Fortnightly, 21 October 2015

Fortnightly, 21 October 2015

October 21, 2015





1.1  Israel’s Budget Deficit Down to 2% of GDP
1.2  Bank of Israel Lowers Inflation Expectations
1.3  U.S. Congressman Fattah Introduces Legislation to Strengthen US-Israel Neuroscience Partnership


2.1  Israeli Google Team First to Sign Agreement for Private Mission to the Moon
2.2  Huge Amount of Oil Discovered on Golan Heights
2.3  CyberArk to Acquire Viewfinity to Extend Privileged Account Security Solutions
2.4  Barclays to Launch Israel Accelerator in Tel Aviv
2.5  CreditEase Announces $30 Million First Closing of Its Israel Innovation Fund (CEIIF)
2.6  HCC Embedded & MIGVAN Partner Deliver Best-in-Class Embedded Software in Israel
2.7  India’s DEL Buys Stake in Israeli Irrigation Company Rivulis
2.8  United Airlines to Launch Tel Aviv – San Francisco Flights
2.9  Virtual Container Security Company Scalock Raises $4 Million
2.10  SentinelOne Raises $25 Million to Displace Anti-Virus Vendors
2.11  French Firm Buys 51% Stake in Chromagen for NIS 73 Million
2.12  China’s XIO Completes $510 Million Acquisition of Lumenis


3.1  VPS Healthcare signs MoU with The Children’s Hospital of Philadelphia
3.2  Hospitality Marketing Concepts Launches My Mazaya Exclusively in the Middle East
3.3  First 7-Eleven Store Opens in Middle East
3.4  Boeing Celebrates Delivery of Oman Air’s First 787 Dreamliner
3.5  Circle Oil Says Morocco to Start Production of Gas As Soon As Possible


4.1  Abu Dhabi Fund Offers $15 Million Loan to Cuba For Energy Projects


5.1  Annual Tourist Spending in Lebanon Grew by5% by September 2015
5.2  Growth of Registered Cars in Lebanon is Flat
5.3  Jordan’s Debt Grows Faster Than the Economy
5.4  Jordan Signs Six Cooperation Deals with India

♦♦Arabian Gulf

5.5  Kuwait’s Plan to Convert Old Cemeteries Into Parks Draws Debate
5.6  Ooredoo & QBIC Reveals Plan for Qatari ‘Silicon Valley’
5.7  Oman’s Budget Deficit Grows To Nearly $7 Billion on Cheap Oil
5.8  Saudi Arabia to Record a Budget Deficit of SAR573 Billion
5.9  Saudi Arabia Remains China’s Top Oil Supplier

♦♦North Africa

5.10  Egypt’s Annual Inflation Spiked in September
5.11  Russia’s Rosatom Says Egypt Nuclear Station Talks in Final Stages
5.12  Egypt’s Foreign Reserves Drop by $1.76 Billion in September
5.13  Morocco’s Health Ministry to Decrease Medical Equipment Prices
5.14 Tourism Industry in Morocco Makes Up 6.7% of GDP
5.15  Liquor Sales Add Over MAD 1 Billion Revenue to Moroccan Treasury
5.16  3M to Establish a New Hub in Tangier


6.1  Major Cuts in Turkish Trade & Growth Goals for 2015
6.2  Cyprus Says Economy is Accelerating as Bailout End Nears
6.3  Greek Government Wins Confidence Vote Before First Bailout Review
6.4  Number of Greeks Registered As Unemployed Exceeded 800,000 in September



7.1  New Campaign Offers Americans a Low-Cost Holiday in Israel
7.2  New Jersey-Israel Healthy, Functional and Medical Foods Alliance
7.3  Israeli Bars Win International Awards


7.4  Over a Quarter of Moroccans Speak Tamazight, Only 18.3% Speak English


8.1  Kadimastem Submitted Pre-IND Package to the FDA
8.2  FDA Approved InSightec’s Exablate System for Treatment in the USA
8.3  Teva Announces Approval of Three-Times-A-Week COPAXONE 40 mg/mL in Russia
8.4  Rosetta Genomics Raises $8,000,000 in Private Placement
8.5  Izun Reports Positive Results from Phase 2 Randomized Trial in Diabetic Foot Ulcers
8.6  Rosetta Genomics Launches BRAF Mutation Assay
8.7  Gamida Cell Announces Strategic Equity Investment by Major Pharmaceutical Company
8.8  EarlySense Named “Fierce 15” Med Tech Company of 2015 by FierceMedicalDevices
8.9  Prawn Sex-Change Boosts Male Yields, Say Scientists
8.10  Chinese VC Firm Virtus Inspire Ventures Invests in Israeli Company Gordian Surgical


9.1  Qualcomm & Mellanox Collaborate on Cost-Effective Data Center Platforms for Servers
9.2  Israel Aerospace Industries Unveils Lightweight Satellite
9.3  IAI is Boosting its Observation Satellites Activity
9.4  AnyClip Extends Reach of Licensed Content through Partnership with LKQD
9.5  PowerUp Unveils World’s Only First-Person View Paper Airplane Drone
9.6  Altair Powers Novatel Wireless’s New MiFi M100 4G LTE Personal Mobile Hotspot
9.7  illusive networks Raises $22 Million in Series B Funding Led by NEA


10.1  Israel’s CPI Falls More Than Expected
10.2  Israel had 17 Billionaires & Over 88,000 Millionaires in 2015


11.1  ISRAEL: Fitch Affirms Israel at ‘A’; Outlook Stable
11.2  EGYPT: Egypt’s Exports Fall By 20%, Hit by Energy and FX Crunch
11.3  EGYPT: ‘Garbage Police’ Look to Clamp Down on Pollution
11.4  TUNISIA: IMF Executive Board Concludes 2015 Article IV Consultation with Tunisia
11.5  ALGERIA: Arabic in Algeria: Identity Tainted By Politics
11.6  MOROCCO: ‘BBB-/A-3’ Ratings Affirmed On Fiscal & External Profiles
11.7  TURKEY: Russian Market Huge Disappointment for Turkey


1.1  Israel’s Budget Deficit Down to 2% of GDP

State tax revenues are again outstripping the Ministry of Finance forecasts, thereby bringing the budget deficit down to 2% of GDP.  State budget performance figures for September published by the Ministry of Finance show that state revenues from taxes and fees totaled NIS 22.6 billion, NIS 600 million more than the revised forecast published by the Ministry only last month, following the rapid growth in state revenues in the preceding months.

The aggregate budget deficit in the past 12 months (October 2014 – September 2015) amounted to 2% of GDP.  The government budget deficit in its budget activity reached only NIS 3.8 billion in January-September 2015, compared with a NIS 10.9 billion deficit in the corresponding period last year and a NIS 32.7 billion annual deficit in the original 2015 budget proposal.  According to the proposed state budget for 2015-2016, the 2015 deficit will be 2.9% of GDP, with the Ministry of Finance planning to bring forward NIS 1.5 billion in spending from 2016 to 2015.

Government spending since the beginning of the year is 5.1% more than in the corresponding period last year, with spending by the civilian ministries up 4.1% and Ministry of Defense spending up 8.3%.  Revenues in September were 7.3% higher in real terms than in September 2014, discounting legislative changes.  Receipts from direct taxes soared 19%, while revenues from indirect taxes dipped 2.5%. The Ministry of Finance said that the fall in revenues from indirect taxes was caused by fewer working days in September because of the holidays, all of which fell in September this year (they were divided between September and October last year).  The sharpest rise in tax revenues came from land taxes (discounting reimbursements), which totaled NIS 837 million, a 54% increase in real terms, compared with September 2014.  The Ministry of Finance explained that there had been little activity in September 2014 because people were waiting for the cancelation of VAT on purchases of first apartments.  Betterment tax proceeds skyrocketed 90% and purchase tax proceeds climbed 36%.

Since the beginning of the year, state tax revenues have exceeded the original forecast by NIS 8.3 billion, with the forecast for 2015 as a whole being revised to NIS 269.4 billion as a result.  An additional NIS 600 surplus over the forecast was posted in September, despite the revision of the original forecast.

The Ministry of Finance noted that cutting VAT from 18% to 17%, starting in October 2015, and the reduction of corporate taxation from 26.5% to 25%, starting in 2016, would reduce annual state tax revenues by NIS 5.7 billion, and by NIS 800 million already in 2015.  Trend data for the past four years show a sustained 5% annual rise in tax revenues.  From the end of 2011 to June 2014, state revenues grew by 4% a year, while the rate of increase speeded up to 9% from June 2014 to September 2015: 14% in direct taxes and 5% in indirect taxes.  (Globes 08.10)

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1.2  Bank of Israel Lowers Inflation Expectations

Inflation expectations in the Israeli economy continue to fall further below the target set while the Bank of Israel shows no signs of changing its monetary policy.  The latest forecast for September, on 19 October by the Bank of Israel, shows capital market expectations for inflation over the next 12 months down to 0.4% (from 0.5% in August) and inflation expectations over the next 24 months have fallen to 0.8% (from 0.9% in august).

The law requires the Bank of Israel to use the monetary tools at its disposal, including first and foremost the interest rate, to ensure that the inflation rate is between 1% and 3%.  The Bank of Israel Monetary Committee, headed by Governor Flug, left the interest rate for October unchanged at the historic low of 0.1%.  In fact the Bank of Israel has not changed the interest rate since March.  Senior Bank of Israel officials have said that the low inflation expectations were a result of the impact of the one-time fall in VAT, and companies tax, cancellation of the TV license, and the fall in the price of fuel due to the drop in oil prices on global markets.  Inflation expectations have fallen sharply in recent months.  In August inflation expectations for the next year were 0.8%, falling to 0.5% last month and now 0.4%.  (Globes 19.10)

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1.3  U.S. Congressman Fattah Introduces Legislation to Strengthen US-Israel Neuroscience Partnership

On 8 October, Congressman Chaka Fattah (PA-02) introduced legislation, the United States-Israel Global Neuroscience Partnership Act, which will advance opportunity for unprecedented collaboration between the United States and Israel in order to create groundbreaking progress in neuroscience.  Currently, more than one billion people are affected by brain disease or disorders worldwide, including 50 million individuals in the United States.  The United States and Israel have both heightened their attention and commitment to advancing neuroscience research over the last decade.

The bill will direct the National Institutes of Health (NIH), in conjunction with Israel’s Ministry of Science and the Office of the Chief Scientist, to award grants that support neuroscience-related research and technology development.  Eligible entities will include any combination of U.S. or Israeli universities, researchers, or private companies invested in neuroscience projects.  The legislation will also establish a U.S.-Israel Neuroscience Advisory Committee under NIH.  This legislation will build on successful partnerships like the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation and the U.S.-Israel Binational Science Foundation (BSF), but with a greater focus on bringing similar success to brain science.  (Fattah 08.10)

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2.1  Israeli Google Team First to Sign Agreement for Private Mission to the Moon

On 7 October, SpaceIL announced a significant milestone in its race to the moon: securing a “ticket to the moon” on a SpaceX Falcon 9 launcher, with a mission scheduled for the second half of 2017.  With this, SpaceIL becomes the first team to produce a verified launch contract in the $30 million Google Lunar XPRIZE competition, and aims to accomplish not only the first Israeli mission to the moon, but also the world’s first private lunar mission.

To win the Google Lunar XPRIZE, a privately funded team must successfully place an unmanned spacecraft on the moon’s surface that explores at least 500 meters and transmits high-definition video and images back to Earth, before the mission deadline of 31 December 2017.

Signing the launch agreement was made possible due to the completion of an additional fundraising round led by the two major contributors to SpaceIL: Dr. Miriam and Sheldon G. Adelson Family Foundation and Morris Kahn’s Kahn Foundation.

SpaceIL has purchased launch services from Spaceflight Industries, an American space company that recently purchased a SpaceX Falcon 9 launcher and will manifest SpaceIL’s spacecraft as a co-lead spot, which will sit in a designated capsule inside the launcher, among a cluster of secondary payloads.  Once the capsule separates from the launcher, it will automatically release the spacecraft, which will use advanced navigation sensors to guide it to the lunar surface, with engineers in a mission control room standing by to remotely send commands and corrections as needed.

SpaceIL is a nonprofit organization working to land the first Israeli spacecraft on the Moon.  The only Israeli team in the Google Lunar XPRIZE competition, SpaceIL is building a small and smart spacecraft for landing on the Moon.  SpaceIL is committed to using the potential prize money to promote science and scientific education in Israel, to ensure that Israel will continue to live up to its reputation of excellence in the field.  (XPRIZE 07.10)

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2.2  Huge Amount of Oil Discovered on Golan Heights

While the fates of Israel’s Tamar, Leviathan, and Tanin offshore natural gas reserves have yet to be decided, oil has been discovered on the Golan Heights.  According to the report, recent exploratory drilling on the Golan has located a reserve of enough oil to supply Israel’s needs for many years to come.  Large amounts of oil have thus far been found in three drillings that have taken place in the southern Golan Heights.  Ofek, which conducted the drilling on the southern Golan Heights, claims that at first estimate, the reserve contains nearly 1 billion barrels.

The question now is how worthwhile producing oil from the reserve would be and how much it would cost to do so.  Global oil prices are plummeting and the high cost of drilling for and extracting the oil could make the venture non-cost effective.  Exploratory drilling at the Golan Heights site has been carried out this past year over the protests of environmental groups, who are concerned about the project causing irreversible damage to the unique landscape and wildlife of the Golan.  (Various 07.10)

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2.3  CyberArk to Acquire Viewfinity to Extend Privileged Account Security Solutions

CyberArk signed a definitive agreement to acquire privately held Viewfinity, a Waltham, Mass. based provider of Windows least privilege management and application control software for $30.5 million in cash.  The transaction is expected to close in Q4/15.  Acquiring Viewfinity enables CyberArk to remove administrative privileges from business users, and limit the privileges available to users and applications to only what is needed, allowing only trusted applications to run.  This enables organizations to stop the progression of most malware-based attacks at the endpoint, limiting the attacker’s ability to move beyond their initial point of entry.  With the acquisition of Viewfinity, CyberArk will offer protection against privileged-based attacks targeting both business and IT users.  Viewfinity’s integrated least privilege and application control solution, combined with CyberArk’s credential vaulting will provide a comprehensive endpoint privilege management solution from the established leader in privileged account security.  The Viewfinity offering is available as either an on premise or SaaS-based solution.

