Fortnightly, 9 January 2019

On 25 December, the Knesset approved the medical cannabis export law in second and third readings, paving the way for Israel to become a leading medical cannabis exporter and participant in a thriving sector. Knesset members voted 21 – 0 in favor of the bill, part of a set of reforms first okayed in 2016, albeit cabinet approval is still needed for its implementation.

According to Israeli government research, medical cannabis exports is set to bring in an estimated $1 billion in revenue per year. Since the government announced the reforms two years ago, some 400 Israeli farmers applied for permits to grow cannabis, with another 242 receiving preliminary approval. The ministry also said it received some 200 applications for cannabis nurseries seeking to distribute cannabis plants, 95 requests to set up cannabis pharmacies, 60 applications for processing facilities, and 44 requests to set up stores selling cannabis products. The revised law provides a budget for police to monitor, track and control the production and delivery of cannabis for export, and prevent spill over.

Recreational use of cannabis in Israel is still not legal but licensed medical cannabis consumption for vetted physical and mental health issues has been allowed for a decade.

The new law specifies that any foreign investment of more than 5% in an Israeli cannabis company will require regulatory approval. The law now awaits final approval from PM Netanyahu and his cabinet. (NoCamels 26.12)

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1.2 Knesset Passes Law Aimed at Fighting Solicitation of Prostitution

On 31 December, the Knesset voted unanimously to ban the solicitation of sexual services in Israel. According to the law, individuals who solicit or attempt to solicit sexual acts will face an NIS 2,000 ($535) fine. A second offense will be punishable by a NIS 4,000 ($1,070) fine and the prosecution will have the authority to file an indictment against the solicitor. In addition, the court will have the authority to issue a maximum fine of NIS 75,300 ($20,000) for repeat offenders. The law is set to take effect in mid-2020, to allow the state time to set up government mechanisms for the rehabilitation of sex workers on the basis of recommendations issued by the inter-ministerial committee on fighting prostitution, which suggested the state allocate a multi-million dollar budget to this end. (IH 01.01)

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1.3 Transportation Ministry to Roll Out Interactive Air-Conditioned Bus Stops

Israel’s Transportation Ministry is preparing to road-test a new “smart” air-conditioned bus stop in an effort to make public transportation users more comfortable in the oppressive summer heat. Transportation Minister Katz announced on 26 December that the pilot program will be launched in Eilat, Israel’s southernmost city, where high temperatures in the summer often exceed 40° C. The first new stops will likely be located at sites throughout the city that see the heaviest public transportation use. The new bus stops are enclosed modules that feature automatic doors, interactive controls, and touch screens that provide transportation users with real-time schedules and routes for the bus lines that stop there. The controls make the stops accessible to passengers with disabilities. (IH 30.12)

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1.4 Over Half Israel’s 2019 Drug Basket Budget Goes to Cancer Treatment

The members of the committee for expanding the National List of Reimbursed Drugs have published the list of drugs and medical technologies to be added to the National List of Reimbursed Drugs for 2019, at a cost of NIS 460 million. The drugs will be used by some 70,000 patients, while the approved tests will be used for a very large number of people. The use of the drugs, costing an additional NIS 40 million, will be gradually introduced and charged to the 2020 budget. Cancer treatments costing NIS 255 million, more than half of projected additional cost, will be added to the list in 2019, in line with the trend in recent years, with the exception of 2018.

In recent months, the committee members initially selected a list of 770 drugs and technologies at a cost of over NIS 3 billion, of which only 107 drugs were selected. Some 220 drugs costing over NIS 2 billion reached the final selection stage. New drugs for treatment of leukemia, multiple myeloma lymphoma (of the plasma cells found in bone marrow), liver cancer, melanoma, breast cancer, prostate cancer, kidney and bladder cancer, lung cancer, and cervical cancer (including advanced biological and bio-immunotherapy drugs activating the immune system to attack cancer cells) were also added to the National List of Reimbursed Drugs. (Globes 03.01)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Elbit to Deliver Two-Color Laser System to Raytheon

Elbit Systems announced that its subsidiary, Elbit Systems of America was awarded a contract by Raytheon Company to provide the Two Color Laser System (TCLS) for the Multi-Spectral Targeting System. The initial contract is in an amount not material to Elbit Systems and will be performed during 2019. TCLS is a production component within the electro-optical surveillance system for multiple military airborne platforms, including the next-generation targeting systems onboard unmanned aerial vehicles.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. (Elbit Systems 03.01)

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2.2 Elbit Systems Provides Security Solution for Karish-Tanin Gas Fields Platform

Elbit Systems announced that it was awarded a $15 million contract from Energean Israel, a subsidiary of Energean Oil and Gas, to supply a comprehensive solution for the Floating Production Storage and Offloading (FPSO) platform of the offshore Karish-Tanin gas fields. The contract will be performed over an approximately two-year period, with warranty and logistic support continuing for an additional 10 years.

The technological suite, to be supplied by the Company’s subsidiary, Elbit Security Systems (ELSEC), includes a wide range of sensors, among them electro-optic systems, radars, sonars, a command and control center as well as equipping rapid interception boats with a dedicated suite of sensors. The security solution will enable to detect and identify both surface and underwater threats and will assist security teams to respond efficiently.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance, unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. (Elbit Systems 07.01)

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2.3 Innovid Receives $30 Million in Funding from Goldman Sachs

Innovid has secured $30 million in pre-IPO funding from Goldman Sachs’ Private Capital Investing group. Innovid will use the additional capital to further its innovation and leadership in the connected TV (CTV) advertising technology market, as well as to expand its global footprint.

Innovid currently creates, delivers and measures video ads for the world’s largest brands, such as L’Oreal, Toyota, Bank of America, GlaxoSmithKline, Campbell’s and more. With the rapid consumer adoption of CTV, Innovid works hand-in-hand with key publisher clients, including Hulu, Roku and Fox, among others, to re-imagine the advertising experience for the consumer. In partnership with its publishing clients, Innovid led the creation of two industry firsts: consumer choice-based engagement ads and live Internet TV campaigns.

Ramat Gan’s Innovid is a leading provider of In-Video Advertising solutions for online advertisers, publishers and content producers. The company’s In-Video platform combines the marketing value of product placement, which is enjoying a 30% growth rate this decade in all electronic media, with the interactivity only possible on the internet. Through the use of Frame-based Meta-Data, Innovid’s proprietary technology provides a seamless integration between the video and the embedded images. Beyond ad integration and serving, the company solution includes a back-end analytics dashboard to measure and track engagement. (Innovid 07.01)

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2.4 mPrest Partners With Southern Company for Smart Energy Applications

mPrest and Atlanta’s Southern Company, America’s premier energy company, announced a collaboration to develop and implement a solution to further enhance the resiliency, efficiency and flexibility of Southern Company’s robust distribution system. mPrest’s intelligent grid “System of Systems” applications directly address the challenges of the evolving energy industry, which include rapidly decentralizing networks, sharp changes in energy demand, extreme weather events and cyber security threats.

As the first step in the partnership, Southern Company and mPrest were awarded a grant from BIRD Energy, a program sponsored by the U.S. Department of Energy, the Israeli Ministry of Energy, jointly with the Israel Innovation Authority and managed by the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation, to develop a distribution product that turns grid-edge devices into fully integrated tools for enhanced management at the edges of the electric grid. Distribution technologies like this allow for optimal distribution energy management, resulting in energy and cost savings and reliable integration of distributed energy resources.

Petah Tikva’s mPrest is a global provider of mission-critical monitoring, control and big data analytics software. Leveraging the power of the Industrial IoT, mPrest’s integrative “System of Systems” is a proven catalyst for digital business transformation. Their innovative management solutions have been deployed in next-gen applications for carrier service providers, system integrators, smart cities as well as IoE (Internet of Energy) applications for energy utilities, defense and HLS. (mPrest 07.01)

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2.5 Amazon to Buy CloudEndure for $250 Million

Amazon is acquiring Israeli cloud computing company CloudEndure for an estimated $250 million. The deal is expected to close shortly. Amazon, through its subsidiary AWS, is the world’s biggest supplier of clouds services, and wants to maintain its advantage over other major cloud computing suppliers and among other things, strives for smoother transfer of data. The acquisition of CloudEndure can help in this task.

Based in Ramat Gan, CloudEndure was founded six years ago and has raised $20 million. CloudEndure is a cloud computing company that develops business continuity software solutions for disaster recovery, continuous backup, and live migration. The company enables the smooth transfer of data from cloud to cloud. For example, organizations operating in a multi-cloud environment can save their data and recover it if the cloud collapses. Companies often work with many clouds for financial reasons (lack of dependence on one cloud), and dispersing risk (for example if there is a security breach in the cloud), or for operational reasons (working in many countries or if there is a better data center). CloudEndure’s product also enables smoother transfer of data from servers to the cloud. (Globes 07.01)

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2.6 SolarEdge to Enter E-Mobility Market with Acquisition of S.M.R.E.

SolarEdge Technologies announced the entry into a definitive agreement to acquire S.M.R.E. Headquartered in Italy, SMRE provides innovative integrated powertrain technology and electronics for electric vehicles. Founded in 1999 and traded on the Italian AIM (SMR.MI), SMRE has three business units: e-mobility, automated production machines and telematics software. The company has more than fifteen years of experience developing end-to-end e-mobility solutions for electric and hybrid vehicles used in motorcycles, commercial vehicles and trucks. These solutions include innovative high-performing powertrains with e-motor, motor drive, gearbox, battery, BMS, chargers, Vehicle Control Unit (VCU) and software for electric vehicles.

The initial acquisition entails a purchase from the founder and an additional two stockholders of approximately 51% of the outstanding shares of SMRE pursuant to a standard share purchase agreement, for an aggregate investment of approximately $77 million, with 50% to be paid in cash and the remaining 50% to be paid in shares of SolarEdge common stock. The transaction is expected to close in the coming weeks and will be followed by a mandatory tender offer in which SolarEdge intends to offer to purchase in an all cash transaction, subject to regulatory reviews and approvals, the remaining outstanding ordinary shares of SMRE, that are currently listed on the Italian AIM stock exchange, with the goal of SMRE becoming a wholly-owned subsidiary of SolarEdge.

Herzliya’s SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, UPS, and grid services solutions. (SolarEdge 07.01)

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2.7 BIRD Foundation to Invest $7.3 Million in 8 New Projects

During its meeting last month, held in Tel Aviv, Israel, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation approved $7.3 million in funding for eight 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 $20.4 million.

The BIRD Foundation promotes collaborations 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.

The eight projects, approved by the Board of Governors, are in addition to the 974 projects, which the BIRD Foundation has approved for funding during its 41-year history. To date, BIRD’s total investment in joint projects has been nearly $350 million, helping to generate direct and indirect sales of more than $10 billion. The projects approved include:

-4Cast Systems (Petah Tikva, Israel) and Adelos (Polson, MT) will develop an Upstream – Advanced Pipeline Disaster Prevention System.

-Compedia Software & Hardware Development (Ramat Gan, Israel) and Samaritan’s Purse (Boone, NC) will develop VolunteerVR – Virtual Reality Skills and Empowerment Tools for Disaster Relief Volunteers.

-HackerU (Ramat Gan, Israel) and JustCode. (NY, NY) will develop Cyber Security and Coding Assessment Platform for Measuring and Enhancing Cyber Readiness and Tech Talent Competency.

-Juganu (Rosh HaAyin, Israel) and Just Greens (Newark, NJ) will develop a Tunable White Spectrum SMART LED Based Fixture for Automated Horticulture Processes.

-Leviticus-Cardio (Petah Tikva, Israel) and Jarvik Heart (NY, NY) will develop the Wireless Jarvik 2000® LVAD.

-Mitos Medical (Netanya, Israel) and FiberTech Medical (Baltimore, Maryland) will design and manufacture a Surround Vision Scope.

-MS Tech (Herzliya Pituah, Israel) and Tekwave Solutions (Alpharetta, GA) will develop a Rapid Field Analysis of Chlorates, Perchlorates, Fentanyl and Synthetic Opioids using HF-QCM Nanotechnology Detection Sensors.

