Fortnightly, 29 June 2016

Fortnightly, 29 June 2016

June 29, 2016


29 June 2016
23 Sivan 5776
24 Ramadan 1437




1.1  Ministerial Committee Approves 6 Sundays Off Per Year
1.2  PM Netanyahu Signs Plan with Cisco to Advance Digitization of Israel
1.3  Israel and Turkey Announce Agreement to Restore Diplomatic Ties


2.1  BIRD to Invest $7.5 Million in 9 New Projects
2.2  Eyeview Raises $21.5 Million
2.3  Nexar Raises $10.5 Million
2.4  Sixgill Raises $5 Million
2.5  Nuro Secure Messaging Raises $2.6 Million
2.6  Interlude Announces Strategic Investment by Sony Pictures Entertainment
2.7  Bessemer Invests $22 Million Into Yotpo to Expand Workforce & Operations
2.8  Israel Military Industries Signs $39 Million Civilian Deal in US
2.9  LightCyber Raises $20 Million to Meet Growing Global Demand
2.10  Leviathan Partners Investing $120 Million to Develop Oil Field
2.11  Kwik Raises $3 Million
2.12  Accenture Acquires Maglan, Expands Security Services in Israel
2.13  Accenture Joins “The Floor,” a New Financial Technology Hub in Tel Aviv
2.14  Dentsply Sirona Acquires MIS Implants
2.15  Aurum and Humavox Sign Agreement for Merger
2.16  Kaiima Announces the Growth and Expansion of Their US Operations
2.17  Lumus Raises $15 Million to Scale Expansion


3.1  CAE Awarded C$145 Million in Contracts by UAE Armed Forces
3.2  UAE Firm Acquires US Commercial Property in $48 Million Deal
3.3  Dow is First Company to Receive Trading License in Saudi Arabia
3.4  3M & Pfizer Win Licenses to Operate in Saudi Arabia
3.5  Increasing Disposable Income Creates Saudi Opportunities for the Food Retail Market
3.6  IKEA Signs Deal for Jeddah Mall Anchor Store


4.1  Israel Erects World’s Highest Solar Tower


5.1  Lebanese Consumer Prices Witness Annual Fall of 2.45% in May 2016
5.2  Ministry of Industry Plans to Reduce Lebanon’s Balance of Trade Deficit
5.3  Jordan & IMF Reach Agreement on 3 Year Extended Fund Facility
5.4  Jordan’s Medical Tourism Debts Rise While Tourist Numbers Fall
5.5  Jordan & Saudi Arabia to Cooperate on Nuclear Energy

♦♦Arabian Gulf

5.6  Qatar’s Foreign Trade Surplus Halves to $2 Billion in May
5.7  Italy Lands Largest Ever Naval Export Deal from Qatar
5.8  UAE Approves Draft Law to Regulate Ownership of Dangerous Animals
5.9  Dubai Announces Plan for New Medicine & Health Services University
5.10  Saudi Military Spending Jumps 50% to $9.3 Billion
5.11  Saudi Arabia Approves 100% Foreign Ownership in Retail

♦♦North Africa

5.12  Egyptian Parliament Approves Tariff Increase on Hundreds of Imported Goods
5.13  Amid Soaring Inflation, Central Bank of Egypt Raises Interest Rates
5.14  Egypt Signs 3 Grant Deals With Canada Worth C$30.6 Million
5.15  Egyptian Cotton in Peril as Exports Slide
5.16  Study Ranks Morocco as Most Reputable Arab Country
5.17  Morocco’s Economic Growth to Stand at 1.2% in 2016, 4% in 2017
5.18  Morocco’s Inflation Forecast Revised Upwards for 2016
5.19  Morocco Attracted $3.2 Billion of Foreign Direct Investments in 2015


6.1  Eurozone Approves Bailout Payment to Greece
6.2  Greece’s Jobless Rate Rises to 24.9% in First Quarter



7.1  Knesset Votes to Make ‘Aliyah Day’ a National Holiday
7.2  Eid Al Fitr Holidays Announced in Oman & UAE


7.3  Oman’s Population Stands at 4.44 Million as of May 31st


8.1  The Stockton Group & Syngenta Development Agreement for New Biofungicide
8.2  BioBee to Ship 500 Million ‘Predatory Bugs’ to Russia
8.3  Biological Industries Announces New Agreement with Mediatech
8.4  Rosetta Genomics Receives Approval from New York State for HEME FISH-based Assays
8.5  E. T. View Medical to be Acquired by Ambu A/S
8.6  Israel – Ground Zero for Cannabis Research in the World
8.7  MedyMatch & Capital Health Collaborate on Artificial Intelligence Platform for Emergency Rooms
8.8  Monsanto & TargetGene Agree on Gene-Editing Technology
8.9  Marrone Bio & Groundwork BioAg Sign Seed Treatment Development Agreement
8.10  FDA Acceptance of Teva NDA for Fluticasone RespiClick Inhalers


9.1  Rafael Concludes First Exports of Shoulder-Fired Anti-Tank Missile
9.2  Lockheed Martin and Israel Celebrate Rollout of Israel’s First F-35 ‘Adir’
9.3  Zore Develops Smart Gun Lock
9.4  Mobileye Ranked Among ‘Smartest’ Firms in the World
9.5  Bsecure Launched B$URE, the Next Generation of Counterfeit Money Detectors
9.6 & Mellanox Join Forces to Drive E-Commerce Artificial Intelligence
9.7  Mellanox Announces Next Generation ConnectX-5
9.8  Verklizan Expands Support for Essence Care@Home Platform
9.9  WakingApp Upgrades Entice Chinese Market with VR, AR, IoT Capabilities


10.1  Israel’s Consumer Price Index Rises by 0.3% in May
10.2  Unemployment Rate in Israel Hits Historic All-Time Low of 4.8%
10.3  Israel’s First Quarter Growth Figure Revised Upwards


11.1  JORDAN: A New Role for Jordan’s Parliament
11.2  EGYPT: Egypt’s Costly Nuclear Project
11.3  SAUDI ARABIA: Salman’s Saudi Arabia More Ambitious Than Ever
11.4  EGYPT: Will Egypt Stop Listing Religion on Official IDs?
11.5  EGYPT: How Egypt Plans to Address its Growing Water Crisis
11.6  TUNISIA: Tunisia Aims For More Sustainable Growth, But Reforms Will Be Key
11.7  TUNISIA: From Political Islam to Muslim Democracy – Ennahda Changes Course
11.8  TURKEY: Reforms Key to Durable Turkish Macroeconomic Improvement
11.9  TURKEY: Where Does Erdogan Want To Take Turkey?
11.10  TURKEY: Why Turkey is Making a Return to Libya
11.11  TURKEY: Turkish-EU ties in Throes of a Slow Death
11.12  TURKEY: Turkish Students Up in Arms Over Islamization of Education


1.1  Ministerial Committee Approves 6 Sundays Off Per Year

The Ministerial Committee for Legislation on Sunday approved a bill giving Israelis six long weekends per year to improve the balance between family life and work.  The bill, proposed by Kulanu MK Eli Cohen, would give workers and schoolchildren six Sundays off per year, creating long weekends.  Sunday is the first day of the Israeli work and school week, and while many employees and some schools work Sundays to Thursdays, many others work six days per week.  To avoid reducing the number of school days and to coordinate between students and parents, the school summer vacation will be shortened by two days and the Passover and Hanukkah vacations will be shortened by four days.  Once it passes all readings, the bill is scheduled to take effect in January 2017.

Israel’s per hour work productivity is considered one of the lowest in the world, with the Israeli employee working an average of 43 hours a week, three hours more than the OECD average of 40 hours.  The bill is based on the premise that more leisure time with the family will boost other important sectors in Israeli economy and will prompt growth in fields such as tourism, commerce, culture and leisure.  Furthermore, studies have shown that reducing work hours actually increases productivity.  The bill has garnered broad support from coalition lawmakers and a ministerial team will be assembled to examine how to implement the law.  (IH 27.06)

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1.2  PM Netanyahu Signs Plan with Cisco to Advance Digitization of Israel

Prime Minister Benjamin Netanyahu met with Cisco Executive Chairman John T. Chambers in Jerusalem on 26 June.  The two signed a memorandum of understandings between the Israeli government and the leading internet technology company outlining plans to work together to advance digitization in Israel.  Among the many areas for cooperation noted in the memorandum are digital health, digital education, cloud solutions, the creation of smart cities and innovation centers, and digital inclusion to increase digital accessibility in weaker populations.  (IH 27.06)

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1.3  Israel and Turkey Announce Agreement to Restore Diplomatic Ties

On 27 June, Israel and Turkey formally announced an agreement to normalize diplomatic relations.  The agreement will renew official diplomatic ties, including the exchange of embassies.  The dispute between Israel and Turkey began six years ago when Israel boarded the Mavi Marmara, a ship launched from Turkey by pro-Palestinian activists to Gaza.  The Israeli government has since apologized for the incident and Israeli-Turkish ties have been improving since a conciliatory phone call in 2013.  Under the agreement, Israel will pay $20 million to the families of the activists killed on the Mavi Marmara.  Though Turkey had stressed that the lifting of the cordon around Gaza was a necessary condition for restoring ties, the cordon will remain in place but Turkey will be allowed to deliver humanitarian aid through the neighboring Israeli port of Ashdod.  (Various 27.06)

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2.1  BIRD to Invest $7.5 Million in 9 New Projects

During its June meeting, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation approved $7.5 million in funding for nine new projects between U.S. and Israeli companies.  In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of all projects to approximately $21.5 million.

The nine projects approved by the Board of Governors are in addition to the 931 projects which the BIRD Foundation has approved for funding during its 39 year history.  To date, BIRD’s total investment in joint projects has been over $330 million, helping to generate direct and indirect sales of more than $10 billion.  The projects approved include:

Cellect Biotechnology (Kfar Sava) and Entegris (Billerica, MA): Improved stem cells selection system.

Evogene (Rehovot) and Arcadia Biosciences (Davis, CA): Novel drought tolerant wheat varieties.

File X (Ness Ziona) and Brimrose (Sparks, MD): Real-Time AOTF-based hyperspectral imaging system for pollution detection.

Hinoman (Or Yehuda) and Benchmark Biolabs (Lincoln, NE): Vaccine for Newcastle virus disease from aquatic plants source.

Israel Aerospace Industries (Ben Gurion Airport, Israel) and Honeywell (Morris Plains, NJ): Sense and Avoid for UAVs.

Kamada (Ness Ziona) and Baxalta (Bannockburn, IL): Treatment for prevention of lung transplant rejection.

Keystone Heart (Caesarea) and SurModics (Eden Prairie, MN): Novel medical device for cerebral protection during cardiovascular procedures.

MedAware (Ra’anana) and Becton Dickinson (Franklin Lakes, NJ): Prescription Error Surveillance.

Mellanox (Yokneam) and Chromis Fiberoptics (Warren, NJ): Polymer Optical Fibers for data centers.

The BIRD Foundation promotes collaboration between U.S. and Israeli companies in various technological fields for the purpose of joint product development.  In addition to providing conditional grants of up to $1 million for approved projects, the Foundation assists by working with companies to identify potential strategic partners and facilitate introductions.  Projects submitted to the BIRD Foundation are reviewed by evaluators appointed by the U.S. National Institute of Standards and Technology (NIST) and by the Israel Innovation Authority, formerly the Office of the Chief Scientist (OCS) at the Israel Ministry of Economy and Industry.  (BIRD 27.06)

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2.2  Eyeview Raises $21.5 Million

On 15 June, Eyeview announced it has received $21.5 million in Series D financing led by new investor Qumra Capital.  Existing investors Marker LLC, Innovation Endeavors, Nauta Capital, Gemini Israel Ventures and Lightspeed Venture Partners also participated in the financing round.  Eyeview has raised $56.8 million to date including the latest financing.  The company will use the funding to further invest in its sales, marketing, and engineering efforts.

Tel Aviv’s Eyeview is a video advertising technology company and the market leader in providing brands with ROI on their video advertising spend.  Eyeview’s VideoIQ platform infuses consumer, brand and retail data into a results-driven decisioning engine to programmatically deliver 1-to-1 personalized video.  VideoIQ provides best-in-class access to highly viewable and guaranteed fraud-free inventory across television, desktop, tablet and mobile.  Eyeview’s platform can be provided as a managed service by Eyeview’s team of analysts, video producers, and campaign experts or through a self-service interface.  (Eyeview 15.06)

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2.3  Nexar Raises $10.5 Million

Tel Aviv’s Nexar has closed a Series A financing round of $10.5 million.  The investment was led by new investors Mosaic Ventures and True Ventures, with seed backers Aleph and Slow Ventures also participating.  Including the latest financing, the company has raised $14.5 million to date.  Nexar, which uses smartphones to create an Artificial Intelligence (AI) supported vehicle-to-vehicle network that works to predict and prevent accidents, is part of the self-driving car technology revolution.

Having launched its app for iOS in February, Nexar is being used by drivers in 130 countries.  Since their launch, they have been running intensive programs in San Francisco, New York City, and Tel Aviv to build a community of users and improve the system.  Since Nexar launched its dashcam, the smartphones managing it have captured, analyzed, and recorded over 5 million miles of driving in San Francisco, New York, and Tel Aviv.  The company’s algorithms have now automatically profiled the driving behavior of over 7 million cars, including more than 45% of all registered vehicles in the Bay Area, and over 30% of those in Manhattan.

Using the smartphone’s camera, machine vision, and AI algorithms, Nexar recognizes the license plates of the vehicles around it, and tracks their location, velocity and trajectory.  If a car speeds past or performs an illegal maneuver like running a red light, that information is added to a profile in Nexar’s online database.  When another Nexar user’s phone later detects the same vehicle, it can flash up a warning to give it a wide berth.  (Globes 15.06)

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2.4  Sixgill Raises $5 Million

Israeli cyber security startup Sixgill has closed a $5 million series A financing round led by technology holding company Elron Electronic Industries.  The company also announced its official launch on 15 June.

The Dark Web has become an encrypted and anonymous hub for nefarious activity.  It is the source of many cyber-attacks and hacks and facilitates the exchange of illicit information and collaboration on criminal and terrorist plans.  Packed with difficult to find forums and pages, the Dark Web can be seen as a social network with different pieces of communications and data scattered across it.  Due to its disparate nature, accessing information regarding an upcoming hack attack is very difficult.  Sixgill solves this problem by using proprietary algorithms and technology to connect the Dark Web’s dots, and provide actionable information enabling organizations to prevent attacks against them and their employees.

Based in Yokneam, Sixgill is a cyber intelligence SaaS startup that analyzes the Dark Web.  The new funds will be utilized to increase Sixgill’s ability to detect and defuse cyber-attacks and sensitive data leaks originating from the Dark Web before they occur, and to provide clients with this information through real-time alerts.  (Globes 15.06)

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2.5  Nuro Secure Messaging Raises $2.6 Million

Nuro Secure Messaging has closed a $2.6 million financing round.  Erez Kreiner, former director of Israeli security in Europe and director of Israel’s National Cyber Security Authority, participated in this round that will help Nuro accelerate its go-to market strategy and grow its product offerings to its growing list of international customers in industries as diverse as finance, healthcare, law and advertising.  Tel Aviv-based startup Nuro Secure Messaging is a cognitive enterprise-grade secure group-messaging and collaboration platform designed for employees and external partners for corporations, government agencies and the military to communicate in a controlled and compliant private messaging environment.

Nuro addresses the challenges institutions must confront on group-messaging and collaboration platforms.  In particular: the lack of security, privacy, data ownership, transparency, management, compliance and control across all devices.  Nuro is the only secure group-messaging platform to draw on IBM Watson’s cognitive language pattern recognition technology to ensure breaches are detected in a timely fashion.  Nuro can analyze patterns in messaging and provide the transparency and predictive analytics that organizations need to ensure that their business communications stay in the workplace and that breaches are not only detected, but more importantly, prevented.  (Globes 15.06)

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2.6  Interlude Announces Strategic Investment by Sony Pictures Entertainment

Sony Pictures Entertainment (SPE) has made a strategic investment in Interlude.  SPE will also collaborate with Interlude on the development of entertainment content to be distributed on Interlude’s Eko platform.  New audiences have grown up with a much more active relationship with entertainment than in the past.  They are used to shaping what they want to see and hear, rather than passively sitting and absorbing content.  Until now, video storytelling has only been passive.  The Eko platform changes this by enabling creators to easily script and craft stories that can be shaped by the viewer based on his or her explicit or implicit preference.

The Eko platform includes substantial breakthroughs in real time seamless video and audio, as well as user-response technologies.  These all have been invented by Interlude’s team to serve the creative needs of artists using this new medium.  Moreover, with a new, active relationship between the story and consumers, Eko enables media companies and brands to benefit from unprecedented viewer engagement.

Israel’s Interlude is a media and technology company that empowers deep emotional bonds between storytellers and consumers through a new medium that lets people shape the story as it’s being told.  The company’s patented technology forms the basis of its consumer platform, Eko, enabling the creation and delivery of stories told in live action video that allow viewers to step into the story.  In an Eko video, the story, in effect, listens and can adapt in a multitude of ways as it unfolds.  (Interlude 16.06)

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2.7  Bessemer Invests $22 Million Into Yotpo to Expand Workforce & Operations

Yotpo announced the completion of a $22 million financing round led by Bessemer Venture Partners.  Yotpo helps firms create customer content by messaging users through email and SMS to get their reviews about a product they have purchased.  It adds marketing features such as coupons, and enables customers to upload photos of themselves with the new product they have acquired.  After revenue, number of customer and amount of content collected saw a “triple digit” jump year on year, according to company data, Yotpo is now eyeing enterprise businesses as its next target.  Yotpo plans to increase its workers in Tel Aviv by 100 and double the number of its New York employees to 100.  It also has plans to open two additional offices in EMEA [Europe, the Middle East and Africa] and another location in the US.

Tel Aviv’s Yotpo is a customer content marketing platform that generates reviews, social Q&A and rich media and uses this content to drive traffic and increase conversions.  Their vision is to maximize the potential of User-Generated Content (UGC) for every business and redefine the way they market themselves via Customer Content Marketing.  (Yotpo 15.06)

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2.8  Israel Military Industries Signs $39 Million Civilian Deal in US

On 22 June, Israel Military Industries confirmed it signed a $39 million deal to supply the U.S. civilian market with small caliber ammunition.  The deal includes supplying U.S.-based distributors with light munitions used for hunting, sports and in shooting ranges.  The order was placed by distributors that the IMI have been collaborating with for over 2 years and is based on a business strategy seeking to direct one-third of the company’s sales to the civilian market.  Meanwhile, the U.S. Army has recently increased its orders with Israel Military Industries, including key component for its flagship Modular Active Protection System program.  (IH 22.06)

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2.9  LightCyber Raises $20 Million to Meet Growing Global Demand

LightCyber announced the completion of a $20 million financing round.  The round was led by the US-based group, Access Industries, through its Israeli technology investments entity, Claltech, and network security luminary Shlomo Kramer, who joined the LightCyber Board of Directors last year.  Existing investors Battery Ventures, Glilot Capital Partners and Amplify Partners also fully participated in the fundraising.