Petah Tikva’s CyberArk is the only security company focused on eliminating the most advanced cyber threats; those that use insider privileges to attack the heart of the enterprise.  Dedicated to stopping attacks before they stop business, CyberArk proactively secures against cyber threats before attacks can escalate and do irreparable damage.  (CyberArk 07.10)

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2.4  Barclays to Launch Israel Accelerator in Tel Aviv

Barclays has announced that it is opening an accelerator in Tel Aviv, part of its global network of Rise accelerators.  The launch comes five months after Barclays held an event in Israel to try and lure Israeli startups to its New York accelerator.  Now Barclays will operate an accelerator in Tel Aviv designed for 10 startups in the fintech and cyber security fields.  Each program will last 13 weeks.  Barclays said that Rise is a network of physical spaces and a virtual global community designed to pioneer the future of financial technology (fintech).  Rise Tel Aviv will provide a physical site for innovative fintech companies, offering a co-working environment, world class event spaces and meeting rooms.  The new accelerator will be located on Ahad Ha’am Street, formerly used as Tel Aviv Stock Exchange building.

The Barclays Accelerator in Tel Aviv will provide 10 companies focused on fintech and cyber security innovation with the opportunity to participate in intensive networking, mentoring and development, with the option of spending part of the program at other Barclays Accelerator global sites.  Two prior cohorts have completed the program in London, with a further one currently underway in New York.

Entrepreneurs and startup companies from around the world can apply for the Barclays Accelerator program in Tel Aviv.  Applications will close on 2 January 2016 with the program beginning in March 2016.  (Globes 07.10)

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2.5  CreditEase Announces $30 Million First Closing of Its Israel Innovation Fund (CEIIF)

CreditEase China, a national leader in wealth management, credit management, microfinance investment and microcredit loan origination and servicing, announced that CreditEase Israel Innovation Fund (CEIIF), its first Israel-focused venture-capital/private-equity fund, has raised $30 million from its clients in China in a first closing of the fund.  CEIIF is managed by Israel Innovation Investment Management, a Cayman Islands-based manager that is jointly owned by CreditEase and its founding managing partners.

The new fund focuses primarily on private technology companies located in Israel and the U.S.  It considers opportunities across a broad spectrum of industries, including technology, media, telecommunications, health care and smart materials, and will invest in a mixture of early- and later-stage opportunities.

Founded in 2006 and headquartered in Beijing, CreditEase is a national leader in wealth management, credit management, microfinance investment, and microcredit loan origination and servicing.  With close to 50,000 employees across more than 100 cities in China, CreditEase today services more than 1 million borrowers.  It is supported by a range of international institutional investors, including Morgan Stanley Private Equity Asia, Kleiner Perkins Caufield & Byers and IDG Capital Partners.  (CreditEase 07.10)

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2.6  HCC Embedded & MIGVAN Partner Deliver Best-in-Class Embedded Software in Israel

Texas based HCC Embedded, experts in securing embedded data, has expanded its distribution network to partner with MIGVAN Technologies & Engineering.  In the Internet of Things, as embedded devices become the focus of safety-, mission-, and business-critical systems, software that ensures secure, high-performance, reliable data storage and communications is essential. MIGVAN understands this, and will extend HCC’s secure networking and storage solutions to the Israeli engineering community through its well-developed technical support and sales infrastructure.

MIGVAN has a long-standing reputation for providing best-in-class engineering solutions to the Israeli electronics industry and is backed by a strong applications engineering team with extensive embedded expertise and knowledge of the IoT space. MIGVAN will provide the sale and support of HCC Embedded software components to developers who must ensure reliability, security, and high performance in their connected applications.

Kfar Saba’s MIGVAN Technologies & Engineering is a leading representative and distribution company, officially representing top global brands in the Israeli market, for the past 30 years.  The company product lines are in the areas of electro-mechanical components, power and control devices, and embedded and active solutions. Based on a team of highly experienced engineers, the company provides local pre- and post-sale technical support to its diverse portfolio of customers.  (Migvan 07.10)

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2.7  India’s DEL Buys Stake in Israeli Irrigation Company Rivulis

Private equity fund FIMI Opportunity Funds is bringing a partner into Rivulis Irrigation (formerly the water division of John Deere).  The new partner, Indian company Dhanna Engineering (DEL) is acquiring 20% of Rivulis for $34 million, while FIMI will retain the remaining 80%.  The deal reflects a $170 million value for Rivulis, six months after FIMI acquired Rivulis for $60 million.

John Deere Water included the Israeli company Plastro from Kibbutz Gvat and US companies T-Systems and Roberts Irrigation, a collection of companies dealing in areas relating to irrigation, spraying, and drip irrigation.  A lack of focus, however, caused the acquired division to lose $50 million in 2013 on $250 million in revenue.  Since FIMI acquired Rivulis, the company has been on the mend, including the replacement of its management and other measures.

The Indian company investing in Rivulis is a private company owned by the Firodia family, one of the wealthiest families in India. It is the controlling shareholder in Force Motors, which is active in the auto industry.  FIMI, whose returns have been exceptional even in terms of the global private equity funds industry, specializes in acquiring operating companies and improving them.  Its acquisitions are made with very little leverage and in a large proportion of cases, with no leverage at all.  As of now, the fund has acquired control of 80 companies and achieved 50 exits amounting to over $4 billion.  (Globes 11.10)

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2.8  United Airlines to Launch Tel Aviv – San Francisco Flights

Starting April 2016, United will conduct three direct weekly flights to San Francisco from Tel Aviv, using Boeing Dreamliner 787-9 jets.  These will be in addition to its 14 weekly flights to New York (twice daily).  The Boeing Dreamliner 787-9 passenger jet is considered one of the world’s most advanced jets.  It has 252 seats, including 48 in business class and 88 in upgraded tourist class. The plane also offers a satellite-based WiFi hookup and electrical sockets.  Flight UA955 will take off from Tel Aviv at 00:55 AM on Tuesdays, Fridays, and Sundays, and land in San Francisco at 6:00 AM of the same day.  The UA954 return flight will take off from San Francisco at 8:00 PM on Wednesdays, Fridays, and Sundays, and land in Israel at 8:10 PM on the following day (all the times are for Israel).  (Various 08.10)

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2.9  Virtual Container Security Company Scalock Raises $4 Million

Israeli virtual container security startup Scalock has closed a $4 million Series A financing round.  The investment was led by TLV Partners, a new Tel Aviv based venture capital fund launched earlier this year.  Based in Tel Aviv, Scalock, “Techcrunch” reports that the company plans opening offices in Silicon Valley.  Scalock provides a comprehensive security solution for virtual containers (e.g. Docker), adding visibility and control to large environments, enabling to scale out without security limitations.  Scalock has 7 employees including the two founders.  (Globes 08.10)

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2.10  SentinelOne Raises $25 Million to Displace Anti-Virus Vendors

SentinelOne has raised an additional $25m in financing which will be used to further disrupt the multi­billion dollar anti­virus (AV) market.  The Series B round brings the company’s total funding to nearly $40M, which makes it one of the highest capitalized next generation endpoint security vendors.  Third Point Ventures (The Venture arm of Third Point LLC) led the round with participation from existing investors Tiger Global, Data Collective, Granite Hill Capital Partners, Westly Group and new investor SineWave Ventures.

SentinelOne has experienced exploding demand for its Endpoint Protection Platform.  It is certified by the independent AV­TEST Institute to perform AV functions while also providing an additional new layer of advanced protection against cyber­attacks.  Forbes recently reported that Netflix is replacing its legacy AV in favor of SentinelOne’s next generation technology.  Netflix is just one of many large enterprises that are deploying SentinelOne to displace aging AV platforms.

While SentinelOne can protect against known threats just like AV products, its patent pending Dynamic Execution Inspection technology can detect and block advanced attacks across any vector on an endpoint machine.  This allows companies to protect against Malware that executes on hard drives or in memory, Exploits residing in documents, email messages or web pages, and Live attacks that are carried out by individuals using scripts or stolen user credentials.  With SentinelOne, enterprises can secure desktops, laptops (Windows and OS X), tablets, smartphones, physical and virtual servers, as well as embedded systems including PoS, critical infrastructure and more.

Bnei Brak’s SentinelOne will use the funds to expand it sales, marketing, research & development and customer support operations in Mountain View, Tel Aviv, New York, Paris and Singapore.  The company will also establish new centers in Boston and London, and plans to double its number of employees in the next six months to more than 100.  (SentinelOne 13.10)

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2.11  French Firm Buys 51% Stake in Chromagen for NIS 73 Million

The shareholders of Chromagen agreed to sell the controlling stake (51%) to Groupe Atlantic.  Kibbutz Sha’ar Ha’Amakim and Tene Investment Funds, who control 68% and 32% respectively, accepted the French offer after struggling in their IPO bid on the Tel Aviv Stock Exchange.  The deal has yet to be signed, but according to the memorandum of understanding between the parties, Tene will sell its entire stake in Chromagen for NIS 48 million – at a valuation of NIS 150 million – while the kibbutz will sell 19% of its shares for NIS 25 million – based on a valuation of NIS 130 million.  In addition, the deal is expected to include reciprocal options for a future sale of the kibbutz’s remaining shares to Groupe Atlantic, which are priced at a higher valuations and dependent on Chromagen’s future performance.

Chromagen, founded in 1962, is the leading manufacturer of solar water solutions in Israel and its products are sold in 40 countries across the world.  Its executive offices and solar water tank factory are located in Kibbutz Sha’ar Ha’Amakim, while the solar collector facilities are in the Tsiporit Industrial Zone in the Lower Galilee.  Tene, a private equity fund, invested in Chromagen nine years ago, when it received 32% of its shares for some $6 million.  Groupe Atlantic is a private French HVAC firm founded in 1968 by two engineers.  Today it operates 17 factories worldwide with over 5,500 employees; eight of the factories are located in France and employ 3,500 workers.  (Globes 13.10)

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2.12  China’s XIO Completes $510 Million Acquisition of Lumenis

The acquisition of Israeli surgical, ophthalmology and aesthetic applications company Lumenis by Chinese private equity fund XIO has been completed for $510 million.  Lumenis shareholders will receive $14 per share, a 16% premium on the Nasdaq share price on the day that the deal was announced.  As part of the completion of the deal, Lumenis received a $100 million loan from Mizrahi Tefahot Bank.  At the end of the first quarter, Lumenis also had $105 million in cash.  China’s XIO is a global fund, which manages assets worth $3 billion.

Lumenis is one of the longest-established and leading companies in Israel’s aesthetic medical market, which has undergone many upheavals over the years.  The company was first listed on Nasdaq in the 1990’s but after losing much of its value, and accumulating debts, and failing to file reports on time, it was delisted in 2006.  Subsequently it was acquired by Viola group and Ofer Hi-Tech (today XT Group) and other investors who injected $120 million into the company.  (Globes 12.10)

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3.1  VPS Healthcare signs MoU with The Children’s Hospital of Philadelphia

VPS Healthcare, one of the fastest growing healthcare conglomerates in the UAE, and The Children’s Hospital of Philadelphia (CHOP), the oldest pediatric hospital in the United States, have signed a Memorandum of Understanding (MOU).  The MOU sets forth their mutual goals and objectives, as well as establishes a process to continue their discussions related to opportunities for providing a continuum of pediatric care for international patients treated at CHOP and establishing new standards of pediatric care at VPS hospitals and clinics.  The MOU was signed by Dr. Shamsheer Vayalil, Managing Director of VPS Healthcare and Mr. Matthew Cook, Executive Vice President of Strategic Planning and Business Development, at The Children’s Hospital of Philadelphia.

The signing of this landmark MOU comes at a time when UAE is in a drastic need of a rationalized approach to pediatric sub specialties.  The Children’s Hospital of Philadelphia has been one of the main destinations for UAE pediatric referrals including pediatric oncology, pediatric bone marrow transplant, orthopedics and cardiology.  (CHOP 11.10)

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3.2  Hospitality Marketing Concepts Launches My Mazaya Exclusively in the Middle East

Newport Beach, California’s Hospitality Marketing Concepts (HMC), the world’s leading provider of lifestyle frequency programs for hotels, is proud to announce the launch of the My Mazaya network throughout the Middle East.  My Mazaya is a mobile-enabled hotel and dining frequency program that provides members with shared benefits and recognition worldwide.  Instead of relying on coupon services and discount books that often result in transient and very costly one-time business, My Mazaya develops frequency while building a qualified, targeted local consumer base that improves revenue for My Mazaya partner hotels and restaurants.  The program successfully unites a growing network of nearly 60 hotels in the Middle East, including locations in the UAE, Saudi Arabia, Egypt, Qatar and other countries in the region. Participating hotels range from elegant City Center business hotels to luxurious resorts in exotic destinations.  (HMC 12.10)

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3.3  First 7-Eleven Store Opens in Middle East

Seven Emirates Investment, a master franchisee of 7-Eleven, celebrated the opening of its first 7-Eleven store in the United Arab Emirates.  The store opened for business on 6 October.  The location of 7-Eleven’s first store in the Middle East is Bay Square, Building #4, near downtown Dubai and the world’s tallest building, Burj Khalifa Tower.  The new 2,000-square-foot store carries some 2,500 products that are both typical of 7-Eleven stores and special to that part of the world.  The currently company-operated store employs 18, who reflect the diversity of the United Arab Emirates.

