 million tons this year but only if the protests stop.  In 2017, President Beji Caid Essebsi ordered the army to guard phosphate sites but has not dispersed the protests fearing a backlash.


Some staff in the company say CPG has also lost money through other inefficiencies.  At CPG’s headquarters employees showed a Reuters team dusty, unused train carriages, purchased four years ago to ship phosphate to the coast.  “They have not been used because of a (technical) problem at the railway track near the production sites,” said CPG production director Rafaa Ben Nassib.

A CPG employee told Reuters that the company sometimes ordered replacement pieces for parts that were not broken.  Nassib said this was “wrong and unfair”.  Feriani said there was no proof.  “We are constantly receiving petitions about corruption suspicions, but there is no proof of that. Yet we are seeking to strengthen corporate governance,” said Feriani.

Union officials and mining town residents say CPG also pays too much to transport phosphate to coastal plants where it is turned into fertilizer.  It costs $3 a ton to ship phosphate by train but the track is often blocked so CPG then uses truckers who charge up to $10 a ton, CPG officials say.  Feriani said he wants to upgrade the railways and eventually follow Morocco’s example and ship phosphate by pipeline.  The government has set aside $90 million for 20 new trains but this may not be enough.

Analyst Moez Joudi said the government must spend “significant sums” to repair the railways and develop transport rather than “dumping the company with imaginary jobs.”  (Reuters 07.03)

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11.9  ALGERIA:  How Bouteflika Lost Algeria’s Business Class

Riccardo Fabiani posted in Sada on 12 March that Algeria’s recent protests have highlighted existing divisions within the business class that are only likely to widen further.

On 11 March, Algerian President Abdelaziz Bouteflika announced that he was withdrawing from running for a fifth presidential term, in response to a wave of protests that has shaken Algeria’s political system.  Yet neither have these protests spared the country’s business class.  Since the protests started on 22 February, several high-profile defections from within Algeria’s prominent business organization, the Business Leaders Forum (Forum des Chefs d’Entreprise, FCE) were an early indication that the regime was losing support from its core constituencies.  In early March, Mohamed Laid Benamor, CEO of the agri-food company Benamor Group; Mohamed Arezki Aberkane, CEO of steel manufacturer Sogemetal; Hassan Khelifati, owner of Alliance Assurances; and Madjid Meddahi of the Granitex firm (which specializes in building materials) resigned from the FCE in protest at the forum’s open support for Bouteflika running on the 2019 presidential ballot.

Their resignations have sent a clear signal that even the Algerian regime’s core constituencies are showing widening fissures, with an increasing number of people willing to stand publicly against the sitting president and in favor of the protest movement.  That several high-profile businessmen have done this is even more remarkable, as their resignations have highlighted FCE Chairman Ali Haddad’s increasingly weak position and contributed to isolating Bouteflika, thus paving the way for his eventual decision to renounce running.  Over the past few years, Haddad has played a key role in securing the support of Algeria’s business class for Bouteflika, contributing to the widespread perception that these entrepreneurs are oligarchs that have benefited from their close connections to the political power.

Since Haddad became head of the FCE in 2014, the relationship between businesses and the Bouteflika faction has become increasingly evident.  The deal between these two sides has been that the regime provides all the support, protection, and contracts the entrepreneurs need in return for the FCE’s explicit backing and, most importantly, generous financing for Bouteflika’s

Indeed, for years domestic and external observers alike have assumed the business elite have been staunchly supportive of Bouteflika.  Under his presidency, an emerging class of increasingly self-assertive entrepreneurs has thrived, benefiting from the end of the civil war and the recycling of oil revenues into the non-hydrocarbon economy through government contracts and various forms of protectionism.  Shielded from domestic and international competition, entrepreneurs such as Ali Haddad, Karim Kouninef of the KouGC construction company, Mahieddine Tahkout of the automobile manufacturing Takhout Company, and others have successfully diversified their portfolios, building conglomerates that dominate the Algerian economy.

This arrangement has been part of the presidential faction’s attempt to centralize rent management and gradually muscle out other competing patronage networks within the regime.  Since his election in 1999, Bouteflika has aimed to impose his authority within the country by carefully strengthening his clientelist network at the expense of the army generals and, later, the military intelligence.  While this effort has been relatively successful in reducing these groups’ influence, the Algerian polity has remained stubbornly divided into a series of power networks that have prevented the presidential faction from establishing a monopoly over society and the business sector.