-Somatix Technologies (Ra’anana, Israel) and Catholic Senior Housing and Health Care Services (PA) will develop a Digital Health System, SafeBeing – ‘Aging in Place’ Lifestyle with Exceptional Peace of Mind.

The deadline for submission of Executive Summaries for the next BIRD cycle is 6 March 2019. Approval of projects will take place in June 2019. (BIRD 08.01)

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2.8 Eyesight Teams Up With Samsung on Driver Monitoring System

Eyesight announced it was teaming up with Samsung Electronics. The deal will integrate Eyesight’s advanced AI computer-vision Driver Monitoring software into Samsung’s software for its in-cabin camera solution, creating the most advanced fully-integrated Driver Monitoring System for installation by car manufacturers. Eyesight and Samsung’s Driver Monitoring System monitors a driver’s gaze direction, pupil dilation, eye openness, blink rate and head position using Eyesight’s proprietary Computer Vision algorithms to detect levels of drowsiness and distraction. A car manufacturer can decide what to do next: it can sound an alarm to alert the driver, suggest a rest, or activate more self-driving features. The new Driver Monitoring bundled hardware and software solution will offer advanced capabilities and quick time to market for the carmakers and Tier-1 manufacturers.

Tel Aviv’s eyeSight Mobile Technologies is a leader in touch free Interfaces for consumer electronics. Its technology allows users to control mobile and portable devices with simple hand gestures by using the built-in camera, advanced real-time image processing and machine vision algorithms. (Eyesight 07.01)

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2.9 Innoviz and HARMAN Partner to Deliver Industry-Leading LiDAR to Automakers

Innoviz Technologies and Connecticut’s HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co., focused on connected technologies for automotive, consumer and enterprise markets, announced a newfound strategic partnership to make Innoviz’s high-performing, solid-state and mass-producible LiDAR solutions available to OEMs globally. HARMAN will leverage Innoviz’s LiDAR offerings to further reinforce its position as a leading provider of products and technologies to automakers that help improve vehicle safety, perception, connectivity and experience. Specifically, Innoviz’s LiDAR will enhance HARMAN’s existing ADAS and Automated Driving initiatives, helping deliver superior driver assist features today and Levels 3-5 automation tomorrow.

InnovizOne, which HARMAN will make available to OEMs through this partnership, is a solid-state LiDAR sensor that is designed specifically for automotive deployments and automakers’ mass-production needs. Innoviz LiDAR sensors create dense 3D point clouds. Innoviz’s perception software enables outstanding object detection, classification and tracking at long distances. The solution delivers on all of the automotive industry’s needs for performance, reliability, cost, compact size and product maturity, and is a sensor for next generation autonomous vehicles.

Rosh HaAyin’s Innoviz is a leading manufacturer of high-performance, solid-state LiDAR sensors and perception software that enable the mass -production of autonomous vehicles. InnovizPro is a solid-state LiDAR that offers outstanding performance and value for automotive and other applications. InnovizOne is a cutting-edge, automotive-grade LiDAR sensor that provides superior 3D sensing for Level 3-Level 5 autonomous driving. Innoviz is backed by top-tier strategic partners and investors, including Aptiv, Magna International, Samsung, Magma Venture Partners, Vertex Ventures, SoftBank Ventures Korea, 360 Capital Partners, Glory Ventures, Naver and others. (Innoviz 08.01)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 yallacompare Raises $8 Million in Latest Round

Dubai-based yallacompare has raised $8 million in its latest round of funding. Lead by existing investors STC Ventures and Wamda Capital, the financial comparison website also attracted new investor Argo Ventures, the investment arm of international insurance company Argo Group. The investment will be used to expand to Egypt by the end of the first quarter of this year while also increasing market share in the UAE and Kuwait.

While consumers in the region feel comfortable comparing prices online, many still prefer to conclude the purchase offline, usually on the phone. yallacompare is working with insurance companies to automate more of the processes and interactions with customers. The company’s last round of funding was in May 2017 when it raised $3.5 million. (Wamda 06.01)

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3.2 South Korea to Provide 28 Subway Cars to Egypt by 2021

Egypt is set to receive 48 subway cars by 2o21 from South Korean railway system Hyundai Rotem Co worth $135 million. The order, which was based on a competing bid, will be custom made as Hyundai Rotem Co will be building the subway cars for Egypt’s National Authority for Tunnels. The cars, which will be air-conditioned, will travel at the speed of 80 kilometers per hour and will service Cairo’s metro line 2. The order will also guarantee a maintenance and repair service until 2031. Hyundai Rotem is an affiliate of Hyundai Motor Group. The 41-year-old company produces defense and plant equipment; it has already supplied Cairo metro Line 1 with 180 subway cars.

Egypt’s metro system is one of the oldest in the Middle East and Africa. It stands as one of Egypt’s most used and affordable means of public transportation as official taxi fares start at EGP 5 while Uber and Careem are considered pricier options. (ES 02.01)

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3.3 American Concrete Institute Opens New Middle East Regional Office in Dubai, UAE

The American Concrete Institute (ACI) announced the opening of its regional office in Dubai, United Arab Emirates. The opening marked the Institute’s first physical presence outside of the United States since its inception in 1904. The Middle East Regional Office will focus on advancing the development, dissemination, and adoption of ACI consensus-based knowledge on concrete and its uses in the region. The new office is located on level 7 of the Dubai World Trade Center.

Founded in 1904 with a headquarters in Farmington Hills, MI, USA, and a regional office in Dubai, UAE, the American Concrete Institute is a leading authority and resource worldwide for the development, dissemination, and adoption of its consensus-based standards, technical resources, educational & training programs, certification programs, and proven expertise for individuals and organizations involved in concrete design, construction, and materials, who share a commitment to pursuing the best use of concrete. (American Concrete Institute 07.01)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Construction Progresses on Final Phase of Giant Dubai Solar Park

On 29 December, the Dubai Electricity and Water Authority (DEWA) said that construction work on the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park has advanced further with the completion of 128 pillars of the project’s solar tower. The fourth phase of the park is the largest single-site investment project in concentrated solar power (CSP) in the world based on the independent power producer (IPP) model. Featuring a total investment of AED50 billion, the park will reach a total capacity of 5,000 megawatts (MW) by 2030.

The fourth phase of the solar Park will use three technologies to produce 950MW of clean energy, 600MW from a parabolic basin complex, 100MW from a solar tower and 250MW will be generated from photovoltaic panels. It will have the world’s tallest solar tower, at 260 meters and the largest thermal energy storage capacity in the world of 15 hours, which allows for energy generation round the clock.

The 13MW photovoltaic first phase of the solar park became operational in 2013. The 200MW photovoltaic second phase of the solar park was launched in March 2017 while the 200MW first stage of the 800MW photovoltaic third phase became operational in May 2018. The third phase will be completed in 2020. (AB 30.12)

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4.2 The Use of Plastic Bags in Greek Supermarkets Drops by 80%

The use of plastic bags in supermarkets in Greece dropped 80% in 2018 since stores no longer give them away for free, according to a recent survey by the Research Institute of Retail Consumer Goods (IELKA). The environmental protection measure that came into force on 1 January 2018 has resulted in an enormous reduction in the use of plastic bags. Based on 2017 figures, 1.5 billion fewer plastic bags were used this year in Greece. While plastic bags had historically been given away for free in supermarket and retail stores, this year businesses began charging for plastic, beginning at 4 cents for thin bags and going up to 40 cents for larger, thicker ones. The charge for the plastic bags is considered an environmental fee. The reduction in use is expected to be even higher in 2019, as the charge for the bags will be begin at 9 cents for the thinner ones from 1 January onward.

The objective set by the E.U. in their “Community Directive 2015” for the reduction of plastic waste is that member states should take measures to ensure that the annual consumption level does not exceed 90 thin plastic bags per capita by 31 December 2019. In an attempt to inform consumers about the increase in the environmental fee, IELKA is cooperating with nine supermarket chains in a new campaign. The drive started in the second half of December and will continue through January, 2019. It will include a special brochure sent to over 1,500 supermarkets, informational posters and promoting the use of reusable bags on electronic and social media. (IELKA 25.12).

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Prices Rose by An Annual 6.26% in November 2018

According to the Central Administration of Statistics (CAS), the average inflation rate of Lebanon rose by 6.26% by November 2018, as the Consumer Price Index (CPI) reached 106.53 by November 2018. In reality, consumer prices went up across all sub-categories. The average price of Housing and utilities (Housing water, electricity, gas and other fuels) constituting a combined 28.4% of the CPI, witnessed a yearly rise of 7.05%, on the back of increases in its components. Owner-occupied rental costs (grasping 13.6% of this category) and water, electricity, gas and other fuels (grasping 11.8% of this category) rose by 3.94% y-o-y and 11.22% y-o-y, respectively.

Also, the average costs of food and non-alcoholic beverages (20% of CPI) rose by a yearly 5.07% by November 2018. As for the average prices for Transportation (13.6 % of CPI), they increased by 8.57% y-o-y, and this can be mainly due to the significant rise in average oil prices by a yearly 35.45% to reach $72.87/barrel by November 2018. In addition, the average price for Health (7.7% of CPI), Education (4.33% of CPI), and Clothing and footwear recorded a yearly upticks of 5.24%, 4.33% and 15.84%, respectively. (CAS 27.12)

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5.2 Lebanon’s Trade Deficit Widened to $14.4 Billion in October 2018

Lebanon’s trade deficit in the first 10 months of the year 2018 stood at $14.41B, up by 3.98% from last year’s deficit. In details, the total value of imports gained an annual 4.02% to stand at $16.87B. Also, the value of exports rose by 4.25% to stand at $2.46B by October 2018. As for the month of October alone, total deficit amounted to $1.45B which is 4.20 % lower when compared to the same month last year. 2018’s most imported product was Mineral products (grasping 21% of the total value of imports), followed by 11.65% for machinery and electrical instruments and 10.9% for products of the chemical and allied industries.

By the month of October 2018, the value of imported mineral products dropped by 1.2% to $3.55B. In addition, the value of machinery and electrical instruments surged from $1.61B by October 2017 to $1.97B by October 2018. The value of the chemical and allied industries rose by 5.05% to $1.84B when compared to the same period last year.

In the tenth month of 2018, Lebanon had mainly imported goods from Greece which grasped 11.04% of total imports, followed by China, Italy, Germany and USA with respective shares of 10.30%, 8.28%, 6.23% and 4.76% of the total value of imported goods.

As for exports, the top exported products from Lebanon were pearls precious stones and metals with a share of 22.42% of the total followed by shares of 13.28% for base metals and articles of base metal and 12.23% for products of the chemical or allied industries. In details, the value of pearls, precious stones and metals surged by 12.86% by October 2018 to stand at $550 million, compared to $0.5 billion by October 2017. In turn, the value of base metals and articles of base metal rose by 13.28% to $0.33B, and the value of products of the chemical or allied industries also registered a yearly increase of 12.23% to $0.30B.

As for the top destinations in terms of exports, UAE grasped the first place with 21.32%, followed by Syria, KSA, Iraq, and Hong Kong with 8.03%, 6.25%, 5.30%, and 4.42% respectively. (Blom 27.12)

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5.3 Foreign Currency Reserves Cover Jordan’s Imports For 7 Months

The foreign currency reserves at the Central Bank of Jordan (CBJ) exceed $13.4 billion, which is enough to cover the cost of the Kingdom’s imports of goods and services for seven months, CBJ Governor Fariz said on 7 January. Fariz added that the international standard for foreign reserves rate is the coverage of three months. The governor said that monetary stability is the bank’s top priority, noting that the CBJ is aware of the national economy’s low growth rates and is, consequently, keen on reaching a balance between the requirements of achieving monetary stability and providing funding tools. He pointed out that the banking system in the Kingdom is “solid and well-structured”, and is able to absorb major shocks and risks due to the fact that banks in Jordan possess high capitalization ratios, in addition to adequate levels of liquidity.

The governor said that the national program for economic reform has been adopted in cooperation with the IMF and includes a set of important reform procedures that mainly target the general monetary status, the energy sector and reducing shortcomings in the general budget. He expressed hope that these measures would achieve further success in the medium term, especially in light of the stabilization of political conditions witnessed in the region, calling for enhancing the investment environment in the Kingdom and guaranteeing so that it benefits from the upcoming reconstruction process in the region.