The prepared fresh-daily foods include Arabian, Indian and Asian lunch-box meals, like chicken biryani and rice balls.  Also for meal or snack times, the store carries samosas, curries and falafel wraps, hummus, Greek and tabouleh salads.  Orange date muffins and Umm Ali are among the pastry and dessert selections.  7-Eleven’s iconic Slurpee drinks are already a hit with the locales.  The store boasts a number of special features and customer conveniences. For example, an indoor counter faces outdoors where customers can eat and charge their mobile devices; a mini-office area with ATM, bill payment and copier machines, and delivery bicycles outside for on-demand service.  Seven Emirates plans to open a second 7-Eleven store in December in the high-profile Dubai Marina neighborhood.  (7-Eleven 13.10)

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3.4  Boeing Celebrates Delivery of Oman Air’s First 787 Dreamliner

Boeing and Oman Air celebrated the delivery of the airline’s first Boeing 787 Dreamliner.  The airline ordered six 787-8s in November 2011 as part of its expansion plans.  The Boeing 787 Dreamliner is an all-new, super-efficient family of commercial airplanes that brings big-jet ranges and speed to the middle of the market.  In response to airlines’ overwhelming preference, Boeing designed the 787 family with superior efficiency, which allows airlines to profitably open new routes to fly people directly where they’d like to go in exceptional comfort.  Since entering service in 2011, the 787 family has opened more than 50 new non-stop routes around the world.  Oman Air has announced that it will deploy its first Dreamliner on services to Saudi Arabia and Europe.  (Boeing 11.10)

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3.5  Circle Oil Says Morocco to Start Production of Gas As Soon As Possible

Circle Oil, an Irish energy company operating in North Africa and the Middle East has announced positive progress of the Ksiri West-A (KSR-A) exploration well on the Sebou Permit, onshore Morocco.  The well will be tied to the company’s infrastructures and the production will be starting as soon as possible.  This gas production will be sold at fixed rates which are not subject to oil price fluctuations.  The well is located within the western-central area of the Sebou Permit, about 3.2 kilometers to the south-west of the main gas gathering station.  The company has previously abandoned the second well in its drilling campaign last months on the Lalla Mimouna permit onshore due to disappointing results.  (MWN 14.10)

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4.1  Abu Dhabi Fund Offers $15 Million Loan to Cuba For Energy Projects

Abu Dhabi Fund for Development (ADFD) has offered the Government of Cuba $15 million in concessionary loans to support the energy sector.  The loan agreement was formalized at a signing ceremony held during a visit by a UAE delegation to Havana.  The loan will be allocated towards the installation of four 10 MW solar power plants in four provinces of Cuba.  The project will help reduce cost of energy generation in Cuba, while the construction, operation and maintenance works will create many job opportunities and will improve the performance of Cuban economy.  The renewable energy project involves the supply and installation of silicon photovoltaic panels at four power plants in the provinces of Matanzas, Santasbertos, Kmagoy and Sandicocopa and linking them to the national grid.  (AB 10.10)

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5.1  Annual Tourist Spending in Lebanon Grew by 5% by September 2015

Tourist spending in Lebanon grew 5% y-o-y in the first eight months of 2015, according to “Global Blue.”  The improvement of tourist spending in the first three quarters of the year came from the successful skiing and summer seasons and despite the relative insecure political environment in the country.

With respect to demographics, Arab tourists continued to capture the largest share of spending in Lebanon, led by Saudi Arabian residents with a stake of 14%, and followed by tourists from the UAE and Kuwait with 14% and 13% respectively.  In fact, spending by tourists from Jordan saw the highest growth of 35% y-o-y by September 2015, which was expected following the 10% yearly increase in Jordanian tourists (3rd largest among Arab countries) by July reaching 45,188 visitors.  In contrast, those coming from Syria underwent, over the same period, the heaviest spending decline of 30% y-o-y, due to the ongoing political turbulence in their country.

In terms of spending by category, fashion and clothing accounted for 72% of total items purchased by tourists, watches and jewelry captured 14%, home & garden items and department stores took respective shares of 4% and 3% each.   respect to point of sale distribution, Beirut’s shopping districts continued to attract the most tourists, accounting for 80.58% of total spending, followed by Metn (12.02% of total spending) and Keserwan (2.42% of total spending).  However, spending in Jbeil revealed the biggest improvement of 101% y-o-y by September and was trailed by the 68% yearly rise in Keserwan.  (Global Blue 10.10)

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5.2  Growth of Registered Cars in Lebanon is Flat

According to the Association of Lebanese Car Importers, the number of newly registered commercial and passenger cars during the first 9 months of 2015 expanded  by a mere 0.96% year-on-year (y-o-y) up to September to reach 30,832 cars.  This might have been on the back of decreasing oil prices and the depreciating Euro and Yen.  The orientation of the market is towards small cars, based on the absence of a public transport system and the drop in the purchasing power of the consumers.

In details, the above improvement was attributed to the yearly 1.25% increase to 29,170 by September in newly registered passenger cars, which was partially offset by the 3.71% annual fall in newly registered commercial cars to 1,666.  A possible explanation for the weakening demand for commercial cars is the hesitance of the commercial sector amid the presidential vacuum and political uncertainty in Lebanon.

Notably, there was a change in the market share of car exporting-countries, due to the average 13% and 15% y-o-y depreciation of both the Euro and the Japanese Yen against the US dollar to respective levels of Euro/Dollar 1.1288 and Dollar/Yen 119.59, by End-September.  For instance, Japanese cars were the most demanded cars in Lebanon in the first 9 months, with their share improving from 34.35% in 2014, to 39.77% in 2015.  Notably, most Japanese cars saw a yearly improvement in imports with main jumps witnessed in Toyota and Suzuki cars.  Meanwhile Korean cars lost their hold on the number one spot, going down from 40.46% to 32.80% in 2015.  European cars maintained their third rank, however with a higher market share of 21.01%, compared to 18.86% in 2014.  Looking at the car brand breakdown, Kia held the largest share of 18.03% of the total, followed by 16.14% for Toyota. Furthermore, Hyundai and Nissan respectively grasped shares of 14.98% and 10.48%.  (BlomInvest 14.10)

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5.3  Jordan’s Debt Grows Faster Than the Economy

Jordan’s public debt by the end of this year is expected to reach JD22.3 billion.  The GDP is expected to rise by 5% in current prices by the end of this year, over last year, to reach JD26.7 billion.  Based on the above assumption, the ratio of debt/GDP will become 83.5%, compared to 80.8% at the end of 2014.  The rate was only 71% at the end of 2011.  The debt/GDP ratio given by the Ministry of Finance now is 79.1%.  Debt is compared by the ministry to the GDP as it is projected to reach at the end of the year, when debt would also be higher, perhaps much higher.  Comparing figures by using different dates is misleading.  It shows that debt is shrinking, which is not the case.

Jordan’s GDP is expected to rise by 5% in current prices this year, broken down to 3% real growth and 2% inflation rate.  In other words, debt can be allowed to rise by up to JD1.028 billion this year while maintain the same debt/GDP ratio of last year.  This is obviously an amount that should be sufficient to cover a reasonable budget deficit, which the ministry claims is shrinking year after year.  (JT 11.10)

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5.4  Jordan Signs Six Cooperation Deals with India

On 11 October, Jordan and India signed six agreements and memoranda of understanding (MoU) in various fields of cooperation.  The agreements were signed in the presence of Prime Minister Ensour and Indian President Mukherjee, covering cooperation in the maritime transportation sector and a memorandum between the Jordan Institute of Diplomacy and the Indian Foreign Service Institute.  Another deal was signed between the Jordan News Agency, Petra, and the Press Trust of India, in addition to signing the executive program for cultural exchange between the Jordanian and Indian governments.  Also, an MoU was signed between the ICT Ministry and its Indian counterpart to cooperate in ICT and electronics fields, and another between the Jordan Standards and Metrology Organization and its Indian peer to cooperate in assessment techniques.  Ensour and Mukherjee discussed bilateral ties and regional issues of mutual interest.

In a related development, India has extended a line of credit of $100 million to the Hashemite Kingdom for promoting trade and economic cooperation.   Bilateral trade currently stands at $1.89 billion and is planned to be upped to $5 billion in five years, in addition to establishing joint projects in various fields.  (JT 11.10)

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►►Arabian Gulf

5.5  Kuwait’s Plan to Convert Old Cemeteries Into Parks Draws Debate

The Kuwait City Municipal Council has been working on a number of projects, including plans to convert old cemeteries into parks, relocate the city’s zoo and build new housing units.  After being confronted with protests over plans to convert some of 50 cemeteries in Kuwait into public parks, of which only cemeteries in three areas are in use, the municipality decided to put the plans on hold for now.

Speaking to Kuwait Times, Muhalhal Al Khaled, director of the Municipal Council, said: “There is an (Islamic) rule that after 50 years of disuse, a cemetery goes out of service and can be changed into a park.  An example is the Baladiya Park, which was originally a graveyard.  Later, a fatwa was issued forbidding this change and ideas were proposed to build multi-story car parks on cemetery grounds.  Many conflicts ensued, so the municipality preferred not to execute these projects and avoid problems. So we only planted flowers on top of the gravesites.  “One cemetery is in Jahra, three in Sulaibikhat for Sunnis, Shiites and non-Muslims, and one in Subhan.  All other cemeteries are abandoned and not used anymore.”  (AB 11.10)

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5.6  Ooredoo & QBIC Reveals Plan for Qatari ‘Silicon Valley’

Ooredoo and Qatar Business Incubation Centre (QBIC) announced a partnership that will launch a Digital and Beyond incubator to encourage the creation of a new range of start-ups and technology-focused businesses.  The one-year agreement, which includes the option to renew every year, will enable telco Ooredoo to contribute to the development of Qatar’s economy, by supporting economic diversification, new business creation, and encouraging entrepreneurialism.  It will also reduce the time to market for new digital products and services in Qatar and open new business opportunities for Ooredoo in adjacent markets.

The Digital and Beyond incubator will empower young people to start and grow a diverse range of companies.  It will include three zones designed specifically for start-ups – a community zone for relaxation and regeneration; a collaboration zone to encourage communication and teamwork; and private zones for meetings and innovative thinking.   Through the partnership, Ooredoo will form a committee to evaluate and select “disruptive ideas” in the digital space, and provide seed-funding for the aspiring entrepreneurs.  The first wave of ideas to be assessed will include innovative digital ideas focusing on customer experience, healthcare, education, sport, smart living and other areas.

QBIC, founded by Qatar Development Bank (QDB) and the Social Development Centre (SDC), is a leading mixed-use business incubator in the Middle East, with a mission to develop the next QR100 million value companies in Qatar.  For QBIC and QDB, the partnership is one of several new ventures with leading industry leaders, as part of a plan to create various sector-specific incubators at QBIC.  (AB 19.10)

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5.7  Oman’s Budget Deficit Grows To Nearly $7 Billion on Cheap Oil

Oman posted a budget deficit of OR2.68 billion ($6.97 billion) in the first eight months of this year, provisional Finance Ministry data showed.  This was in comparison to the OR205.7 million surplus reported a year earlier because of lower oil export prices.  The budget deficit has also grown since the first half of 2015 when Oman posted a budget deficit of OR1.92 billion.  Oman’s 2015 budget plan envisages government expenditure of OR14.1 billion and a deficit of OR2.5 billion, assuming an average oil price of $75 per barrel.

The plunge of crude prices is a serious blow to Oman, which lacks the ample fiscal and hydrocarbon reserves of its wealthier Gulf neighbors.  In April, the World Bank estimated the decline in crude prices could cost the Gulf Cooperation Council (GCC) countries – Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Qatar, Oman and Bahrain – $215 billion, or 14% of their combined GDP this year.  Consequently, the region may record a fiscal deficit for the first time in four years.  (AB 19.10)

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5.8  Saudi Arabia to Record a Budget Deficit of SAR573 Billion

Saudi Arabia will record a budget deficit of SAR573 billion, or 24% of the projected GDP, according to IMF.  This prediction is based on the projected oil price of $53 a barrel, Saudi Fransi Capital says.  Fransi Capital said that the debt program can cover up to SAR115b of the government spending, while withdrawing up to SAR458b from the kingdom’s reserve covers.  Fransi Capital explained that in the absence of price recovery, the government entities have the option to pass the cost of spending on infrastructure for beneficiaries in the form of taxes or reduction of subsidies.  It is expected that Saudi Arabia will record a budget deficit of $350b during 2016, based on the expected oil price of $55 a barrel.  Fransi Capital expects that Saudi Arabia’s next budget should be balanced accurately with the expected cut in spending on existing big projects.  (AME 06.10)

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5.9  Saudi Arabia Remains China’s Top Oil Supplier

Saudi Arabia remained the largest exporter of oil to China in August with 925,000 barrels a day.  Angola and Iraq followed suit with 833,000 and 800,000 barrels respectively, while Russia and Oman came in fourth and fifth place, according to official Chinese data.  However, the data indicated that the kingdom was the third-largest oil exporter to China after Russia and Angola in the months before August.  Over the past few months, Russia increased its exports to China by 33% to 928,000 bpd, followed by Angola with 772,000 barrels and Saudi Arabia with 722,000 barrels, down by 18.1%.  It is noteworthy that China surpassed the US as the world’s largest oil importer in April for the first time in history.  Despite the economic slowdown, China’s demand for oil is projected to remain strong, the figures published by Al-Riyadh paper say.  According to official data, trade exchange between Saudi Arabia and China amounted to a massive $69 billion in 2014, $20b of which is the value of Saudi Arabia’s imports from China.  (AME 04.10)

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►►North Africa

5.10  Egypt’s Annual Inflation Spiked in September

Egypt’s annual inflation accelerated to 9.4% in September compared to 7.9% in August, announced state-run statistics agency CAPMAS on 8 October.  Inflation had been slowing down over the past few months after soaring on the back of rising fuel prices in mid-2014.  (Ahram Online 08.10)

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5.11  Russia’s Rosatom Says Egypt Nuclear Station Talks in Final Stages

Russia’s state-owned nuclear firm Rosatom is in final stages of talks for a contract to build a nuclear power station in Egypt.  Rosatom Overseas vice president Moskvin said that the deal was expected to be signed by the end of the year.  Speaking on a visit to the United Arab Emirates, Moskvin said construction of the plant, Egypt’s first, at Dabaa in Egypt’s north would finish by 2022 if a contract was signed by the end of 2015.  The contract would involve a loan from Russia to Egypt.  (Reuters 14.10)

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5.12  Egypt’s Foreign Reserves Drop by$1.76 Billion in September

Egypt’s foreign reserves decreased by $1.76b of their value in September, reaching $16.334b, compared to $18.096b in August, the Central Bank of Egypt (CBE) announced on 7 October.  The decline is the third consecutively in foreign currency levels, as the international reserves went down from $20.08b in June to $18.5 in July, then to $18.096 in August, to record their lowest level in September.  International foreign reserves have recorded their highest level this year in April, when they registered $20.525b, according to the CBE.  The current foreign reserves cover Egypt’s commodity imports for 3.3 months.  (CBE 07.10)

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5.13  Morocco’s Health Ministry to Decrease Medical Equipment Prices

The Health Minister Houcine El Ouardi announced on 5 October during a press conference in Rabat that prices of expensive medical devices will decline “before the end of 2015.”  The press conference following the presentation of the draft of the National Health Service and the priorities of health department in 2016.  El Ouardi said that this drop will primarily concern the price of about 1,000 expensive medical devices.

The Minister explained that the adjustment will begin with a reduction of prices for third generation medical devices, which could mean a reduction from MAD 28,000 and 32,000 for a machine to MAD 10,700.  He highlighted that the price of the equipment exceeded the purchase power of citizens.  El Ouardi stressed the need to encourage national laboratories to develop a treatment of “viral hepatitis C”.  It is believed that this treatment will provide more than 625,000 Moroccan patients with low price medication with the possibility of benefiting from full coverage for the medicine.

