TOP STORIES
- Pango Mobile Parking App Coming to Philadelphia
- Morocco ‘to Reduce Greenhouse Gas Emissions 13% by 2030’
- After Renault and Ford, Peugeot to Open Production Facility in Morocco
- Israel’s Unemployment Rate Drops to Historic Low of 4.9%
- ISRAEL: Six Great Food Tech Startups from Israel
- SAUDI ARABIA: IMF Staff Completes 2015 Article IV Mission to Saudi Arabia
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Bank of Israel Governor Warns of Demographic Economic Fallout
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Exploration Company Reports Signs of Oil on the Golan Heights
2.2 EverCompliant Secures $3.5 Million in Funding Led by Carmel Ventures
2.3 Mobile Live Streaming Startup FlyOnWall Raises $3 Million
2.4 Pango Mobile Parking App Coming to Philadelphia
2.5 Forewin Chooses Orbotech System for Advanced Flex Production
3: REGIONAL PRIVATE SECTOR NEWS
3.1 Westinghouse Dedicates New Office in United Arab Emirates
3.2 FASTSIGNS Expands Middle East Presence with First Dubai Location
3.3 Cairo Deploys Trafficware’s ITS Technology
4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Jordan’s Households Use Only 5% of Water for Drinking, 45% in Bathrooms & Gardens
4.2 Morocco to Reduce Greenhouse Gas Emissions 13% by 2030′
5: ARAB STATE DEVELOPMENTS
5.1 Jordan Signs Loan Guarantee Deal with US
5.2 Jordan Targets Energy Diversification with Bumper Investment Deals
5.3 Jordanian Pundits Call on Amman to Revisit Open-Door Refugee Policy
♦♦Arabian Gulf
5.4 Saudi Arabia Imports Hit $173.8 Billion in 2014
♦♦North Africa
5.5 IMF Disappointed with Egypt’s Postponement of Capital Gains Tax
5.6 Egypt’s Petroleum Imports Rise 95% in March
5.7 Suez Canal Revenues Hit $1.7 Billion in First 4 Months of 2015
5.8 Libya Edges Closer to Economic Collapse as Currency Dives
5.9 Following Renault and Ford, Peugeot to Open Production Facility in Morocco
6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS
6.1 Turkey’s Year-On-Year Exports Decline By 19% in May
6.2 Cypriot Economy Not Expected to Grow Before 2016
6.3 Greece & Creditors Line Up Rival Reform Proposals to Unlock Aid
7: GENERAL NEWS AND INTEREST
♦♦ISRAEL:
7.1 Ramadan Begins on Eve of 16 June
♦♦REGIONAL:
7.2 Jordanian Flag Sets New World Record for Size
7.3 Moroccan Think Tank Calls for English to Replace French in Schools
8: ISRAEL LIFE SCIENCE NEWS
8.1 Kamada Update from Study of Inhaled Alpha-1 Antitrypsin to Treat AAT Deficiency
8.2 Rosetta Genomics Launches OncoGxOne
8.3 Cannabics Pharmaceuticals Patent Application for Novel Personalized Anti-Cancer Treatment
8.4 Clear-Cut Medical Raises Further Funding for Clinical Trials
8.5 Teva Enhances Women’s Health with Launch of Generic Lomedia 24 Fe Tablets
8.6 Mapi Pharma Closes $10 Million Investment Led by Shavit Capital
8.7 Teva Announces Exclusive Launch of Generic Actonel Tablets in the United States
8.8 Teva Enhances ADHD Product Line with Generic INTUNIV in the United States
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 GeoEdge Unveils the Industry’s First Video Ad Verification Solution
9.2 PV Nano Cell Announces Further Expansion into the U.S. Market
10: ISRAEL ECONOMIC STATISTICS
10.1 Israel’s Unemployment Rate Drops to Historic Low of 4.9%
10.2 Israel’s New Car Deliveries Drop in May
10.3 Eight Thousand Israelis Die Annually from Smoking
10.4 Israelis Buy 787,630 Smartphones in First Quarter
11: IN DEPTH
11.1 ISRAEL: Israeli Startups That Made It Onto Gartner’s ‘Cool Vendors’ List
11.2 ISRAEL: Six Great Food Tech Startups from Israel
11.3 JORDAN: Light at the End of Tunnel for Jordan’s Subsidy Cuts
11.4 KUWAIT: New Oil Finds In Kuwait Underscore Expansion Plans
11.5 BAHRAIN: Bahrain Works to Attract Foreign Students
11.6 UAE: Abu Dhabi Tackles Rising Substance Addiction
11.7 OMAN: Ratings on the Sultanate of Oman Affirmed At ‘A-/A-2’; Outlook Stable
11.8 OMAN: Oman Moves to Broaden Health Care Base
11.9 SAUDI ARABIA: IMF Staff Completes 2015 Article IV Mission to Saudi Arabia
11.10 EGYPT: Egypt Sets Tourism Target for 2020
11.11 TUNISIA: Issuer Rating Affirmed at Ba3 and Outlook Changed to Stable From Negative
11.12 TUNISIA: Tunisia Cracks Down on Radicalization
11.13 ALGERIA: Made in Algeria Campaign Shifts Up a Gear
11.14 MOROCCO: Morocco Retail Sector Mirrors Growing Wealth, Changing Habits
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Bank of Israel Governor Warns of Demographic Economic Fallout
Bank of Israel Governor Dr. Karnit Flug said on 1 June that demographic changes such as an aging population and the growth of Arab and ultra-Orthodox Jewish populations are threatening the country’s long-term economic prospects. Speaking at the annual conference of the Israel Economic Association, Flug said the low employment rates among ultra-Orthodox men and Arab women in particular are hindering growth. Both segments were showing increased participation in the workforce, but without a drastic change Israel would suffer compared to other developed nations, she said.
Arabs make up about 20% of Israel’s 8 million citizens, while the ultra-Orthodox comprise about 10% of the population. Both sectors are among the fastest-growing segments of society. The bank’s demographic forecast predicted that within 50 years, Israel’s non-ultra-Orthodox Jewish population will drop from 70% to just 50%. A separate Finance Ministry report warned that these trends could lead Israel toward Greece-style bankruptcy. To ensure Israel’s economic and social future, “we must courageously look at the current situation, and begin even now to work to ensure an increase in productivity that will allow an extended increase in the standard of living of all citizens of the country,” she said.
Flug recommended the government improve the education system and schooling infrastructure, to “furnish the skills that are critical to successful integration into the labor market, such as math, science and English, to the ultra-Orthodox population as well, [and] reduce the high-school dropout rate, strengthen science and technology abilities, and improve Hebrew language skills in schools in the Arab sector.” Noting factors she called “supporting of growth and productivity,” Flug said she believed improvements should be made to infrastructure. She recommended reducing regulation, increasing competition in industries that are not exposed to domestic or foreign competition, promoting reforms in the ports and energy and gas industry, and improving the efficiency of public education, health and welfare services’ systems. (Various 02.06)
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Exploration Company Reports Signs of Oil on the Golan Heights
Jini energy exploration company, which has been contracted by the Afek company to conduct its exploratory oil drilling on the Golan Heights, has promising findings from the target layer. The company is currently conducting exploratory drilling on the southern Golan Heights. According to assessments in the energy sector, the company will gradually move northward — permits allowing — to investigate whether additional oil reserves exist at the target depth. Although the findings indicate the existence of hydrocarbons at the target depth of the drilling site on the southern part of the Golan, it is still too early to know whether the material is oil, gas, or oil shale, or whether drilling there is commercially viable — in other words, whether there are sufficient reserves to cover the cost of extracting it. Current estimates say that the Afek company will be asked to return to the planning and construction committees to receive additional permits to conduct more advanced exploration that will allow it to determine the results of the drilling. At this stage, however, it seems that the chances of finding oil have risen. (IH 28.05)
2.2 EverCompliant Secures $3.5 Million in Funding Led by Carmel Ventures
EverCompliant raised $3.5 million in Series A financing, led by Carmel Ventures, Nyca Partners and existing EverCompliant investor Joey Low from Star Farm Ventures. The company will use the funding to further develop its product suite, MerchantView, and accelerate its global expansion. Acquiring banks and payment service providers, (PSPs) are struggling to identify the fraudulent illegal online activity that is being funneled through presumably legitimate merchants. EverCompliant has solved this problem by creating an innovative solution that allows the payment industry to onboard, and continuously monitor any number of merchants and instantly uncover hidden fraudulent and suspicious e-commerce activity that may create financial liability and risk. While using EverCompliant’s technology, acquirers and PSPs can dramatically reduce the time and money spent on the underwriting process, and reach a conclusive business decision efficiently and accurately allowing them to grow their client base. EverCompliant’s technology has been tested, validated and adopted by large-scale financial institutions and payment service providers in the US, Israel and Europe.
Tel Aviv’s EverCompliant is a leading provider of cyber intelligence that allows acquiring banks and payment service providers (PSPs) to manage merchant-based fraud and cyber risk. Their focus is to provide a range of solutions that give acquirers and PSPs the necessary relevant information to check ongoing and newly boarded merchants, while guiding them through the process of managing online risk, detecting transaction launderers, hidden transaction tunnels and fraud detection. (EverCompliant 27.05)
2.3 Mobile Live Streaming Startup FlyOnWall Raises $3 Million
FlyOnWall announced it has raised $3 million in Series B funding from private investors. The company (previously LiveLens) plans to use the funds to launch its new live streaming product and expand its product development and marketing efforts. Introduced over the last few years, live streaming allows users to stream live video from their mobile devices and share it with viewers online. As the underlying technologies that make it possible have developed, so has activity in the sector. The live streaming market is expected to grow dramatically and holds potential across a wide range of applications, from sports and events to politics, news, marketing, religion and much more. FlyOnWall (previously LiveLens) lets users stream live video from their mobile devices and share it anytime, anywhere. The original LiveLens app was named to several Best Apps lists, including Mashable and AppAdvice. Founded in 2013, the company is headquartered in Tel Aviv and New York City and previously raised $2.5 million in Series A funding in 2013. (FlyOnWall 20.05)
2.4 Pango Mobile Parking App Coming to Philadelphia
On 21 May, the Philadelphia Parking Authority (PPA) Board approved entering into a contract with Pango USA, LLC (Pango) to provide a mobile parking payment option for Philadelphia motorists. It’s the first time the city offered such option. Pango was selected from five vendors who submitted proposals for this service based on the quality of the product, the low transaction fee, and the option to share in advertising revenue generated from the service. Customers will be able to establish an account through the app to pay for on-street parking in the core of Center City initially (4th to 20th Streets, Arch to Locust Streets as well as Columbus Blvd. from Spring Garden to Race Streets) as well as the Torresdale Rail Station lot and the 8th & Chestnut Streets lot. After a six-month successful trial period, then the PPA is expected to expand Pango to the entire City of Philadelphia. More details on the specific expected launch date will announced soon by the PPA.
Pango, headquartered in New York City and Israel, is available in 61 cities around the world and used by more than more than 1 million active accounts. Pango also received the Sixth Annual Better World Awards in Monaco in May 2015. (Pango 21.05)
2.5 Forewin Chooses Orbotech System for Advanced Flex Production
Orbotech announced that Forewin, a large Chinese Flexible Printed Circuit (FPC) manufacturer has for a second time, selected Orbotech’s production solutions for its high-end fine-line flex applications. Forewin’s Suzhou-based printed circuit board shop was looking for premium technology that would offer very high throughput and maximum yields, while ensuring optimal environmental protection. Forewin selected Orbotech’s Paragon-Xpress 9 Laser Direct Imaging (LDI) system, which is designed for high-speed throughput of up to 5,000 panels per day per line. With the ability to achieve a depth-of-focus and significantly improved yields, the Paragon-Xpress 9 enjoys a reputation as one of the most stable solutions on the market.
Yavne’s Orbotech is a global innovator of enabling technologies used in the manufacture of the world’s most sophisticated consumer and industrial products throughout the electronics and adjacent industries. The Company is a leading provider of yield enhancement and production solutions for electronics reading, writing and connecting, used by manufacturers of printed circuit boards, flat panel displays, advanced packaging, micro-electro-mechanical systems and other electronic components. Today, virtually every electronic device in the world is produced using Orbotech systems. (Orbotech 22.05)
3: REGIONAL PRIVATE SECTOR NEWS
3.1 Westinghouse Dedicates New Office in United Arab Emirates
Westinghouse Electric Company, a group company of Toshiba Corporation, formally dedicated a new branch office that will facilitate Westinghouse’s participation in the development of the UAE’s peaceful nuclear energy program at Barakah, in the Western Region of Abu Dhabi. Westinghouse will use its new Westinghouse Electric-Abu Dhabi office, working in close cooperation with Toshiba Power Systems Company, to promote the merits of safe, clean and reliable nuclear energy throughout the Middle East region. Westinghouse supports the UAE’s program as a U.S. subcontractor to the Korea Electric Power Company (KEPCO), the Prime Contractor to the Emirates Nuclear Energy Corporation (ENEC), who is responsible for the deployment, ownership and operation of nuclear energy plants within the UAE. The company provides plant components such as reactor coolant pumps and instrumentation and control equipment, along with engineering, licensing, and training services for ENEC’s four units currently under construction at the Barakah Nuclear Power Plant (Barakah NPP), the first of which is scheduled to become operational in 2017. (WEC 31.05)
3.2 FASTSIGNS Expands Middle East Presence with First Dubai Location
FASTSIGNS International has opened its first Dubai location in the Addiyar Building on Sheikh Zayed Road. Further enhancing the company’s presence in the Middle East, this expansion is led by FASTSIGNS Master Franchisee Hamdi Osman, chairman of Solitaire IGT and former SVP of FedEx Express Middle East, Indian Subcontinent and Africa. Under his master franchise agreement with FASTSIGNS, Osman will open 12 locations in the United Arab Emirates (UAE) and 25 centers in North Africa – specifically targeting Morocco, Algeria, Tunisia and Libya for expansion. In addition to owning and operating franchise locations, Osman has the rights to sub-franchise FASTSIGNS across both markets. Additionally, FASTSIGNS is continuing to expand the Middle East with two new centers in Saudi Arabia planned to open later this year by another master franchise partner. FASTSIGNS is seeking additional master franchisees to develop the region.