The governor expected the inflation rate in 2018 to stand at 4.5%, noting that the impacts of inflation resulting from administrative decisions of temporary nature vanish after a short term, and central banks usually do not take any action to counter such inflations, which are normally not accompanied by changes on the medium and long terms. (CBJ 07.01)

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5.4 Tourism Revenues for Jordan Reach $5 Billion

Tourism revenues reached $5 billion, and are expected to exceed this figure at the end of this year, the Central Bank of Jordan (CBJ) announced on 31 December. Tourism sector’s performance indicators showed a rise in the number of overnight tourists, which amounted to about 3.860 million tourists until the end of November, an increase of 8% compared to the same period of 2017, while the number of one-day visitors reached 721,325, a rise of 8.7% to the same period of 2017.

The number of visitors to Petra rose by the end of November to reach 800,000 visitors, an increase of 33%, the number of visitors to Jerash increased by 30% to 308,000 visitors, Wadi Rum 36% to 225,000 visitors, Mount Nebo 155% to 444,000 visitors, Ajloun 24.5% 243,000 visitors, the Baptism Site 395% to 131,000 visitors, the Madaba Map church 42% to 291,000 visitors and Karak 71% to 26,000 visitors, the Ministry added. Revenues of archaeological sites increased to JD21 million by the end of November, an increase of 36% compared to the same period of 2017. (CBJ 31.12)

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5.5 Aid Received by Jordan in 2018 Reaches $3.3 Billion

The financial assistance received by the Hashemite Kingdom in 2018 until 20 December amounted to $3.3 billion, the Ministry of Planning and International Cooperation announced. The figure represents the total of both grants and soft loans contracted and pledged to support Jordan, of which regular grants amounted to $1.1 billion, while soft loans comprised $1.3 billion and an additional $894.7 million was granted to the Kingdom within the Jordan Response Plan to the Syrian Crisis (JRP). The Planning Ministry said that some $526 million of regular grants were directed to support the Treasury, whereas the remaining amount was allocated for financing development projects across the Kingdom in various fields, including education, water, health, waste management and women’s empowerment.

The ministry added that 66% of the received loans, worth around $873 million, was also directed to support the Treasury and the remaining was split 14-20% between development programs and power and energy projects. Additional grants within the JRP went to fund the plan’s three main pillars; Treasury support ($5.3 million), developmental projects for host communities at ($218.6 million) and meeting refugee needs ($228.69 million). (JT 26.12)

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►►Arabian Gulf

5.6 UAE Aviation Sector Contributes 15% to the Country’s GDP

The aviation sector contributed 15% to the UAE’s GDP in 2018, according to Saif Mohammed Al Suwaidi, director-general of the General Civil Aviation Authority (GCAA). Al Suwaidi said the UAE has invested an estimated $270 billion in the aviation sector, which includes improvements to airport infrastructure and a fleet of 884 commercial aircraft. Al Suwaidi said GCAA is also re-planning routes to neighboring countries that will increase airspace capacity and generate annual financial savings of $14 million for airline companies. The GCAA chief said passenger traffic across all UAE airports is expected to increase at a rate of 5.2% (142m passengers).

UAE accounts for 45% of the Arab aviation sector, which takes into consideration the number of passengers and aircraft capacity, and the addition of up to five aircraft each month to the UAE’s four carriers. He said the UAE registered a total of 6,438 drones this year, with each recorded on the GCAA’s unified e-platform. (AB 31.12)

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5.7 Dubai Approves 2019 Budget with Higher Expo 2020 Infrastructure Expenditures

Dubai Government has approved a budget for 2019 foreseeing expenditure of $15.5 billion (AED56.8b), a marginal increase on last year, with infrastructure investment for the upcoming Expo 2020 again a focus for the emirate. Last year’s budget was the largest in the history of the emirate – a 19% increase from 2017 – as it increased spending on Expo 2020 Dubai infrastructure. This is expected to be scaled up even further this year with AED9.2b allocated from this year’s budget, which is almost double last year’s amount. Dubai expects to generate $13.8b (AED 51b) in public revenues, an increase of 1.2% over the fiscal year 2018.

Non-tax revenues (fees and other) account for 64% of total expected revenue. Tax revenues account for 25%, while revenues from government investment represent 3%. The budget was approved by Sheikh Mohammed, Ruler of Dubai. (AB 01.01)

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5.8 Oman Approves Increased Budget Based on $58 Per Barrel of Oil

Oman’s budget deficit for the coming year is estimated to be $7.2b (OMR2.8b) with 86% of the shortfall to be financed through external and domestic borrowing. Oman’s government approved a 2019 budget of $33.5 billion (OMR12.9b), $1b (OMR400m) more than its 2018 projected figure. The sultanate’s budget was based on an oil price assumption of $58 per barrel, with estimated total revenues of $26b (OMR10.1b).

The budget deficit for the coming year is estimated to be $7.2b (OMR2.8b) with 86% of the shortfall to be financed through external and domestic borrowing. The remainder of the deficit will be financed through the withdrawal of reserves. (AB 01.01)

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5.9 Oman Bans Expats in Specific Private Sector Education Jobs

Oman’s National Centre for Statistics and Information said of the 2,041,190 workers in the private sector, 250,717 are Omanis. As a result, Oman has issued a ban on expats holding certain positions in private higher education institutions and private training institutions. The new decree, issued by the Minister of Manpower Al Bakri, has banned the appointment of non-Omanis as director of admissions and registration department, director of student affairs, director of quality assurance and director of the career guidance department. While those expats currently employed in these positions will continue until the end of their contracts, the ministry said those contracts will not be renewed. The ministry’s data said that the Omanisation rate in technical colleges at the dean’s position is 100%, administrative staff is at 98%, technicians is 57% and academic cadres stood at 20%, which the ministry seeks to increase by hiring more lecturers. (AB 31.12)

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5.10 King Salman Announces Plans to Establish Saudi Space Agency

As part of a series of royal decrees to reshape the government, Saudi Arabian King Salman announced Prince Sultan bin Salman bin Abdulaziz Al Saud as chairman of the board of directors of the Saudi Space Agency at the rank of minister. Prince Salman was the first Arab and Muslim to travel into space in 1985, helping to deploy a satellite for the Arab Satellite Communications Organisation with NASA. The announcement comes just weeks after two Saudi-designed satellites were launched into space from China.

The satellites, which were developed by the King Abdulaziz City for Science and Technology, will be used to provide high-resolution images of the planet’s surface from low earth orbits, help with urban planning, monitor movements and changes on the earth’s surface, and provide government agencies with high-resolution images. Known as Sat 5a and Saudi Sat 5b, the satellites were launched from Jiuquan Satellite Launch Centre. The launch of the two new satellites comes as part of the Kingdom Vision 2030 aiming to localize strategic technologies, maximize local content and empower the Saudi youths gain knowledge of advanced technologies in the development and manufacture of satellites. (AB 28.12)

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5.11 Saudi Arabia Reports an 18% Drop in Expat Remittances

Expat remittances fell by 18% in November, according to Saudi Arabian Monetary Authority (SAMA). The banking authority said $2.6 billion was transferred by expats in November, compared to $3.2b in the same month last year. SAMA said remittances by Saudis also dropped by 39.5% – $1.2b in November, compared to $2.1b in 2017. The value of retail (point of sale) transactions in the kingdom reached a record $56b (SAR210b) for the first 11 months of this year, up from $48b (SAR180b) in 2017. (AB 31.12)

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►►North Africa

5.12 Libya Falls in Ease of Doing Business Index

Libya has been ranked 186th out of 190 countries in the World Bank‘s recent Doing Business 2019 report, down from 185th place the previous year. Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 128th, with Iraq 171st.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking. (WB 06.01)

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5.13 Forbes Says Morocco Ranks 62nd Best Country for Business for 2019

Forbes has ranked Morocco as the 62nd “Best Country for Business” for 2019. The magazine said that Morocco earned this place due to its “proximity to Europe and relatively low labor costs” and that it is working “towards building a diverse, open market-oriented economy.” The country’s key business sectors include agriculture, tourism, aerospace, automotive, and phosphates. Forbes said Morocco has increased investment in its port, transportation, and industrial infrastructure to position itself as a center and broker for business throughout Africa.

Forbes also noted King Mohammed VI’s leadership in business, saying that since taking the throne in 1999, “King Mohammed VI has presided over a stable economy marked by steady growth, low inflation, and gradually falling unemployment.” The magazine, however, acknowledged that “poor harvests and economic difficulties in Europe contributed to an economic slowdown.” Morocco’s ranking dropped from 55th in 2017 out of 153 countries, ranking in the top 36%.

The magazine also noted Morocco’s Free Trade Agreement with the US and its Advanced Status agreement with the EU as boosting Moroccan exports. Morocco also seeks to expand its renewable energy capacity with a goal of making renewable more than 50% of installed electricity generation capacity by 2030. The UK topped Forbes list for 2019 before Sweden, Hong Kong, the Netherlands, New Zealand, Canada, and Denmark. Regionally, Tunisia ranked 82nd and Algeria 114th. (MWN 04.01)

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5.14 Morocco Received Over MAD 30 Billion in Foreign Funds in 2017

Morocco received MAD 30.4 billion in foreign funds in 2017, up 35.7% compared to 2016, according to the Treasury and External Finance Department (DTFE). The rise in foreign loans is explained by the budget increase allocated for reform programs, amounting to MAD 20.7 billion in 2017 compared to only MAD 6.6 billion in the previous year. The external funding that Morocco received included loans of MAD 20.89 billion, concessional loans of MAD 7.07 billion, and grants of MAD 2.44 billion.

The government allocated 22% of the funds for the financial sector, 19% for budget support, 15% for agriculture, 14% for social services and 13% for transport. Morocco’s public external debt rose to nearly MAD 332.35 billion in 2017, compared to MAD 312.46 billion in 2016, according to DTFE. At the end of 2017, Morocco had MAD 900 billion in public debt and MAD 149 billion in debt service.

The French Development Agency (AFD) announced last month that Morocco receives the bulk of the agency’s funding in Africa, with €2.9 billion in loans as of October 2018. In 2017, AFD provided Morocco with €431 million in loans for project funding. The most recent AFD loan to Morocco amounted to €50 million to extend and improve potable water in the country’s northern provinces. Morocco plans to issue a new bond in 2019 of around €1 billion. (MWN 04.01)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Exports Hit All-Time High With $168 Billion in 2018

Turkey’s exports hit an all-time high with $168.1 billion last year, the country’s trade minister said on 4 January. Minister Pekcan stated that exports in 2018 climbed 7.1% year-on-year, compared with nearly $157 billion in the previous year. In 2018, imports fell 4.6% on a yearly basis to $223.1 billion. Turkey’s exports-to-imports coverage ratio reached 75.3% last year, up 8.2%age points from 2017. According to the preliminary data, Turkey’s foreign trade balance posted a deficit of $55 billion last year, marking a significant improvement compared with $76.8 billion in 2017. The final figures will be announced by the country’s statistical authority on 31 January. (HDN 04.01)

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6.2 Turkey Was Russian Tourists’ Leading Destination in 2018

Turkey was the most popular foreign destination for Russian tourists in 2018, with visitor numbers rising 25%, said the Russian Association of Tour Operators on 26 December. The overall Russian tourist flow grew 8% in 2018 compared to the previous year. This growth was ensured thanks to high demand for tours to several countries, including Turkey. Other popular destinations for Russian tourists include Germany, Italy, Spain, Greece, the UAE, Tunisia and France. Visa-free travel and short-terms flights are among the most important factors when Russia tourists choose their destination. (AA 27.12)

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6.3 Cyprus’ Registered Unemployed Falls by 16.7% to Under 30,000

The number of registered unemployed dropped by 5,971 in December 2018 compared to a year ago, official data indicates. In December, the jobless number fell 16.7% and was reduced to 29,800 from 35,771 the year before. Based on the seasonally adjusted data that show the trend of unemployment, the number of registered unemployed for December 2018 decreased to 23,929 from 24,589 in the previous month. Compared to a year ago, the biggest drops in unemployment were observed in the sectors of trade (a decrease of 1,193 unemployed), public administration (-1,137), accommodation and food service activities (-794), manufacturing (-607), construction (-529), education (-189) and for newcomers to the job market (-1,521). (CyStat -4.01)

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6.4 Cyprus’ Tourism Revenue Jumps 6% in October

Revenue from Cyprus tourism surged 6% in October reaching €293.8 million from €277.1 million in the same month of 2017, it is the highest percentage increase since March. For the 10 months to October 2018 revenue from tourism is estimated at €2.56 billion compared to €2.49 billion in the same period of 2017, recording an increase of 2.7%. The expenditure per person for October 2018 during their stay reached €677.60 compared to €681.05 in the corresponding month of the previous year, recording a decrease of 0.5%. Expenditure per person/per day for October 2018 recorded an increase of 4% (from €73.23 to €76.13).