The new funding will be used for fueling further growth in sales and marketing worldwide.  LightCyber has been expanding rapidly since its last round of funding in September 2014.  Last month, the company announced the opening of its EMEA regional headquarters and operations in the UK and DACH (Germany, Austria and Switzerland).  It also started its APAC operations earlier this year.  LightCyber has grown its sales team by 150% over the past three months and plans to grow it by a total of 400% by year end.

Ramat Gan’s LightCyber is a leading provider of Behavioral Attack Detection solutions that provide accurate and efficient security visibility into attacks that have slipped through the cracks of traditional security controls.  The LightCyber Magna platform is the first security product to integrate user, network and endpoint context to provide security visibility into a range of attack activity.  (LightCyber 22.06)

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2.10  Leviathan Partners Investing $120 Million to Develop Oil Field

The Leviathan partners Ratio Oil Exploration and Delek Group units Avner Oil and Gas and Delek Drilling notified the Tel Aviv Stock Exchange on 22 June that together with the license operator Noble Energy, they will be making an initial $120 million investment in developing the field.  They also reported that they are in talks with several entities on gas export deals.  The $120 million will be spent on FEED services (detailed engineering specifications) and procurement of equipment and services for developing the field.  Although the High Court of Justice is yet to approve the new gas outline agreement with the “softened” stability clause, the partners reported that they are in talks with potential customers both in Israel and abroad on gas supply agreements.  The partners still estimate that gas will begin flowing from Leviathan by Q4/19.  (Globes 22.06)

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2.11  Kwik Raises $3 Million

Israeli Internet-of-Things startup Kwik has raised $3 million in a financing round led by Norwest Venture Partners.  Tel Aviv’s Kwik is an open end-to-end IoT platform connecting retailers, brands and delivery providers, enabling brands to develop direct relationships with their consumers in their homes. In effect, the company has developed smart buttons, similar to Amazon’s dash buttons, which let consumers order products from their home by pressing a button.  Kwik is working with Domino’s, Budweiser, Huggie’s and others on the subject.  With a beta-site operating in Israel, the company will use the proceeds of the financing round to expand to the US.  (Globes 22.06)

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2.12  Accenture Acquires Maglan, Expands Security Services in Israel

Accenture has acquired Maglan, a privately-held Israeli cybersecurity company specializing in offensive cyber simulation, vulnerability countermeasures, cyber forensics and malware defenses, and IT security research and development with a focus on threat intelligence. Financial terms of the transaction were not disclosed.  The acquisition brings to Accenture a team of highly skilled cybersecurity professionals, who honed their skills fighting cyber-crime and confronting cyber espionage around the globe.  The acquisition advances Accenture’s strategy of leveraging Israel as a cybersecurity innovation hub to provide clients with cross-industry cyber defense consulting.  Maglan has specialized tools and methodologies that will augment Accenture’s full range of security services and defensive countermeasures, comprising strategy and risk management through enterprise and extended enterprise security.

Based in the Tel Aviv metropolitan area, Maglan was founded in 1998 and has performed extensive penetration tests for numerous organizations in Europe. Its clients include companies in the financial services, telecommunications and automotive industries.  (Accenture 20.06)

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2.13  Accenture Joins “The Floor,” a New Financial Technology Hub in Tel Aviv

Accenture has joined a new hub of financial technology (fintech) start-ups based in Tel Aviv, Israel dubbed “The Floor.”  As a supporter, Accenture will evaluate potential innovations for its clients and potentially its own strategic investments, while mentoring start-ups and strengthening its ties to the growing Israeli technology community.

The Floor was founded this year with support from institutions, including Banco Santander, HSBC, Intesa Sanpaolo and RBS, and from Intel Corporation.  It offers fintech entrepreneurs and start-ups a platform to collaborate with financial services institutions, technology companies and venture capitalists.  In recent years, fintech investment in Israel has grown dramatically, with the number of fintech ventures growing from 90 in 2002 to approximately 430 today.

Accenture has been promoting fintech venture innovation since 2010, when it co-founded the FinTech Innovation Lab with the Partnership Fund for New York City.  The Lab is a mentorship and accelerator program for leading financial technology ventures. Accenture launched additional labs in London in 2012, and in Hong Kong and Dublin in 2013.  (Accenture 20.06)

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2.14  Dentsply Sirona Acquires MIS Implants

York, Pennsylvania’s Dentsply Sirona announced a definitive agreement to acquire all of the outstanding shares of privately held MIS Implants Technologies, a dental implant systems manufacturer headquartered in Shlomi, Israel.  Dentsply Sirona develops and produces ground-breaking and industry-leading innovations in implant surface technologies, implant-abutment connections, immediate placement protocols and guided surgery.  MIS has a strong presence in the value segment, selling its products in more than 65 countries worldwide. MIS (Make It Simple) aims to simplify implant dentistry through innovation and clinical education.  The MIS brand offers a wide range of dental implants and prosthetic solutions, together with grafting materials and guided surgery services. MIS launched its latest innovation with the V3 implant system last year in June at the EuroPerio8 in London.  It is patented for its unique triangular shape and brings biological benefits in many different aspects.  The V3 design allows for greater volume of bone and soft tissue, reduces pressure on the cortical bone, and does not compromise primary stability.  (Dentsply Sirona 27.06)

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2.15  Aurum and Humavox Sign Agreement for Merger

Melbourne, Australia’s Aurum entered into a binding term sheet with the shareholders of Kfar Saba’s Humavox, a company that creates wireless charging solutions.  According to the term sheet, Aurum will acquire 100% of the shares of Humavox and 100% of the warrants and options to acquire shares of Humavox in exchange for the issue of shares of common stock of Aurum representing, 50% of the shares of common stock of Aurum post issue on a fully-diluted basis, including the investment of an amount of $16 million in Humavox.  The investment will take place in unconditional installments over a period of 24 months following the closing.  The closing of the merger is subject to certain closing conditions, including the investment in Humavox of the first installment of the investment in the amount of $5.5 million.  The parties are using their best efforts to close the transaction within 90 days or earlier.  Due diligence is being undertaken following which a share sale agreement will be completed.  (Aurum 27.06)

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2.16  Kaiima Announces the Growth and Expansion of Their US Operations

Kaiima Bio-Agritech announced the opening of new, expanded facilities and growth of their St. Louis-based team.  The facility is located in the Helix Center Biotech Incubator in St. Louis County, which is owned and operated by the St. Louis Economic Development Partnership.

Kaiima’sEP technology is a breeding tool developed to enhance plant performance by inducing novel genetic diversity using the plant’s own DNA.  The technology works with all major crops and plant species.  Kaiima works with multinational and leading regional seed companies to apply its technology to their elite germplasm.  EPTM Technology benefits include significant yield increases, improved stress tolerance, reduced seed production costs, and efficient product development timelines.

Moshav Sharona’s Kaiima Bio-Agritech is a plant genetics and technology company that has developed a proprietary technology platform called EP.  EP is a new breeding tool that can enhance plant performance by inducing novel diversity within the genome, using the plant’s own DNA.  The technology works with all major crops and plant species.  Kaiima’s R&D currently covers corn, soy, rapeseed, rice, wheat and tomatoes. Kaiima collaborates with leading multinational and regional seed companies to apply its EP technology to their elite germplasm.  (Kaiima 27.06)

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2.17  Lumus Raises $15 Million to Scale Expansion

Lumus received $15 million of funding led by Shanda Group, a global private investment group, along with Crystal-Optech, a leading Chinese photo-electric component manufacturer.  Lumus will use the funding to scale up production of its market-leading, patent-protected optical technology for the emerging consumer market.  Lumus develops and sells transparent displays to companies working on developing consumer and enterprise AR solutions.

Consumer electronics and smart-eyewear manufacturers use Lumus for the underlying optical technology in their see-through wearable displays.  Founded in 2000, Lumus is the gold standard for transparent displays based on its patented Light-guide Optical Element (LOE) waveguide, which always allows for the smallest form factor irrespective of the field of view.  The Lumus DK-50 development kit, introduced earlier this year, offers AR creators a fully mobile, wireless, comprehensive stand-alone binocular display development kit.

The Lumus near-to-eye display technology consists of the patented Light-guide Optical Element—a unique eyeglass lens that contains an array of ultra-thin transparent reflectors—and a small, patented mini-projector that injects an image into the lens. Together they offer a wide field of view, true color, brightness that enables daytime reading, and a crystal clear see-through display.  With Lumus technology, wearable eyeglass displays can now be compact, comfortable, and fashionable for the first time.

Rehovot’s Lumus optics enable the fusion of the digital and physical world, allowing businesses and individuals to maximize the potential of augmented reality and smart eyewear today.  Lumus technology makes possible the most natural-looking eyewear, wide field of view, and true see-through performance available today.  (Lumus 15.06)

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3.1  CAE Awarded C$145 Million in Contracts by UAE Armed Forces

On 15 June, CAE announced it was awarded contracts by the General Headquarters (GHQ) of the United Arab Emirates (UAE) Armed Forces valued at approximately C$145 million.  The contracts are for CAE to design and develop a comprehensive Naval Training Centre (NTC) for the UAE Navy and to provide the UAE Joint Aviation Command (JAC) with a suite of helicopter simulators and training devices for the NorthStar Aviation 407 Multi-Role Helicopter (407MRH) as well as the Sikorsky UH-60M Armed Black Hawk (ABH).

The purpose-built NTC facility will feature a range of integrated ship simulation-based training suites as well as maritime aircraft sensor stations that will be used to deliver training for individuals, command teams, and whole ship crews.  In addition, the overall naval training system for the UAE Navy is being designed for networking and interoperability to enable distributed multi-platform and joint mission training.

CAE was also awarded a contract to provide the UAE Joint Aviation Command (JAC) with a suite of helicopter simulators and training devices for the NorthStar Aviation 407 Multi-Role Helicopter (407MRH) as well as the Sikorsky UH-60M Armed Black Hawk (ABH).  CAE will also design and manufacture a UH-60M ABH full-mission simulator for the UAE JAC to be delivered in 2018.  The UH-60M/ABH full-mission simulator representing the armed variant of the Black Hawk helicopter will feature a six-degree-of-freedom motion system, vibration platform, and extreme field-of-view display system.

Montréal, Québec’s CAE’s Defence & Security business unit focuses on helping prepare our customers to develop and maintain the highest levels of mission readiness.  They are a world-class training systems integrator offering a comprehensive portfolio of training centers, training services and simulation products across the air, land, sea and public safety market segments.  (CAE 15.06)

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3.2  UAE Firm Acquires US Commercial Property in $48 Million Deal

Gulf Islamic Investments, a UAE based Islamic financial services company, has announced that it has acquired a commercial property in Pennsylvania in a deal worth $48 million.  The Class A Commercial Building ‘3501 Corporate Parkway’ is situated in Center Valley (Allentown) and has net leasable area of 178,330 square feet.  The building is fully let out to investment grade tenant Dun & Bradstreet Corporation for a term of approximately 11 years and is the largest corporate office of Dun & Bradstreet.  Gulf Islamic Investments said the building was acquired for approximately $48 million with part of the acquisition financed through a five-year sharia compliant loan.  (AB 21.06)

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3.3  Dow is First Company to Receive Trading License in Saudi Arabia

The Dow Chemical Company recently became the first company to receive a trading license from the Government of Saudi Arabia, allowing 100% ownership in the country’s trading sector, expanding Dow’s long history of partnership and investment in the Kingdom.  The trading license advances Dow’s ability to deliver high-value, innovative products that will benefit Saudi Arabia in the areas of sustainable development, energy-efficiency, oil and gas, alternative energy and water.  Saudi Arabia recently approved the issuance of trading licenses to companies outside of the Kingdom in alignment with the country’s strategy to diversify its economy and address challenges brought by lower global energy prices.

Dow is the largest foreign investor in Saudi Arabia, and maintains several joint ventures in the region including a joint venture with Juffali & Brothers, and Saudi Acrylic Monomer Company (SAMCo).  Dow currently has more than 500 employees in Saudi Arabia.  The trading license is expected to create additional employment opportunities for the highly educated Saudi workforce, with a particular focus on improving women’s participation in the local workforce.  (Dow Chemical 16.06)

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3.4  3M & Pfizer Win Licenses to Operate in Saudi Arabia

Saudi Arabia is to grant licenses to 3M and Pfizer to operate in the kingdom, following its licensing of US petrochemicals giant Dow earlier the same week.  It is hoped that Apple will also soon enter the market, Minister of Commerce & Investment Al Qasabi announced.  Al Qasabi said that the Dow investment would spur other international firms to seek to open factories in Saudi Arabia.  Dow was the first company to be awarded a license under new Saudi rules allowing 100% foreign ownership in the trade sector.  It is not yet known when the three firms will commence operations in the kingdom.  (AB 21.06)

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3.5  Increasing Disposable Income Creates Saudi Opportunities for the Food Retail Market

Technavio analysts forecast the food retail market in Saudi Arabia to exceed $54 billion for 2016-2020.  The research study lists cereals, dairy, fruits and vegetables, meat, and other foods as the five major product segments for the food retail market in Saudi Arabia.  According to Technavio, an important growth driver for the food retail market in Saudi Arabia is the increasing urbanization in the country.  Urbanization has led to busier lifestyles, as a result of which people increasingly seek convenience, especially with regard to foods and beverages.  It is estimated that by 2025 the rate of urbanization in Saudi Arabia will be about 88%.  As urbanization increases, the share of modern retail channels in the food retail market is also likely to increase.  In 2014, supermarkets and hypermarkets had a market share of 56.5% in food retail sales, as compared to 45% in 2013.

With the recent economic growth of the country, the per capita disposable income of consumers has increased, as a result of which consumers are able to spend more money on high-quality food products at retail outlets.  Saudi Arabia’s disposable income has increased from $20,267 in 2008, to $25,400 in 2014.  Due to the increased disposable income, consumer spending on food products has also increased.  It is estimated that consumers in Saudi Arabia spend about 27% of their income on food products.

The number of food retail outlets in Saudi Arabia is expected to increase to 50,000 by 2020.  Food retail outlets in Saudi Arabia carry a wide range of options for consumers such as domestically processed foods, imported specialty food products, and organic food products.  Food retailers are trying to increase their store numbers so as to gain a larger market share and also access more consumer segments.  Panda supermarket chain plans to increase its number of stores to 250 by 2020 from the current number of 240.  Al Sadhan Supermarkets also plans to increase its number of stores by 18 over the next 10 years.  (Technavio 27.06)

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3.6  IKEA Signs Deal for Jeddah Mall Anchor Store

Arabian Centres, the Saudi-based developer, owner and operator of shopping malls, entered into a tenancy agreement that will see Swedish giant IKEA open in Jeddah.  The deal has been signed with Ghassan Ahmed Al Sulaiman Furniture Trading Co. and IKEA Saudi Arabia to open an anchor store in Al Salaam Mall in Jeddah, making it the first IKEA store integrated into a shopping mall in Saudi Arabia.  As part of the deal, Al Salaam Mall will house a 23,000 sq. m. IKEA store which is expected to open in 2017 and will be the second store in the western region.  The three-level outlet will include a showroom, restaurant and a market hall and expects to receive three million visitors annually.  Al Salaam Mall features more than 200 stores.  (AB 15.06)

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4.1  Israel Erects World’s Highest Solar Tower

In the middle of southern Israel’s desert, engineers are hard at work building the world’s tallest solar tower, reflecting the country’s high hopes for renewable energy.  Once completed in late 2017, the Ashalim Tower will rise to 240 meters (787 feet), taller than Paris’s Montparnasse Tower and London’s Gherkin, according to the Israeli government and the consortium building it.  Covered in stainless steel, the square tower in the rocky Negev desert with a peak resembling a giant lighthouse will be visible from dozens of kilometers away.

A field of mirrors covering 300 hectares (740 acres) – the size of more than 400 football pitches – will stretch out from its base, directing sunlight toward the tower’s peak to an area called the boiler, which looks like a giant lightbulb.  The boiler, whose temperature will rise to 600 degrees Celsius (1,112 Fahrenheit), generates steam that is channeled towards the foot of the tower, where electricity is produced.  The Ashalim tower will be equipped with 55,000 projecting mirrors, amounting to a total reflective surface of a million square meters.  The construction, costing an estimated $570 million, is being financed by US firm General Electric, with France’s Alstom and Israeli private investment fund Noy also involved.

The tower should provide 121 MW, or 2% of Israel’s electricity needs, enough for a city of 110,000 households.  The country of eight million people is seeking to make renewable energy account for 10% of its total consumption by 2020.  (AFP 19.06)

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5.1  Lebanese Consumer Prices Witness Annual Fall of 2.45% in May 2016

Deflation persisted in May 2016 as demonstrated by the Consumer Price Index (CPI) that dropped by 2.45% y-o-y by May 2016.  According to Lebanon’s Central Administration of Statistics (CAS), the CPI decreased from 98.02 points in May 2015 to 95.62 points in the same month of 2016.  In terms of the CPI’s components, prices of food and non-alcoholic beverages (20.6% of CPI) declined by 3.22% y-o-y by May 2016.  Transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI) witnessed yearly drops of 6.25% and 14.3%, respectively.  This significant decline can be linked to the overall fall in oil prices, where the monthly average crude oil price of the OPEC basket for the period between May 2015 and May 2016 fell by 30.48% to reach 43.21$/barrel.  The other sub-indices that shrank were health (7.8% of CPI) and communication (4.6% of CPI), posting a 0.82% and 0.28% y-o-y declines, respectively.  However, the education sub-index, constituting 5.9% of the CPI, increased annually by 1.49% in May 2016.  Furthermore, average restaurants & hotels prices (2.6% of CPI) went up by 2.58% y-o-y by May 2016.  In addition, the actual rent sub-index for households (old and new rent), with a weight of 3.4% of the CPI, increased by 3.08%.  (CAS 22.06)

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5.2  Ministry of Industry Plans to Reduce Lebanon’s Balance of Trade Deficit

Lebanese Minister of Industry Hassan launched a vision for 2025.  The strategies of this vision include, among other things, encouraging the creation of new subsectors, raising productivity, and narrowing the trade deficit.  This strategy aims at increasing exports up to $5B by 2025 and decreasing imports from $15B to $11B over the same period, enhancing competitiveness, boosting investments and encouraging new and green industries.