Carrollton, Texas’ FASTSIGNS International is the largest sign and visual communications franchisor in North America, and is the worldwide franchisor of 575-plus independently owned and operated FASTSIGNS centers in nine countries. FASTSIGNS consultants provide comprehensive visual marketing solutions and help companies attract more attention, communicate their message, sell more products, help visitors find their way and extend their branding across all customer touch points. (FASTSIGNS 28.05)
3.3 Cairo Deploys Trafficware’s ITS Technology
The City of Cairo, the largest city in the Middle East and the 13th largest metropolitan area in the world, deployed Trafficware’s advanced traffic management technology to improve the city’s transportation network that serves the economic and motorist needs of more than 22 million people. Based on a competitive bid process, Trafficware’s central management system ATMS.now and the company’s controllers and cabinets were selected for installation on more than 230 of the busiest intersections citywide and its adaptive traffic management system SynchroGreen for deployment on 100 critical traffic arteries. The multimillion dollar project is part of the City’s extensive infrastructure initiative to ensure economic growth in this region of Egypt. Prior to this, Cairo did not have any type of traffic signal network in place. SensorTec was the project’s subcontractor.
Pittsburgh’s Trafficware specializes in research, design, and development of electronic equipment and enterprise software for the transportation industry. Trafficware’s more than three decades of industry expertise includes hands-on experience solving traffic management challenges around the world, earning the company a reputation for unmatched quality. (Trafficware 01.06)
4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Jordan’s Households Use Only 5% of Water for Drinking, 45% in Bathrooms & Gardens
Only 5% of domestic water in Jordan is used for drinking and cooking purposes, according to a new study, which said that 45% of the water is used in bathrooms and for the irrigation of gardens. The study, released on Saturday by the Water Authority of Jordan (WAJ), showed that showers account for 30% of the supplied domestic water used in bathrooms, while 20% is used for washing clothes and cleaning houses. Consumers’ negligence in carrying out regular maintenance on their water tanks is a major source of household water loss, with 50.07% of subscribers failing to implement any kind of maintenance on their water tanks, according to the study, which covered all parts of the country.
A total of 21% of households whose owners fail to carry out regular maintenance on their water tanks and pipes have leakage inside their houses and suffer from cracked and rotten walls. Moreover, 13% of water-quality-related complaints handled by WAJ are caused by internal leakage of wastewater due to worn out pipes, failure to clean water tanks regularly or leaving them without a cover, according to the study. The ministry official said using hoses to clean pavements, gardens and cars is illegal, noting that water companies and WAJ send written warnings to consumers who waste water and suspend water services until they pay a fine and pledge to conserve water. Repeat offenders are denied water services for three months, even if they pay the fine for wasting water, he noted.
Under the water distribution program, households receive water once a week on a rotating basis. Scarce water resources compelled the Kingdom to initiate the program in the early 1980s to ensure a sustainable water supply to subscribers.
Jordan ranks as the world’s second water-poorest country, where water per capita is 88% below the international water poverty line of 1,000 cubic meters annually. The available water resources in Jordan offer 800-900 million cubic meters of water annually, according to the ministry, which said that this annual amount provides for the needs of only three million people, while the number of water users in Jordan now exceeds 10 million people. (JT 30.05)
4.2 Morocco to Reduce Greenhouse Gas Emissions 13% by 2030′
Morocco’s environment minister on 2 June announced that the North African nation will reduce its emissions of greenhouse gases by 2030 by at least 13%. The announcement comes ahead of the 21st session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris in December. Morocco, which will host the 22nd UNFCCC session in 2016, “is committed to reducing by 13% its emissions in 2030”, Hakima el Haite said. She said the estimated $10 billion cost will be borne by the kingdom. (MWN 02.06)
5: ARAB STATE DEVELOPMENTS
5.1 Jordan Signs Loan Guarantee Deal with US
On 31 May, Jordan and the US signed a third sovereign loan guarantee agreement that will enable the Kingdom to raise $1.5 billion this June on global financial markets at low interest rates. The US embassy in Amman said that the loan guarantee agreement is part of a broader US commitment to enhance Jordanian stability, security and economic growth. The proceeds of the US-guaranteed bonds issued pursuant to the agreement will help to ensure that Jordan can continue to provide critical services to its citizens as it hosts the nearly 630,000 Syrian refugees registered by the UNHCR, said the statement, adding that the agreement is designed to support specific economic reforms that Jordan has been pursuing in order to promote economic stability, growth and prosperity for the Jordanian people.
Under the agreement, the US would guarantee repayment of principal and interest on Jordanian sovereign bond issuances totaling up to $1.5 billion with tenors not to exceed 10 years. Jordan previously issued sovereign bonds worth $1.25 billion in 2013 and $1 billion in 2014 with US government guarantees. A government official has recently told The Jordan Times that the government plans to issue another non-guaranteed bond worth $500 million in the last quarter of this year. Part of the proceeds of the bonds will be used to pay off a $750 million bond that will be due at the end of the year, according to the official. (JT 31.05)
5.2 Jordan Targets Energy Diversification with Bumper Investment Deals
Jordan has confirmed well over $10b of investment in a series of deals struck during the recent World Economic Forum. The investment, which came mainly within the energy sector, should boost the economy of a country that imports 97% of its energy needs, and which is struggling to cope with an estimated refugee population of around two million. The two largest deals were a $1.5b deal with Chinese firm Hanergy to build a one gigawatt cluster of solar and wind power projects, and a proposed liquefied natural gas sale and purchase agreement with British Gas, which would be worth $6b over 20 years. Other deals included an agreement with Canada’s Questerre Energy to explore oil shale opportunities in the country, and oil and gas exploration contracts with Transeuro and Ammonite Energy, also from Canada. Jordan also announced a push towards electric vehicles, agreeing three separate deals to replace part of its taxi and public-sector fleets with electric cars and to build charging points at petrol stations.
Investment from the Arabian Gulf came in the form of a solar energy project in Al Quwairah, which is being funded by the Abu Dhabi Fund for Development. Prince Khalid Bin Alwaleed’s KBW Investments also signed a memorandum of understanding to invest up to $400m in airports, transportation and infrastructure. Other contracts involved investment in IT, broadband connectivity, transport, and vocational training.
Jordan’s King Abdullah also announced a further $20b worth of investment opportunities as part of the country’s new 10 year economic plan – ‘Jordan 2025’. The blueprint envisions a further $9b being spent on energy, with $2.7b going towards urban development and $2.5b on transport. Infrastructure, water, ICT and tourism also feature heavily. (AB 23.05)
5.3 Jordanian Pundits Call on Amman to Revisit Open-Door Refugee Policy
The Hashemite Kingdom should revisit its refugee strategy and consider an end to the open-door policy regarding Syrian refugees, experts and lawmakers said. Meanwhile, they urged the government to increase pressure on the international community to help in hosting refugees who are already in Jordan.
According to official statistics Jordan hosts 1.4 million Syrian refugees, with more than 80% of them in host communities, putting more pressure on the country’s limited natural resources and infrastructure. With no end in sight to the Syrian crisis and the shortfall in supporting Jordan for hosting this unprecedented number of refugees, experts interviewed described the situation as “critical”. Of the $2.9 billion needed to provide services to Syrian refugees this year, the Kingdom so far has received only 7.2% of that sum. Some commentators blamed the government for mismanagement of the Syrian refugees’ crisis in the Kingdom, which “affects the daily lives of Jordanians”.
Although the Kingdom stopped providing free-of-charge health services to Syrians in Jordan, the fees they pay to receive service are similar to that paid by Jordanians, according to Hatem Azruie, the Health Ministry’s spokesperson. According to Azruie, due to the high turnover of Syrians at the public hospitals and centers, the ministry appointed 5,000 medics in the past two years, and upgraded medical equipment in health facilities.
As for the employment of Syrian refugees in Jordan, economist Khaled Wazani said there are 300,000 Syrian refugees in the Jordanian job market, which is adding to the unemployment problem in the country. Today, Jordan is the world’s third-largest host of refugees. In addition to the 1.4 million Syrians, the country hosts more than 200,000 Iraqis, along with Yemenis, Libyans, Sudanese and Somalis. (JT 28.05)
►►Arabian Gulf
5.4 Saudi Arabia Imports Hit $173.8 Billion in 2014
Saudi Arabia’s total exports in 2014 dropped by 8.9% to SR1.28 trillion ($342.28 billion), while imports rose by 3.3% to SR651.88b ($173.8b), according to fresh statistics. The value of the kingdom’s oil exports comprised 83% of the total value of exports at SR1.066 trillion, a report by the Saudi Central Department of Statistics and Information revealed. The value of chemical industries’ exports reached SR73.943b (5.6% of the total) and plastic and rubber products with SR71.126b (5.5%). According to the report, the kingdom’s imports in 2014 hit SR651.9b, as against SR630.6b in 2013, up by 3.4% or SAR21.3b.
Machinery and electrical appliances were Saudi Arabia’s top imports with their value standing at SR171.012b, comprising 26.2% of the total value of imports. Other top imports include transport machinery (SR108.610b or 16.6% of the total) and metals (SR79.759b or 12.2%), the figures indicate.
The US was Saudi Arabia’s top exports’ destination. The country accounted for 12.6% of the kingdom’s exports, followed by China (12.5%) and Japan (12.2%). China accounted for the largest proportion of Saudi Arabia’s imports at 13.6% of the Arab nation’s total imports, followed by the USA (13%) and Germany (7.2%). (Saudi Gazette 28.05)
►►North Africa
5.5 IMF Disappointed with Egypt’s Postponement of Capital Gains Tax
The IMF voiced its disappointment with Egypt’s recent decision to delay the enforcement of a capital gains tax, saying it was fair and raised needed revenue. The decision means that “more of the cost of reducing the budget deficit will now be paid by people who are less able to afford it,” Chris Jarvis, the lender’s Egypt Mission Chief, said. The 10% tax on investors’ gains in the bourse had been introduced by the government in July 2014 as part of its efforts to overhaul an economy battered by years of political turmoil. The move was part of a spate of new taxes on income, consumer goods, and real estate geared to bolster state revenues and cut the budget deficit from 12.8% of GDP to 11% this year. The tax comprised of a capital gains component and a stock dividends duty. When the tax was implemented in April, it was blamed for a simultaneous drop in stock turnover and value. Egyptian investors also launched a legal challenge to the capital gains tax. Earlier in May, Masood Ahmed, Director of the IMF Middle East and Central Asia Department, told Reuters that Egypt’s economic policies to cut the budget deficit are a move in the right direction. (Ahram Online 24.05)
5.6 Egypt’s Petroleum Imports Rise 95% in March
Egypt’s petroleum imports increased 94.7% to LE7.82 billion in March from LE4.017 billion in the same period the previous year, CAPMAS reported on 1 June. The CAPMAS report shows that the production of natural gas had fallen in March 2015 by 7.6% to 2.989 million tonnes from 3.325 million metric tons in the same month 2014, an amount which then exceeded domestic consumption by 234 million metric tons. The production of crude oil and other petroleum products increased 3.8% from 2.972 million tonnes last year to 3.086 million tonnes in March this year. In both periods, domestic consumption almost paralleled output levels.
Over the past few years Egypt has transformed from an energy net exporter into a net energy, the result of falling production as arrears to foreign oil firms accumulated after the uprising in 2011. But international investments have been pouring into the energy sector, as the government repays its debt to foreign oil firms, which stood at $3.1 billion in December of last year. Also on 1 June, Italian oil company Eni signed a $2 billion deal with the Egyptian government for exploration and well drilling, the latest of a wave of investments in the energy sector. Egypt, however, has bought an LNG terminal and announced a tender for another one in a sign it is stepping up its efforts to import more natural gas. (CAPMAS 01.06)
5.7 Suez Canal Revenues Hit $1.7 Billion in First 4 Months of 2015
Egypt’s Suez Canal revenues reached $1.659 billion (LE12.6 billion) during the first four months of 2015, according to Egypt State Information Service (SIS). The Suez Canal Authority confirmed that 5,510 ships transited the Suez Canal, during the first four months, carrying a total cargo of about 319.670 million tons. Egypt’s Suez Canal revenues inched down by 0.5% to $442.2 million in April of 2015 as compared to the same month a year earlier when the canal collected $402.4 million in revenues. The Suez Canal is one of Egypt’s main sources of foreign currency. Egypt Independent 25.05)
5.8 Libya Edges Closer to Economic Collapse as Currency Dives
Libya’s public finances, wracked by a dramatic loss in oil revenue that has been exacerbated by a power struggle between rival governments, are foundering. The crisis has prompted the authorities in Tripoli, who control much of western Libya, to plan cuts to petrol subsidies, to delay public salary payments and to ban on imports from cars to steel. It has already been forcing the central bank – which is treading a fine line between rival governments and funds the whole country – to burn through its foreign reserves. Libya needs $30 billion to fund imports annually and typically spends $40 billion on its budget.
Since last year, the central bank has frozen year infrastructure projects, limited spending to basic public salaries and food and petrol subsidies. This has led civil servants, the biggest workforce in Libya, to now say they have not been paid for at least two months and accuse the central bank if not providing local lenders with liquidity to issue paychecks.