On the other hand, the Minister addressed the law that will implement health coverage for students starting in the current academic session (2015-2016).  This law falls within the implementation of the government program for 2012-2016, which also planned on covering liberal profession and self-employed workers so as to achieve universal health coverage.  The Minister said that the Health Ministry allocated MAD 1 billion for the promotion and development of medical equipment of affiliated public health institutions in remote areas.  (MWN 07.10)

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5.14  Tourism Industry in Morocco Makes Up 6.7% of GDP

According to the High Commission for Planning (HCP), tourism industry in Morocco earned MAD 61.9 billion in 2014, compared to MAD 59.2 billion in 2013.  Tourism made up 6.7% of Morocco’s gross domestic product (GDP) in 2014, compared to 6.6% in 2013.  In a report by La VieEco, the HCP noted that due to an increase in tourism products net tax subsidies of 10.3%, tourism registered a growth of 4.7% in 2014.  Tourism added value increased by 3.3%, from 49.3 billion MAD in 2014 compared to MAD 47.7 billion in 2013.  Domestic tourism spending increased by 5.4%, reaching MAD 107.6 billion in 2014 compared to MAD 102.1 billion in 2013.  Domestic spending of inbound tourism (foreigners’ expenditures in Morocco) increased 4.7%, from MAD 74.9 billion in 2014 compared to MAD 71.5 billion in 2013, the source added.  Domestic spending of outbound tourism (Moroccan nationals’ expenditures in foreign countries) increased by 6.9%, from MAD 32.7 billion in 2014 compared to MAD 30.5 billion in 2013.  All forms of domestic tourism spending increased from 29.9% in 2013 to 30.4% in 2014.  (MWN 10.10)

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5.15  Liquor Sales Add Over MAD 1 Billion Revenue to Moroccan Treasury

Alcohol sales in Morocco are far from insignificant.  According to L’Economiste, the Moroccan treasury receives over MAD 1 billion in revenue from the sale of liquor in the Kingdom.  This figure includes the sale of beer for MAD 708 million and MAD 456 million for the sale of wines and spirits.  According to the same source, Moroccans consume 85 million liters of beer every year.  In 2014, Moroccans consumed 260 million bottles of beer and 30 million liters of wines and spirits.

In the first 9 months of 2015, the sale of alcohol has already reached a staggering MAD 800 million in revenue to the treasury.  What is more, these figures are only based on ‘formal market’ sales.  The sale of liquor in the Kingdom is governed by two rules dating back to 1967 with numerous loopholes that make them unenforceable.  .Moroccan law calls for a ban on alcohol sales to Muslims to preserve the Islamic identity of the country, which prohibits the sale and consumption of intoxicants.  The Wilaya of Casablanca recently banned the organization of Beer Festival and labeled it as a “bold step incompatible with Islam”.  (MWN 10.10)

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5.16  3M to Establish a New Hub in Tangier

American company 3M will establish its regional hub in the city of Tangier, a city known for being a supply chain for North, Central and Western Africa.  The platform will be operational by the end of 2015.  3M is a US scientific industrial enterprise, present in many strategic sectors in Morocco, including mining, health, automotive, infrastructure, security, border control and banking technology.  By establishing a logistics center in Morocco, the company aims to strengthen its presence throughout the French speaking countries in North, Central and Western Africa.  This presence will give it the opportunity to expand its supply line in the region.  The choice of Morocco is also due to its unique geographical position, its political stability, and its good business environment, especially in Tangier.  The group achieved a revenue of MAD 211 million in 2012.  It has operated in Morocco for 20 years.  (MWN 07.10)

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6.1  Major Cuts in Turkish Trade & Growth Goals for 2015

Turkey expects its foreign trade for 2015 to be as much as $80 billion lower than what was estimated at the beginning of the year, while economic growth is revised down to 3% from 4%, a significant deterioration amid domestic and regional security problems, according to a new government program revealed on Sunday.  The government published its revised Medium-term Economic Program (OVP) in the Official Gazette on 11 October, revealing some major changes for the worse from an earlier program released this year.  According to the revised OVP, Turkish gross domestic product (GDP) for 2015 will be 3% instead of an earlier suggested 4%, while total foreign trade, covering imports and exports, was cut by $80 billion, a serious deviation in macro-economic prospects.

Turkey has been already battered by domestic and international headwinds in recent months, with inconclusive elections, weak economic growth, regional conflicts and a surge in Kurdish militant violence. These negative factors have also taken a toll on the country’s foreign trade.  The revised OVP shows the government has cut its imports estimate for 2015 by $49.6 billion to $208.4 billion from $258 billion.  The new OVP sees total exports $30 billion lower than the earlier program at $143 billion.  The country’s GDP growth was also revised down to 3% from 4%.  Likewise, year-end unemployment estimates rose to 10.5% from 9.5%.  The new OVP also put tourism revenues for the year-end at $26.8 billion; the earlier estimate was $31.5 billion.  (Zaman 11.10)

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6.2  Cyprus Says Economy is Accelerating as Bailout End Nears

Cyprus expects its economy to gather pace in coming years as the country looks to emerge from its international bailout program in 2016.  The finance minister said 19 September the economy could grow by more than 1.8% in 2016 and above 2% the following year if authorities can keep the politics and finances even-keeled.  Presenting next year’s budget to a parliamentary committee, Finance Minister Georgiades said growth this year would reach 1.5%, beating creditors’ projections.  Georgiades said growth drivers include the maritime, tourism, services and real estate sectors.  He said public debt will drop below 100% of annual economic output in the next few years.

Cyprus is expected next year to end a €10 billion ($11.36 billion) rescue deal it got from creditors in March, 2013 that forced a grab of uninsured deposits in its two largest banks and shuttered the second largest lender.  Georgiades said the country won’t need any additional support from creditors as it wraps up its rescue program and ruled out any new tax increases or spending cuts.  He said that high unemployment and the huge number of bad loans that still burden banks are the main challenges. The best way to deal with them, he said, is sustaining a steady growth rate in the economy.  (Associated Press 20.10)

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6.3  Greek Government Wins Confidence Vote Before First Bailout Review

Greek Prime Minister Tsipras’ government comfortably won a confidence vote early on 8 October, starting a race to pass key reform laws before Athens undergoes a crucial first review of its international bailout.  Greece has promised to implement the third bailout program agreed with European Union and IMF lenders in August in exchange for €86 billion.  It wants the first review to be wrapped up soon so it can start talks on a debt relief before the end of the year.  Tsipras, who was re-elected on 20 September, won the backing of all 155 lawmakers in the 300-seat parliament who support his radical left-right coalition.  His parliamentary group will be tested in the coming weeks during votes on reforms, tax hikes and pension cuts that Greece must enact to qualify for €3 billion of bailout aid and to unlock €25 billion to recapitalize its banks.  The first set of 48 reforms needs to be turned into law by 15 October.  Tsipras needs the debt restructuring to convince Greeks after seven years of economic hardship that he achieved something in return for performing a spectacular U-turn and accepting austerity conditions he had rejected in June.  (Reuters 08.10)

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6.4  Number of Greeks Registered As Unemployed Exceeded 800,000 in September

 The number of Greeks registered with the state-run Manpower Organization, OAED, reached over 800,000 people in September, the agency announced on 20 October.  A report by the agency pointed to 806,429 people being registered as unemployed, out of whom 43.41% were registered for less than a year and 56.59% for over a year – 350,100 people and 456,329 people, respectively.  Women who registered as unemployed surpassed their male counterparts, with figures pointing to 61.54% against 38.46%.  (OAED 20.10)

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7.1  New Campaign Offers Americans a Low-Cost Holiday in Israel

As Israel experiences a further slowdown in incoming tourism following the recent wave of terror, the Tourism Ministry is launching a unique collaboration with the global Groupon company which it hopes will bring thousands of tourists to the country.  The deal, which is being marketed to some 30 million households in the United States starting 20 October, offers a vacation in Israel for $990 – 1,400 – including flights, seven nights in a hotel, meals, tours and more.  This is the first time the Tourism Ministry has cooperated with the e-commerce marketplace. The ministry’s representative in the US will help market and advertise the campaign under the brand Groupon Getaways, in a bid to promote low-cost tourism to Israel.  The campaign will be offered for two weeks and will include vacation packages with hotels in Jerusalem, Tel Aviv and the Sea of Galilee area.  All packages will be marketed for the winter season, for the months of January and February 2016.  (Various 20.10)

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7.2  New Jersey-Israel Healthy, Functional and Medical Foods Alliance

Israel’s leading role in medical-device, biotechnology and agricultural innovation is now expanding to the emerging science of functional foods.  A new collaboration between Rutgers University in New Jersey and Tel-Hai College in Israel’s Galilee will focus on formulating advanced edibles to tackle obesity and to manage diabetes, food allergies and other nutrition-related issues spiking to epidemic proportions in developed countries.  The New Jersey-Israel Healthy, Functional and Medical Foods Alliance will support scientific research, technology commercialization, startup incubation and “a world-class business cluster for the development of the healthy, functional and medical foods industry” in both Israel and New Jersey, according to a memorandum of understanding signed on 18 September at the Rutgers Food Innovation Center, a business incubation and economic development program.  “Functional foods” are defined as having a health benefit beyond basic nutrition, while “medical foods” are meant to be consumed or administered under a physician’s care.  The related field of botanical drugs, also to be explored through the academic and business exchange, consists of vegetable, plant, plant algae or fungi to provide health and medical benefits. (IDT 12.10)

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7.3  Israeli Bars Win International Awards

While the world has become increasingly aware of – and enamored by – Israel’s thriving restaurant scene, the local bar scene has perhaps been overshadowed by this success, as well as by the popular nightclubs.  But this underexposure may change.

The Imperial Craft Cocktail Bar, on Tel Aviv’s HaYarkon Street, was ranked the seventeenth best bar in the world in the 50 World’s Best Bars competition that took place in London recently.  The Imperial shot up to its top 20 position after reaching number 56 last year.  The bar also garnered the title of best bar in the Mideast and Africa for the second year running, beating out Zuma in Dubai.  The list is based on the opinions of more than 400 alcohol experts from around the world, who each chose five bars they had visited in the past five years.

Meanwhile, Israeli wine bar Tasting Room won the Middle East & Africa Bar category at the Restaurant & Bar Design Awards, in which 200 of the best restaurants in the world competed.  The ranking is significant not only for the Imperial, but also for Tel Aviv’s status as a popular tourist and nightlife destination.  (Ynetnews 10.10)

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7.4  Over a Quarter of Moroccans Speak Tamazight

Over 26% of Moroccans speak Amazigh, which is Morocco’s second official language after Arabic since the adoption of the 2011 constitution.  Morocco’s High Commission for Planning (HPC), announced that 89.8 % of Moroccans speak Darija, 96% of which live in cities and 80.2% in the countryside.  The results revealed that Amazigh-speaking people comprise 26.7% of the population, 14% of which speak Tachlhit, 7.6% Tamazight and 4.1% Tarifit.  According to the last population and housing census held in September 2014, Morocco’s population reached 33, 573, 292 people.  According to the same source, 66% of Moroccans can read and write in French, compared to only 18.3% who can read and write in English.  (MWN 13.10)

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8.1  Kadimastem Submitted Pre-IND Package to the FDA

Kadimastem submitted the documents and comprehensive information package to the FDA, in preparation for a Pre-IND meeting.  The meeting with the FDA is scheduled to take place in November in the US, and in it the development of the company’s cell-based therapy for the treatment of Amyotrophic Lateral Sclerosis (ALS) will be discussed, as well as the outline of Kadimastem’s clinical trial.  The aim of the meeting is to present the complementary results of the proof of concept animal model trial to the FDA, to lay out the product manufacturing plan (chemistry, manufacturing and controls), to outline the future framework for safety trials and to present the clinical framework for phase I/IIa clinical trials.  The result of the Pre-IND meeting will outline the agreed-upon path towards the application for clinical trials in humans.

The company recently reported success in a pre-clinical trial for the treatment of ALS in an additional animal model. The results of the trial demonstrated the efficacy of Kadimastem’s cell-based treatment for ALS.  The trial tested the efficacy of injecting the brain supporting cells (astrocytes) produced through the company’s unique technology from pluripotent stem cells.  The astrocytes were injected into the spinal fluid of ALS rat model, and have shown an improvement in the rats’ life expectancy and motor functioning.

Kadimastem’s unique technology enables the production of the cells which will serve as the treatment for the patients, in the company’s facility under GMP standards, as an off-the-shelf product for the treatment of large patient populations.  The injection into the spinal fluid is a standard procedure performed routinely in hospitals worldwide.  The company found that injecting the cells into the spinal fluid enables them to disperse throughout the spinal cord, it thus established this method of cell penetration in the future treatment of patients.  The injecting of healthy and functioning astrocyte cells into the nervous system of patients may provide systemic support for the damaged motor neurons, thereby inhibiting disease progression and improving the patients’ life quality and expectancy.

Ness Ziona’s Kadimastem is a biotechnology company, operating in the field of regenerative medicine – a groundbreaking field in which the malfunctioning of organs which leads to diseases is repaired by external cells, tissues or organs.  The company specializes in the development of human stem cell-based medical solutions for the treatment of diabetes and neurodegenerative diseases, such as ALS and Multiple Sclerosis.  (Kadimastem 07.10)

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8.2  FDA Approved InSightec’s Exablate System for Treatment in the USA

InSightec announced that the US FDA has approved InSightec’s next generation Exablate system to treat symptomatic uterine fibroids and changed the labeling to allow consideration for women who desire to maintain fertility.  The updated labeling specifies that ablation of uterine fibroid tissue can now be considered for women with symptomatic uterine fibroids, who desire to retain fertility and spare their uterus.  InSightec estimates that such change in labeling provides younger women suffering from symptomatic fibroids access to a new, non-invasive treatment option that is safe, effective and keeps their uterus intact without compromising their existing ability to get pregnant.  The approval is based on accumulated, documented clinical data on 118 patients’ pregnancies post Exablate MRgFUS treatments.  FDA approval of INSIGHTEC’s next generation Exablate system offers treating physicians a more advanced technology.