This has been particularly evident in the business sector.  Even before the 2019 protests, some of the most high-profile entrepreneurs dared to openly criticize Haddad’s approach – the most notable examples being Issad Rebrab, owner of Cevital, and Slim Othmani, CEO of NCA Rouiba.  Rebrab emerged as a vocal dissident and critic of the regime and never shied away from attacking the presidential faction.  His conflict with the Algerian regime has become apparent in the standoff that has pitted him against Kouninef’s KouGC conglomerate in Bejaia since 2017.  The authorities have thrown a series of administrative obstacles in Rebrab’s way, in a not-so-subtle attempt to favor Kouninef.  Rather than accept a compromise with the regime, Rebrab has upped the ante by mobilizing his workforce and supporting a series of civil society groups to push back against the regime’s ploy to undermine his project.

In a similarly outspoken fashion, Othmani has also made his critical opinions of the government known through social media and the press and even resigned from the FCE in 2014 in protest at its decision to support Bouteflika’s candidacy for a fourth term.  Yet despite the regime’s displeasure with their statements and actions – and despite its threat to arrest Rebrab – it permitted them to continue doing business, and these entrepreneurs managed to protect their property rights from any possible predation by the authorities.

Other entrepreneurs have fallen afoul of the regime’s attempt to centralize the distribution of economic rents, despite their pro-Bouteflika credentials.  The most relevant example is Benamor, who resigned from FCE to express his support for the protest movement.  In recent years, rumors about Benamor’s falling out with the regime have abounded in the Algerian press, despite his supposedly close relationship with the president’s brother Said Bouteflika.  Only a few weeks before the protests erupted, Benamor had to issue a statement denying an alleged secret meeting with presidential challenger Ali Ghediri.  Benamor has been the target of various rumors and speculation, from alleged involvement in the Oran cocaine scandal due to his links with informal businessman Kamel Chikhi to efforts by Prime Minister Ahmed Ouyahia to undermine his activities.  The main reason for his difficult relationship with the regime, however, seems to have been his failed attempt to remove Haddad from the FCE with the support of former Prime Minister Abdelmalek Sellal.  Regardless of their plausibility, these rumors indicate Benamor’s difficult relationship with some of the regime’s competing patronage networks, which likely fed these stories to local media outlets.

Bouteflika’s failure to impose a tight grip over the business sector has been most obvious in the government’s effort to pursue an industrial policy in the automobile sector.  Faced with dwindling oil revenues, high unemployment, and an increasingly precarious economic outlook, the Algerian regime has tried to boost local manufacturing, particularly in the automobile sector.  Former Minister of Industry Abdelsalem Bouchouareb was the mastermind behind this policy, as he tried to emulate the positive results Morocco and Tunisia achieved in this sector.  The strategy elaborated by Bouchouareb focused on curbing car imports while forcing global car manufacturers such as Peugeot and Volkswagen to accept producing some automobiles in Algeria to bypass the trade restrictions.  This policy should have offered enough incentives for local entrepreneurs to supply spare parts to these manufacturers and thus gradually lay the foundation for the development of Algeria’s domestic car industry.

However, Algeria’s industrial policy has failed to achieve any of its goals, due to the regime’s intrinsic instability and its inability to discipline dissenting entrepreneurs.  Bouchouareb has fallen victim of political instability, as he was ousted from the ministry of industry under the short-lived government headed by Abdelmajid Tebboune and not since been reinstated.  His successors have harshly criticized his policies, highlighting the inefficiencies and high costs involved in the industrialization strategy.  Even some of the entrepreneurs in this sector have accused Bouchouareb of playing favorites, while Rebrab (himself holder of a license to import Hyundai vehicles) has also criticized this policy.  Other pro-regime entrepreneurs, such as Tahkout, have taken advantage of this chaotic implementation to continue to import cars while disguising his activity as manufacturing.

Unable to centralize rent management completely and forced by the intrinsic instability of the political system to focus on short-term goals, the Algerian regime’s industrial policy has been a complete failure.  The Bouteflika faction has been completely absorbed by its short-term survival imperatives, neglecting any commitment to more difficult long-term policy objectives in its focus on trying to manage regime infighting.  As a result, the business class has managed to avoid being completely strangled by the regime and has retained a degree of autonomy that the presidential faction has been unable to control once the most recent protest movement began.