The economy is essentially being hit on two sides. The dinar currency has lost 35% of its value against the dollar since January alone. Oil production, meanwhile, has fallen to 400,000 bpd, or a quarter of what was the case before an uprising toppled Muammar Gaddafi in 2011. Libya has earned only $5.5 billion so far in oil revenue as fighting between the rival factions and Islamic State attacks have shut down major oilfields and ports. (Al-Masry Al-Youm 01.06)
5.9 Following Renault and Ford, Peugeot to Open Production Facility in Morocco
French car manufacturer PSA Peugeot Citroen is planning to build a production facility in Morocco as part of an effort to increase its sales in Africa, following French rival Renault. The factory might be possibly located near the city of Kenitra. The first Moroccan-assembled vehicles would come from the middle to lower portion of Peugeot’s product range and be sold in the region.
In February 2012 King Mohammed VI inaugurated the Renault-Nissan Alliance factory in Tangiers, specialized in the manufacturing of low-cost cars. The new factory would be the first wholly owned and operated by Peugeot in Africa. Europe’s second-biggest carmaker’s sales in Africa and the Middle East dropped 25% last year to 169,400 vehicles. That was 5.8% of its total sales. (MWN 22.05)
6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS
6.1 Turkey’s Year-On-Year Exports Decline By 19% in May
Turkish exports in May were down 19% from the same month in 2014, the Turkish Exporters’ Assembly (TIM) said on 1 June, amid fallout from an autoworkers’ strike in May and the decrease in euro-dollar parity. Exports in May were announced at $10.8 billion. In the first five months of the year, exports decreased to $61.3 billion, with an 8.3% decline in total exports from last year. For the last 12 months, exports declined 2.7% year-on-year to $151.7 billion. Announcing the May export figures, Turkish Exporters’ Assembly said the negative effect of the parity was around $1.1 billion in May and $5.7 billion in the first five months of the year. The labor disputes in the automotive sector caused more than $500 million in loss across the economy.
While automotive exports decreased to $1.48 billion, a 27.4% decline, in May from the same period of the previous year, the sector remained the top exporter. The automotive sector was followed by the chemical products sector with $1.38 billion, a 13% decrease, and the confection sector with $13.5 billion, a 16.4% decrease, in May from the same months of the previous year.
The most exports were made to Germany, Britain, Iraq, Italy and the U.S. in May. The exports to Germany, however, decreased by 26% from the same month of last year, to Britain by 16%, to Iraq by 38%, to Italy by 22% and to the U.S. by 15%. The highest increase in exports was seen in the exports to Singapore among the top 30 importers of Turkey by a 544% increase in May from the same month of the previous year. (HDN 01.06)
6.2 Cypriot Economy Not Expected to Grow Before 2016
Cyprus’ GDP growth projections for 2015 have been revised downwards by almost a full percentage point, from a positive 0.4% to a negative 0.5%, according to the European Commission’s Spring 2015 economic forecast. The revision compares unfavorably with a projected EU-wide 1.8% GDP growth average – 1.5% for the Euro area – and reflects negative contributions from domestic demand for oil and net exports, though plateauing unemployment signals “further adjustment of the labor force”.
Exports, which recorded a 5.7% spike in 2014 following a sharp 5.0% drop the year before, are projected to drop moderately by 0.3% this year, before picking up again by 1.5% in 2016. Imports, on the other hand, followed a similar pattern, with a 13.6% drop in 2013 followed by an 8.1% recovery, while 2015 will see a 0.2 drop before picking up again in 2016 – by 1.0%. The growth momentum, the report said, is not expected to resume until 2016, when household and corporate deleveraging enable sustainable growth, while insolvency and foreclosure rules should have helped address the burning issue of non-performing loans, allowing the banking sector much-needed breathing space and the gradual restoration of credit supply. However, risks to the recovery remain, including a failure to keep NPLs in check and ripples from Russia.
Meanwhile, drastically consolidated government spending and improved tax collection seem to paint a brighter picture for 2015, but one-off revenues – such as high dividends from the Central Bank of Cyprus – will not be included in this year’s primary balance. (Cyprus-mail.com 15.05)
6.3 Greece & Creditors Line Up Rival Reform Proposals to Unlock Aid
Greece’s creditors are close to finishing a draft agreement to put to the leftist government in Athens, a source close to the talks said, injecting new momentum into long-running negotiations to release aid for the cash-strapped country. Earlier, Greek Prime Minister Tsipras said Athens had submitted its own proposal to lenders – an apparent effort to pre-empt a take-it-or-leave-it offer by the creditors and to show Greek voters that Athens made its move first. The statements of proposal and counter-proposal came after leaders of Germany, France and the lending institutions held emergency talks on the Greek debt crisis in Berlin late on 1 June in a sign of top-level concern about the impasse.
Starved of aid and access to bond markets, Athens is precipitously close to running out of money. It has threatened to default on an IMF payment this week without a deal, though it also says it will reject any ultimatums. Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe’s supposedly irreversible single currency. A source close to the talks said the lenders in the meantime were finalizing details of their offer to Athens.
The leaders who met in Berlin agreed to work with “real intensity” to try to wrap up the negotiations in the coming days and to keep in touch with each other and with Tsipras. Their meeting showed that national and international leaders have now taken the battle to keep Greece in the euro zone into their own hands after months of insisting it was a matter for technical negotiations among experts.
A Greek government official said Athens would make a €300 million ($329.58 million) repayment to the IMF on Friday as due if there was an agreement with the creditors, hinting it might otherwise withhold the money without saying so explicitly. Greece’s central bank governor, Yannis Stournaras, who served as finance minister in a previous conservative-led government, urged the government to respect the “sacrifices” its people had made to stay in the euro, citing a 35% drop in living standards since the crisis began in 2009. Greek officials have said the IMF is toughest in demanding pension cuts and opposing any restoration of collective wage bargaining, while some euro zone governments have privately accused the EU of being too soft on Athens. Greece has received two EU/IMF bailouts totaling €240 billion since 2010, when it lost access to capital markets after admitting it had issued erroneous figures for years concealing the true scale of its budget deficit.
7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 Ramadan Begins on Eve of 16 June
Ramadan in 2014 will start on Tuesday night, 16 June and will continue for 30 days until Thursday night, 16 July. Ramadan is the ninth month of the lunar Islamic calendar, which lasts 29 or 30 days according to the visual sightings of the crescent moon according to numerous biographical accounts compiled in Hadiths. It is the Muslim month of fasting, in which Muslims refrain from dawn until sunset from eating, drinking and sexual relations. The sawab (rewards) of fasting are many, but in this month, they are believed to be multiplied. Muslims fast in this month for the sake of demonstrating submission to God and to offer more prayers and Quran recitations.
Ramadan is a time of spiritual reflection and worship. Muslims are expected to put more effort into following the teachings of Islam and to avoid obscene and irreligious sights and sounds. Purity of both thoughts and actions is important. The act of fasting is said to redirect the heart away from worldly activities, its purpose being to cleanse the inner soul and free it from harm. It also teaches Muslims to practice self-discipline, self-control, sacrifice and empathy for those who are less fortunate; thus encouraging actions of generosity and charity (zakat).
It becomes compulsory for Muslims to start fasting when they reach puberty, so long as they are healthy, sane and have no disabilities or illnesses. The elderly, the chronically ill and the mentally ill are exempt from fasting, although the first two groups must endeavor to feed the poor in place of their missed fasting. Also exempt are pregnant women if they believe it would be harmful to them or the unborn baby, women during the period of their menstruation, and women nursing their newborns. A difference of opinion exists among Islamic scholars as to whether this last group must make up the days they miss at a later date, or feed poor people as a recompense for days missed. While fasting is not considered compulsory in childhood, many children endeavor to complete as many fasts as possible as practice for later life. Lastly, those traveling (musaafir) are exempt, but must make up the days they miss. Twelver Shī‘ah define those who travel more than 14 miles (23 km) in a day are exempt.
*REGIONAL:
7.2 Jordanian Flag Sets New World Record for Size
Marking its Independence Day, a Jordanian flag made by King Hussein Sports City and Origami Academy set a new world record as the biggest flag in the world. The flag, made by Origami papers measured 43 meter long and 24 meters wide. About 250 youths took part in the making of the flag, which entered the Guinness Book of World Record. (AMMONNEWS 25.05)
7.3 Moroccan Think Tank Calls for English to Replace French in Schools
The Rabat Center for Political and Strategic Studies called for the need to adopt English as the second language of instruction in the educational system in Morocco. The Center presented a report to the Supreme Council for Education, Training and Scientific Research, recommending the replacement of French with English in Moroccan curriculum. Despite the fact that the Committee of the Supreme Council has considered the language replacement, it is currently still moving to keep French as a second language. The center believes that maintaining the French language directly under Arabic in the curriculum “is not based on objective measures and not based on standards offering good opportunities both locally and internationally for Moroccan learners.” The center added that without mastering English, Moroccan students would not be able to compete with other learners from Korea, South Africa, Brazil or elsewhere, whom are fluent in English. The same report hints to the fact that “English is the first language in the world,” followed by other languages like Chinese and Spanish. The report gave the example of Germany, which introduced English to their schools and as a medium of instruction in 1996.
Despite the willingness of the Moroccan government and public to replace French with English in Moroccan curriculum and in the educational system of Morocco in general, there seems to be a strong lobby from the Supreme Council to fighting to keep French as the second language in Moroccan school. (MWN 28.05)
8: ISRAEL LIFE SCIENCE NEWS
8.1 Kamada Update from Study of Inhaled Alpha-1 Antitrypsin to Treat AAT Deficiency
Kamada reported the discussion of the updated data from the Company’s European and Canadian Phase 2/3 clinical study of inhaled alpha-1 antitrypsin (AAT) to treat alpha-1 antitrypsin deficiency (AATD). Results from the Phase 2/3 Inhaled AAT Trial reinforced the known anti-inflammatory effects of AAT on neutrophil migration and elastase release, and thereby, on inflammation in the lung. This is a very important finding as it could be applicable in a number of respiratory conditions where lung inflammation exists. In addition to previously announced results that focused on the statistically significant lung function beneficial effect, additional data on the nature of symptoms of the first exacerbation, a clinically important measurement, were reported during the panel session. In the study, three major exacerbation symptoms comprised the severity nature of an exacerbation: dyspnea, sputum volume and sputum color. These symptoms were scored by patients using a daily electronic diary device. The inhaled AAT treated group showed a statistically significant lower symptoms score (for both dyspnea and volume) for patients who experienced first exacerbation versus the placebo group for events.
Ness Tziona’s Kamada is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived proteins. AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. The Company’s flagship product is Glassia, the first and only liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. FDA. (Kamada 20.05)
8.2 Rosetta Genomics Launches OncoGxOne
Rosetta Genomics announced the commercial launch of OncoGxOne, Admera Health’s next-generation sequencing (NGS) panel that detects a vast number of genetic alterations implicated in cancer to provide clear, concise and actionable clinical recommendations from a single, comprehensive test. OncoGxOne was recently approved as a Laboratory Developed Test and is the fifth new product introduced by Rosetta Genomics in 2015.
OncoGxOne interrogates all types of genomic aberrations in 64 genes, specifically 56 related to cancer targeted therapy and 8 related to chemotherapy. This test covers all exons and 5’ and 3’ UTRs for each gene, as well as all introns that harbor potential gene translocation breakpoints. OncoGxOne is performed on a modest-sized pathology sample in the standard format of FFPE (formalin fixed paraffin embedded) tissue, the same as Rosetta’s other clinical microRNA-based diagnostics. OncoGxOne will compete with currently available genomic profiling offerings through next-generation sequencing platforms that can identify potentially actionable cancer-driving mutations, which can be targeted by specific therapies.
Rehovot’s Rosetta Genomics develops and commercializes a full range of microRNA-based molecular diagnostics. Founded in 2000, Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. (Rosetta Genomics 28.05)
8.3 Cannabics Pharmaceuticals Patent Application for Novel Personalized Anti-Cancer Treatment
Cannabics Pharmaceuticals has filed an exclusive patent application with the US Patent & Trademark Office (USPTO) on a System and Method for High Throughput Screening of Cancer Cells. Cannabics’ team of scientists has developed a high throughput screening system which is specifically designed to give personalized antitumor treatments to cancer patients. In this proprietary system, biopsies are treated, in-vitro, with innumerous plant extract combinations and the antitumor effects are screened and calculated. The results could enable cancer patients to receive cannabinoid based therapy with a potential of reducing their tumors. Cannabics Pharmaceuticals plans to complete the development of this novel and sophisticated technology and license it by the end of 2016. Cannabics Pharmaceuticals is a US public company with Research & Development conducted in Israel. Cannabics is engaged in the development and commercialization of cannabinoid based medicine upon the wide range of active ingredients found in diverse strains of cannabis. The company’s main focus is standardized oral delivery systems, personalized cancer therapies and procedures based on novel biotechnology tools and bioinformatics. (Cannabics Pharmaceuticals 28.05)
8.4 Clear-Cut Medical Raises Further Funding for Clinical Trials
Clear-Cut Medical has completed a Series B financing to support its continued product development and commercialization of its novel ClearSight MRI system for cancer surgery margin assessment, where first clinical trials are being conducted for breast conserving surgery. The financing was led by Previz Ventures. The funds will support clinical trials in the U.S., Europe and Israel as well as global market development for the anticipated launch of the product in early 2016 and further product development.
The ClearSight system is a compact, mobile, affordable and easy to use MRI system for intra-operative margin assessment of excised tissue. It utilizes well-established Diffusion Weighted Magnetic Resonance Imaging (DW-MRI) protocols, which have shown effective results in tissue characterization in general and particularly in breast imaging. Indication of margin status is highlighted and correlated with its orientation, supporting real-time surgical decisions on the need for additional excision. ClearCut will pursue additional applications of the technology for prostate, thyroid and skin cancer surgery, as well as imaging of biopsy cores, providing the benefits of MRI in a mobile format that does not require special shielded suites.