The goal of 2025 vision includes: providing a unified central building for the ministry and new centers for its departments, increasing the number of jobs, raising the industrial sector’s capacity to provide 50-70% of consumption needs.  The ministry intends to expand the local market through organizing factories, encouraging the preference of locally produced goods, supporting small and medium industries, and expanding them nationwide.  Moreover, the Ministry of Industry will enhance industrial exports by boosting cooperation with Lebanese missions abroad, finding new markets, and stimulating industrial tourism.  To develop competitiveness, the ministry will encourage industries with added value such as nanotechnology, alternative energy, and industrial equipment.  The ministry will also participate in research and will support industries that want to be more technologically advanced.  (BLOM 15.06)

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5.3  Jordan & IMF Reach Agreement on 3 Year Extended Fund Facility

The Jordanian government and a team of the International Monetary Fund (IMF) have reached a staff–level agreement on a request for a 36-month Extended Fund Facility (EFF).  The approval of the EFF is expected to help catalyze loans and grants from multilateral and bilateral sources during the program period, in support of the Jordan Compact, agreed in the London Conference on February 2016, where donors pledged considerable financial support for Jordan to address the impact of Syrian refugees.  Jordan completed a three-year Stand-By Arrangement in the amount of about $2 billion in August 2015.

The agreement aims to implement fiscal consolidation in a gradual and steady pace so that public debt is reduced from about 94% of GDP to about 77% of GDP by 2021, to minimize the impact on growth.  Finance Minister Malhas said that in order to achieve this objective there is a need for both efforts and measures to enable the government to improve its resources, cut spending and increase growth.  (AMMONNEWS 20.06)

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5.4  Jordan’s Medical Tourism Debts Rise While Tourist Numbers Fall

Hospitals in Jordan are owed $180 million by medical tourists and the number of Libyan and Yemeni medical tourists is down 80%.  The large drop is attributed to the government’s decision to regulate the entry of Libyan and other nationals.  Unpaid debts owed to 61 Jordanian private hospitals by patients from Libya and Yemen and Jordan, including the government of Jordan, exceed $180 million.  The number of Libyan and Yemeni medical tourists going to Jordan has fallen by 80% over the first quarter of 2016.  An increase in patients from Saudi Arabia helped, but the overall numbers are down 30% on 2015.  The Private Hospitals Association attributes the large drop to the government’s decision to regulate the entry of Libyan, Yemeni and Sudanese and other nationals into Jordan through the visa system that will see further falls in numbers and revenue for medical tourism for the rest of 2016.  (Ammon 22.06)

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5.5  Jordan & Saudi Arabia to Cooperate on Nuclear Energy

A Jordanian official stated that his country and Saudi Arabia are negotiating to promote cooperation between them in different sectors, including the peaceful use of nuclear energy, along with training Saudi staff on extracting uranium.  The CEO of Jordan Nuclear Power Company, Dr. Ahmad Hiyasat, said that the cooperation between Riyadh and Amman in the field of nuclear energy to produce electricity is important and will ensure sustainable development and confront rising prices in the energy sector.  Hiyasat said Saudi Arabia is considered the biggest backers of Jordan in different fields, and that Riyadh has provided Amman with economic aid to support its infrastructure and national budget.

Jordan said that the use of nuclear energy to generate electricity in Jordan will help reduce the burden of the oil cost on the national economy, which represented 20% of the GDP of 2014, and will also reduce the dangers of instability in global oil prices on the Jordanian economy.  Concerning the demand on electricity in Jordan, over the past ten years Jordan has witnessed a rising demand on electricity that ranged between 5-7% annually.  This trend is expected to continue with the flow of refugees to Jordan, the national population growth, and the expansion of development projects.  The National Electric Power Company in Jordan is continuously following up the expanded demand on electricity and taking the needed measures to face it by attracting investments to build new plants to generate electricity, especially those working with renewable energy, natural gas, liquid gas, and nuclear energy.  (Asharq Alawsat 27.06)

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►►Arabian Gulf

5.6  Qatar’s Foreign Trade Surplus Halves to $2 Billion in May

Qatar’s foreign trade surplus halved from a year earlier to QR7.5 billion ($2.05 billion) in May, data from the Ministry of Development Planning and Statistics showed on 27 June.  The surplus slumped by 50.4% from more than QR15 billion in the year-earlier period because of low natural gas and oil prices.  Exports of petroleum gases and other gaseous hydrocarbons fell 38.2% to QR9.85 billion ($2.71 billion), according to the data.

Last month, Qatar cut its planned spending on building healthcare facilities by about two-thirds this year following the drop in energy prices.  The world’s top liquefied natural gas exporter is one of the richest countries per capita but it faces a QR46.5 billion ($12.8 billion) budget deficit this year because of the continued lower oil and gas prices.  Like other Gulf states, it is turning to international markets to bridge the gap, but it is also having to reduce and prioritize state spending.  (AB 27.06)

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5.7  Italy Lands Largest Ever Naval Export Deal from Qatar

On 23 June, Qatar signed a contract worth €3.8 billion ($4.28 billion) to buy seven naval vessels from Italy’s Fincantieri shipyard as part of Italy’s largest ever naval export deal.  Qatar also signed a pre-contract agreement, or “Letter of Award” with European missile house MBDA to supply Exocet and Aster 30 missiles worth €1 billion to equip the vessels.  Qatar is acquiring four corvettes, one landing platform dock and two offshore patrol vessels, with a six-year construction program due to start at Fincantieri’s Italian yards in 2018.

Italian firm Leonardo-Finmeccanica will provide combat systems for all the vessels and take a third share of the contract.  The radar to be installed on the corvettes will be based on the multi-functional radar the firm has previously built for Italy’s FREMM frigates.  The platforms were worth 30 to 35% of the value of the contract, while propulsion systems would be worth 20 to 25% of the value.  Built into the contract is 15 years of logistic support.  The agreement with Qatar follows keen attempts by France to head off the deal and convince Qatar to purchase French FREMM frigates instead of the Italian vessels.  (DN 17.06)

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5.8  UAE Approves Draft Law to Regulate Ownership of Dangerous Animals

The UAE has approved a draft federal law covering the regulation of owning a dangerous animal in the country, following reports of animals roaming loose.  The Federal National Council (FNC) has approved draft legislation after the completion of discussion on the articles regarding penalties and amendment of the two addendums attached to the bill.

In March it was reported that the FNC was discussing an outright ban on people in the UAE owning wild animals.  Under a draft law, which covers possession of wild animals by zoos, nature reserves and people, offenders could receive fines of up to AED500,000 and jail terms.

In January, three people were charged with public endangerment over an incident that saw a lioness escape from a home in Dubai and prowl the streets for several hours.  The owner of the lioness, the buyer and a middleman were charged after the lioness escaped.  The animal was caught without incident and taken to the zoo.  Keeping wild animals as pets is seen as a status symbol in the Gulf states.  In the UAE it is illegal to keep wild animals as pets without first obtaining a special permit.  (AB 15.06)

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5.9  Dubai Announces Plan for New Medicine & Health Services University

Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum has issued a law to establish the Mohammed Bin Rashid University of Medicine and Health Sciences, which aims to enhance Dubai’s position as a healthcare education hub.  The new law stipulates that the university, which will comprise a number of colleges, research centers, a library and e-library, will offer Bachelor’s, Master’s and PhD programs, as well as professional certificates in the fields of Medicine and Health Sciences.  The university will also provide graduate programs for education, research and career development in the healthcare sector.  It added that the university is aiming to further enhance Dubai’s position as a recognized medical and health sciences education hub as well as contribute to the development of sustainable education by supporting the advancement of medicine and health sciences.  (AB 24.06)

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5.10  Saudi Military Spending Jumps 50% to $9.3 Billion

The IHS announced in its Global Defence Trade Report that a surge in weapons purchases by Saudi Arabia helped push global arms sales up more than 10% last year.  While the global defense market climbed to $65 billion in 2015, up by $6.6 billion from 2014, purchases by Saudi Arabia jumped about 50% to $9.3 billion.  Saudi Arabia’s purchases in the past year include Eurofighter Typhoon jets, F-15 warplanes and Apache helicopters, as well as weapons, drones and surveillance equipment.  In April, research from the Stockholm International Peace Research Institute (SIPRI) showed that Saudi Arabia’s defense expenditure rose by 5.7% to $87.2 billion in 2015, overtaking Russia to make it the world’s third-largest military spender.  (HIS 18.06)

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5.11  Saudi Arabia Approves 100% Foreign Ownership in Retail

Foreign investors may own 100% of retail businesses in the kingdom for the first time under a decree issued by ministers on 13 June.  The planned reforms were announced last September – to hike the maximum foreign ownership of retail and wholesale operations from 75% to 100%.  A cabinet statement announcing the decree said: “The decision is in line with [Saudi Arabia’s] Vision 2030 [and aims to] to ease restrictions on ownership and foreign investment in the retail sector to attract regional and international brands and contribute to the creation of job opportunities for citizens in this sector.”  However, foreign firms licensed to own 100% of retail and wholesale businesses in Saudi Arabia under the new laws will have to invest at least SR200 million ($53 million) in the first five years after obtaining a license.  They must also have minimum capital of SR30 million ($7.9 million) and operations in at least three international markets.  (AB 15.06)

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►►North Africa

5.12  Egyptian Parliament Approves Tariff Increase on Hundreds of Imported Goods

On 14 June, the Egyptian parliament approved a presidential decree issued in late January that will raise customs tariffs imposed on more than 600 imported goods to between 20 and 40% up from previous 10 and 30%.  The decree, No 25 of 2016, which includes imported goods such as household appliances, cosmetics, garments, footwear, nuts and pet foods, aims at protecting national industries and stopping the draining of foreign currency in Egypt.

Egypt has been facing a foreign currency crunch following years of instability after the 2011 uprising ousted Hosni Mubarak from power.  Weak FX receipts from tourism, workers’ remittances, foreign investment, the Suez Canal, and other exports have contributed to the currency shortage.  CBE Governor Tarek Amer said in January that the government is aiming to reduce imports by $20 billion to $60 billion in 2016, down from $80 billion in 2015.  (Ahram Online 15.06)

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5.13  Amid Soaring Inflation, Central Bank of Egypt Raises Interest Rates

The Central Bank of Egypt raised benchmark interest rates by 100 basis points on 16 June, bringing its overnight deposit rate to 11.75%, its overnight lending rate to 12.75% and its main operations rate to 12.25%.  The decision by the bank’s Monetary Policy Committee comes after the release of data showing that annual core consumer price inflation (CPI) reached a seven-year high of 12.23% in May.  Annual headline CPI, which includes volatile items like fresh fruits and vegetables, rose to 12.3%, the highest rate in a year.

Raising interest rates to fight inflation is a common tactic for central banks, but this announcement came as a surprise to some economists.  Polls ahead of the announcement were split, with some firms forecasting an increase while others predicted a rate hold.  Although a rate hike can help control inflation, it comes at the expense of increasing Egypt’s debt burden and could dampen economic growth.  Raising benchmark interest rates has a pass-through effect on the interest the Egyptian government pays on the money it borrows via bond issuances.

Egypt’s domestic debt rose by LE480 billion in a year, reaching almost LE2.5 trillion in March 2016, or some 88.1% of GDP.  In the first nine months of the current fiscal year, the government spent more than LE176 billion on interest payments, almost 40% more than it spent in the same period the year before.  The rate hike may also be intended to bolster the Egyptian pound.  The Central Bank allowed the pound to devalue in March, but the currency is still under pressure with foreign-currency inflows down and a wide gap between the official and black market exchange rates.  (Mada Masr 16.06)

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5.14  Egypt Signs 3 Grant Deals With Canada Worth C$30.6 Million

Egyptian Minister of International Cooperation Nasr signed three cooperation deals with Canada worth C$30.6m in the fields of technical education, food security and small- and medium-sized enterprises (SMEs).  The deals were signed while Nasr was attending the Montreal International Conference in Canada.  The conference was held under the umbrella of the International Economic Forum of Americas, the largest international economic forum in the Americas.  Marie-Claude Biebeau, minister of the international development in Canada, represented Canada during the signing of the agreements.  Nasr explained that cooperation with Canada will exist in several fields, including renewable energy, technical education, climate change, SMEs, and women empowerment projects.  (DNE 16.06)

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5.15  Egyptian Cotton in Peril as Exports Slide

Exports of world-famous Egyptian cotton have dropped sharply as years of neglect and recent government spending cuts have taken their toll.  Exports dropped by almost a quarter in the first half of the current marketing year, which starts in September, compared to a year earlier, figures released by state statistics agency CAPMAS showed.

Egypt sold 236,300 qintars (1 qintar equals 50 kg of cotton lint or 157 kg of cotton) on the world market between September 2015 and February 2016, down from 308,800 during the same period of the previous year.  Lax enforcement of regulations during the turmoil that followed the country’s 2011 revolution has led to mixing premium long-staple strains of cotton with cheaper ones.  Seeds of different qualities were also jumbled together in the ginning process, further compromising the premium quality demanded by buyers overseas, as well as makers of luxury cotton products at home.

The decline in cotton exports can only exacerbate Egypt’s foreign currency crunch following years of instability and weak FX receipts from tourism, workers’ remittances, foreign investment, the Suez Canal and other exports.  (CAPMAS 15.06)

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5.16  Study Ranks Morocco as Most Reputable Arab Country

New York-based Reputation Institute published a report on 23 June on the most reputable countries in the world.  Morocco was ranked 39th of the 70 countries that were studied, receiving a score of 51.99, indicating weak/vulnerable reputation relative to the rest of the world.  The North African country, however, has scored better than any other country in the Middle East and North Africa region (MENA).  The study reports that Morocco has a better reputation than Israel (51st with a score of 47.43), Qatar (53rd with a score of 46.87) and Egypt (55th with a score of 45.22).  Other MENA countries studied were Algeria (64th with a score of 40.52), Saudi Arabia (67th with a score of 36.32) and Iran (69th with a score of 29.74).  The institute collected data on country reputations by interviewing a panel of 48,000 representatives from G8 countries: Canada, France, Germany, Italy, Japan, Russia, the UK and the US.  The report details a list of key drivers of reputation, which include contribution to global culture, quality of products & services, the education and reliability of the workforce, fame of brands, the value of education, and technology advancements.  (MWN 25.06)

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5.17  Morocco’s Economic Growth to Stand at 1.2% in 2016, 4% in 2017

Morocco’s national economic growth is forecast to stand at 1.2% in 2016, taking account of a better agricultural production than what was expected in March, except for cereals, and of a revision of the contraction of the agricultural value added at 9%, according to the Bank-Al Maghrib, Morocco’s central bank.  As the projection for nonagricultural GDP growth is kept at 2.8%, GDP growth is expected at 1.2%.  In 2017, assuming an average crop year, growth is expected to accelerate to 4%, with increases by 10% in agricultural value added and 3.2% in nonagricultural GDP.  (MWN 21.06)

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5.18  Morocco’s Inflation Forecast Revised Upwards for 2016

The Board meeting of Morocco’s central bank, Bank Al Maghrib, revised upwards its inflation forecast for 2016 to 1.6%, mainly as a result of a significant increase in volatile food prices.  The projection for core inflation was maintained virtually unchanged at 0.6%,” the central bank said.  In 2017, inflation would decline to 1%, as the dissipation of shock effects on volatile food prices would more than offset the expected rise in core inflation and the prices of fuels and lubricants.  (MWN  21.06)

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5.19  Morocco Attracted $3.2 Billion of Foreign Direct Investments in 2015

Foreign Direct Investments (FDI) flows to Morocco remained sizable at $3.2 billion in 2015, the United Nations Conference on Trade and Development (UNCTAD) said in its “World Investment Report 2016”.  Morocco continues to serve as a major manufacturing base for foreign investors in Africa.  In 2015 it attracted large amounts of FDI in the automotive industry, especially from France.  Real estate developments in the country also attracted FDI from West Asia.  FDI flows to Africa fell to $54 billion in 2015, a decrease of 7% over the previous year; an upturn in investment into North African economies such as Egypt was offset by decreasing flows into Sub-Saharan Africa, especially in natural-resource-based economies in West and Central Africa.  North African firms are playing an active role in outward FDI, the report stressed, adding that outward investment increased from Libya and Morocco.  The increased outward FDI from Morocco is largely intra-African and reflects the increasing capabilities of Moroccan firms in financial services, telecommunications and manufacturing, according to the report.

Investment into Africa’s auto industry is driven by industrial policies in countries such as Morocco, growing urban consumer markets, improved infrastructure, and favorable trade agreements.  Major automotive firms are expected to continue to expand into Africa: PSA Peugeot-Citroen and Renault (France) and Ford (United States) have all announced investments in Morocco.  (MWN 22.06)

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6.1  Eurozone Approves Bailout Payment to Greece

Eurozone finance ministers agreed on 16 June to unlock €7.5 billion ($8.4 billion) in urgently needed cash for Greece, saving Athens financially for a few months.  The ministers met in Luxembourg and officially unblocked the money that will allow the Greek government to meet two huge debt payments to the European Central Bank in July.  In May, the ministers last month agreed in principle to unlock the aid, the windfall for completing the first formal review of its €86 billion bailout program agreed last July.

However, the leftist government in Athens still had to deliver on some last reforms, including a revamped plan on long-delayed privatizations.  The payout came a day after thousands of Greeks protested in Athens over new cuts imposed by Prime Minister Alexis Tsipras in return for the bailout.  Re-elected last year on a pledge to fight austerity, Tsipras instead brokered Greece’s third bailout with its EU creditors that required fresh tax hikes and a controversial pension overhaul.  (AFP 16.06)

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6.2  Greece’s Jobless Rate Rises to 24.9% in First Quarter

Greece’s jobless rate rose to 24.9% in January-to-March from 24.4% in the last year’s final quarter, ELSTATA revealed on 16 June.  The highest unemployment rate was recorded in the first quarter of 2014, when joblessness hit 27.8%.  About 70.3% of Greece’s 1.19 million jobless are long-term unemployed, meaning they have been out of work for at least 12 months, the figures showed.  Athens has already published monthly unemployment figures through March, which differ from quarterly data because they are based on different samples and are seasonally adjusted. Quarterly figures are not seasonally adjusted.