Tirat Carmel’s INSIGHTEC is the global leader in the technology of MR-guided-Focused Ultrasound (Exablate MRgFUS).  Founded in 1999, the company develops and distributes a non-invasive therapy platform that is transforming medicine by providing non-invasive therapeutic alternative to millions of potential patients around the world. INSIGHTEC is continuously expanding its applications ranging from functional neurosurgery to oncology and gynecology.  (Elbit Imaging 07.10)

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8.3  Teva Announces Approval of Three-Times-A-Week COPAXONE 40 mg/mL in Russia

Teva Pharmaceutical Industries announced that the Russian Ministry of Health has approved the Marketing Authorization license (MA) for three-times-a-week COPAXONE (glatiramer acetate injection) 40 mg/mL, a new dose of COPAXONE, for the treatment of patients with relapsing-remitting multiple sclerosis (RRMS).  This formulation of COPAXONE will allow for a less frequent dosing regimen for patients with RRMS in Russia.  The Russian Ministry of Health approval was based primarily on data from the Phase III Glatiramer Acetate Low-Frequency Administration (GALA) study. In the GALA study, which included more than 1,400 patients, the 40 mg/ml dosage of COPAXONE administered subcutaneously three times per week significantly reduced relapse rates at 12 months and demonstrated a favorable safety and tolerability profile in patients with RRMS.  Daily COPAXONE 20 mg, approved in Russia in 2010, continues to be available in Russia.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area.  In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products.  (Teva 08.10)

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8.4  Rosetta Genomics Raises $8,000,000 in Private Placement

Rosetta Genomics has entered into definitive agreements with investors to purchase an aggregate of $8,000,000 in units, consisting of ordinary shares and warrants, in a private placement.  Aegis Capital Corp. acted as the exclusive placement agent in connection with the private placement.

Rehovot’s Rosetta develops and commercializes a broad range of microRNA-based and other high-value molecular diagnostics.  Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs.  Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools.  (Rosetta Genomics 14.10)

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8.5  Izun Reports Positive Results from Phase 2 Randomized Trial in Diabetic Foot Ulcers

Izun Pharmaceuticals Corporation successfully completed a multicenter randomized, controlled trial comparing IZN-6D4, a topical pharmaceutical gel, to a matching active hydrogel placebo to treat diabetic foot ulcers.  The study was conducted at seven centers in Israel in 82 patients.

The results of the study showed a steady and continuous improvement in wound healing over the four-week duration of the trial for the active arm. IZN-6D4 demonstrated greater than 54% wound closure at week four compared to baseline.  The control group showed improvement at week one that plateaued at approximately 30% for the duration of the study.  The improvement in wound healing in the active arm was significantly greater than that of the control arm at P< 0.05. IZN-6D4 accelerated wound healing and the trial demonstrated a clinically relevant effect size.  Moreover, control arm patients were given the opportunity to utilize IZN-6D4 in open label fashion for an additional month after the conclusion of the study.  Those who chose to do so experienced incremental improvement in wound healing that approximated the 50% response rate results in wound healing seen in the active arm during the controlled study, thus validating the beneficial effect of IZN-6D4 in refractory wounds.

The Company intends to meet with the FDA and other regulatory authorities to request guidance for a 510(k) or equivalent device filing with accompanying medical claims.  Based on the outcome of these meetings, the company expects to be able to file for regulatory approval in 2016. Izun intends to make IZN-6D4 available for partnering in the United States, Europe and other territories.

Izun Pharmaceuticals is a US-based clinical stage pharmaceutical company with a wholly owned R&D center in Israel.  Izun’s technology platform allows it to develop botanical drugs by optimizing the extracted botanicals to yield polymolecular drug candidates.  These patented products are designed to impact on multiple specific receptor targets.  The main therapeutic focus is on agents that can reduce inflammation and accelerate healing.  (Izun 13.10)

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8.6  Rosetta Genomics Launches BRAF Mutation Assay

Rosetta Genomics launched a molecular test for BRAF mutation analysis to help personalize therapy for melanoma and colon cancer patients.  This newest assay will complement its broad offerings so that oncologists can optimize treatment decisions for their cancer patients.  Rosetta Genomics’ BRAF mutation analysis test utilizes highly specific and sensitive Competitive Allele-Specific TaqMan (CAST) PCR technology that can detect as little as 0.5% mutated DNA in a large, normal DNA sample.  BRAF mutations occur in up to 50% of malignant melanomas, and several FDA-approved BRAF inhibitor therapies have been introduced to the market for use in patients with late-stage metastatic melanoma.

Rosetta develops and commercializes a full range of microRNA-based and other molecular diagnostics. Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs.  Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools.  (Rosetta 12.10)

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8.7  Gamida Cell Announces Strategic Equity Investment by Major Pharmaceutical Company

Gamida Cell announced that Novartis will invest up to an additional $15 million in the Company in current and future equity.  The investment will be used to advance Gamida Cell’s clinical programs, including the development of NiCord, an experimental treatment for patients with high risk hematological malignancies (blood cancers).  The Company plans to initiate a Phase III clinical trial with NiCord in mid-2016.  NiCord is derived from a single cord blood unit, which is expanded and enriched with stem cells and immune modulatory cells, utilizing the Company’s proprietary NAM technology.

Under the terms of the agreement, Novartis will immediately invest $5 million in Gamida Cell for an additional 2.5% equity interest in the Company.  Additionally, subject to the close of an equity financing by the end of 2017 to fund the late stage development of NiCord, Novartis will invest up to another $10 million as part of the equity raise, subject to certain conditions set forth in the agreement.  This financing follows the initial August 2014 agreement under which Novartis invested $35 million in return for a 15% equity interest in Gamida Cell.  Novartis will not have rights or options to Gamida Cell products or technology under the terms of the agreement.

Jerusalem’s Gamida Cell is a world leader in cellular and immune therapies for the treatment of cancer and orphan genetic diseases.  The Company’s pipeline of products are in development to treat a wide range of conditions including cancer, genetic hematological diseases such as sickle cell disease and thalassemia, genetic metabolic diseases, and refractory autoimmune diseases.  (Gamida Cell 12.10)

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8.8  EarlySense Named “Fierce 15” Med Tech Company of 2015 by FierceMedicalDevices

EarlySense has been named by FierceMedicalDevices as one of 2015’s Fierce 15 med tech companies, designating it as one of the most promising private med tech companies in the industry.  Each year, FierceMedicalDevices evaluates hundreds of private companies from around the world for its annual Fierce 15 list, which is based on a variety of factors, including strength of technology, partnerships, venture backers and a competitive market position.

Earlier this year, EarlySense secured $28 Million in financing from a round led by Samsung Ventures. The Company also expanded its global footprint, signing a strategic partnership with Mitsui, one of the largest general trading companies in Japan.  Additionally, EarlySense achieved regulatory clearance South Korea and signed a leading distributor for the region.  In September, the company launched myEarlySense, its first OEM solution for the digital health consumer market for users to monitor and improve their sleep and overall wellness.  The technology has been integrated in Samsung’s recently unveiled SleepSense, and Beurer’s Sleep Expert 80, with additional partnerships in the works.

Ramat Gan’s EarlySense is the market leader in contact-free and continuous monitoring for the medical and consumer wellness markets, with a unique sensor that is placed under the mattress and advanced analytics that leverage big data capabilities to provide unique offerings.  The company’s solutions monitor heart and respiratory rate, as well as movement and sleep. EarlySense’s medical solutions for institution and home environments assist clinicians in early detection of patient deterioration and in identifying and preventing potential adverse events such as patient falls and pressure ulcers.  (EarlySense 14.10)

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8.9  Prawn Sex-Change Boosts Male Yields, Say Scientists

An Israeli-developed method to enhance prawn yields without resorting to genetic modification has started to take hold in Asia, the researcher who has developed the technology said.  Male prawns can grow up to 60% larger than females and a breakthrough by a team of researchers at Ben Gurion University in creating all-male prawn populations is significantly increasing income for farmers.  This technology is using a cutting-edge scientific approach called temporal gene silencing through RNA interference.  The idea is that this technology can produce an all-male population that is for the benefit of the end user, the grower.  The advantage of this technology is that with using all male with that technology is that they do not have to use any chemicals nor any hormones and it is a non-GMO.

The method involves carefully injecting females of the giant freshwater prawn known as “Macrobrachium rosenbergii” with a molecule that silences a gene.  This changes the sex of a female and ensures that all its eggs hatch as males.  The sex change occurs only in the generation that has been injected and does not affect the offspring, Sagi explained.  Delicate injection of the fluid that changes the sex of the females is administered by hand to each individual young prawn at a site in southern Israel before batches are shipped to growers in Asia.

Expert workers can inject as many as 2,000 prawns per day and as each individual can excrete thousands of eggs over several cycles, it can facilitate a population of millions in an industry of higher-end foods.  Israeli private firm Tiran Shipping, which has aquaculture interests in Asia, has invested in the technology and uses it to grow the prawns.  A Beersheba-based start-up called Enzootic established by the university and private investors focuses its research on developing prawns with the technology but academic research into additional applications is ongoing.  (Reuters 18.10)

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8.10  Chinese VC Firm Virtus Inspire Ventures Invests in Israeli Company Gordian Surgical

Gordian Surgical, a portfolio company of Trendlines Medical, recently announced the completion of a raise nearing $1 million, including an investment from Virtus Inspire Ventures, a Chinese venture capital firm.  Participants in the round are leading U.S. laparoscopic surgeons, including Prof. Barry Salky, and other investors.  Gordian intends to use the funds to complete American (FDA) and European (CE) regulatory processes, start first-in-man (clinical) trials, and prepare for market penetration.

Gordian has developed an innovative trocar that offers surgeons a simple, economical solution for opening and suturing (closing) internal incisions made during laparoscopic surgery.  The “two-in-one” trocar inserts sutures into the tissue surrounding the incision at the beginning of the procedure and anchors them to stay in place throughout the operation.  The built-in closure mechanism enables surgeons to easily close the sutures when the trocar is removed at the end of the procedure.  Minimally invasive, laparoscopic procedures involve making a number of small incisions in the abdominal cavity for placing cameras and surgical tools.  Despite the more than 10 million laparoscopic surgeries performed worldwide, the challenge of closing the abdominal incisions remains time-consuming, requires expertise, and poses risks of post-operation complications such as hernias.

The Trendlines Group invests in, incubates, and supports early-stage, medical and agricultural technology companies in Israel, a global leader in start-up ingenuity.  Trendlines Medical, an investment unit for medical innovation, works in partnership with innovators and investors, in an environment that encourages curiosity and fosters collaboration.  (Gordian Surgical

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9.1  Qualcomm & Mellanox Collaborate on Cost-Effective Data Center Platforms for Servers

Qualcomm Incorporated, via its subsidiary, Qualcomm Technologies, and Mellanox Technologies announced a multi-phase technology collaboration that brings Qualcomm’s server technology ecosystem one step closer to commercialization.  As part of the collaboration, Mellanox will offer Ethernet and InfiniBand interconnect solutions that, in conjunction with Qualcomm Technologies’ ARM instruction set based server CPUs, will be optimized for scalable server and storage infrastructures.  Mellanox’s product leadership with 10, 25, 40, 50, and 100 Gigabit per-second Ethernet and InfiniBand interconnect technology provides solutions for the most efficient hyperscale deployments including Web 2.0, cloud, big data, database and storage applications.  When paired with Qualcomm Technologies’ server CPU, the combined solution will enable advanced and cost-effective platforms for the next generation of datacenter infrastructure, delivering a significant return on investment.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  (Qualcomm 08.10)

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9.2  Israel Aerospace Industries Unveils Lightweight Satellite

Israel Aerospace Industries (IAI) is currently in advanced stages of development of an innovative communications satellite named AMOS-E which weighs about half the weight of other communications satellites in the market today.  AMOS-E’s life expectancy is about 15 years, and its projected weight will be about 1.5-2 tons.  The satellite is designed to provide a range of communication services to different customers, such as broadband Internet, TV and more.  AMOS-E will perform maneuvers in space with an electric propulsion system.  This innovative propulsion system is more efficient and smaller compared with chemical propulsion systems, used by most communications satellites.  This technology enables reducing the satellite’s weight by half, thus lowering launch costs, and making it more attractive to customers who want an affordable communication satellite with similar capabilities to those of large and expensive satellites.  The product line which will be based on AMOS-E allows IAI to enter new market segments in the field of communications satellites and to offer complete satellite operation capabilities at a competitive price.  The new satellite is generating great interest among potential customers.  (IAI 12.10)

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9.3  IAI is Boosting its Observation Satellites Activity

Israel Aerospace Industries (IAI) recently began construction of new observation satellites, employing either Synthetic Aperture Radar (SAR) or electro-optical payloads.  These innovative new satellites will utilize the advanced technologies, experience and know-how developed over the years by IAI, and provide the users with cutting edge performance.  The new satellites are planned to be launched from 2018 onwards.

One of the satellites is Eros C, a commercial high-resolution imagery satellite for ImageSat International (ISI). Eros C, weighing less than 400 kg, will join Eros-A and Eros-B in orbit in 2018.  Eros-C will allow ISI to offer its commercial customers high-quality imagery and superior resolution, increased coverage and improved accuracies.  Another satellite under construction these days is the unique TECSAR, which employs a Synthetic Aperture Radar payload, designed to provide images during day, night and under all weather conditions.  IAI was a pioneer in this field, launching its first TECSAR satellite in 2008, and has since continuously improved its capabilities.  With very high resolution, and extremely high maneuverability due to its light weight, TECSAR is designed to provide a wide range of tactical intelligence capabilities to demanding users.  Among the new satellites is also the light weight, highly maneuverable OPTSAT 3000 which includes a large, 70 cm diameter telescope that provides resolutions better than 40 cm and enables extremely flexible intelligence gathering.

These new satellites join, among others, the 5.3 ton AMOS 6 communication satellite, Italian OPTSAT 3000 and the scientific Venus observation satellite currently being built at IAI for the Israel Space Agency (ISA) and France Space Agency (CNES).  (IAI 12.10)

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9.4  AnyClip Extends Reach of Licensed Content through Partnership with LKQD

AnyClip announced a partnership with LKQD®, an ad serving solution built specifically for publishers to provide a screen-agnostic premium video monetization solution.  The agreement will extend the reach of AnyClip’s library of licensed content to smartphones, tablets, Smart TVs, and streaming devices.  LKQD’s ad serving platform pairs with a feature-rich video player to enable easy set-up and scalability for publishers, enabling them to reach their audience regardless of which screen they’re using.  This is achieved through the use of HTML5, which offers the flexibility to deliver device-agnostic viewing experiences.  The partnership between AnyClip and LKQD allows publishers to incorporate licensed video clips into their content, while also monetizing through AnyClip’s advertiser relationships and dynamic, in-stream ad capabilities.  The partnership will provide programmatic verification of mobile inventory by industry leading brand analytics partners to ensure brand protection and provide inventory transparency.