Clear-Cut Medical is a medical device company based in Rehovot, Israel, dedicated to improving the quality of care for cancer patients through its novel intra-operative MRI technology. The company has developed the compact, mobile, affordable and easy to use ClearSight system for excised tissue assessment. The system utilizes state of the art MRI protocols for tissue margin assessment, for example for the excised tissue in breast conserving surgery, to support real-time surgical decisions on the need for additional excision. (Clear-Cut Medical 29.05)
8.5 Teva Enhances Women’s Health with Launch of Generic Lomedia 24 Fe Tablets
Teva Pharmaceutical Industries launched the generic equivalent of Lomedia 24 Fe (norethindrone acetate and ethinyl estradiol tablets USP, 1 mg/20 mcg and ferrous fumarate tablets, 75 mg) as part of the extensive line of Women’s Health products. The product will be launched under the name Junel Fe 24 (norethindrone acetate and ethinyl estradiol tablets USP and ferrous fumarate tablets) and is now available in the United States. Teva recognizes that women’s needs change over time and the portfolio of Women’s Health products is positioned to support women through many stages of life. With the addition of Junel Fe 24, Teva can offer women a comprehensive line of nearly 30 generic contraceptive products.
Junel Fe 24 is indicated for the prevention of pregnancy in women who elect to use oral contraceptives as a method of contraception. Patients should be counseled that this product does not protect against HIV infection (AIDS) and other sexually transmitted diseases.
Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 29.05)
8.6 Mapi Pharma Closes $10 Million Investment Led by Shavit Capital
Mapi Pharma announced that Shavit Capital has led an investment round of $10 million in the company in a Series A financing round that included participation by the company’s chairman and CEO Mr. Ehud Marom. The funding will be used to support the company’s clinical development plans; the funding is sufficient to advance the company’s lead product, the Glatiramer Acetate (GA) Depot, a once every four weeks injection, currently at Phase II, up to the initiation of the single pivotal Phase III needed for registration. This path follows the recommendations made during a pre-IND meeting the company had with the FDA in March 2015.
Ness Ziona’s Mapi is a development stage pharmaceutical company, engaged in the development of high-barrier to entry and high-added value life cycle management (LCM) products that target large markets and generic drugs that include complex active pharmaceutical ingredients (APIs) and formulations. Mapi has R&D facilities in Israel and China. Mapi has a strong IP position, filing numerous patent applications for APIs and formulations. (Mapi Pharma 27.05)
8.7 Teva Announces Exclusive Launch of Generic Actonel Tablets in the United States
Teva Pharmaceutical Industries announced the launch of the generic equivalent to Actonel (risedronate sodium) Tablets, 5 mg, 30 mg, and 35 mg, in the United States. Teva was first to file, making the product eligible for 180 days of market exclusivity. Risedronate sodium tablets are used to treat or prevent osteoporosis in women after menopause. Risedronate sodium tablets help increase bone mass and help reduce the chance of having a spinal or non-spinal fracture (break). Risedronate sodium tablets are also used to treat or prevent osteoporosis in either men or women who are taking corticosteroid medicines, and to treat Paget’s disease of the bone.
Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 01.06)
8.8 Teva Enhances ADHD Product Line with Generic INTUNIV in the United States
Teva Pharmaceutical Industries announced the launch of the generic equivalent to INTUNIV (guanfacine) 1 mg, 2 mg, 3 mg, and 4 mg, in the United States. Guanfacine extended-release tablets are a non-stimulant medication for the treatment of attention deficit hyperactivity disorder (ADHD) that can be used alone, or as an add-on to stimulant medications. ADHD is the most common neurobehavioral disorder diagnosed in children in the United States. ADHD affects 1 in 10 U.S. children and half of these children are diagnosed by the age of six. Guanfacine extended-release tablets are indicated for the treatment of attention deficit hyperactivity disorder (ADHD) as monotherapy and as adjunctive therapy to stimulant medications. Safety and efficacy of guanfacine extended-release tablets in pediatric patients less than 6 years of age have not been established.
Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. (Teva 02.06)
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 GeoEdge Unveils the Industry’s First Video Ad Verification Solution
GeoEdge announced the release of the industry’s first transparency and verification solution for video ads. This latest addition to their ad verification services will allow publishers to gain visibility and control over the quality of video ads displayed on their site and inside their apps. GeoEdge is the industry standard in terms of ad verification. Their comprehensive automated service ensures video ad compliance is adhered to in all locations and on all devices. With complete visibility, publishers can guarantee a clean, safe and engaging user experience while protecting their brand reputation and advertising revenue. Recognizing that some advertisers fail to comply with the rules set by publishers, GeoEdge’s Video Ad Verification service maintains a seamless user experience by ensuring videos load correctly and play without auto sound. Additionally, GeoEdge takes the verification process a step further by scanning video ads for malware. This ensures users remain safe and protected when interacting with the publisher’s property.
The video ad verification service is invaluable for both operational processes as well as campaign monetization. GeoEdge fully supports IAB VAST specifications, tackles auto play sounds, and prevents unscrupulous advertisers from transforming display ads into premium video ads.
Petah Tikva’s GeoEdge is the premier provider of ad verification, malware protection and transparency solutions for the online and mobile advertising ecosystem. The company ensures high ad quality and verifies that sites and apps offer a clean, safe, and engaging user experience. GeoEdge guards against malware, non-compliance, inappropriate content, data leakage, operational and performance issues. (GeoEdge 19.05)
9.2 PV Nano Cell Announces Further Expansion into the U.S. Market
PV Nano Cell (PVN) is introducing its digital ink technology to the rapidly growing U.S. printed electronics (PE) market. PVN’s Sicrys family of innovative, nanometric conductive inks is expected to speed the adoption of printed electronics (PE), which can bring intelligence to virtually any object by enabling the use of fast, inexpensive inkjet printing technologies that can be used on flexible substrates such as plastic, fabric or even paper. The entry of Israel-based PV Nano Cell into the U.S. PE market follows the recent introduction of its digital ink technology to the U.S. solar photovoltaic (PV) market, where it is expected to accelerate the adoption of solar PV by achieving significant cost reductions in the production of silicon solar cells and by increasing solar cell efficiencies at a mass production scale.
The field of printed electronics is expected to revolutionize our daily lives by enabling the distribution of small, inexpensive, networked processing devices used for commonplace purposes at all scales throughout everyday life. These electronics are typically printed on films made of plastics. But until now the field has been held back by the lack of printing technologies that enable printing on flexible substrates. Digital ink technologies enable printing on flexible substrates made of plastic or even paper. Sicrys family of inks is the enabler for customized and 3D printed electronics. PVN is working with several OEMs to develop printed antenna prototypes using inkjet technology. Preliminary results show that costs can be reduced by as much as a half.
Migdal HaEmek’s PV Nano Cell (PVN) has developed innovative conductive inks that will accelerate the adoption of solar photovoltaics (PV) and printed electronics (PE) through inkjet printing with inks made of nano-metric materials. PVN’s Sicrys is a single-crystal, nano-metric silver conductive ink delivering enhanced performance. Sicrys is also available in copper-based form, delivering all of the product’s properties and advantages with improved cost efficiency. Sicrys silver conductive inks are used all over the world in a range of industrial inkjet printing applications, including photovoltaics, printed circuit boards, antennas, RFID tags, sensors, smart cards, touchscreens and advanced packaging. (PV Nano Cell 28.05)
10: ISRAEL ECONOMIC STATISTICS
10.1 Israel’s Unemployment Rate Drops to Historic Low of 4.9%
Unemployment in Israel has fallen to an all-time low and the number of employed Israelis has reached an all-time high, the Central Bureau of Statistics announced on 25 May. The April jobless rate was just 4.9%; unemployment among men fell from 5.2% in March to 4.9% in April and unemployment among women dropped from 5.4% to 4.7% in the same months. The number of employed Israelis reached an all-time high in April of 60.9%, or 3.64 million, and the workforce now numbers 1.9 million men and 1.74 million women. Workforce participation in March was 60.2%.
The unemployment rate for men aged 25-64 fell from 4.6% in March to 4.2% in April. The unemployment rate for women in the same age group dropped from 4.7% to 4.2%. Unemployment has fallen by 0.7% since September 2014, and by 3% since 2009. The unemployment rate in Israel reached an all-time high of 11.2% in 1992. (CBS 25.05)
10.2 Israel’s New Car Deliveries Drop in May
In the first five months of 2015, 118,437 new cars were delivered in Israel, up 5.3% from the corresponding period in 2014. However, in May the rising tide turned with 20,763 new cars delivered, down 4.3% from May 2014. May was characterized by continuing high demand from leasing companies for cars taken through financing. However, sources in the sector now see more moderate demand, which will become more pronounced in the summer due to a surplus of new vehicles held by leasing companies.
The leading brand for new cars in 2015 is Hyundai, which has made 15,447 deliveries this year, up 3% from the corresponding period last year. In second place is Kia with 14,539, up 31%. Kia’s Sportage 1.6 liter engine car, which had its price cut three months ago, and had over 1,000 deliveries in May, has become Israel’s top-selling car. In third place with 13,690 deliveries over the past five months is Toyota, up 5%. In fourth place was Mazda with 8,934 deliveries, up 6% and in fifth place was Skoda with 7,298 deliveries, up 26%. (Globes 02.06)
10.3 Eight Thousand Israelis Die Annually from Smoking
Thousands of Israelis die every year as a result of smoking, according to a Health Ministry report. Second-hand smoke exposure was reported by about one-third of the survey’s respondents. The damages of smoking to the Israeli economy and health system are estimated at billions of shekels a year.
The latest World Health Survey published in 2014 revealed that the rate of smokers among Israelis over the age of 21 is about 19.8%. According to the Central Bureau of Statistics’ 2013 Social Survey, the rate of smokers in Israel was 23.1% that year, while a survey conducted by the Israeli Center for Disease Control (ICDC) in 2013 found a rate of 18.7%. A breakdown by gender found that 27.3% of Israeli men and 12.6% of Israeli women smoke. A breakdown by nationality found a smoking rate of 26.3% in the Arab population and 18.4% in the Jewish population.
More than half of the smoking men, both Jews and Arabs, reported that they consume 10 – 20 cigarettes a day. The number of women who consume less than 10 cigarettes a day is higher (about 40%) and similar in the two populations.
Over the years, there has been a drop in smoking rates in Israel, which was curbed in 2013. In the early 1980s, smoking rates were about 45%, falling to about 40% in the early 1990s. Another drop in smoking rates was detected in the early 1990s, reaching about 32% in the late 1990s. By 2005, smoking rates decreased to about 30%, followed by another drop to 21%. Since 2013, there has been a slight increase in smoking rates. In total, the past 35 years have seen a 48% drop in smoking rates among Jewish men in Israel.
According to experts’ estimates, smoking is responsible for about 8,000 deaths in Israel every year, about 700 of them among passive smokers. In addition, smoking constitute a heavy economic burden, as the direct and indirect cost of the damages of smoking to the health system is estimated at NIS 1.7 billion (about $440 million) a year. Other indirect costs as a result of the loss of working capacity and paid sick days are estimated at some NIS 1.9 billion ($490 million), and the loss of human life is valued at NIS 8 billion ($2 billion) a year. In total, the direct and indirect costs of smoking to the Israeli economy are estimated at some NIS 12.8 billion ($3.3 billion) a year.
Israeli households spend more than NIS 8.2 billion ($2.12 billion) on tobacco and smoking products in 2014. In households which belong to a low socioeconomic class, this expense could reach 25% of the household’s total monthly income. (Ynet 31.05)
10.4 Israelis Buy 787,630 Smartphones in First Quarter
Smartphones in Israel are very expensive, with some models costing more than NIS 4,000, but still, Israelis keep buying and buying. According to IDC data, in Q1/15, 787,630 devices were sold, compared with 657,740 in the corresponding quarter of the previous year – an increase of 20%. Apple led the market in the first quarter, with a market share of 32%, compared with 33% in Q1/14. This is a very impressive figure, considering that Apple offers only two new models, the iPhone 6 and the iPhone 6 Plus, both of which are very expensive. Samsung dropped to second place, with a market share of 31%, compared with 34% in the corresponding quarter of the previous year. These sales do not include the newly released Galaxy S6. LG is doing well in the Israeli market, thanks primarily to the success of the G2 and G3 models, which have yielded high sales for importer Ronlight. LG’s market share more than doubled, from 10% to 22%. LG sold 170,000 smartphones in Israel, compared with 247,000 Samsung’s and 253,000 iPhones.
The market share of HTC, imported by Touch Group, held steady compared the corresponding quarter of 2014, at 4%. On the other hand, fewer Israelis purchased Sony smartphones and Sony’s market share dropped from 4% to 3%. The prevailing sense is that the Japanese company does not understand the Israeli mobile market well enough, and has priced its mobile device too high. It’s possible that Sony underestimates its Korean rival, and at this rate, Sony devices are liable to disappear from the shelves. (Globes 20.05)
11: IN DEPTH
11.1 ISRAEL: Israeli Startups That Made It Onto Gartner’s ‘Cool Vendors’ List
NoCamels reported on 21 that out of 350 companies selected by leading American IT research firm Gartner as “Cool Vendors” in 2015, 18 of the industry-defining companies are Israeli. Historically, Gartner’s list has been a prediction of the future success stories of some of the industry’s most promising startup companies, like Israeli mobile navigation app Waze that sold to Google for $1.3 billion two years ago.
This year, the Israeli companies that made the cut are producing novel technologies, mainly in the Internet of Things (IoT) space. These technologies could potentially be used in every IoT product, from a wearable band that will tell you where the lines are shorter in amusement parks, to a robot that partakes in your surgery, a drone that will deliver your pizza, or a mobile app that tracks your exercise routine.
“We have identified the cool, innovative startup companies that currently operate in Israel,” Gartner’s Chief Researcher Daryl Plummer said at a briefing in Herzliya. Plummer flew into Israel especially to recognize the ‘coolest’ Israeli startups of the 350 companies globally selected this year.
What does it take to be ‘cool’?