With Bouteflika’s official announcement that he will not run for a fifth term and the postponement of the presidential elections, the existing divisions within the business class are only likely to widen further.  While pro-Bouteflika entrepreneurs are increasingly concerned with the outcome of the current transition and fear that a leadership change could threaten their positions, dissident business owners are likely to rely on their networks to influence the succession process and protect their interests.  The fragmentation of the Algerian political system is only likely to increase, offering the country’s business class opportunities for greater jockeying and maneuvering.

Riccardo Fabiani is a Senior Analyst on geopolitics at consulting firm Energy Aspects.  (Sada 12.03)

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11.10  TURKEY:  Turkish Economy Faces Grim Outlook for 2019

Al-Monitor noted on 7 March that the Turkish economy will contract by as much as 1.8% this year, the Organization for Economic Cooperation and Development has forecast.  The prediction came in a week that saw opposition newspapers deploring the soaring cost of vegetables, President Recep Tayyip Erdogan’s blaming the price rises on speculators whom he likened to “terrorists” and opposition leader Kemal Kilicdaroglu’s scoffing at Turkey’s having to import onions from Egypt.  “Growth prospects remain weak in Turkey,” the OECD said in its Interim Economic Outlook.  “Financial markets have stabilized and external competitiveness has improved, but weak confidence, high corporate-debt service burdens, tight monetary policy and soft demand in euro-area markets still weigh on domestic and external demand.”

The silver lining of the 6 March report is that the OECD predicts the contraction will be short.  It expects Turkey’s economy to grow by as much as 3.2% in 2020.

The Birgun newspaper published the report under the headline “Economy to contract beyond our expectations.”  It was referring to the fact that in November the OECD had forecast the economy would contract by a modest 0.4%, but on 6 March it said the contraction would be as severe as 1.8%.  The OECD says the priority for economies such as those of Turkey and Argentina is “to undertake reforms that enhance the prospects for fiscal and financial sustainability in the medium term.”

This means Turkey should implement austerity measures, the economist Cem Oyvat told Al-Monitor.  But this is not what the government is doing.  Oyvat said government policies are expansionary.  He pointed to its cutting the taxes on the sale of major appliances and cars, ordering the state housing agency to build 50,000 apartments and offering incentives for employers to hire staff.  Figures show that government expenditure increased by 62% in January.

Interestingly, Oyvat said he believes the government is right to defy the OECD.  “Austerity would be suicidal for the economy.  There are so many bankruptcies and defaults on payment.  The expansion from the private sector is very limited.  Therefore if you implement austerity, you’d come out with even further contraction,” said Oyvat, who teaches economics at the University of Greenwich in London.  However, Oyvat said that the repeated fiscal deficits run up by the government are not sustainable.

Simultaneously, the autoworkers’ union, Birlesik Metal Is Sendikasi, published a report saying that while the minimum wage has increased by TL 413 ($76) from January 2018 to January 2019, the poverty line has increased by TL 1,060 ($196).  The union’s economic research center defines the poverty line as the minimum level of monthly income to keep a family of four out of poverty.

Inflation is about 20%.  The union said its researchers found that with the latest price increases, the poverty line in February was TL 6,798 ($1,257), and that the daily amount that a family of four spends on fruit and vegetables has risen to TL 13.98 ($2.59).

President Recep Tayyip Erdogan is acutely aware of how much the rising cost of food is likely to affect voters when they go to the polls on 31 March in municipal elections.  He has ordered town councils to open food stalls where consumers can buy fruit and vegetables at supposedly rock-bottom prices.  Erdogan has told voters the government is subsidizing the price “for the benefit of our people.”

But Ibrahim Uslu of the ANAR polling company told the press that the municipal food stalls were not having a big impact on voters.  “People are consuming many more kinds of food than the ones sold in municipal stalls.  At the beginning of 2018, one out of two people were talking about their economic hardships, but it is three out of four people now,” Uslu said.  Uslu did not give the figures that ANAR is gathering from its surveys of people’s voting intentions on 31 March.  However, he told Birgun that in cities such as Istanbul, Ankara and Izmir “it is a close race, but the opposition has a slight advantage.”

Uslu said he thought Erdogan was making a mistake by focusing his campaign on appeals to political identity and thereby allowing the opposition to capitalize on the economic crisis.  The Cumhur Alliance of Erdogan’s Justice and Development Party and the hard-right National Movement Party (MHP) is telling people to vote for “beka,” a word that means something between survival and permanence.