Tel Aviv’s AnyClip is a content marketing platform that connects top advertisers and publishers through premium video, offering in-stream targeting to create meaningful audience experiences.  The company’s data-driven approach to video delivery empowers brands to effectively match relevant playlists to more than 80 million unique viewers monthly by verticals and audience characteristics across any screen.  Leveraging industry-leading technology and data expertise, AnyClip protects brands from inappropriate or unsafe content by blocking non-human and malicious traffic on multiple levels through its proprietary SafePlay player widget.  (AnyClip 14.10)

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9.5  PowerUp Unveils World’s Only First-Person View Paper Airplane Drone

Tel Aviv’s PowerUp Toys unveiled the next generation of paper airplanes with the Powerup FPV – the only first-person view paper airplane drone.  Putting flyers into the cockpit of their own creation, Powerup FPV embeds a camera to transmit a live video stream of the flight experience straight to the user’s smartphone with a range up to 300 ft.  To make video streaming a reality, the company has partnered with Parrot, makers of the AR.Drone and Minidrones, to leverage their expertise in WiFi streaming and drone controls.

Launching on Kickstarter this November, PowerUp FPV gives users a truly unique flight and viewing experience, all based on a paper airplane.  PowerUp FPV can live stream the flight straight to a user’s Google Cardboard or other smartphone-powered head-mounted display (HMD).  Users can control their flight using their HMD, or use the PowerUp App’s on-screen gamepad to control the drone.  In addition, the fully rotating wide-view camera lets users capture their flight while looking forward from the cockpit, off the wings; or even take the ultimate “selfie” with a rear-view shot as users launch their planes and share them via WiFi straight to YouTube, Facebook, Twitter or favorite video sharing service.  (PowerUp Toys 15.10)

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9.6  Altair Powers Novatel Wireless’s New MiFi M100 4G LTE Personal Mobile Hotspot

Altair Semiconductor announced that its FourGee-3800/6300 Cat-4 chipset is powering Novatel Wireless’s new MiFi M100 Dragon, a 4G LTE personal mobile hotspot that launched last month on U.S. Cellular’s network.  The MiFi M100 is compatible with LTE bands 2, 4, 5, 12 and 17, and enables secure, super-fast 4G LTE service on U.S. Cellular and their roaming partners’ network.  It can connect up to 15 devices simultaneously and – leveraging Altair’s power-optimized technology – offers a battery life of 10 hours.  The Novatel Wireless solution also offers a mobile app for users to easily monitor data usage, battery life and connected devices.  Additionally, the MiFi M100 includes advanced security features, including corporate VPN compatibility, hacker prevention, password protection and anti-CSRF (spoofing).

Hod HaSharon’s Altair Semiconductor is a leading provider of single-mode LTE chipsets.  Altair’s portfolio covers the complete spectrum of cellular 4G market needs, from supercharged video-centric applications all the way to ultra-low power, low cost IoT and M2M.  (Altair Semiconductor 20.10)

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9.7  illusive networks Raises $22 Million in Series B Funding Led by NEA

illusive networks announced a $22 million Series B round of funding led by new investor New Enterprise Associates (NEA), one of the world’s largest and most active venture capital firms.  The round includes participation from new and existing investors Bessemer Venture Partners, Marker LLC, Citi Ventures, and Eric Schmidt’s Innovation Endeavors.  The new funding will further fuel illusive’s global expansion investing in sales and marketing, as well as expanding the engineering and support teams for the company’s patent pending security deception technologies.

illusive networks is deployed across dozens of leading financial institutions, insurance, retailers, law firms, healthcare providers, energy and telecommunication companies in the United States and EMEA.  illusive networks’ detection by deception technology has identified numerous advanced targeted attacks that went undetected by other solutions, thereby securing its customers’ networks from Advanced Persistent Threats (APT).

Launched in June 2015, illusive networks raised a $5M Series A round from leading cybersecurity foundry Team8. In just four months, illusive has made a significant impact on the cybersecurity market and continues on an accelerated growth path.  illusive networks is pioneering deception-based cybersecurity with its patent pending Deceptions Everywhere technology that neutralizes targeted attacks and Advanced Persistent Threats (APT) by creating a deceptive layer across the entire network.  By providing an endless source of false information, illusive networks disrupts and detects breaches with real-time forensics and without disruption to business.  (illusive networks 20.10)

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10.1  Israel’s CPI Falls More Than Expected

Israel’s Consumer Price Index (CPI) fell 0.4% on September, the Central Bureau of Statistics announced.  Expectations on the capital market were for a 0.3% fall in the index.  In 2015 to date, the CPI has fallen 0.6%.  In the past twelve months, it has fallen 0.5%.  The outstanding price falls in September were in culture and entertainment (5.1%), automobile fuels and oils (4.3%), domestic power (3.6%), and fruits (4.7%). The outstanding rises were in cucumbers (52.9%) and tomatoes (57.9%).  Poultry and fish rose by about 1%.  The CPI reading was affected by the low number of working days in September because of the incidence of the Jewish holidays.  In August, the CPI fell 0.2%.  At the time of the announcement of the Bank of Israel’s last interest rate decision, Governor of the Bank of Israel Flug estimated that tax cuts, abolition of the television license fee, and falls in fuel prices, would have an impact of -0.7% on upcoming CPI readings.  (CBS 15.10)

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10.2  Israel had 17 Billionaires & Over 88,000 Millionaires in 2015

There are 88,231 millionaires currently living in Israel, most of who have a net worth of between $1 – 5 million, according to the 2015 Global Wealth Report, published by Swiss investment bank Credit Suisse.  Seventeen of these are billionaires.  According to the report, about 124,000 members of the world’s top percentile come from Israel.  The Israeli middle class comprises 42% of the general adult population in the country and holds 40.2% of the wealth.

Overall, wealth declined in Israel by 7.6% in the past year, with the decline mostly being due to the fluctuating exchange rate between the dollar and the Israeli shekel, with the former gaining value.  (Ynetnews 14.10)

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11.1  ISRAEL:  Fitch Affirms Israel at ‘A’; Outlook Stable

On 16 October, Fitch Ratings has affirmed Israel’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘A’ and ‘A+’, respectively.  The Outlooks are Stable.  The issue ratings on Israel’s senior unsecured foreign and local currency bonds have also been affirmed at ‘A’ and ‘A+’, respectively.  The Country Ceiling has been affirmed at ‘AA-‘ and the Short-term foreign currency IDR at ‘F1’.

Key Rating Drivers

Israel’s IDRs balance a strong external balance sheet, robust institutional strength, solid macroeconomic performance and high financing flexibility with a high government debt/GDP ratio and elevated geopolitical risks.

The affirmation reflects the following key rating drivers:-

Israel’s general government deficit is consistently larger than peers’.  The deficit has narrowed so far in 2015 reflecting the use of an expenditure rule due to the absence of a budget, and is forecast at a seven-year low of 3.1% of GDP in 2015 (the central government deficit is forecast at 2.6% of GDP).  Tax cuts announced in the final quarter of 2015 will cause the deficit to widen to a forecast 3.5% of GDP in 2016 (with a central government deficit of 3% of GDP).  With non-defense spending among the lowest in the OECD and the ruling coalition constrained by a small parliamentary majority, near-term fiscal consolidation is unlikely.

We forecast government debt/GDP to remain stable at around 67%, well in excess of the peer median of 44%.  Financing flexibility is high, with deep and liquid local markets, access to international capital markets and an active diaspora bond program and US government guarantees in the event of market disruption.  The structure of debt is favorable.

Domestic politics can be turbulent, with coalition governments often not lasting their full term.  The new ruling coalition, formed in May 2015 after elections in March that followed the collapse of the previous coalition, holds only a one seat majority in the Knesset. Fitch considers that the small majority is constraining policymaking under the new administration.  A recent wave of security incidents highlights underlying tensions; Fitch expects little progress in the peace process with the Palestinian Authority.

Geopolitical risks weigh on Israel’s ratings.  Some neighboring countries do not formally recognize Israel’s existence and there are intermittent conflicts with military groups in surrounding countries and territories.  Tensions with Iran are high. The conflict in Syria poses risks to Israel and to other neighboring countries that could impact Israel, although direct spill-over has so far been negligible.

The external balance sheet is a strength and Fitch forecasts it will improve.  Gas production should ensure sustained current account surpluses, which we forecast to average over 5% of GDP over 2015-2017.  Likely large inflows of FDI will further bolster reserves and Israel’s net creditor position, from 35.6% of GDP at end-2014, compared with the ‘A’ range median of 7.9% of GDP.

Growth has slowed in recent years, partly reflecting weak world trade growth, but is in line with the peer median.  Growth is forecast at 2.7% in 2015, which would be the second consecutive year of sub-3% expansion for the first time in over a decade.  High frequency data show an improvement after growth of just 0.3% (seasonally adjusted, annualized) in the second quarter due partly to a strike in the chemicals sector.  It is too early to form a view on the potential impact of recent security incidents.  An improving external economic environment, investment and tax cuts are forecast to lift real growth back over 3% in 2016 and 2017.

Inflation is below peers and has been negative so far in 2015 due to lower commodity prices, currency strength and measures to stimulate greater competition.  Fitch expects a strengthening of the economy and the dropping out of one-off factors to push inflation into the lower end of the 1% – 3% target range by end-2016.

Israel’s well-developed institutions and education system have led to a diverse and advanced economy. Human development and GDP per capita are well above the peer medians and the business environment promotes innovation, particularly among the high-tech sector.  However, Doing Business indicators, as measured by the World Bank, have slipped below peers and government intervention risks setting back development of the gas sector.

Rating Sensitivities

The main factors that could, individually or collectively, lead to a positive rating action are:

  • Sustained progress in reducing the public debt/GDP ratio towards the category peer median.
  • A sustained easing in geopolitical risk.
  • A continued strengthening of the external balance sheet.

The main factors that could, individually or collectively, lead to a negative rating action are:

  • A sustained deterioration of the public debt/GDP ratio.
  • A serious worsening of geopolitical risk.

Key Assumptions

Current regional conflicts and tensions are assumed to continue, but their impact on Israel is not expected to worsen materially.  Fitch does not expect a military conflict between Israel and Iran.  Fitch assumes the civil war in Syria will continue without directly spilling over into Israel.

Renewed conflict with Hamas in Gaza is not ruled out, despite a serious degradation of the latter’s military capacity.  The tolerance of the rating and Outlook depends on the economic and fiscal implications of any conflict.  Fitch does not assume any breakthrough in the peace process with the Palestinians or a pro-longed serious deterioration in domestic security conditions.  (Fitch 16.10)

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11.2  EGYPT:  Egypt’s Exports Fall By 20%, Hit by Energy and FX Crunch

Export receipts in Egypt fell to $13.9 billion from January to the end of September 2015, down from $17.2 billion in the first nine months of the previous year, according to official data released by Egypt’s Ministry of Trade and Industry on 12 October.  Manufactured exports have been hit by both energy and FX shortages.

Egypt, which has gone from being a net-exporter to a net-importer of natural gas in recent years, has been diverting most of the fuel to power plants, leaving many factories unable to operate at full capacity.  The government will work to address the issues behind the decline, including securing enough gas for factories to operate at 100% capacity, according to the new Minister of Trade and Industry Tarek Kabil.

A foreign currency crunch is also behind the decline in Egypt’s exports.  The country is still experiencing a foreign currency shortage crisis almost four years after the uprising that toppled president Hosni Mubarak, as tourism revenues and Foreign Direct Investment have yet to recover to pre-2011 levels.  Egypt’s foreign currency reserves, which amounted to $36 billion on the eve of the revolution, reached a near critical $16.3 billion at the end of September 2015, only about a billion dollars more than what the country needs to cover three months’ worth of vital imports.

The Central Bank of Egypt, which has used Egypt’s foreign currency reserves to prop up the pound since the 2011 uprising, has allowed the pound to drop by 9.5% of its value since January 2015 to LE7.83 against the dollar and imposed new limits to curb the currency black market. However, many have suggested that the devaluation is insufficient.  An IMF delegation that visited Cairo in September recommended that Egypt adopt a more flexible exchange rate.

The Central Bank of Egypt has not set a target for the exchange rate.  New measures to curb the foreign currency black market, which flourished in the turmoil of the past years, have unintentionally stifled business activity, including exports.

In addition to capital controls in place since the 2011 revolution, the new limits imposed by the Central Bank include a $50,000 a month cap on foreign currency bank cash deposits to make it more difficult for traders to buy hard currency from the black market and deposit it in the banks.

The difficulties in obtaining hard currency to import raw materials has hit industries such as chemicals and building materials, which have seen their exports drop by 34% and 25% from January to September this year, respectively, according to official figures.

Declining global food prices has also meant that Egypt’s food exports have been facing tougher competition and therefore a potential loss of export revenue.  The value of Egypt’s food industry exports was down almost 11% to total $1.9 billion from January to September this year, while the value of agricultural exports fell to $1.7 compared to $1.9 billion in the same period of 2014.  (Ahram Online 13.10)

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11.3  EGYPT:  ‘Garbage Police’ Look to Clamp Down on Pollution

George Mikhail posted in Al-Monitor on 8 October that in August, Egypt’s Ministry of Environment declared a state of emergency to deal with a thick layer of air pollution — referred to by locals as the “black cloud” — that forms and hangs over Egypt at the end of every year as a result of farmers’ burning rice straw that accumulates and remains after the harvest.  The ministry launched several campaigns to discourage this activity.

On 17 September, Minister of Environment Khaled Fahmy announced the hiring of garbage inspectors to monitor the burning of refuse, another source of the black cloud.  The garbage guard positions are the latest addition to the Ministry of Environment’s efforts, which include imposing fines, to control these sources of air pollution.

Fahmy’s statement was met by a barrage of sarcastic criticism on social media and citizen complaints about the suffocating air and environmental pollution in several regions, including Cairo’s Abu Rgeila slums, Minya al-Qamh in Al-Sharqiyah governorate and El Marg in the Cairo governorate, among others.  On 19 September, the new prime minister, Sherif Ismail, ordered his ministers to find a radical solution to the problem of garbage collection to prevent the waste from being burned.

The garbage crisis moved toward critical mass after the 25 January revolution, with waste piling up due to state neglect.  People were left with no other option than to burn their garbage, negatively affecting the environment and contributing to the black cloud.  On 9 August, the Ministry of Environment pointed out to Egyptians that their garbage burning was raising the atmospheric temperature.