At the conference, entitled “What does it take to be cool? The next innovation frontier,” Plummer – who’s considered a “cloud computing guru” – stressed that Gartner “doesn’t pick companies in stealth mode,” but rather startups that are already marketing their solutions. On the other hand, giants such as IBM cannot be on the Cool Vendor list because they’re well established. “A cool vendor deals with the up-and-coming trends that will drive our world in the next 10 years,” Plummer explained.
18 Israeli companies were recognized as Cool Vendors; NoCamels profiles five of the coolest:
Glide: Video-messaging startup Glide Talk allows users to send video messages over the cloud, so that the videos they record, send and receive don’t take up space on their device. The company’s popular live video messenger has attracted more than 15 million users since its launch for smartphones. Glide recently closed a $20 million investment round, bringing total investment in the company to $28.5 million. Following the funding round, the company has reached a $100 million valuation.
CyActive: The latest example of how Gartner has been able to forecast promising startups is CyActive, which was acquired by PayPal for $60 million in March, shortly after the Cool Vendors list had shaped up, according to Plummer. CyActive’s claim to fame is its ability to offer proactive detection of future malware before it has ever seen the light of day, using a unique cybersecurity algorithm based on biology. Based in Beer Sheva, the company was founded in 2003.
Wibbitz: Wibbitz has developed a technology that can automatically turn any text article into a short video. Wibbitz is supported by Hong Kong billionaire Li Ka-Shing’s venture capital firm Horizons Ventures. The company has raised $2.4 million since its inception in 2012.
ICS²: ICS² (or ICS2/ICS squared) is one of the first cyber-security companies focusing on protecting the control systems of power, oil, gas and petrochemical plants. Founded in 2013, the company provides a technology that learns the normal behavior of an industrial process. Deviations are reported for immediate response and analysis.
Telesofia Medical is one of the ‘youngest’ startups to enter the list, having raised a scant $1 million since it was founded in 2013 by a team of medical doctors and internet experts. Telesofia allows healthcare providers to automatically generate personalized educational videos for patients. The videos are tailored to the specific patient and are available on smart devices without requiring its users to download an external application.
Other Israeli Cool Vendors this year include: Xpolog, Infinidat, Applitools, CyberX, Illusive Networks, Nativeflow, Safe-T, OpenLegacy, Own Backup, Particular Software, Startoscale, ThetaRay and TrapX Security. (No Camels 21.05)
11.2 ISRAEL: Six Great Food Tech Startups from Israel
Our Crowd’s Kalia Natan posted that while Israelis are passionate about technology, they are even more passionate about food; when gastronomy meets technology, anything is possible. The rapidly growing foodtech sector is changing the way we find, order, ship, prepare, and consume food and drinks. Although Israel may have entered the industry after the US, thousands of food-related technologies are already being developed in the country. It’s no surprise that the Startup Nation is set to soon become a powerhouse for foodtech startups.
Israel recently witnessed the launch of its 1st foodtech accelerator – alpha Strauss. The program, part of Boston-based accelerator MassChallenge’s partnership with Israel’s Strauss group, combines the latter’s food expertise with the former’s experience in nurturing early-stage startups to help promote foodtech related ideas or companies into businesses and consumer products.
The idea of making big bets on food has become enticing to investors too. For some, foodtech startups have a place among their social impact and sustainability portfolios (easing up the strain on the environment as apparent with traditional food production technologies), for others they fit among various health investments like fitness devices and nutrition monitors. Ultimately, the foodtech sector offers a variety of flavors that ensure most investment opportunities are to your liking.
Based out of Tel Aviv, Consumer Physics is best-known for developing SCiO, an advanced optical spectrometer that allows users to identify the chemical makeup of anything around them. SCiO is effectively “Google for matter”, enabling consumers to analyze the physical world using their smartphones, from medicine identification to plants to calculating how many calories are in your food.
EatWith is a global community that invites people to dine in homes around the world. Guests can connect with amazing hosts, share stories and unforgettable experiences, and enjoy delicious homemade cuisine.
Founded in 2011, Kitchenbug is an online recipe box that tells you if your recipes are good for you. Collect any recipe from any website, organize them in boxes, get dietary and nutritional insights, follow other people’s boxes and share your recipes with anyone you like.
You’ll want a taste of this new device developed by Israeli entrepreneurs at White Innovation, a company that engineers products for other businesses. The Genie, a coffeemaker-sized appliance, acts as a private chef, uniquely designed to prepare mess-free, tasty, healthy, and all-natural personalized dishes – in less than a minute!
Dubbed “Whole Foods Market” for the web, Abe’s Market is a rapidly growing e-commerce hub that has developed a best-in-class online marketplace for natural and organic products. Abe’s Market offers its community of sellers a slate of services such as innovative pilot product programs and even a small investment fund to support and grow small sellers that see outstanding early success.
Smart tables and multi-media dinners, that’s what this Israeli software company offers users and restaurant in an attempt to change the customer service experience. MultiDine lets you use Table-top Touch surfaces to interact with your favorite restaurants. It can be used to view digital menus and arousing images, discover restaurants & dishes that fit your taste, accept personal offers & discounts, receive recommendations from your friends and to share your favorite dishes and restaurants with them.
The success of Israeli startups in the foodtech sector is expected to continue and OurCrowd has a great ringside seat for seeing what’s trending right now and finding the best investment opportunities there are to offer. OurCrowd is extremely proud of its latest investment opportunity, Mark One, the Silicon Valley startup behind Vessyl, the world’s first smart cup that identifies the calories and nutrients of any beverages it contains and tracks user nutrition and hydration habits.
Kalia Natan, Marketing Manager at OurCrowd, received a B.A. in International Relations and English Literature & Linguistics from the Hebrew University, she is now working towards a Master’s degree in Communications. (OurCrowd 26.05)
11.3 JORDAN: Light at the End of Tunnel for Jordan’s Subsidy Cuts
Jordan’s decision in 2012 to begin a phased withdrawal of electricity subsidies was undoubtedly a good one from the point of view of the kingdom’s public finances, according to the Oxford Business Group.
However, as a result, many businesses have faced higher electricity costs and lower margins and the subsidy cuts have also proved unpopular with many of the kingdom’s households. Electricity prices have been rising at a time when oil and gas prices have been tumbling globally, making Jordan one of the few countries in the region to see its power costs rise.
Yet many suggest that the subsidy cuts are not having as negative an impact as they might have, with Jordan able to benefit from the deflationary effects of falling oil and gas prices. At the same time, the long-term benefits from the kingdom shedding this major fiscal burden may well make the short-term pain worthwhile.
Subsidy drawdown
With proven hydrocarbon reserves of only around 1m barrels of oil and 200bn cu feet of natural gas, Jordan imports over 90% of its energy needs – a quantity that’s equivalent to around 40% of the state budget, according to the US Energy Information Administration.
In the past, Jordan bought oil from Iraq and later, piped natural gas from Egypt to the generators of the kingdom’s central power provider, the National Electric Power Company (NEPCO). However, the Iraqi deal is no longer operational, while the pipeline from Egypt has been repeatedly sabotaged. This has left Jordan more dependent than ever on imported fuel oil for its power stations.
In recent years, the higher price of these imports has severely impacted NEPCO and the Jordanian exchequer. The electricity subsidy jumped from JD161m ($226.4m) in 2010 to an estimated JD1.1bn ($1.5bn) in 2011, after the Arab Spring and the first major disruption of Egyptian supplies. The 2011 figure represented 3.8% of GDP, with the total growing since. One of the outcomes is that Jordan had to pay out JD1.1bn ($1.6bn) in 2014 to service its resultant burgeoning public debt.
This means cutting subsidies has been a major tool in the government’s fight to cut its losses and ensure long-term financial stability, with all subsidies to be removed by 2017 as part of a phased withdrawal. Since the cuts began, the fiscal deficit has fallen from JD1.8bn ($2.5bn) in 2012 to JD1.3bn ($1.8bn) in 2013, and an estimated JD1.1bn ($1.5bn) in 2014. This improved fiscal position even allowed some tentative expansion in the 2015 budget.
Cost of doing business
Street protests greeted the initial decision to cut subsidies in 2012, while fierce opposition in parliament to a further 15% hike in electricity at the start of 2015 led to a more moderate 7.5% rise.
Businesses have often had to pass on the electricity hikes to their customers with higher prices and suffer cuts in margins. This has made some Jordanian products less competitive, according to Toufic Tabbara, CEO at Lafarge. “Energy prices in the kingdom are very high, which translates to higher end costs for products. This means Jordan’s cement and concrete is priced higher than regional and international market prices, making it wholly uncompetitive to export in the region,” he told OBG.
However, other industrialists believe that electricity prices are fair, given that other large manufacturing countries in the region such as Turkey and Israel have higher energy costs. “The problem is that the industry and commercial tariffs pay to subsidize housing electricity tariffs. Households should pay more, but the problem is people have become accustomed to this status quo and any change leads to public backlash,” Sheldon Fink, CEO at PBI Aqaba, which develops and manages Aqaba Industrial Estate, told OBG.
Lower prices
Yet there is evidence that Jordan may be benefitting from its subsidy cuts. As global oil and gas prices tumbled last year, the prices of many commodities, including food, fell too. This has kept inflation down, despite the electricity price hikes. Indeed, in January-February 2015, consumer prices eased by 0.8%. This has helped households and businesses shoulder the burden, as the costs of other inputs have declined.
Moreover, Jordan’s energy import costs – and thus electricity prices – should ease with the opening of the new liquefied natural gas (LNG) terminal at Aqaba later this year. Higher electricity prices have also made the costs on projects such as Arab Potash Company’s natural gas pipeline from Israel more attractive, while continuing to provide incentives for companies to invest in renewables, such as solar, and energy saving schemes.
There is also room for further cost efficiencies down the road. Currently, the LNG coming ashore at Aqaba – and the gas coming in from Israel – will go straight to NEPCO to power turbines and be made into electricity, which will then be sold on to businesses. One further development might be to redirect some of that flow directly to industry, making more cost-efficient gas a direct production input, rather than obliging firms to buy power. (OBG 25.05)
11.4 KUWAIT: New Oil Finds In Kuwait Underscore Expansion Plans
The Oxford Business Group observed that the discovery of four new oil fields has drawn fresh attention to Kuwait’s long list of expansion projects, as the country aims to raise output by nearly one-third by 2020.
According to an announcement by Kuwait Oil Company (KOC) in April, the company discovered four new oil fields and two new hidden sources, with production likely to start in the near future. Three of the fields, containing high-quality light crude, are located in the western Al Manageesh and northern Al Rawdhatain and Umm Neqa fields, the company noted. The discoveries are the result of two years of drilling by KOC, which pressed on with explorations despite the depressed price for Kuwait Export blend on the world market.
Projects in the pipeline
The recent slump in oil prices has brought new impetus to Kuwait’s plans to boost production and efficiency in its energy sector – which despite controlling 6% of the world’s oil reserves according to the US Energy Information Administration (EIA) – has long operated below potential, a situation which offers scope for expansion and diversification.
The government is planning to spend $100b on the oil sector over the next five years to reach its goal of raising output from 2.8m bpd in 2014 to 4m bpd by 2020. The government has pursued a host of large-scale initiatives in recent years, including Project Kuwait, a bid to encourage greater foreign investment; the Clean Fuels Project, which involves a series of refinery upgrades; and a new refinery at Al Zour.
The, Kuwait Petroleum Corporation (KPC), the umbrella company for the country’s state-owned oil and gas firms, including KOC, announced a $75b capital spending plan for 2015-20, split between $40b for upstream and $35b for downstream development.
However, many of the initiatives were ones that had been delayed under the previous five-year plan, which closed in 2014 with only 57% of planned spending carried out. Progress has also been slow at many discoveries, such as Kra’a Al Mara (1990), Sabriya and Umm Niqa (2006), largely because these are more technically challenging, being of a heavier and more sour quality, the EIA reports.
Foreign involvement challenging
If Kuwait is to implement its more challenging projects in full, the KPC may need to make more use of foreign expertise. With foreign ownership of natural resources banned by the country’s constitution, international oil companies (IOCs) have been recruited in recent years via “technical service agreements” and special buy-back contracts that exclude any concessions or control of output levels.
These structures are part of the Project Kuwait reforms designed to draw foreign investment and boost production by taking advantage of IOCs’ technical know-how, especially in the northern fields. Oil major Shell signed a contract in 2010 to help develop natural gas production at the northern Jurassic field, while Japan Oil, Gas and Metals Corporation has inked a deal with KOC to test enhanced oil recovery (EOR) techniques in the country. However, progress under many of these agreements has been delayed by the National Assembly, which scrutinizes them for quasi-ownership clauses and often challenges their constitutionality, holding back development.
EOR is another potential area for foreign involvement. According to research by intelligence firm IHS released in May, Kuwait is among the top 10 countries outside North America that could benefit from vast unconventional reserves available through new technologies, with more than 4b barrels in extra resources. Of the 141b barrels of such reserves worldwide, 96% would require hydraulic fracturing, an EOR practice that has so far been mostly limited to the US despite its success over the last decade.
Clock ticking
Despite deep cuts to spending and subsidies, in January the Ministry of Finance projected a funding gap of $23.8b, based on an oil price of $45 a barrel, as the country looks set to run a deficit in fiscal year 2015/16, its first in 15 years.
To keep Kuwait in the black, the current rebound to above $60 a barrel would have to improve further – something many analysts and industry participants doubt given OPEC’s strategy of maintaining output in the face of low prices in order to squeeze competitors in areas like US shale.
Kuwait has ample fiscal reserves, worth $548b as of June 2014, according to the state audit bureau, but the country needs to secure oil revenues in the long term to fund its spending plans, most recently a $155b five-year package of 523 development projects in areas ranging from infrastructure to human resources, announced by the government in January.