The debt crisis and a six-year austerity imposed by the EU/IMF lenders in exchange for Greece’s bailouts have wiped out about a quarter of the country’s economic output, driving the jobless rate to record highs.  Greece’s economy shrank by 0.5% in the first quarter, at a slightly faster pace than previously estimated, weighed by weaker consumer spending and net exports.  The country’s central bank expects the economy will contract 0.3% this year.  (Reuters 16.06)

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7.1  Knesset Votes to Make ‘Aliyah Day’ a National Holiday

On 22 June, the Knesset plenum voted to make “Aliyah Day,” a day recognizing the contribution of aliyah (immigration to Israel) and olim (new immigrants) to the state, an official holiday.  The bill sets the Hebrew date for “Aliyah Day” as 10 Nisan, which falls in the spring shortly before Passover and is believed to be the date when Joshua crossed the Jordan River with the Israelites, an event considered the first aliyah to the Land of Israel.  However, because the date conflicts with the Knesset’s Passover recess, “Aliyah Day” will be marked on 7 Cheshvan, in the fall, a few weeks after Sukkot.  (Various 22.06)

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7.2  Eid Al Fitr Holidays Announced in Oman & UAE

Eid Al Fitr holidays will start from 5 to 9 July for government and private sector employees, according to the Omani Diwan of Royal Court and the Ministry of Manpower.  The UAE Cabinet has approved the Eid vacation for federal bodies from 3 to 9 July with work resuming on Sunday, 10 July.  (ONA 27.06)

The first day of Eid Al Fitr in most countries will fall on 6 July.  The absolute determination of the sighting of the crescent moon will set the exact date.  Eid Al-Fitr, which marks the end of the holy month of Ramadan, starts on the first day of the month of Shawwal.  The three day festival marks the end of Ramadan, the month of fasting.  This festival is a time of gift giving and of giving alms.  The fasting of Ramadan is meant to remind people what life is like for their less fortunate brethren and the alms giving at Eid (known as Zakat-el-Fitr) is a continuation along the same idea.  Both fasting and the giving of alms are two of the five pillars of the Islamic faith.  Ramadan is a holy month in which drinking, smoking and eating is prohibited.  Fasting is forbidden on Eid el-Fitr and Moslems are encouraged to rise early and partake of some dates or a light, sweet snack, significant because for the past 30 days they have abstained from all food and drink from dawn till dusk.  Muslims are encouraged to dress in their best clothes, new if possible, and to attend a special Eid prayer that is performed in congregation at mosques.  Before the prayer the congregation recites the takbiir: the Eid prayer is followed by a sermon and then a prayer asking for forgiveness, mercy and help for the poor.  It is then customary to embrace the persons sitting on either side of you as well as your relatives, friends and acquaintances.  Children are normally given gifts or money.  Women (particularly mothers, wives, sisters and daughters) are normally given special gifts by their loved ones.

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7.3  Oman’s Population Stands at 4.44 Million as of May 31st

Oman’s National Centre for Statistics and Information (NCSI) announced that the country’s total population exceeded 4.44 million in May, posting a 0.3% increase over the previous month.  Expatriates numbered over 2.02 million, forming 45.5% of the total population.  The Governorate of Muscat recorded the highest number of expatriates at 891,942, against 503,470 nationals, followed by the Governorate of North Al Batinah with 241,142 expatriates.

According to the figures, the Governorate of Muscat registered the largest population at over 1.39 million people in May, marking a growth of 0.3% over April.  Population of the Governorate of Dhofar rose 0.9%, the fastest rate in May, to 420,836, the figures also showed.  (NCSI 17.06)

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8.1  The Stockton Group & Syngenta Development Agreement for New Biofungicide

The Stockton Group (STK) signed a major agreement with Switzerland’s Syngenta as the exclusive global distributor of a new bio-fungicide technology based on tea tree oil for the control of several diseases in ornamental crops.  The products of Stockton will be sold under the Syngenta brand for Botrytis and Powdery Mildew in Ornamentals globally.  The biofungicide technology complements the comprehensive fungicide portfolio of Syngenta and will help to provide its customers with innovative sustainable tools for disease resistance management.

Petah Tikva’s The Stockton Group (Stockton) specializes in the development and marketing of botanical based bio-pesticides. Its core focus is on the incorporation of these bio-pesticides into conventional agriculture spraying programs that use conventional chemical products, thus creating a balanced, cleaner and sustainable agricultural environment.  Stockton has an active R&D program for the development of future natural products for crop protection. Its unique research and development center in Israel invests substantial resources in developing ‘green’ products.  (The Stockton Group 15.06)

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8.2  BioBee to Ship 500 Million ‘Predatory Bugs’ to Russia

By employing predatory bugs that attack and kill harmful insects, BioBee has developed a technique free of chemicals.  Already, their solution is being deployed in farms across 50 countries, including Colombia, where BioBee shipped 600 million spider mites.

Also dubbed “Bio Persimilis,” these spiders are as big as the spider mites they chase, about one or two millimeters long.  They move quickly, hunt their prey and pierce it, sucking out its fluids.  Bumblebees were also sent to Russia in order to encourage pollination of vegetables.  In addition, the bees sent from Israel will be deployed in cherry orchards across Russia.

Founded in 1984 in Kibbutz Sde Eliyahu, BioBee’s facility mass-produces the natural enemies of harmful pests by harvesting spiders, flies and bees for various purposes.  Selling its products to 50 countries worldwide, including India, Chile and South Africa, BioBee‘s spiders are said to costs about $180 – more than four times the price of gold ($42 per gram)!  The company maintains that this is a good investment for farmers, who may otherwise be limited in exporting crops that were sprayed with chemical pesticides, which are limited by international regulations.

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8.3  Biological Industries Announces New Agreement with Mediatech

Biological Industries announced a co-branding agreement with Corning Incorporated’s subsidiary, Mediatech, which will enable cell therapy, research and manufacturing organizations around the world to purchase the innovative, xeno-free NutriStem human pluripotent stem cell (hPSC) medium in conjunction with Corning’s existing portfolio of stem cell-focused technologies.  Before the end of this year, Corning and BI will launch a jointly-branded NutriStem hPSC XF Medium, which will continue to be manufactured by BI, but marketed, distributed and supported worldwide by Corning’s global commercial team.  NutriStem hPSC XF Medium was developed and launched in 2009, and has been increasingly adopted by leading academic and commercial labs worldwide for use in the culture of pluripotent stem cells.

Kibbutz Beit HaEmek’s Biological Industries is one of the world’s leading and trusted suppliers to the life sciences industry, with over 30 years’ experience in cell culture media development and manufacturing.  BI’s products range from classical cell culture media to supplements and reagents for stem cell research and potential cell therapy applications to serum-free media and many other products for animal cell culture and molecular biology.  BI is committed to a Culture of Excellence through advanced manufacturing and quality-control systems, regulatory expertise, in-depth market knowledge, and extensive technical customer-support, training, and R&D capabilities.  (BI 23.06)

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8.4  Rosetta Genomics Receives Approval from New York State for HEME FISH-based Assays

Rosetta Genomics received conditional approval from the New York State Department of Health (NYSDOH) for the Company’s multiple fluorescence in situ hybridization (FISH) tests for detection of amplifications or rearrangements of DNA in a number of hematologic cancers, such as leukemia, lymphomas and myelomas in order to form a diagnosis and/or to evaluate prognosis or remission of disease.  NYSDOH approval was granted under the Company’s Molecular Oncology and Cellular Tumor Marker permit.  The laboratory is CLIA certified and CAP accredited, yet New York requires an additional permit for each test from the NYSDOH for them to be offered to patients in the state.

Rehovot’s 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.  Through the acquisition of PersonalizeDx, the Company now offers core FISH, IHC and PCR-based testing capabilities and partnerships in Pathology, Oncology and Urology that provide additional content and platforms that complement Rosetta’s microRNA and Next-Gen Sequencing offerings.  (Rosetta 21.06)

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8.5  E. T. View Medical to be Acquired by Ambu A/S

The Trendlines Group announced that its 26.5%-owned associated company, E.T.View Medical, signed a definitive agreement for its sale to Ambu A/S, a Danish medical device company.  According to the agreement, Ambu will acquire E.T.View in a “reverse triangular merger” valued at $16 million, less about $3.4 million in transaction costs, employee bonuses, and the assumption of certain debts, liabilities and expenses.  Following the sale, E.T.View will be delisted from the Tel Aviv Stock Exchange and will become a wholly owned subsidiary of Ambu.  The Board of Directors of E.T.View unanimously approved the agreement on 21 June 2016.  The value of The Trendlines Group’s holdings in E.T.View was approximately $1.3 million as at 31 March 2016.  Trendlines estimates that it will receive net proceeds of approximately $3.3 million resulting in a pre-tax gain from the sale of approximately $2 million.

Misgav’s Trendlines Group is an innovation commercialization company that invents, discovers, invests in, and incubates innovation-based medical and agricultural technologies to fulfill its mission to improve the human condition. As intensely hands-on investors, Trendlines is involved in all aspects of its portfolio companies from technology development through business building.  (Trendlines Group 23.06)

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8.6  Israel – Ground Zero for Cannabis Research in the World

CannaTech, the hugely successful International Summit for Accelerating Cannabis Innovation, which put Israeli cannabis innovation on the map, will be held in Israel on 20 – 22 March 2017.  The event will once again bring together entrepreneurs, investors, medical professionals and top Israeli researchers in life sciences, agtech and medtech to interact and share their knowledge of this multi-billion-dollar industry.  CannaTech gathers hundreds of attendees from dozens of nations to hear world-class presentations, network with colleagues in the industry, and learn about the most cutting-edge cannabis innovations.  The conference is held annually in Israel, ground zero for cannabis innovation and research.

iCAN: israel-cannabis is actively engaged in identifying and accelerating cannabis technologies in Israel.  As the cannabis leaders in Israel, iCAN: israel-cannabis has partnered with both public and private entities to create innovative global brands to power the cannabis economy.  iCAN is the creator of the CannaTech International Summit for Accelerating Cannabis Innovation.  (iCAN 22.06)

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8.7  MedyMatch & Capital Health Artificial Collaborate on Intelligence Platform for Emergency Rooms

MedyMatch Technology announced a partnership with Capital Health, the first of several partnerships with hospitals in the United States intended to improve stroke patient outcomes.  As part of the agreement, Capital Health will provide anonymized data to MedyMatch for use in the development of its first decision support tool, directed towards stroke patients.  Additionally, MedyMatch will leverage medical imaging libraries across multiple imaging modalities including CT, X-ray, MRI, Ultrasound and PET, which will be utilized as part of its research and development efforts to train its next set of applications and deep learning algorithms.

Tel Aviv’s MedyMatch utilizes advanced cognitive analytics and artificial intelligence to deliver real-time decision support tools to improve clinical outcomes in acute medical scenarios.  The foundation of clinical discovery and value creation lies in the deep clinical understanding of how to diagnose disease, utilizing the right data (electronic medical record, medical imaging, and genomic data).  MedyMatch’s vision includes an innovative approach in re-defining ‘capacity in healthcare’ by applying advanced analytic technologies in the emergency room setting to prognosticate downstream cost of care outcomes.  The MedyMatch team of artificial intelligence, machine learning, deep learning and algorithmic experts along with its medical and science advisory boards are achieving breakthroughs in standards of cost and care.  (MedyMatch 27.06)

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8.8  Monsanto & TargetGene Agree on Gene-Editing Technology

Monsanto Company and TargetGene Biotechnologies announced a license agreement to advance the application of the company’s proprietary techniques in global agriculture.  TargetGene is an innovative genome-editing company using RNA-guided gene-editing techniques.  Under the agreement, Monsanto has been granted an exclusive license to TargetGene’s novel and proprietary “T-GEE” (Genome Editing Engine) platform to deliver continuous improvements in agriculture.  Monsanto has also established an equity position in the private Israel-based company.  Additional terms of the agreement were not disclosed.

The companies noted that gene-editing technology and the broad array of emerging gene-editing techniques represent a key scientific tool that can deliver breakthroughs in agriculture.  The science is the biological equivalent to the “search and replace” function in computer word-processors.  Monsanto believes that genome-editing technologies will enable plant breeders to deliver better hybrids and varieties more efficiently, as well as offer plant scientists additional resources to provide new improvements in plant biotechnology.

Rehovot’s TargetGene Biotechnologies is a privately held company developing a proprietary ground breaking Genome Editing technology, based on the founders’ invention of the principle of RNA-directed gene-targeting.  TargetGene’s R&D is aimed at creating precise and highly specific DNA editing solutions in living organisms for agricultural, veterinary and therapeutic use.  (Monsanto 28.06)

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8.9  Marrone Bio & Groundwork BioAg Sign Seed Treatment Development Agreement

California’s Marrone Bio Innovations and Groundwork BioAg (GBA) announced a collaboration to create and commercialize the world’s first all-biological comprehensive seed treatment.  The treatment is expected to contain a mycorrhizal biostimulant from GBA as well as a bio-insecticide, a bio-nematicide, and a bio-fungicide from MBI.  The Binational Industrial Research and Development Foundation (BIRD), a foundation that supports and encourages cooperation between Israeli and U.S. companies in various areas of technology, selected the collaboration for matching funding.  MBI notes that it has another project, a previously announced collaboration with Evogene, also partially funded by BIRD.

Moshav Mazor’s Groundwork BioAg produces cost-effective mycorrhizal inoculants for commercial agriculture.  Natural mycorrhizal fungi improve soil nutrient uptake in 90% of all plant species.  When applied to agriculture, mycorrhizal inoculants increase crop yields while reducing fertilizer requirements, most notably phosphorus.  Groundwork’s uniquely vigorous and highly concentrated Rootella products have demonstrated double-digit yield increases in several major crops, such as corn, soybean, tomato and onion.  (Marrone Bio 28.06)

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8.10  FDA Acceptance of Teva NDA for Fluticasone RespiClick Inhalers

Teva Pharmaceutical Industries announced that the U.S. FDA accepted for review the company’s new drug applications (NDAs) for two products for adolescent and adult patients with asthma.  The first, fluticasone propionate/salmeterol, is a fixed-dose combination inhaled corticosteroid (ICS) and long-acting beta agonist (LABA) delivered via Teva’s RespiClick breath-actuated, multi-dose dry powder inhaler (MDPI).  The second, fluticasone propionate, is an ICS monotherapy also delivered via the RespiClick device.  The NDAs for fluticasone propionate/salmeterol RespiClick and fluticasone propionate RespiClick are supported by data from Teva’s clinical development program, including data from three Phase III trials which evaluated the efficacy and safety of the treatments in adolescent and adult patients with asthma. In the double-blind studies, both therapies showed clinically relevant and greater benefit compared with placebo in the improvement of lung function as measured by Forced Expiratory Volume in one second (FEV1).

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by 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 28.06)

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9.1  Rafael Concludes First Exports of Shoulder-Fired Anti-Tank Missile

Israel’s Rafael Advanced Defense Systems recently concluded first export deliveries of its Spike SR (Short Range), a shoulder-launched, fire-and-forget anti-tank missile designed for precision strikes against fixed and moving targets.  The newest member of Rafael’s air, sea and ground-launched family of electro-optical missiles, Spike SR is designed to respond rapidly against so-called targets of opportunity, whether they are tanks and fast-travelling vehicles or bunkers.  Known in Hebrew as TACT — an acronym that translates into Short Range Personal Missile — Spike SR is can be equipped with two warheads, one for moving targets and the other a blast fragmentation penetrator against bunkers.  Designed for use by infantry in congested urban environments, Spike ER has an effective range from 50 meters to 1.5 kilometers.  (DID 15.06)

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9.2  Lockheed Martin and Israel Celebrate Rollout of Israel’s First F-35 ‘Adir’

Israeli and U.S. government leaders joined Lockheed Martin to celebrate the rollout of the first Israeli Air Force F-35A Lightning II, marking a major production milestone for the future of Israel’s national defense.  Israel’s F-35, called Adir – which means “Mighty One” in Hebrew – will be a significant addition to maintaining Israel’s qualitative military edge in the Middle East region, with its advanced capability to defeat emerging threats, including advanced missiles and heavily-defended airspace.  The F-35 combines advanced low observable stealth technology with fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment support.

Israel’s program of record is 33 F-35A Conventional Take Off and Landing, or CTOL, aircraft, acquired through the U.S. government’s Foreign Military Sales (FMS) program.  Israel’s contribution to the F-35 program includes Israel Aerospace Industries F-35A wing production; Elbit Systems work on the Generation III helmet-mounted display system, which all F-35 pilots fleet-wide will wear; and Elbit Systems-Cyclone F-35 center fuselage composite components production.  (Lockheed Martin 22.06)

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9.3  Zore Develops Smart Gun Lock

Two Israeli army veterans have developed a patented cartridge to prevent firearm accidents.  Jerusalem based startup Zore has developed Zore X a patented cartridge that connects owners to their firearms and is the fastest way to go from a locked firearm to disengaging and chambering a round and firing it.  Zore X also notifies owners if their gun has been tampered with by cell phone.  The company has also developed the Zore Watchdog alert system which lets owners keep tabs on their guns even when they are not near it.  The minute that someone touches a gun, the owner gets an immediate notification sent to their smartphone.  (Various19.06)

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9.4  Mobileye Ranked Among ‘Smartest’ Firms in the World

Israel’s Mobileye technology company was ranked sixth on a list of the world’s 50 “smartest” companies published on 21 June by MIT Technology Review.  The first five spots were taken by Amazon, Baidu, Illumina, Tesla Motors and Aquion Energy.  Describing Mobileye, MIT Technology Review wrote: “How can automakers compete with companies developing self-driving vehicles, such as Google parent Alphabet?  One increasingly popular option is to partner with Mobileye, which makes machine vision systems and motion detection algorithms that warn drivers when they are deviating from driving lanes or about to collide with cars in front of them…Mobileye is already working on autopilot and collision avoidance technology for Audi, BMW, General Motors, Nissan, Tesla, Volkswagen, and Volvo, and recently inked an agreement with two undisclosed automakers to provide systems for fully autonomous cars.”  (IH 22.06)

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9.5  Bsecure Launched B$URE, the Next Generation of Counterfeit Money Detectors

Counterfeit money is a growing problem worldwide, even more so when it comes to the most common currency, the U.S. dollar.  Fueled by technological advances and knowledge sharing platforms, it appears this problem is here to stay. In light of this, the Bsecure group from Israel, developed B$URE, a detector that is both highly accurate and portable.  B$URE is a pocket-size, battery-operated device designed to authenticate dollar bills. It is easy to use and gives feedback in less than a second.  B$URE gives you the flexibility of a portable device, along with the highest level of accuracy currently provided only by desk-top scanners.  B$URE is now available through a crowdfunding campaign via Indiegogo.