A decrease of 4.3% was recorded in the average length of stay, from 9.3 days in October 2017 to 8.9 days in October 2018. Spending per person for the 10-month period January – October 2018 reached €697.54 from €731.63 in the same period of 2017, recording a decrease of 4.7%. Expenditure per person/per day for January – October 2018 also fell 1.5% from €77.01 to €75.82. The most frugal visitors in October were the Greeks spending an average of €43.80 a day while the most extravagant were the Belgians spending a whopping €136.34 per-day. A record number of 3.65 million tourists enjoyed a Cyprus holiday in 2017, spending an unprecedented €2.6 billion. (Cystat 07.01)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 As 2019 Begins, Israel’s Population Stands at 9 Million

The population of Israel stood at nearly 9 million people as the country began 2019. According to the Central Bureau of Statistics, 74.3% of the population is Jewish, 20.9% is Arab and another 4.5% are residents who immigrated to Israel under the Law of Return despite not being recognized as Jews. In 2018 the population grew by 2% and in 2025, it is expected to hit the 11 million mark. A record-breaking 185,000 babies were born in 2018 – 74.4% were Jewish, 22.8% were Arab and 2.8% were others. Also contributing the growth of the population was Jewish immigration, with some 28,000 people making their new homes in Israel. Their main countries of origin: Russia (31.5%), Ukraine (19.6%), France (8%) and the United States (7.9%). (CBS 01.01)

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7.2 Immigration to Israel Increases by 5% in 2018

Jewish immigration to Israel rose by 5% in 2018, compared with 2017, the Jewish Agency reported. Some 29,600 immigrants arrived in Israel in 2018, up from 28,220 in 2017. The main contributors to the rise was a 45% increase in immigration from Russia with 10,500 immigrants coming to Israel in 2018. Some 6,500 immigrants arrived from Ukraine this year, down 9% from 2017. There were 3,550 immigrants to Israel from North America, a similar number to last year. Another 2,600 immigrants arrived from France, down 25% from 2017, 660 immigrants from Brazil, down 4% and just over 500 immigrants from the UK, down 4%. There were 330 immigrants from Argentina, up 17% and 320 immigrants from South Africa, down 2%. (Various 30.12)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva Announces FDA Approval of Only Digital Inhaler with Built-In Sensors – ProAir Digihaler

Teva Pharmaceutical Industries announced that the U.S. FDA has approved ProAir Digihaler (albuterol sulfate 117 mcg) inhalation powder, the first and only digital inhaler with built-in sensors which connects to a companion mobile application and provides inhaler use information to people with asthma and COPD. ProAir Digihaler is indicated for the treatment or prevention of bronchospasm in patients aged four years and older with reversible obstructive airway disease, and for prevention of exercise-induced bronchospasm (EIB) in patients aged four years and older.

ProAir Digihaler contains built-in sensors that detect when the inhaler is used and measure inspiratory flow. This inhaler-use data is then sent to the companion mobile app using Bluetooth Wireless Technology so patients can review their data over time, and if desired, share it with their healthcare professionals. The approval of ProAir Digihaler is based on the review of a supplemental new drug application (sNDA) submitted by Teva to the FDA. ProAir Digihaler combines a breath-activated, multi-dose dry powder inhaler with albuterol, the most widely used asthma rescue medication, with a built-in electronic module and a companion mobile app.

Teva Pharmaceutical Industries is a global leader in generic medicines, with innovative treatments in select areas, including CNS, pain and respiratory. Teva delivers high-quality generic products and medicines in nearly every therapeutic area to address unmet patient needs. They have an established presence in generics, specialty, OTC and API, building on more than a century-old legacy, with a fully integrated R&D function, strong operational base and global infrastructure and scale. (Teva 22.12)

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8.2 RenalSense Pilot Study on ICU Patient Monitoring at Pittsburgh’s UPMC

RenalSense is conducting a pilot study with its Clarity RMS critical care monitoring system at the University of Pittsburgh Medical Center (UPMC). The objective of the study is to assess the contribution of the Clarity RMS system towards improving the nursing workflow in the intensive care unit (ICU). The first part of the two-stage study launched in July was completed in 200 patients. In the second stage, data will be collected and analyzed from an additional 2000 patients.

Jerusalem’s RenalSense is a privately owned medical device company dedicated to real-time renal diagnostics. The company’s first product, Clarity RMS, provides continuous, automatic monitoring of urine flow, enabling better patient care and ICU economics. RenalSense’s next generation products will provide additional real-time parameters and expanded diagnostic capabilities, to further improve the practice of ICU and critical care management. (RenalSense 25.12)

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8.3 Venus Medtech Completes Merger with Keystone Heart

Venus Medtech (Hangzhou), the preeminent Chinese transcatheter heart valve company, announced it has closed its Merger with Keystone Heart, a privately-held medical device company and makers of TriGUARD 3. The Merger provides Venus Medtech with TriGUARD 3, the first Cerebral Embolic Protection Device designed to provide complete coverage to all brain regions for patients undergoing cardiac procedures, as well as an established clinical and commercial organization in both the US and Europe.

Keystone Heart is focused on protecting the brain from embolic debris to reduce the risk of brain infarcts during TAVR, surgical valve replacement, atrial fibrillation ablation and other structural heart procedures. The company is currently enrolling patients in the REFLECT trial in the US to evaluate TriGUARD 3, anticipating enrollment completion in the early part of Q1/19 and FDA approval in Q3/19. CE mark approval for Europe is anticipated by the end of Q1/19.

Caesarea’s Keystone Heart is a medical device company developing and manufacturing cerebral embolic protection devices intended to reduce the risk of brain embolization associated with cardiovascular procedures. The company is focused on protecting the brain from emboli to reduce the risk of brain infarcts during TAVR, atrial fibrillation ablation and other cardiovascular procedures. The TriGUARD 3 product pipeline is designed to help interventional cardiologists, electrophysiologists and cardiac surgeons preserve brain reserve while performing these procedures. (Venus Medtech 26.12)

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8.4 Syqe Medical Raises $50 Million

Syqe Medical has raised $50 million, the largest financing round ever by an Israeli cannabis company. The Shavit Capital fund, which usually invests in companies planning an offering on a foreign stock exchange, led the round, indicating where Syqe is probably headed in the coming years. Also participating in the round were a pharma industry investor and the PRM Holdings fund, the investment arm of therapeutic plants company Martin Bauer Group. PRM’s investment is consistent with Syqe’s strategy of developing its product for additional drugs based on plants and administered by inhaler, in addition to cannabis.

Syqe has raised $83 million to date, including the current round. Previous funding was mainly through the OurCrowd crowdfunding platform and from private investors Barry Shaked and Brian Cooper.

Syqe’s product is an inhaler designed to vaporize specific dosages of medical cannabis and make it possible to inhale them with very accurate control of a fixed dosage. The product includes the option of changing the dosage according to the patient and changing the dosage remotely by the attendant physician. Teva Israel markets the product at hospitals in Israel, as of now in a pilot program. Teva is interested in smart inhalers for conventional drugs.

Tel Aviv’s Syqe Medical aspires to transform cannabis and other botanicals into mainstream medical drugs. Their vision is to decentralize drug development and streamline its clinical testing in a 21st century fashion. To achieve these goals Syqe has been implementing cutting-edge technologies for over 6 years and employs a multi-disciplinary team of electronic engineers, mechanical engineers, industrial designers, chemists, biologists, physicians and pharmacologists. (Globes 31.12)

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8.5 Israeli Researchers Raise $1 Million for Eye Drops That Could Replace Glasses

Researchers from Shaare Zedek Medical Center and Bar Ilan University recently raised a $1 million investment to fund research and development for eye drops they say can correct cornea-related vision problems, thereby potentially making eyeglasses obsolete. The development of the eye drops, dubbed “nanodrops,” was first announced in March 2018.

Made up of a synthetic nanoparticle solution, the eye drops have shown great potential to solve cornea-related vision issues. In the team’s first round of animal trials in March, the nanodrops were applied to pigs’ corneas and successfully corrected two kinds of refractive errors: myopia (near-sightedness) and presbyopia (far-sightedness typically caused by aging). The team plans to further test the drops on live rabbits this year, before moving on to human trials in 2020. During these trials, the researchers will test the drops on subjects with “any type of refractive error that enter into the scope of the nanodrops.” They will also address remaining issues regarding the functionality of the drops.

The researchers are currently working with their team of investors to build a biotech startup around the nanodrops. They plan to promote their invention through this company with the expectation of placing the product on the market by the summer of 2020. In addition to the nanodrops themselves, the researchers are developing a small, smartphone-compatible laser device that will allow patients to easily apply the drops at home using a mobile application. (NoCamels 01.01)

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8.6 CytoReason Signs Collaboration Agreement with Pfizer for Drug Discovery

CytoReason has entered into a collaboration agreement with Pfizer that will leverage CytoReason’s cell-centered models of the immune system. CytoReason will receive from Pfizer payments potentially equaling up to low double digit millions of US$ for technology access fees, research support and certain success-based payments. CytoReason’s proprietary platform helps rebuild lost cellular information from gene expression data and associates genes to specific cells. This information is then integrated with additional omics and literature data to create a cell-based model of the trial-specific immune response. Integration with the CytoReason disease model empowers the study analytics and allows the model to learn and improve, leading to robust target discovery, drug response biomarkers and indication selection.

Based on more than 10 years of research, Tel Aviv’s CytoReason’s technology uses a proprietary data and machine learning model to reconstruct cellular information from bulk tissue, to train an immune-specific NLP engine, and to integrate multi-omics data. The company’s platform organizes and standardizes collaborators’ data (gene, protein, cell, and microbiome) and integrates it into CytoReason’s proprietary disease model to generate mechanistic understanding of the immune system, leading to novel insights. (CytoReason 07.01)

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8.7 Greater Cannabis Company Distribution Agreement With iCAN

Baltimore’s the Greater Cannabis Company, a biopharmaceutical company focused on development and commercialization of innovative delivery systems for the Cannabis market, entered into a letter of intent with iCAN Cannabis to expand distribution of its eluting patch platform into key global markets. The eluting patch platform is an innovative delivery system, which uses a patented muco-adhesive and multilayered orally dissolving thin film to deliver a precise dose of cannabinoids into the body through the buccal mucosa. Clinical studies funded in part by the National Institutes of Health (NIH) have shown the delivery system’s capability in achieving higher bioavailability and desired results in the body using lower, and controlled, dosing when compared to other routes of administration.

The agreement with iCAN will include commercial ready formulations to meet medical and recreational market demands. Distribution and marketing rights for iCAN will include Israel, Australia, South Africa, Netherlands, South Africa, Mexico, Colombia, Panama, Germany, Austria, Switzerland, Malta, Macedonia and Portuguese territories.

iCAN: Israel-Cannabis is a leading Israeli developer of cannabis-based formulations, clinical trials and cannabis testing. iCAN is committed to accelerate Israel’s Canna-Technology industry, capitalizing on Israeli innovation and a leading cannabis regulatory environment to bring premier products to market. iCAN is powered by CannaTech, the premier international cannabis summit held annually in Tel Aviv, and around the world including London, Sydney, Hong Kong and now Panama in 2019. (iCAN 07.01)

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8.8 EarlySense Completes $39 Million Financing Round to Accelerate Global Expansion

EarlySense has completed a $39 million financing round, with the majority of the funding coming from Hill-Rom, a global provider of medical technologies and the world’s leading hospital bed manufacturer, and Wells Fargo Strategic Capital, the venture capital and growth equity investment arm of Wells Fargo & Company. Other new investors include BlueRed Capital, Israel Innovation Fund, Argos Capital and Hotung Capital. Existing investors, including Pitango Venture Capital and JK&B Venture Capital, participated as well.