Asked if “beka” was managing to win opposition voters to the Cumhur camp, Uslu replied: “It is not for opposition voters.  It is an attempt to consolidate their own [Cumhur] vote.  But we cannot say that they are succeeding.  The Cumhur Alliance is losing voters.”

In a separate development, Erdogan broke new ground recently by making a personal attack on Meral Aksener, the leader of the right-wing Good Party.  Pundits have long observed that while Erdogan often denigrates the leaders of other opposition parties, he has eschewed attacks on Aksener.  The reason seemed to be that Aksener hails from the MHP, which is allied with Erdogan, meaning her supporters belong to the same constituency that the president cultivates.  Aksener herself has told reporters that Erdogan does not like to compete against a woman.

What triggered the change was a speech Aksener made in the western town of Denizli.  Addressing an enormous crowd, she began by making fun of the fact that Erdogan repeatedly calls his opponents “terrorists” and says they are in league with the Kurdistan Workers Party, the Kurdish militant group.  “You citizens of Denizli whom the president calls terrorists, how are you?” Aksener said, provoking cheers and guffaws of laughter.  “A president who calls 18 million of his citizens terrorists!” she said, referring to a rough total of votes that the alliance of opposition parties polled in the general elections last June.  “Even as a joke, how awful it is [to use the word terrorist].”

She accused Erdogan of polarizing the country and “making us enemies of each other.”  Erdogan replied while campaigning in the southeastern city of Mardin.  “Meral Hanim is saying that I called my brothers in Denizli terrorists,” he said. “Shame on you. Shame on you.  You are deprived of shame. I have just now engaged my lawyers for this business.”  Erdogan filed 6,000 lawsuits against his political opponents last year, the exiled journalist Can Dundar wrote in Die Zeit newspaper in December.

Jasper Mortimer is a South African-trained journalist who works for France24 TV and GRN. While traveling the world, he was waylaid in the Middle East, married a Turkish woman and settled in Ankara in 2007. He covers the Kurdish issue, the Syrian war and Cyprus.  (Al-Monitor 07.03)

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11.11  TURKEY:  Turks Fire Back as Trump Ends Preferential Trade Status

Jasper Mortimer reported on 5 March in Al-Monitor that the United States removed Turkey from its list of countries that enjoy tariff-free access to the US market, a decision criticized by the Turkish government.

On 5 March, the Turkish government criticized the US decision to remove Turkey from its list of nations that enjoy tariff-free access to the US market, saying the move would hurt producers in both countries.  Turkish commentators accused Washington of political motivations.  One trade expert said it was not a coincidence that the move came as US envoys were trying to persuade Turkey to abandon its purchase of the Russian S-400 air defense system.

The US Trade Representative’s Office declared that Turkey was no longer entitled to benefit from the Generalized System of Preferences (GSP) because the country is “sufficiently economically developed.”  Turkey joined the GSP in 1975.  It meant that certain products benefited from tariff-free access to the US market.

Turkish Trade Minister Ruhsar Pekcan said the US decision “contradicts the $75 billion trade volume target that both governments have declared.”  “This decision will also negatively affect the small and middle-sized companies and manufacturers in the US,” Pekcan added in a tweet.

Pekcan said Turkey had been among the top five countries benefiting from the GSP, under which the United States imported $20.9 billion of goods from around the world.  “With exports amounting to $1.74 billion, Turkey was the fifth largest supplier to the US with a share of 8.2%,” Pekcan tweeted.  Turkish exports to the United States tend to be vehicles, machinery, iron & steel and textile products.  The termination of Turkey’s GSP status will take effect in May, 60 days after President Trump informed Congress.

The move is not expected to have a huge impact on Turkey. In billions of dollars’ worth of trade, Turkish exporters sold about eight times more to European countries in 2018 as they sold to the United States.   But it did have an immediate impact on the currency.  The dollar rose 0.17% against the lira, closing at 5.39 liras to the dollar.

The US Trade Representative’s Office argued the decision was rooted in economics.  “An increase in Gross National Income per capita, declining poverty rates, and export diversification, by trading partner and by sector, are all evidence of Turkey’s higher level of economic development,” read a press release.  But Turkish commentators noted that Washington began reviewing Turkey’s participation in the GSP in August, the same month that Trump imposed sanctions on Turkey for its prosecution of American pastor Andrew Brunson on terrorism charges.