Caesarea’s Bsecure Group is a full-service brand and document protection consulting and integration organization, established in 1999.  Bsecure offers the latest front-line technologies designed to protect its clients against counterfeiters and gray markets.  The company is managed and operated by a highly experienced team with vast expertise in the field of anti-counterfeiting solutions.  (Bsecure 22.06)

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9.6 & Mellanox Join Forces to Drive E-Commerce Artificial Intelligence

Mellanox Technologies, China’s largest online direct sales company, have concluded a cooperative agreement involving the establishment of the Joint Innovation Lab, designed to drive technology innovation.  Based on the agreement, both parties will work together on new technology innovation, enhanced user experience and developing a new e-commerce platform for enterprise-level products.  Together, the companies are dedicated to driving the next generation of e-commerce artificial intelligence solutions, and conducting associated research and development for high-speed interconnect products. Joint Innovative Lab will use image processing and cogitative computing technologies to drive innovation in finance, e-commerce, logistics and intelligence applications. A broad spectrum of intelligent applications ranging from refrigeration, big data search, intelligent logistics to autonomous capabilities – all with the goal of demonstrating application-specific viability to industry.  In addition to safeguarding high-performance and reliable computing for on big data processing, cloud computing and others, the Joint Innovation Lab will first deploy new solutions and technologies within so as to provide a new level of user experience to its customers.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  (Mellanox 21.06)

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9.7  Mellanox Announces Next Generation ConnectX-5

Mellanox Technologies announced ConnectX-5, the most advanced 10, 25, 40, 50, 56 and 100Gb/s InfiniBand and Ethernet intelligent adapter on the market today.  ConnectX-5 introduces smart offloading engines that enable the highest application performance while maximizing data center return on investment.  Furthermore, ConnectX-5 is the first PCI Express 3.0 and 4.0 compatible adapter, enabling greater flexibility and future-proofing for the data center.  The new intelligent ConnectX-5 100G adapter enables the most advanced real-time in-network computing engines to unleash business opportunities and new technological developments.

ConnectX-5 enables greater HPC performance with new Message Passing Interface (MPI) offloads, such as MPI Tag Matching and MPI AlltoAll operations, advanced dynamic routing, and new capabilities to perform various data algorithms.  ConnectX-5 delivers the highest available message rate of 200 million messages per second, which is 33% higher than the Mellanox ConnectX-4 adapter and nearly 2X compared to competitive products.  ConnectX-5 is the first interconnect adapter to support PCI Express 3.0 and 4.0 connectivity options, and includes an integrated PCIe switch.  For upcoming PCI Express 4.0 enabled systems, ConnectX-5 will deliver an aggregated throughput of 200Gb/s.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  (Mellanox Technologies 15.06)

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9.8  Verklizan Expands Support for Essence Care@Home Platform

Essence recently completed full integration of its Care@Home platform for elderly monitoring with Verklizan, a leading European provider of emergency call center management platforms.  Care@Home Enhanced Telecare Services Platform is an independent living solution offering a seamless health monitoring experience, allowing independence for seniors and peace of mind for their loved ones.  The system provides the spectrum of active, passive and intelligent alerting capabilities, including: PERS+, the next generation of social alarms; Family, customized monitoring with an advance rule-based engine; and Pro, a personalized and intelligent service that constantly learns and adapts to the daily behavior of individuals and provides alerts based on deviations from the individual routine.

PERS+ includes Essence’s new Voice Panic Detector.  The VPD is the first product in the industry to employ voice recognition technology to give seniors access to emergency response by using the most seamless interface of all – their voices.  It recently won the ESX Innovation award for excellence in the PERS field of personal emergency technologies.

Herzliya’s Essence is a global IoT provider of scalable, cloud-based connected-living solutions for security, communication, and healthcare service providers.  Over the past 20 years, Essence has built an impressive installed base, with more than 15 million products deployed and used by Tier-1 service providers worldwide.  Essence is committed to developing and supporting solutions that both enhance partners’ businesses and enable people to live fuller and better lives.  (Essence 27.06)

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9.9 WakingApp Upgrades Entice Chinese Market with VR, AR, IoT Capabilities

Rosh HaAyin’s WakingApp announced a full Mandarin language version of its successful software, placing it prominently as the leading AR and VR software in the Chinese market.  Wakingapp provides a powerful cloud-based platform that enables users to create virtual and augmented reality content.  Already, users around the world upload hundreds of new content every week; although, this is expected to increase as more Chinese users can now navigate the platform in their native language.  The firm’s ENTiTi VR content creation platform for PC and Mac is the first in the world to enable non-developers easily to create rich, highly interactive virtual reality content for leading devices, including the Oculus Rift and HTC Vive.  WakingApp enables anyone, without any programming experience, to create advanced interactive VR and AR content, including IoT capabilities, once and immediately make it viewable on leading Mobile VR glasses like Google Cardboard, Zeiss VR One, FreeFly VR and Samsung Gear VR and now also Oculus Rift, HTC Vive and upcoming new devices.  (WakingApp 27.06)

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10.1  Israel’s Consumer Price Index Rises by 0.3% in May

Israel’s Consumer Price Index (CPI) rose 0.3% in May, the Central Bureau of Statistics reported on 15 June, after rising 0.4% in April.  Prior to the past two months, the CPI had fallen for five straight months.  Since the start of 2016, the CPI has fallen by 3% and over the past 12 months, the CPI has fallen 0.8%, fueled by the fall in world oil prices.  This is well below the government’s inflation target range of between 1% and 3% although with oil prices now recovering, the CPI is likely to rise again in June.  Outstanding price rises in May included fresh fruit (12%), and tobacco and cigarettes (1.9%). Outstanding price falls in May included onions (17.4%) and tomatoes (5%).  The housing price index, published separately from the CPI, showed that home prices rose 1.2% and have risen 7.8% over the past 12 months.  (CBS 15.06)

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10.2  Unemployment Rate in Israel Hits Historic All-Time Low of 4.8%

On 16 June, the Central Bureau of Statistics announced that Unemployment rates in Israel have hit an all-time low. The figures reflected a steady decrease of an aggregated 2.2% in jobless rates since 2012.  The unemployment rate in May was 4.8%, compared to 4.9% in April and 5.3% in March.  According to the figures, since 2012, the number of unemployed Israelis has decreased by 31.4%, from 277,083 to 190,000.  Jobless rates among Israelis ages 25 to 64 marked an all-time low as well, at 4.1% in May, compared to 4.3% in April. Unemployment among men in this age group was 4.8%, while unemployment among women in this age group was slightly higher, 4.9%.  The CBS also found that 77.1% of adult Israelis, or 3.74 million people, were salaried employees, and that among them, 77.9% had full-time jobs.  (CBS 23.06)

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10.3  Israel’s First Quarter Growth Figure Revised Upwards

Israel’s economy grew at a 1.3% annualized rate in the first quarter, the Central Bureau of Statistics now estimates.  The current estimate constitutes an upward revision of the 0.8% original estimate, below the government’s forecast, and following 3.4% GDP growth in Q4/15.  According to the Central Bureau of Statistics, a 4.8% rise in private consumption and a 16.2% jump in investments in fixed assets accounted for the upward revision.  One of the main factors having a negative impact on growth was the steep drop in exports of goods and services in the first quarter.  (CBS 16.06)

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11.1  JORDAN:  A New Role for Jordan’s Parliament

Kirk H. Sowell wrote in Sada on 22 June that Jordan’s latest government and constitutional changes signal a move toward a more technocratic parliament, responsible for tightening the state’s belt.

King Abdullah II’s 29 May appointment of Hani al-Mulqi, head of the Aqaba Special Economic Region Authority, to replace outgoing prime minister Abdullah Ensour comes at a turning point for Jordan.  Though the office has limited inherent power – especially since a set of constitutional amendments announced in April enhanced executive authority and, specifically, the power of the king – it signals a shift toward a more technocratic government, even if not an independent one.  These changes, which coincide with the king’s dissolution of parliament, should leave the next parliament with the unhappy role of forming the budget and managing an unpopular process of cutting fuel and electricity subsidies while Mulqi, with his technocratic experience, becomes the public face of a painful austerity program.

These changes coincide with rhetoric about Jordan’s need for a “parliamentary government.”  King Abdullah has spoken about this periodically for years, meaning that Jordan’s parliament should have a full ideological spectrum of parties and that a coalition government should elect a prime minister.  This was done in an informal manner in early 2013, when the king instructed parliament to choose its own prime minister, but after some squabbling they were unable to come up with an alternative to the king’s previous choice of Ensour, the standing prime minister.  The idea of parliamentary autonomy has now returned: on 21 April, an op-ed by Jawad Anani, a former minister later selected to be Deputy Prime Minister for Economic Affairs under Mulqi, argued in the official al-Dustour newspaper that the amendments had precisely this role: “to achieve the king’s vision of a parliamentary government based upon political parties.”  A similar article by former interior minister Hussein Hazza al-Majali in al-Rai expressly pushed the constitutional amendments as “preparatory” to achieve the king’s parliamentary government vision.

First announced on 18 April, the bill containing the amendments was approved by cabinet the same day, and passed votes in parliament and the senate on 27 April and on 2 May, respectively.  While the government gave no explanation for why the amendments were introduced at this time and in such haste, the most logical explanation is that this followed a warning from the International Monetary Fund (IMF) that a more stringent adjustment program would be needed.  The amendments, which became law on 5 May, included lengthening the speaker’s term from one year to two (repeated terms remain permissible), allowing holders of dual nationality to hold top-level executive posts and providing that a government is no longer dissolved automatically if the prime minister dies in office.

Yet the core amendment was to Article 40, which previously provided that “the king shall exercise the powers vested in him by royal decree.  Every such decree shall be countersigned by the prime minister and the minister or ministers concerned.  The king expresses his concurrence by placing his signature above the said signatures.”  At least formally, this was a check on monarchial power, although the king’s authority to remove ministers at will meant the limitation was nominal.  The new Article 40 adds exceptions for many appointments.  The text now reads: “the king shall exercise his powers the powers vested in him by royal decree without the signature of the prime minister and the minister or ministers concerned to appoint: the crown prince, the regent [either the crown prince or another prince conducting a function in the king’s absence], Senate president and members, members of the Constitutional Court, president of the Higher Judicial Council, the army’s Joint Chiefs-of-Staff, and the directors of the General Intelligence Department and the darak [riot police].”  The government argued, without providing many details, that this was a way of “strengthening the separation of powers, the independence of the judiciary and the neutrality” of the security services.  Since the king already had the authority to appoint the cabinet itself alone, this gave him unfettered authority to appoint every powerful position in the state apparatus.

Indeed, though the notion of a parliamentary government has been used to encourage greater autonomy for the legislative branch, the current move appears to have more to do with shifting the burden of unpopular fiscal austerity measures to parliamentarians and away from the palace.  The country is on the road to insolvency, with its debt-to-GDP ratio at over 93%, an increase of about 50% since the beginning of 2011, and still increasing.  Much of the commentary in the national press on Mulqi’s appointment stressed his experience in economic portfolios in Aqaba and former Prime Minister Ensour bequeathed him the conclusion of talks with the International Monetary Fund, whose previous adjustment program was a total failure.

Moreover, while Mulqi has in reality a constituency of one – that is, the king – he is an executive proxy for the king and the policy framework he sets.  The monarch can appoint and remove the prime minister at will, and while formally the cabinet holds authority for legislation, key decisions are made by the palace.  Despite the fact that Mulqi’s appointment is temporary, the wording of his four-month mandate – which includes carrying out the “Jordan Vision 2025” reform goals and implementing the decentralization law, which does not take effect until 2017’s municipal elections – suggests he may get a renewed mandate once the election is done as well.

The expansion of the king’s powers has stirred some discussion.  Perhaps the most notable negative reaction came from former speaker of the lower house of parliament Abdul Karim al-Dughmi, who explained during a speech in Mafraq that the constitution stressed – and still stresses – that ministers are personally responsible for their own actions, and neither verbal nor written instructions from the king relieved a minister of legal responsibility.  Noting that the constitution places the king beyond legal accountability (the monarch can neither be questioned nor sued in any court according to Article 30), Dughmi argued the amendments broke down the division between authority and responsibility, since the king now had power to make appointments yet remained immune from legal accountability.  He told Al-Jazeera that “Jordan is moving toward an absolute monarchy as opposed to a constitutional monarchy,” and allegedly told local press outlet AmmonNews that the constitutional changes were a coup against the Jordanian political system.

Yet most legislators voiced their support for what they agree is indeed a move towards “parliamentary government.”  The Speaker of the Senate, Faisal al-Fayez, gave an explicit endorsement, noting the “successful model in Morocco” in which the king appoints a prime minister nominated by the largest coalition of parties.  But unlike in Morocco, there was no referendum to add popular legitimacy to the changes, and there were no qualifications that a government be based on party support.  This latter point is important in terms of application: because the putative move toward parliamentary government is informal, the king will maintain discretion to not have a parliamentary government if he so wishes.

In the meantime, the current four-month technocratic government acts without a parliament. Mulqi has wasted little time on fiscal initiatives, although his initial steps show some uncertainty.  On 9 June, not two weeks in office, the government announced it would be raising electricity prices.  A cabinet subcommittee also decided to increase water prices, but the government publicly backtracked on this move within a few days, as the measures might just be too much for the government to implement.  Mulqi’s chief short-term task is to reach a new agreement with the IMF, which Minister of Finance Omar Malhas, a holdover from the Ensour government, indicated would be ready in July.  Whether or not Malhas remains finance minister after the elections in September, Mulqi is likely to stay on, and the IMF agreement reached this summer will be the center of his new term.  Mulqi’s fiscal cuts, likely to be more stringent, may test whether or not the Jordanian street will remain quiescent.

Kirk H. Sowell is the principal of Utica Risk Services, a Middle East-focused political risk firm.  (Sada 22.06)

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11.2  EGYPT:  Egypt’s Costly Nuclear Project

Eric Trager wrote in TWI PolicyWatch 2632 on 16 June that Cairo’s expensive nuclear deal with Moscow will likely increase the country’s economic burden and susceptibility to Russian influence.

Egypt is reportedly on the cusp of finalizing a $25 billion loan from Russia to construct a civilian nuclear power facility near Dabaa on the Mediterranean coast.  While the new plant will help Cairo satisfy the country’s long-term energy needs to some extent, its high cost suggests additional motivations, such as bolstering the government’s domestic political standing and expanding its foreign relationships beyond Washington.

Egypt’s Second Avenue Subway

Egypt has pursued nuclear capabilities periodically since the 1952 Free Officers Revolution, a heretofore fruitless campaign that had become even more of a fiscal red herring than New York City’s century-long quest to build a new train line under Manhattan.  Cairo first declared its intention to build a plant at Dabaa in 1983 under President Hosni Mubarak, and the Australian government agreed to provide uranium two years later.  These plans were canceled following the 1986 Chernobyl disaster, however, and Egypt instead focused on developing its natural gas reserves, which soon replaced oil as the primary fuel for electricity generation.

Cairo revived the Dabaa nuclear proposal in 2006 but faced resistance from businessmen aligned with the National Democratic Party, who wanted to develop the area for tourism, and from local tribes, who worried about the safety implications. Mubarak’s 2011 ouster further deferred these plans.

An Expensive Solution To A Nonexistent Problem

During the tumultuous years that followed Mubarak’s exit, Egypt suffered major electricity shortages.  Demand rose due to rapid population growth and the government’s generous energy subsidies, while supply fell due to terrorist attacks on gas pipelines.  These shortages contributed to the political upheaval that culminated in the July 2013 ouster of Egypt’s first democratically elected president, Muslim Brotherhood leader Mohamed Morsi, ultimately forcing a suspension of gas exports.

President Abdul Fattah al-Sisi ameliorated these shortages by cutting gas subsidies a month after taking office in June 2014, and then signing contracts for new gas, solar, and wind turbines over the following year.  As a result, electricity production capacity rose from approximately 27,000 megawatts in June 2013 to 32,000 in May 2015.  Today, Egypt’s production exceeds demand, but the government has continued to expand capacity in anticipation of demographic and industrial growth.

The proposed nuclear facility at Dabaa is one such attempt to satisfy future energy needs.  The project’s first phase entails the construction of four third-generation reactors capable of producing a total of 4,800 megawatts within the next twelve years, and the site can accommodate an additional four reactors.  Russia’s state-owned firm Rosatom will build the reactors; the $25 billion loan will finance 85% of the project, with Cairo paying the remainder.  Egypt will eventually repay the loan at 3% interest, over a twenty-two-year period that begins in 2029.

While the loan’s terms are relatively favorable, the nuclear plan is very cost-ineffective compared to other energy deals Cairo has signed in recent years.  For example, last year’s $9 billion deal with Siemens to build gas- and wind-powered plants will add 16,400 megawatts to Egypt’s grid – more than three times the output of the proposed nuclear plant for roughly a third of the cost.  Moreover, the Italian firm Eni discovered the supergiant Zohr gas field along Egypt’s northern coast in August 2015, while BP’s local branch discovered another massive Mediterranean field earlier this month.  Extracting these resources would be more cost effective than building the nuclear plant, especially since nearly three-quarters of Egypt’s electricity is generated by natural gas, and the country’s declining gas output will likely force it to continue importing even after Zohr opens.

The Dabaa deal also compares unfavorably with other nuclear projects in the region.  The Middle East Economic Survey (MEES) estimates that Egypt will ultimately pay $6.1 billion per gigawatt of generating capacity, whereas Iran’s two new plants at Bushehr will cost $5.5 billion per gigawatt and the UAE’s reactors at Barakah $3.6 billion.

In addition, repaying the Russian loan may present a long-term fiscal challenge given Egypt’s recent foreign reserve shortages and growing budget deficit.  According to MEES, Cairo will have to pay Moscow a total of $70.3 billion in nominal terms, or approximately $3.2 billion per year.

The project will increase Cairo’s dependence on Russian technical expertise as well.  In remarks published in al-Wafd on 31 May, the vice president of Egypt’s Nuclear Power Plants Authority acknowledged that the country does not have enough experts to run the new station, so Russian personnel will have to operate it for the first ten years.

Another Pride Project

Despite these costs and challenges, the Sisi government is moving ahead with the project because it views the nuclear plant as an important signal to two audiences.  First, it hopes the project will bolster its domestic support.  “It’s not just about a [nuclear] reactor – it is about Egyptians,” Sisi said during a major television interview on 3 June.  “Instead of one project, we can create 100.  I am trying to do this quickly to be productive, to give hope – to shorten the gap between where we are at and where we want to go.”  In this sense, the nuclear plan is following the same pattern as the Suez Canal expansion project, which was completed within one year and opened last August.

Second, Sisi wants to broaden Cairo’s foreign outreach beyond the still-frosty bilateral relationship with Washington.  The Obama administration restored full military aid to Egypt in March 2015, after withholding big-ticket items for seventeen months in protest of the crackdown that followed Morsi’s ouster.  Yet Cairo still mistrusts the administration due to its prior embrace of the 2011 uprising and its cooperation with the short-lived Muslim Brotherhood government.  Moreover, despite improved military cooperation since last year’s bilateral Strategic Dialogue, Egyptian officials view ongoing U.S. criticism of Cairo’s deteriorating human rights record as interference in their country’s domestic affairs.  Sisi alluded to this problem in his 3 June interview, stating that Egypt’s relationship with Washington is “strategically strong” but that the “principles of its policy that prevailed for thirty years can’t work now.”