Hill-Rom’s investment comes on the heels of the hospital bed manufacturer’s launch of the Centrella Smart+ Bed, the world’s first hospital bed with integrated continuous contact-free heart rate and respiratory rate sensing and analytics technology.

EarlySense’s FDA-cleared and CE-approved solutions are used by healthcare facilities around the world. EarlySense technology leverages Big Data and advanced machine learning algorithms to generate highly accurate health information, empowering clinicians to achieve early detection of adverse events and improved patient outcomes. The combination of accurate identification and prediction enables proactive intervention by health teams and enhanced patient safety. The company’s contact-free, under-the-mattress sensing platform improves the patient experience, and provides 24/7 (100 times per minute) monitoring for patients who were previously monitored manually only every few hours.

Ramat Gan’s EarlySense is the global leader in contact-free, continuous monitoring solutions for the healthcare continuum. Used worldwide in hospitals, post-acute care facilities and homes, EarlySense assists clinicians in early detection of patient deterioration. The solution has been proven to help prevent adverse events, including code blue events which are a result of cardiac or respiratory arrest, preventable ICU transfers, patient falls, pressure ulcers, and hospital readmissions. EarlySense’s FDA-cleared solutions leverage Artificial Intelligence (AI) and big data analytics to provide actionable health insights and improve clinical outcomes. (EarlySense 07.01)

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8.9 Biond Biologics Announces $17 Million Series B Financing

Biond Biologics announced the closing of a $17 million Series B financing. Biond was founded in 2016 by the former scientific team of cCam Biotherapeutics, an immuno-oncology company which was fully acquired by Merck in July 2015. The former cCAM Biotherapeutics team was joined by additional veterans of the Israeli biotech industry, with the aim to build a strong, sustainable and innovative science-driven biotechnology company. The company’s vision and strategy are to bring innovative drugs to patients based on synergistic long-term collaborations with leading global companies in the immunotherapy field.

Biond intends to use the proceeds to move its lead drug candidate, BION-202, into clinical trials and to advance the preclinical development of BION-206 and its proprietary antibody cell-internalization technology. The financing and due diligence were led by Israel Biotech Fund and Harel Insurance & Finance Group, with participation of Celgene Corporation, the Japanese-Israeli fund, SBI JI Innovation Fund and existing investors.

Misgav’s Biond Biologics is a drug discovery and development company focused on the field of immunotherapy, combining excellent science and out-of-the-box innovative thinking. Biond aims to translate high quality science into therapies for diseases with unmet medical needs by developing innovative drugs and establishing collaborations with leading pharma companies. Biond’s in-house pipeline is based on internal research of newly discovered immune-checkpoints and immune-evasion mechanisms. Biond’s leading pre-clinical development programs include BION-202, a novel macrophage activator, and BION-206, a novel agent developed for overcoming a natural immune suppression mechanism, recently discovered by Biond’s scientists. (Biond Biologics 08.01)

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8.10 Orri Jaffa Mandarins Heading to North America

The Plant Production and Marketing Board of Israel predicts that 2019 will see significant increase in exports of the Orri Jaffa mandarin to the US and Canada. The organization set goals for expanding export of its leading, easy-to-peel mandarin in response to the increased demand for high-quality, easy-peelers. The Jaffa Orri is a mandarin developed by scientists at the Israeli Volcani Research Center. This easy-to-peel mandarin retains an excellent, fresh, sweet flavor with a fleshy texture, and mouthful juiciness, while bearing virtually no seeds. It also carries a particularly long shelf life and appears later in the season compared to other easy peelers – from January into May.

Over the past five seasons, citrus exports from Israel to North America have increased from 3,000 tons to 9,000 tons last season, of which about 5,300 tons are easy-to-peel mandarins. This season, export of Orri Jaffa mandarin alone is expected to reach 9,000 tons, constituting a potential 70% growth.

Orri Jaffa mandarin currently is exported to 45 countries worldwide. Most of the yield is exported to Europe (78%). The most prominent outlets in Europe of the popular fruit are: France (39%), the Netherlands, Scandinavia and Russia (7% each). About 18% of the fruit is shipped to North America, and 4% to Asia Pacific.

The Plant Production and Marketing Board of Israel was established in 2004 to assist farmers in advancing their agricultural missions. The board promotes the Jaffa brand and other registered citrus industry brands. It helps kick-start pioneering R&D projects, executes centralized crop protection initiatives, assists organizations in meeting phytosanitary standards and insures growers against weather-related losses. (The Plant Production and Marketing Board 08.01)

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8.11 Cann2Go Software Optimizes Last Mile Delivery of Medical Cannabis

As the number of medicinal cannabis users in Israel surge and demand for at-home delivery grows, Cann2Go has developed a SaaS platform, utilizing a sophisticated set of algorithms that enables the cost-effective and secure transport of medicine to the patient. Cann2Go allows cannabis companies to easily plan and manage all their Cannabis distribution and last-mile deliveries in an efficient and cost-effective manner with full visibility to the end customer. Cann2Go’s powerful distribution & delivery technology provides orders management, optimized routing, real-time secured tracking and end-customer experience. Instead of focusing on routing and prioritization algorithms, Cann2Go clients can focus on bringing their clients the best service with the best user experience.

Cann2Go is a SaaS solution that allows its users to create dynamic workflows and automate the management of the whole Cannabis retailers’ distribution process. Their set of elastic algorithms and smart tools allows its user to adjust the platform to his organization’s unique workflows and its end-consumers’ high expectations.

iCAN is building the global cannabis ecosystem. iCAN identifies and accelerates innovative medical cannabis technologies and creates synergies and cooperation across the industry. iCAN uses its global network and reach to position Israel as the world’s leading medical cannabis tech hub. (iCAN: Israel Cannabis 08.01)

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8.12 Anchiano Therapeutics Files F-1 Registration Statement for U.S. IPO

Anchiano Therapeutics has filed a registration statement on Form F-1 with the Securities and Exchange Commission for the proposed initial public offering in the United States of American Depositary Shares (ADS) representing ordinary shares of Anchiano Therapeutics. The number and value of ADSs to be offered have not yet been determined. The proposed U.S. IPO is expected to commence as market conditions permit and is subject to the SEC’s review and declaration of effectiveness of the filing.

Anchiano Therapeutics, located in Cambridge, MA, and in Jerusalem, is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapies to treat cancer in areas of unmet need. Their initial program is the genetic therapy for early stage bladder cancer. Inodiftagene vixteplasmid (formerly BC-819), their most advanced investigational agent, is under development as a treatment for non-muscle-invasive bladder cancer (NMIBC). Inodiftagene vixteplasmid has been tested in three clinical trials to date, and two registrational trials are set to be initiated in 2017 and will begin enrolling patients in the first half of 2018. (Anchiano Therapeutics 07.01)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SafeRide Technologies Launches vXRay Advanced AI Technology Vehicles Security

SafeRide Technologies announced the launch of vXRay, a behavioral profiling and anomaly detection technology for connected vehicles’ Security Operation Centers (SOC). vXRay can be seamlessly integrated into customers’ connected vehicles’ SOC independently of vehicle architecture or ECU sourcing. It can help customers uncover zero-day vulnerabilities, provide early detection of vehicle malfunctions and flag misuse and abuse problems.

vXRay uses advanced, unsupervised machine learning paradigms in a fully autonomous process to establish the normal behavior of the vehicle without dependencies or previous knowledge of ECU properties and protocols. Once the behavioral baseline is established, the machine learning models can accurately detect, categorize and flag any abnormal behavior and report it to the connected vehicles’ SOC for further analysis. SafeRide’s vXRay technology was proven to effectively detect all cyberattacks and vehicle malfunctions in multiple vehicle models in customer testing, and is being implemented by several major automotive vendors as part of their 2019 security strategies.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks, and helps to avoid financial damage, prevent reputation loss, and save lives. (SafeRide Technologies 03.01)

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9.2 Upstream Security & Arilou Partner to Build ‘End to End’ Security for Smart Mobility

Upstream Security announced a technology and go-to-market partnership with Arilou. Combined, Upstream Centralized Connected Car Cybersecurity (C4) technology and Arilou Intrusion Detection and Prevention (IDPS) technology will create a fully integrated cybersecurity offering for vehicle OEMs. Upstream Security and Arilou are engaged in joint go-to-market initiatives including joint marketing and demonstration of their integrated solution.

Today’s smart mobility providers face two unique challenges: first, they must secure the internal components and communication within the vehicle and, secondly, they must ensure the security of multiple vehicles, their connectivity and suite of mobility services using them. Now, through this pioneering partnership, Upstream Security and Arilou simultaneously resolve these two critical challenges – establishing a true “defense in depth” architecture for connected vehicles.

Arilou’s in-vehicle network cyber protection expertise and Upstream’s expertise in cloud-based security creates a best-in-class, next generation security framework for automotive manufacturers scrambling to introduce connectivity-based functions to consumer vehicles. Arilou brings much needed innovation to agent based vehicle security market through its IDPS security approach. Upstream Security, in turn, offers OEMs and mobility providers cloud-based agent-less access to connected car cybersecurity that can be implemented immediately, even for vehicles already on the road. In combination, the solution establishes an end-to-end security framework combining insights from both inside and outside the vehicles, resulting in unmatched resiliency and anomaly detection capabilities.

Herzliya’s Upstream improves the safety and security of connected vehicles and services built around them by monitoring business critical events and identifying cyber threats in real-time via a centralized cloud-based analysis of multiple automotive data feeds, including telematics and mobile applications. The solution is 100% agent-less and does not require any hardware or software inside the vehicles. Founded in 2017, Upstream Security is backed by Charles River Ventures, Glilot Capital Partners and Maniv Mobility.

Arilou Technologies, part of NNG Group, is a pioneer in the field of automotive cyber security. Established in 2012 in Tel Aviv, Israel, Arilou researches and develops end-to-end, multi-layered security solutions dedicated to the automotive environment. Independently tested by leading research institutes, the US Department of Transportation and major OEMs, Arilou’s ground-breaking technology, provides 100% accuracy in cyber-attack detection and prevention, with zero false positives and zero latency, placing Arilou’s solutions at the vanguard of real-time prevention. In 2016 Arilou was acquired by NNG, a leading automotive software supplier, specializing in hybrid navigation and vehicle user experience. (Upstream Security 03.01)

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9.3 Arbe to Launch the World’s First Ultra-High Resolution Automotive Radar System

Arbe is excited to announce the launch of Phoenix, its automotive 4D imaging radar beta product. This new front-end system, powered by Arbe’s proprietary chipset technology, enables evaluation and development towards production and full commercialization of 4D imaging radar for all levels of vehicle autonomy. Phoenix provides an image 100 times more detailed than other top industry radars, offering superior separation of stationary and moving objects in real time – an industry first. Phoenix proprietary chipset is the first system in the industry to leverage the advanced 22nm RF CMOS process. Additionally, by leveraging the 22nm RF CMOS process, Phoenix dramatically reduces costs while consuming the lowest power per channel in the industry.

Arbe is a recipient of the 2018 Global Technology Innovation Award from Frost & Sullivan. Recognized for its breakthrough full-stack 4D imaging radar system for the automotive environment, along with its future business value in terms of scalability, application diversity, technology licensing and human capital.

Tel Aviv’s Arbe is the world’s first company to demonstrate ultra-high-resolution 4D imaging radar with post processing and SLAM (Simultaneous Localization and Mapping). It is disrupting autonomous driving sensor development by bridging the gap between radar and optics with its proprietary imaging radar solution that provides optic sensor resolution with the reliability and maturity of radar technology for all levels of vehicle autonomy. The company was founded in 2015 and raised $23 million in funding to date. (Arbe Robotics 03.01)

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9.4 Mellanox 200 Gigabit HDR InfiniBand to Accelerate a World-Leading Supercomputer at Stuttgart

Mellanox Technologies announced that its 200 Gigabit HDR InfiniBand solutions were selected to accelerate a world-leading supercomputer at the High-Performance Computer Center of the University of Stuttgart (HLRS). The 5000-node supercomputer named “Hawk” will be built in 2019 and provide 24 petaFLOPs of compute performance. By utilizing the InfiniBand fast data throughput and the smart In-Network Computing acceleration engines, HLRS users will be able to achieve the highest HPC and AI application performance, scalability and efficiency. The mission of the HLRS Hawk supercomputer is to advance engineering development and research in the fields of energy, climate, health and more, and if built today, the new system would be the world’s fastest supercomputer for industrial production.