Brunson flew back to the United States in October but tension between the two countries continued. In December, President Recep Tayyip Erdogan vowed to send troops into northern Syria to wipe out the Kurdish guerrilla group, the People’s Protection Units (YPG), many of whose fighters have fought alongside US troops in the campaign against the Islamic State. In January, Trump threatened to “devastate” the Turkish economy if the Turkish army attacked America’s Syrian allies.

“When you think of the US having disagreements with Turkey in regional and global matters,” Sherif Dilek, a researcher at a pro-government think tank, said, “and if you remember Trump’s threat to punish Turkey economically, it is evident that political considerations were uppermost in this decision.”  Dilek, who works for the Foundation for Political, Economic and Social Research (SETA), said the United States had also thrown India out of the GSP, but for economic reasons.

The US Trade Representative’s Office said India would no longer benefit from the GSP because of “its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.”

The head of a Turkish-US business association, Ali Osman Akat of TABA-AmCham, was blunter: “Trump’s decision is not a surprise. In the international arena, power is not displayed through war but through economics.”  A trade expert and consultant, Hakan Akbas, said the interesting factor in the US move was its timing.  “It coincides with the critical bargaining for the S-400s,” he told NTV.

A high-level US delegation was in Ankara trying to persuade the government to cancel its acquisition of the Russian air defense system, which is not compatible with NATO air defense systems, and buy US Patriot missiles instead.  Erdogan has insisted that the S-400 deal will go ahead.  “There are other equally developed countries that are still benefiting from the GSP,” Akbas said, naming Brazil, Thailand and Indonesia.  He suggested that if Turkey makes compromises on the S-400 issue during the next 60 days, the United States could be persuaded to keep Turkey on the GSP list.

Jasper Mortimer is a South African-trained journalist who works for France24 TV and GRN. While traveling the world, he was waylaid in the Middle East, married a Turkish woman and settled in Ankara in 2007. He covers the Kurdish issue, the Syrian war and Cyprus.  (Al-Monitor 05.03)

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11.12  TURKEY:  Is Erdogan’s Airport Dream Turning Into Nightmare?

Pinar Tremblay posted on 6 March in Al-Monitor that the Istanbul New Airport’s current and projected damage to ecosystems, its subpar construction and its woeful financial setup is turning the project into a grandiose failure — one that will cost the Turkish public dearly for decades to come.

Turkish President Recep Tayyip Erdogan enjoys talking about gigantic construction works, aiming to make Western powers and domestic enemies envious.  Often referred to as mega infrastructure projects, the third Bosporus Bridge, Istanbul Canal and the third international airport are his signature enterprises.  Erdogan inaugurated the new airport at a soft opening 29 October, the 95th anniversary of the founding of the Turkish Republic.  Named Istanbul New Airport (ISL), it aims to be the biggest hub in the world once it is fully operational.

Yet, when that day might actually come remains a mystery.  The opening had been set for December.  In January, a new date was announced: 3 March.  Around mid-February, another delay moved the opening to April.  Despite all efforts, the airport suffered several cancelled flights and even temporary suspensions.  Some reports say contractors are walking away from the project.

A senior employee from Turkish Airlines told Al-Monitor, “We need hangars for cargo and facilities for catering services.  The construction is nowhere close to completion.  We don’t know when they will be done.  It is not possible to fully operate before these facilities are completed.”

These delays are not only embarrassing, but also indicate the Turkish government’s tainted management of even short-term planning.  Indeed, the airport — once expected to be a “monument of victory” — has become a monumental problem.

Al-Monitor spoke with engineers, opposition lawmakers as well as workers’ representatives who are involved in the project.  Almost all the groups criticized the project from the start, but their voices weren’t taken into account.  We found two main reasons for the delay — reasons that may cause serious problems if the airport becomes fully functional: bad planning and financial collapse.

First, the airport’s location is simply wrong — for economic, environmental and infrastructural reasons.  As explained in the official introductory video published on 29 October, the land chosen for the project was previously the site of coal mines, with uneven surfaces, wetlands and coastal sand dunes.  It took 750 million cubic meters (980 million cubic yards) of soil to fill and even it out — something the video portrays as an engineering conquest.  Images captured from the sky may impress ordinary observers, but experts are concerned about the site’s durability and safety.