This looks set to require new investment and potentially more accommodative policies towards foreign partners, especially regarding difficult oil reserves that are critical to boosting output as older, easier-to-access reserves gradually dwindle. (OBG 29.05)
11.5 BAHRAIN: Bahrain Works to Attract Foreign Students
With the aim of creating a niche for itself as a top student destination in the Gulf, the Oxford Business Group said Bahrain hopes international students will fill up to 35% of all university places over the next decade, according to projections from the national education plan.
Until recently, the kingdom had been one of the region’s leading providers of education to overseas students. Within the GCC, Bahrain has already been able to capture 10% of overseas students. According to 2012 figures, the kingdom attracted more students than it sent abroad.
However, a strategy paper issued last year by the Higher Education Council (HEC), which oversees tertiary education in Bahrain, said that while the kingdom had outstanding potential to attract students from the region, recent concerns over the quality of some universities had diminished the flow of inbound students, especially from key markets such as Kuwait and Saudi Arabia.
In its study, entitled National Higher Education Strategy 2014-24, the HEC said strong quality assurance policies and mechanisms were vital in developing confidence and attracting foreign enrolments. It said by doing that, Bahrain could become the “foremost student-friendly, quality-focused higher education destination of the GCC”.
Reviewing & boosting offerings
As a result of the HEC’s observations, Bahrain is moving to review its educational offerings, with part of this process being driven by the National Authority for Qualifications and Quality Assurance for Education and Training (QQA). The QQA was established as a result of the National Education and Training Development Project unveiled in 2006, the blueprint for a modern and competitive higher education system.
Tasks assigned to the authority include reviewing schools’ quality assurance arrangements by identifying strengths as well as areas in need of improvement; carrying out program assessments to ensure international standards are being met; and acting as an advocate for Bahraini higher education. The QQA not only assesses educational institutions but also the qualifications issued in order to ensure international standards are met, a move that is critical if Bahrain is to increase the number of overseas students applying to undertake courses in the kingdom.
Bahrain currently has more than a dozen universities, a mix of public, private and regional institutions, all of which are subject to review by the QQA. The authority also provides quality control assessments of more than 40 vocational and technical institutes, which are core to the government’s educational plans to build a workforce that can sustain the needs of an increasingly diversified economy.
An image of excellence
It is vital for Bahrain’s education system to successfully project an image of excellence, according to Jawaher Al Mudhahki, the CEO of the QQA, with a need for more awareness of quality assurance. “Bahrain has a confident education sector, even though the QQA is fairly young,” Al Mudhahki told OBG. “There is a strong desire to build capacity for quality assurance and spread the culture of awareness.” The assessment process of educational facilities at all levels will boost confidence in the system and serve to drive further improvements, she said.
“Knowing the quality ranking of our schools is a prerequisite to improving their quality,” Al Mudhahki said. “We have seen strong strides of progress made since the first rankings were made, as parents, students and teachers become more aware of their schools’ rankings and push to improve them.”
Confidence boost
Saad Darwish, vice-president for administrative and financial affairs and community engagement at the privately owned Applied Science University (ASU), said the QQA’s review process could serve to attract fee-paying overseas students. “Huge progress is being made by the Higher Education Review Unit of the QQA,” Darwish told OBG. “Bringing up the quality of Bahrain’s offering overall and formally performing quality assurance checks will help bring in students from the rest of the Gulf and elsewhere.” For its part, ASU is intending to expand its appeal by bolstering its research capacity, in cooperation with the public and private sectors. “This is one of our key pillars, and advancing research would bring Bahrain to the next stage in education,” Darwish said. (OBG 28.05)
11.6 UAE: Abu Dhabi Tackles Rising Substance Addiction
Substance abuse is becoming a growing burden on the economy of Abu Dhabi, as it is across the region. However, as observed by the Oxford Business Group, increased spending on both prevention and treatment may help reduce the burden and repay the investment into tackling this problem many times over.
A recent report into the social and economic impact of substance abuse in the UAE found that the financial cost of substance abuse was as much as Dh5.5b ($1.6b) annually. The results of the study, conducted by the Abu Dhabi National Rehabilitation Center (NRC) and released in late March, showed that cost of loss of productivity was far greater than the cost of treatment, schemes to reintegrate former addicts into society and drug prevention programs.
According to the NRC’s research, which was supported by the UN’s Office on Drugs and Crime, the social cost of drug abuse was significant. For example, the majority of those suffering from addiction in the UAE have not completed high school and around 45% of those with addiction were unemployed. The report made several recommendations including the need for greater levels of co-operation between various entities to develop a surveillance system or an observatory that would allow for collection of accurate data and analysis. Additionally, the report also recommended placing greater emphasis on treatment and rehabilitation, with a specific focus on reintegration, as well as improved prevention through the implementation of tested family-oriented health education programs.
Though addiction rates have risen sharply over recent years, particularly the abuse of prescription drugs, an encouraging statistic was that 75% of patients seeking treatment, did so voluntarily or were referred by their families. The balance was referred by the police. The high percentage of those seeking assistance points to both a growing awareness of the problems of abuse within society as well as the opportunity for treatment.
Meeting a Growing Need
The NRC currently has the capacity to provide in-patient treatment at its existing facility which has 72 beds, a total that will rise to 169 after the completion of a new building in 2016, part of its AED285m ($77.7m) expansion. The center also provides outpatient services; group, individual and family counselling, and other support activities.
Since its inception in 2002 as the country’s first comprehensive drug treatment and rehabilitation center, the NRC has become widely seen as a model for substance abuse treatment and support across the UAE, with the center having been asked to create a similar facility in Ajman to treat patients in the northern emirates.
Prevention Better Than Cure
While its primary role is to provide support and treatment to victims of substance abuse, the NRC is also taking on an equally important task, that of promoting awareness of the risk of drugs, as part of a broader campaign amongst young people.
According to Dr Hamad Al Ghaferi, the NRC’s director general, the project has experts working with educators in the school system to provide tools to encourage healthier lifestyles among pupils. “The goal is that the program will eventually help students stay away from drugs, alcohol, prescription medicines and other forms of addictive substances,” he told OBG.
The NRC hopes that the so-called “Fawasel Program” will raise awareness of the threat of substance abuse among students. Following this, the NRC is also developing policy, in collaboration with 15 various government bodies, most notably the Ministry of Interior, Health Authority Abu Dhabi (HAAD) and the Abu Dhabi Education Council (ADEC), that will provide schools with a clear set of directions of how to deal with cases of drug abuse.
Another area where the Center is working to take rehabilitation beyond treatment of addiction is efforts to help patients return to society. Last year, the NRC signed a memorandum of understanding with the Abu Dhabi Tawteen Council – a government entity charged with identifying employment opportunities for Emiratis seeking work – to help develop labor market opportunities for recovering substance abuse patients across the country.
Dr Al Ghaferi pointed out that by offering avenues back into the workforce, and through training programs intended to boost patients’ skills and self-esteem, the NRC and the Abu Dhabi Tawteen Council hope to ease the social pressures that lead to addiction. “It will support them to effectively reintegrate into society, making them positive drivers in the UAE’s continued economic development,” Dr Al Ghaferi said. (OBG 29.05)
11.7 OMAN: Ratings on the Sultanate of Oman Affirmed At ‘A-/A-2’; Outlook Stable
On May 22, 2015, Standard & Poor’s Ratings Services affirmed its ‘A-/A-2’ long- and short-term sovereign credit ratings on the Sultanate of Oman. The outlook is stable.
Rationale
The ratings on Oman are supported by its strong government net asset position and its external net asset position. The ratings are constrained by a lack of monetary flexibility and still-developing institutions.
In Oman, oil accounts for just under half of GDP, slightly over half of exports, and three-quarters of government revenues. Given the country’s high dependence on the commodity, the sharp decline in oil prices, and the expected weakening of Oman’s fiscal and external positions, we lowered our ratings on Oman on 9 February 2015. We expect fiscal and current account deficits, in contrast with the surpluses in previous years when oil prices exceeded $100 per barrel (/bbl). Since our review in February, we have lowered our oil price assumptions by a further $5/bbl, with Brent blend now forecast to average $67.5/bbl (Omani crude typically trades at a discount to Brent of about $5). However, this slight change has not prompted us to significantly revise any of our key credit metrics for Oman.
We still expect an annual average change in Oman’s government debt of just under 1% of GDP a year in 2015-2018. Given our expectation that deficits will partly be financed by liquidating assets and extra borrowing, including an imminent sukuk issuance of Omani riyal (OMR) 200 million ($520 million), we forecast that the government’s net creditor position (its gross debt, less its significantly larger liquid assets) will stand at 52% of GDP in 2018.
We view the government’s room for spending cuts as limited, given that nearly 50% of spending relates to public-sector wages and subsidies and exemptions, which are typically hard to reduce. We expect some cuts to outlays on subsidies, as well as postponement of some defense spending and lower-priority capital expenditures, but the government currently plans to stick to its capital-spending program as budgeted.
The 2015 budget assumes an average price of $75/bbl for Omani crude in 2015, which is approximately $25/bbl higher than our current forecast (assuming a $5 discount to Brent oil). We think the government may revise its 2015 budget later in the year, which could cause us to change our assumptions for the fiscal position and government debt.
Sizable oil receipts in recent years have helped maintain Oman’s strong external position. However, lower oil prices lead us to forecast a deficit in 2015 equivalent to nearly 5% of GDP (compared with the small surplus we forecast in December 2014). That said, our assumptions for the balance of payments may be on the cautious side, because we think that repatriated earnings on foreign assets, including those of the sovereign wealth fund, may not be fully captured in reported current account receipts.
Oman’s net external creditor position–as measured by liquid external assets minus external debt–will remain a rating strength, but we expect it will decline sharply, to 32% in 2018 from an estimated 62% of current account receipts (CARs) in 2014. Meanwhile, we expect the country’s gross external financing requirements will rise to 111% of CARs and usable reserves in 2018 from 95% in 2014. In addition to higher external borrowing, we expect net inflows of foreign direct investment (FDI) to pick up to the equivalent of 1% of GDP, which will help finance major projects such as the Duqm port and petrochemicals complex and the Khazzan gas project.
We forecast annual average real GDP growth of 3.4% a year in 2015-2018, chiefly based on large capital projects and consumption. We estimate trend growth in real GDP per capita as slightly negative, although this measure is complicated by volatile population data, given the large and variable proportion of expatriate workers. We anticipate that lower oil prices will turn the GDP deflator sharply negative in 2015. We therefore expect per capita GDP will drop to just under $18,000 in 2015 from an estimated $21,100 in 2014, before recovering slowly to about $20,000 in 2018.
Under the rule of Sultan Qaboos bin Said Al Said, who came to power in 1970, the country has undergone a remarkable improvement in human development. Once one of the least-developed countries in the world, Oman now ranks in the 70th percentile of countries in the United Nations Development Program’s Human Development Index. Although this advancement stems largely from the advent of high hydrocarbon revenues during this period, we think it also results from increasingly effective policymaking. However, the sultan exercises absolute power in governance and decision-making, which could pose risks to the effectiveness and predictability of policymaking.
The sultan remains popular, but the eventual process of succession remains untested, as the country lacks recent experience in smooth transitions of power. We expect the succession process will be smooth, without any radical policy shifts. But we do not rule out the possibility that Oman could experience a disruptive period of uncertainty if the royal family does not quickly agree on a successor. We do not expect the conflict in neighboring Yemen will affect Oman’s creditworthiness, because it appears unlikely to spill over into Oman, which has remained neutral in the conflict.
In our view, monetary policy flexibility is limited because the Omani rial is pegged to the U.S. dollar. That said, the peg has provided a stable nominal anchor for the economy, particularly as contracts for the main export, oil, are typically priced in dollars. The transmission of monetary policy is constrained by an underdeveloped local capital market, although we expect to see some growth in local debt and sukuk issuance over the next four years.
Outlook
The stable outlook reflects our view that the deterioration in Oman’s nominal GDP and the fiscal and external positions will not substantially exceed our current expectations, and that the eventual succession of the sultan will be smooth.
We could lower our ratings on Oman if it appears we have underestimated the likely negative impact of lower oil prices on the economy, and the government’s fiscal and external positions, if it looks likely that trend growth in real per capita GDP will remain materially below that of peers, or if we see signs that the eventual succession of the sultan will disrupt institutional functioning.
We could raise the ratings if our current forecasts for Oman’s external position prove to be overly conservative, perhaps if it transpires that our oil price forecasts were too low, or if we include more income from external assets in our current account forecasts. We could also raise the ratings if the government’s net asset position materially outperforms our current expectations and if trend growth in Oman’s per capita real GDP accelerates to a level in line with peers’. (S&P 22.05)
11.8 OMAN: Oman Moves to Broaden Health Care Base
The opening of a multimillion-dollar cardiac center outside of Muscat in May marked the latest milestone in Oman’s drive to broaden the scope of its health care sector, so notes the Oxford Business Group.
On the back of heavy investment channeled into services and facilities through a series of state development plans, the sector has expanded rapidly in recent decades. The government is also looking to increase the role played by the private sector in health care provision, particularly in preventative care and the treatment of lifestyle-related diseases.
Meeting demand
Efforts to develop the sultanate’s national health care system have seen the number of hospitals in Oman increase from just two in 1970 to 66 in 2013, including seven privately owned facilities, according to the Ministry of Health (MoH). In the eight years to 2013, the number of hospital beds rose from 5,270 to 6,178.
The opening of the $62.12m Salalah Heart Centre in May, a 16,444-sq. meter center located in the south-western governorate of Dhofar, signals good news for residents of Oman’s largest province, who will no longer have to make the 1,000 km. trip to Muscat for treatment. The 56-bed facility housing X-ray and MRI scanning equipment, alongside laboratories for diagnostics and clinical chemistry, and units for both pediatric and intensive care, will also take the strain off the capital’s Sultan Qaboos University Hospital and Royal Hospital.
Changing trends
Rising demand and shifting health care requirements are driving the expansion. Oman’s older population is growing, and non-communicable diseases such as diabetes and obesity are on the rise.