200 Gigabit HDR InfiniBand provides leading performance, scalability, and network robustness advantages. Among them, the Mellanox Scalable Hierarchical Aggregation and Reduction Protocol (SHARP) technology enables the execution of data algorithms on the data as it is being transferred within the network, providing the highest application performance and scalability. The Mellanox SHIELD technology enables self-healing interconnect capabilities to deliver highest network robustness and reliability. The higher HDR InfiniBand switch port count reduces total cost of ownership. These advantages, together with the high data throughput and the extremely low latency, make InfiniBand the preferred interconnect choice for both pre-Exascale and Exascale compute and storage platforms.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand smart 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 07.01)

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9.5 VAYAVISION VAYADrive 2.0 – Software-Based AV Environmental Perception Engine

VAYAVISION announced the release of VAYADrive 2.0, an AV perception software engine that fuses raw sensor data together with AI tools to create an accurate 3D environmental model of the area around the self-driving vehicle. VAYADrive 2.0 breaks new ground in several categories of AV environmental perception – raw data fusion, object detection, classification, SLAM and movement tracking – providing crucial information about dynamic driving environments, enabling safer and reliable autonomous driving, and optimizing cost-effective sensor technologies.

The VAYADrive 2.0 software solution combines state-of-the-art AI, analytics, and computer vision technologies with computational efficiency to scale up the performance of AV sensors hardware. The software is compatible with a wide range of cameras, LiDARs, and radars. VAYADrive 2.0 solves a key challenge facing the industry: the detection of ‘unexpected’ objects. Roads are full of ‘unexpected’ objects that are absent from training data sets, even when those sets are captured while travelling millions of kilometers. Thus, systems that are mainly based on deep neural networks fail to detect the ‘unexpected’.

Or Yehuda’s VayaVision is a leading environmental perception based on raw data fusion software solution provider for autonomous vehicles. Compatible with all autonomous sensor systems, VAYAVISION’s patented autonomous driving technology fuses raw data from cameras, LiDARs, and radars to provide a full environmental model of the driving scenario, including high reliability object detection, classification, and tracking, traffic and road sign recognition, and free space analysis. Working with leading OEMs and Tier 1’s globally, VAYAVISION is paving the way for comprehensive autonomous vehicle environmental perception. (VAYAVISION 07.01)

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9.6 Cortica to Collaborate with Renesas to Deliver AI Capability in System-on-Chip Platform

Cortica announced a groundbreaking milestone: Cortica’s ‘Autonomous AI’ Solution for enabling smarter, safer, and better performing autonomous cars will be embedded onto the new R-Car V3H system-on chip solution, available from Renesas, the world’s leading manufacturer of processors for the automobile industry. Cortica is the developer of next generation ‘Autonomous AI’ that utilizes an ‘unsupervised learning’ methodology to mimic the way humans experience and incorporate the world around them.

Cortica will immediately begin deploying its advanced platform product in collaboration with Renesas, utilizing Cortica’s state-of-the-art computer vision system for front-facing cameras. Leveraging the low compute nature of the Cortica technology, Cortica offers the most accurate central perception engine for all current and future ADAS functions, available directly on the Renesas R-Car V3H SoC. For the first time, the collaborative effort will introduce a more robust and scalable open-platform perception solution featuring unmatched accuracy and performance rates, faster reaction time, and overall safety upgrades for ADAS. The solution demo by Cortica at CES will demonstrate a new generation of safer, smarter, and more ‘aware’ auto running directly on the Renesas chip with unparalleled execution times.

Founded in Israel in 2007, Tel Aviv’s Cortica has created next-generation Autonomous AI. Highly complex in its methodology yet stunningly simple in premise: the enablement of machines thatus1 think and learn on their own. Cortica’s ‘Autonomous AI’ model is based on an unsupervised learning methodology that recreates the way that humans experience and interact with the world around them so that cars (and all machines) can learn, predict and extrapolate information. Autonomous AI raises the bar on safety and efficiency of autonomous vehicles for the entire automotive industry. (Cortica 08.01)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Startups Raised Over $400 Million in December

According to IVC-ZAG, Israeli startups raised over $400 million in December, according to press releases issued by companies that completed financing rounds. The figure may be more as some companies prefer not to publicize the investments they have received. This sum can be added to the $4.5 billion that Israeli startups raised over the first nine months of 2018, as well as the estimated $1.2 billion raised in October and November. This means that the country’s startups have raised a record $6.1 billion since the start of 2018, easily surpassing last year’s record of $5.24 billion.

Most of the sum in December was raised in large financing rounds led by medical cannabis smart inhaler company Syqe Medical, which raised $50 million and public transport optimization algorithm company Optibus, which raised $40 million. Conversation intelligence platform Chorus.ai raised $33 million, heart failure treatment company WhiteSwell raised $30 million and cyber security company Avanan and primary care app company K Health each raised $25 million. (Various 01.01)

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10.2 Poverty and Inequality Decline in Israel

The National Insurance Institute (NII) published its report on poverty in Israel in 2017, which stated that the number of children living in poverty declined during the year for the first time in many years, while the incidence of poverty among Haredim (ultra-Orthodox Jews) and Arabs fell. At the same time, poverty worsened among groups not in the labor market, especially senior citizens and the unemployed.

There were 1,780,500 poor people, including 814,800 children, in 466,400 families in 2017. The NII highlighted the fact that the absolute number of children living in poverty fell by 23,700, the first such decrease in many years, although the total number of children in Israel grew by 47,900 during the year. The proportion of middle class people in Israel rose from 47.9% to 53.4%.

The Gini Index of inequality in disposable income was down 1.6% in 2017 and the index of inequality in market income fell 1.3%. The Gini Index of inequality has thus fallen 11% since 2000. The decline in the index of inequality in disposable income was similar, but began only in 2007.

Israel still leads the developed countries in the per capita poverty rate, despite the reduction in the dimensions of poverty and income inequality. The report credits the Netanyahu government policy with a number of substantial achievements. The first is the decline in the number of poor children in Israel, although the poverty line was raised and the population grew. 17.9% of Israelis live below the poverty line (according to disposable income), a slightly higher proportion than in the US, Turkey and Mexico. Israel is in second place with a 23.8% proportion of poor children (Turkey is in first place). It is important to note, however, that the poverty line in Israel, which is linked to the standard of living, rose 4.6%, in tandem with a similar rise in per capita disposable income.

The incidence of poverty fell in 2017 as a result of higher employment rates and wage increases. For the first time since 2013, the incidence of poverty among working people fell, as did the proportion of working families in the poor population. The proportion of households with only one breadwinner dropped significantly in 2017. One possible explanation is the 6.1% increase in the minimum wage between 2016 and 2017, which probably had a positive impact on people with wages slightly higher than the minimum wage.

The incidence of poverty among Arab families fell from 49.2% in 2016 to 47.1% in 2017. The NII attributes this decrease to a 9% drop in the incidence of poverty among Arab families who neither live in East Jerusalem nor are part of the Bedouin population in southern Israel (two areas in which the incidence of poverty rose in 2017). Together with the fall in the incidence of poverty in the Arab sector, the depth of poverty rose 10% and the severity of poverty jumped 22% in this sector.

Among Haredim, the incidence of poverty fell from 45.1% in 2016 to 43.1% in 2017, and the incidence of poverty among children also dropped 3%. 15% of poor families are Haredi, far higher than the proportion of all families who are Haredi.

Unlike most NII allowances, the poverty line in Israel is linked to the standard of living and rises together with it. Gross monthly monetary income per family in Israel reached NIS 20,027 in 2017, 4.4% more than in 2016. Net monthly per capita income rose from NIS 5,223 in 2016 to NIS 5,477 in 2017, a 4.6% increase, and the poverty line rose accordingly. The poverty line is defined as income is at least 50% lower than the median per capita income, adjusted for size of family. (Globes 31.12)

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10.3 Arab Israeli Women’s Employment Up Sharply to 40%

The most prominent trend in the labor market in 2018 was a steep rise in employment among Arab Israeli women, according to a report by written by the Taub Center for Social Policy Studies. The employment rate of Arab Israeli women has risen by 3.8% since the beginning of 2018, following a 2.5% increase in 2017. The employment rate among Arab women is now nearing 40%, two years ahead of the target set for 2020 and getting closer to the employment rate among Haredi (Jewish ultra-Orthodox) men. The report attributes the increase to higher education levels among Arab women, a trend that has continued since the beginning of the decade.

Another point highlighted in the report is that the population group that has derived most of the benefit from the prosperity in the Israeli high-tech sector is non-Haredi Jewish men. Employment figures show that the proportion of people in this group employment in high tech rose from 8% to 15% in the course of a decade, compared with 7% among non-Haredi Jewish women, 3% among Haredi Jewish women and less than 2% among Haredi men and Arab women and men.

The general picture in the labor market is positive. Wages continue their upward path, with an 11% increase since 2014. Growth in productivity continues to lag behind the rise in wages, which will prevent further wage rises in the long term. The Taub Center found a surprising resemblance between wages of Haredim and Arabs, despite differences between the two groups in work hours and other variables.

Employment rates continued to improve in 2018; the downtrend in unemployment rates since 2003 continued into 2018. Employment rates among women have risen dramatically since 1995, greatly narrowing the gap between men and women in this aspect. The employment rate among women has risen from less than 60% in 1995 to 74%. The employment rate has risen slowly among men, regaining the 83% level it reached in the mid-1990s. The most impressive increase in employment rates was among Haredi women – 22% in 15 years. The employment rate among Arab women went up 11% since 2002, especially in the past few years, boosting the numbers of those employed by 50%, concurrently with a strong rise in education in this group. (Globes 31.12)

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10.4 New Car Deliveries in Israel Decline by 5% in 2018

Some 267,490 new vehicles were delivered in 2018, down 5% from 2017, according to the report of the Association of Car Importers based on Ministry of Transport figures. In December 2018, 5,100 new vehicles were delivered, down 12% from December 2017. The top-selling car brand in 2018 was again Korean company Hyundai with 38,423 deliveries, up 4% from 2017. In second place was Kia with 35,663 deliveries, virtually unchanged from 2017. Hyundai and Kio are both part of Hyundai Motors and together they have 27% of Israel’s market in new vehicle sales, and have been the top selling brands for the past four years. In third place in 2018 in terms of new vehicle deliveries in Israel was Toyota with 27,192, down 13% from 2017 and in fourth place was Skoda with 19,928 deliveries, down 8% from 2017. In fifth place was Nissan with 15,626 deliveries, up 9% from 2017, and in sixth place was Suzuki with 13,604 deliveries, down 20% from 2018. In seventh place was Mazda with 13,253 deliveries, up 2% and in eighth place was Mitsubishi with 12,952 deliveries, up 19% from 2018. (Globes 06.01)

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10.5 Record 4.1 Million Tourists Visited Israel in 2018

A record 4,120,800 tourists visited Israel in 2018, up 14% from last year, which was also a record year, and rising by 42% over 2016’s totals, the Ministry of Tourism announced. The Ministry of Tourism estimates that income from tourists last year totaled NIS 22 billion ($5.8 billion). December alone was a busy month for tourism with 325,600 visiting Israel, up 12% from December 2017. The Ministry of Tourism estimates that income from tourists in December totaled NIS 1.7 billion. In December, 288,100 tourists came to Israel by air, 37,400 by land and 26,200 by sea. (MoT 06.01)

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11: IN DEPTH

11.1 ISRAEL: PwC Finds 2018 a Record Year for M&As in Israel

Low-tech industries outperformed high-tech and life sciences industries in the Israeli mergers and acquisitions market in 2018, according to figures compiled by the PwC Israel. The company’s report reviewed mergers and acquisitions by Israeli companies in Israel and worldwide and by foreign companies in Israel in 2018.