An engineer from the Ministry of Transportation who spoke to Al-Monitor on condition of anonymity said, “I would not want any of my family members to even set foot in this airport.  The project was started against all warnings and continued without meeting proper standards.  For example, initially the recommendation was to [build] at least 105 meters [344 feet] above sea level.  Then they reduced it to 90 meters and finally it ended up at 60 meters.  The ground is not stable; it’s built on underground wetlands.  There is not enough soil in the world to fill it safely.”  The engineer explained that the 105-meter height from sea level is directly linked to flight safety.

Indeed, on June 7, 2014, the first ground-breaking ceremony was held before the Environmental Impact Assessment report was even complete.

Several opposition lawmakers questioned the safety procedures.  Sezgin Tanrikulu from the Republican People’s Party (CHP) shared with Al-Monitor multiple parliamentary questionnaires he had submitted.  On 12 December 2014, Tanrikulu asked three questions specifically concerning the distance above sea level being slashed.  The change saved the construction consortium an estimated €2.5 billion ($2.8 billion) from their original plans, but it came at the expense of public safety.

The engineers Al-Monitor contacted all emphasized that a meteorological center should have been set up before airport construction began.  The chosen area is susceptible to strong winds and fog for about one-third of the year.  Not only is that dangerous for flights landing and taking off, the conditions have contributed to the deaths of many workers.

A senior construction worker who has been employed at the site for two years told Al-Monitor, “We don’t know how many workers lost their lives, as different subcontractors were used.  But I can tell you when I first started in 2016, we would stop work when the winds were stronger than 45 kilometers [28 miles] per hour.  As the deadline approached, they would force workers to keep working under unsafe conditions at 65- to 70-kilometer [40- to 43.5-mlie] per hour winds.”  The airport has been described as the graveyard of an untold number of workers.

Environmentalists and scientists also accuse the project of ecocide for its cruel disruptions of ecosystems.  The area is also in the path of major bird migration, which endangers the birds and increases the likelihood of birds entering planes’ engines, risking the safety of flights.

The airport lacks proper public transportation to the city.  Workers living under inhumane conditions and what few passengers there have been complained about the cost of reaching the airport.  Plus, once the new airport is fully functional, Istanbul Ataturk Airport has to be shut down because Istanbul’s air traffic can’t handle both airports at the same time.  The airport was simply built at the worst possible place in the Istanbul region.

That brings us to the second reason for the delays.  The consortium that won the bid to build the airport and its management rights for the next 25 years is called IGA, a group of five major companies (Cengiz, Limak, Mapa/MNG, Kolin Co. and Kalyon).  These five companies, fortunate for their close links with the Turkish government, are frequently awarded lucrative tenders.  Indeed, in 2018, these firms held five of the top 10 positions in a World Bank ranking of companies acquiring government tender bids in Europe and Central Asia.  They originally each held a 20% share of the project.  The project was delayed two years during which IGA paid no rent.  The government initially guaranteed 90 million passengers per year to IGA.  If this mark is not met, then the government will subsidize the remaining part.  The five companies definitely saved money by changing the technical agreement after their bid was accepted.

In early January, news broke that Kolin Co., one of the five firms of the IGA consortium, was selling its 20% share back to the other shareholders.  Bahadir Ozgur, a columnist for the publication Duvar, penned a piece titled “It’s over, 3rd airport is going bankrupt.”  His detailed analysis was followed by other experts in independent media outlets saying there are several indications that after the 31 March municipal elections, the IGA consortium will bail out of the project and leave all the debt with the government.

The more the airport’s opening is delayed, the more debt is incurred by the main creditor, the government’s airport administration directorate.  Beyza Ustun, an environmental engineering professor and former Peoples’ Democratic Party (HDP) lawmaker, concurred with other experts Al-Monitor interviewed that the airport will not be operating at full speed in the near future.  “Since all projects are used as a tool for propaganda for the municipal elections, if there was any way that the airport could operate at some capacity that would have been done before April.”  Ustun has worked in collaboration with the Solidarity Platform for airport workers, including those who have been arrested for protesting dangerous work conditions.