The country’s changing demographics, together with other factors, such as rising incomes, are generating huge spending in health care. Funding for public health expenditure increased almost three-fold in the eight years to 2013 to reach OR593.7m ($1.54b). Oman doubled spending on health care to OR1.29b ($3.34b) in the 2014 budget, while projects such as the $1b International Medical City in Salalah and the $1.5b Sultan Qaboos Medical City, west of Muscat, will play a key part in the sector’s expansion.
Oman is now targeting 10,000 new clinics over the next 35 years, in line with the country’s long-term strategy for the sector, Health Vision 2050.
Bringing businesses on board
The government is hoping that its plans will include the private sector becoming more involved in the provision of services. “We are keen to promote hospitals in the private sector,” Dr Sayyid Sultan bin Yarub Al Busaidy, adviser for health affairs at the MoH, told local press in late 2014. “Any plans that can add momentum to the health sector’s progress are welcome. We want all small clinics to grow into hospitals.”
Private providers already have a decent foothold in Oman’s health care sector. A study released in 2014 found that almost half of patients treated at the country’s 11 private medical facilities were locals, even though Omanis qualify for free public health care.
Government employees form a key client group, often showing themselves willing to pay higher premiums for health care services. In April 2015 the Ministry of Education in Oman’s Sharqiya governorate signed a deal to provide its employees with medical services at the private Starcare Sur Private Hospital.
One way to spur further development would be to outsource hard-pressed public services to private providers, according to John Clarke, director of Muscat Private Hospital. “What will move the private sector along now is to follow the UK model, where the National Health Service contracted out patient services with growing waiting times to the private sector,” Clarke told OBG. “That reduced the burden on the government to provide health care and developed the private sector’s competencies.”
Looking close to home
The scale of outward-bound medical tourism in Oman indicates another area for potential. Thousands of Omanis go abroad for medical treatment each year – 75,000 in 2013 alone travelled to Thailand, according to media reports – with some trips sponsored by the MoH, which provides financial support for citizens to receive treatments unavailable domestically.
“Instead of using this money to send citizens abroad for treatment, the MoH could use it more cost effectively to up-skill the private sector so that Omanis can get quality treatment here,” said Clarke.
A 2011 study in the Sultan Qaboos University Medical Journal found that “orthopedic diseases” were the most common conditions for which Omanis sought treatment abroad, while tests for cancer and ensuing treatment also came near the top of the list. Oman’s public health system does not yet offer PET scans or CT scans. The provision of these two imaging technologies, which are considered crucial for the early detection of cancer, represents another niche that the private sector would be well placed to fill. (OBG 29.05)
11.9 SAUDI ARABIA: IMF Staff Completes 2015 Article IV Mission to Saudi Arabia
An International Monetary Fund (IMF) team held discussions from 17 – 28 May on the 2015 Article IV Consultation with Saudi Arabia. At the conclusion of the talks, the IMF made the following statement:
“The decline in oil prices is resulting in substantially lower export and fiscal revenues, but the effect on the rest of the economy has so far been limited. Real GDP growth is projected by IMF staff at a healthy 3.5% this year, unchanged from 2014, with an increase in oil production and continued government spending expected to support the economy. Growth, however, is projected to slow to 2.7% in 2016 as government spending begins to adjust to the lower oil price environment. Over the medium-term, growth is expected to be around 3%. Inflation is likely to remain subdued.
“Government spending in 2015 is expected to remain strong, partly due to a number of one-off factors, while oil revenues have declined. As a result, IMF staff projects that the government will run a fiscal deficit of around 20% of GDP in 2015. Government deposits with the Saudi Arabian Monetary Agency (SAMA) have declined in recent months to finance the deficit and smooth the pace of fiscal adjustment. While this is an appropriate policy at this conjuncture given the large stock of deposits and very low government debt, a sizable fiscal policy consolidation will be needed over the next few years to put the deficit on a gradual but firm downward path. Going forward, the decline in government deposits will slow as the government starts to issue debt to finance the deficit.
“A strong fiscal framework that sets the annual budget in a medium-term framework and clearly establishes fiscal policy goals would support the fiscal adjustment. Improving the efficiency of government spending, comprehensive energy efficiency and price reforms, and expanding non-oil revenues will need to form central elements of the fiscal consolidation strategy.
“Saudi banks’ strong capital, profitability, and liquidity will help them weather a slowing in the pace of economic growth. SAMA continues to further strengthen its regulations and supervision of the financial sector and this will support the continued development and stability of the financial system. The exchange rate peg to the U.S. dollar continues to serve Saudi Arabia well given the current structure of the economy.
“The opening of the Tadawul (Saudi Stock Exchange) to qualified foreign investors this May is a welcome development that will help deepen the equity market and broaden the investor base. The depth of the local debt market will be enhanced by the issuing of more debt and sukuk. Government debt issuance to finance part of the fiscal deficit would help in starting to build a benchmark yield curve, an important step in developing the debt market.
“The decline in oil prices has emphasized the importance of economic diversification. Policies are continuing to strengthen the business environment, but more needs to be done to encourage firms to focus more on tradable rather than non-tradable production in the non-oil sector.
“The government is undertaking an ambitious reform program to increase the employment of nationals in the private sector. With a young educated population entering the labor force in large numbers each year, creating a sufficient number of well-paying jobs is a critical challenge to support sustained and inclusive growth. With employment in the government sector at a very high level, more jobs for nationals will need to be created in the private sector to employ the new labor market entrants. This will require a continued focus on making nationals more competitive in the private labor market combined with changes to the incentives people face so that they opt for entrepreneurship and private sector employment rather than jobs in the public sector. (IMF 01.06)
11.10 EGYPT: Egypt Sets Tourism Target for 2020
Safiaa Mounir posted in Al Monitor on 19 May that the Egyptian Ministry of Tourism is drafting an ambitious plan to attract 20 million tourists by 2020 and to boost the sector’s total revenues to $26 billion.
Minister of Tourism Khaled Rami believes this goal can be achieved through a new international advertising campaign that is set to begin in December 2015. The campaign will focus on the diversity of tourism in Egypt, in particular Nile tourism, as well as desert outings, sports, therapeutic retreats and religious tourism.
Elhamy el-Zayat, chairman of the Egyptian Federation of Chambers of Tourism, told Al-Monitor, “It is possible to achieve the goal of 20 million tourists, but reaching the estimated revenues of $26 billion is difficult in light of the prices at which the Egyptian tourism product is offered.”
Zayat said that achieving the revenue target requires increasing the number of cultural tourists coming to Egypt to visit temples and museums, and increasing the number of nights tourists spend in Egypt. In March 2015, the number of tourists totaled 834.6 million, marking an increase of 10.6% compared with March 2014.
Cultural tourism was strongly affected following the January 25 Revolution, as many countries such as Japan, China, India and Spain warned their citizens about traveling to Cairo, Luxor and Aswan.
The Chambers of Tourism currently plan to send tourism delegations to the United States and Latin America to promote Egyptian tourism, Zayat said. He added that a delegation would be sent in October to eastern US cities, including New York, Washington and Boston, as well as Toronto and Montreal in Canada, with the mission of attracting more tourists to Egypt. Another delegation is scheduled to depart in November to the cities of San Francisco, Los Angeles and Chicago, as well as Mexico City. The third delegation will target South American countries, namely Argentina, Brazil and Chile.
El-Zayat said that the United States, Canada and South America are known for their cultural tourists, and that the delegations will contribute to Egypt being more accepted by the West — a trend that has already begun thanks to President Abdel Fattah al-Sisi’s repeated visits to foreign countries.
According to the strategy presented by the Ministry of Tourism to the Council of Ministers on 21 April, the spending rate of tourists in 2020 is expected to be $100 per night – an increase of $23 from 2014. The strategy aims to amass 260 million tourism nights in 2020, compared with less than 97 million nights in 2014.
The 2014 revenues came to EGP 7.5 billion ($982 million), compared with EGP 12.5 billion ($1.6 billion) in 2010, just before the January 25 Revolution. According to Egypt’s 2014 annual report on tourism, the number of tourists reached 9.87 million that year, down by 32.9% from 2010 and an increase of 4.4% from 2013. “The level of tourism services must be improved, and their prices must be increased. We should focus on attracting tourists who are interested in classic cultural tourism since cultural tourists are the ones who spend the most,” Zayat said.
The Egyptian Ministry of Foreign Affairs issued a decree on 17 March banning the distribution of individual visas to foreigners at Egyptian airports. However, the ministry reversed its decision on 2 April after owners of tourism companies showed that they were negatively affected by the decision.
El-Zayat said that this decision would have negatively impacted Arab tourism as a whole, as most Arab tourists visiting Egypt, individually or as families, are not required to obtain entry visas in advance. “We would have lost the Arab market,” he said.
Arab tourists totaled 1.8 million in 2014, accounting for about 16.4% of the total inbound tourism to Egypt, according to the Egyptian report. The Ministry of Tourism plans to have Egypt account for 34% of inbound tourists to the Arab world by 2020, compared with 25% in 2014.
Tourism relies on political and security stability, which has been strengthened following a long period of violence in Egypt. This political stability positively affected the number of inbound tourists to Egypt, which rose by 10.6% in March compared with the same month last year.
Adla Ragab, economic adviser to the minister of tourism, told Al-Monitor that the first quarter of 2015 witnessed an increase of 6.9% in the total number of tourists coming to Egypt, noting that about 2.15 million tourists visited the country during that period.
Bookings indicate that the total number of tourists will reach about 12 million by the end of 2015, which misses the peak recorded in 2010, when 14.7 million tourists visited the country. However, this number exceeds the one registered in 2014 as 9.9 million, according to Ragab.
Ragab said that indicators regarding summer bookings improved by about 15% when compared with the summer of 2014, noting that the next winter season bookings indicate an increase from 15% to 20% compared with last winter.
Safiaa Mounir is the editor of the economy section of al-Shorouk newspaper. After graduating with a degree in journalism from Cairo University, she completed the Reuters training courses on news and report writing. She participated in the US-affiliated International Visitor Leadership Program in 2010 and completed the occupational safety program and the training courses on how to cover news in conflict zones from the Egyptian Foreign Ministry in 2014. (Al Monitor 19.05)
11.11 TUNISIA: Issuer Rating Affirmed at Ba3 and Outlook Changed to Stable From Negative
On 25 May, Moody’s Investors Service affirmed Tunisia’s government issuer rating at Ba3 and changed the outlook to stable from negative.
Ratings Rationale
The key drivers of today’s rating action are:
(1) A significant decline in domestic political risk emphasized by the successful democratic transition and installing of a broad unity government;
(2) Reduced external funding challenges following the resumption of official financing and access to international capital markets;
(3) The gradual reduction in fiscal and external imbalances.
As part of the rating action, Moody’s has also affirmed the debt rating of the Central Bank of Tunisia at Ba3 and changed the outlook to stable from negative. The Government of Tunisia is legally responsible for the payments on all of the central bank’s bonds given that they are issued on behalf of the government.
Moody’s has changed the local-currency bond and deposit ceilings to Baa2 from Baa3 to reflect heightened economic and institutional strength, and left the foreign-currency bond ceiling unchanged at Ba1 and the foreign-currency deposit ceiling at B1. The short-term ceilings remain unchanged.
Rationale for Assigning a Stable Outlook
The first driver for the assignment of a stable outlook is the successful democratic transition with the installing of a broad-based unity government which counteracts the polarization between moderate Islamists and secular parties that emerged during the transition process. The end-2014 presidential and parliamentary elections after the adoption of the new constitution in January 2014, represent the culmination of a multi-year democratic transition process following the January 2011 Jasmine revolution.
The second driver for the outlook stabilization is the improved access to finance reducing government liquidity risk. This includes availability of official financing, via the recently extended IMF Stand-By Arrangement and additional multilateral and bilateral funding commitments to support Tunisia’s economic reform process over the next few years. Tunisia’s recent Eurobond issuance also underlines improved investor confidence as a result of enhanced political stability.
The third driver for a stable outlook is the gradual reduction of fiscal and external imbalances. On the fiscal side, the fiscal consolidation process is supported by both revenue measures and expenditure restraint in the form of lower energy subsidies, for instance, which are further supported by the recent fall in oil prices. The increased focus on capital expenditures in the 2015 budget should support the shift toward growth-enhancing expenditures, although the public sector wage bill remains elevated at over 12% of GDP. Moody’s expects the fiscal deficit to reach 5.3% in 2015 before declining to 4.2% in 2016 as a result of the improving growth outlook.
On the external side, Moody’s expects a reduction in the current account deficit from the peak reached in 2014 in view of improving external demand from EU trading partners, lower oil prices and recent onshore oil discoveries that support the oil and gas production profile, in addition to the boost in food exports following a record olive oil production season. While Moody’s expects the tourism industry to recover in a more gradual manner, data for Q1/15 point to a gradual resumption of FDI inflows, which will bolster the country’s foreign exchange reserve buffer. At 127 days of import cover in Q1/15, the reserve position has improved significantly compared to level in Q1/14 of 100 days. The maintenance of an adequate reserve buffer is key in view of Tunisia’s significant foreign-currency debt share at over 60% which increases the debt burden’s vulnerability to a sharp depreciation of the domestic currency.
Rationale for Affirming the Rating at Ba3
Tunisia’s credit profile and positioning among peers supports the affirmation of the Ba3 rating. The public administration and civil society’s ability to navigate the four-year transition process in the face of social upheaval and security disruptions attests to the country’s robust institutional framework. That said, pronounced regional disparities and labor market inefficiencies add to social tensions which weigh on the country’s investment climate and growth potential. Government liquidity risk remains a moderate constraint on credit quality in view of public gross funding requirements of around 10% of GDP over the next two years. The Ba3 rating also captures vulnerabilities in the public banking sector which is undergoing a significant restructuring process. Finally, while domestic political risk has receded significantly, recent terrorist activity highlights the security tensions Tunisia remains exposed to, including from neighboring Libya.