PwC said that 2018 had seen a record year for the Israeli economy, with the volume of deals rising 77% to $21.6 billion (before completion of the Mazor Robotics deal), compared with $12.2 billion in 2017 and $16.8 billion in 2016. The report did not include exceptional deals of over $15 billion, and therefore excluded the huge acquisitions of Mobileye by Intel and of Actavis by Teva Pharmaceutical Industries.

The average deal price rose 88% to $267 million in 2018, but the number of deals dropped from 131 in 2017 to 124 in 2018. In addition to the increase in the conventional industries, the life sciences and pharma industry produced deals totaling $1.3 billion, down from $4.7 billion in 2017.

PwC Israel partner, head of advisory services, and transaction services leader Liat Enzel-Aviel says, “It appears that the decline in the number of high-tech deals is due to continued development by companies in the sector and growth possibilities that are postponing the sale of companies. The fall in the figures for pharma deals resulted from a decline in mergers and acquisitions activity by Teva, which was active as a buyer of companies in 2016 and a seller of companies in 2017.

“Large Israeli companies active in conventional markets with established business in global markets aroused great interest this year among large strategic players, who made major acquisitions in Israel. One of the main reasons is the effect of Israel’s image as a nation of innovation, which is spreading from the usual technology sectors into other areas. At the same time, companies sold this year had the potential to become flagship companies in the Israeli economy. The question arises of what this indicates about the economy, and whether there is a glass ceiling preventing these companies from developing into Israeli-owned global leaders.”

Acquisitions by US concerns rose from $3.7 billion to $12.9 billion this year, despite the US tax reform supporting the return home of US money. The number of deals from East Asia, remained unchanged, but the value of the deals declined.

Uncertainty About 2019

PwC believes that factors with conflicting effects are creating uncertainty for 2019. “Volatility in the financial markets and predictions of a slowdown in global growth are likely to have a negative impact on deal prices, if the predictions come true. Macroeconomic factors are liable to cause companies’ value to plummet, which could make acquisitions more attractive. On the other hand, price fluctuations will be so extreme that that market is likely to reach a standstill, due to investors’ desire to reduce their exposure,” Enzel-Aviel says.

At the same time, she detects a change in the mood among local entrepreneurs, who are not pushing for a quick exit. Another factor is the effect of the US tax reform, which is causing signs of a slowdown in activity outside the US. The regulatory aspect is also influential – if an extension for implementing the Promotion of Competition and Reduction of Concentration Law is not granted, it could potentially result in the sale of assets worth billions of dollars. (PwC 26.12)

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11.2 ISRAEL: Bank of Israel Research Department Staff Forecast for January 2019

This article presents the forecast of macroeconomic developments compiled by the Bank of Israel Research Department in January 2019 regarding the main macroeconomic variables – GDP, inflation and the interest rate. According to the staff forecast, Israel’s gross domestic product (GDP) is projected to increase by 3.4% in 2019, slightly lower than the previous forecast, and by 3.5% in 2020. The inflation rate over the next year is expected to be 1.3%, slightly lower than the previous forecast, and 1.8% in 2020. The Bank of Israel interest rate is expected to increase to 0.5% in the third quarter of 2019, and to continue increasing gradually to 1.25% by the end of 2020 (the end of the forecast range).

Forecast

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

The Global Environment

Our assessments of expected developments in the global economy are based mainly on projections by international institutions (the International Monetary Fund and the OECD) and by foreign investment houses. These institutions’ forecasts for growth and inflation in advanced economies remained virtually unchanged since the previous forecast, while their projections for imports to those economies declined slightly. We assume that growth in advanced economies will be about 2.0% in 2019 and 1.7% in 2020, and that the advanced economies’ imports will increase by 4.0% in 2019 and by 3.7% in 2020. Our assumption is that inflation in the advanced economies will total 2% in each of 2019 and 2020. According to the most recent assessments of investment houses that were published before the forecast was prepared, the US federal funds rate is expected to be about 3% at the end of 2019 and to remain at that level during 2020. The declared interest rate in the Eurozone is expected to be 0.1% at the end of 2019, and 0.5% at the end of 2020. The sharp decline in the price of oil was among the significant changes that took place in the global economic environment since the publication of the previous forecast. The average price of Brent crude oil was about $68 per barrel in the fourth quarter of 2018, compared with $76 in the third quarter.

Real Activity in Israel

GDP is expected to grow by 3.4% in 2019 and by 3.5% in 2020

National Accounts data indicate that the growth rate in 2018 was lower than the assessment in the previous forecast. Our assessment therefore is that it is more likely that the accelerated growth of recent years has been maximized, inter alia due to the supply constraints in the labor market. Accordingly, our assessment is that in 2019 and 2020, the economy will grow at a rate close to its long-term growth rate (about 3%), and that the expected activity of a number of large companies in those years will have an added significant effect. The forecast for 2019 is slightly lower than the previous forecast, due to the slowdown in activity reflected in the National Accounts data. Regarding the uses, private consumption is expected to increase in 2019 at a slower pace than our previous assessment. Fixed capital formation is expected to grow by 3% in 2019, but is expected to contract by 2% in 2020 as a result of the culmination of several large investments in the economy. The maturation of these investments is expected to contribute to exports, which are therefore expected to grow slightly more than world trade in 2019 and in 2020.

Inflation and interest rate estimates

According to the staff forecast, the inflation rate in the four quarters ending in the fourth quarter of 2019 will be 1.3%. Inflation at the end of 2020 will be 1.8%. The Consumer Price Index readings published since the publication of the previous forecast indicated a higher-than expected inflation rate, reinforcing the assessment that the moderation of inflation in the third quarter of 2018 was temporary. A number of factors are expected to support inflation in 2019: wage increases, the recent depreciation of the shekel in terms of the nominal effective exchange rate, and increases in the prices of electricity, water, and vehicle insurance. However, oil prices are expected to moderate inflation in the coming months, since they declined sharply during the fourth quarter of 2018. These combined considerations led us to lower the forecast for 2019 slightly. For 2020, our assessment is that the tight labor market will continue to support wage increases and consequently the convergence of inflation to the midpoint of the target range. However, the increase in inflation is expected to remain gradual, against the background of processes that have apparently not yet been fully maximized, including the continued growth of competition, government measures to lower the cost of living, and the development of e-commerce.

According to the Research Department’s assessment, the Bank of Israel interest rate is expected to increase to 0.5% in the third quarter of 2019, similar to the forecast from October, and to 0.75% in the first quarter of 2020. Overall, the interest rate is expected to rise gradually and to support the convergence of inflation to the midpoint of the target range as well as GDP growth in accordance with the long-term pace.

Main risks to the Forecast

Several factors may lead to economic developments that differ from those in the forecast. Regarding the global environment, the International Monetary Fund and the OECD noted in the recent publications that the downward risks to growth and world trade have increased. The main risks include the possibility that the trade war between the US and China may worsen, uncertainty regarding an agreement concerning the UK leaving the European Union, and questions regarding the abilities of the US and some European countries to carry deficits such as those upon which the forecast is based. Uncertainty in the global environment has been reflected in, among other things, the recent volatility in the financial markets, which in and of itself may lead, under certain circumstances, to a slowdown in the real economy globally and in Israel.

In the domestic environment, there is uncertainty regarding the extent to which the expected increase in wages and in the prices of some inputs (electricity and water) will be passed on to product prices, inter alia due to animated public discussion and the government’s declaration that it will act to reduce price increases.

There is also a downward risk to the forecast due to uncertainty regarding the causes of the decline in growth. The forecast is based on the assessment that the slowdown in the growth rate is mainly due to the economy having maximized its surplus production capacity and the increased effect of constraints on the supply side. However, the slowdown in growth may reflect some slowdown in the growth rate of domestic demand. In such a situation, the slowdown in growth may be more significant than just to the long-term rate, and domestic inflation may increase more moderately. (BoI 07.01)

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11.3 LEBANON: US Doubles Down on Military Aid to Lebanon

Jack Detsch posted on 3 January in Al-Monitor that the Trump administration is providing Lebanon’s army with more than $100 million in upgrades to tanks and attack helicopters.

The Donald Trump administration is providing the Lebanese army with more than $100 million in upgrades to tanks and attack helicopters in the latest US effort to stem the influence of Iran-backed Hezbollah.

The package includes training for pilots and maintenance crew on MD-530G light scout attack helicopters provided by the Pentagon last year as well as laser-guided rockets, according to Defense Department records obtained under the Freedom of Information Act by the Security Assistance Monitor. Lebanon will receive the equipment through the Defense Department’s Section 333 program, which helps US partners build their military inventories to fight terrorism and handle border security.

The Pentagon has indicated that the upgrades have long been in the works to help the Lebanese army stem the influence of Iran and Hezbollah as the organization’s activity has spread inside Syria. The package will also include sniper rifles, night-vision devices and mortars for infantry units.

“The Department of Defense (DoD) plans Section 333 security cooperation — including the assistance in question — well in advance according to our plans to strengthen the capabilities of key partners in the region,” Pentagon spokeswoman Rebecca Rebarich told Al-Monitor in a statement. “Strengthening the Lebanese Armed Forces (LAF) advances a range of US interests in the Middle East that includes not only countering the spread of violent extremisms but also stemming the influence of Iran and Hezbollah.”

With al-Qaeda and the Islamic State on the run, top Trump administration officials including national security adviser John Bolton and Secretary of State Mike Pompeo have called for the United States to take a harder line against Iran. But some experts aren’t sure aid to the Lebanese army fits the emerging American policy in the region.

Despite $1.5 billion in US assistance since 2005, including tanks and attack helicopters sent over last year, the LAF — while popular in Lebanon – has remained split along sectarian lines, a recent report from the Carnegie Endowment’s Middle East Center revealed.

Experts say the United States still holds a good record when it comes to keeping track of the equipment, despite the federal Government Accountability Office finding flaws in the State Department’s monitoring efforts in 2014. But it’s not clear that arming the LAF will help mitigate Hezbollah’s influence in the country.

Lawmakers in Lebanon have failed to agree on the formation of a government since elections in May, which saw Hezbollah make gains over Sunni Prime Minister Saad Hariri. Hariri has criticized Hezbollah for impeding the process of forming the Cabinet, which is split by law between the country’s religious blocs. Iran’s influence has been ascendant in Lebanon since the country faced a brutal 15 year civil war, which ended in 1990. Experts tell Al-Monitor that while US assistance is of limited military significance, only helping on a limited counterterror mission that has little relevance to the nation’s security, it gives the United States some influence at the bargaining table.

“These insurgencies are not an issue anymore,” Hanin Ghaddar, a visiting fellow at the Washington Institute, told Al-Monitor. “It’s more about leverage that the United States would like to keep. It’s the only leverage that the United States has over state institutions.”

While information on Section 333 had long been made widely available through Congress, the Defense Department recently began categorizing the records as “For Official Use Only,” making them more difficult for journalists and members of the public to obtain. During his tenure as secretary of defense, James Mattis sought to limit access to unclassified records and said DoD employees were obligated to report leaks.

Jack Detsch is Al-Monitor’s Pentagon correspondent. Based in Washington, Detsch examines US-Middle East relations through the lens of the Defense Department. Detsch previously covered cybersecurity for Passcode, the Christian Science Monitor’s project on security and privacy in the Digital Age. Detsch also served as editorial assistant at The Diplomat Magazine and worked for NPR-affiliated stations in San Francisco. (Al-Monitor 03.01)

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11.4 EGYPT: Cairo – The World’s Test Platform for Transportation

Yasmeen Nabil posted on Wamda on 7 January that recently Dubai-based ride-hailing app Careem launched an on-demand tuk tuk service in Cairo without any fanfare. The move marked the increasing competition in the city’s transport sector where ride-hailing applications continue to pilot new services that promise to ease the hassle of getting around the Middle East’s biggest city.

With a population of more than 25 million people and 2.3 million licensed vehicles in 2017, Greater Cairo (which includes the governorates of Giza and Qalyubia) is struggling with aggravated traffic, congestion, poor infrastructure and increasing fuel prices. And as one of the fastest growing cities in terms of population according to Euromonitor International, the problems are unlikely to disappear anytime soon.