Indeed, the delays and hazards should not surprise anyone watching the airport planning — or lack of planning — closely for the last six or seven years.  In June 2013, research published by scholars Seyfettin Gursel and Tuba Toru-Delibasi of Bahcesehir University Center for Economic and Social Research projected different scenarios estimating costs and profits of the airport project.  Even using the most optimistic variables, their analysis demonstrated that the airport can’t be expected to make a profit until 2043.  Since the only creditor is the Turkish government, the costs will be incurred by the public.  What public interests were served by the consecutive reckless choices made about the airport’s construction?

So, why did Erdogan’s administration stubbornly push the project?  Simply because it could.  So far, it seems only the IGA consortium has benefited from this project.  There are myriad crucial questions still unanswered, and the public costs are snowballing each day.

Pinar Tremblay is a columnist for Al-Monitor’s Turkey Pulse and a visiting scholar of political science at California State Polytechnic University, Pomona. She is a columnist for Turkish news outlet T24. Her articles have appeared in Time, New America, Hurriyet Daily News, Today’s Zaman, Star and Salom.  (Al-Monitor 06.03)

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11.13  GREECE: IMF Concludes First Post-Program Monitoring Discussions with Greece

On March 6, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the First Post-Program Monitoring Discussions with Greece.

The economic recovery in Greece is accelerating and broadening.  Growth is projected to reach 2.4% this year (up from an estimated 2.1% in 2018) supported by exports, private consumption and investment as sentiment improves.  A gradual recovery in private deposits has facilitated a further relaxation of capital flow management measures, though bank lending remains negative.  Over the medium term, economic expansion is expected to slow down to just above 1%.

Greece’s medium-term debt repayment capacity is adequate, but subject to rising risks amid still significant vulnerabilities.  Debt-to-GDP is projected to remain on a downward trajectory in the medium term thanks to continued high primary surpluses agreed with European partners, nominal GDP growth, and debt relief, which provided for a substantial precautionary cash buffer and low debt service on official loans.  However, risks (both domestic and external) have intensified, and crises legacies—including high public debt and impaired private balance sheets — and a weak payment discipline continue to pose significant vulnerabilities.

Executive Board Assessment

Executive Directors welcomed the commendable progress in implementing reforms which have helped restore stability and growth, reduce unemployment, improve debt sustainability and re-access markets.  Building on Greece’s growth momentum, they encouraged the authorities to address still significant vulnerabilities and strengthen the economy’s resilience and inclusion by enhancing labor market flexibility, rebalancing the fiscal policy mix, and strengthening bank balance sheets to support sustainable and more inclusive growth.  Directors recognized that Greece’s medium term repayment capacity remains adequate, but noted rising downside risks that require further actions to strengthen the economy.

Directors noted that further efforts are needed to lock in competitiveness gains, enhance productivity, and ensure labor market flexibility.  They expressed concern about the risks to employment and competitiveness from the combination of the recent reversal of the 2012 collective bargaining agreement reform and the increase in the statutory minimum wage, which was well above productivity growth.  Looking ahead, Directors encouraged the authorities to accelerate reforms that could both mitigate these downside risks and help boost productivity and lower non-wage costs.  They recommended further steps to improve the business climate and facilitate higher and more diversified investment, including long needed deeper product market reforms aimed at improving product choice, quality, and competition.

Directors emphasized the importance of adopting a more growth friendly and socially inclusive fiscal policy mix. They called for a further fiscal rebalancing, while meeting medium term fiscal targets agreed with European partners.  Directors supported the planned tax cuts in 2020, prioritizing lower direct tax rates while broadening the personal income tax base.  They also recommended allocating more fiscal space to public investment and better targeted social spending.  To support these objectives, Directors also called for accelerating public financial management reforms and tax compliance efforts and addressing the structural causes of arrears.  They also recommended deeper contingency planning for the possible realization of rising fiscal risks.

Directors encouraged the authorities to take a more comprehensive, well-coordinated approach to strengthening bank balance sheets and reviving growth enhancing lending.  Noting the high level of non-performing exposures (NPEs), they encouraged the authorities to bring together key stakeholders and base policy measures on cost efficiency assessments of various NPE reduction options, while considering the impact of forthcoming regulatory changes and related fiscal implications.  Directors encouraged further strengthening of the legal toolkit to facilitate private sector based NPE reduction before considering state support, and to avoid measures that could further erode payment discipline, while improving bank internal governance.  Liberalization of capital flow management measures should continue in line with the conditions based roadmap.  (IMF 12.03)

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