What Could Change the Ratings Up/Down
Timely implementation of the structural reforms agreed under the extended IMF program would be credit positive, including public bank recapitalization and governance reform in addition to fiscal reforms geared toward leveling the playing field between the on- and offshore sectors in order to promote more inclusive growth. A sustained fiscal and external rebalancing would also exert upward pressure on the rating.
Moody’s would consider assigning a negative outlook in the event of: (1) an unexpected deterioration in the domestic or regional security environment with lasting negative spillovers on economic activity; (2) further delays in bank recapitalization and structural reform implementation which weigh on the investment and potential growth outlook; (3) a sharp increase in fiscal and external imbalances. (Moody’s 25.05)
11.12 TUNISIA: Tunisia Cracks Down on Radicalization
Eric Reidy posted on 19 May in Al Monitor that the 18 March attack on the Bardo National Museum that resulted in the deaths of 24 people, including the two gunmen, highlighted the issue of internal security threats to Tunisia. Even before the attack, however, the prevalence of Tunisian fighters in the ranks of the Islamic State (IS) had drawn attention to the country’s struggle with radicalization following the 2011 revolution.
While the struggle is not new, the government is now emphasizing its efforts to increase security and counter radicalization. So far, security operations against militant cells and the introduction of a new anti-terrorism bill in parliament have been the centerpieces of this effort. In addition, the Ministry of Religious Affairs has been working to bring back under its control those mosques that harbored extremist imams and networks after the revolution. Part of its effort involves reinstating ministry-sanctioned leaders in these mosques.
While these moves represent initial steps, parliament Speaker Mohamed Ennacuer, during remarks introducing the anti-terrorism bill 17 April, called for a national strategy to address the root causes of radicalization in the country. “The organic anti-terrorist law is not enough to eradicate terrorism,” he later told journalists. To supplement the steps that have already been taken, the government is planning to establish an anti-terrorism commission and hold a national conference, tentatively scheduled for September, to devise a comprehensive strategy for preventing violent extremism and radicalization.
Abdessatar Badr, chief of staff for the Ministry of Religious Affairs, told Al-Monitor that in the chaotic period immediately following the revolution, more than 1,000 of Tunisia’s approximately 5,300 mosques slipped from the ministry’s control. Many of these mosques came under the influence of groups espousing extremist interpretations of Islam. “These people accused non-Muslims of being heretical,” Badr said, noting that Tunisians were included among the alleged heretics. In addition to the unregulated mosques, Badr said, close to 200 new mosques built without a license also became centers of radicalization.
Alaya Allani, a professor specializing in Tunisian Islamism at Tunis’ Manouba University, said that at the same time about 3,500 charities associated with political Islamist groups or Salafist organizations were founded. Two hundred of them were associated with the Salafist group Ansar al-Sharia.
Some of the more radical of these associations received large amounts of funding from Qatar and private individuals in Kuwait and Saudi Arabia, Allani told Al-Monitor. “The main reason why these associations had a lot of money is because they were recruiting fighters to Syria,” he said. According to Allani, some of the associations also set up kindergartens and schools to teach radical interpretations of Islam as well as establishing training camps in western Tunisia, on Mount Chaambi, close to the border with Algeria.
The government did not intervene until a group of protesters, including Salafists, stormed the US Embassy in September 2012. The government arrested a number of Salafist leaders on charges of incitement to violence and began cracking down on Ansar al-Sharia activities. The crackdown intensified following the assassination of two secular politicians in the winter and summer of 2013 that thrust Tunisia into political crisis. The government blamed Ansar al-Sharia for the killings and outlawed the group in May 2013. A few months later, in August, it designated Ansar al-Sharia a terrorist organization.
“During this period, these organizations were able to establish an infrastructure for jihadism in Tunisia,” Allani said. Thus, the stage was set for Tunisia’s struggle with radicalization.
Al-Qaeda-linked militants in Mount Chaambi carried out their first attack against Tunisian security forces in April 2013, injuring two soldiers. A second attack in July killed eight soldiers and marked the beginning of a low-level but persistent campaign that has resulted in the deaths of more than 70 security personnel, Allani said.
By mid-2013, the high number of Tunisian foreign fighters in Syria had begun to attract international attention. It is now estimated that around 3,000 Tunisians have gone to fight in Syria and Iraq, many in the ranks of IS, and others are fighting with militant groups in neighboring Libya.
The Tunisian Ministry of Interior says that it has stopped around 12,500 people trying to leave for foreign battlefields since the government led by the moderate Islamist Ennahda began its crackdown on radical activity in 2013. The Nidaa Tunis-led government that took power after winning elections held 26 October 2014, has intensified security operations against extremists cells. More than 880 suspected militants have been arrested since the government took office on 6 February.
Between 2013 and 2014, almost all of Tunisia’s mosques were brought back under the control of the Ministry of Religious Affairs. Badr said that today, there are around 53 mosques not yet fully under its control. The ministry inaugurated a program to register unlicensed mosques, and of the 187 that had been built illegally, 25 received government licenses. Badr said the Ministry of Interior is working to dismantle the rest. “These were urgent measures that were taken,” said Mohamed Jalel Ghedira, a Nidaa Tunis parliamentarian. “But we still need to develop a strategy for prevention.”
Ghedira told Al-Monitor, “Our objective is for every person and every structure to have a role in counterterrorism.” The proposed anti-terrorism commission is supposed to bring together a number of ministries to devise a national strategy for the prevention of radicalization. At the September conference, ministries will present their ideas on how to combat radicalization and violent extremism and receive input from civil society, Ghedira said.
Despite the initial steps taken by the government, Mohamed Haddad, president of the Arab Observatory for Religions and Freedoms and UNESCO chairman of Comparative Studies of Religion at the University of Tunis, is skeptical about the effectiveness of the national program. “This national program is something to be said in words, but in reality it will not happen,” Haddad said. He believes the government lacks sufficient vision to carry it out.
Sayida Ounissi, an Ennahda parliamentarian, struck a more optimistic tone. “I strongly believe that if we ensure public liberties, rule of law and make people feel that they belong to this country, we will ensure the defeat of all those who instrumentalize people’s frustration … to enroll them in radical groups,” she said.
Eric Reidy is a freelance journalist currently based in Tunisia. His reporting covers topics in the Middle East and North Africa from politics and human rights to environmentalism and entrepreneurship. (Al Monitor 19.05)
11.13 ALGERIA: Made in Algeria Campaign Shifts Up a Gear
Faced with a slowing economy, the Oxford Business Group reports Algeria has launched a drive to revitalize its industrial sector and boost agricultural productivity by upping the focus on locally made products.
Food imports have weighed heavily on public expenditure in recent years, with the import bill largely supported by a strong performance from the country’s oil sector. However, with lower global oil prices of late, the government is moving to boost consumer interest in locally produced foodstuffs and Algerian-made goods through a range of initiatives and reforms, which include awareness campaigns and easier access to credit for consumers when buying non-imported products.
This effort, largely driven by various public bodies including the Ministry of Commerce, Ministry of Industry and Ministry of Agriculture and Rural Development, will also be achieved by focusing on improving consumer confidence and the assurance of the quality and availability of locally produced goods.
To that end, Minister of Commerce Amara Benyounes told local media, “Strong and sustainable economic growth can be achieved only by relying on the domestic market and working to improve locally produced goods, streamline production costs and develop supply logistics chains.”
However, while its efforts are being backed by the private sector, low levels of productivity and value-added remain key challenges to developing the Made in Algeria brand.
Keeping things local
Algeria recorded a trade deficit of $1.73b in the first quarter of 2015, according to figures from the Algerian Customs’ National Center for Data Processing and Statistics, against a surplus of $1.83b for the same period last year. Imports edged downwards in the first quarter of 2015, slipping from $14.3b to $13.0b year-on-year (y-o-y), while exports fell by 30.1%, driven by a 32% contraction in the value of hydrocarbons exports.
Legal reforms will support the government’s efforts to generate a higher take-up of locally made products, led by the reintroduction of the consumer credit program, which will make loans available for the purchase of locally produced goods.
The Algerian newspaper Liberté described the decision to bring back the program as both welcome and timely. “The consumer credit comes at an important time, when inflation is eating away at purchasing power. The consumer credit will allow consumers to breathe and will also help stimulate local companies that drive Algeria’s development,” the report said. The program issued loans to households totaling almost AD100b (€912.5m) in 2008, the year before it was withdrawn, while four-fifths of the total was extended as car credit.
The private sector is also expected to play a part in boosting local production. In a key move, the Business Leaders’ Forum (le Forum des Chefs d’Entreprises, FCE) announced in May that it hoped to establish a “Guaranteed Algerian Production” (Origine Algérie Garantie) label. Studies are currently being carried out to clarify the criteria that need to be met before the label can be placed on Algerian products. Local telecoms operator Mobilis has offered financial support for the initiative, and the studies are scheduled to be completed by the end of June, according to the FCE.
The venture will be supported by a general push to promote Algerian products in the domestic market. While much of Algeria’s food produce and its locally built household appliances are already popular with locals, some products struggle to compete with international brands. Sales of cosmetics and textiles, in particular, remain low, with Algerian consumers overlooking local versions in favor of imported alternatives.
Adding value
Aside from the challenges of winning over customers, domestic producers face other hurdles, including limits to the existing distribution system, according to media reports. Weak value-added is another sticking point that needs to be addressed if Algeria’s industrial sector is to thrive, particularly in sectors such as the automotive industry. The low level of value-added in locally made products came under scrutiny when the legislation governing Algeria’s consumer credit program was drafted.
In addition, the African Development Bank (AfDB) highlighted the low levels of value-added processing in a study published last year on the integration of several African economies into the global value chain. The AfDB reported that of all imports to Algeria, just 28.8% undergo value-added processing for re-export, with the remaining 71.2% consisting of food or durable goods for consumption. (OBG 29.05)
11.14 MOROCCO: Morocco Retail Sector Mirrors Growing Wealth, Changing Habits
The Oxford Business Group said more than three-quarters of Morocco’s retail activity takes place among small-scale or informal retailers, but that is beginning to visibly change, with dedicated retail property growing and large foreign retailers expanding.
The largest malls received millions of visitors last year, with Casablanca’s Morocco Mall – one of Africa’s largest malls with over 300 stores and covering a total of some 250,000 sq. meters – welcoming 17m shoppers. In Marrakech, Almazar recorded 5m visitors and Carré Eden notched up 3m visitors after opening its doors in spring 2014.
By the end of last year, 96% of the available lots in Almazar were occupied, while Carré Eden had rented out 94.2% of its space and Morocco Mall nearly 100%. Some 95% of available mall space at Carré Eden is occupied by franchises, reflecting the growing power of brand recognition.
Shopping spree
The occupancy rates should ease somewhat, given the number of new retail complexes currently in the pipeline, such as the Bouskoura Golf City, a high-end shopping complex located on the outskirts of Casablanca by the Prestigia Group. Covering an area of 3600 sq meters and due to be opened later this year, the complex has already filled 78% of its floor space.
However, high demand for mall and retail space is likely to continue, given the number of European and Middle Eastern retailers currently eyeing the country. French retailer Carrefour, for example, set out plans in 2013 to invest Dh750m (€68.8m) in the country through its Label’Vie franchise and to expand the network with an increase in floor space of 8500 sq meters. The group opened a further eight stores in 2014 and according to its full-year announcement released in March, plans to open another eight this year, with a budget of Dh650m (€59.6m).
In addition, 15 Monoprix stores will be opened in Morocco through the French retail chain’s Tunisian franchisee SNMVT, while Abu Dhabi-based supermarket chain Lulu, which has stores in Egypt, several Gulf states and India, is also targeting Morocco as part of a wider $200m expansion in the country.
Changing Habits
Morocco’s retail sector now accounts for 12.8% of the economy, employing 1.2m people or roughly 13% of the workforce. Increasing revenue from the tourism industry is also expected to drive retail growth. A rising middle class – representing 30% of the population – and an increasingly urbanized population is also boosting purchasing power. According to government figures, purchasing power of the average Moroccan consumer rose steadily by roughly 4% each year over the past decade, aided in part by increased consumer credit – which grew by about €500m between 2012 and 2013 – and a reduction in income taxes from 44% to 38% between 2007 and 2011.
Riad Laissaoui, managing director of Retail Holding, which owns brands and franchises such as Atacadio, Burger King and Label’Vie in an alliance with Carrefour, said the wide array of product choice is changing consumer patterns, pushing them towards more formal channels. “Consumer habits are changing for alimentary products: Moroccan consumers now care more about quality and prices,” Laissaoui told OBG.
Government Support
To further stimulate retail modernization, the government is prioritizing growth in the sector over the next five years by making funds available through its national plan for developing the sector known as Rawaj Vision 2020 program. The Rawaj Vision 2020 plan was rolled out in 2007 and over the first four years injected nearly €100m into helping support the retail sector, through modernization initiatives and zoned land. The program ultimately hopes to raise retail’s GDP contribution to 15% and add another 450,000 jobs to the sector. Under the plan, the sector should see annual growth of 8% until 2020.
Certainly, the performance of local retailers has been sufficiently strong to merit an optimistic outlook for the sector. One of Morocco’s largest chains, Marjane – a subsidiary of Société Nationale d’Investissement, with 32 stores across its three brands Marjane, Acime and Electroplanet – is now expanding abroad with plans to open branches in Côte d’Ivoire, Senegal, Gabon, Mali and Tunisia, amid a wider trend of Moroccan companies looking to sub-Saharan Africa for opportunities.
However, there are still a number of challenges to meeting the Rawaj Vision 2020 targets. Poor infrastructure increases the cost of distribution and shipping, while also limiting accessibility. People in rural areas, for example, where formal retail penetration has lagged, also tend to have fewer cars and thus are also less able to access malls, according to Laissaoui. (OBG 29.05)
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