This exacerbated transport issue has generated several ride-hailing applications looking to offer a solution. “Any mode of transportation, whether group transport or something like Uber and Careem, of course is very well received by the ministry because anything that helps in solving the transportation problem, or let’s say better eases the traffic flow and facilitates mobility is supported by the state, government and the ministry, especially group transport projects,” says Mohamed Ezz, spokesperson at the ministry of transport in Egypt.

This governmental backing has proven fruitful for the likes of US-based Uber and Careem and has spawned several local players including on-demand bus ride services Swvl and Buseet. “Cairo is our biggest city in Careem and the biggest city in the region as well. There are around 40% of Egyptians that don’t have any services that really cater for their needs. They are either forced to use public transportation or basically their own private cars,” says Hadeer Shalaby, general manager at Careem Bus.

The Need for Affordable Rides

On-demand private car hire services became widely popular when they were launched a few years ago, but the devaluation of the Egyptian currency in 2016 and the recurrent increase in fuel prices have proven an obstacle to this service as many Egyptians can no longer afford them.

In response, both Careem and Uber began introducing cheaper alternatives on their platform including their first ever bus service, using Cairo as a test-bed for their other markets. Around the same time, Buseet and Swvl also raised tens of millions of dollars in investment.

“In Egypt, rising inflation and costs for drivers have been a primary concern. For riders, Uber has launched a range of low-cost options including Uber Scooter, and most recently the Uber Bus, which is 70% cheaper than UberX and was designed in response to the Egyptian government’s request for low-cost transport options,” says Ahmed Khalil, head of operations at Uber Middle East and North Africa (Mena).

However, even with the cheaper bus services, there is still a significant share of the market that is unable to afford that. For this segment, tuk tuks and scooters are the main form of transportation.

Founded in 2017, Halan is an application that provides on-demand motorcycles and tuk tuks to the underserved communities and poorer areas where roads tend to be too narrow for cars. The company has already completed more than three million rides, expanded to Sudan and recently raised a multi-million series A funding round while securing founding Uber chief technology officer, Oscar Salazar as a board member. Back in March 2018 the company raised $2 million in a pre-series A round.

“When you live in these areas, there is a high need for these vehicles. Tuk tuks have resolved the problems of millions of people because a lot of people had to walk for kilometers to reach their destination,” says Mounir Nakhla, co-founder at Halan. “Also, motorcycles help a lot to overcome traffic jams in big cities. In Egypt, many citizens need to use more than one mode of transportation to get to their destination. What a motorcycle does is that it takes you to your destination directly.”

Dissatisfactory Options

Cairo’s public transport sector is currently fragmented. Almost half of the city’s daily transportation needs are met by the microbuses, an unregulated network of privately-owned vehicles running several routes across the city with prices ranging from EGP1.5-3 ($0.08-0.17).

Meanwhile the government is currently working on upgrading its metro system to serve the expected 2.1 billion rides expected this year. Ticket prices now start from EGP3 but are expected to rise for a third time following a 250% price hike last year which sparked protests at some stations. The traditional white taxis, while equipped with fare meters, are notorious for drivers who refuse to use them and are seen as an overpriced option.

With such decrepit options, transportation that appeals to young, working professionals is lacking in the public sector and with a mobile penetration rate of 105% according to research company, Budde, and low cost of connectivity, it is this highly connected youth segment that has led Cairo to become a market to test and scale transportation services. “In this part of the world, there is a very big population. We have very high internet penetration and smartphone penetration. We have very diverse methods of transportation and there is a lot of room for efficiencies in these methods of transportation,” says Nakhla. “Where efficiencies can be created, that is where entrepreneurs go.”

These entrepreneurs have included Mostafa Kandil, co-founder and chief executive officer of bus-booking app Swvl who is now looking to expand globally after closing a Series B round that valued the company at close to $100 million. Kandil is now in talks with Chinese investors to fund its planned expansion to South East Asia.

Smaller player Buseet recently raised an undisclosed seed amount for its bus-booking app, while other local startups have emerged in recent years to cater to the more niche segments. Raye7 is a carpooling application, Tawslni offers seats on journeys from one city to the next while Fyonka offers on-demand cars for women only.

Saturation Point

But some of these new ride-hailing apps have come with their own set of problems. Frequent reports and complaints about these companies often circulate on social media with consumers facing situations where they feel that their personal safety was threatened.

Conversely, Careem and Uber also had to deal with a different kind of problem when they faced a lawsuit in 2017 filed by taxi drivers who were severely affected by the rise of these services. They complained that the two companies use private cars for commercial purposes and do not pay the taxes for operating transport vehicles. The licenses of the two companies were suspended but soon after, the court lifted the ban once both companies agreed to pay the taxes. For both government and the companies it seems, transporting Cairenes was deemed more important than ongoing legal cases.

So competition has been sanctioned to thrive in Cairo’s transport sector. Both Uber and Careem’s bus service currently costs EGP5, their scooter service starts at EGP8 while Careem’s pilot tuk service starts from EGP3.5. Halan’s tuk tuk and motorbike service are priced just as competitively. With such an array of services, the market is becoming increasingly saturated, some of the local players are betting on their niche, others are focusing on providing a unique service and creating brand loyalty, but how they will eventually compete with the prowess and coffers of Uber and Careem, remains to be seen. (Wamda 07.01)

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11.5 TURKEY: Istanbul, the Flashpoint of Turkey’s Crisis and Looming Elections

Mustafa Sonmez posted in Al-Monitor on 7 January that Turkey’s commercial capital, Istanbul, is in the grips of economic turmoil, which raises the prospect of the city’s local administration changing hands after more than two decades of dominance by political Islam.

Turkey ushered in the new year under the mounting stress of economic crisis and local elections looming on 31 March. The stress is felt heavily in Istanbul, Turkey’s biggest city and commercial capital, which contributes 31% of the country’s gross domestic product and harbors 22% of the labor force and is now the epicenter of the economic tremors.

Under the 16-year rule of the Justice and Development Party, construction became the engine of economic growth and Istanbul drew the largest investments of the sector, ranging from sprawling housing complexes and business high-rises to countless urban infrastructures and “megaprojects” conducted as public-private partnerships. Istanbul’s economic rent and public wealth was appetite-whetting. Rent-seeking proliferated and businesspeople close to the AKP grabbed the biggest shares.

Turkey’s political Islam movement, whose hold on power has reached nearly 25 years at the municipal level and 16 years in the central government, made Istanbul the main worksite for its own growth and then increasingly for the building of a new regime. The construction-centered drive advanced problem-free for roughly a decade after the AKP’s coming to power, but began to stumble in 2014. Today, it is in turbulence amid a fully “homemade” crisis, with the strongest jolts felt in Istanbul.

Turkey’s economic growth under the AKP relied on foreign funds, mainly external borrowing of some $460 billion, with the funds used mostly for domestic consumption. When the inflow of funds decreased before grinding to a halt in 2018, the crisis became inevitable.

Not surprisingly, the earliest blows of the crisis hit the construction sector, where the first downticks in employment were seen. After an extraordinary profit bonanza until 2015, homes in Istanbul had begun to depreciate in real terms, with price increases trailing at least 10% behind overall inflation. The housing woes in the city particularly upset builders close to President Recep Tayyip Erdogan. In a bid to revitalize real estate sales, Ankara has opposed hiking interest rates and offered incentives to promote purchases, but none of those measures have yielded results.

Offices in Istanbul’s Levent and Maslak districts, the city’s main business centers, have seen a fast decline in occupancy rates, with rents also nosediving. In many of the once-mushrooming malls, shops are either empty or struggling to stay afloat with very low net sales. For many, the sales volume can no longer meet rents despite a presidential decree in September banning rental contracts in foreign currency.

The so-called megaprojects, built by both local and foreign contractors, are also in dire straits. The third bridge over the Bosporus and the new airport, erected — by flouting zoning laws — in Istanbul’s north, where the city’s scarce forests and water basins are, remain fraught with problems. The third bridge, inaugurated in 2016, remains largely idle, while the new airport is hit by delays, facing an uncertain future. One more megaproject — an undersea tunnel to the city’s south — is underperforming. The profit guarantees offered to the builders in the project contracts have already placed hefty burdens on the central government budget.

The turmoil in Istanbul’s construction sector has spilled over to other areas, affecting big and small companies alike. Even the metropolitan municipality is in a serious debt crisis.

Istanbul is also Turkey’s financial hub, and banks are similarly in a bottleneck, marked by a rapid decline in employment figures. While the contracting economy bears heavily on domestic trade, it is deeply shaking the advertising and media sectors, two indispensable links in marketing; layoffs are on the rise in this area, which is an important one for white collar workers.

The tourism sector, which is trying to keep the city afloat, has come to cater mostly to Middle Eastern visitors. Due to the Turkish lira’s dramatic depreciation, sightseeing, accommodation and dining in Istanbul are now going for a song.

Among ordinary Istanbulites, the rising costs of living and unemployment worries are the main topics of conversation nowadays. In 2018, Turkey’s consumer inflation hit 20.3%. The rate for Istanbul was not much better, standing at 19%. The country’s non-agricultural unemployment, or urban unemployment, was 13.5% in September, tending upward. Given that Istanbul’s jobless rate is usually 2% higher than the national average, urban unemployment in the city has reached more than 15%.

Now that the 31 March local elections coincide with a serious economic crisis, Istanbulites are expected to largely influence the message of the electorate. Arguably, the long municipal reign in Istanbul of political Islam itself owes much to opportunities spawned by crisis. The Islamist movement originally appealed only to traditionally conservative Istanbul districts such as Uskudar and Eyup, but its voter base grew notably in the 1990s as its message resonated with migrant masses from provincial Anatolia, which the winds of globalization had propelled to the city. While the left-wing and social democrat parties failed to reach out to the impoverished masses swarming the city’s outskirts, political Islam managed to fill the vacuum.

In the local polls in 1994, which was a crisis year, the four center-right and center-left parties mustered 70% of the vote in Istanbul, but because they did not care to form alliances, the Welfare Party, to which Erdogan belonged at the time, grabbed the metropolitan municipality with just 25% of the vote, marking the beginning of the 25-year dominance of political Islam. The 1999 election was basically a replay, as centrist parties failed to learn a lesson from their previous defeat, letting the Islamists retain Istanbul with 27% of the vote.

In the November 2002 general elections, the AKP, the new party of the Islamists, came in first with 34% of the vote and was able to form the government alone, courtesy of the intricacies of Turkey’s electoral system. In the 2004 local elections, the AKP won Istanbul with 45% of the vote.

In the next local polls, in 2009 — a year in which Turkey’s economy shrank nearly 5% amid global financial woes — the AKP was still the winner, but its support dropped to 38% in the overall vote and 40% in Istanbul, which was 5% less than what the party had garnered in the 2007 parliamentary polls. The main opposition Republican People’s Party (CHP), meanwhile, got 33%, reducing the AKP’s lead to 5%, which was a clear but inconclusive repercussion of the economic crisis.

Now, a similar crisis climate prevails ahead of the municipal polls. The opposition is rather optimistic, given that the AKP got 42% in the general elections in June 2018, a notable decline from nearly 50% in November 2015. Moreover, it had to seek an electoral alliance with the Nationalist Movement Party, with the pair barely managing 50.7% together.

The CHP, which reckons the AKP’s support could have dropped further as the crisis deepened in the past six months, is hopeful of winning Istanbul with the support of other opposition parties. The AKP, meanwhile, appears highly alarmed over the prospect of losing the city. Erdogan nominated parliament speaker and ex-premier Binali Yildirim to run for the mayor’s office, but in order to keep the speaker’s seat in case of a defeat, he proclaimed that Yildirim did not have to resign from his current post, although this violates the constitution.

Such unlawful behavior compounds worries over the integrity of the elections, stemming from serious vote-rigging allegations in recent years. The opposition appears close to victory in Istanbul this time, but whether it will be allowed to triumph remains questionable.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question. (Al-Monitor 07.01)

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Fortnightly, 9 January 2019

Fortnightly, 9 January 2019

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