On 23 August, Fahmy announced the launch of a coordinated effort involving civil protection units to control the open sites where garbage was being burned.  The same day, his ministry announced that 70% of the black cloud had dissipated. In Beheira governorate alone, 29 fires were reported extinguished and 23 fines were issued for burning rice straw.

Amid the public sarcasm surrounding the creation of the garbage guard positions, Fahmy defended his decision on al-Hayah al-Youm TV on 17 September, reiterating, “One of the main reasons behind pollution and the black cloud in Cairo is burning garbage.  This is why we are trying to control the fires through the sporadic patrols of garbage guards.  Their mission is to monitor garbage and address any fires using special equipment.”

Mohammed Farouk, head of the department of residues and toxins at the Ministry of Environment, told Al-Monitor, “The ministry is using satellites to detect the burning of rice straw and garbage.  If such an incident is detected, the search patrols take action and prevent the fire from spreading.  These patrols have branches in all the governorates.”  He further stated, “Each administration has search patrols with experienced and specialized members who know how to deal with garbage fires.  They are skilled in using tools and enclosures to contain the fire.

“The search patrols can deal with all sorts of garbage fires, whether they result from municipal waste, which includes household garbage and items discarded by citizens, or medical waste, which is very harmful to the environment.  They work 24/7, and they coordinate with the relevant parties, like the environmental police and the Egyptian Meteorological Authority, to deal with garbage fires.”  Farouk also explained, “The ministry hires the members of the patrols that protect the environment from burning garbage and rice straw.  They should have certain competencies, like experience in the environmental sector, and they should have special training on how to deal with open-air fires.”

Maj. Gen. Hamed al-Akili, head of the environmental police, told Al-Monitor, “The environment law imposes sanctions on open-air fires and punishes those who commit this crime with a fine of 1,000 Egyptian pounds [$127] minimum and 20,000 Egyptian pounds [$2,554] maximum.”  Akili emphasized, “The administration is constantly launching campaigns, in cooperation with the Ministry of Environment, through search patrols that work day and night to address any garbage or rice straw fires in order to eliminate the black cloud.  These measures were taken last year as well, and the most recent campaign was launched in Gharbia and Zafti governorates.

“The percentage of garbage and rice hay burning violations reported to the administration range between 15 and 20 cases a day,” Akili said.  “More than 80% of the cause of the black cloud has been eliminated through the efforts of the search patrols.”

Ahmad Abdel Wahab, who teaches environmental sciences at Banha University, criticized Fahmy’s performance in dealing with garbage burning.  He told Al-Monitor that the minister’s statements are false and that the garbage guard patrols are mere propaganda.  He claims that they have no real effect and have not produced tangible results. Garbage burning persists.

Abdel Wahab commented, “The government is not benefitting from the garbage produced or municipal waste from households like in countries that have adopted recycling.  These countries have succeeded in preventing the accumulation of garbage and its incineration.  Egypt, however, is behind in recycling, and all its attempts in this regard remain primitive and have not contributed to solving much of the crisis.”  (Al-Monitor 08.10)

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11.4  TUNISIA:  IMF Executive Board Concludes 2015 Article IV Consultation with Tunisia

On September 30, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Tunisia.

Tunisia’s economy has been resilient throughout a protracted political transition and a difficult international economic environment.  The country has been facing headwinds from security threats and social tensions, which are offsetting the benefits from the successful conclusion of the political transition, lower international oil prices, and a recovering Europe.

After successfully recovering from the trough of 2011, growth momentum has waned in early 2015, with GDP growth averaging 1.2% (y-o-y) for the first semester as activity in the manufacturing, tourism, and mining sectors slowed significantly.  At the same time, unemployment has been persistently high. Headline inflation dropped to 4.2% in July, reflecting lower food prices and a prudent monetary policy.

External imbalances remain high.  Weak tourism receipts, buoying imports (especially energy and capital goods imports), and declining oil and phosphate exports widened the current account deficit to 8.8% of GDP in 2014, its highest level since the 1980s.  Exceptional olive oil exports and declining energy imports narrowed the deficit in the early part of 2015, but this improvement is not expected to last as tourism revenues – which were significantly impacted by the Bardo and Sousse attacks – are expected to drop this year.  Reserve buffers are holding up, helped by a successful international bond issuance earlier in the year.

The fiscal situation improved, with the structural fiscal deficit declining to 3.3% of GDP in 2014 due to strong revenue collection.  However, the budget composition weakened as public investment – which is necessary to sustain growth – has reached record lows of 4.2% of GDP while the wage bill – representing about 60% of revenues – rose.  The 2015 revised budget accommodates the short-term fallout of the recent economic slowdown, including through increased security expenditures and transfers to SMEs.

The banking system remains fragile, with the system’s capital adequacy ratio below the minimum regulatory requirement.  At 15.8%, non-performing loans of the banking sector continue to be high. Low deposit growth is keeping public banks structurally illiquid, increasing banks’ recourse to CBT refinancing.  Against this background, private sector credit growth remains modest, with its level well below potential.

The medium-term prospects remain favorable, with growth projected to increase to 4.7% by 2020.  They hinge on reduced security risks and easing of social tensions, and the successful and quick implementation of comprehensive reforms that improve the business climate and foster private sector development.

Executive Board Assessment

Executive Directors agreed with the thrust of the staff appraisal.  They commended the authorities for maintaining macroeconomic stability in the context of a prolonged political transition and a difficult international economic environment.  While all quantitative performance criteria under the Fund-supported program have been met, progress on structural reforms has been challenging.  Directors regretted the recent terrorist attacks, which weakened confidence and growth in 2015, and expressed their support for the authorities’ response.  Directors agreed that the successful completion of the political transition represents an opportunity for the authorities to press ahead with efforts to strengthen the fiscal position, complete financial sector reforms, and accelerate structural reforms to improve growth and employment prospects.

Directors considered the modest fiscal loosening to respond to weaker economic activity in 2015 to be appropriate, but stressed that a return to fiscal consolidation from 2016 onwards is needed.  In this regard, Directors urged the authorities to improve budget composition by containing the growing wage bill through civil service reform and by reducing energy subsidies in a sustainable manner through the implementation of a new automatic fuel price formula.  They also noted the importance of using fiscal space for priority social spending and stepping up the implementation of public investment from its currently low level.

Directors stressed the importance of growth-friendly fiscal reforms.  They welcomed the government’s commitment to adopt a tax reform that increases equity, efficiency and permanent revenues.  Strengthening public financial management and public enterprise monitoring would help reduce fiscal risks.  Directors also commended the authorities’ commitment to pension reform.

Directors welcomed the authorities’ prudent monetary stance.  They were encouraged by the recent move towards positive real interest rates and the central bank’s readiness to raise the policy rate further if inflationary pressures materialize.  Directors looked forward to further efforts to strengthen the monetary policy framework and to the adoption of the central bank law which will strengthen its independence and clarify its objectives.  They supported the authorities’ commitment to move toward greater exchange rate flexibility, supported by efforts to deepen the foreign exchange market, which will help strengthen reserve buffers and reduce imbalances.

Directors welcomed the steps being taken to modernize and strengthen the banking system and its governance.  They called for the swift completion of the recapitalization of all public banks and stressed the importance of ensuring regulatory compliance throughout the restructuring period.  They also emphasized the importance of modernizing the banking resolution framework, strengthening banking supervision and regulation, and introducing an effective bankruptcy law to support the resolution of nonperforming loans.

Directors stressed that a better business environment is key to bolster growth and job creation and strengthen competitiveness.  They welcomed the adoption of the competition law, and called on the authorities to step up efforts to revamp the regulatory environment—including through adopting long-standing legislation on investment—and to initiate labor market reforms aimed at addressing the high levels of unemployment.

It is expected that the next Article IV consultation with Tunisia will be held in accordance with the Executive Board decision on consultation cycles for members with Fund arrangements.  (IMF 14.10)

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11.5  ALGERIA:  Arabic in Algeria: Identity Tainted By Politics

Yacine Boudhane posted in Fikra Forum on 18 September that Amid continuing debate over school curricula, Francophone and Islamist movements are both exploiting language issues to further their political agendas, while the government attempts to distract the public from dire economic problems.

Since July 2015, a heated ideological debate on language and its relation to national identity has occupied Algeria, sparked by the Ministry of Education’s decision to use “dialect” or “colloquial” Arabic language in teaching during the early stages of primary school.  The inspector-general of educational affairs unveiled this decision at the ministry during a press conference to present the recommendations of a pedagogical forum held under the direct supervision of Prime Minister Abdelmalek Sellal and designed to examine Algeria’s weak educational system.  Minister of National Education Nouria Benghabrit-Remaoun has justified the decision to switch to Arabic dialect as a decision based on “purely pedagogical motives.”

Benghabrit-Remaoun emphasized that the use of local dialect in schools is not intended to rob Arabic of its position as Algeria’s official language as protected under the constitution, implemented after Algerian independence in 1962.  Instead, teaching in Arabic dialect will be an attempt to bring knowledge closer to new students in preparation to teach them standard Arabic at later stages.  Currently, according to the minister, Algerian students are suddenly hit with standard Arabic instruction at the beginning of their school life, even though most are at that point only accustomed to speaking either one of a variety of Algerian dialects heavily inflected with French or Spanish or Amazigh language.  Nevertheless, the minister’s statements and the proposed change to Algerian schools created waves of anger throughout the country to the extent that some have called for President Abdelaziz Bouteflika to intervene and remove Benghabrit-Remaoun from office.

Leading advocates of Standard Arabic include supporters of the Islamic movement headed by the Association of Algerian Muslim Ulama, Movement of Society for Peace president and Muslim Brotherhood affiliate Abderrazak Makri, and the Algerian National Movement headed by chairman of the Algerian Association for the Protection of the Arabic Language and alleged Algerian Baathist leader Othman Saadi.  These Standard Arabic advocates believe that the use of dialect in a teaching environment boils down to a plot against the Standard Arabic language, which already suffers from restrictions and marginalization compared to the use of French.  Many Algerians see French as the language of colonization and thereby an unsuitable language for education.  Although most Algerians use French in their daily conversations, they view education conducted in French, or by extension French-influenced dialects, as a continuation of Algerian dependence on France, the colonizer.

Supporters of Standard Arabic believe that teaching in dialect “threatens the fundamentals of the Algerian nation and puts its unity at risk.”  They also raise a fundamental question, asking which dialect the ministry would choose for the new language of instruction out of Algeria’s dozens of local dialects.  Favoring one dialect over another for schooling could produce serious social divisions and in turn threaten the unity and solidarity of Algerians.

There are also ideological arguments in opposition to the Ministry of Education’s proposal.  According to a statement issued by the Association of Algerian Muslim Ulama, “The Arabic language is one of the pillars of Algeria’s cultural identity, and we cannot bypass it under any pretext whatsoever.”  Meanwhile, the Islamist National Building Movement claimed that, “The decision to teach dialect at the expense of standard Arabic will sow chaos in the country,” and called on President Bouteflika to intervene by lifting the freeze on the Arabic Language Generalization Law.  The law was passed in January 1991 and frozen on 4 July 1992; that same year, former president Liamine Zeroual lifted the freeze and established the Supreme Council of the Arabic Language in Algeria to monitor Standard Arabic’s use and advancement.  But the law never entered into effect, and the activity of said Supreme Council was restricted to literary seminars.

Islamists and the Arab nationalist movement blame Standard Arabic’s difficulties on the French lobby that is deeply spread throughout the Algerian administration.  They believe that this group has thwarted all attempts to Arabize Algerian official departments and institutions as these institutions operate primarily in French, despite the constitutional passage listing Standard Arabic as Algeria’s official language.

In response to this Francophone movement, social network activists launched a campaign to collect one million signatures on a petition, which demanded that President Bouteflika substitute French with English in Algerian schools.  They argued that French is headed toward extinction even in its own country, whereas English is the language of science and technological development.

Several major Algerian figures have also been vocal in their opposition to the recent decision to implement dialect in school systems.  Algerian political sociologist Nasser Gaby argued that “this decision is not an Algerian national decision, but rather comes under international pressure, and is similar to the many other decisions that were previously imposed in the context of globalization and diminution of countries’ sovereignty.”

Algerian novelist and critic Omar Azradj believes that “blaming the failure and weak linguistic level of the educational system on Standard Arabic is not an innocent move.  It rather reflects malicious intentions that continue to question the ability of Arabic to be a strong means of cultural performance.”  Additionally, Azradj links the new decision to a longer history of colonialism, saying that “The inclusion of dialect in the Algerian educational system in order to destroy the Arabic language is not a new scenario.  It was planned during the colonial era ever since 1905 and then resurfaced after independence amongst individuals and a few male and female researchers who called for it.”

Hostility against the decision also seems connected to enmity against the minister of national education herself, which began when she took office in May of last year.  Because of her last name “Remaoun,” some Algerians raised questions about her origins, arguing that her last name might be “Jewish.”  Her participation in the so-called Bin Zagho Commission, which President Bouteflika tasked to prepare a reform plan for the educational system, has further increased the criticisms.  The Bin Zagho Commission came out with recommendations that Islamists considered a “Westernization scheme” threatening the fundamentals of the Algerian nation. Benghabrit-Remaoun has opened herself up to more criticism by committing serious errors when speaking Standard Arabic: she can barely form a complete sentence in the language.  These factors have all led to the accusation that the minister is part of a plot against Standard Arabic.

On the other hand, advocates of the Francophone movement believe that the Islamist-led smear campaign against the minister of national education proves that the Islamists do not want the implementation of any reforms in the weak educational system, whose curricula are immersed in a single dominant ideology and language.  French-language print media and well-known political figures — most notably al-Watan newspaper, the communist Democratic and Social Movement, the Workers’ Party led by Trotskyite Louisa Hanoune, and former president of the Rally for Culture and Democracy Said Saadi — launched several campaigns to support the minister’s initiative.  These arguments state that Arabic was imposed on Algerians and that Algerians would not have learned the language otherwise.

Supporters of this movement strongly believe that French is the only savior from ignorance for the Algerian people and blame the current educational system for contributing to the spread of religious extremism, since educational programs include materials that encourage religious hatred.  Some link this to the generation of extremists who orchestrated the miseries of the nineties, or “Black Decade,” that led to more than 200,000 Algerian deaths due to terrorism.