Accordingly, the nuclear project is partly an attempt to show that Cairo is “open to the whole world,” as one senior Egyptian official recently told the author.  In seeking a partner for the project, Cairo solicited offers broadly, receiving proposals from China and South Korea before settling on Russia.  By accepting Moscow’s loan and commissioning Rosatom to build the reactors, Cairo is deepening its ties with Russia – an actor that has stood in contrast to Washington by warmly embracing Sisi following Morsi’s ouster and selling military equipment to Egypt during the temporary U.S. aid suspension.

Low Prospects For Weaponization

There is presently no indication that Egypt’s nuclear project is intended for military purposes.  Cairo has been a forceful proponent of a nuclear-weapons-free Middle East since the 1970s and Egyptian officials highlight the country’s right to nuclear energy under the Treaty on the Nonproliferation of Nuclear Weapons, which it signed in 1968 and ratified in 1981.  In a November 2015 speech after the nascent Dabaa deal was first announced, Sisi emphasized that the nuclear project was for “peaceful purposes.”

To be sure, Egypt’s calculus may change if Iran acquires nuclear weapon capabilities, especially since Sisi has declared his commitment to securing Gulf allies against external threats.  For this reason, Washington should seek reassurances that the new reactors are intended for energy purposes exclusively.  At the same time, it should vigilantly monitor Iran’s commitment to the Joint Comprehensive Plan of Action in order to reassure its Sunni Arab allies and prevent proliferation.

U.S. Policy Implications

Given its interest in Egypt’s economic stability and foreign policy outlook, Washington has ample reason to be concerned about the nuclear project.  The large Russian loan is a significant economic burden and will likely enhance Moscow’s leverage with Cairo in the long run.  While the Sisi government has successfully pursued new energy resources to accommodate its expanding needs, the nuclear plant is a very cost-ineffective approach.

Even so, U.S. officials should tread lightly, as they did with the Suez Canal expansion project last year.  To the extent that the nuclear project is intended to bolster the government’s domestic standing and “to give hope,” in Sisi’s words, any public disparagement from Washington would be counterproductive, likely bolstering the distrust that spurred Cairo to accept the Russian loan in the first place.  More to the point, the lingering distrust means that publicly criticizing the project will not deter Cairo from pursuing it anyway.

Eric Trager is the Esther K. Wagner Fellow at The Washington Institute.  (TWI 16.06)

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11.3  SAUDI ARABIA:  Salman’s Saudi Arabia More Ambitious Than Ever

King Salman bin Abdul-Aziz Al Saud’s 18 months on the Saudi throne have been marked by an unprecedentedly energetic and dynamic foreign policy expanding Saudi influence. Riyadh has been far more willing to take risks in national security choices than in recent decades.  In the process, the Saudis have acquired some strategic territory.

Bruce Riedel posted on Al-Monitor on 20 June that the king’s decision to restore Saudi sovereignty over two uninhabited islands, Tiran and Sanafir, in the Gulf of Aqaba and take possession of them from Egypt is a prime example of his aggressiveness.  Saudi kings since Abdul-Aziz ibn Saud have left the two islands under Egyptian control to avoid getting involved in the sensitive issue of passage through the Straits of Tiran.  Now Riyadh plans to build a bridge across the straits to provide a land link from the kingdom to North Africa.  The islands will be inhabited at least by customs and toll collectors.

The annexation provoked controversy in Cairo and undermined Salman’s client, President Abdel Fattah al-Sisi.  Egyptians complained Sisi was giving away part of their country.  Many saw it as a naked payoff for the billions in aid and investment Saudi Arabia has made in Egypt since they helped orchestrate Sisi’s coup in 2013.  It makes Saudi Arabia the dominant power in controlling access to the Gulf of Aqaba and the ports of Eilat in Israel and Aqaba in Jordan.  Riyadh has committed to ensuring free access.

At the other end of the Red Sea, the king’s war with the Houthi rebels in Yemen has given Saudi Arabia de facto control of the Yemeni side of the crucial Bab al-Mandab Strait between Asia and Africa.  The Saudis took control of the port of Aden on the entrance to the Red Sea a year ago and the strategic island of Perim in the Bab al-Mandab last October.  Their Yemeni allies control Socotra Island in the Gulf of Aden as well.  This spring, Saudi and Emirati troops took control of the capital of the Hadhramaut region of southeast Yemen, Mukkala, away from al-Qaeda in the Arabian Peninsula.  Mukkala is the fifth-largest city in Yemen and provides the Saudis with land access across the Empty Quarter Desert to the Indian Ocean.

Yemen is now de facto partitioned by the war.  The Saudis have backed the shaky UN-brokered cease-fire and the political negotiations in Kuwait.  During Deputy Crown Prince Mohammed bin Salman’s visit to Washington recently, he promised President Obama the kingdom is committed to a “political settlement of the conflict.”  While the parties to the talks in Kuwait say they want a united Yemen, many southerners would prefer a return to southern independence.  Saudi Arabia backed a southern secessionist rebellion in 1994.  In the Middle East, “temporary” partitions have a tendency to last.

In the Persian Gulf, Salman has sharply escalated Saudi Arabia’s rivalry with Iran.  The war in Yemen is justified as a conflict to prevent Iran from developing a proxy in Arabia.  Diplomatic relations with Tehran were severed in January and Iranians will not be participating in the hajj this year.  While Tehran has hinted at openness to cooling tensions, there is no sign of any such interest in Riyadh.  The influential Wahhabi clerical establishment has strongly endorsed the tough line with Shiite Iran.

In Syria, the Saudis hope that defeating the government of President Bashar al-Assad will lead to the unraveling of Hezbollah and Iran’s position in the Levant.  Last summer, the Saudi intelligence service nabbed Ahmed Ibrahim al-Mughassil, chief of Saudi Hezbollah, after he got off a flight from Tehran to Beirut and spirited him away to the kingdom.  Mughassil was the mastermind of the 1996 truck bombing of the Khobar Towers that killed 19 Americans.  He was also involved in several attacks on Saudi diplomats in the 1980s.  His rendition is the boldest Saudi intelligence coup ever.

The favorite son of the king, Prince Mohammed bin Salman, 30, has been at the center of all the action.  As defense minister he has also presided over the creation of the new Islamic military alliance announced last winter by the king.  The alliance is clearly aimed at isolating Iran and Iraq, though officially it is a counterterrorism pact.  Its 30 or so members have established a secretariat in Riyadh.

Mohammed bin Salman’s high-profile visit to Washington, New York and California, with extensive Saudi press coverage, further enhanced his status as the king’s emissary.

Crown Prince Mohammad bin Nayef keeps a lower profile.  But his hand has been critical in the Mughassil caper, breaking ties with Iran, the tough hajj policy and the taking of Mukkala.  He also leads the battle against the Islamic State terror challenge at home.

This aggressive foreign policy is expensive.  Billions have gone to prop up Sisi and others.  The war in Yemen is costing more.  The king and his two deputies clearly feel the price is worth it.  Whether by accident, design or some combination of the two, Salman has acquired some of the most strategically valuable terrain in the Middle East.  (Al-Monitor 20.06)

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11.4  EGYPT:  Will Egypt Stop Listing Religion on Official IDs?

Rami Galal posted on 14 June in Al-Monitor that the draft bill to remove the religion field from national IDs and official documents sparked a debate among Egyptians, with some supporting the decision as it would eliminate discrimination and others arguing that it would further entrench sectarian tension.

After collecting the signatures of 60 Egyptian parliamentarians, the official spokesperson for the Support Egypt coalition, member of parliament Alaa Abdel Moneim, submitted 1 June to parliament an 18 article draft bill titled Citizenship.  Article 3 of this draft bill states, “The religion field be abolished from identification cards and all official documents.  No citizen may be compelled to disclose his/her religion unless doing so were necessary to determine the legal premise of matters such as inheritances and marriages.”

The draft bill provoked a sharp debate.  Supporters of the bill viewed it as a basis to convert a heterogeneous society predicated on religious affiliation, such as “Muslim” and “Copt,” into a homogenous one founded on citizenship, and not religion.  For their part, opponents considered the draft bill an affront to Egypt’s Muslim identity, where religion not only affects inheritance and marriage, but is also a basis for the rituals performed by either community; for instance, Muslims who wish to perform I’tikaf (act of residing in the mosque in seclusion during the month of Ramadan) have to submit the necessary papers to the Ministry of Religious Endowments to this effect.

The opponents also saw that many legal issues would need to be addressed, such as legal testimonies.  A testimony in court of non-Muslims, for example, may not be accepted in Islamic matters and Muslim personal status cases, such as proof of adultery or divorce.

In this context, the head of the parliamentary Human Rights Committee, member of parliament Anwar El-Sadat, told Al-Monitor, “I am not against the law as a whole.  But we must feel reassured that it will not lead to domestic problems, the loss of rights or state of confusion in any form, for said changes [removing the religion field] must occur only through consensus within the [Egyptian] community.”

Sadat added, “The elimination of the religion field from official documents primarily aims to prevent discrimination.  Discrimination is not based on this [religion] field, but occurs in day-to-day relations.  As a result, we, in the parliamentary Human Rights Committee, discussed [another] draft law for equality and non-discrimination, without any consideration to eliminating the religion field [from IDs or official documents], because we know that doing so would result in grave problems that might lead to even more sectarianism.”

On the other hand, the head of Al-Azhar’s Fatwa Committee, Abdul Hamid al-Atrash, highly criticized the bill and told Al-Monitor, “Removing the religion field from official documents is futile.  According to Islam, each individual enjoys the freedom to choose whatever religion one desires without compulsion.  Therefore, people are free to believe whatever they want.  But the national ID, and therefore the religion field, is used to regulate transactions between individuals and allow the proper identification of others, by managing Muslim and Christians rites and allowing entry to Muslim and Christian holy places — mosques for Muslims and churches for Christians.  Moreover, the law would lead to confusion in Egypt’s relations with some countries such as Saudi Arabia, where some places are only accessible to Muslims, with Mecca being an example.”

Atrash said that there is no discrimination against a specific community in Egypt that requires the passing of such law, adding, “Laws must serve the interests of society, but this law lacked this characteristic.  [For example,] Christians in Egypt are not excluded from any job as they are present in all state institutions — judiciary, army, police and Foreign Ministry — without any form of discrimination.  But this bill inadvertently fuels sectarianism by removing the religion field.”

Ahmed Karimeh, a professor of comparative jurisprudence at Al-Azhar University in Cairo, told Al-Monitor, “In the past [Egypt’s modern history], Copts held leadership posts in Egypt, such as prime ministers Boutros Ghali in 1908 and Youssef Wahbi in 1919, while Wissa Wassef was speaker in 1928, Makram Ebeid was finance minister in 1942 and Youssef Boutros Ghali held the same position in 2004.”

Noteworthy is that there are no texts in the Egyptian Constitution that prevent Copts from holding the position of president.

Karimeh added, “Today, there is nothing in Islam that precludes a Copt from becoming president, which was not the case during the Islamic caliphate, when the caliph — in addition to his political functions — also held a missionary role, led prayers and gave the Friday sermon.  The situation in Egypt is different today as [most] modern democratic civil regimes rely on voting for the most competent people, irrespective of whether they were Muslim or not.”…“[However,] current intolerance against Copts assuming leadership posts emerged during Anwar Sadat’s reign [1970-1981], when he played the religion card and allowed Islamic political movements to enter the political arena.”

Sadat had used the Islamic movements to create balance with the leftist movements, which were a thorn in his side during his rule.  Before him, Gamal Abdel Nasser had clamped down on Islamic forces, namely the Muslim Brotherhood.

“Also, Salafists strongly re-emerged during Hosni Mubarak’s term in office [1981-2011].  We currently fear additional Salafi incursions into the existing political system, aided by political support from Gulf countries — especially Saudi Arabia — which backs Salafists who espouse Wahhabi ideals in Egypt,” Karimeh said.

In contrast, Father Salib Matta, a member of the Congregational Council of the Coptic Orthodox Church, told Al-Monitor, “Citizenship is predicated on a sense of belonging to the homeland, while religion is a relationship that exists between believers and their God.  Therefore, I welcome this law and I think it is urgently necessary to remove the religion field from the IDs to strengthen the sense of citizenship [among Egyptians].”

He added, “Each church knows who the members of its congregation are, and there is no fear for non-Christians to infiltrate church meetings.  The seven sacraments such as baptism, chrism, confession, communion and marriage will not be given to non-Copts.”

Matta indicated that the law would fail to achieve true citizenship if forced upon society. In this case, Al-Azhar and the church must play the important role of instilling this sense of citizenship by choosing sermons that solidify this, as well as provide a rhetoric that encourages proper citizenship through the media and the ministries of culture and education.

In the same context, lawyer of the Coptic Church Ramses Najjar, told Al-Monitor, “This law will make all citizens equal as dictated by the 2014 Egyptian Constitution.  Its aim shall be to confront Salafi extremist ideologies and allow people to embrace their Egyptian nationality without any fanaticism for the religion of their birth.”  He added, “The law will allow any Egyptian Copt to assume sovereign ministries such as those of defense, foreign affairs and interior. Modern Egypt can only be built on competencies and not fasting and prayer.”

The assistant secretary-general of the Salafi Nour Party, Shaaban Abdel Alim, countered by saying, “Sponsors of the current draft law are politically bankrupt. Instead of concentrating their efforts on urgent matters needed to advance the country — such as the economy, security and education — parliamentarians are proposing these laws to distract people from core affairs.”

Shaaban told Al-Monitor, “Special committees from our party [Nour Party] shall study this matter [draft bill] and put it to a vote [within the party] pursuant to a key principle stipulated in Article 2 of the Egyptian Constitution of 2014, which states that ‘Islam is the religion of the state and Arabic is its official language.  The principles of Islamic Sharia are the principal source of legislation.’  As such we shall reject the bill if the committees find it inconsistent with constitutional provisions.”

The cancellation of the religious field from IDs and official documents may not help to eliminate discrimination in Egypt, as discrimination is not present at the government level.  Rather, discrimination is fueled by sectarian tension, an issue that needs to be addressed by spreading awareness about the importance of the citizenship concept through education and media.  (Al-Monitor 14.06)

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11.5  EGYPT: How Egypt Plans to Address its Growing Water Crisis

Walaa Hussein posted on Al-Monitor on 17 June that amidst the worst drought to hit the Horn of Africa in the past 100 years, the Egyptian Ministry of Water Resources and Irrigation declared a state of extreme emergency in early May to last until next August in preparation for the summer crop season.  The ministry also launched extensive campaigns to eradicate and burn water-thirsty rice crops.

In villages, farmers intensified their demonstrations against agents from the Department of Agriculture and the Ministry of Water Resources, who sprayed incendiary compounds on rice crops planted in violation of the ministry’s decision prohibiting the cultivation of rice, which it confined to an area of about 1 million acres in specific areas of the Nile Delta.

Nabil Al-Shahat, one of the farmers who violated the Al-Sharqia governorate’s rice-growing ban, told Al-Monitor, “My children will starve all year if I implemented the government’s decision and refrained from planting rice on the one and a half acres that I own.”  He explained that the high price of rice, which is a staple in the diet of Egyptian farmer families, precluded them from abiding by the ministerial decision, which would lead to hunger among peasant families.

In that regard, a government report indicated that total land surfaces planted with rice had increased by 1 million acres in just one month, rising from 174,000 on 5 April to 1.175 million on 30May.

According to Shahat, in the summer seasons of past years, he used to plant corn on his land in order to avoid violating the rice ban.  He said, “Last year I found no buyers for my corn, and the government did not provide any marketing services to compensate for my loss.  Now, even if no buyers are available, I will store the rice and use it to feed my family.  Because I grew rice, Ministry of Irrigation officials punished me by cutting off my water supply.  But I overcame that setback by digging a well on my land.  Although it is somewhat briny, the well water is fresh enough to satisfy my needs while also serving to quench my family’s thirst in light of the lack of clean water in the village.”

In contrast, the former head of the Egyptian Farmers Union, Mohammad Barghash, told Al-Monitor that some farmers violated the decision, not to satisfy any immediate needs, but to take advantage of high rice prices.  All those who cultivated 1 acre of rice in past years planted 10 acres this year, which threatens to exhaust yearly water allowances on one summer crop at the expense of other crops at a time when Egypt is suffering from a water crisis.

Barghash asked the United Nations to adopt an initiative aimed at countries suffering from water shortages, among them Egypt, in confirmation of their citizens’ rights to live and preserve their water rights.  Barghash’s calls come in the context of current fears among Egyptians concerning the entry into operation of Ethiopia’s Renaissance Dam, and the resulting potential decrease in Egypt’s 55.5 billion cubic meter annual water quote from the Nile.

In that regard, Hussam Maghazi, former minister of water resources and irrigation, told Al-Monitor that Egypt’s water-rationing crisis was now of utmost importance and required the combined efforts of the state and the ministry in order to educate citizens and farmers that the water-rationing decisions adopted by the state served the people’s interests.  He said, “Farmers must understand that, due to water scarcity, planting water-thirsty crops such as rice is no longer possible in Egypt.”

In addition, according to statements made to Al-Monitor by Agriculture Committee member in the Egyptian Parliament, Mohamed Hilmi al-Sherif, no leniency would be shown toward those who violate the rice-planting ban this year.  This is a decision that has been agreed upon between parliament and the government.  Sherif warned that a state of confusion has reigned over government decisions lately, resulting in this high number of rice-planting violations — among them the decision to allow rice exports, which led to a two-fold increase in rice prices and encouraged farmers to plant said crop despite the imposed ban.

Haitham Awad, chairman of the Department of Irrigation and Hydraulics at Alexandria University, explained that confining the cultivation of rice to Delta governorates was to ensure that Mediterranean Sea waters did not encroach onto those lands and the wells located therein.  He further pointed out that the rice cultivation ban and restricting its cultivation to certain areas was technically taken in past years yet not enforced on violating farmers through the imposition of fines.  But the situation is much different this year.

Engineer Walid Haqiqi, spokesperson for the Ministry of Water Resources and Irrigation, told Al-Monitor, “Egypt can no longer afford to waste water.”  He argued that exporting water-thirsty crops was a waste of water, and the cultivation of crops such as rice, bananas and sugarcane had become a burden on available Egyptian water resources.  As a result, land allocated for their cultivation must be scaled back and coordination initiated with the Ministry of Supply to only allow the cultivation of quantities needed to satisfy established local needs.  Doing so would free water resources needed for the cultivation of other crops as well as satisfy the country’s drinking water and development needs.

Haqiqi also confirmed that the Nile’s water output last year was below its annual average due to the drought that has stricken the Nile Basin and Ethiopia.  As a result, Cairo was forced to siphon large quantities of water from its strategic reserves at Lake Nasser.