Looking at the essence and depth of this ideological polarization between the Francophone and Standard Arabic supporters, one can see that the issue of language in Algeria is primarily a political and ideological, rather than pedagogical, problem.  The Francophone movement, while blaming Arabic and its advocates for Algeria’s political, economic, and cultural disappointments, has failed to produce a modernist plan to free Algerian society from the impact of fundamentalism that has threatened the country for two full decades, despite its supporters’ position as the largest decision making power throughout Algerian institutions.

Conversely, proponents of Standard Arabic use the language, along with other components of their preferred identity, to achieve their political goals mainly related to the spread of their own ideas into Algerian society rather than advancement of the language itself.  For them, Standard Arabic becomes a tool to promote the agendas of certain political, sectarian and ethnic groups. Ironically, most of these proponents speak French, and some of them even send their children to study in French universities.

But most important, identity-related issues are often stirred up in Algeria by the authorities in order to keep Algerians distracted from the economic and social problems they continue to face.  The dialect issue has come to the fore at a time when Algeria is suffering through a severe financial crisis.  The economy has lost more than $50 billion in less than a year due to the collapse of oil prices in global markets.  Algeria relies on oil revenues for 98% of its general budget and economic programs, leading to general economic downturn in the wake of falling oil prices.  Compounding the economic danger, the country’s reserves of foreign currency fell from $200 billion in August 2014 to $157 billion as of this writing and are expected to fall by another $125 billion by the end of 2015.

Moreover, the collapse of oil prices caused an unprecedented drop in the value of the local currency against the dollar.  At one time, one U.S. dollar equaled 70 Algerian dinars.  Now, one dollar equals 105 dinars, triggering a massive increase in the price of consumer goods.  The country’s revenues are thus expected to decline by 70% beginning at the end of this year, which may force the government to resort to borrowing money from the International Monetary Fund, thereby threatening the state’s sovereignty through foreign intervention.

The dangerous economic situation has created a certain amount of confusion in the Algerian government, forcing it to announce the adoption of austerity measures.  Faced with pressure from the opposition and Algerians’ apprehension of an uncertain future, the government found itself obliged to create discussions on tangential issues to distract the people from focusing on possible ways of addressing the serious issues threatening the Algerian economy.  What better way to stir up controversy and distract people from the crisis that will face the country in 2018 than identity-related issues?

Returning to the issue of Standard Arabic language instruction, decisions related to this issue — a very sensitive one in Algerian society — should occur in conjunction with an open discussion involving the various political and cultural groups and civil society organizations.  This dialogue would allow the country to reach a consensus that would spare it from divisions that threaten the unity and solidarity of its society. In contrast, future language-related decisions should not be injected with the political and ideological agendas of one specific group or another, since there are no assurances that a certain group represents the majority of Algerians’ views.

Algeria’s educational system should be insulated from political and ideological polarization.  Attempts at reform should be carried out through academically motivated curricula developed in accordance with a strategic vision that contributes to creating human capital that will put the country out of its complete dependence on oil revenues.

Yacine Boudhane is an Algerian journalist. (Fikra Forum 18.10)

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11.6  MOROCCO:  ‘BBB-/A-3’ Ratings Affirmed On Fiscal & External Profiles

On 9 October, Standard & Poor’s Ratings Services affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on the Kingdom of Morocco.  The outlook is stable.


The ratings on Morocco are supported by political and social stability, economic growth prospects and a moderate government debt burden.  The ratings remain constrained by low income levels and high social needs, a relatively high external liability position, and the deterioration in external and fiscal debt stocks that has occurred in recent years.

In our view, Morocco has demonstrated its resilience at a time of widespread social and political upheaval in the regional context of the Arab Spring.  Unlike elsewhere in the Middle East and North Africa region, political turmoil has been contained.  This has been largely due to the 2011 constitutional revision adopted in a popular referendum, a rise in current spending by the government, and the continued popularity of King Mohammed VI.  In 2011, the Party for Justice and Democracy (PJD), an Islamist political party, won a plurality of seats in the elections for the Chamber of Representatives.  That election was the country’s first under the new constitution whereby the king appoints the head of government from the largest party in parliament.

The multiparty government coalition, led by the PJD, has broadly demonstrated a willingness and ability to reform substantial and fiscally burdensome programs, particularly the subsidy system, the state pension regime and public salaries.  In our view, the PJD’s victory in the September 2015 local elections has strengthened its capacity to push through sensitive reforms, notably further reduction in subsidies and reform of the struggling pension system, which are still pending.

Morocco fares reasonably well in international comparisons of governance and institutional quality.  For example, the World Bank ranks Morocco in the 53rd percentile globally for government effectiveness, 49th for rule of law, 50th for regulatory quality, and 32nd for political stability and absence of violence.  Transparency International, meanwhile, places the country in the middle of its Corruption Perceptions Index. (The World Bank ranking and the Corruption Perceptions Index are not direct inputs into our rating.)

Morocco’s economy grew by about 3.6% in 2011-2014. GDP growth has been held back by the country’s dependence on volatile agricultural output, weaker phosphate prices, and lower external demand from Europe.  We project growth to accelerate in 2015 to 4.6% from 2.6% in 2014, supported by a rebound in agricultural output.  We forecast economic activity to average about 4.5% in the medium term as we expect agricultural production to return to more normal levels.

In recent years, Morocco has successfully attracted French car manufacturers – such as Renault in 2007 and PSA Peugeot in June 2015 – to develop its emerging automotive industry.  In our view, the country will continue to attract foreign direct investments and its business environment should stay broadly supportive.  Morocco stands at 71 in the ranking of 189 countries in the World Bank’s Ease of Doing Business.  New economic sectors such as the automotive industry, aeronautics, and electronics are set to continue growing rapidly in line with the country’s industrial policy, which enjoys broad political support.  However, the country’s judiciary system needs reform to improve Morocco’s attractiveness to foreign investors.  Recent and ongoing judicial reforms, such as changes to the penal code, could improve matters over the medium term.

We project that the fiscal deficit will reach 4.3% of GDP in 2015 from 4.9% of GDP in 2014 as a result of subsidy and wage reforms.  We expect consolidation to continue apace, and the government to meet its fiscal target of a deficit of 3% of GDP by 2017.  Subsidies on fuel and food ballooned to over 6% of GDP following the start of the Arab Spring in 2011.  This led to wider fiscal deficits, and annual average changes in general government debt of more than 6% of GDP in 2011-2013.  However, the government has since managed to cut its subsidies bill substantially.  It has also taken measures to slow growth in other areas of current spending, such as public salaries.

Nevertheless, given that there has been some slippage from budgeted spending in previous years, particularly on subsidies and wages, we foresee implementation risks to the proposed cuts.  However, we expect a new budgetary framework to help boost discipline.  Notably, it should make wage appropriations binding, and increase the transparency and oversight of line ministries’ spending.  Capital spending has broadly stagnated in the past three years, squeezed by demands for sustained high operating spending, but it is due to rise in 2015 by 9% year on year.  This should help support economic growth and private-sector job creation to some extent.

The projected fiscal consolidation will help the debt ratios decline gradually over the medium term, according to our forecast.  We expect net general government debt (which excludes from gross debt the government’s liquid assets and the holdings of central government debt by other branches of state, such as public pension funds) to average 51% of GDP in 2015-2018.  The general government debt stock has risen quickly in recent years to fund wide deficits.  External financing has increased, and the government successfully tapped the international dollar and euro markets in 2013 and 2014, respectively, with issues of $750 million and €1 billion.

Morocco’s current account deficit shot up to nearly 10% of GDP in 2012, amid high prices for imported food and fuel products and weak demand for Moroccan exports from major markets in Europe, as well as weaker phosphate prices.  We expect the deficit to continue narrowing to 2.1% of GDP in 2018, from 5.8% in 2014, reflecting rising exports from newly developed industries (such as automotives) and lower imports owing to lower oil prices.  Lower hydrocarbon prices should significantly ease pressure on imports, of which fuel products accounted for nearly one quarter in 2014.  We have revised down our forecasts for oil and gas prices over the projected period.

We also forecast rising tourism receipts and higher export volumes of cars from the Renault factory in Tangier.  Cars have recently become the country’s leading export product by value, overtaking phosphates.  We also anticipate that increased phosphate production will support exports and, in turn, current account consolidation.  The expected slow economic recovery in key European markets for trade, investment, tourism, and remittances, particularly France and Spain, will also help Morocco’s external position in the next three years.

We expect foreign direct investment to finance a growing proportion of these deficits, from just over one-third in 2013, with external borrowing covering the remainder.  We forecast narrow net external debt to drop slowly as a proportion of current account receipts (CARs) to 26% in 2018 from an estimated 37% in 2015.  We forecast the country’s gross external financing requirements to be covered by its CARs over this period.  Meanwhile, our revised forecast for lower current account deficits in 2015-2018 now leads us to expect the country’s reserve coverage to be slightly higher than five months of current account payments.

In our view, the $5 billion 24-month Precautionary and Liquidity Line (PLL) approved by the International Monetary Fund in July 2014 helps bolster confidence in Morocco’s external position in a stress situation.  As with the two-year PLL granted in August 2012, we do not expect the authorities will need to draw on it.  Also supportive of Morocco’s external position are the pledged grants for project financing from Gulf Cooperation Council states, totaling about $1 billion per year in 2013-2017.

We expect that the Moroccan Central Bank, Bank Al Maghrib (BAM), will remain committed to the current pegged exchange rate regime for at least the next two years, and until a more supportive macroeconomic environment is in place, at which point the BAM has indicated its intention to liberalize the regime.  The current foreign exchange regime will continue to limit monetary policy flexibility.  Successive and substantial cuts by BAM of its reserve requirement ratio, from 15% in January 2008 to 2% in March 2014 have helped ease liquidity conditions on the domestic market and ensured adequate financing of the economy.  We expect credit to the economy to continue to grow at a moderate pace over the next few years, but at a lower rate than our projected nominal GDP growth.  Inflation should remain low–we forecast it will average 2% in 2015-2018, compared with 0.4% in 2014.


The stable outlook reflects our expectation that the consolidation of Morocco’s fiscal and external deficits will continue over the next few years, while economic growth accelerates under the influence of continued implementation of reforms.

We could lower the ratings if growth does not accelerate as markedly as expected, if the government deviates substantially from its fiscal consolidation path, or if the current account does not narrow as we anticipate.  We could raise the ratings if economic growth substantially exceeds our forecasts, and if monetary policy and exchange regime flexibility increase markedly.  (S&P 09.10)

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11.7  TURKEY:  Russian Market Huge Disappointment for Turkey

Last year, the Russian government banned imports of meat, dairy items, and fruit and vegetables from European countries in response to the sanctions they had imposed on Russia over the Ukraine crisis.  At the time, it was also announced that the affected products would be supplied by Turkey, sparking optimism in Ankara and among Turkish exporters.

Mehmet Cetingulec posted on 9 October on Al-Monitor that Turkey’s then-Agriculture Minister Mehdi Eker said that Russia was especially interested in animal products, milk, dairy items, white meat and fish.  In August 2014, a Russian delegation traveled to Ankara to discuss the issue and received a list of Turkish companies active in the relevant sectors.  Ibrahim Yigit, chairman of the parliament’s agriculture commission and who took part in the talks, said, “We reached an agreement with Russia. Technical teams have begun work on the issue.  This is something very profitable for Turkey. We have to make good use of this opportunity.  Our exports to Russia totaled 3,346,000 tons, now they will reach 5 or 6 million tons.  We used to supply 1.1 million tons of fresh fruit and vegetables to Russia; now the amount will reach 3-4 million tons.”

The head of the Turkish Agriculturalists Association, Ibrahim Yetkin, was equally upbeat, describing the deal as an “incredible opportunity” with little competition.  The Turkish press was jubilant, with one headline calling the deal an “embargo lottery for Turkey.”  Russian President Vladimir Putin remarked that Moscow “welcomed the Turkish producers’ intentions to increase meat, fishery, fruit and vegetable exports to Russia.”

A year later, however, the export data speaks of huge disappointment.  According to the Turkish Exporters’ Assembly (TIM), exports to Russia stood at $2.76 billion for the first nine months of 2015, a 39.6% decrease from $4.57 billion for the same period last year.  The economic crisis in embargo-stricken Russia, marked by curbed purchasing power due to currency depreciation, has been a major factor in pushing down Russian demand.  In addition, Turkish exports have been undermined by returned shipments found to contain contaminated products, which, by the way, are allegedly resold to the Turkish market.

The well-respected daily Cumhuriyet broke the scandal on 27 September under the headline “They feed the poisonous food to us.”  According to the report, tons of fresh fruit and vegetable exports from Turkey were returned this year because they contained residual pesticides and western flower thrips, slender insects invisible to the naked eye.  The produce — mostly tomatoes, apricots, peppers, cherries and pears — was returned mainly by Russia but also by Switzerland, Germany and other European Union countries.  In March, Russia returned a shipment of 25 tons of tomatoes. According to the Dogan News Agency, the Russian agricultural watchdog Rosselhoznadzor had denied entry because of western flower thrips.

The head of the Agricultural Engineers’ Chamber, Ozden Gungor, told Cumhuriyet that the use of pesticides in Turkey had increased from 1.3 kilograms per hectare to 1.7 kilograms per hectare in the past three years, with the amount reaching up to 3.1 kilograms per hectare in the Mediterranean region.

So what happened to the returned shipments?  Gungor said contaminated fruits and vegetables are supposed to be destroyed, but he has never witnessed such a procedure, suggesting the products might be sold to local markets.

Meanwhile, Turkey’s overall exports were also down in the first nine months of the year, falling to $106.29 billion, a 10% decrease from the same period last year.  Exports to other major countries have also declined.  After Russia, the second-largest decrease was in exports to Iraq, which were down 20.4%, from $7.83 billion to $6.23 billion, according to TIM figures.  Germany was third on the list, with a decline of 14.16%, from $11.24 billion to $9.6 billion, followed by exports to France, which were down 13.9%, from $4.91 billion to $4.23 billion.

The prospect of increased food sales to Russia last year had been a morale booster for Turkish exporters, who had suffered significant losses in the Iraqi market amid the turmoil created by the Islamic State.  The Russian market was therefore seen as a major opportunity and chance to compensate for losses elsewhere.  As the Turkish saying goes, the calculation made at home went awry at the market. The hopes for a boom in exports to Russia have come to naught.

Mehmet Cetingulec is a Turkish journalist with 34 years professional experience, including 23 years with the Sabah media group during which he held posts as a correspondent covering the prime minister’s and presidential offices, economy news chief and parliamentary bureau chief.  For nine years, he headed the Ankara bureau of the daily Takvim, where he also wrote a regular column. He has published two books.  (Al-Monitor 09.10)

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