Exterminating water-thirsty crops, developing awareness campaigns calling for water-saving measures and the statements made by Foreign Minister Sameh Shoukry that Ethiopia’s Renaissance Dam was now a fait accompli all clearly indicate that Egypt’s political leadership wants citizens and farmers to become partners in shouldering the responsibility for the water crisis plaguing the country.  (Al-Monitor 17.06)

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11.6  TUNISIA:  Tunisia Aims For More Sustainable Growth, But Reforms Will Be Key

Tunisia’s structural reform effort aims to lift the country’s future growth potential with the assistance of international institutions, although social and security-related challenges weigh on tourism revenues and on investment activity, says Moody’s Investors Service in a report published on 27 June.

“Tunisia benefits from strong institutions relative to rating peers and support of international institutions, which aid the country’s transition to a more sustainable growth model.  However, its economic potential is linked to further reform progress,” says Elisa Parisi-Capone, a VP-Senior Analyst at Moody’s.

In Moody’s view, the implementation of the long-delayed structural reform agenda in the banking, fiscal and business environment areas is key to lifting the country’s future potential growth path once the security-related headwinds recede.

The four-year $2.8 billion Extended Fund Facility (EFF) follow-up arrangement approved by the IMF on 20 May paves the way for ample international support commitments.  These continue to sustain Tunisia’s government liquidity and external vulnerability profiles over the rating horizon.  The public administration’s ability to manage recent security disruptions and increased political tensions (which led to the split of the former majority-holding Nidaa Tounes party) attests to the country’s robust institutional framework.

However, Tunisia’s reliance on external support, albeit provided on very favorable terms, has led to a rise in external debt levels toward 70% of GDP by 2017.  Persistent current account imbalances over the forecast horizon also constrain the country’s creditworthiness, mostly due to plunging tourism revenues arising from lingering domestic and external security risks.

Overall, Tunisia’s fiscal stance has improved under the umbrella of the previous two-year IMF program that expired in December 2015, but remains subject to social and security-related spending pressures which have crowded out public investment and driven wage expenditures to over 14% of GDP.  (Moody’s 27.06)

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11.7  TUNISIA:  From Political Islam to Muslim Democracy – Ennahda Changes Course

Sarah J. Feuer wrote in The Washington Institute that to read the newspapers is to believe that Tunisia, the small country that sparked the Arab Spring, is the only one still on a recognizable path to democracy, in large part thanks to the conciliatory nature of the country’s leading Islamist party, Ennahda (Renaissance).  There is truth in this narrative.  At key moments of the democratic transition, Ennahda, which has roots in the Muslim Brotherhood, distinguished itself from other Brotherhood derivatives by granting concessions to its secular opponents in the interest of preserving stability, even going so far as to cede to a technocratic government the political power it earned through free and fair elections, an unprecedented move for an Islamist party.  Now, Ennahda may again be making history.

In late May, over one thousand members of Ennahda convened in the resort town of Hammamet for the movement’s 10th party congress. Delegates discussed and voted on seven measures – from the party’s internal procedures to Ennahda’s political and economic platforms.  Arguably the most significant outcome of the congress and the one subsequently grabbing international headlines, was the adoption of a motion to separate Ennahda’s political and religious activities.  In the run-up to the decisive vote, 74-year-old Ennahda leader Rached Ghannouchi (who the party reelected as president) issued a series of statements indicating that Ennahda was poised to leave behind “political Islam” and embrace “Muslim democracy.”

The statements and vote have been variously interpreted as signaling everything from a radical departure for the Islamist movement and the end of political Islam in Tunisia to a rhetorical ploy aimed at easing Western concerns while Ennahda pursues its long-term goal of establishing an Islamic state.  A close reading of Ghannouchi’s remarks and the congress’ decisions suggests a more complicated picture.  Although the move to distinguish between the Islamist party’s religious and political functions is significant, it is too soon for observers to begin drafting obituaries for political Islam in the birthplace of the Arab Spring.

Muslim Democrats

In a 19 May interview with the French daily Le Monde, Ghannouchi affirmed that Ennahda “is leaving political Islam in order to enter Muslim democracy.  We are Muslim democrats who no longer refer to ‘political Islam.’”  Instead, “Ennahda is a democratic, civil party whose points of reference are Muslim and modern civilizational values.”  To the delegates gathered in Hammamet, Ghannouchi described Ennahda as a “national democratic party devoted to reform, based on a national reference drawing from the values of Islam.”

In part, the change in terminology is a matter of branding. In his interview with Le Monde, Ghannouchi noted that violent groups such as al Qaeda and the so-called Islamic State (ISIS) have appropriated the term “political Islam” and given it a decidedly negative connotation.  In labeling its members “Muslim democrats,” Ennahda can distinguish the movement from the violent groups that also identify as Islamist.  The rebranding may also be intended to reassure readers of Le Monde that Ennahda does not find common cause with those responsible for the terrorist attacks in Paris, Brussels and elsewhere.  Still, the generous loan packages that France, the EU, the World Bank and the IMF announced even before Ennahda’s decision suggest that the party should be less concerned with winning over the West and more worried about secular Tunisians who remain skeptical of Ennahda’s long-term goals.

Since the outbreak of the so-called Arab Spring in Tunis five years ago, nearly 6,000 Tunisians have left the country to join jihadist groups in Iraq, Libya and Syria.  During its tenure in government from 2011 to 2013, Ennahda came under fierce public criticism for what many perceived to be a lax approach to Islamist extremism at home.  The current rebranding is, therefore, partly aimed at convincing a domestic electorate that the country’s leading Islamist party has adopted a firm stance against extremism.  In this vein, Ghannouchi told delegates to the congress that Ennahda remained uniquely suited for counterterrorism at home because it had drawn “the clear and definitive line between Muslim democrats and extremist and violent trends that falsely attribute themselves to Islam.”

The decision to disavow the term “political Islam” also reflects a conceptual argument, namely: since political Islam in Tunisia achieved what it set out to achieve, it is no longer necessary.  In his interview with Le Monde, Ghannouchi asserted that political Islam emerged in reaction to two regional trends: dictatorship and an extremist form of laicism, the French variant of secularism in which expressions of religious identity are discouraged, if not outlawed, in public.  Given that the Tunisian uprising installed a democracy and did away with both dictatorship and laicism, “there is no longer a justification for political Islam in Tunisia.”  In his address to the Ennahda delegates, Ghannouchi implied that political Islam had run its course when he recounted that Ennahda had evolved “from an ideological movement engaged in the struggle for identity, when identity was under threat, to a comprehensive protest movement against an authoritarian regime, to a national democratic party devoted to reform.”

Ghannouchi is downplaying key aspects of Islamist ideology here, portraying Ennahda as something akin to a civil rights organization advocating on behalf of Muslims who, for decades, could not freely practice their faith.  Ennahda was banned under the former regime, with hundreds of its members thrown in jail, tortured or forced into exile.  As such, the drive for greater religious and cultural recognition for its members, and the achievement of social justice more generally, were always components of Ennahda’s societal project.  But they were never the only components. Informed by its roots in the transnational Muslim Brotherhood, Ennahda also sought to establish an Islamic state, guided by Islamic law (sharia), in which devout Muslims could live openly, achieve social justice and so on.

The 2011 uprising and Ennahda’s subsequent ascendance appeared to offer the movement a chance to fulfill its ideological aspirations after decades of repression.  But Ennahda quickly encountered obstacles.  When the party’s bloc of parliamentarians proposed a constitutional provision that would have made sharia “a source” of law (some wanted it to be “the source”), fierce opposition from secular parties forced the group to withdraw the proposal.  Ghannouchi reassured his supporters that the movement could remain true to its Islamist identity because Islamism fundamentally meant promoting the broader aims of the sharia, such as justice and liberty, rather than specific regulations outlined in the Koran and Sunna (the sayings and behaviors attributed to the Prophet Muhammad).  He could also point to articles in the new constitution affirming that Islam is “the religion of the state” and committing the state to imparting an “Arab-Muslim identity” to its youth.  The episode was telling both for what it suggested about the ideological commitments many Ennahda members had retained, and for what it revealed about Ennahda’s ability to adapt to political constraints.

But it became harder to claim success once Ennahda bowed to public pressure and stepped down in 2013 after what was widely viewed as a dismal performance in government; it was harder still after the 2014 legislative elections, when 70% of the electorate voted for parties other than Ennahda and the Islamist movement lost 20 seats in parliament, falling behind the secular Nidaa Tounes (“Tunisian Call”) party.  These setbacks may explain why Ghannouchi has taken to highlighting identity and democracy promotion, issues on which his movement can more convincingly claim success in the past five years.

Separation or Specialization?

Ennahda’s defeat at the polls in 2014 prompted what turned out to be nearly two years of internal discussion regarding the future direction of the party.  The repeated postponement of the party congress reportedly stemmed from the leadership’s difficulties in convincing the base that Ennahda should be a political party and leave overtly religious activities to a separate, if related, body.  In the end, although delegates to the Congress rejected the term fasl (separation), they approved a takhassus (specialization) between the movement’s religious and political activities.  Thus, for example, Ennahda leaders can no longer preach in mosques or hold leadership positions in religious associations.  As Ghannouchi explained in Le Monde, “we need to specify the difference between political and religious activity. The arena of political activity is not within the mosque.”

Precisely where the movement will draw the boundaries between public life, politics, and religion remains an open question.  Such moves partly reflect political considerations. Ghannouchi told Le Monde that Ennahda “wants a party that speaks of daily problems, of families’ and individuals’ lives, and not a party that talks [to voters] about the last judgment, paradise, and so on.”  As if to demonstrate what he meant, he dedicated the second half of his speech at the congress to outlining a series of reforms aimed at combating corruption, spurring economic growth, reducing unemployment, and improving conditions for the country’s youth – all goals that Tunisians have consistently ranked as the nation’s highest priorities.  With local elections scheduled for March 2017 and parliamentary elections to follow in 2019, Ennahda knows it needs to expand its base of support if it is to rebound from the 2014 defeat.  Whatever else may be driving the movement’s current transformation, focusing on the “daily problems” of the electorate makes good political sense.

It is too soon to tell whether the relatively narrow decision to require members who preach in mosques to give up politicking will spell a more dramatic move to separate religion and politics in Tunisia.  Ghannouchi did tell delegates to the congress that “We are determined to keep religion far from political struggles and conflict,” even as he was keen to stress that separating religion and politics should not be equated with separating religion from public life.  “We are astonished to see the insistence of some to exclude religion from public life,” he proclaimed.

This begs the question of what will happen when political conflicts concern the place of religion in public life.  Precisely where the movement will draw the boundaries between public life, politics, and religion remains an open question.  In his interview with Le Monde, Ghannouchi noted that “Neither the [Tunisian] law nor religion should interfere with people’s private lives.  In the public sphere, the law is applied. In the private sphere, it’s individual liberty.”  So if, as he stressed to Ennahda’s delegates, religion is to inform public life, and that same public sphere is to be regulated by the law, then Ghannouchi’s statements would suggest a closer connection between religion and the law than his secular adversaries are likely to accept.

What Next?

In the end, the extent to which the Ennahda congress changes Tunisian politics may depend on the extent to which Ennahda itself changes.  Analogies have been drawn to Turkey’s experience in the early 2000s, when the Islamist AKP recast itself as a socially conservative party and highlighted its economic platform in an effort to broaden its support base. Ennahda may have the AKP in mind, but the more relevant model today is arguably Morocco, where an Islamist party with Brotherhood roots legislates in parliament and even occupies the prime ministry but leaves overtly religious activities to its sister organization in civil society.  Whether Ennahda changes its internal structures; where the party comes down on divisive legislation, such as the regulation of problematic imams or the recent proposal to remove the religious imprint on the country’s inheritance laws; and the degree to which the party campaigns on religiously oriented themes in the upcoming election cycles will give observers a clearer picture of Ennahda’s longer-term plans and more ammunition for the debate about the continued evolution of political Islam in Tunisia and in the wider Middle East.  (TWI 08.06)

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11.8  TURKEY:  Reforms Key to Durable Turkish Macroeconomic Improvement

On 23 June, Fitch Ratings said the Turkish economy is growing faster than its ratings peers and some external indicators are still improving, but a hiatus in structural reforms and a weakening in some policy settings means the durability of these trends is uncertain.

A pro-growth bias is apparent in monetary policy.  The Central Bank of the Republic of Turkey (CBRT) just cut the top rate of the interest-rate corridor for the fourth time this year.  Cumulative cuts in 2016 total 175 bp.  Although billed as part of a planned simplification of monetary policy under new governor Murat Cetinkaya, the narrowing of the interest-rate corridor has occurred entirely at the upper end.  With the interest-rate floor unchanged, the effective funding rate is falling, despite stubbornly high core inflation.

Lower rates will further support consumption, which is driving GDP growth.  Consumption has also been supported by a higher minimum wage as well as the influx of migrants.  GDP increased by 4.8% in 1Q16 from a year earlier at constant prices, data from the Turkish Statistical Institute showed earlier this month.  Household consumption increased by 6.9%, the fastest rate in over four years.

Consumption-driven growth draws in imports, but the adverse effect on the current account is more than offset by lower oil prices.  The CBRT reported this month that the current account deficit fell nearly $1 billion y-o-y in April.  This was the ninth consecutive monthly fall, and reduced the rolling 12-month deficit to a near six-year low, despite a drop in tourist arrivals, with Bloomberg reporting a 28% y-o-y fall in April on security concerns and Russian sanctions.

Despite the cyclical narrowing of the current account deficit, the external financing requirement remains large.  The potential risks from economic overheating or changes in international investor sentiment are long-standing credit weaknesses, and the prospects for economic and external rebalancing are an important part of our sovereign ratings assessment.

The Turkish government has outlined a policy program to tackle structural weaknesses.  But renewed political commitment to reforms that would sustainably improve the pace and composition of growth and reduce vulnerability to external shocks (to which Turkey has been resilient) has yet to be demonstrated.

Prime Minister Binali Yildirim, who succeeded Ahmet Davutoglu in May, has included reform advocates in his cabinet.  But he has also restated plans to amend the constitution to give the presidency more powers.  This is likely to maintain the political uncertainty that saw Davutoglu replaced, and which increases risks to policy predictability.  We think that the CBRT will remain under political pressure to continue easing.

Implementation of structural reform would be credit positive, as would a more stable and predictable domestic political and security environment.  A deterioration in fiscal discipline or a materialization of external stresses would put pressure on Turkey’s ‘BBB-‘/Stable sovereign rating.  (Fitch 23.06)

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11.9  TURKEY:  Where Does Erdogan Want To Take Turkey?

Soner Cagaptay wrote on 15 June in The Washington Institute that Erdogan’s leader’s distorted view of the Ottoman past may dictate whether the country further embraces Islamization.

Turkish President Recep Tayyip Erdogan is the most powerful democratically elected leader in the country’s history.  He has run Turkey since 2002 through his Justice and Development Party (AKP), first as prime minister and since 2014 as president.  Having orchestrated on 22 May the promotion of his close ally Binali Yildirim to the post of prime minister and AKP chairman, Erdogan has amassed even more power in his hands: he is now head of state, as well as (de facto) head of government and leader of the ruling party.  Where does he want to take Turkey?

Since 2002, Erdogan has methodically eliminated the legacy of Kemalism, the revolutionary-secularist ideology of Turkey in the 20th century named after the country’s founder Mustafa Kemal Ataturk.  Erdogan’s counter-revolution has been democratic “sensu stricto.”  Although his critics blame him for being authoritarian, Erdogan has built strong popular support, using the wind from four electoral victories since 2002 to revolutionize Turkey’s political system.

While Ataturk established a strict firewall between religion and government and firmly defined Turkey as a Western country, Erdogan flooded the country’s politics, education system and foreign policy with Islam.  Erdogan’s proclivity to view the world through an anti-Kemalist lens has subsequently pivoted Ankara toward the Middle East, where Turkey has become a party in the ruinous Syrian civil war.  Hard as it is to believe, today Ankara supports radical Islamist groups, such as Ahrar al-Sham, which has ties to al Qaeda, in the Syrian conflict.

At home, Erdogan’s counter-revolution, whereby he has made Islam the epicenter of Turkish politics, looks Kafkaesque.  Subsequent to the changes to the country’s secular education system, a growing number of pupils are forced to study in Islamic high schools.  Recently, the grandson of the chief rabbi of Turkey was placed in an Islamic high school, along with many Christians, in government-run matriculation exams.

Turkey’s Islamization, coupled with Ankara’s involvement in the Syrian civil war and bad neighbors, such as the Islamic State next door, expose the country to grave risks.  According to a report by the Global Policy and Strategy Institute, an Ankara-based think-tank, more than 2,000 Turkish citizens have crossed the border to fight for IS.  In the past 10 months, the group has carried out four terror attacks in Turkey, killing more than 150 citizens.

While Turkey is, unfortunately, yet to see the worst of the IS threat, I blame Ataturk indirectly for Erdogan’s ruinous fixation to make Islam the guiding light of all politics in Turkey.  Ataturk was a general in the Ottoman military before the empire collapsed at the end of World War I.  A product of the Ottoman system, he liberated Turkey and then went on to fully secularize the country.  He was an ordinary middle-class citizen who received secular education in Ottoman public schools.  As a young man, Ataturk lived in an Empire that already had a huge body of secular laws, courts and institutions, including a parliament, and a tendency to see itself as part of the European state system.  Thus, Ataturk’s uniqueness is not that he secularized Turkey but that he took the Ottoman trajectory to its fullest extent.  He enshrined secularism in the Turkish constitution and strongly confirmed Turkey’s Western vocation.

Revolutions need to portray the political systems they overthrow as being utterly useless in order to justify themselves, and so in his revolution Ataturk cast the Ottomans in an entirely different light.  Ataturk and the Kemalist elites depicted the Westernizing Ottomans as religious fanatics who were obsessed with Islam, and who subsequently and consequently failed.

The Kemalists caricaturized the Ottomans: the Empire was all about religious, anti-Western darkness, almost a Turkish version of the Salafists. Kemalism, they argued, was all about progressive secularism.  Over 80 years, Turkey became one of the most secular-ideological Muslim-majority states, and such falsified ideas about the Ottomans were taught to generations of pupils and citizens, including Erdogan, who have internalized them.

Counter-revolutions aim to rewind the political order back to the past and this is what Erdogan is doing in Turkey.  Erdogan’s counter-revolution is focused on making Islam the centerpiece of Turkish politics and sees the country’s foreign policy role as being primarily anti-Western.  This, Erdogan thinks, is how he will bring the Ottomans back.  The irony is that while trying to revive the pre-Ataturk Ottoman Empire, Erdogan is actually trying to revive the caricature of the Ottomans that he was taught by the Kemalists.

The Ottomans were a sophisticated bunch.  They were Muslims, but not obsessed with Islam in foreign policy or at home.  From its inception, the Empire saw itself as a European power and was so deeply Westernized that by the 19th century it provided education for women, ran secular courts and taught its pupils, including Ataturk, to take religion out of politics.  In foreign policy, the Ottomans always hoped to be a Muslim and European power, even as their power waned in the 19th century.  The last Ottoman caliph whom Ataturk exiled, Abdulmecid II, was an established painter known for his nudes.

If Erdogan can grasp the Ottoman legacy beyond the Kemalist caricature that shapes his thinking, Turkey still has a chance to walk away from a ruinous policy of Islamization at home and the IS threat from Syria.

Soner Cagaptay is the Beyer Family Fellow and director of the Turkish Research Program at The Washington Institute.  (TWI 15.06)

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11.10  TURKEY: Why Turkey is Making a Return to Libya

Barin Kayaoglu posted in Al-Monitor on 14 June that given its economic troubles at home, it is no surprise that Ankara has decided to reopen its embassy in the Libyan capital of Tripoli, which had been closed since 2014.  Although Turkey has pursued seemingly strange and inconsistent policies toward Libya since 2010, commercial and economic interests have taken over the Turkish approach to the North African nation.

In the aftermath of the Mavi Marmara crisis between Turkey and Israel in May 2010, Libya, then holding the presidency of the United Nations Security Council, issued a statement in support of Turkey.  In November that year, Libyan dictator Moammar Gadhafi awarded Recep Tayyip Erdogan, then Turkey’s prime minister, with Gadhafi’s famed “human rights” prize.

When the Arab Spring reached Libya in early 2011 and a popular uprising against Gadhafi turned into a bloody revolution, Erdogan first tried to hold back his NATO allies from intervening against Gadhafi.  “Can there be such nonsense?  What business does NATO have in Libya?  As Turkey, we say we oppose this; it cannot be talked about, it cannot be debated,” Erdogan told an audience in Hamburg, Germany, in late February 2011.

But as Ankara’s Western allies began pounding Gadhafi’s forces in mid-March, the Turkish prime minister had a change of heart.  On 21 March 2011, Erdogan uttered one of the most nonsensical statements in his political career: “NATO must enter [Libya] to establish and record that Libya belongs to Libyans.”  The Turkish military soon joined the UN-sanctioned blockade against Gadhafi, which led to his eventual overthrow.

Turkey’s initial reluctance to join the West in the Gadhafi regime’s overthrow and its subsequent about-face were both rational decisions.  As Al-Monitor’s Fehim Tastekin reported last year, Turkish contractors in Libya undertook some 565 projects worth $29 billion from 1973 onward.  Two years prior to the Arab Spring, Turkish engineering firms were awarded 124 projects valued at about $8 billion in Libya.  Turkish entities were estimated to hold $2.5 billion in assets, funds and pending reimbursements in Libya, another $1.4 billion in overdue payments and nearly $100 million in Libyan banks in 2011.  Given Libya’s high earnings from petrodollars in those days, the Gadhafi’s regime’s announcement that it would invest $100 billion abroad had also animated Turkish leaders’ imaginations.

By getting on board the fight against Gadhafi, Ankara hoped that its investors and entrepreneurs could quickly return to the North African country upon the Libyan strongman’s overthrow.

Yet that is not what happened.  With no experience in deliberation and democracy, disparate Libyan factions failed to achieve transition to a democratic and representative government similar to the one in neighboring Tunisia.  A bloody civil war followed Gadhafi’s demise in October 2011.

Much as it did with its ill-advised policies in other Arab countries (especially Egypt and Syria), the Erdogan regime bet on the wrong horse in Libya by favoring the Muslim Brotherhood over other political parties.  Whereas Turkey’s Western allies backed the UN-recognized government in Tobruk, Ankara supported the Muslim Brotherhood-dominated General National Congress based in Tripoli.

Relations between Ankara and Tobruk became so bad that in February 2015, the latter decided to expel all Turkish firms from Libya.  Less than three months later, forces loyal to Libya’s internationally recognized government attacked Tuna 1, a freighter owned by a Turkish company registered in the Cook Islands, on the suspicion that it was carrying weapons and supplies to pro-Tripoli militias.

The establishment of the Government of National Accord between Tripoli and Tobruk in December could turn the tide — even though the resolution of the crisis may still elude Libya.  The Islamic State has entrenched itself in the country’s central coastal areas, while rival militias wield immense influence. In this context, the Erdogan regime probably calculates that it could play a role in stabilizing Libya.

According to Volkan Ipek, one of Turkey’s leading African specialists who teaches at Hacettepe University in Ankara, the Turkish decision to close the embassy in Tripoli was a strange one.  Ipek told Al-Monitor, “There were also deep political and economic issues during the 2011 presidential crisis in the Ivory Coast, yet Turkey had not closed its embassy there.”  In Libya, Ipek said, Turkey did not want to step too far from the West and so closed its embassy in 2014.  He said that now that the Government of National Accord has come into existence, “Turkey wants to play nice with both Libya and the West, [and] it wants to show that it supports reconciliation [in Libya].”

Asked if Turkey’s “return” to Libya has any financial and economic motives, Ipek said, “That is precisely so. As I argue in a recent article, many Turkish companies did not receive their earned payments [after Gadhafi was killed], which especially affected ‘Anatolian tigers.’  I think these businessmen put pressure on the Turkish political elite, asking them to collect their monies from Libya.  It is also quite likely that Turkish leaders said, ‘We pursued a solution during the [Libyan] crisis so now Libya should offer us something,’ which of course is oil.  You can’t ask anything from Libya if you’re not in Libya.”

But what’s in it for the Libyans?  Ipek argued, “Turkey is the only Muslim country that makes major overtures in Africa.  Turkey could make massive investments in Libya, especially with its construction sector.”  That makes a lot of sense. During Turkish Foreign Minister Mevlut Cavusoglu’s visit to Libya on 30May, the two sides emphasized economic and commercial cooperation as a leading reason to revive relations.

Ipek also suggests that the thaw in Turkish-Libyan relations could have political underpinnings.  “Both countries are discussing their regimes these days. Debates on a presidential system in Turkey could influence Libyan debates.  Of course, Turkey today is an immigration destination for Libyans.  If Turkey is represented in Libya via its embassy, the migration of Libyans could be eased.”

Whether this conciliatory approach toward Libya means that Ankara is abandoning its pro-Muslim Brotherhood stance in its regional policy, Ipek is not so sure.  He mentioned how Erdogan ousted Prime Minister Ahmet Davutoglu recently and will likely weigh even more heavily on foreign policymaking.  “I don’t think Turkey will alter [its policy] either in North Africa or sub-Saharan Africa, irrespective of who comes to power.  The pro-Brotherhood [outlook] will continue.”

Still, one hopes that realist policy calculations such as those that have led to positive results for Turkey in Libya could be repeated in other parts of Turkish foreign policy — starting with Syria and Iraq. Turkey’s economic well-being and national security depend on it.  (Al-Monitor 14.06)

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11.11  TURKEY:  Turkish-EU ties in Throes of a Slow Death

The EU’s demand for a revision of Turkey’s anti-terrorism law as a precondition for allowing Turks visa-free travel in Europe has turned into the Achilles’ heel of ties between Ankara and Brussels, notes Semih Idiz in Al-Monitor on 21 June.

Ankara’s bid for European Union membership used to underlie Turkey’s appeal for many of the Middle East’s progressive elements in the past.  The Arab Spring enhanced Turkey’s importance as a “model country” for other Islamic countries.  With the Arab Spring gone sour and the EU battling its own crises, while Turkey becomes more authoritarian under President Recep Tayyip Erdogan, these hopes have all but faded.

It was a negative issue, the refugee crises, which appeared momentarily to inject fresh life into ties between Ankara and Brussels recently.  Following the highly controversial migrant agreement concluded by the sides in March, then-Prime Minister Ahmet Davutoglu announced “a new era” in relations with Europe.  “Today we realized that Turkey and the EU have the same destiny, the same challenges and the same future,” he said over-optimistically.

Davutoglu also came back from Brussels with a “bonus” he hoped would mollify domestic critics of the migrant agreement; these critics said the pact would turn Turkey into Europe’s refugee camp.  Turks would be given the privilege of visa-free travel to Europe by the end of June, provided Ankara met 72 criteria for this.

Erdogan has since fired Davutoglu and the general impression is not one of deeper engagement between Turkey and the EU, but what appears to be a continuing process of disengagement.

Ironically, it is the “bonus” Davutoglu brought from Brussels in March that has become the Achilles’ heel in this respect.  It is clear that Turks will not gain the right of free travel in Europe by the end of June.  That has been already deferred to October and many doubt it will happen then.

At issue is Turkey’s refusal to fulfill a specific EU demand, even though Ankara has met most of the 72 criteria required.  Turkey is being called on to change its anti-terrorism law so that journalists, academics, activists and ordinary citizens are not charged under it for merely expressing their views — something that is happening with increasing frequency.

Ankara is currently embroiled in a bloody war against the outlawed Kurdistan Workers Party (PKK), which the United States and the EU have also designated as a terrorist group.  Erdogan, who is clearly displeased with the way Davutoglu negotiated the migrant deal, reacted to the EU demand with his familiar abrasive manner.

Early in May he made it clear that Ankara would not comply with the deal, indicating that if the EU is not pleased with that, it can go its way while Turkey goes its.  In a separate address in May, he said, “Asking for the definition of terrorism to change is to call for a stop to fighting terrorism. This amounts to supporting terrorism.”  Erdogan also recalled that PKK supporters were allowed by Belgium to open a publicity tent outside the European Commission building in Brussels in March, while Davutoglu was negotiating the migrant deal inside.  “They give them euros and tell them to go and divide Turkey.  They give them weapons.  Do they think we don’t know all of this?” he said angrily.

Prime Minister Binali Yildirim, who replaced Davutoglu in May, also indicated recently that Turkey would forgo the visa privilege for the sake of fighting terrorism.  In an address to his parliamentary group, Yildirim said the EU’s demand regarding Turkey’s anti-terrorism law was “unfriendly,” adding that Ankara would never bow to this.  “Even if it is the visa waiver that is in question, this will not happen.  Let [that waiver] stay where it is,” Yildirim said defiantly.

Turkish government officials have also suggested that Ankara will refuse to fulfill its obligations under the migrant agreement if the visa waiver does not go through as promised.

Already under intense criticism for allegedly caving into “Turkish blackmail” with the migrant agreement, top EU officials are adamant with regard to their demand, despite concerns that this might undermine the migrant deal.

Regardless of the controversy surrounding it, this agreement — which is being silently implemented even though the Turkish parliament has not ratified it yet — has reduced the number of illegal crossings to Greece from Turkey.

Analysts argue, however, that Turkey can’t afford to scuttle the migrant deal over the visa issue because the refugee crises and the related threat from Islamic terrorism cut both ways.  The fact that the final decision on the visa issue has been deferred to October buys time for the sides to try to overcome the impasse.

The current state of affairs also vindicates those who argued that it was a fatal mistake to lump the refugee question with Turkey’s EU bid, and the visa issue.  The result, they point out, has left Turkish-EU ties in a worse state.  Retired Ambassador Osman Koruturk, whose past posts included Paris and Berlin, says that using refugees to advance unrelated political needs was unethical on the part of both sides to start with.  “Both sides acted dishonestly with regard to their promises, so it was not hard to see then that the whole business would have negative results for Turkish-EU ties,” Koruturk, who is currently a deputy from the main opposition Republican People’s Party, told Al-Monitor.

He recalled that German Chancellor Angela Merkel had started the campaign against Turkey’s EU membership while he was ambassador in Berlin and she was then in the opposition; Koruturk indicated that it was less than honorable for her to give the impression now that she was supporting this bid purely for the sake of the migrant deal.  The negative results of this deal were also seen in the UK’s Brexit campaign.  Anti-EU campaigners used the visa question to argue that Turkey will eventually be given “free EU membership” even if it doesn’t fulfill the democratic prerequisites for this, and flood Britain with Turks.

Opinion polls show that most Turks believe that the EU will never admit Turkey as a member.  This also makes Erdogan’s life easier, enabling him to continually lambaste Europe for its “perfidy.”  Koruturk also believes that the current situation plays into Erdogan’s hands.  “When he said Turkey would go its own way if the EU insists on its demands, he was probably expressing his true desire,” Koruturk said.  “He considers the West to be degenerate and believes its values are not suitable for Turkey.”  Erdogan’s continuing railings against Europe seem to confirm this assessment.

Meanwhile, the recent resignation of Hansjoerg Haber, the EU’s ambassador to Ankara — for “reasons to do with Turkey,” according to EU officials — also shows where Turkish-EU ties stand.  Given this general situation, the impression that these ties are in the throes of a slow death appears unavoidable.

Semih Idiz is a columnist for Al-Monitor’s Turkey Pulse.  He is a journalist who has been covering diplomacy and foreign policy issues for major Turkish newspapers for 30 years.  His opinion pieces can be followed in the English-language Hurriyet Daily News.  His articles have also been published in The Financial Times, The Times of London, Mediterranean Quarterly and Foreign Policy magazine.  (Al-Monitor 21.06)

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11.12  TURKEY:  Turkish Students Up in Arms Over Islamization of Education

Posted in Al-Monitor on 20 June, Sukru Kucuksahin commented on students in Turkey’s leading high schools rebelling against government efforts at an Islamist makeover of the education system.

Since the Justice and Development Party (AKP) took power in 2002, Turkey has had six education ministers, each of whom made major changes to the education system, some argue to turn students into guinea pigs.  The most significant change, bulldozed through parliament amid fistfights and protests in March 2012, expanded the imam-hatip religious schools and introduced Quranic studies and the life of the Prophet Muhammad as elective courses in public schools, among other changes.  The opposition has long decried the Islamization of education, while President Erdogan has insisted on raising a “devout generation,” lauding imam-hatip schools, which train Muslim clergy and offer extensive Quranic studies.

In early June, a wave of protests spread through leading high schools around the country, with students demanding “modern” education.  The spark was ignited at the graduation ceremony of the prestigious Istanbul Erkek Lisesi when the students turned their backs in protest to their principal as he delivered a speech.  The protest continued the following day at the school’s traditional party, which the principal chose not to attend.  The students unfurled a large banner demanding “a modern and not partisan administration,” setting the tone for more protests to come.

Students at the Galatasaray Lycee, one of Turkey’s oldest and most influential schools, quickly followed suit, calling for a “modern” principal who had not succumbed to the “servitude of any sultan” and could live up to the legacy of Tevfik Fikret, the famous Turkish poet who headed the school in the late 19th century.  Within a week, students and graduates from about 370 schools had issued similar statements.  One school, in the Black Sea city of Samsun, was raided by anti-terror police, called in by the principal.

Erdogan and his new education minister, Ismet Yilmaz, blamed anti-government forces for inciting the students, and many in AKP circles wondered anxiously whether a “second Gezi Park” was on its way.  The protests have remained peaceful so far.

Under the AKP, education at Turkey’s mainstream high schools notably declined, as the government focused on expanding imam-hatip schools, using both incentives and coercive measures to increase enrollment at them.  Erdogan, himself an imam-hatip graduate, has routinely promoted these schools as the “apple of our eye,” calling them “exceptional” and “moral” centers of learning. In doing so, he not only raised alarm about the future of secular education, but ostracized the students at other types of schools.

Following the 2012 amendment, drawn up hastily and over the head of the then-education minister, the government changed the administrators of schools virtually overnight.  The newcomers belonged overwhelmingly to a trade union close to the AKP.

The real problem with Turkey’s school system, however, is the quality of the education provided, but no progress has been visible in this regard.  Take, for instance, several statistics from this year’s nationwide university entrance exam, which more than 2 million people took, including 912,000 students graduating from high school.  In the latter group, the average number of correct answers for the Turkish-language and social sciences tests, each consisting of 40 questions, stood at 19.31 and 10.45, respectively.  As for the science test, about 750,000 of the 2 million who took it had no correct answers, while another 500,000 managed only three at most, leaving little to be said.  In global school rankings last year by the Organization for Economic Cooperation and Development, based on test scores in math and science, Turkey fared 41st among 76 countries, hardly good news for a country that boasts one of the world’s top 20 economies.

The AKP, however, has shown little concern about the current situation.  With another controversial amendment in March 2014, the government laid hands on 174 schools that produce the country’s highest achievers, dubbing them “project schools,” with the stated aim of raising future scientists and inventors.  Many of these schools have established traditions for selecting their principals from among in-house candidates and through exams.  This approach was discarded and the government appointed new principals of its own choosing who were unfamiliar with the schools and their students.  Moreover, thousands of experienced teachers were dismissed due to what was described as “mental fatigue” and replaced with younger colleagues who belong to the pro-government trade union.

The makeover has also affected social life at these schools, where students tend to have an avid interest in arts, sports and scientific and creative activities.  Events the students wanted to organize were axed in favor of religiously themed conferences and activities.  Some principals were accused of interfering with how students dress and trying to keep boys and girls apart.

All this led to the wave of protest, with graduating students speaking up for modern, scientific and secular education.  The rebellious schools may represent only a small portion of Turkey’s 10,550 high schools, but they boast the country’s brightest students.  Hence, whether the government lends them an ear or not is vital to Turkey’s future.

Representatives of critical trade unions in the education sector are both upset and disappointed with themselves.  “The kids had to raise their voices after we, the adults, failed to do what was up to us,” Veli Demir, the head of the Education and Science Workers Trade Union, told Al-Monitor.  “Our respectable schools, and therefore their students, were ostracized, while the imam-hatip schools were glorified.”

According to Demir, the number of secondary imam-hatip schools grew from 1,099 in 2012 to 1,961 at present, while imam-hatip high schools increased from 708 to 1,149 in the same period.  Meanwhile, the number of students attending them has risen from 932,000 to 1.2 million.  Back in 2002, the figure stood at 71,000, he said, recalling a leaked audiotape from a 2013 meeting in which Erdogan’s son Bilal allegedly lectured education officials and pro-AKP charity representatives on how enrollment in imam-hatip schools should reach 1 million in a short period of time.  “They don’t want students involved in science, arts and sports, but students who are [only] pious,” Demir said.

Another critical trade union leader, Kamuran Karaca of the Education and Science Laborers Syndicate, said the main reason why students at the so-called project schools rebelled was the appointment of principals with religious motivations, keen to bring “all kinds of Islamists” to the schools “under the pretext of panels, discussions or book days.”

“The students, however, demand secular, scientific and modern education and want activities accordingly,” Karaca said.  “What they imposed was a dead end and now that this has become obvious, they are targeting the students and trying to portray them as puppets.  We’ll only move forward if we remember that these places are not mosques but schools.  Otherwise, the problems will persist and our future will be undermined.”  (Al-Monitor 20.06)

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